VAU - Vault Minerals

RED’s 31 March 2009 announcement (excerpt below) was very positive but went relatively unnoticed (apart from initial spike to .059). Does show what potential the project has.

“Siana Ore Reserve doubles with
completion of underground mine study

Combined surface stockpile, open cut and underground
Probable Ore Reserve now 5.1 million tonnes at 4.3 g/t gold
(708,000 ounces) and 8.9 g/t silver (1.46 million ounces)
an increase of 105% by gold ounces over the previous
Reserve estimate”

One large sell went through this morning (15M shares @ .051 = $765K)

RED up 10% today to 6.6c on nice volume. More interest being shown and buyers (2.55m units) building v sellers (805K units).

The attached is taken from RED’s quarterly report out this morning:

“OVERVIEW
Siana Gold Project, Philippines
• Environmental Compliance Certificate awarded
• Associated documentation lodgement advanced (Declaration of Feasibility, Social Development and Management Programme, Environmental Protection and Enhancement Programme and Final Mine Rehabilitation and Decommissioning Plan)
• Ore Reserves doubled
– 5.1 Mt at 4.3 g/t gold (708,000 ounces) and 8.9g/t silver (1.46 million ounces)
– extend to 400 metres vertical (resource remains open to north, south, and below 500 metres)
• Long Term Mine Plan modelled
– assumes some Inferred Resource upgrade with further drilling and use of road headers to extract total of 6.5 Mt at 4.6g/t (975,000 ounces)
• Exploration drill result
– SMDD135 (3 metres at 31.6 g/t gold) at 220 metres vertical
received post resource data base cut-off date
• Bankable feasibility study
– documentation nearing completion
Mapawa MPSA
• MPSA grant and associated regulatory commitments
nearing completion
• Exploration programme and budget in preparation Finance and Corporate
• Net cash position $24.0 million (unaudited) at period close
• Discussion with project financiers to accelerate”

RED 5

hi im new to the stocks game and would like to find out as much info as possible to make informed choices but dont know where to start. one of my mates has bought some red 5 limited shares code RED and said I should too unfortuanately i dont know anyone else in the know and would be apreciative if anyone could help

Trading Halt?

anyone knowing what is actually happening?
A share purchase plan?Or good news mining wise?
I saw a few last minute buy orders at 20c so expect some good news...
Any info welcome;

PS: I own RED

Has anyone plugged any Charlie Aitken ramps on this thread yet? I heard a rumour that Southern Cross like this one. :dunno:

GumbyLearner said:

Has anyone plugged any Charlie Aitken ramps on this thread yet? I heard a rumour that Southern Cross like this one. :dunno:

Click to expand...

Charlie is indeed a fan. He recently posted a favourable review and sees the stock as having plenty of upside potential based on:

• Production potential
• Low operating costs
• Valuation upside from the Mapawa prospect
• High sensitivity to gold prices
• Experienced management
• Strong balance sheet position

Disclosure: I own RED 5 shares.

Does anyone have some insight into this stock, next 2-3 months,

The stock price has diluted since the news of capital raising was announced.

Would appreciate any thoughts be it negative or positive

RED recent break out

RED has now consolidated its recent break out for a few days and looks poised to make its move as per chart

Any new views on this stock? Must be a disappointing price for those who bought in the capital raising. I've been watching it for a while looking for a good entry point...

RED - Ramification of MCC Acquisition

Ramifications of MCC Acquisition

The announcement yesterday of RED acquiring Merrill Crowe Corporation (“MCC”) is one of THE greatest milestones achieved by RED over the past 12 months IMO. Whilst the broader market may not appreciate the subtleties of the acquisition, the ramifications are far-reaching and extremely positive:

1. Until this transaction occurred RED was not the registered owner of the Siana MPSA with the Philippines Mines Department. It had held its interest via a legal contract with MCC, its joint venture partner up until the acquisition. NOW RED holds the registration of the Siana MPSA IN ITS OWN RIGHT (via the subsidiary MCC).

