Red River Resources Limited (ASX:RVR) wrote $21.1 million in receipts from customers during the September quarter, with $20.9 million of the revenue being from concentrate sales.
This helped the company achieve a $3 million EBITDA from its Thalanga operations in Queensland for the quarter.
Red Rivers zinc concentrate production figure was 6,199 dry metric tonnes (DMT) in the period, while lead concentration production was 2,016 DMT and copper concentrate production was 1,372 DMT.
Canaccord Genuity and Hartleys have maintained their speculative buy rating for Red River with a target price of 35 cents per share and 39 cents per share respectively.
Canaccord Genuity
FY20 Outlook:
Stoped ore is expected to contribute ~70% of mined feed from Far West, benefitting from multiple mining fronts that have been developed (1,363m of decline completed) in advance of first production.
We expect copper grade to materially lift vs West 45 (1.6% vs 0.6% Cu) and grade to ramp by MarQ20 towards reserve grade (1.4Mt at 1.3% Cu+1.6% Pb+5% Zn for 12% ZnEq), with RVR expected to employ grade control measures (sludge drilling, increased sampling) to be more predictive on short-term planning.
With mining method (LHS) leading to a similar productivity (~400ktpa) and cost profile (~A$70/t mined) as West 45, grade presents as the key lever, with infill and extensional drilling also expected ahead of an updated resource estimate.
Valuation and view: We have rolled our model forward for SepQ19 and made slight adjustments to the Far West ramp-up over FY20 to our Thalanga (NPV8%) valuation. With recent sentiment improving in the zinc market (TC/RCs peaked, Glencore guidance -85kt over CY19), we view RVR's current trading multiple (P/NAV 0.5, 3x FY20 EV/ EBITDA) as undemanding and retain our SPEC BUY rating and A$0.35/share PT.
Hartleys
Model updated for Thalanga production guide: Spec Buy
We have updated our Thalanga model ofRead More – Source
