Where is the Red River Share Price Heading? (ASX:RVR)

Where is the Red River Share Price Heading? (ASX:RVR)

The Red River Resources Ltd’s [ASX:RVR] share price has accelerated its ascent today thanks to record copper production.

While we usually cover gold focused stocks at The Daily Reckoning Australia, RVR caught my eye.

The company is involved in gold exploration among other minerals and even produced gold last quarter.

Its stock price has showed some strong upwards momentum in the past few months, so I thought it would be worth discussing.

At time of writing, RVR is up 7.53% to trade at 10 cents per share.

Since hitting its 52-week low in March, RVR has bounced back by 130%.

Why have investors changed their minds?

ASX RVR Share Price Chart - Red River Resources

Source: Tradingview

Has Red River gone unnoticed?

RVR is a small fry in comparison to some of the other copper and gold producers listed on the ASX.

So, you can’t expect its share price to compete with these larger producers.

But RVR is an interesting stock because of its price.

At 10 cents per share you could purchase a company that already produces copper, lead, zinc, and owns a gold exploration project.

You don’t often see a gold exploration company that has the means to generate cash flow.

That could be the kicker.

Downward momentum had a grip on RVR’s share price until it seemed likely the company could restart its gold production at Hillgrove in NSW.

Potential gold producer

In its quarterly production update released the morning, RVR highlighted its record production output.

The company produced 4,544 tonnes of zinc concentrate, 1,133 tonnes lead concentrate, and a record 2,697 tonnes of copper concentrate.

It also produced 1,300oz of gold from gold-rich tailings from RVR’s Liontown project.

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Meaning it can turn the leftovers from processing at its other projects into an economic benefit.

Nothing to be sneezed at.

Keep in mind that these are very small amounts of minerals produced in comparison to full-scale miners.

So, it will not achieve the same types of cash flow presently.

Perhaps what has got the share price most excited is the potential restart of its Hillgrove gold project.

Hillgrove gold project already has an existing JORC 2012 Mineral Resource of 3.0Mt at 4.9 grams of gold per tonne (g/t).

A new drilling campaign is expected to commence this month.

RVR said it plans to recommence gold production at Hillgrove sometime in 2020.

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Kind regards,

Lachlann Tierney,

For The Daily Reckoning Australia