Australian (ASX) Stock Market Forum

VAU - Vault Minerals

Jump to new
Hey Beatle I'll stop watching my RED shares if you stop watching yours, then it'll go up TWICE as fast! :D;)

I think the price rise today is purely on speculation of a completed finance deal to be announced within this week, and the update on construction, which is going according to schedule with nothing too much out of ordinary, which is what you want from an explorers first foray into mining! If we get an announcement sometime this week with favorable financing, it can only be good news for RED, so here's to hope that we get another update!

:2twocents
 
Ok, thats a deal ParleVousFrancais, I will stop watching my shares in RED ok? Similarly you can stop watching yours. Instead I'll watch your shares and you can watch mine, lol!

I watch every day because, just like you, I'm convinced todays little run was a sign of things positive to come - where there is smoke there is fire, and we all know there is plenty of RED smoke now! I will look forward to the day that it breaks through 20 cents and keeps running, I have no doubt that day is just around the corner as well! I believe we may have seen the last of the significant cycles back down to 12 cents, its probably now going to run in a different direction!

And just to look forward to much more action, as a comparison, at todays closing price of RED, its market cap is only A$181 million, whilst MML which is already producing similar amounts of gold in a similar Phils mining environment, broke through A$1 billion in market cap, ending at around A$1,031 million - some 5.7 times that of RED!!! If RED was to achieve only half of MML's market cap that amounts to 53 cents per share for RED (that's a good starting point I should think!).

Fastbuck and Anderbond, of course you are both quite correct, that yesterday's announcement confirms that things remain on track with Siana development for gold production in the second quarter of 2011 and with a raging gold price overnight aided by reduced aussie dollar strength cf gold price and strong overseas markets last night, it all added up to a great day for all gold shares, including RED. That's a good rationale I must admit.

Anderbond, I hope you are on the money with the timing, but would like to think its closer to this week than in 2 weeks time! My nerves won't hold out any longer! (I may have to start drinking some of your old RED stuff with the sediment to read the next chartist interpretation correctly!).
 
Yes Mr Beatle I agree we should be trading around half of MML when we start producing, because MML's margin is higher, and we still have financing risk, where we are today is still a bit lower than I think we should be. However you can't question the market, it's always correct :rolleyes:, I just want that elusive TH and finance announcement, it's been a long time coming and I'll be glad to see RED a roaring success :). Lots of excitement building up around RED for me, just hoping for some GREEN days.

:2twocents
 
Beatle, yes I think I have got the timing about right for an announcement. Latest announcement described as a "cleansing" statement, with the next one to be the revised finance announcement. It could be slightly sooner than two weeks of course but that seems the given timeframe. Likely to include a CR it seems. DB still there with amendments. Mapawa expected to be about 10 times Siana. :)AB
 
Hi All, great to be able to post on RED after such a strong GREEN day, and with the likely promise that there's more GREEN to follow in coming days when RED finally announces its funding! In this current bullish environment for gold stocks I have no doubt that such an announcement will be the catalyst for RED to break well into the 20's, on its way up to and beyond its fundamental value.
I am also excited by the prospect, as was discussed yesterday by ParleVousFrancais as well, that MML has broken through the A$1 billion barrier market cap, and with say 50% of that market cap RED (based on its current shares on issue of course) could be worth around 52 cps! What are the reasons why RED should have some comparison to MML?
1. They both "operate" (RED in an exploration/development sense of the word "operate", MML in a production and exploration sense) within historic mining districts of Mindanao in the Philippines, approx 150 kms by road from each other. They have similar strong affinities with the local communities, with mutual support/reliance of those communities.
2. They have similar exploration environments linked by the common Philippines Fault system that traverses the entire Philippines region from roughly north to south, with the potential to develop large porphyry gold/copper projects.
3. They both have historic gold mines that form the basis of the newer operations for Co-o (MML) and Siana (RED). Each has long life mining operations based on considerable reserves, (MML - 5 years, RED - 9 years) with the potential to extend beyond existing reserves, along strike and at depth. Reserves for MML are 500,000 ozs, whilst RED has 840,000 ozs in reserves.
4. Both MML and RED anticipate working up to 100,000 oz gold production within the next couple of years.

