VAU - Vault Minerals
- Thread starter Uncle Festivus
- Start date
THanks Mgm1a, most appreciative of your explanation and logic. I don't have issue with your logic and I understand that is why some of the bigger state owned chinese companies are looking at gold resources in order to get a hold on considerable gold inventory, in order to increase treasury holdings with a diversified portfolio outside of the usual investments they have held in US government bonds and other US$ investments etc. And gold in the ground (IF its there) is a much cheaper option than buying big in the physical gold market (cf Indian Central Bank purchase of 200 tonnes of gold bullion in October 2009 at around US$1,160).
I do make the point though that its all a matter of whether the gold is truly there to be gotten in the first place, that is why I refer to the resource category (ie its not going to be A$71 per ounce if all those ounces are not there, but in the case of RED, being predominantly Indicated Resources (==> Probable Reserves) there is more likelihood compared to some company with quoted Inferred Resources (which don't fit into any reserve category until upgraded to confirm continuity of those resources).
Anderbond, I have a sneaking suspicion you will get a reply to your phone message once the announcement is made and not before, lol!
Moit, I agree with you that is awfully frustrating, but having lived the dream now for such a long time I remain completely confident it will happen, based on the fundamental evidence, and Mgm1a's logical explanation above is testimony as to why it WILL happen! I don't actually feel it being nerve-wracking, just frustrating! And of course it means we have to follow the share prices like a jockey riding a horse, unless you can take Petard's advice to not look, lol!
I do make the point though that its all a matter of whether the gold is truly there to be gotten in the first place, that is why I refer to the resource category (ie its not going to be A$71 per ounce if all those ounces are not there, but in the case of RED, being predominantly Indicated Resources (==> Probable Reserves) there is more likelihood compared to some company with quoted Inferred Resources (which don't fit into any reserve category until upgraded to confirm continuity of those resources).
Anderbond, I have a sneaking suspicion you will get a reply to your phone message once the announcement is made and not before, lol!
Moit, I agree with you that is awfully frustrating, but having lived the dream now for such a long time I remain completely confident it will happen, based on the fundamental evidence, and Mgm1a's logical explanation above is testimony as to why it WILL happen! I don't actually feel it being nerve-wracking, just frustrating! And of course it means we have to follow the share prices like a jockey riding a horse, unless you can take Petard's advice to not look, lol!
Worst part is.. some are probably riding this horse bareback and the pain is too much to handle and jump off mid stride..
Hi beatle and anderbond.
Thanks for the reply re the possible end of exclusive period, I noticed it was mentioned in some earlier posts, I should have looked closer. Anderbond hope you don't mind me repeating the possibility of end of exclusivity with db on hc, not sure what the correct protocol is for these things but thought that might be of great interest to others. Seems like this thread is certainly more on the pulse if the issue anyway. Thanks for your info, I'm hoping this turns out to be a life changer ( hopefully in a good way)
Thanks for the reply re the possible end of exclusive period, I noticed it was mentioned in some earlier posts, I should have looked closer. Anderbond hope you don't mind me repeating the possibility of end of exclusivity with db on hc, not sure what the correct protocol is for these things but thought that might be of great interest to others. Seems like this thread is certainly more on the pulse if the issue anyway. Thanks for your info, I'm hoping this turns out to be a life changer ( hopefully in a good way)
Anderbond, I have a feeling based on the tea leaves at the bottom of my cup that its gonna be some time early next week that you will get a reply from CJ, and its going to be preceded by a message to us ALL! Thats just in my tea cup of course, but maybe its cos I've been riding RED bareback just as Desjosie has suggested and its unsettled my reading of the tea leaves!
And if my tea leaves are correct its gonna be a life changer in a VERY positive way, Andrew! But I don't dare order another cup of tea in case the next cup of tea leaves is different, Lol!
And if my tea leaves are correct its gonna be a life changer in a VERY positive way, Andrew! But I don't dare order another cup of tea in case the next cup of tea leaves is different, Lol!
