RRL -3.29%: Hosted its first exploration update today and they’ve committed to doing these twice a year to improve communication with the market, the crux of it being they don’t think investors fully understand what they are sitting on. In any case, these updates will provide good insight into RRL’s exploration progress which is important. Exploration increases reserves, more reserves = more cash flow and importantly, longevity in cash flow which over time will increase the net present value (NPV) of their asset base – all of this should be reflected in an increasing share price all things being equal. The key takeaway for us from today’s update is that RRL’s WA operations are likely to have much longer mine lives than currently suggested by reserves and that will be a positive for share price over time.
MM views RRL as deep value amongst the gold stocks
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