The significant differences, that are the reason for the current suggestion that RED should have a considerably lower market cap compared to MML are:
1. MML is in operation, and its operating margin is greater, based on a very low operating cost. RED is not in operation yet. RED's operating cost, when in production, is envisaged to be within the second quartile for gold producers, MML is in the lowest quartile.
2. RED is yet to announce its final funding package to confirm that it can get to production as it aims to by second quarter next year, 2011.

OFFSETTING those differences, RED's Siana is a new project operating WITHIN the Philippines system that allows 50% of its operating mine life to be TAX FREE! MML pays its full tax requirements as its corporate structure will not provide for that tax free status.

I can see a time, once RED confirms its funding package and moves towards first production, that the discounting in price that RED currently has endured will move closer to its fundamental value, and thereafter as production commences, that RED share price will also be at a premium, thus if we remain in this strong gold price environment RED could conceivably move beyond 50 cents towards A$1.00!!!

That is my view anyways. Now its up to you RED, one step (forward!) at a time . . .
 
Hi Beatle...I was just looking at the silver price and wondered whether you had factored in the ag credits in your calculations, as regards Siana? Also, you keep alluding to a possible equity raising in conjunction with a possible new debt package....I have stated before that I believe that not only is it FURTHER diluting long-standing holders, it seems totally unnecessary, given a host of factors swirling around debt capital markets right now, all indicating that there is demand for exposure to the Phillipines, and also to robust projects such as Siana. If there is in fact some mythical Melbourne insto waiting in the wings to pick up 5% of the company, if I were Baker Steel or Mathews Capital, I would be livid were there to be a discounted offering to enable this group to get set. So would I!!!!
 
RED just broke it's 52-week range, meaning a new high for the past year! :)

Might see an increase in activity from traders on the breakout, but either way it's a positive sign and i'm eager to see how the breakout develops :)
 
Hi Hugh_Jarz, good to see you still following RED, and your comments regarding finance etc.

In answer to your question re Silver price in my model: As indicated in my prior post, I did put all the significant new inputs into the Siana valuation model, re Au/Silver/AUD. The incremental change in silver has not had a pronounced impact on the valuation, despite there being approx 1.44 million ounces of recovered silver in Siana - once again the impact of the AUD is not helping as it slowly moves back up beyond US$0.97 after the drop the other day with the rate decision by the RBA.

I would like to clearly state that I'm not aware of, nor a party to, any of the discussions regarding RED and its outstanding funding arrangements. I'm just commentating of what those outcomes could provide from an investors point of view. Therefore, in order to establish each outcome I have developed scenarios in my model that looks at the extremes, from debt included through to only equity included.

THE MOST IMPORTANT OUTCOME OF MY ANALYSIS IS THAT EVEN IF EQUITY IS THE ROUTE FOR FUNDING IT IS VALUE ACCRETIVE FOR RED DESPITE IT BEING LESS ATTRACTIVE TO AN ALL DEBT ROUTE.

Of course I would prefer the debt route if its achievable with reasonable terms and conditions, and does not take forever it to occur. I would however, much prefer an equity issue, as a placement to some selected insto's at anything like current share price, if its done on a timely basis. I believe that time is of the essence, to commence gold production as soon as it is practicable, since RED should take advantage of the higher gold prices likely to be available - and I have stated before, that I would see it being very positive if RED were to put in place, as a proportion of its future gold production, gold hedging to take advantage of current gold prices.

I believe that any of the larger existing shareholders such as Matthews and Baker Steel would see the value of even an equity issue to get the funding completed (they could well be part of that issue if it were to be offered).

As for that mystical Melbourne based insto, well that scenario makes for some exciting possibilities, but times have changed with RED's share price moving up the past days, so who knows what that group are thinking now. I am not aware that they were being targetted for this funding package though, so it could be on-market activity to come.