What amazes me is the number of shares that are being sold on a day like today, with an announcement imminent! I wonder if these are small shareholders selling out, or being churned by larger insto's, or what? Any thoughts? My view is that the buyer(s) may include those more aggressive buyers such as Baker Steel etc. Just my view, it would be good to get a list of the latest shareholders and who is adding etc. I guess that should happen quite soon!
Looking at the course of sales it does seem there is still some bot action going on which I guess means the big boys are still interested. I can't help but feel that this is still winding up like a rubberband. Surely there can be no way the price will fall significantly from here between now and production, and if that is the case then we just need something to trigger the rise. I just hope it's not a mapawa announcement that could turn into a pump for a cr.
Andrew, the only capital raising is related to the development of Siana, which could be a mix of debt plus equity or one of those, but in saying that the past quoted requirement of US$40 million is misleading as that was based on a debt only facility (that DB turned into debt plus equity warrants!) and assumed self funding future Mapawa drilling. But aside from that CR I am absolutely sure that RED will not raise additional cash for Mapawa - I have previously asked CJ of that and he was in complete agreement that they will only utilise existing funds available (which included internal funds plus the US$40 million).
Sorry Beatle, what I was referring to was a cr to cover the outstanding 40mil or whatever is required for sienna development if db falls thro. My concern is they might put out a good announcement in drilling mapawa, then do a trading halt on the rise and announce cr for sienna development. Unlikely I hope but seems to be the way many others operate in the mining sector. Hopefully your tea leaves hold a much better outcome than this for us.
Hi Beatle, I am not sure what brand of tea leaves you are looking at but I hope it is a good consistent one. That way I expect you will continue to get consistent readings on RED's future and near announcements (lol). As for me I usually indulge in an end of office day glass or two of RED about now. As these are usually aged REDs, there is a crusty sediment left in the bottom of the glass. It has now occurred to me that I might be able to read this like tea leaves lol! By the way, the reason I am drinking aged REDs is not because I have a big expensive cellar, but because I foolishly bought too much RED wine a few years back and cannot consume it at the rate necessary to "liquidate" it in a reasonable time frame. Back then I was younger and foolish, now I am older and..........well....older!
Of course I could say the same thing about my RED shares, bought too many too far back! But hey, there is no way that RED is degenerating like my RED wine. It will just keep getting better and better and better imo! It will be my retirement fund of that I am sure.
Andrew, no problems with HC. I too post there but only occasionally as there has been some degeneration with some of the posts. Additionally, as all of us have found, the quality and depth of friend Beatle's posts is far ahead of anything that anyone else has to say, so I prefer to stay here.
Now, one more aside. CJ is also Chairman of IAU (Intrepid). For those who have not seen it recently, just have a look at the SP run it has had! Now I am not saying this will be the immediate RED story, but it is encouraging to share the same Chairman. I can also say that IAU spent quite a long time as a "despised" stock, but look at it now!So, sooner or later (but sooner I think), it will be up up and away for all of us! AB
Of course I could say the same thing about my RED shares, bought too many too far back! But hey, there is no way that RED is degenerating like my RED wine. It will just keep getting better and better and better imo! It will be my retirement fund of that I am sure.
Andrew, no problems with HC. I too post there but only occasionally as there has been some degeneration with some of the posts. Additionally, as all of us have found, the quality and depth of friend Beatle's posts is far ahead of anything that anyone else has to say, so I prefer to stay here.
