"Why NST is up 7% whilst RMS/SLR/WGX etc are down >4% and NCM is flat, it's because of our old friends at Market Vectors.
The junior golds index which is tracked by the GDXJ ETF has change its composition rules such that
Companies ranking between 60% and 98% (currently: between 80% and 98%) of the full market capitalisation qualify for inclusion in the MVIS Global Junior Gold Miners Index (Ticker: MVGDXJ, MVGDXJTR).
In other words, looks like NST will get added to the GDXJ, whilst room will have to be made for it (and lots of others) by all the existing components of the ETF, such as RMS/SLR/WGX etc.
Probably makes sense because the ETF had got to the point where it was owning >10% of the companies that were part of the index - that's too much."
So it looks like Van Eck are now decreasing their holdings in RMS - by how much I'm not sure as they don't want to hold close to 20% of the stock. Either way, the shorters have brought it back to Dec 16 prices so as not to lose out on their shorts that were taken out then.
The company that is probably responsible for this is Instinet (as per @accaeric thread on broker movements on the RSG thread)
It openly admits to dealing in dark equities - don't know what dark equities are but it sounds like we've been butt probed by a foreign banking outfit (Nomura). Not much use complaining about it I suppose as our authorities are too slow and stupid. Furthermore anything that encourages foreign exploitation of our natural resources will always be defended vigorously by the powers that be.
There's a solution to all of this by the way. Bring back stamp duty on share trading. You have to pay it on real assets so why shouldn't you pay for it on the secondary market. It would kill scalpers and market manipulators stone dead as the transaction costs would be too high. The money raised from it should fund the abolition of payroll tax. For RMS this would mean substantial savings. Furthermore since around 40-50% of the ASX is traded by foreign owned enterprises it should be a winner at the ballot box while encouraging more employment in Aus.
Very fickle world we live in - Saracen's cash last quarter reduced from $44 million to $30 million and they're still valued at $876 million - didn't lose a cent all week - go figure. The company's CEO thinks it's a solid result - 12 months ago it had $34 million - so it's gone nowhere in that time - but don't worry its "gunna" produce 300,000 ounces one day. That's all that's counts - the future - don't worry about what's happening now or past results.
I don't think margin will be a problem for RMS going forward - once Water Tank is up and running over 50% of RMS production for the next two years will be from Vivien and Water Tank - 7+g/t and 5+g/t mines - so the grade will be quite high if you average out with Titan and Milky Way (1.3g/t).
Last quarter will be down because as stated previously, Mt Magnet contributed well over half of production so that will have averaged the g/t down. Also there would have been one off costs with the cementing and repairing the mill.
The cementing should of been flagged by management - the one fault I have with them is their poor communication skills - it needs to improve - as can be seen with SAR its all about delivery - because the market didn't see it coming perception of management has been damaged even though operationally they have been performing very well. (Last quarter aside - even though had the market knew that Vivien was going to be impacted it probably would have live with it)
Given the flogging it's copped over the last month RMS is a buy at current prices. If management delivers on its promises of a new (and hopefully extended) mine plan, resource upgrade, further drilling results and 30,000+ ounces this quarter it should be able retrace some of its losses.
IMHO/GLTA
RMS Price at posting:
45.5¢ Sentiment: Buy Disclosure: Held
(20min delay)