I have been a shareholder of RSG for 4.5 years and I rode the...

I have been a shareholder of RSG for 4.5 years and I rode the upwave and then the halfway downwave. I have also experienced quite a lot of disappointment since November 2016 when they raised $70m capital and embarked on the Syama and Ravenswood mines expansion scheme. For the next 2 years and 2 months, there has been much hopes built up only to be somewhat disappointed. However, I can see where this whole scheme is going and I think what is important is to take the following points and think about it:

- The company is still producing above 250koz p.a. and is comfortably a mid-tier. The current valuation using the enterprise value is around $3 500/oz production after adjusting for AISC. This is in the upper end of the range for mid-tiers. The company is fairly valued right now in its current state.

- Substantial cash has been expended to expand the underground operations for Syama, having been an open-pit mine up till recently. Some $200m cash has been spent (around that I think). Look at Dacian gold, they spent $200m to get their Mount Morgan mine to begin production and they only just announced commercial production. How long did they take to get this going and what is their market capitalisation? $570m?

- John Wellborn has been a buyer of his stocks, even though suspicions were raised about the whereabouts of his holdings at one stage. However, he has been eating his cooking. He has been in an unenviable position of having taken up the reins as the company is moving onto the next stage of expansion. I am not cheering for him completely, but I think he has steered the ship pretty well thus far.

- The company has a healthy cash and bullion reserves of over $100m, plus another $100m or so of gold in circuit to support its $173m debt. The company is hardly going to go into administration. In fact, St Barbara (which has been mentioned a couple of times before in this thread) had $400m in debt supported by $70m in cash at around late 2014. Where are they now?

- The possible sale of the Ravenswood mine may seem to shoot a hole in John Wellborn's ship making its voyage towards 500koz p.a. by 2022. However, Ravenswood is still able to ring up the cash register and provide them with sufficient cash balance to expand their Syama mine, potentially start up Bibiani or make other opportunistic mine purchases. Ravenswood is worth something. Consider how St Barbara fared after giving up the Gold Ridge mine in early 2015. But the Gold Ridge mine was a real disaster and cash burner compared to Ravenswood. So, is it not a good idea sometimes to take one step back to take two steps forward?

Many investors here have been seeing with much frustration how Northern Star, Evolution, St Barbara, Regis and Saracen rise sharply alongside Resolute from 2014-2016, and then Resolute was left in the dust afterwards. Yes, I am in that position too. I sold my holdings on NST SBM and RRL (didn't hold EVN or SAR) in 2016/2017 and then watched them soar. But that is not justification to go rip JW a new navel. No one ever owes us anything when we make an investment unless we lent cash to them. You take the risk, you bear it.

And as things start to look like the expansion project is getting on track, either be patient for one more quarter, or just hop off. I know what I am doing. Call it sunk cost, but I personally am willing to take the gamble.