RE:Rnxarh0070,
Have a few comments on your post:
- It's fair for you to have negative comments on the company if you have the facts to support what you say. For the case of Dumont, you may be right to say that RNX would not proceed with taking the mine to production, due to the fact that the required Capex is large, over 1.5B plus another 1B in 5 years (it does not matter if the B's are in US or Cad $, they are huge and would take more than the other deep pocket partner to fund it). After the deliberation period, it is likely that ARX would package it neatly and spin it off for other major to bring Dumont to production. Besides, Eric Sprott is not after a long-term project that would require a huge amount of capital foe many years to produce something like a 18% IRR. He is an impatient person who want to roll the dice for a 10-bagger.
- Royalty: In my opinion, the royalty, 2.5% for the Aus Gov and a total 7.5% for Maverix may ot be an eye-sore to ES. So, RNX would get 90% of the take instead of 100%. The 10% going to royal could easily compensated by an increase in the PoG (say by 10% to bring it to about USD1400/oz level). But, other factors would be a lot more important, e.g. the production cost. If the AISC is around USD $900/oz, then the profit @1300/oz would be 400/oz. Assuming a production of 100,000oz/yr, this would rake in 100,000 x 400 = $40M/yr. Profit of this order of magnitude (40M or 30M level) would support a lot exploration drilling, especially drilling in the deeper zone. This is where ES rolled his dice. He's hopeful (nothing is 100% guaranteed) that RNX would hit another Swan zone just like Fosterville. With higher grades than assumed, the AISC will remain the same but the additional ounces would go straight to profit (ES said the same thing when he gave the invited speech in Jekyll Island about 2 years ago). Link below if you are interested.
https://www.youtube.com/watch?v=h8SGctygo_k
Yes, we wait for the drill bits to speak.
- Share consolidation: If the SP is going up, nobody would care much about the OS. Eric has 47M shares or so = 10.3% OS. Why spend they effort trying to consolidate. If MS needs some more money he would know who to talk to. ES can afford double down his investment (just keeep it below 20%, for now).
GH11
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arh0070 wrote: It was a good article .Didnt mention the possibility of paid boosters on these bbs .It certainly happens .In response to a question .I have owned RNX off and on, I regard it as a trader stock not a long term hold .My posts generally confine themselves to known and verifiable facts which can be found with a little digging .rarely have the facts that I present been challenged other than to say that I am a basher .Sadly a lot of posters (mainly boosters) have no interest in facts .When a lot populate a bulletin board its generally a poor sign .By and large the best performing stocks are those with the fewest notes .
Personally cant see dumont going anywhere ,neither one of the owners have the financial resources to create a mine .Though its a big resource it would be years to permit and get a mine rolling and profitable . At the very best if a Major miner came along RNX might end up with a 10% free carried interest or possibly a royalty though there is a 1.75% royalty on it already .
I am actually quite surprised that Sprott invested in a company with a mine with a 7.5% royalty ,the royalty comes off the top .When the next financial report comes out look at the financials and see the impact the royalty has on profitability ..
Because of the huge royalty ,this is a major impediment to creating a viable and profitable mine .To believe that this mine has 20-40 million ounces of gold is frankly in the realms of total denial .It would make the beta hunt mine one of the largest in history .If you go back and look in the 2-3 years that rnx has had the beta hunt you will see quite a lot of drilling with decent mid range results .It was the discovery of the Father’s Day vein that created the excitement .Mining nickel from the mine was not especially profitable ,which is why the mine was up for sale prior to the Father’s Day vein find .
So we wait for the drill bit probably at. Least another 2-3 months before they have a decent set of cores analysed .
With 500 million shares out I suspect a reverse stock split will be in the cards in the not too distant future .