Who knows . . .
 
I would be interested in feedback from some of the longer term shareholders in RED, that are not apt to trade for a 0.5 - 1.0 cent gain:

If you have been a longer term shareholder/follower of RED I'm sure you would be as convinced as me that we are now in the midst of RED's initial re-rating by the market, with an expectation that funding is soon to be announced -the reassurance we got from its ASX release that development of Siana remains on track for gold production in the second quarter of 2011 probably has an unwritten notice and expectation of funding to follow! Therefore, if we are in the midst of that re-rating and it could move right past 30 cents based on fundamental valuation of Siana alone, why would you consider selling your shares at this price?

Do others have that same view of RED as me, or do you feel that its better to take profits at this halfway place, to ensure that you cut your risk profile? I have read ParleVousFrancais webpage commentary, and his view is appreciated on here.

I feel that whilst there are sellers out there, the buyers, who are presumably larger insto's, have a little time on their hands to hold the share price at each level waiting to allow the trickling out of weaker holders.

I for one do not have any intention of selling at anything like this initial stage of RED's re-rating. I am convinced that the buyers are not out to get a 1 cent gain, they are largely in to RED in a bigger longer term way, to extract much more value based on gold production and a development schedule that should see production in April 2011.

Thats my view anyway, any other views on this are welcome and sought . . .
 
I have bought and sold red before for tidy profit. But now i have been holding for the finance ann and into the new year for production. I will be holding til this hits closer to or beyond value.
 
As a follow up to my last post, I noticed that RED appears to be coming off the boil after an earlier morning flurry. There was a lone trade, of 50,000 shares at 19.5 cents, the first to break down after earlier trading up to 20.5 cents and then some decent volume at 20.0 cents. So what about that last 50,000 shares traded at 19.5 cents - guess what, it was a crossing. That might be coincidental, but also it might be that the main buyer of shares is playing again, trying to weaken the resolve or weaker holders!

I wouldn't be surprised if there is no takers at 19.5 cents then the buyer will be forced to push up the trades at 20.0 cents. Whilst they have some time on their side, once the funding is announced it might push buyers to much higher levels. Of course thats just my feeling and I wouldn't want people holding out for that!
 
Soon after that lone 50,000 shares crossed at 19.5 cents trading resumed at 20 cents. And interestingly a buyer for 2 million shares at the end of a list of bidders at 19.5 cents appeared. Does that mean someone is positioning for taking out of a weaker 2 million holder, or a sign that RED is about to resume its upwards path?

(Excuse the blow by blow description, but sometimes the trading is intriguing, giving you an insight to what is happening at the coalface by some relevant bids/offers/trades).
 
What a great day.. Just wish i brought some more at 0.16c :banghead:.. Hindsight is a wonderful thing.. I'll just have to be happy with the little Parcel i have and watch that grow.. heres for better day tomorrow..
 
Haha josie hindsight is a pain...but given the recent run and with the pending finance announcement, things do indeed look good for red. I might pick up a few more shares once we see that announcement assuming that the sp remains at similar to current levels. Happy trading all
 
Hi beatle lots of shares after close today mate must be saying something. When I get some more time later today I will post further.
 
Well beatle and all others thankyou so much for all your informative commentary, I have learnt more from this site in the last few weeks than I have anywhere else in the last 12 months.
I am still new to trading/investing, and have limited funds compared to many people, having only really traded for the last 12 months. I enjoy it, but have found it to be very time consuming and a some times coslty learning experience, but after a year of trading i feel i am finally getting the hang of it.
With regard to RED, it was first brought to my attention by a friend whose brother is a stockbroker in he early months of this year when it was trading at 10/11 cps. Unfortunately at the time my funds were all tied up in other stocks and just recently (last few days) is he first time I have been able to take a couple of dollars profit enabling me to invest in RED.
I have read every post in this thread several times over and on many occasions have I debated cutting my losses and selling all to invest the lot in RED, but today I finally achieved enough earnings to allow me to buy a small parcel.
I ended up paying near the top, but from what I have read here and researched myself, I feel and hope that things can only improve. As more funds hopefully become available, I will endeavor to buy more of RED, but one thing Beatle, what do you think of my idea of selling 8 other stocks to buy RED, considering my others are all specs and are all over the place.
Once again, thankyou so much to all contributors
 
Mr Beatle thanks for doing a little plug for my blog up there :D.

