Breaking $2.00, page-3

RRL has been under performing most of the gold stocks for the last month. Funds selling and a director selling doesn't help, particularly from a sentiment point of view.

I think it is at fair value now and there isn't a rush to buy. That's understandable since the short term production trend is sideways at best and the medium term growth options look fairly limited.

Short positions have unwound to 6.5% from a peak of over 10% at the start of the year. The squeeze that looked possible hasn't eventuated probably because of the shorts buying back a lot of stock from the funds exiting.

I think Regis management will consider the purchase of Barrick's Cowal gold mine in NSW. It is within the region of McPhillamy's deposit (~150km away) and Regis could see the potential to build a long term regional presence like they have in Duketon. The price is probably $200-300M which Regis could finance through a capital raising and debt funding. I guess it depends on how badly Barrick wants to sell. Regis is not exactly in a position of strength but they need to show growth to the market.

Regis has clearly been replaced as the top mid-tier gold stock by Northern Star and looks like a lot of institutional money is now going into Northern Star instead.