RMS chart and discussion - 1 Jan 2018, page-3

Thanks nordesmic,

As always a good balanced commentary.

I don't see the lack of big funds in RMS as a problem. The value of a stock is governed by its performance at the end of the day and funds will come and go based on performance and future performance expectations. The falling strip ratio at Edna May should help with meeting guidance in 2018 and should hopefully be a short term panacea for the share price when production is lifted. Even if RMS doesn't have the lowest AISC amongst its immediate peer group the operational free cash flow should be lifted by the step change in production profile which should provide optionality (which is my new catch word when it comes to assessing the performance of gold miners). I think you can divide gold miners into two classes. Those that are constrained by cash and those that are not. The only excuse an established gold miner should have for going back to the market for capital is to fund an acquisition or mine development or if its share price has run well beyond its actual value. Avoid cash constrained turn around stories until they have actually turned the corner in terms of actual cash is my suggestion to investors.

I was lucky enough to be invited for a site visit at Edikan in December, while in Ghana. Unfortunately I can't really talk about it due to confidentiality constraints. On a general note however one might think that with Sissingue almost at the first gold pour stage PRU should get a lift for similar reasons to RMS. ie the extra production should bring more operational free cash flow. I understand that commissioning has gone pretty smoothly at Sissingue and because of its remoteness it suffers less problems than trying to develop new mines around Anayfuri where populations can be expensive to relocate and can be troublesome.

Never held any SLR but agree with you on the elation and tears that stock offers in terms of share price movement. I remember on its last run it was much better supported by the market and led RMS all the way up. Maybe with RMS's new production profile the roles will be reversed if we are fortunate enough to have another run on gold stocks. A lot of lithium bulls will have made a lot of money but there are big loses coming to those late to that party IMO. Think of the cumulative market capitalisations of all these lithium companies and then look at their cumulative profits compared to a basket of gold stocks with equivalent combined market capitalisations. I know its still a little early to judge as many are hoping to get into production but IMO people are going to get burnt just like after iron ore prices boomed and busted and the uranium miner/explorer boom an bust before that. A lot of inexperienced investors are riding high on profits in this lithium bubble but for those that aren't nimble they are going to get a hard lesson on what a commodity market is. Same goes for the crypto currencies.

Agree that an extra shaft should help MML from an operational perspective as bottlenecking seemed to be a problem when I looked at them a while ago. Problem with MML for me is the jurisdiction. The Philippines is just not an investment destination I'm prepared to risk money on at the current time. Duterte is a loose cannon.

Interesting to see if 2018 will be a good year for gold investors. I've seen some nice green on my screen during the first few hours of trade this year. Let's hope that's a good omen for more to come.

Eshmun