RMS - Ramelius Resources

[rederob]

RMS still powering on and now about 100% up since December.

Looks like some funds worked out who was going to be added to the ASX 300 index last week and gave RMS a well deserved lift.
Similar thing happened with MGX.

 

[noirua]

Ramelius are now at $1.30 against 4c in 2014/5. Amazingly they could get back to the $2.00+ level at its height. If you invested $2,000 at 4c a share it would now be worth $65,000.

In 2011 there was a cash raising at $1.15 and the shares looked cheap. At 4c eventually they were also cheap. Highly volatile or what?

 

[noirua]

I finally gave way and sold about 70% of my Ramelius shares and hopefully left a fair profit to come for the next guy.

 

[rederob]

One of the problems with some gold equities is their level of hedging.
Below is the Ramelius Hedge Book Summary

Maturity Dates
(Qtr end) Ounces A$/Oz
Sep-19 41,750 $1,807
Dec-19 33,750 $1,802
Mar-20 33,200 $1,793
Jun-20 30,100 $1,822
Sep-20 30,100 $1,858
Dec-20 28,250 $1,872
Mar-21 17,000 $1,879
Jun-21 16,750 $1,875
Sep-21 10,000 $1,904
TOTAL 240,900 $1,834
​

With AUD POG nearer $2200/oz, and RMS knocking out over 200koz in the next 12 months we see RMS has locked in 179koz at almost $400/oz less than prevailing rates.
Assuming POG holds at or above US$1500oz over the coming years, then fy2021 will reap handsome rewards for RMS.
Until then it would be good to see if RMS can unwind some of its hedge book and sell into the improved market.

 

[rederob]

I thought RMS may have unwound its hedge book a little with POG rising.
Unfortunately we have this:
"At 31 December 2019, forward gold sales consisted of 239,150 ounces of gold at an average price of A$1,943/oz, covering the period to May 2022."
I have put a sell on my RMS today at $1.50 as I will look for another goldie that is not losing AU$400/oz over the next year.
Why they think they need to hedge in a bull market beggars belief.
They will say "prudent management" however it would have been prudent to wait until the hedges were largely unwound before booking more "losses."

 

[fergee]

I thought RMS may have unwound its hedge book a little with POG rising.
Unfortunately we have this:
"At 31 December 2019, forward gold sales consisted of 239,150 ounces of gold at an average price of A$1,943/oz, covering the period to May 2022."
I have put a sell on my RMS today at $1.50 as I will look for another goldie that is not losing AU$400/oz over the next year.
Why they think they need to hedge in a bull market beggars belief.
They will say "prudent management" however it would have been prudent to wait until the hedges were largely unwound before booking more "losses."

In saying that as long as they stick to their hedging strategy consistently over time when the POG goes down they will be better off than non hedging rivals making up for "lost profits" when the POG was going up.

Although the SP: POG beta(leverage) will not be as favourable to the company when POG is going up, it is more solidly managed as far as underlying asset risk is concerned (IMO) and does have a place in a gold stock portfolio as you will gain access to the hedging protection that they have.

GOR seems to hedge around 1/3 of their output which to me is a smatter hedging strategy in this market. I posted their current hedge book on the GOR thread recently if any one is interested.

 

[rederob]

Sold out of RMS today and tried a bit too late to get on to Aurelius (AMI).
RMS hedge book of 272koz at AU$2015 will continue to be a big drag (losing about AU$500/oz at today's POG of $2530), while AMI will close theirs out in a few months.
Given that RMS don't crank out 272koz in a year, I cannot see the point of stating on a "loser."
Aside from that RMS has put itself into a "safe" position to churn out reasonable profits over the next 5 years.

 

[explod]

RMS is a favourite I have followed for awhile. They have recently gained access to some promising gold ore and with the price of gold in my view about to increase further it's well worth a go for Aprils comp. The long term chart just shows the recent volatility which to me equals the fear and uncertainty in these times. Of course the Aussie gold price, currently around $2600 an ounce must transmit over to most gold stocks soon in my view.

 

[$20shoes]

I don't mind the possible setup here. A high volume bar on the 19th May, following an earlier gap up, put a halt to the upward trend and prices have moved sideways since. This occurred above a longer term resistance area around $1.40

There's been some obvious selling pressure - the last few days show closes well off their daily highs. So there's some distribution at these prices.
But yesterday's dip out of the consolidation area mostly closed the gap and on lowish volume. Even though you'd be caught in the consolidation area, an aggressive setup might have you go long at $1.72.
A more conservative setup might wait until price break $1.83

The Stochastics shows a very sharp drop in the short term Oscillator as opposed to a longer time frame Stochastic; so there may be some upward pressure on prices in the short term - whether it is enough to carry through the churn is difficult to say.

 

[Chronos-Plutus]

RMS is a favourite I have followed for awhile. They have recently gained access to some promising gold ore and with the price of gold in my view about to increase further it's well worth a go for Aprils comp. The long term chart just shows the recent volatility which to me equals the fear and uncertainty in these times. Of course the Aussie gold price, currently around $2600 an ounce must transmit over to most gold stocks soon in my view.

