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my No vote has already been sent;as a smaller shareholder, mgt can and will screw us, but do not expect me to bend over, and I will remember this for any IPO where the same names surface;
VAU - Vault Minerals
- Thread starter Uncle Festivus
- Start date
Good day RED members, what an incredible time with gold breaking out again and the overseas markets going wild, with the aussie dollar now supreme against the US dollar - its a positive for RED in terms of any capex required to be met in US dollars, but does nothing for the valuation of RED as the currency keeps the US gold price in check, but at least its a positive sign to the markets that gold overall is not ready to tank itself!
In trading early today I note that the smallish capper which sat at 19.5 cents yesterday and was being chewed ever so slightly, had shrunk from more than 1 million shares to be down to 516,000 odd shares by start of today, and moved back to 20.5 cents at start of trade, and now seems to have disappeared. Whether they have decided to think again in trying to hold the share price down or decided not to fight the rising tide for now not sure, all I know is that yesterday I got a few more shares, thanks for that mate!
In trading early today I note that the smallish capper which sat at 19.5 cents yesterday and was being chewed ever so slightly, had shrunk from more than 1 million shares to be down to 516,000 odd shares by start of today, and moved back to 20.5 cents at start of trade, and now seems to have disappeared. Whether they have decided to think again in trying to hold the share price down or decided not to fight the rising tide for now not sure, all I know is that yesterday I got a few more shares, thanks for that mate!
This post will be controversial, but something that needs to be aired and considered by all, and best posted during the off-trading time of the weekend!!!
The RED thread on ASF tends to be fairly low key, and generally involves commentary of a supportive nature to RED invesment and its chronic highly discounted share price based on fundamental value of Siana. It has been the bane of my life this shareholding RED, knowing that we have never received full value for our shares despite it having considerable upside, not just because of the exploration potential at Mapawa, but also at the core gold project at Siana!
However, at HC there are a number of more vocal and disenchanted shareholders. Most are genuine in their criticism, and some are longer term shareholders, one of whom is someone called Councilgritter ("CG"). Over the years CG and I have had some interesting dialogue, and one of the main points of our discussions has been RED management.
I have tried to modify my previously highly critical (and previously outspoken) view on this topic over the years, which all revolves around the frustration of having Siana development take so long. In recent times I therefore have focused on the positives of the company, and the slow but certain progress of its development, and to consider the positives of RED from an investment point of view. CG has kept a much lower profile, who acknowledges the discounted value of RED, but now and again posts with some very salient points that should not be ignored by anyone either investing in RED or considering an investment in RED.
This resolution 10 is a case in point for CG who, clearly out of frustration, made the following comment (a portion of the post only!):
"I certainly would only give management a 2 out of 10, however, these guys have struck it lucky with all the stars seemingly aligned in their favour. It's a classic case of a great resource, run by monkeys, however, given the huge free kick they have had with the run in the bullion price, they should just about scrape through, but, if only they had a Rowan Williams from Avoca or any of another half dozen other hard-working mining men involved, RED would be a stand-out. That it's a slow, slow struggle, says it all. I'm still a long-term holder however."
I can only agree wholeheartedly with his comment that the stars certainly have aligned for RED, and clearly its the events out of control of RED such as a rampant gold price and recovery of equity markets (particularly aided by circumstances with China's rise and the US' fall) that have been instrumental in lifting RED to this unenviable position.
I would like to add that the long gestation of RED getting this project to this stage has been very frustrating to us all. Even to RED management! And that the MD who has been charged with the bulk of organising the various phases of outstanding tasks and has finally been able to conclude most of them. I have no doubt that his direct involvement and tenacity at the project has been rewarded by finally overcoming those many obstacles. I for one would have thrown the towel in long ago trying to cope with all the frustrations - so I do give credit to the MD, as a person for having achieved this success with the project going through the washing machine over the years.
But times have now changed! Clearly RED board has had a rethink in recent times with regard to the skill set of board members, including the replacement of 2 directors by others with more experience in the development of projects, with assisting the future development of Siana etc. I would like to think that the board is now close to considering the future of RED with regard to the person chosen to lead the company forward as MD.
I have held a long time view (and earlier on, a much more outspoken view!)that RED has been affected negatively with its management structure, having the Managing Director based in the Philippines, and the non-executive Chairman seemingly responsible for the financing arrangements with the company. My view has always been that the MD should be in control of the company leading all aspects of it from a corporate level, and be in a position to ably represent the company as necessary to the market, its potential investors/lenders/shareholders etc. Since RED is an ASX listed company, with the majority of its shareholders being Australian (including most insto's) then the RED MD should be based in Australia, and working for the benefit of the company. And preferably with a skill set more aligned to one of a financial, corporate or investment aspect, not a geologist with mainly technical skills. And certainly not continuing the arrangement with the MD based in the Philippines who has had to run with the project on the ground, developing it further at the same slow and steady pace, as it has done through all the past years guiding it through all hoops and hurdles that will confront it in coming years.