2. RED has made all (100%) cash contributions (exploration plus development and budgeted for 100% of future capex) assuming it will get 90% equity in Siana – now it owns 100% of Siana via its Philippine corporate structure.

3. The project financing probably required RED to be the primary sponsor for 100% of debt funds despite it only getting 90% of cash flows, now RED gets 100%. Thus now on the debt side of funding the development at Siana RED has much stronger repayment and debt servicing capability. IF the project finance before was ever in any doubt, this acquisition will remove that doubt, and its more likely now with reasonably enhanced commercial terms.

4. Previously RED held 80% of Mapawa, now due to the acquisition of MCC RED owns 100% of Mapawa, and similarly previously held its interest via the joint venture with MCC, but now holds direct ownership via MCC subsidiary.
These points will all be considered substantially more favourable by banks wanting to fund the Siana development via the debt, and will similarly considerably enhance its attractiveness for investment by institutions otherwise concerned about ultimate ownership of Siana and Mapawa.

These changes will have a profound positive affect on RED for the future of mining activities as well, being its own boss in terms of how it develops the operations at Siana on a professional basis, without any interference from what otherwise would have been a joint venture partner (who has had no previous mining experience whatsoever).

Is the Acquisition Price Fair or Dilutionary?

I have looked at a number of differing gold price scenarios on a pre- and post-acquisition basis (in the range of US$1,000 – US$1,200, currency exchange rates $0.87 – $0.935) and can confirm that the acquisition price for just Siana alone at the increased equity is commercially more attractive to RED5 and the other shareholders of RED (each scenario provides an increase in NPV for RED), thus the acquisition is NOT DILUTIONARY.

IF Mapawa has any value attributed to it (currently no value is assigned in broker valuations of any significance) then the acquisition is a considerable plus, bearing in mind that its equity increases from 80% to 100% to RED.
IMO the only thing that has held RED back from achieving its indicated NPV for Siana has been the outstanding issues remaining to confirm development of the project. This announcement today removes the majority of that doubt about development, and yesterdays slightly positive share price move suggests it is likely to move further towards indicated NPV value. Based on the current gold price of US1,150 and $0.925 exchange rate, and with the changes in shares plus cash involved Siana value to RED share price equates to, based on 10% discount rate:-

33.5 cps

At the time of first production RED should trade ABOVE the indicated NPV valuation! (This happens to ALL gold producers with long life, low cost operations).

IF Mapawa shows promise, then value assigned to it will increase RED valuation beyond the indicated NPV valuation (of 33.5 cps currently).
Thus the acquisition announced yesterday is very a very positive one, with a very acceptable cost to RED and removes any doubt about future development of Siana.

The ultimate owner of the 40 million shares clearly is another issue to be considered, but the fact that there are escrow provisions to the shares limits any immediate downward (ie selling)pressure on the share price, and clearly at a time when RED remains severely discounted to its DCF valuation, is unlikely to present any significant risk at this time or the intervening period up to production (or a significant re-rating in share price, whichever is the earliest event).

RED - Huge Mapawa Intersection

Mapawa

The first hole announced by RED for Mapawa is staggering, with a 189 metre intersection of 1.0 g/t!!! This is WAY above the grades normally encountered on these huge porphyry deposits that have made BIG money in the past for major companies. The value of these large gold-copper projects is valued in the billions, and usually well outside the reach of small market cap companies – if a small market cap companies identifies one then either it gets re-rated immediately, or will be the subject of a takeover by a major company!

If you look at RED’s announcement re Mapawa and consider the big porphyry operations currently in production such as Batu Hijau you will realize that these are the THE BIG money earners for major companies:

Batu Hijau (48.5 % beneficial interest to Newmont). Newmont has just sold 7% of equity in the project for US$247 million (1% = A$38 million at an exchange rate of 92.5 cents!!!).

Batu Hijau 2009 production forecast to produce 500 million pounds of copper and 525,000 ozs gold, and was amongst Newmont’s lowest cost producing assets.

Batu Hijau (last published resources) total 1.01 billion tonnes at 0.37 g/t Au, 0.48% Cu.

