Rio Alto (RIOM) shares capsized, recently plunging 26% in less than a week, drowned by a deluge of unrelenting selling. Given the carnage across the precious metal space, at first glance, Rio's dive isn't surprising. But when compared to its sector - junior gold miners (GDXJ) - Rio's drop seems vastly overdone. Rio actually crashed even faster than the juniors as a whole, despite Rio's status as one of the highest-quality operations within the index. The gold mining sector is full of unprofitable, heavily levered and high cash cost mining operations that are now, in a $1400/oz gold price world, likely cash flow negative and may end up on the brink of insolvency.
Rio Alto, by...
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