THERE has been much discussion about what gold's rebound to more than $US1600 an ounce means for the the shell-shocked local market in gold equities.
Gold equities remain down a thumping 35 per cent on their level of a year ago and there is a feeling that the raid on bank accounts in Cyprus might just be the tonic needed to convince investors it is time to stock up on some gold equities as a hedge against what might come from Europe's ongoing debt nightmares. Given the shell-shocked nature of local equities, it should be a case of easy pickings. But braver folk are going a step further and starting to dabble in gold stocks with Indonesian exposure.
As a sub-group of the ASX, they have been smashed something shocking thanks to the on-going saga at Intrepid Mines. It was done over last year by counterparties after spending $100m or so on its Tujuh Bukit gold-copper project. Tough for Intrepid, but even tougher for the other Indonesian players that don't have the same counterparty risk that befell Intrepid.
Robust Resources (ROL) is one such company. Its share price has been anything but robust in the past 12 months, tumbling more than 70 per cent to the 34c seen yesterday. There is a general gold equities sell-off component in that share-price dive, but it is mostly the dumping of anything with an Indonesian flavour on the ASX post the Intrepid saga.
It is a source of frustration to Robust chief executive Gary Lewis. As he said last week, subtract Robust's $25m cash from its $30m market cap and the company is basically being valued at the cost of a Kirribilli apartment.
For its current enterprise value of some $5m, Robust comes with its 1.18 million-ounce gold equivalent project on remote Romang island, also home to a potential low-cost, early-cashflow manganese opportunity.
The plan is to get in to production inside 18 months, initially from the Lakuwahi (oxide) gold project. None of that would be interesting if not for Robust having what Intrepid lacked -- clean and clear tenement status.
More than that, Robust has aligned its interests in Indonesia with the country's fourth-richest businessman and global noodle king, Anthony Salim. Salim owns 19.8 per cent of Robust and 22.5 per cent of the Romang island projects.
ROL Price at posting:
34.0¢ Sentiment: Buy Disclosure: Held
