hedge not only negative, seems mine life bigger drag on SP

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23/01/21

07:11

Post #: 50393237
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Originally posted by Wieman01: ↑

Smartdude, I am with you. My mantra has always been "it is what it is". But there is also another one "the market can stay crazy for longer than many persons can foresee". For most of the times this is true in a case that stocks are too expensive. Like now for example. Money creation around the globe and negative intrestrates makes sure than many people put their money at work in the equitymarkets. The POG in 2020 had a decent run, nothing to complain about. But taking into consideration the debtmountain (which will even grow a lot higher in 2021) and the increasing prices for a lot of the commodities (copper, soybeans etc) the performance of gold has not been that great (not to speak of the performance of Bitcoin). But anyway on december 17th 2019 I wrote an note on RRL where I came up with a valuation for RRL of around A$ 6 - 8. I just red the note again and found out that two important parameters in this valuation framework are even better than december 2019. The grossmargin is now around A$ 1150,- per OZ compared to A$ 975,- then and the cashposition is better (november 2020 A$ 210 mln vs A$ 150 mln in december 2019). So the price is where it is right now so you as an investor can do 3 things: stay put and you will see where it gets, you sell the stock because you are so diappointed in the performance of 2020 and the beginning of 2021, or (and that is what smart money needs to do) you buy some extra stock of RRL (if you financial position will let you ofcourse). I bought some extra for the following reasons: I think the dividend is secure and is extremely high for a goldminer (4%), the profit RRL will make in 2021 will be good, the balancesheet is conservative and the management is more aware of growing the business. The only factor which is negative is the hedgebook, but that is already the case for quite some time so that is not a new facor. For me it is clear that eventually RRL will gets its rerate to a fair value (6 - 8 A$). This is also true for a lot of other miners like RMS, NCM etc. The whole goldmining sector (including the US/Canadian miners) offers a lot of value when you believe in sustainable level for gold of around US$ 1800- 1900,- per OZ and possibly an increasing goldprice. I do.

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hedge not only negative, seems mine life bigger drag on SP

RRL Price at posting: $3.70 Sentiment: Buy Disclosure: Held
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(20min delay)
Last $1.88		Change 0.025(1.35%)		Mkt cap ! $1.416B

Open	High	Low	Value	Volume
$1.90	$1.92	$1.88	$7.330M	3.879M

Buyers (Bids)

No.	Vol.	Price($)
2	6800	$1.88

Sellers (Offers)

Price($)	Vol.	No.
$1.88	49002	2

View Market Depth

No.	Vol.	Price($)
2	6800	1.875
5	78420	1.870
3	32256	1.865
4	70043	1.860
2	21064	1.855

Price($)	Vol.	No.
1.885	11420	2
1.890	4892	1
1.895	57146	3
1.900	47780	5
1.905	4892	1

Last trade - 16.10pm 11/07/2024 (20 minute delay)

RRL (ASX) Chart

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hedge not only negative, seems mine life bigger drag on SP

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