Centro Thanks for waking me up to today's later announcements...

Centro

Thanks for waking me up to today's later announcements and for your kind comment.

I think it is self evident that they have delivered what they promised and are back on track. They have fully explained why their ASIC is somewhat higher this quarter than what I had expected (the need for additional waste stripping). The only disappointment is that gold production is a bit less than what many may have expected a year or two ago giving their 10mtpa milling capacity. But this is a reflection of the lower ore grade compared with what they were getting previously.

I like their dividend policy, aggressive exploration plans and share buyback (assuming they do not chase the share price up beyond say $1.50). At the current share price of $1.15 an annual dividend of 10 cents fully franked would result in pre-tax dividend yield of 12.3%, which would be close to twice what is available from bank shares, I think. Of course RRL is having to find new ore reserves to replace its ore depletion if it wants to maintain dividends longer term, and this may not be feasible at the current lower cost structure. At this stage one could assume they could continue to do so at the prevailing AUD POG for perhaps another 7 years, which is a long time in the life of goldiebugs.

If the market believes the forward ASIC of $1020/ounce and production level for FY2016 then I think we will see a positive response to the announcements as broker analysts give their seal of approval to a re-rating, perhaps resulting in a rise initially to $1.40-1.60 and higher later on.

It will be nice to collect some dividends.

loki