I believe that RED board now has a responsibility to recognise that current shortcoming, and force change now as it is necessary for the company going forward to extract maximum value for its long-suffering shareholders. If RED seeks to have its shareholders remain involved with the company during this next exciting phase then it should seriously consider this issue.
This is not to say that the current MD should be removed from the project, I have no doubt that he still provides a key link between the company and the various stakeholders and government departments within the Philippines (and he clearly likes being in the Philippines), although the March 2010 appointment of a "Project Director" may be somewhat overskilling this requirement but I'm not the one to judge that.
I guess that Resolution 10 at the AGM is initiating this discussion of mine, as it epitomises long endured frustrations of longer term shareholders in RED. In my view, the events leading up to the drafting up of Resolution 10 was definitely something that RED could of, and should of, had complete control of. Now its left up to us as shareholders either to accept a passive view that the insto's will do the right thing and therefore vote YES of this resolution, or more aggressively force our opinion and vote NO, that opens up the door to a more risky outcome but potentially more rewarding in the longer term for us shareholders.
Unfortunately we only have guidance from RED management that now recommends we take the passive road and vote YES, without any additional information as to why we should trust that such a large capital raising is necessary and in our best interests - on the face of it, certainly its against RED's own commentary just a few months ago when they announced their intention to raise US$40 million (these subsequent events are now seeing us confronted with the possibility of it being increased to US$76 million, thereby blowing out the shares on issue!!!).
I believe that RED needs to make a strong statement to the market within the next week, to guide us more as to why we should vote YES and consider this significantly bigger capital raising, at such a discount, at a time when we expect to have Siana developed on time and on budget as stated in recent ASX announcements.
And soon thereafter I hope that RED board does announce the future progression of the company with the appointment of a new MD. Sure as anything those insto's will force this change in due course IF Resolution 10 is passed, and if its not passed then maybe they will still force the change anyway, as they have overall control now regardless!
The RED thread on ASF tends to be fairly low key, and generally involves commentary of a supportive nature to RED invesment and its chronic highly discounted share price based on fundamental value of Siana. It has been the bane of my life this shareholding RED, knowing that we have never received full value for our shares despite it having considerable upside, not just because of the exploration potential at Mapawa, but also at the core gold project at Siana!
However, at HC there are a number of more vocal and disenchanted shareholders. Most are genuine in their criticism, and some are longer term shareholders, one of whom is someone called Councilgritter ("CG"). Over the years CG and I have had some interesting dialogue, and one of the main points of our discussions has been RED management.
I have tried to modify my previously highly critical (and previously outspoken) view on this topic over the years, which all revolves around the frustration of having Siana development take so long. In recent times I therefore have focused on the positives of the company, and the slow but certain progress of its development, and to consider the positives of RED from an investment point of view. CG has kept a much lower profile, who acknowledges the discounted value of RED, but now and again posts with some very salient points that should not be ignored by anyone either investing in RED or considering an investment in RED.
This resolution 10 is a case in point for CG who, clearly out of frustration, made the following comment (a portion of the post only!):
"I certainly would only give management a 2 out of 10, however, these guys have struck it lucky with all the stars seemingly aligned in their favour. It's a classic case of a great resource, run by monkeys, however, given the huge free kick they have had with the run in the bullion price, they should just about scrape through, but, if only they had a Rowan Williams from Avoca or any of another half dozen other hard-working mining men involved, RED would be a stand-out. That it's a slow, slow struggle, says it all. I'm still a long-term holder however."
I can only agree wholeheartedly with his comment that the stars certainly have aligned for RED, and clearly its the events out of control of RED such as a rampant gold price and recovery of equity markets (particularly aided by circumstances with China's rise and the US' fall) that have been instrumental in lifting RED to this unenviable position.
I would like to add that the long gestation of RED getting this project to this stage has been very frustrating to us all. Even to RED management! And that the MD who has been charged with the bulk of organising the various phases of outstanding tasks and has finally been able to conclude most of them. I have no doubt that his direct involvement and tenacity at the project has been rewarded by finally overcoming those many obstacles. I for one would have thrown the towel in long ago trying to cope with all the frustrations - so I do give credit to the MD, as a person for having achieved this success with the project going through the washing machine over the years.
But times have now changed! Clearly RED board has had a rethink in recent times with regard to the skill set of board members, including the replacement of 2 directors by others with more experience in the development of projects, with assisting the future development of Siana etc. I would like to think that the board is now close to considering the future of RED with regard to the person chosen to lead the company forward as MD.
