Hopefully no screw up. at $4500 Aud and $2350 ASIC, we have profit of $2150 an ounce. $100k ounces per quarter and that is a cash generator of $215,000,000 profit a quarter. Multiply by 4 quarters, $860 million annually. Minus 250m development expenses annually, $610m profit hopefully. Thats based on $4500. We are trading at $4700 today. First half profit not as high so maybe 500m profit for the year? At under 2.5B market cap, that's only 5x.
In my simple and humble opinion, regardless of the slight nuances in the above figures, we are well and truly short of a reasonable valuation for this company. Given how other miners are trading at 20x 40x 15x, etc...The cash generation can go to buying a mine when gold price depletes in future if they are patient. No need to deploy now if they are paying premiums for it. It could go to developing McPhillamy's if overturned, etc... Although if gold price goes up to the $3k USD which some are predicting or 3.1-3.2k USD by end of year and our dollar keeps dropping (which we tend to do during global economic downturns, we could be looking at a gold price of over $5k an ounce in AUD terms. Imagine the potential.....
The above is not advice, it is merely a fanciful thought that may or may not eventuate.
RRL Price at posting:
$3.50 Sentiment: Hold Disclosure: Held
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