It will take a huge amount of time till they are worth $6 per...

It will take a huge amount of time till they are worth $6 per share.

This would give them a market cap of $1 billion. They would need an absolute heap of gold to justify that kind of market cap. Assume a margin of even A$450 on production (which is high), they would probably need 4+ million ounces to justify that kind of price, and be producing at much, much higher volumes with a much, much larger plant than they currently have.

On a fully diluted basis, they will have 166.8m shares (ignore the 1:10 bonus issue of options, as the ex-entitlement price should just adjust for this and total value shouldn't change). Using a price of $1.75, this gives them a market cap of c.$292m. At $100 per ounce of Resource (which is on the higher end of the valuation of other companies), they would need 2.9m ounces of resources (not reserves) to justify the current price.

This is why I sold my RMS shares at a lower price than they currently are ($1.46). I personally think they are overvalued (although people will often reply to this message to say that the market will determine the value).

I'm a little bit surprised at the price RMS have stabilised at. If next drill results are good then it may be okay, but if the next results don't also have excellent values I would expect some price weakness (IMHO).

Don't forget that mining companies are generally NOT valued on a PE basis, but rather a DCF basis (albeit if commodity prices stay up for longer then the current DCFs being used will be proven to be conservative).

Good luck to holders.

Do your own research. I just get concerned when people put very high price targets on RMS (and don't get me wrong, I have done well out of RMS ... only I didn't buy enough of them in first place!!!).

Cheers
Marvin