Hi guys,For those who are not aware of this, RMS is cheap as...

Hi guys,

For those who are not aware of this, RMS is cheap as chips if you do the figures, and should be due for a nice re-rating imho.

Have a look at the following back of the envelope figures which will give you a fair idea how undervalued this company is.

shares on issue 292 M
MarketCap $455 M
Cash A$100M
Dividend payments yes
NO DEBT
production FY2011-2012 = 120,000 oz
(production forecast FY2012-2013 165,000-200,000 oz)
production cost wattledam around $330/0z

Production current FY2011-2012

120,000 oz at production cost A$330
current gold price A$1.700
profit after production cost A$164.4 M(but before tax ect)

Earnings per share before tax 71 cents!!

current MarketCap = $455 M
take off the cash =$355 M
profit before tax FY2011 $164.4M!!

this means that profit before tax of FY2011 is basically half the Market cap of the company!!!!

And that the earnings per share before tax will be A HEALTHY 71 CENTS PER SHARE


Production for the FY 2012-2013 will increase to 165,000 to 200,000 oz, with Mt Magnet coming into production.

According to JPMorgan the price of gold this year will increase to $2500/oz and the Bank of America has a target for $2000/oz

Looking at these rough figures you probably all understand what a bargain this company is, and imho a re-rating can come any time now.

good luck to all

jojo