I have held a long time view (and earlier on, a much more outspoken view!)that RED has been affected negatively with its management structure, having the Managing Director based in the Philippines, and the non-executive Chairman seemingly responsible for the financing arrangements with the company. My view has always been that the MD should be in control of the company leading all aspects of it from a corporate level, and be in a position to ably represent the company as necessary to the market, its potential investors/lenders/shareholders etc. Since RED is an ASX listed company, with the majority of its shareholders being Australian (including most insto's) then the RED MD should be based in Australia, and working for the benefit of the company. And preferably with a skill set more aligned to one of a financial, corporate or investment aspect, not a geologist with mainly technical skills. And certainly not continuing the arrangement with the MD based in the Philippines who has had to run with the project on the ground, developing it further at the same slow and steady pace, as it has done through all the past years guiding it through all hoops and hurdles that will confront it in coming years.
I believe that RED board now has a responsibility to recognise that current shortcoming, and force change now as it is necessary for the company going forward to extract maximum value for its long-suffering shareholders. If RED seeks to have its shareholders remain involved with the company during this next exciting phase then it should seriously consider this issue.
This is not to say that the current MD should be removed from the project, I have no doubt that he still provides a key link between the company and the various stakeholders and government departments within the Philippines (and he clearly likes being in the Philippines), although the March 2010 appointment of a "Project Director" may be somewhat overskilling this requirement but I'm not the one to judge that.
I guess that Resolution 10 at the AGM is initiating this discussion of mine, as it epitomises long endured frustrations of longer term shareholders in RED. In my view, the events leading up to the drafting up of Resolution 10 was definitely something that RED could of, and should of, had complete control of. Now its left up to us as shareholders either to accept a passive view that the insto's will do the right thing and therefore vote YES of this resolution, or more aggressively force our opinion and vote NO, that opens up the door to a more risky outcome but potentially more rewarding in the longer term for us shareholders.
Unfortunately we only have guidance from RED management that now recommends we take the passive road and vote YES, without any additional information as to why we should trust that such a large capital raising is necessary and in our best interests - on the face of it, certainly its against RED's own commentary just a few months ago when they announced their intention to raise US$40 million (these subsequent events are now seeing us confronted with the possibility of it being increased to US$76 million, thereby blowing out the shares on issue!!!).
I believe that RED needs to make a strong statement to the market within the next week, to guide us more as to why we should vote YES and consider this significantly bigger capital raising, at such a discount, at a time when we expect to have Siana developed on time and on budget as stated in recent ASX announcements.
And soon thereafter I hope that RED board does announce the future progression of the company with the appointment of a new MD. Sure as anything those insto's will force this change in due course IF Resolution 10 is passed, and if its not passed then maybe they will still force the change anyway, as they have overall control now regardless!
I just noticed an article published last week prior to the announcement of details on USA's QE2 outcome, it refers to Sprott Asset Management, who has recently come onto the share register of RED5, and is the provider of the gold pre-payment loan proposed for drawdown in December 2010. It gives you an idea of Sprott's current investment view on gold and gold stocks (such as RED).
The link is: http://finance.fortune.cnn.com/2010/10/29/the-case-for-gold-stocks/
I copy some small excerpts of that article below which are most relevant to investors in RED re outlining Sprotts view:
"Despite the buzz you've heard about gold and silver over the last two months, the stocks haven't caught up," write Eric Sprott and David Franklin of gold-pushing Sprott Asset Management in Toronto. "We expect that to change over the next two quarters as investors realize how much stronger gold producers' earnings will be at $1,350 gold."
and
"If you haven't participated in gold's recent rise, don't fret, because the fun has only just begun," Sprott and Franklin write. "At $1,300 gold, these companies literally have a license to print money."
That gives us a fairly recent commentary of their bullish outlook for investment in gold equities such as RED, which is also due to get a re-rating in line with its starting up of gold production in April 2011.
The link is: http://finance.fortune.cnn.com/2010/10/29/the-case-for-gold-stocks/
I copy some small excerpts of that article below which are most relevant to investors in RED re outlining Sprotts view:
"Despite the buzz you've heard about gold and silver over the last two months, the stocks haven't caught up," write Eric Sprott and David Franklin of gold-pushing Sprott Asset Management in Toronto. "We expect that to change over the next two quarters as investors realize how much stronger gold producers' earnings will be at $1,350 gold."
and
"If you haven't participated in gold's recent rise, don't fret, because the fun has only just begun," Sprott and Franklin write. "At $1,300 gold, these companies literally have a license to print money."
That gives us a fairly recent commentary of their bullish outlook for investment in gold equities such as RED, which is also due to get a re-rating in line with its starting up of gold production in April 2011.
Dear Beatle.
This is all a beat up as you & I know , the 2nd tranch of shares is a done deal.I ask you to look at the voting on the 290 mio shares issued as at 10/12/2009 when the 2nd tranch of 192 mio shares were approved at a price of 15.5 c--
112,685,160 in favour against 120.500 against and the U.S.gold price had reached about 1250 dollars.I suggest the A$ price of gold is now less than it was at that time, therefore it is now arguable that this is a good deal for all Red shareholders at this time.
