sharetrader
Page 1 of 2 12 LastLast
Results 1 to 15 of 21
  1. #1
    Advanced Member
    Join Date
    Jul 2010
    Posts
    2,117

    Default Resolute Mining - How Low will it go ?

    Third biggest established Gold miner in Australia. Projected production in the year ended 30 June 2013 450,000 ounces at a cash cost of $830.
    PE of 3.2 !! It was $1.80 in January 2013, now 73.5 cents.

    I know the Gold and Silver sector is having a crisis of confidence but this stock is being priced very harshly in my opinion but looking at the chart it looks like its a bit early to take a counter cylical view on this one yet. Significant holders appear to be trimming their positions.

    Will it be a speculative counter cyclical buy soon ?

    Any views you'd like to share on this stock ? Where do you think it will bottom out ?

  2. #2
    Banned
    Join Date
    Sep 2004
    Location
    , , .
    Posts
    3,408

    Default

    Worst case scenario-gold goes to $500. What will happen to RSG? Probably shut down.

  3. #3
    Senior Member
    Join Date
    May 2013
    Location
    Bay of Islands
    Posts
    889

    Default

    Yep cheap as chips like most goldies. Resolute have been the perennial under achiever in my book although they have improved in recent years by upping production & slowly reducing cash costs. The cash costs are still too high though particularly if you are operating in somewhere like Mali & I would like to see their cash costs average around $100/toz lower than the current $830. In saying all that with a market cap of just $520M they are very cheap I agree.

  4. #4
    Advanced Member
    Join Date
    Jul 2010
    Posts
    2,117

    Default

    Quote Originally Posted by Skol View Post
    Worst case scenario-gold goes to $500. What will happen to RSG? Probably shut down.
    One would think if the gold price heads much lower from here they will soon to forced into taking forward cover on the gold price, I understand they're presently unhedged.

    $A seems to have started a new downward trend which may be helpful in the medium term.

  5. #5
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    6,331

    Default

    RSG is the code.
    I learnt last night from KW that buying stocks in a down trend is the best way to throw your money away.
    Stay away until the trend changes.Going by the charts that is unlikely to happen any time soon.

  6. #6
    Senior Member
    Join Date
    May 2013
    Location
    Bay of Islands
    Posts
    889

    Default

    I doubt they will be quick to hedge as they paid something like $80M or might have been more to close out their hedge book about 2 years ago. So it would look pretty bad to go & reinstate hedging. If the miners start hedging, I'm with Skol & gold will go a lot lower, if they don't & have discipline then the cost of production will kick in & support gold.

  7. #7
    Advanced Member
    Join Date
    Jul 2010
    Posts
    2,117

    Default

    Quote Originally Posted by percy View Post
    RSG is the code.
    I learnt last night from KW that buying stocks in a down trend is the best way to throw your money away.
    Stay away until the trend changes.Going by the charts that is unlikely to happen any time soon.
    I hear you mate and won't buy until the chart says its clearly bottomed-out. I'd rather let others have the first 10-15% of a new upward trend in due course than catch what appears to be a falling knife at the moment. I've put it on my watch list though because history tell's me there's lot of money to be made if you get the timing right by buying out of favour companies with dirt cheap PE ratio's. I think waiting until the price has clearly intersected the 100 day moving average with a new uptrend is a nice simple tool that's useful with stocks like this. 100 day moving average is currently at $1.20 so I'm happy bide my time.
    Thanks for the warning. Fear and Greed, the two greatest motivators, Greed was starting to get the better of me
    Last edited by Roger; 17-05-2013 at 03:30 PM.

  8. #8
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    6,331

    Default

    Quote Originally Posted by Roger View Post
    I hear you mate and won't buy until the chart says its clearly bottomed-out. I'd rather let others have the first 10-15% of a new upward trend in due course than catch what appears to be a falling knife at the moment. I've put it on my watch list though because history tell's me there's lot of money to be made if you get the timing right by buying out of favour companies with dirt cheap PE ratio's. I think waiting until the price has clearly intersected the 100 day moving average with a new uptrend is a nice simple tool that's useful with stocks like this. 100 day moving average is currently at $1.20 so I'm happy bide my time.
    Thanks for the warning. Fear and Greed, the two greatest motivators, Greed was starting to get the better of me
    You are onto it.
    I should have known.!!!

  9. #9
    Advanced Member
    Join Date
    Jul 2010
    Posts
    2,117

    Default

    Quote Originally Posted by percy View Post
    You are onto it.
    I should have known.!!!
    Always good to bounce idea's around though and I am grateful for everyone's thoughts.
    Interesting to note on CNBC that George Soros and some of the other whales are bailing out of Gold and Silver. Could be quite a while till we see a new up-trend I reckon.

  10. #10
    Advanced Member
    Join Date
    Aug 2010
    Location
    Tauranga
    Posts
    1,753

    Default

    BDR , NST, MML, PGI i believe are the cheapest producers by far, worth putting them on ones watch list and doing ones RESEARCH for when a turnaround in Gold price/sentiment happens
    Last edited by Joshuatree; 19-05-2013 at 06:32 PM.

  11. #11
    Advanced Member
    Join Date
    Jul 2010
    Posts
    2,117

    Default

    Quote Originally Posted by Joshuatree View Post
    BDR , NST, MML, PGI i believe are the cheapest producers by far, worth putting them on ones watch list for when a turnaround in Gold price/sentiment happens
    Thanks for those tips, much appreciated

  12. #12
    Senior Member
    Join Date
    May 2013
    Location
    Bay of Islands
    Posts
    889

    Default

    Soros has been bailing out of gold but has gone long call options on junior miners... ;-)

  13. #13
    Senior Member
    Join Date
    May 2013
    Location
    Bay of Islands
    Posts
    889

    Default

    I updated my research on RSG & bought in. I dealt with these guys over a 15 year period. Very straight shooters, however were always constrained by an out of the money hedge book & also some difficult mines. Operationally they seem to be more on the boil & I like the fact they are buying distressed assets at very good prices. $340M MC with around 350k of production which is likely to increase in the future with the acquisitions they have made. Also have plenty of resources/reserves. RSG should be one of the better performers in my book on a rising gold price.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

  14. #14
    Senior Member Bobcat.'s Avatar
    Join Date
    Apr 2002
    Location
    NZ
    Posts
    1,225

    Default

    Yes Daytr, RSG has some appeal. I looked at this stock earlier (November) and got disinterested because of their AISC (~$1,200/oz AUD), high debt, and lack of hedging...but it's worth another look as the sp drfits to around 50c...since
    a) AISC forecasted to improve in 2014
    b) lack of hedging is less of a concern now given POG support is confirmed above $1200
    c) $28m CAPEX reductions on the Syama expansion project is freeing up working capital

    I'm watching the RSI (currently ~45) and anticipating an imminent bounce off somewhere between 51 and 53c. Trading to it.

    BC
    To foretell the future, one must first unlock the secrets of the past.

  15. #15
    Senior Member
    Join Date
    May 2013
    Location
    Bay of Islands
    Posts
    889

    Default

    BC, they have $95M of debt which isn't huge considering the amount of production they have. I also think their ASIC is forecast to be between $A1000 & A$1100 for 2014. So with a A$ POG over A$1400 should give them EBITDA of around A$120M!
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •