RRL Board & Management,
RRL is getting a fair bit of a tailwind with the strength in the gold price, congratulations. I like to reminisce in times like these as it is absolutely crucial to know where you are from to know where we are heading. To those that have been investors and stakeholders in the gold sector for decades, we all know what is coming as we have been here before. I'd like to present a snapshot of the Australian Gold miners in the last bull run. Arguably RRL was the top ASX listed mid-tier in Australia, second only to NCM which at that point was no longer considered a mid tier on account of its 18 Billion market cap.
Also of note is that we are now at all time highs, the previous high was set in the last gold run at $5.71 Sept 2012. Yes it is a great company 2 Billion to a 3 billion company in a space of 7 years is a fair accomplishment. But at the same time I can't help but wonder, what toppled us from being the king of the mid-tier 7 years ago? It is certainly not the gold price as the other companies would have experienced a similar tide... Per snapshot above EVN was a 1 Billion company, NST was a 500m company and SAR was a measly 360m company. What made these 3 companies and a whole lot of other goldies Steven Bradbury themselves in front of RRL in the last 7 years?
By in large the answer is that these other companies offered capital protection better than what RRL have done in the past and specially in the years of 2013 to 2015. RRL has a current PE of 16.68, compared to the other 3 I mentioned above they are more than double that at this point. This tells me that a lot of other investors perceived these other companies as a better hedge in their portfolio than RRL is. RRL must do better.
I believe in RRL and have been a long time holder. I firmly know that RRL can do better in asserting itself than what it has done in the recent years. We were at the top of the mountain and we can be again. For that to happen Jim and Co will need to show us leadership in showing that, we are not just another gold miner but a pillar of capital protection in times of financial and economic stress. A beacon of growth even when the gold price is not and most of all a company that will be around for a very long time. Show the market this and I think RRL will be at the top again in no time.
Many thanks for your time,
LT RRL SH Exised
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