Rye Patch Gold RPMGD

RE:RE:PI Financial: Buy rating and $0.55 target price for RPM

[Looking4Doubles]

PL Financial's report/assessment is much more credible than Macquarie's guidance has been, although I am still not buying into their price target. (Think it's way too aggressive !)  I would say maybe $.26-.30 (US) by the end of 2018, or about 32-38 (CAN)

In the end, both are drinking too much kool-aid, and not doing the detailed analysis they should be doing.

I have known for some time, that the annual numbers and commercial production wouldn't happen, just from the slippage in schedules and the on-going operational issues (I have an extensive background in operational planning, logistics and proj mgmt.)

The issues now are quality improvement efforts and cash flow/availability. (ie can they permanently resolve each issue with short-term and long-term chgs on issues they didn't anticipate or will they resurface in the future?)  Band-aids normally cost you in the short -term & the long-term solutions are needed to get your margins back.

What we know:

1.) They are NOT executing well and are repeatedly revising their operating plans. (not a confidence builder)
2.) They have equipment maintenance issues, which are a drag on production and productivity. (watch the availability numbers carefully as no new trucks/equipment arrives until most likely Dec.
3.) They are now burning through cash to fix things they neither anticipated nor planned for (should have had a contingency plan and a fully funded budget for short-falls which were inevitable)
4.) They need commercial production volumes to be profitable
5.) They have a new Mine Mgr, so they have FINALLY acknowledged what I have been saying for awhile (operationally they had planning, communication, logistical and credibility issues)  They originally said they would be at commercial production levels in Jan 2017
6.) They are still sugar-coating the updates and continue to backtrack on prior comments and plans

What we don't know:

1.) How fast they are burning through their cash. Any published number I've seen refers to the 2nd qtr and a lot has happened since then (leach pad chgs, truck issues, over-liner issues)  Each of these are setbacks to production & profitability levels they need and adds to all of their costs (impacting margins, expenses, etc..)
2.) Is the new mine mgr having any positive impact yet. (I originally estimated it would take at least 6 months for substantial change)
3.) Will the size of the operational loss increase or decrease in the 3rd qtr report?  If the former, you can't assume things are finally improving.

Conclusion: I have seen enough to know that they will eventually get to commercial production levels (1st Qtr/2nd  Qtr /2018?), but just don't know how profitable they will be when they get there (still may need more money/dillution).  Hence the reason I continue to wait on my re-investment in Rye until there is more clarity.