RE: DRC Payment???4 Mar 2024 14:28
As I said non-shareholder who sold out a couple of weeks ago on the basis that there would be an immediate placing and he could back in cheaper. Since then, practically non-stop deramping to get that lower buy back in price.
Since you want me to pick holes and I am good at it. Who said lucrative? What the gold price being higher is about, is marginality.
Gold production is a largely fixed cost activity: a well know feature of the listed gold company investment market is the marginal cost of production. If your marginal cost of production is $1.200 an oz and the price is $1,300 then it probably isn't worth producing. If the price moves to $2,000 then there is $700 an oz margin to be had and therefore worth producing. A big chunk of the marginal cost of production function is grade. Lower grade miners with a high marginal cost of production go from being unprofitable over night when the gold price rises. This is all about a DCF in the first case where the margin is zero or minimal and in the second case high profitability.
This has a number of effects: the high marginal cost producers are suddenly valued more highly, M&A activity picks up, financing for operations becomes easier and the retail investors start paying attention. But mainly, gold in the ground becomes more highly valued, partly because it becomes more likely it will be developed.
All that means is that suddenly RRR will have more people wanting to get their sweaty mitts on its gold assets. RRR has already confirmed it has signed NDAs in respect of its CDI gold assets.
But obviously, this like teaching my granny to suck eggs, what you with you being an expert on investment analysis. I realise you probably already know all of this and are just pretending to not understand because, you know that lower buy back in price ain't going to work without some help.
And since we are talking gold price: it is currently $2,097.75 but again you know this don't you? Gold was $1,925 6 months ago. That is a change of $200.
DYOR
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