Goldminers still need to appreciate in price, to reflect the current goldprice and RSG is no different.
They are going to produce 400,000 oz, and with a gold price of around US$1900 they will be making approx $400 million, if you take out the production cost.
With the current Mcap of $800 Million you can see that RSG is NOT overvalued imho.
Looking at the current gold price RSG will get $500 more per oz then their average price sold last FY at $1,337/oz.
That is $500 per oz increase, will be on a higher production forecast of around the 400,000 oz per year and lower production cost.(compared with 330,000 oz last FY)
Oil is getting cheaper which will also have big positive influence on the production cost.
And with the current debt problems which will NOT go away, we can expect GOLD to say strong and probably going higher given time.
Yesterdays announcement of good drilling results at Ravenswood will also sink in during the weekend.
So imho SRG is not overvalued at all and could easily double in price from here, if the high goldprice stays with us, and given enough time.
jojo
RSG Price at posting:
$1.78 Sentiment: LT Buy Disclosure: Held
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