I am sure that all the institutional shareholders who bought at that time will also be supporting this additional raising.
The big sleeper in all of this of course is how big is Mapawa going to be?
Any funds recieved now wil be very beneficial to all holders in the future but may not materialise untill Sciana gets nearer to production.
These are my currant thoughts and I will be at the A.G.M. on the 23rd.
Regards Mardo
This is all a beat up as you & I know , the 2nd tranch of shares is a done deal.I ask you to look at the voting on the 290 mio shares issued as at 10/12/2009 when the 2nd tranch of 192 mio shares were approved at a price of 15.5 c--
112,685,160 in favour against 120.500 against and the U.S.gold price had reached about 1250 dollars.I suggest the A$ price of gold is now less than it was at that time, therefore it is now arguable that this is a good deal for all Red shareholders at this time.
I am sure that all the institutional shareholders who bought at that time will also be supporting this additional raising.
The big sleeper in all of this of course is how big is Mapawa going to be?
Any funds recieved now wil be very beneficial to all holders in the future but may not materialise untill Sciana gets nearer to production.
These are my currant thoughts and I will be at the A.G.M. on the 23rd.
Regards Mardo
Hi Mardo, I would like to make a number of points with regard to Resolution 10, some of which i have mentioned before, in reply to your view that is a done deal. I believe it definitely is not a done deal!
Firstly, your observation of that past vote and it getting the nod of approval from shareholders at that time is similar, is incorrect, I believe the circumstances and the requirements were very different and for that reason it was supported by all, including me. I had no problems with the reason RED seeking the cash, therefore i also voted yes, as it ensured RED was on the path to developing Siana, that cash was absolutely essential, and it has worked out well for RED since that time.
Now the Resolution is all about significantly more cash than is actually required to complete both Siana development and continue substantial exploration of Mapawa over the coming 12 month period in my opinion. IF there is another reason to justify such a significant capital raising, then let RED management tell us first - in the Explanatory Notes about the Resolution they have not explained nor justified as necessary. IF there is a valid reason then I will accept it, I just haven't seen it. And the fact it says "up to 198 million", I won't accept - if RED get the approval it will be ALL (not "up to 198 million"), I have no doubt about that, especially since it was 4 times over-subscribed!
Ok, now about your point whether its a done deal and the Resolution will be passed. Consider this:
1. It appears on the face of it that all the existing insto's in RED who seem to have at least 2/3 of the shares in RED have been a party to the first tranche of the placement (and most likely also the proposed tranche to boot). But the very fact that RED has linked the ratification of the first tranche with the approval of the second tranche in the SAME resolution, means that anyone involved in EITHER of the tranche 1 or tranche 2 placements cannot vote on the Resolution! Thus it appears that no institution will be able to vote this Resolution.
2. IF you look at the top 20 shareholders, most are insto's or representing insto's from my reading of it, other than Thomas Cumming (7 mil), GE (6.8mil), LG (6.8mil), and SM (5 mil) and some smaller holdings around 6 mil or less that appear to be smaller private companies. I'm not sure whether David Teoh (39.8 mil) would have been offered any, but I would be surprised if he wasn't offered and didn't take up shares under the first tranche and therefore can't vote in this Resolution - his right to vote and his attitude to the vote is critical IMO. I have no doubt that GE will vote FOR, probably LG will vote FOR, but I think SM will vote against!
Anderbond has commented that he has received a letter from a disenchanted RED shareholder who believes the Resolution to smaller shareholders, seeking the support of all to actively vote against the Resolution. I have also received that letter in each of my separate holdings! I assume that the disenchanted shareholder has sent many on the RED shareholder register, or maybe some of the larger holders (say above some level, maybe 100,000 shares and above, or maybe the entire register but i think not so exhaustive as that) seeking that support against the Resolution. I believe this will likely result in a great deal of support against it.
When you look at that analysis, in fact the votes FOR are not necessarily going to be anything like the tearaway vote that happened last time. It could in fact be a huge landslide vote NO against the resolution!
I still am yet to decide. I still seek some clarification in the coming week, and I will certainly post my conclusion based on the discussion I have with RED. I have one concern, previously posted, about whether the failure of Resolution 10 having a material impact on the future drawdown of the gold loan pre-payment. If it does materially affect RED's capacity to drawdown then I will vote YES. Of course there maybe other, undisclosed reasons which RED maybe can't divulge to anyone, including in private shareholder discussions, and if that is the case, then my conclusion may well be incorrectly based, but thats a fact that I risk taking.
I do believe though, that voting against the Resolution does have the potential to increase risk with RED share price, in terms of losing out on some insto support, and possible liquidity, and I will weigh that up once I have had the discussion with RED.
Firstly, your observation of that past vote and it getting the nod of approval from shareholders at that time is similar, is incorrect, I believe the circumstances and the requirements were very different and for that reason it was supported by all, including me. I had no problems with the reason RED seeking the cash, therefore i also voted yes, as it ensured RED was on the path to developing Siana, that cash was absolutely essential, and it has worked out well for RED since that time.