Now, one more aside. CJ is also Chairman of IAU (Intrepid). For those who have not seen it recently, just have a look at the SP run it has had! Now I am not saying this will be the immediate RED story, but it is encouraging to share the same Chairman. I can also say that IAU spent quite a long time as a "despised" stock, but look at it now!So, sooner or later (but sooner I think), it will be up up and away for all of us! AB
Andrew, of course I'm hoping we don't have another equity issue to cover the US$40 million (or whatever they finally decide), but I would assume there will be equity issued, as a debt issue will be hard to achieve if its not with DB in the timeframe we would expect it - bank due diligence is very exhaustive, it typically requires a comprehensive technical review onsite by a reputable consultant, and additionally requires a considerable legal review relating to ownership etc etc, each of which could not be easily done within a couple of months at the earliest (unless the same consultant was used but DB would hardly give permission!). I have already considered a new CR involving purely equity assuming US$40 million at 15.5 cents per share, which would change the valuation of Siana worth, from around 38 cps to 32 cps at a gold price of around US$1,285 plus exchange rate of around A$1.00 =US$0.94 cents. Thus it has a significant impact on the overall evaluation, but still considerably above current level. That does not take into account excess cash nor Mapawa value.
Anderbond, I think you make a very good point re CJ being Intrepid Chairman as well as RED Chairman - noting that IAU main asset is a porphyry copper-gold project in Indonesia. There have been some whopping intersections on that property so far, but interestingly when I spoke to CJ about it he was of the view that Mapawa could still give similar whopping intersections as the LSY prospect at Mapawa had considerable length and width of lower grade gold in alteration zones, and based on the low silver values so far possibly the drilling to date had not touched anywhere near the best zones, notwithstanding the drilling so far had been very successful in plumbing high gold grades at depths of 600 metres! (CJ's observations obviously are based on geologist opinion on site, noting CJ's technical expertise a long time ago was metallurgy, not geology).
Anderbond, I think you make a very good point re CJ being Intrepid Chairman as well as RED Chairman - noting that IAU main asset is a porphyry copper-gold project in Indonesia. There have been some whopping intersections on that property so far, but interestingly when I spoke to CJ about it he was of the view that Mapawa could still give similar whopping intersections as the LSY prospect at Mapawa had considerable length and width of lower grade gold in alteration zones, and based on the low silver values so far possibly the drilling to date had not touched anywhere near the best zones, notwithstanding the drilling so far had been very successful in plumbing high gold grades at depths of 600 metres! (CJ's observations obviously are based on geologist opinion on site, noting CJ's technical expertise a long time ago was metallurgy, not geology).
If CEB2 is lurking out there, perhaps you can give a chartist interpretation of RED? Whilst I believe RED's fundamentals can look after itself, seems to me many traders need to be convinced by reading the charts for a stock before getting as bullish as I am. Maybe you can tell us which day the announcement is out based on your charts for RED eh CEB2 (in jest of course, I respect your interpretation, otherwise I wouldn't be asking for it!).
Fastbuck, most appreciative of you handballing the question to CEB2 on HC, and CEB2, absolutely first class commentary of trying to inform a dumb technical trader type like me and others, of how to interpret the share activity in terms of share price. Now we know that CEB2 having put RED's immediate, and future price requirements in terms of charts before us all, we can decide whether it fits the chartists criteria or more closely fits my tea leaves. (And gee CEB2, I'm ecstatic with the RED tea cup (what if i drink green tea, lol!).)
I think, just from an activity point of view, that RED had better start demonstrating its capacity to meet its own set deadline, with an announcement early next week. If it linger much longer than that I would assume some people will start losing faith, esp since RED does have a Listing Rule requirement to maintain continuous disclosure, and having made an announcement of the DB finance on August 5 it MUST report BEFORE the quarterly (due out no later than end of October) of the status of the DB review, and whether that offer of finance remains available or has been terminated (either by RED or DB for that matter!).
I remain bullish that gold production will occur close to the timeframe already set and will not consider selling a single share, and I hope the longer term shareholders will do likewise - each day that passes brings us closer to the finishing line, it would be a shame to fall over at the last hurdle, its getting to a critical time when we might expect share price re-valuation IMO (UP!).