I believe 25 cents is a good time for me to take all the risk off the table from RED, as a doubling in SP and selling down half is like I just got 5k in free shares in RED @ 25 cents from uncle Beatle's research! That being said I don't have an order in at 25 cents as of yet, I don't want to jinx this latest price rise :rolleyes:, so hopefully a TH for the financing, then when we get out it's already 30 cents so I don't get a chance to sell! :D

:2twocents
 
G'day Beatle and other posters, well I feel it is a good day to again partake in sipping some older RED wine, while trying not to strain the sediment through my teeth (yes I still have them!lol). A very good day with a strong close. Beatle you seem to have missed my comments made earlier today, however I think they are near the mark. I also believe there is strong interest from N America in our little company, so don't be surprised to see something happen there. Your modelling incorporating a mix of debt and CR may well prove to be fairly accurate imo. Well time to sip a nice 2002 Cab/Merlot from the Hunter. AB:cool:
 
G'day Beatle and other posters, well I feel it is a good day to again partake in sipping some older RED wine, while trying not to strain the sediment through my teeth (yes I still have them!lol). A very good day with a strong close. Beatle you seem to have missed my comments made earlier today, however I think they are near the mark. I also believe there is strong interest from N America in our little company, so don't be surprised to see something happen there. Your modelling incorporating a mix of debt and CR may well prove to be fairly accurate imo. Well, time to sip a nice 2002 Cab/Merlot from the Hunter. AB:cool:
 
Hi All at the RED clubhouse, what a great day, and I'm so happy to see so many more, and new posters. I believe that strength is in numbers, it gives us another semi-quantitative indicator to how a share is going, and clearly there has been a substantial increase in posts and posters in RED in recent times, both here at ASF and elsewhere.

I would like to make a very general comment about the trading today in RED before following up specifics with various of the posters.

Like some of the longer shareholders in RED I have at times watched the trading intently, esp of course when there has been sufficient action to keep me awake and when I have not had to do some housechores directed by the boss of the household (Hmmm!).

Those observations have given me a fairly good idea of how trading has changed over the years, and how the more recent trading patterns have developed with the involvement of much bigger trades (insto's presumably) and the innovative BOTS (that I still am not sure of other than knowing it probably requires a serious player to have one invoked on their behalf!). Of course you have to also recognise that RED, with a fairly hefty number of quoted shares approaching 1 billion, means that its not easy to influence the movement of RED share price, unless you are a bigger player with much bigger wallet. So someone like me and other retail traders &/or shareholders rarely can influence the movement, just follow it.

There have been others observe the trading patterns of RED in say the past year or so, and have even used the term "manipulation" to describe the activity. Whilst that might be inferred to be a sinister activity, I don't see it that way at all, I get heartened when I see it as I know there is an intent by a serious player to try to weaken the resolve of smaller shareholders to drop their stock. So provided you are aware of that, then its a sign to me that there is more activity in RED trading around the corner and the indication is that over the following days/weeks its likely that RED will be moving up based on strong buying signals. I see those observations as in a way being synomymous to "hand to mouth technical analysis of the trades", except I'm not using charts, I'm watching the actual trades.
Today about an hour to the end of trading was most instructive for me, and it was documented with some of my posts that you can refer to above. I'm of the view that there was a deliberate attempt to try to coerce some weaker holders (possibly shorter term day traders etc) to drop stock, by forcing the price lower. (I refer to the crossing of 50,000 shares in one parcel at 19.5 cents). About 10 minutes after I posted that, shares began to trade again at 20 cents, and soon thereafter the whole of the 20 cents shares on offer were taken out.

