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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 ?
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Worst case scenario-gold goes to $500. What will happen to RSG? Probably shut down.
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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.
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Originally Posted by Skol
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.
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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.
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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.
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Originally Posted by percy
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 Beagle; 17-05-2013 at 04:30 PM.
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Originally Posted by Roger
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.!!!
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Originally Posted by percy
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.
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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 07:32 PM.
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