Is the Red River Resources’ Share Price Finally a Buy? (ASX:RVR)
The share price of small-capped mineral producer Red River Resources Ltd [ASX:RVR] may be signalling a buy.
The explorer/producer has managed to turn its share price around over the past few months.
Its latest push upwards comes today, thanks to some decent results in its quarterly activities report.
At the time of writing, the RVR share price is one-cent higher or 9.09%, to trade at 12 cents per share.
Though shares have made a negative return of 33.33% over the past 12 months since April, they have gained 130%.
We are now seeing the crossover ‘buy’ signal emerge in the charts.
A little producer that can
It was only a few weeks ago when we visited RVR and where its share price could be headed.
With its quarterly activities report out, I thought it a good idea to see how this little producer had been tracking.
Though results seem pleasing, there are a few things to unpack.
Both zinc and lead concentrate production fell significantly when compared to Q3 2019.
Lead production has been on a steady decline for the last five quarters.
Zinc production has shrunk significantly too.
However, copper production, as well as grade and recovery, improved on the quarter.
According to RVR this is because production transitioned from the West 45 to Far West site at its Thalanga mine in Northern Queensland.
Which reflects higher Far West copper grades.
The improving copper grades have set a record for quarterly copper production at 2,697 tonnes.
Despite shrinking zinc and lead production, an increase in copper comes at a fortuitous time.
Source: Trading Economics
The copper price has rebounded strongly since March.
Copper has almost 50% from its low to hit a two-year peak of $2.98.
A resurgent China along with supply disruption and global stimulus has help boost the rebound.
Accordingly, RVR’s copper sales have grown nicely throughout the last financial year.
But it is all about the gold?
To be honest, it can be a little difficult to tell where the interest in RVR stems from.
On one hand it has a decent mineral production operation that is producing in-demand copper.
On the other, it is producing some gold from historic tailings and has two gold producing mines in development.
With the price of gold hitting fresh highs, RVR has a lot going for it.
Like I mentioned in the last update, RVR are good at spotting opportunities.
During the quarter, as part of the ongoing development activities at the Liontown Project, the opportunity was taken to reclaim historical gold tailings.
Which produced saleable gold.
According to RVR, development at Liontown is coming along nicely.
The focus being on a combined open-pit and underground development with a conceptual mine life of 10-plus years.
The surrounding area is also highly prospective, according to RVR.
RVR’s NSW located Hillgrove gold mine is reportedly on track for a staged restart by the end of 2020.
A full restart is expected to be completed by 2021.
With the price of gold continuing upwards, we’re seeing more and more explorers seeking out opportunities outside of the typical gold regions of Australia. That’s why our resident gold expert Shae Russell has tipped Australia to become the next ‘gold epicentre’, meaning there could be big spikes in Aussie gold stock prices. If you want to learn more, download your free report here.
For The Daily Reckoning Australia