I think, just from an activity point of view, that RED had better start demonstrating its capacity to meet its own set deadline, with an announcement early next week. If it linger much longer than that I would assume some people will start losing faith, esp since RED does have a Listing Rule requirement to maintain continuous disclosure, and having made an announcement of the DB finance on August 5 it MUST report BEFORE the quarterly (due out no later than end of October) of the status of the DB review, and whether that offer of finance remains available or has been terminated (either by RED or DB for that matter!).
I remain bullish that gold production will occur close to the timeframe already set and will not consider selling a single share, and I hope the longer term shareholders will do likewise - each day that passes brings us closer to the finishing line, it would be a shame to fall over at the last hurdle, its getting to a critical time when we might expect share price re-valuation IMO (UP!).
In expectation of some early week action in RED (with a much awaited announcement about funding), I have run the financial model again to check what the latest gold/silver/exchange rate does to the Siana valuation model for RED shares.
The inputs I have used are current, being:
Gold US$1,318
Silver US$22
A$/US$ Exchange 0.9720
I have assumed 2 cases, one including only debt, of US$40 million, the other being only equity, also of US$40 million. My thought is with no recent news about the Deutsche Bank offer I presume that is now dead and that an alternative offer will be made and be the basis of any announcement.
I assume its more likely to be an equity based deal, and have assumed 15.5 cents per share for raising those funds. Its likely if its an equity funding that RED will not go for the entire US$40 million at this stage as it doesn’t need that much for development of Siana due to it having A$56 million or thereabouts in kitty AND the rising A$ will have reduced the capex requirements somewhat, but my assumptions are conservative as a result.
RED’s value based on Siana alone, excluding Mapawa and excess cash in bank are:
Debt only: 39 cps
Equity only: 33 cps
Therefore, it appears that based on the latest gold/silver/exchange rate that RED valuation has moved slightly higher, and that any equity based deal is worth close to at least double its current share price! If RED doesn’t raise an entire US$40 million in equity (say $35 million) then the valuation moves closer towards 39 cps from the base of 33 cps.
Now RED its your turn – an announcement please ….
The inputs I have used are current, being:
Gold US$1,318
Silver US$22
A$/US$ Exchange 0.9720
I have assumed 2 cases, one including only debt, of US$40 million, the other being only equity, also of US$40 million. My thought is with no recent news about the Deutsche Bank offer I presume that is now dead and that an alternative offer will be made and be the basis of any announcement.
I assume its more likely to be an equity based deal, and have assumed 15.5 cents per share for raising those funds. Its likely if its an equity funding that RED will not go for the entire US$40 million at this stage as it doesn’t need that much for development of Siana due to it having A$56 million or thereabouts in kitty AND the rising A$ will have reduced the capex requirements somewhat, but my assumptions are conservative as a result.
RED’s value based on Siana alone, excluding Mapawa and excess cash in bank are:
Debt only: 39 cps
Equity only: 33 cps
Therefore, it appears that based on the latest gold/silver/exchange rate that RED valuation has moved slightly higher, and that any equity based deal is worth close to at least double its current share price! If RED doesn’t raise an entire US$40 million in equity (say $35 million) then the valuation moves closer towards 39 cps from the base of 33 cps.
Now RED its your turn – an announcement please ….
An interesting aside regarding RED:
I posted the previous commentary on RED (the valuation, of 33 cps or 39 cps based on anticipated funding) yesterday morning approx 22 hours ago (its affected by change to daylight saving over night remember!), with no follow up posting since that time by any other poster. I have not looked at it since it was posted. In that time ASF records that 122 views have been made of my post in that 22 hours - and ASF doesn't appear to update the number of views as each individual view is made, it seems to be periodically, so the ASF views might be more than 122 views! In addition CEB2 most graciously copied the post to another website (HC) and it had got 50 views on that website as its the last of the posts on that particular thread, he copied it about 9 hours ago - i opened his post on HC once and he must have opened it up say 1 time, so you can reduce that reading by 2 only!).