I have looked at all the gold producing stocks on the planet, but Newcrest have the best gold producing assets in my opinion. RMS have how many proven ounces of gold? At what AISC?

 

[explod]

I have looked at all the gold producing stocks on the planet, but Newcrest have the best gold producing assets in my opinion. RMS have how many proven ounces of gold? At what AISC?

Depends , investing long term with the dividends yes. I prefer to trade myself, takes a bit of research but I found NST a good one. In at $1.20 and out at $8.00 a few years back. Probably should have held but profit is profit..

 

[Chronos-Plutus]

Depends , investing long term with the dividends yes. I prefer to trade myself, takes a bit of research but I found NST a good one. In at $1.20 and out at $8.00 a few years back. Probably should have held but profit is profit..

NST was a beauty, I missed it though. EVN also is another great story.

I think NCM will have some decent capital growth over the coming years. The current share price doesn't reflect the assets in my opinion.

 

[finicky]

Pouring record gold and "very well positioned for the next stage of growth.”
Someone I follow on twitter said he counted selling at 1.76 as a rare instance of him getting out at the top - don't think so.

• Full June 2020 Quarter production now expected to exceed 80,000 ounces
(Previous Guidance was 65 - 70,000oz)

• Full FY2020 production Guidance upgraded to record 225 – 230,000 ounces (Previous Guidance 210 – 220,000oz)

Ramelius Managing Director, Mark Zeptner today said:

“We are obviously delighted by the operational performance in achieving records in both quarterly and annual gold production, particularly against the backdrop of COVID-19 and the additional administrative requirements the pandemic has necessitated.
We remain confident that Ramelius, with its high-performing team, excellent cash generation and enviable balance sheet, is very well positioned for the next stage of growth.”

Held
Sentiment: Hold. Buy in a broad market bust

 

[rederob]

Pouring record gold and "very well positioned for the next stage of growth.”
Someone I follow on twitter said he counted selling at 1.76 as a rare instance of him getting out at the top - don't think so.

• Full June 2020 Quarter production now expected to exceed 80,000 ounces
(Previous Guidance was 65 - 70,000oz)

• Full FY2020 production Guidance upgraded to record 225 – 230,000 ounces (Previous Guidance 210 – 220,000oz)

Ramelius Managing Director, Mark Zeptner today said:

“We are obviously delighted by the operational performance in achieving records in both quarterly and annual gold production, particularly against the backdrop of COVID-19 and the additional administrative requirements the pandemic has necessitated.
We remain confident that Ramelius, with its high-performing team, excellent cash generation and enviable balance sheet, is very well positioned for the next stage of growth.”

Held
Sentiment: Hold. Buy in a broad market bust

I sold RMS to buy EVN because in FY 2021 RMS has committed 128koz at average AUD$2002 into hedged sales. That's a conservatively estimated loss on hedges of AUD$65M (based on POG at AUD averaging over $2500, whereas it has already breached $2700 this year).
I am on the record here as a former long term holder of RMS and an advocate of its sound future. I just don't like companies that get hedging so badly wrong and cost their shareholders tens of millions in foregone profits.

 

[finicky]

Holders might be very glad of that overly conservative hedging in 6 months time. Depends how someone views the outlook for the general market and gold for a year or so. I'll be trimming stocks, including gold miners in the new financial year, but not RMS or RRL because of their hedges and additionally RMS because of its high production performance and growth prospects. I actually do think it is over priced on current and recent measures.

 

[rederob]

Holders might be very glad of that overly conservative hedging in 6 months time. Depends how someone views the outlook for the general market and gold for a year or so. I'll be trimming stocks, including gold miners in the new financial year, but not RMS or RRL because of their hedges and additionally RMS because of its high production performance and growth prospects. I actually do think it is over priced on current and recent measures.

Goldman Sachs just upped their gold forecasts for the next 6 and 12 months, having already been badly under on their 2020 predictions.
RMS and most other gold producers have a prosperous year ahead imho.

 

[noirua]

Ramelius Resources shares remain up 50 times at $2.28 from the 2014 low point of 4.5c. The leading gold mining stock in Australia. An investment of $25,000 in 2014 is now worth A$1.26 million. Ramelius Chart: http://www.advfn.com/p.php?pid=staticchart&s=ASX:RMS&p=9&t=27 Precious Metals: http://www.kitconet.com/images/sp_en_8.gif​

​

 

[finicky]

Profitability of RMS wildly up for December half.
ASIC up 2% but NPAT up 297%
Net cash and bullion is now at $213m with Mark Zeptner awake to opportunities ?

 

[finicky]

Best positive volume in 8 months for RMS today. Strong white candle, price up 13%! Cheap, lol

6 Months Daily

 

[finicky]

Out performing the other goldies again today. What the ... ?