Australian (ASX) Stock Market Forum

VAU - Vault Minerals

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mgm1a said:
beatle - they repeatedly said capex $US87 - so they can't be a case of adding "substantial capitalised mining" - that would be operating costs, so would "mining the pit"

The slide I mentioned with 2013 capex seems to be what they want to start fairly soon and have cash on hand to do so, rather than wait for gold production to convert to cash....there may be contracts & equipment requiring substantial up front payments to initiate.
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Hi Mgm1a, I take your point and to be honest my accounting knowledge is not adequate to be able to argue on treatment of particular cost allocations.

My understanding is, and it may be incorrect, that since the commissioning was extended considerably, there was a decision to increase waste removal rather than concentrate on the rate required for the scheduled start up mining phase. The primary reason is that since the production didn't occur as expected due to delays in commissioning there is simply not enough room on the ROM stockpile to accomodate what would have been a substantial buildup of ROM ore. Thus as an accounting treatment they have capitalised the cost of that additional waste removal rather than consider it a current operating expense. And that is why we should see a considerable reduction in waste mining in the coming years! I may be wrong with that interpretation, and if what I have said isn't making sense then maybe you should ask Joe.
 
Nah, I'm just a caring sort of guy MrLister! (But from time to time I visit the mine to see how the development is going - that is not inside information, I never trade on or ever get any inside edges from my association/knowledge with/of RED).

PS Regardless of the accounting treatment of the current mining, from an operating point of view its a fantastic situation to have a choice of so many different ore exposures to optimise ore blend in terms of physical and grade characteristics, provided access is possible. thus whilst the pit scheduling becomes complex the flexibility it provides is great for the operation.
 
As I understand it so far 18,000 ounces to be mined as of 1st July then and more each day. At even $1000 per ounce profit I make that $18,000,000. (Am I missing something?) So why a capital raising? I am very very uncomfortable at the thought that once again the retail investors are to be shafted while some "professional investors" buy in just when the going ahead looks good, thus diluting our shareholdings. You wusses out there allowed this last time, get ready for a repeat performance.
Hey Beatle, next time you go, if you would like some company please advise.
 
Yes I understand that there should still be something like $18 million profit this financial year Fwpike, but if its as I understand it, at a 7% discount to the last sale price, and thus some 11.7 million odd shares, ie less than 15% then it can be done as a placement without any shareholder approval being sought.

I understand its more about cash liquidity and it does accelerate the exploration as well. The irony is it might end up back in our lap as a dividend later.
 
My understanding is that it can only be done again this year because when the last placement was approved management asked for another bite later at the same time. Why anyone voted for that is a mystery to me. I prefer to vote on knowns rather than unknowns.
 
Well all the past capital raisings in the past 12 months have been ratified so there is now 15% available without shareholder approval.
 
Its all part of "the game" placement to instos & brokers mates who then vote at AGMs for directors increased remuneration packages, who then make another placement & on it goes. Meanwhile the retail shareholder sits on their diluted holdings.

Tech/a has read the current position beautifully imo
 
Yeah, actually I understand and agree with you both, except its unfortunately a characteristic of the game called "the stock market". And it applies to all companies, not just RED.

But what you must recognise is that a capacity to "place" shares on short notice, is a very efficient means to raise cash, provided you have the relationships to be able to do it.

And RED is fortunately in that its shareholder base has considerable depth in terms of capital raising capability and in fact this placement (if done at $2.12) is considerably above the price that might otherwise have been achieved. Of course its frustrating, but its a fact of life.

I personally, as a shareholder (and not insignificant, and similar I would imagine as you Fwpike knowing your previous holding that you have mentioned you have reduced from) don't feel concerned about the dilution, more frustrated than anything more - those new shares won't be placed to groups that will be dumping them on day 1 like you see with some of the retail brokers who give out to sub-underwriters who trade them out day 1.
 
G'day Beatle, your right the game is called the stock market & i think most of us understand that.
If directors were doing their job properly there would be no need to quickly raise funds & they could place some of the CR with shareholders. The offer price to shareholders may be less than what the instos pay, but what about offering something to loyal shareholders. Also shareholders are more than likely to hold onto their holding longer than "brokers mates".

