Winmore - I'd suggest anyone putting out a future share price estimate (unless they're a highly paid broking analyst) has rocks in their head. So, I guess by the fact that this isn't the final paragraph of this note would suggest my mental health is therefore quite questionable.
Playing around with a million assumptions - USD gold price, AUD exchange rate, RED's tolling rates and recovery rates etc etc etc - my own 3 year models suggest a NPAT for RED could be $65-125m p.a. Using a PE Ratio of 8 to 13, I get a market capitalisation in the range of $520m to $1,625m or about 15c to 47c per share.
From where RED's share-price sits at the moment, these ranges produce a compound 3 year return of nothing to 46% pa.
Leading with my jaw ready to receive an uppercut, I'll offer the view that my Mid-Case outcome, three years hence, suggests RED's market capitalisation should be about $1 billion or about 28c per share for a 3 year compound return of about 23% pa by around this time in 2026.
Finally, as far as the utility of the USD is concerned, I'm reminded of a quote by, I think, Winston Churchill about democracy. Roughly speaking, he suggested that despite all its flaws, democracy is the best system we've got.
RED Price at posting:
15.5¢ Sentiment: Hold Disclosure: Held