Cadia (100% Newcrest, NCM).
NCM has just announced development of Cadia East, at an estimated capex of A$1.9 billion, to produce annually around 700,000 – 800,000 ozs gold and 75,000 – 100,000 tonnes of copper for the first 10 years of production, with cash operating cost around A$100/oz!!!

Cadia resources total 2.347 billion tonnes at 0.44 g/t Au, 0.28% Cu.

Potential for Mapawa:

The geophysical anomaly delineated by RED for Mapawa has a diameter of 900 metres, and commences at a depth below about 150 metres vertical. The first hole has confirmed that the anomaly points to a porphyry lithology that is analogous to the mineralized Boyongan prospect owned by Philex (where in excess of 100 million tonnes of likely economically viable resources exist and are now in the process of an economic feasibility study). Above this anomaly at Mapawa, there is an established resource (drilled by Suricon to a depth of 100 – 120 metres) that indicates a gold enriched resource totaling around 3 – 4 million tonnes grading 1.5 – 2.5 g/t Au is likely – this will be an extremely high grade sweetener to any large gold/copper processing facility being developed by RED for Mapawa.

Of the 900 metre diameter target zone to a large deep mineralized porphyry, the first hole has intersected above average porphyry gold ore grade mineralization to a depth of 450 metres. This suggests that the potential for a large mineralized porphyry, of grades analogous to Batu Hijau and Cadia is possible, with tonnage around 500 million tonnes possible.

As a back of the envelope calculation (and subject to many other considerations and skeptical critics!) to keep things in perspective with the value assumed for 7% of Batu Hijau (and assuming development cost at 50% of Cadia development, say A$1 billion for Mapawa), this would suggest that Mapawa valuation has the potential to be ascribed at something like:

“Back-Of-The-Envelope” Valuation for Mapawa when developed A$38m/2 per 1% = A$1.9 billion (ie assume total Mapawa resource 50% of Batu Hijau)
Less Capex A$1.0 billion

Net value to RED (100%) = $900 million

ie 91 cps

To be conservative if we DISCOUNT this value by 90% to this potential we get 9 cps

Thus RED valuation potential:

Siana 34 cps
Mapawa 9 cps (90% discount)
Other Cash 2 cps
Total RED Value 45 cps

Share volume for RED has been extremely high, and very pleasing, based on the move upwards 2.5 cents from 16.5 cents to 19.0 cents, with just 15 minutes to go. It demonstrates that bigger insto's and large traders are now on board, but the irony is that IF those selling considered what has just been announced to the market regarding Mapawa, they may regret their disposal of shares.

Currently RED is completely discounted, about 50%, of the indicated discounted cash flow basis, for the Siana gold project (around 1 million ozs production to be produced over a 10 year life span with a low US$351/0z operating cost). Indicated share value based on Siana alone is 33.5 cents based on the current gold price and exchange rate.

Mapawa, based on the first hole, has demonstrated its potential to grow into a huge porphyry project, with potential to be a major low cost producer, maybe of many millions of ozs of gold, based on the first hole and the indication that the second hole is similarly heavily mineralised and at a similar depth (and more visible sulphides logged on that second hole) to the first hole. That suggests that the porphyry system is large and likely to hold a large bulk tonnage of good gold grade ore. It has already been described as such by RED in a prior announcement to the ASX, referring to "The anomaly
has characteristics typical of many porphyry style (bulk tonnage)
mineral systems." in the announcement of 25 Jan 2010, and that there is a large sulphide component, with "The diorite hosts variable quartz veining and sulphide mineralization, predominantly pyrite but also minor zinc, lead and copper sulphides."

It suggests to me that Mapawa could in fact become the centre of attention of investors soon, with the announcement of the second hole assays in about 2 weeks, and the third hole being targeted to a depth of 800 - 1,000 metres! And the fact that RED is about ready to announce the project financing for Siana suggests that there is plenty of positive news in the pipeline that could push the share price way above its highly discounted 19 odd cents today.

