RSG always loses votes on 'colouring' their statements and definitions - one such example is with their definition of 'net debt' - they manage to deduct Mali receivables, gold bullion(stocks) and listed investments from their definition of net debt - most reputable companies such as AQG apply the proper meaning to net debt being interest bearing liabilities less cash. So if we apply the correct formula to net debt then RSG's position at 31Dec18 was US$107mil being drawn debt facility $US100mil plus Mali bank overdraft of 20billion CFA being US$35mil less cash of $A38.7mil being US$28mil - and we can probably assume that they have now drawn the extra $US50mil from the additional debt facility so net debt would now be US$157mil. If we are comparing to AQG then you say their net debt at 31Dec18 is $US205mil, although I have it at $US245mil being $US350mil drawn facility less cash $US105mil - I have no idea where you get $US205mil from.
Another example of RSG 'colouring' their statements is the fact that they never tell you in quarterly reports and presentations that they only have an 80% interest in Syama and a 90% interest in Tabakoroni whereas reputable companies such as AQG will spell out their interest in Copler at 80% in every published document so investors are fully informed. And of course, RSG is quoting figures in their reports for a 100% interest in the mine and without any footnote to tell you it's only 80% or 90% attributable - so when they say that Syama is a potential +300k oz/pa operation it is really only somewhere between +240k to +270k attributable to RSG. You would have to look deep into the Annual Report to get the facts - how many retail investors read them? But if you are interested it is on pg10 of the FY18 report.
So when you are working out FCF figures it is important to use the attributable percentage and also realise that there are other costs that do not appear in AISC such as corporate admin costs(that would be 100% attributable to RSG) and finance charges that are probably 80% attributable to RSG - the combined 100% cost of those two items in FY18 was over $18mil(pg 65 of A/R). Also important to know that the Mali corporate tax rate is 35% and although RSG enjoyed a tax holiday from 2012-16 that that is now long gone and so you should be incorporating the corporate tax rate into your FCF figures. As a matter of interest the corporate tax rate in Turkey is 22% and will drop to 20% in 2021 but AQG has received large tax incentives from the Turkey govt to build their Copler sulphide plant so will only be paying a cash tax rate of 5% this year.
Another area where RSG colours the landscape is in their Syama sulphide DFS - they haven't released the full report but have only cherry-picked sections to give to investors whereas AQG have released the whole DFS report to investors. It has to be said it is compulsory to do so in Canada but ASX/ASIC don't require it and leave it up to individual companies to decide the level of disclosure - no wonder we breed such a large army of cowboys in the Wild West.
I really don't get your comments about the amount of money AQG has spent to build-up ore stockpiles at Copler so they were ready to start feeding the new sulphide plant as soon as it was commissioned as it makes perfect sense to me. AQG had total stockpiles at 31Dec18 of $US86.9mil whereas RSG had total stockpiles of $A74.2mil at 30Jun18.
RSG Price at posting:
$1.03 Sentiment: None Disclosure: Not Held
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