Now the Resolution is all about significantly more cash than is actually required to complete both Siana development and continue substantial exploration of Mapawa over the coming 12 month period in my opinion. IF there is another reason to justify such a significant capital raising, then let RED management tell us first - in the Explanatory Notes about the Resolution they have not explained nor justified as necessary. IF there is a valid reason then I will accept it, I just haven't seen it. And the fact it says "up to 198 million", I won't accept - if RED get the approval it will be ALL (not "up to 198 million"), I have no doubt about that, especially since it was 4 times over-subscribed!
Ok, now about your point whether its a done deal and the Resolution will be passed. Consider this:
1. It appears on the face of it that all the existing insto's in RED who seem to have at least 2/3 of the shares in RED have been a party to the first tranche of the placement (and most likely also the proposed tranche to boot). But the very fact that RED has linked the ratification of the first tranche with the approval of the second tranche in the SAME resolution, means that anyone involved in EITHER of the tranche 1 or tranche 2 placements cannot vote on the Resolution! Thus it appears that no institution will be able to vote this Resolution.
2. IF you look at the top 20 shareholders, most are insto's or representing insto's from my reading of it, other than Thomas Cumming (7 mil), GE (6.8mil), LG (6.8mil), and SM (5 mil) and some smaller holdings around 6 mil or less that appear to be smaller private companies. I'm not sure whether David Teoh (39.8 mil) would have been offered any, but I would be surprised if he wasn't offered and didn't take up shares under the first tranche and therefore can't vote in this Resolution - his right to vote and his attitude to the vote is critical IMO. I have no doubt that GE will vote FOR, probably LG will vote FOR, but I think SM will vote against!
Anderbond has commented that he has received a letter from a disenchanted RED shareholder who believes the Resolution to smaller shareholders, seeking the support of all to actively vote against the Resolution. I have also received that letter in each of my separate holdings! I assume that the disenchanted shareholder has sent many on the RED shareholder register, or maybe some of the larger holders (say above some level, maybe 100,000 shares and above, or maybe the entire register but i think not so exhaustive as that) seeking that support against the Resolution. I believe this will likely result in a great deal of support against it.
When you look at that analysis, in fact the votes FOR are not necessarily going to be anything like the tearaway vote that happened last time. It could in fact be a huge landslide vote NO against the resolution!
I still am yet to decide. I still seek some clarification in the coming week, and I will certainly post my conclusion based on the discussion I have with RED. I have one concern, previously posted, about whether the failure of Resolution 10 having a material impact on the future drawdown of the gold loan pre-payment. If it does materially affect RED's capacity to drawdown then I will vote YES. Of course there maybe other, undisclosed reasons which RED maybe can't divulge to anyone, including in private shareholder discussions, and if that is the case, then my conclusion may well be incorrectly based, but thats a fact that I risk taking.
I do believe though, that voting against the Resolution does have the potential to increase risk with RED share price, in terms of losing out on some insto support, and possible liquidity, and I will weigh that up once I have had the discussion with RED.
Hi again Beatle,
I understand some of your points put but I still believe it will be a done deal.
Just look at the share price while Red was in limbo prior to then.On 5/8/10
they announced"Debt financing package under review"and what happened to the share price ,
Between 11/8/10 and 27/8/10 Low 11.5 c High 13cents also
Between 22/9/10 and 5/10/10 low 16.0 c High 16.5 cents. I also realize there was a lot of strange Bot trades going on during this period .
This is why I bilieve the 17 cents should be viewed as a reasonable pricing for such a large placement even though it will dilute us by about 18% as you have previously stated(if you disregard the 1st tranch,) which could have been approved by managements 15% rule.
I also agree us shareholders are not being told the full story by Red management as they should under the continuous disclosure rules of ASIC ,but thats a matter to be bought up at the AGM.
Only time will tell and I do value your thoughts.
I understand some of your points put but I still believe it will be a done deal.
Just look at the share price while Red was in limbo prior to then.On 5/8/10
they announced"Debt financing package under review"and what happened to the share price ,
Between 11/8/10 and 27/8/10 Low 11.5 c High 13cents also
Between 22/9/10 and 5/10/10 low 16.0 c High 16.5 cents. I also realize there was a lot of strange Bot trades going on during this period .
This is why I bilieve the 17 cents should be viewed as a reasonable pricing for such a large placement even though it will dilute us by about 18% as you have previously stated(if you disregard the 1st tranch,) which could have been approved by managements 15% rule.
I also agree us shareholders are not being told the full story by Red management as they should under the continuous disclosure rules of ASIC ,but thats a matter to be bought up at the AGM.
Only time will tell and I do value your thoughts.
