Originallypostedbyneedle
Sellingjustpriortothequarterlyisbeingdoneforareason,Ithink.Sizeableoffscreenssellstakingoutloadedtoplayers.....solikelytobeafund.Ihaveheardsomeofthesesfundiesaskingirrelevantnonsensicalquestionsduringthe3monthcalls.(AlthoughIhavebeendoingthisstufffor20yearsandthathelps,whereexperienceisnosubstitute)
SonotsurprisingthatoneortwomayhavetakenfreightattheONEOFFendofcalendaryear$4.7mroyaltiesandinsurance.Wewillgetrevenuesofabout$22mlastquarter,buttheseannualexpensesareafactoflife.Accordinglyitwillbeaslightlynegativecashflowagain.Refertopage20oftheSeptquarterActivitiesandCashflow&youwillseeforyourself.
Noconspiracyhere...justsomebodyworriedatanotherbreakevenornegativequarter.Havingsaidthat...itisveryunusualthecompanyhasdecidedtoreportcashandEBITAeachquarter.Itisnotnecessaryanddifferenttoalmostallothersmallcaps.Justlookathowwelltheyaredoinginrampingupproductionandincreasingminelife.Thatwasagreatresultlastquarter,consideringthemineclosedfor5daysduringthe1/4......veryencouragingexceptunlikeothercompanies,allfocuswillbeoncashsituation,whentheyreportinafewdays.
ItisfairenoughthatCAPEXisinvolvedinnewminingdevelopment,whichmeansNPATaftertaxwouldbeabout$10mforthecalendaryear.Verysolid,verygoodconsideringproductionisabouttoalmostdouble.....butwithRVRwhowillcareaboutNPATwhencashpositionisthefocuseverythreemonths.
Iwillputoutsomemoreovertheweekend.
That selling on Friday and the generally low market cap....I think has come about through misunderstanding, unusual reporting by the company and just confusion at what is happening here.
I mention low market cap - sounds like a typical shareholder comment, which could be proven to be correct, or just as equally wrong. Lets just say before moving on....the cost of building the mill would be $180m v their EV of $60m. So on that basis alone maybe my "generalisation" is indeed correct.
Even the seller on Friday would agree, the company will generate gross revenues of $130m this calendrer year. No doubt about that - no need to further elaborate. So WHY on earth would they be selling when now 12 month forward revenues exceed their cap by double. No mining company ever has been in this situation....do a check for yourself, you will see gross revenues v cap probably more like 1 to 2.5. Certainly nothing like we have here with RVR.
NOTE also official Net Profit for Half Year 17 on revenues of $17.739m was $6.067m.....hello $130m gross revenues this calendar year.
So maybe we have high debt NO....maybe our cost of production margin is tight - @ US$0.70 per pound of payable metal, than that is another NO.
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As alluded to in the previous post, the company report their cash position, quarter on quarter, on Page 1 under the heading "Corporate" . Like everybody else, I will go straight to Corporate to see their cash position. Investors with RVR has now been conditioned to "CASH" results, quarter on quarter, as the key driver for that past quarter. I think because of these annual once only royalties and insurance, we will see another small cash drawdown on Tuesday or Wednesday, when they report, despite great production results. Thus the selling Friday. It is a misunderstanding of the worth of this company.
It actual fact they are developing a mine, which would have a NPV of $80m...what a shame here, whereby cash is considered any measure as to how successful that quarter was.....given $80 m underground mines must incur capex and infill drilling exploration.
In fact, according to the company in the Sept quarter the company $1.9m was spent on capex and 1.7m exploration. Strip these one off type expenses out and annualised, that increases their cash for almost $8m.....but who understands or considers that, not the sellers that is for use.
I will drop a note to the company this weekend and present a copy on the chatline, to further explain. The way they report is hurting the company.