Then at the close, there was some fairly strong bidding to keep RED at 20.5 cents. I was heartened by this plus the crossing action, and I believe that there is no doubt some bigger player trying to get a lot more stock at present, but they have met with a fair degree of seller reluctance to drop shares downwards, only to meet at the same level or higher price. I feel that so long as people are aware of that, then they won't make it easy for the buyer to get the stock at this current level. I can see that time is on our hands, as each day is a day closer to RED making an announcement on funding which could well and truly change the RED share price (upwards) forever!

Now, yes Anderbond, you are quite right, I didn't see your post, as I was posting at the same time and therefore it didn't show in my window at all until you pointing it out just then. And wow, what a post, short as it might be, its full of information. Is this your 3rd hand source? If DB are still there then its a good outcome, as obviously we all prefer a debt funding provided the terms and conditions are reasonable and if there is any equity component its not excessive or lowly priced! If we get some mix of debt plus equity we can assume a valuation for Siana somewhere between the 40 cents and 34 cents valuation based on debt only and equity only scenarios I have described elsewhere. Thats a good starter for RED seeing that does not include anything other than Siana. Thus your comment about Mapawa being about 10 times the size of Siana is all bonus!!! But I hope there is some difference in timing between the funding and Mapawa, as it would be good to get a re-rating on Siana alone for starters.

I welcome your post Kash, about your future view on investment in RED, and its more in line with mine, but I admit that I expect to hold my RED for longer than first production as I believe that Mapawa will take longer to derive considerable value with the mine opening being a priority for RED over the next few months.

Rick, most appreciative of your comments, and if you have learned anything plus made some cash from RED its a great result. I do feel like we can all support each other with regards to either information or whatever for the common cause of increasing our knowledge of our investments in RED, although of course you must take full responsibility for your own investment decisions. And with your comments about you having about 8 other specs plus RED and wonder whether you should consolidate your investment with it all in RED. Well I'm sure most would say, firstly don't put more than what you can afford to lose in spec stocks, and the other thing is the argument that diversification is safer in case something goes belly up. Not sure how that helps you at all, or even me, as to be honest my biggest investment now by far is RED, with probably about 90% of my spec investments in RED - but due to me extreme bias I don't even consider RED as a spec nowadays, for me its a dead cert, so I'm not a good person to advise you. I believe that spec stock picking is all about trusting management, and having confidence in the assets. I do with RED, except RED management are awfully conservative which means they are never going to set the world on fire with news and speed of delivery - both very frustrating for shareholders, except RED has got the goods in terms of it being a laggard and therefore we have been able to buy RED shares at a price much cheaper due to that under-performance in the past. I think those times are now numbered with the change in the shareholdings. (I haven't answered your question about your other specs vs RED, and you have to be more asking yourself the question why you bought them and is the situation now the same as it was when you bought them).

Hi ParleVousFrancais, you did state that intention in your webpage blog but I was not going to make a comment, preferring you to confirm it here. I see your strategy being a very reasonable and safe way to trade out of RED. Lets hope that it does achieve 25 cents pretty quickly though, then maybe you might change the exit price for the first 50%, lol - after all I won't have many of your shares to watch after you!

And yes I think we all agree with your Desjosie about hindsight, including wtang89. Even I, the most biased RED commentator, was not prepared to put another dollar into RED in the past few weeks as I believed we were to get an update about Siana development but nothing came. So I wondered if RED share price might go for a mini-drop back to 15 cents, just below where Yuyu had about 50,000 shares sitting at 15.5 cents, and assuming he didn't change his buy price we both missed out! In the end I am very happy with my existing holdings and will wait for the next big announcement with interest!

Anderbond, now you have got me more excited referring to Mapawa being 10 times the size of Siana, which is about right since I can see it being at least 100 million tonnes minimum if exploration continues as the first 6 holes of information, of course at a lower gold grade (but still very profitable grade with potentially around 3.5 million contained ozs of gold). Do you believe there will be news coming soon on Mapawa? Now back to your RED Anderbond, I hope you can see the sediment by the time you finish the bottle!
 
Top