Hi Mardo once again, I do agree with your general comments regarding the pricing - I don't have a problem with the pricing of the placement that has been made, from my point of view the run up in share price certainly did post-date the obvious timing of the announcement, whether that be the market anticipating the announcement or it being forced up by certain parties.
The issue is more about the quantum of the equity raising, and that alone.
I would like to think that the bigger equity raising is in consideration of a bigger investment foray by RED within the general area surrounding Siana/Mapawa, such as a deal regarding Philex or similar. In that event I would wholeheartedly support the bigger capital raising as it would be part of a bigger growth strategy for RED, and in my mind provide a base for a much larger company in the process!
The issue is more about the quantum of the equity raising, and that alone.
I would like to think that the bigger equity raising is in consideration of a bigger investment foray by RED within the general area surrounding Siana/Mapawa, such as a deal regarding Philex or similar. In that event I would wholeheartedly support the bigger capital raising as it would be part of a bigger growth strategy for RED, and in my mind provide a base for a much larger company in the process!
I spoke with one of the senior RED management team today, and it was confirmed that as outlined in the Quarterly, a pre-condition of the future drawdown of the gold pre-payment loan in December, has a requirement to firstly raise at least US$25 million through equity. That means that if Resolution 10 fails to approve the second tranche of funding then Sprott would have to acquiesce from its requirement to meet that equity funding to enable drawdown. That means instead of just voting out the second tranche of placement funds we may well be voting out the pre-payment loan funds as well, thus it would be line-ball as to whether RED has sufficient funds in-house to finalise development of Siana without some additional funding arrangement, and since the failure to refresh the 15% would also require another Gen Meeting and approval of shareholders for another equity raise, whether it be a rights issue, spp or some other placement arrangement.
Thus its a risky decision to vote against Resolution 10, notwithstanding the fact that RED management should never have put the company in this predicament.
As a consequence I will consider this more before I make a final decision on whether to support the Resolution (against my views of it being a less attractive option) or vote it down! I suggest all shareholders should carefully consider that risk as well before making a decision. I welcome any other thoughts on this most important issue as soon as possible.
I don't agree that its "a given" that the Resolution will be passed regardless of what we smaller shareholders vote, I believe that the vote could in fact be a landslide vote against the company due to the distribution of that letter by the shareholder I have referred to previously. Therefore your vote should not be used as a way to send a message, it should be used to get exactly what you consider the best outcome will be for the RED share price, regardless of your own view about it being a dilutionary placement. I would like to think that anyone attending the AGM will make that general comment known to RED board, to let them know they have been very lax in forcing this issue upon us!
Thus its a risky decision to vote against Resolution 10, notwithstanding the fact that RED management should never have put the company in this predicament.
As a consequence I will consider this more before I make a final decision on whether to support the Resolution (against my views of it being a less attractive option) or vote it down! I suggest all shareholders should carefully consider that risk as well before making a decision. I welcome any other thoughts on this most important issue as soon as possible.
I don't agree that its "a given" that the Resolution will be passed regardless of what we smaller shareholders vote, I believe that the vote could in fact be a landslide vote against the company due to the distribution of that letter by the shareholder I have referred to previously. Therefore your vote should not be used as a way to send a message, it should be used to get exactly what you consider the best outcome will be for the RED share price, regardless of your own view about it being a dilutionary placement. I would like to think that anyone attending the AGM will make that general comment known to RED board, to let them know they have been very lax in forcing this issue upon us!
Hi Beatle, and thanks for getting in touch with RED management in regards to RES 10.
By the sounds of it they have put the company and us share holders in a bit of a predicament, (or have Sprott given RED only ONE option). Do WE as a smaller share holder really have a choice in the matter? I believe we do! But do we want to see Siana go from explorer to producer, by the second quarter in 2010? Do we want to see accelerated exploration at Mapawa, that could in turn, totally eclipse the Siana project? On the other hand do we really want to go through this financing process for a second time just to get Siana off the ground? Admittedly it could turn out for the better, but would mean a major delay in the first gold pour. Or it could just be another complete disappointment, which would also incur major delays, and also an old share price of 12 cents... Need i say more, but again, just my thoughts....
By the sounds of it they have put the company and us share holders in a bit of a predicament, (or have Sprott given RED only ONE option). Do WE as a smaller share holder really have a choice in the matter? I believe we do! But do we want to see Siana go from explorer to producer, by the second quarter in 2010? Do we want to see accelerated exploration at Mapawa, that could in turn, totally eclipse the Siana project? On the other hand do we really want to go through this financing process for a second time just to get Siana off the ground? Admittedly it could turn out for the better, but would mean a major delay in the first gold pour. Or it could just be another complete disappointment, which would also incur major delays, and also an old share price of 12 cents... Need i say more, but again, just my thoughts....
Hi Moit, I'm truly grateful for your comments and view on this darn Resolution 10. AND I agree with your thoughts entirely.
