RVR Market Valuation, page-9

I've been crunching the numbers to make sure I'm not crazy; seeing a falling SP set against improving fundamentals and what seems likely to be a very positive quarterly report due out between Tuesday and Thursday next week.

Firstly the chart. Annualised revenue (updated daily) vs share price:



You see a widening gap between the two lines, particularly notable over the past week. The last time RVR was fundamentally this strong was 29/10/18, when the SP was 18.5c. Another way of looking at is since the fundamental low on 16/08/18, annualised revenue has improved 12.7% (incl. AUD zinc price up 17.7%) while the SP has fallen 28.6%.

Next the recent production update. Plugging in average quarterly spot prices against the concentrate production figures reported earlier this month, you get sales revenue of A$23.1m, after allowing for 85% payability (how much of the spot price RVR receives).

Using the same same formula against the September quarter production figures, you get A$18.8m. RVR produced a combined 9964t of concentrate that quarter, but only sold 8900t, or 89.3% of production. The company later reported revenue for September qtr of A$16.7m.

$18.8m * 89.3% = $16.8m. Pretty darn close.

To sum it up, assuming RVR sells 89.3% of its production this quarter - and bearing in mind they sold 98.7% of production in June qtr and 109.1% in March qtr - then they're on track for December quarter revenue of A$20.6m, or a 22.3% improvement on the previous quarter.

With development of Far West due to be completed this quarter (estimated $3.7m cost for Dec qtr) and production to commence immediately after, ramping up to nameplate capacity of 650kpta throughput (currently 325kpta); and with A$17.5m in the bank at last report, no debt, an untapped $10m funding capacity and offtake agreements with 2 of the world's largest commodity traders - Trafigura and Glencore - there's no sound fundamental reason for the share price to be where it currently is.

Here's hoping for a greatly improved valuation after next week's quarterly report.