RRL has outperformed a number of arguably higher-quality gold miners. The miner is now debt-free and unhedged, which leverages it to a rising gold price though also makes it vulnerable to a steep pullback by the precious metal. With an All-In-Sustaining-Cost (AISC) of around $A2,400, there is plenty of margin for the miner, with the precious metal still trading well above $A5,100, after testing $A5,450 earlier this week. As we’ve said previously from a quality perspective, this is not our preferred miner, with the production profile shrinking as it increasingly becomes an underground miner. Still, its strong balance sheet leaves it excellently positioned to benefit from the next leg higher in gold.
- We like RRL into dips back to around $4 for leveraged exposure to gold.
MM is bullish on RRL medium term
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