Whilst i am still formulating my view and continuing to weigh up the pros and cons to this most important issue further, my thoughts are similar to yours, of: Do we want to put at risk the timing of the development of Siana, and the risk that some of the insto's may pull out at this time and probably drop the share price?
I would like to be able to put in a protest vote and vote against the resolution, but i am thinking that it could cost us more than its worth, to do so!
There is no point in putting the future path in doubt at this highly critical time, despite it affecting the full value of the investment - as i have said before, my valuation suggests that without the excessive capital raising Siana value in RED is about 38 cents, whereas with this excessive capital raising drops the value to about 32.5 cents. So, even though the very thought that they have forced us down this road, whether Sprott angled for it or not, has caused that drop in valuation, at least if it proceeds it doesn't put at risk the development of Siana, it enables Mapawa value to be fully tested, and we should be able to achieve a value around 32.5 cents just on Siana, within the next months, with Mapawa value adding to that valuation.
But as a protest, I would like to think that someone is able to go to the AGM and put that protest to the board, at least in words if not in votes, to have a go at RED. I might arrange to attend the AGM, depending on how things are on the home front.
By the way, whether its absolutely true or not, I was told that the company do not believe that any insto's currently on the register are dropping shares at the moment, with any intention to pick up more in that second tranche! That could mean some other share traders are using the current time of uncertainty to deliberately frighten others in the RED market!
My pondering continues.
Whilst i am still formulating my view and continuing to weigh up the pros and cons to this most important issue further, my thoughts are similar to yours, of: Do we want to put at risk the timing of the development of Siana, and the risk that some of the insto's may pull out at this time and probably drop the share price?
I would like to be able to put in a protest vote and vote against the resolution, but i am thinking that it could cost us more than its worth, to do so!
There is no point in putting the future path in doubt at this highly critical time, despite it affecting the full value of the investment - as i have said before, my valuation suggests that without the excessive capital raising Siana value in RED is about 38 cents, whereas with this excessive capital raising drops the value to about 32.5 cents. So, even though the very thought that they have forced us down this road, whether Sprott angled for it or not, has caused that drop in valuation, at least if it proceeds it doesn't put at risk the development of Siana, it enables Mapawa value to be fully tested, and we should be able to achieve a value around 32.5 cents just on Siana, within the next months, with Mapawa value adding to that valuation.
But as a protest, I would like to think that someone is able to go to the AGM and put that protest to the board, at least in words if not in votes, to have a go at RED. I might arrange to attend the AGM, depending on how things are on the home front.
By the way, whether its absolutely true or not, I was told that the company do not believe that any insto's currently on the register are dropping shares at the moment, with any intention to pick up more in that second tranche! That could mean some other share traders are using the current time of uncertainty to deliberately frighten others in the RED market!
My pondering continues.
On a completely different issue that relates to RED and other gold equities, I saw an interesting analysis on CNN, that refers to gold's record high:
"One caveat on gold. The precious metal remains miles away from its true peak, when adjusted for inflation. Gold hit its real record on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation from 1980 dollars to 2010, that translates to an all-time record of $2,184.08 an ounce."
Does that mean gold could go even much further in this current run to test that all-time cpi adjusted gold price?
Talk about RED being very lucky with its timing of developing a gold mine!
"One caveat on gold. The precious metal remains miles away from its true peak, when adjusted for inflation. Gold hit its real record on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation from 1980 dollars to 2010, that translates to an all-time record of $2,184.08 an ounce."
Does that mean gold could go even much further in this current run to test that all-time cpi adjusted gold price?
Talk about RED being very lucky with its timing of developing a gold mine!
Hi Beatle, thanks for the additional information on the 2nd tranche and the impact of a negative vote. I was interested to know if there was any additional comment from senior management regarding the increased CR and the impact of this on smaller shareholders? AB
I would like to propose to ASF readers that instead of / as well as your on vote on Resol. 10 that a protest vote be made by voting against the re-appointment of one of the directors that we select to make a voice from retail investors be known. Any thoughts?
Anderbond, Mm1a, what are your views with regard to Resolution 10 - I'm interested in both of your views as to what is the most sensible outcome for us smaller shareholders? Particularly as to how it might affect our investments thereafter.
Mgm1a, its an interesting suggestion, I must admit I laughed when I read it! From what I have observed most of the work on the finance side appears to come from CJ, but if we didn't have him involved I shudder to think what might have happened to date! I don't suggest that CJ should be used as the protest vote as I don't think we have anyone else on the board that is capable of filling that role at present. Do you have any suggestion? And as I have posted previously, the role I consider that RED is lacking is a true MD that represents the corporate side of the company's activities rather than just the project side - and the irony is that the MD position never comes up for rotation, as a result of the company's Constitution.
