Hi Excised,The companies that have overtaken RRL have made...

Hi Excised,

The companies that have overtaken RRL have made fantastic purchases at the bottom of the cycle. NST picked up a fantastic asset in Kanowna Belle. They also took Jundee when it was seen to be coming to the end of its life and proved up a pile of new resources. That is, not just picking up an asset on the cheap at the bottom of the cycle but then showing technical expertise far superior to a major producer. EVN picked up Cowal at a distressed selling price at the bottom of the cycle and has since proved up significant resources there and improved the plant throughput and recoveries. They paid a reasonable price at the time for a stake in Ernest Henry but the increase in the gold price since then has demonstrated it to be a fantastic purchase also.

Unfortunately for Regis, the time for picking up great assets on the cheap is past. They will have to do the hard work of developing McPhillamys to generate above sector returns. But they are a much safer company than those that trade on higher multiples due to a perception that they can pull a rabbit out of a hat. M&A can go wrong too.

Cheers,
Tim.