Patience will be rewarded - however it may take a while as I think RVR share price is currently in Limbo Land in the absence of further positive news from RVR or the a significant upward move upwards in zinc prices.
How long we are in Limbo Land I don't know my guess max 2-3 months - i.e what can change as we all know company announcements
- zinc off take agreement - could be any time now
- increase in reserves - LOM - probably next 1-3 months
- commissioning of mill - first run through of ore and zinc production - next 2-3 months (first trial run)
The above 3 I am very confident RVR can deliver well on
Or
- an increase in zinc price - we have bounced back from US$ 1.10 per lb to US$1.15 per lb but are still way short of the highs reach in late 4 Qtr 2016 in the US$1.30's - every US$1 increase in zinc prices drops straight to the bottom line assuming same zinc ore processed.
The big unknowns in my mind are
1) When does the drop in zinc inventories begin to impact significantly on zinc pricing - we are seeing a steady drop in LME and China market stock levels - The daily drop in LME stock levels seems to be increasing to around 1,500 to 2,000 tons per day and LME zinc stock should drop below 300,000 tons in the next 10 business days - the question is where is the "trigger point" for this to significantly increase zinc prices - i.e will it be when inventory drops below 300,000 or 200,000 or less
2) It looks to me like China inventory levels are "flashing red - warning LOW" however I have never been one to trust any numbers coming out of China - The other question is how much zinc is coming across the Chinese North Korean boarder as North Korea is one of the biggest producers of zinc
Plext can you please remind us what zinc price were RVR financial assumptions based on
Remember every US$1 increase in zinc prices drops straight to the bottom line assuming same content of zinc ore processed.
Lets see how patient we will have to be
RVR Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held