Opinion on Regis Resources (RRL)
Hi MM, What’s your opinion on RRL - why does it appear to be trading so cheaply? Thank you, Peter W.
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Answer
Hi Peter,
Regis (RRL) has endured an extremely tough time post COVID, like many in the Gold Sector although their poor operational performance has made RRL’s journey a more difficult one.
RRL is now unhedged which offers significant earnings leverage to higher short-term A$ gold prices. However, there remains risks around: the short-medium term production profile from Duketon, timing and execution of the McPhillamys project given the higher-than-expected capex estimate of ~A$1bn.
As gold bulls we like the risk/reward on offer by RRL under $1.80 but as a high Beta play investors need to be prepared for ongoing volatility in both directions. We still prefer EVN.
