Yes there are riskier jurisdictions, but how much of a premium can you attribute to these safer ounces? I agree with Rick Rule (a renowned and successful resource investor) when he says "I will take geopolitical risk over technical risk any day." Risk is also a function of price; If you overpay you 'risk' losing money. In light of this I would purchase RMS below 0.6c, however at these levels I would argue a lot of future catalysts are priced into its value; therefore it is wise to take at least some profits.
Lets juxtapose these two resource and reserve estimates: (this is only one company example)
RMS:
Add in reserves from Explaurum takeover.
Vs
I see dead money in the first at $600M MC. My argument is that RMS has risen 50% in 3 weeks on an index announcement. The company itself didn't double its resource ounces, their cash flow, or their profit in the last 3 weeks; so their ounces just got more expensive.
Where's The Pullback, page-88
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Last
$2.27 |
Change
-0.030(1.30%) |
Mkt cap ! $2.514B | |||
| Open | High | Low | Value | Volume |
| $2.27 | $2.29 | $2.22 | $7.884M | 3.493M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 3771 | $2.26 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $2.28 | 319256 | 8 |
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| Last trade - 16.10pm 27/09/2024 (20 minute delay) ? |
| RMS (ASX) Chart |