I agree there is HUGE potential in this and I don't hold any shares in RRS.
I doubt the SP will rally strongly though - they are going to borrow $US1m on 20/10 to pay the starting fee , then they need another $US1m on completion (This accounts for approx $A2.5m of the A$3.5m being raised - then they need $US3.4m spread over the next 18 months AND $US500k on a farmin AND $US5m in spend over the next 4 years. The last 2 would no doubt come from the farminee but there is still $US3.4m over 18 months to raise and not much money to spend on Peru.
I hope you guys know your management - it is a good sign that they could sign up this deal in the first place but they are going to have to be really good to get the farmin $$$ coming thick and fast to be able to fund this.
I hate deals where the middle man is not clearly identified - who is 'Consort' and why do they get 49.9% free carried? If it is corrupt local govt officials you can bet there will be civil unrest again within the next couple of years - If it is Western world business partners then the only reason they would have chosen RRS is because it was the best deal they got - that doesn't mean it is bad for RRS - it just might not be as good as we think. There are a few 'bribe' looking issues in the 3B for introductions as well.
Hopfully Consort is the stage govts interest for the people and all the $$ it makes going into roads, schools and hospitals . . . . . was that a pig that just flew past my window ????
RRS Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