Therefore, around in cyber-space, whether it be Australia or abroad UP to 170different people have read my post! The significance of that which I believe we should all consider, is that on a weekend in which the AFL and rugby league finals were won and celebrated there remains considerable interest in what someone thinks about RED! I am encouraged about that, I would love to get a break down of who those readers were, its amazing that most obviously don't post but just read someone else's post! I assume it would be mainly retail smaller traders, but who knows.
I hope relevant RED management read these posts, its so important they get feedback and consider some of the remarks, especially at the moment we have such a high anticipation of an announcement about funding. I believe an argument can be put that RED has not met continuous disclosure with regard to the DB finance offer - if there are very sensitive commercially material negotiations being undertaken at the moment then I can understand the reason why they have not informed the market, but it makes me believe an announcement or Trading Halt is not far from occurring.
As of 9.18am EST Australia, we still have no announcement or TH announced, but I'm waiting with eager anticipation....
I posted the previous commentary on RED (the valuation, of 33 cps or 39 cps based on anticipated funding) yesterday morning approx 22 hours ago (its affected by change to daylight saving over night remember!), with no follow up posting since that time by any other poster. I have not looked at it since it was posted. In that time ASF records that 122 views have been made of my post in that 22 hours - and ASF doesn't appear to update the number of views as each individual view is made, it seems to be periodically, so the ASF views might be more than 122 views! In addition CEB2 most graciously copied the post to another website (HC) and it had got 50 views on that website as its the last of the posts on that particular thread, he copied it about 9 hours ago - i opened his post on HC once and he must have opened it up say 1 time, so you can reduce that reading by 2 only!).
Therefore, around in cyber-space, whether it be Australia or abroad UP to 170different people have read my post! The significance of that which I believe we should all consider, is that on a weekend in which the AFL and rugby league finals were won and celebrated there remains considerable interest in what someone thinks about RED! I am encouraged about that, I would love to get a break down of who those readers were, its amazing that most obviously don't post but just read someone else's post! I assume it would be mainly retail smaller traders, but who knows.
I hope relevant RED management read these posts, its so important they get feedback and consider some of the remarks, especially at the moment we have such a high anticipation of an announcement about funding. I believe an argument can be put that RED has not met continuous disclosure with regard to the DB finance offer - if there are very sensitive commercially material negotiations being undertaken at the moment then I can understand the reason why they have not informed the market, but it makes me believe an announcement or Trading Halt is not far from occurring.
As of 9.18am EST Australia, we still have no announcement or TH announced, but I'm waiting with eager anticipation....
Good Morning Beatle,
I think i may in 'amongst those that read but do not post' category that you mentioned on your previous post. I just like to express my appreciation for your frequent posts of your insights. Yes i think we are all looking forward to an announcement in regards to the financing on RED (HOPEFULLY today). Given the 0 trade volumes, i think i may not be the only one anticipating it.
I think i may in 'amongst those that read but do not post' category that you mentioned on your previous post. I just like to express my appreciation for your frequent posts of your insights. Yes i think we are all looking forward to an announcement in regards to the financing on RED (HOPEFULLY today). Given the 0 trade volumes, i think i may not be the only one anticipating it.
Good morning all, and thanks Wtang89 and Desjosie for your posts and comments! I guess this is going to remain a drama, like pulling teeth at the moment!
RED has met us half way, with today's release of information about Siana progress. It confirms what we had been told some time ago, that the development schedule for Siana has continued on track for first gold production in April 2010 (but with the cautionary comment regarding weather!): "The project build remains within schedule expectations - subject of course to no abnormal rain season weather patterns."
This news and assurance that Siana is developing in line with the development schedule is fantastic new, but its HALF WAY to what we want and need to hear - no guessing what the other half is!!!
