some fundamentals: gdo vs rms

As technicals has already been widely discussed I would to make a point in relation to the fundamentals of the GDO.

It is well known that very good production gold stocks with market capitalisation under $500mln usually are traded at the projective P/E ratio of 4-6. I consider that Ramelius (RMS) is one of the best gold stocks on the Australian market. At the same time it is worthwhile to compare some numbers related to the fundamentals of these 2 stocks:

RMS GDO
Shares on issue 291,208,795 807.29mln
Share price $1.43 $0.425
Market capitalisation $416mln $343mln
Production ~100,000oz 120,000oz
Total cash cost just under AU$500/oz US$686/oz
Generated profit at
the current gold prices ~$90mln ~$88.8mln

So the profit figures are almost the same, then it is clear that with the current share prices GDO is more undervalued than RMS with ~$0.5 share price for GDO would be more fair in the current market conditions.

irynka