The attention on Mapawa is likely to draw the interest of gold-copper majors, and with RED being highly discounted at present may become an attractive target by various resource groups!

Hi beatle. Found ya! I was waiting for your return to you know where!
I haven't time to digest your posts as its gone midnight here, anyway here's my comments posted tonight, i do agree Mapawa has a stunning feel to it: <quote

MAGIC!
I'm still learning but the grade and length appear most attractive. It's deep but don't forget the channel sampling down to there may provide something to work with as the diggers get down to that level!

I didn't think porpheries had this grade of gold but from research i found the whole province has had stunning historic recoveries in 1930's. Todays's ann. is VERY exciting for the company and is manna coming out of the blue sky we had talked about....think about it..this is either another discovery or it will will used at Siana to greatly extend its LOM!!!

Volumes today have changed the character of RED... lines of 2.5m and at one stage 3m with traded vol of 22m and placing it at #19 on the ASX today means its finally getting the attention it deserves. As I posted previously the SP had "broken out" ahead of time from leaking as has happened with this before. The recent increases over 2 Fibonacci lines have also added to the momentum.

The market liked the ann... as ASX:GOLD was down(!) 0.6% we can assume that the 2c price increase is fully due to Mapawa, which equates to an increase in market cap of $18m that we attribute to this ann. Not bad for 2 drill holes of which only one has declared grades!

This is evidence that the market is pricing Mapawa it as another mini gold company already!

But as we have discussed before, VERY conservative fundamentals still justify an SP in mid-late 20's excluding Mapawa!!

Todays ann., the positive no surprise management, the steady progress, a fully capitalised and (about-to-be) debt funded operation, a mkt cap at $175m knocking on the $200m threshold some instos may have, ... all factors will assure further price appreciation before cashflow generation starts 2010.

Happy shareholder, overweighted in RED.
>>

Hi Morton_Mains, very happy to see your post, and by the way I am trying to work out why I am banned so please feel free to copy/paste anything I say here to anywhere else you see fit (hmmm!).

I agree with you, that the volumes are fantastic and I can only say that my thoughts previously about a share price mid-30's is now long gone, its going a LOT higher!

The reason why the price increase yesterday I believe is due to the main insto's involved are trying to work it along slowly, for a few particular longer term objectives - they want to wear out any longer term holders plus any smaller parcels by short sighted insto's at current levels. But I think the main consideration is that there are now another 40 million shares due to be issued soon, and whether they are longer term holders is questionable - maybe the main insto thinks they can take them out around current prices if they are patient. As a result I think you will see a bit more of the playing games with the share price before advancing further, but as was demonstrated yesterday that there are BIG guys in there now so the weight of considerable funds being interested will push this much higher in the short term even!

I agree that the porphyry grade of gold is excellent but actually characteristic of this province, and is a good omen for the future holes. Seems to me that if we get another good hole announced in the next 2 weeks (hole 2 as RED suggest) then maybe the price will naturally move up a lot more soon!

I did notice also, via a copy of the RED announcement that was forwarded with a message by the Chairman of RED, his comment ...."Folks, The first hole at Mapawa delivers economic grades by typical porphyry deposit standards, and with elevated gold which could attract the attention of gold majors as well as the base metal majors."

This is quite an apt point, that it could attract the gold/base metals majors, and if that occurs then there might be some very interesting positions being taken by large companies. In that regard, "Tokyo's" prior observation about the Chinese being a possible buyer of RED is very relevant - remember that Tokyo first pointed us RED observers to the fact that the biggest gold producer in china had moved into Philippines looking for acquisitions, and within about 1 week had announced the deal with Tampakan! So Tokyo's comments are more interesting now with Mapawa a real project!

As i said above Morton-Main, please feel free to distribute anything I post more widely if you think its relevant, especially the post about the acquisition of Merrill Crowe Corporation, which must be considered very positive going forward!
Regards
Beatle

RED share price looks weak today, then all of a sudden there are 13.5 million odd shares traded at 1.5 cents down from yesterday. It was a cross sale, so that means maybe a big holder putting them into a more suitable associated entity. I wouldn't be surprised to see the share price strengthen now, clearly that buyer/seller was setting up the market for that cross trade!

