Resolute Mining (RSG) 0.63c – MM are buying in the Emerging Companies Portfolio

We have increased gold exposure in the Flagship Growth Portfolio but have yet to add to the Emerging Companies. There are a number of small/mid cap gold miners on the ASX but plenty of them aren’t yet producing – not so much a requirement to be in the portfolio, but it certainly helps. Resolute Mining (RSG) is a producing miner with 395koz throughput in 2020 with an cost (AISC) of $1,074/oz – a pretty handy margin to the current spot price. Shares have more than halved since the middle of last year, with a lot to do with a) their balance sheet, & b) a tax issue. We see value around here with the stock trading at nearly 4 year lows. The year ahead will see deleveraging of the balance sheet, lower costs as operating conditions improve & a clever hedging book reducing risk. The tax issue continues to be disputed however any outcome here will likely see a relief rally given the company is well provisioned for an adverse outcome.