Unfortunately imo directors often take the lazy way out & listen to the bankers etc who come knocking on the door. Not suggesting that happened here.

Also i would think that long term shareholders would be less concerned about dilution than newer shareholders.
 
Shareholders as voters get the Government they deserve. A vote was taken on the previous two insto placements, they were approved, as was the reloading for another go. Hard to blame management in those circumstances.
There were some doozy wussy arguments as to why shareholders voted this way as I recall . A general feeling of "or else the sky might fall in".
 
Nasser said:
G'day Beatle, your right the game is called the stock market & i think most of us understand that.
If directors were doing their job properly there would be no need to quickly raise funds & they could place some of the CR with shareholders. The offer price to shareholders may be less than what the instos pay, but what about offering something to loyal shareholders. Also shareholders are more than likely to hold onto their holding longer than "brokers mates".

Unfortunately imo directors often take the lazy way out & listen to the bankers etc who come knocking on the door. Not suggesting that happened here.

Also i would think that long term shareholders would be less concerned about dilution than newer shareholders.
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Again I agree with you on a number of points, but not sure that small shareholders are apt to hold any longer than an insto.

I would say that whilst the concept of offering shares to existing shareholders via a rights issue or share purchase plan sounds most fair, there are a number of issues from that route, and as a shareholder I am dead against both of them for a few reasons:
1. It puts a cap on the share price most of the time for the duration of the issue, as you know that issue is in the wind, and it takes a considerable number of weeks to have it done.

2. Even if its been underwritten there is no guarantee for the funds being raised if offered to existing shareholders. And thus you are at the whims of the market immediately before the last trading day for application of funds. Thus any urgent need of funds is just not possible to be achieved.

3. The possible cheaper pricing of the rights issue is almost always offset by any under-writing, and those underwritings have so many holes in them you can still be unsure your company will get the funds.

I much prefer a company get on with the job, do the deal, pay the subbies their fees and start moving the company forward.

What I would say, that is a negative in this instance, is that RED has not done any significant promotions immediately prior to this CR and thus it has possibly not got the best price for the shares before negotiating the pricing of this placement (if our rumour mill is correct in pricing it at $2.12), BUT actually based on the last sale price of $2.27 its not a bad discount which could easily have been as low as 20% below of $2.27 (say $1.82) on last price, either by a rights issue etc or usual placement).
 
the open estimate on monday is now at 2.38 with 3.8 million shares wanting to be purchased??

what the hell is going on??
 
mrlister said:
the open estimate on monday is now at 2.38 with 3.8 million shares wanting to be purchased??

what the hell is going on??
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I wouldn't worry about bids and ask prices when shares are in a halt.

They are not accurate and are usually taken down once market is opened.

E.g. Bids for Lynas were at ridiculous prices after one of it's halts. Same as GNS. What matters most is opening price, not the bids pre-market.
 
skyQuake said:
imo 222 here is a decent buy into Fri's S&P reweight and Market Vectors reweight.
Oh and gap fill too.
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mrlister said:
the open estimate on monday is now at 2.38 with 3.8 million shares wanting to be purchased??

what the hell is going on??
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As I said before. Market Vectors reweight. It'll probably get pulled monday morning and get done as vwap or crossing. Thats the only positive thing going for it atm.
rumour is the CR looks really crap atm
 
mrlister said:
yeah but this is one buyer for 3.8 mill. surely that is a institution of sorts telling people....ok you wanna sell out...ill give ya 2.38 now to piss off!!
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There was someone with a 850k bid for NWE at 0.068 the other day.

i.e. if you look at the spread, it was around 20k shares at 0.069 then millions at 0.068.

People try to "push" the price up or try to get attention by placing ridiculous bids all the time, for whatever reason.
 
mrlister said:
the open estimate on monday is now at 2.38 with 3.8 million shares wanting to be purchased??

what the hell is going on??
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You might want to check that opening estimate.

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