In the short term I can see RED moving back up, no one in their right mind will allow a company, with a DCF on its Siana project of 33.5 cps, and now with Mapawa (valued at anything upward of 9cps) plus excess cash 2 cps (ie total value now about 44.5 cents) languish at 18 cents for too long - there are too many reasons now why RED will be moving up in a hurry, soon!

Beatle .. what's your opinion on the copper % for Mapawa?

Is it on the low side, but still good enough to be a bonus when combined with the gold levels? or not even that significant of a per centage?

Hi Auscan, good to hear from you (I'm blo*** Pi**** off after what that other crowd did - I was on a trip overseas and used a number of different internet cafes to access my account and then I get accused of having duplicate accounts!).

The gold grade was a complete (pleasant) surprise to me - although as was pointed out by Morton_Main it seems to be characteristic of this part of the general surigao province, and boyongan is similarly high in gold.

If you look at the copper grade, yes its lower than a lot of porphyries, but still will amount to some significant copper output (of course depending upon whether this first hole is indicative of the whole deposit and also if the metallurgy is suitable - which is likely to be ok since boyongan has no issues with metallurgy) - Based on the annual throughput rates envisaged for such a large tonnage ore deposit. (If you think about it, at an annual rate of say 10 mtpa it amounts to contained copper of around 17,000 tonnes, and assuming 90% recovery, is reasonably large from a revenue point of view at around current price of US$3.60/lb ie 0.9 x 17,000 x 2,200 x 3.6/0.93 = A$130million pa!!!).

Its also important to note that the second hole is not aimed at evaluating the heart of the deposit, but actually aimed at testing the limits of the deposit - this also is confirmed with the comment in the announcement that there is an increased level of sulphides (assumed to be pyrite) so this gold grade of this second hole may not be as great since its on the margins - typically these porphyry deposits are zoned outwards, with a lower grade pyritic zone marginal to the orebody, so if the grade in the second hole is lower this is not necessarily meaning that there is no scope for the deposit, it just means it has defined the limit to the higher grade zone!

The third hole probably is a more important test of the tonnage potential, due to the targetting of the deposit at depth below the first discovery hole. And as I have mentioned before, its phenomenal to think that RED has found such strong gold mineralisation in the first hole, its a real indication of potential.

(BTW, note that there are a number of other porphyries in the Siana MPSA as well, and Madja will probably get more of a look at now, both with this first success as well as RED having more money to spend on the exploration).

I would also appreciate you informing all on that other thingo, IF you see it worthwhile, for the comments I make in previous posts here, regarding the acquisition of Merrill Crowe Corporation, its a REAL plus for RED, but no one seems to have really seen it as positive. In fact its probably the biggest coup of all! (And I am not seeking any attribution to your post, I just want everyone know that is a great result for us at RED).

Regards
Beatle

thanks for that informative reply

all of your recent/previous posts have been copied to the dark side already

Thanks Auscan (I can't even get on that site now to check what anyone else posts, each time I log on they have put some sort of bait (or worm?) that tries to get into my computer and my virus checker boots me out! - I'm not sure what they are attempting to do is legal or not!) .

I believe that RED value really should be re-considered now for the potential at Mapawa, and it might be the carrot of Mapawa that tempts some bigger players to consider RED as a real takeover play - I assume that any interested corporates would be waiting for the next couple of holes, and in particular if the third hole confirms similar grades then RED could surge in a couple of days, by much more than a few cents each time! Today I reckon the insto's were playing games with smaller fish trying to tempt out any loose shares.

Interesting times are definitely ahead for RED in the near future, and with very little downside .. if any

Its taken them a long time to line it all up, but they seem to have finally achieved most admin / finance requirements to take the big step up to producer.

If Mapawa can live up to its initial exploration success, that it is one sweet bonus at a VERY opportune time.

Lets hope the positive momentum continues ..