Red River Resources Share Price Rises on First Gold Pour (ASX:RVR)
The first gold bar in more than 20 years has been poured at Red River Resources Ltd [ASX:RVR] after operations resumed three months ago.
However, the RVR share price has been shaky in response.
And at time of writing the RVR share price is up 2% to trade at 25.5 cents per share.
RVR shares have retraced a significant proportion of gains made last year in the lead up to the restart of the Hillgrove gold mine in NSW.
The RVR share price plunged at the end of January with the release of its December quarter results, with its financials failing to impress investors.
First gold proof of strategy
Today’s first gold pour at Hillgrove completes RVR’s commissioning of the gold plant.
The achievement marks what RVR is calling an important step forward in their strategy of building a multi-asset operating business focused on base and precious metals.
Managing Director Mel Palancian commented on the milestone:
‘The start of gold production at Hillgrove represents a material step in our strategy to build a multi-asset operating business focused on base and precious metals.
‘Red River completed the Hillgrove Gold Mine acquisition in August 2019 for A$4 million in RVR shares, and we decided that the best way to bring this project back into production through treating material from the Bakers Creek stockpile before resuming underground operations, with methodical permitting, refurbishment and upgrade activities to execute our strategy.
‘I look forward to updating the market as we increase gold production from the Bakers Creek Stockpile in Stage 1 before we move to the full restart of UG [underground] production in Stage 2, producing gold, gold concentrate and gold-antimony concentrate.’
Now the gold bars currently being produced at not of the same quality you might expect from gold ore being extracted from the ground.
REVEALED: What’s Next for Aussie Gold Stock Prices? Learn more.
The first bar weighed around 0.97kg and is graded 83% gold and 13% silver.
Not that that is necessarily a bad thing.
Where to next for the Red River share price?
With Hillgrove up and running, RVR has now become a diversified, multi-asset mining company.
Meaning the RVR share price is not as susceptible to changes in a single commodity price.
Which could mean we’ll see less volatility in the RVR share price.
RVR said it is continuing to ramp up activities at Hillgrove, with approximately 18,000 tonnes of Bakers Creek Stockpile having been mined and processed through the Hillgrove Plant.
And hopefully we’ll start to see revenue begin to generate from gold sales.
If you are looking to get into gold, one way to get exposure is to buy stocks like RVR. However, these types of stocks can be inherently risky. Another play is to buy physical gold. For a step-by-step guide on how to buy physical gold, you can check out Shae Russell’s ‘Best Way to Buy, Sell, and Store Gold’ here for free.
For The Daily Reckoning Australia