To start off, obviously the imprisonment of the CEO impairs the value of the share somewhat permanently, but that‘s why there was a discount in the first place.
The (based on what we know now) worst case doesn’t seem THAT bad: Mali government demands $160mm of which $55mm was already accounted for as tax provisions, so the „unexpected“ loss in the worst case is $105mm, which is just a bit less than the increase in net cash Q2-Q3 this year. Again, that is the current max demand, so if there is any kind of negotiation the amount can go down. There is NO indication that the government is looking to expropriate the mine.
Additionally Syama makes up „only“ a bit more than half of RSG gold production, so there is a valuation floor based on the Senegal and exploration assets. Obviously there might be more demands coming in the future and this will warrant an additional discount, but based on current information, the max bullish to max bearish HC sentiment swing seems to be a bit overdone.
RSG Price at posting:
40.3¢ Sentiment: Hold Disclosure: Held
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