Its surprising (and disappointing) that there was no reference to how the funding arrangements were progressing, although if you read between the lines I would presume that having NO REFERENCE to funding in this announcement that:
1. It must be at a commercially sensitive time for funding negotiations, otherwise it definitely would have been commented on. Thus we can't have a go at RED management legitimately if this assumption is correct. (And any weakness in RED price might be the last chance to top up before it is made, IF you haven't topped up already - I'm full to the brim!).
2. That funding is not a hindrance to development along the timeline schedule at this stage, with treasury funds a healthy A$47.8 million, of which US$19.8 committed.
The long lead time items of the Siana construction, namely the mill and dewatering are also on track, as per the development schedule, and pre-strip earthworks has commenced. These demonstrate that RED is now seriously turning the earth, and we should see some future announcement very shortly that has the potential to knock the last of the doubters!
I would assume we won't get another announcement re funding out today, as most companies, including RED, like to put out separate and important news as standalone announcements, and surely whilst this assurance of Siana status is very important, it still is not THE announcement that will confirm once and for all, that Siana will once again produce gold!
That funding announcement and todays silence about it means to me that it might only be a few days away or sooner ...
RED has met us half way, with today's release of information about Siana progress. It confirms what we had been told some time ago, that the development schedule for Siana has continued on track for first gold production in April 2010 (but with the cautionary comment regarding weather!): "The project build remains within schedule expectations - subject of course to no abnormal rain season weather patterns."
This news and assurance that Siana is developing in line with the development schedule is fantastic new, but its HALF WAY to what we want and need to hear - no guessing what the other half is!!!
Its surprising (and disappointing) that there was no reference to how the funding arrangements were progressing, although if you read between the lines I would presume that having NO REFERENCE to funding in this announcement that:
1. It must be at a commercially sensitive time for funding negotiations, otherwise it definitely would have been commented on. Thus we can't have a go at RED management legitimately if this assumption is correct. (And any weakness in RED price might be the last chance to top up before it is made, IF you haven't topped up already - I'm full to the brim!).
2. That funding is not a hindrance to development along the timeline schedule at this stage, with treasury funds a healthy A$47.8 million, of which US$19.8 committed.
The long lead time items of the Siana construction, namely the mill and dewatering are also on track, as per the development schedule, and pre-strip earthworks has commenced. These demonstrate that RED is now seriously turning the earth, and we should see some future announcement very shortly that has the potential to knock the last of the doubters!
I would assume we won't get another announcement re funding out today, as most companies, including RED, like to put out separate and important news as standalone announcements, and surely whilst this assurance of Siana status is very important, it still is not THE announcement that will confirm once and for all, that Siana will once again produce gold!
That funding announcement and todays silence about it means to me that it might only be a few days away or sooner ...
Market reaction to RED's announcement confirming and reassuring that the development of the Siana gold operation remains on track for first gold production in April 2011 is subdued at the very least.
I'm fascinated with (presumably) BOT trading that appears to be sending mixed messages (is it a war between different BOTS, lol?), whereby each small UP purchase is met within milliseconds of a similar small DOWN purchase. One would have to ask the question is this a game being played by insto's trading parties, that aims to retain RED's share price in a very tight trading range? I wonder if it also means that its an attempt to ensure that any placement that might be the subject of negotiation with the company is based on the current share price plus/less the usual discount we have all got accustomed to.
Just my wonderings of course . . .
Personally I would like to see it done soon and the market informed that RED has finalised its funding, notwithstanding it getting a good deal out of it!
I'm fascinated with (presumably) BOT trading that appears to be sending mixed messages (is it a war between different BOTS, lol?), whereby each small UP purchase is met within milliseconds of a similar small DOWN purchase. One would have to ask the question is this a game being played by insto's trading parties, that aims to retain RED's share price in a very tight trading range? I wonder if it also means that its an attempt to ensure that any placement that might be the subject of negotiation with the company is based on the current share price plus/less the usual discount we have all got accustomed to.
Just my wonderings of course . . .
Personally I would like to see it done soon and the market informed that RED has finalised its funding, notwithstanding it getting a good deal out of it!