Under valued, page-648

This looks like end of year tax loss selling by overseas investors, more than anything else - unless there is very serous concerns about a much lower AUD POG or that the Dudeton pits only have another 4.5 to 5.5 years of mine life and therefore in around 5 years or even earlier Duketon producers a lot less gold for higher all in costs (AIC) thereby squeezing profit margins.

While RRL is not a big loss for me at present (around 15%, $15k), I would be tempted to buy more shares if I believed the gold price had reached rock bottom or if I knew there was a lot more open pit ore going to be found in the next few years to extend Duketon's mine life to 10 years at the current production rate.

The other likely downer for RRL is that their cash balance has been dropping, resulting in net debt of around $90m at 30 June 2021. To make things worse their payables rose from about $75m to $150m in the 12 months to end June 2021, of which $38m is a payment due to be made this calendar year for the Tropicana purchase. Given the capex and exploration spend its possible that net debt may exceed $130m by end 2021. RRL is going to need more "growth" capex to access new pits and underground ore bodies, so its AIC is going to be fairly high. It annoyed me that the last quarterly report did not state their debt position to clearly highlight their financial position.

Due to hedging arrangements, RRL will continue to produce around 100k ounces of gold in each of the next three years with no return while they run down the ore in their Duketon pits - the blame for this rests with the previous management team.

So let hope the AUD POG heads off towards 2800-3000/ounce early next year.

At least things are not as desperate here as they are at RSG or SBM, for now.

GL fellow goldiebugs.

loki (its all a gamble, until you know the outcome from looking into the rear view mirror.)