Consensus community valuation
52 week high at $6.80 today (19 Apr). FOMO has finally arrived
MinRes making Onslow their flagship project with the progress video right at the beginning of the FY24 presentation.
Has been good for Red Hill, not so good for Develop. Unfortunately I hold less RHI than DVP so this has not been a perfect "hedge". Because I think Red Hill is "boring" even though "boring" can sometimes be "good".
And Joshua Pitt track record has been average till now (marketindex). I guess the saying "Every dog will have its day" applies here?
A few bits of info to take away for more valuation into the research as again I think I've undervalued this somewhat (see previous straw on Financials)
Stage 1 is 35 mtpa. How long to wait till Stage 2? How big will be Stage 2? 50mtpa? 75mtpa?
Map of the JV. Have to verify if there is more than just Red Hill in this royalty. Obviously more upside if there is.
[held DVP and RHI]
This is just simple back of the envelope stuff
Assuming that MinRes will stick with 35mtpa, I get the total royalty value just around $495m using NPV8
My last calculation used 16mtpa because I divided the 500mt reserve by 30 years which works out to be 16mtpa. So I inadvertently underpriced RHI by mistake.
Also the above assuming that MinRes will want to get a head start on Onslow as much as they can even if the reserve is less than 30 years..
The above calculation does not include dividends, expenditure spending on exploration and other projects. I've also not included any potential ramp up (say 35 to 50 mtpa) which will add more upside.
[held]
Giving the Iron ore majors (and the Iron ore price) a run for their money
Popped 10% today from 5.25 to 5.75 possibly on the back of recent updates on the Onslow project from Minires.
Markets obviously factoring high prob of $1.20 dividend (see previous straw).
I also added CZR here since the company is in discussions on joint development of infrastructure for the Pannawonica (RHI) and Robe Mesa Project (CZR) which will obviously benefit both parties.
CZR is top performer so far as they are currently in discussions to sell their interest in Robe Mesa Project for $102 million to Miracle Iron resources (subsidiary of Shenzhen Naao Jiangian Invest Co (SNIC))
Such a development would probably benefit RHI as well if this goes as planned although the market is still divided on the probability of this being successful and hence coming off recent highs
Very illiquid though so buyer beware (and why not added in Strawman as it is too difficult to trade)
[held RHI]
Interesting to see the dividend payments (marketindex)
28 October 21 was around the time RHI received their first 200m payment from the Minres sale
There is currently a 200m payment from Minres due in June 2024 if all goes to plan.
Strong probability that there will be another large dividend payment from this, possibly $1.20 per share and will also put pressure on the share price.
Would be better if RHI saved the money for an acquisition that delivers better potential returns rather than spending money on exploration of their tenements which have been fairly average of late.
[held]
Some recent exploration results below. Not enough to declare a gold discovery yet.
I though the news above would be a negative but due to the upcoming MinRes payments and royalties (see my previous financials straws), the share price has stubbornly held firm and dividends are still being paid (have received the most recent payment).
Would be good if RHI can use the cash to find another promising project instead.
[held]