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As a higher cost indebted producer with previous production issues, this share has been battered down in price.
It is a heavily leveraged play on the price of gold. If they get production right - as they have done Q1 - and gold roofs it as much as expected (above $2000) this is going to make shareholders pots of cash.
DYOR, my position here is locked and loaded.
Many thanks for the flow of info, Monkshood. It's good to see the SP starting to move in the right direction.
This should start around 52p, a good step up.
As always a prompt and comprehensive reply from the CEO when I raised this issue. Essentially, as expected, the devaluation of the A$ and the lower share price from the placing necessitated the increased share offer to Toro. It was pointed out that with the higher price of gold the royalty has already been worth US$2.5 to rsg.
Re - oxide grades, they are expected to be similar to those processed in in the first quarter for the rest of the year.
Whilst it is probably good that Toro have taken shares rather than cash for the royalty the dilution is greater than was proposed at the anouncment of the EGM in Jan (28th) and voted on in Feb (27th)
Today - 'Resolute has completed the acquisition of the Mako Royalty through the issue 23,000,000 shares at a price of A$0.845 per share.'
From - Jan 28th 'Resolute has now negotiated the opportunity to acquire the Royalty from the Royalty Holders for the agreed termination sum of US$12 million to be paid to Taurus Mining Finance Fund L.P. or its nominee/s (TMFF). The Royalty Holders may elect to have the purchase price paid either in cash, or subject to Shareholder approval of Resolution 7, by the issue of 15,750,000 Shares to TMFF at an issue price of $1.10 per Share, being the same Issue Price as the Company's Equity Raising the subject of Resolutions 1-6.'
The update was as expected, most were expecting 20 k oz at Ravenswood this quarter (but this was already flagged as 10k when the sale announcement was made last week). Recoveries at Syama shulphide are low at 75% (they had reached the expected 85% previously). My concern is the quality of the stockpiled mined ore -sulphides are OK @2.5 but the oxides (1.3) at Syama and Mako are significant lower than the ore processed for this quarter.
You will not get a short squeeze on this, shorts often account for 10-25% of the daily trades on the asx and control the price. I having been trying to work out if it is entirely about the company/POG or if they are taking advantage of the dual listing as well.
If POG stays high(ish) and rsg hit the next questers production with no issues then we may finally see the back of them, it may be earlier if they sell Bibiani to reduce the debt further.
Shorts running at about 6%. https://www.shortman.com.au/stock?q=RSG
Wouldn't it be unfortunate if there was a short squeeze here.
Good results IMO, they are on target (with a bit of leeway actually) for their annual production target.
Debt circa $250m as of 31st March - not clear if this includes the initial proceeds from the Ravenswood sale (A$ 50m). Quarterly financial is due later this month which should clarify things. It is still not clear what is happening with Bibiani, which if sold, would reduce debt further.
certainly feel left behind here.
As an ex TORO holder, 30/40 per cent of the costs of Mako is diesel, I think 25 million euros a year. So massive fuel savings going forward.
Should get a quick rerating to 50 pence I am hoping.
Can anyone tell me the current debt, sorry if I'm being lazy .Good luck to all,
Sounds like a good RNS here, surprised there is not much interest in this goldie. Maybe the news will filter through this week.
Given the likely trajectory of the price of gold, this share price will seem very cheap in six month's time.
Basically all going very well with no impact from Covid .
And to keep things in perspective-
'The company has poured gold continuously for more than a decade during which time our team has faced various supply chain and security challenges including the 2012 coup d'État and the 2014-2015 Ebola epidemic'
I make today's RNS really good news. The required refinancing of the debt was always the single biggest risk factor here, and now it's settled. And on good terms as well. The banks must have confidence that operations at Syama (in particular) have improved.
The next news here should be the formal completion of the Ravenswood deal. I think it will still go through, but I'm not 100% confident, given the state of the markets.
If this company is truly back on track, then its shares are amazingly cheap.
From the report ' flexibility for the funding of future growth initiatives' - Does this mean underground at Tabakoroni or developing Bibiani??
As expected, it is clear why JW timed his purchases when he did. Expect the March quater trading update to give this a further boost.
It would be nice to get back to break-even on one share in my portfolio! If only the POG doesn't collapse by everyone having to sell to cover losses elsewhere...
Up nearly 19% last night to 36-37p , hopefully JW's buys have put a floor under the sp. and the re-rate is underway.
He probably remembers making all of those contracts....
Resolute adds to US$ gold hedge book
30,000 ounces forward sold at average price of US$1,670 per ounce
Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG) advises that the Company has forward sold 30,000 ounces of gold at an average price of US$1,670 per ounce
Yes, if JW, the CEO, buys in ion the open market it does indicate that there are no issues with debt refinancing/Ravenswood sale/ production.
He sold out his holding at the top last year so it seems he is interested in making money rather than a statement!
At least one director thinks as I do and puts his money where his mouth is.
Like Monkshead, I had this as a hedge against oilers but it hasn't worked -yet. I think if there had been any problems with production we would have to have seen an announcement, therefore I believe it is safe to assume all is well. In that case, we will trade our way out of the present situation and re-rate. The state the market is in, anything can happen but I'm reasonably confident of a considerable up-lift by the end of 2020.
cheers monk , what i was getting at is the downward pressure on the sp . i have similar thoughts to tiger but my post was poorly worded to be fair.
Not sure if it is a symptom or the reason, this is being very heavily controlled by short positions on the asx.
For the past week nearly 1/4 of all trades have been shorts (often -5-6M p.d). The net short positions has not changed too much so far although did tick up a bit today, (note- there is a lag in reported net verse daily gross positions). Overall net shorts have reduced from mid Feb highs of 11 to 6% now , this is with daily shorts around 10-15% traded vol.
The problem with so much shorting is that they damp any rises and enhance any falls. They will also leap on any negative news to push it lower. For a share like this there will never be a short squeeze as they can control it too tightly - especially in the current market.
The question is - do they know something new or are they continuing to take advantage of their short positions, originally built up since last September and encompassing the roaster shut down and the placing?
Tiger has pointed out some possible issues - others could be Jurisdiction (more British troops sent to the North of Mali last week), supply disruptions (not sure what they may be but last week Barrick said they were taking measures to ensure theirs), the unexpected tax bill and longer term, the potential cost of going underground at Tabakoroni .
I was hoping that RSG would be a bit of a hedge against a market fall but it has been my worst performer (reminder to self to use a gold eft next time..).
Production wise it was going well for the first two months of the quarter so I doubt this is the issue, I also do not think that one quarter of good results will be enough to fully rerate the shares - two good quarters will be a minimum. If production has no glitches and POG holds up then eventually the shorts will exit and there should be a big rerate.
I can think of a few reasons for the SP drop, but I'm just not sure which is the right one!
It could be:
The ASX has a down on gold miners in general at the moment (see Newcrest's SP). Some of the selling could be forced liquidation due to general market woes. The market (always bipolar) has overdone its reaction to last year's production problems.
Any of these reasons would mean RSG is a good buy at this price.
Or it could be:
The market has inside info that production is not going well at Syama and Mako. It is worried that the Ravenswood sale will not complete. And, above all, it is worried that Resolute won't be able to roll over their current debt, which matures soon.
All of these reasons would mean that there is more trouble to come.