Mgm1a, its an interesting suggestion, I must admit I laughed when I read it! From what I have observed most of the work on the finance side appears to come from CJ, but if we didn't have him involved I shudder to think what might have happened to date! I don't suggest that CJ should be used as the protest vote as I don't think we have anyone else on the board that is capable of filling that role at present. Do you have any suggestion? And as I have posted previously, the role I consider that RED is lacking is a true MD that represents the corporate side of the company's activities rather than just the project side - and the irony is that the MD position never comes up for rotation, as a result of the company's Constitution.
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why only voting against one?
the self serving insto puppet can not have my vote;
if for once you can influence outcomes and not be a casualty, as a shareholder, it is your duty to act and defend your rights;
We wait years, provide the seed capital for no return for ages and end up scr...ed
no thanks
I hope this does not appears too virulent ...
the self serving insto puppet can not have my vote;
if for once you can influence outcomes and not be a casualty, as a shareholder, it is your duty to act and defend your rights;
We wait years, provide the seed capital for no return for ages and end up scr...ed
no thanks
I hope this does not appears too virulent ...
Hi Qldfrog, thanks for your view.
Before I answer I will put my situation in context so that you know where I am coming from to have arrived at my view.
I am a long time shareholder in RED. I have no other affiliation with RED, other than knowing most of the senior management, and I have been to Siana site. I am also aware of the hard times in RED, not just going back a few years, but going back before RED was called RED (it was called GREENstone, lol), and that means even before they had a project called Siana! I have no other relationship to RED management. I have a considerable investment in RED (of course not as many as the top institutions, and I hold them in multiple names) and despite Smity's claim I still hold those shares, and in fact very recently bought more!
AND I am not being paid anything to state my view (I am not a consultant nor contractor to RED, and never have been).
Therefore, my only issue is to make sure the share price of RED goes up, with rational, logical thought behind any decision that I make that could influence the outcome of this Resolution - and without knowing anything about who may and may not be able to vote on this Resolution from inside the company, other than to know that anyone who gets shares in tranche 1 or 2 related to this placement cannot vote, I still firmly believe that we smaller shareholders do have considerable power in the outcome of the Resolution. I am not interested in seeking revenge with this vote, and whilst I am resentful of what RED has done, I will not use that as the basis for making my decision on which way to vote.
Having given it a couple of days to consider the machinations of how both options may play out, I will probably vote FOR the Resolution, as I am concerned that there is a risk, even if its slight, that without the approval RED may not be able to finalise the pre-payment loan of US$25,000 - that was confirmed to me when I made the inquiry earlier this week. If that was the case, then a NO vote would seriously affect the development schedule at Siana, as without any further placement approval and no ratification of the tranche 1 placement, RED would have to go to another General Meeting to seek any additional capital raising via placement and in the case of a rights issue or SPP (which I am dead against as it will kill the share price for a considerable period of time at this very critical time!).
I believe therefore that it is in all our best interests, even small shareholders, to vote YES, to make sure that RED does have the cash to develop the project.
I will state further, that I am completely disappointed with the arrangements for the finance, I believe that RED has not acted in the best interests of all shareholders with this funding arrangement, but they have already put it in place and there is no alternative possible at this time that can provide us all with a better outcome with less risk and better reward! Therefore in voting I have decided to accept the better of 2 not so great alternatives. I have accepted that the valuation of RED, on the basis of Siana alone, will drop from high 30's cents, down to low 30's cents. (The exact value now is changing hourly depending upon what gold price and exchange rate you use!).
Mgm1a's suggestion of voting against any of the directors up for rotation as a protest is actually a reasonable suggestion as clearly any insto's voting will support their re-election so they won't be removed but our protest will be registered. In addition I believe that anyone going to the AGM (and I may decide to make the trip) should grill the board on this placement issue with vigour! And once again, I am not talking about price of the placement, I am referring solely about the quantum of the placement and the inefficient use of share capital!
If anyone who reads this post and agrees with my view, but has already put their vote in, they can rescind that first vote by sending in another changed vote by simply putting a later date on the voting slip - it will automatically override your earlier vote.
Before I answer I will put my situation in context so that you know where I am coming from to have arrived at my view.
I am a long time shareholder in RED. I have no other affiliation with RED, other than knowing most of the senior management, and I have been to Siana site. I am also aware of the hard times in RED, not just going back a few years, but going back before RED was called RED (it was called GREENstone, lol), and that means even before they had a project called Siana! I have no other relationship to RED management. I have a considerable investment in RED (of course not as many as the top institutions, and I hold them in multiple names) and despite Smity's claim I still hold those shares, and in fact very recently bought more!
AND I am not being paid anything to state my view (I am not a consultant nor contractor to RED, and never have been).
Therefore, my only issue is to make sure the share price of RED goes up, with rational, logical thought behind any decision that I make that could influence the outcome of this Resolution - and without knowing anything about who may and may not be able to vote on this Resolution from inside the company, other than to know that anyone who gets shares in tranche 1 or 2 related to this placement cannot vote, I still firmly believe that we smaller shareholders do have considerable power in the outcome of the Resolution. I am not interested in seeking revenge with this vote, and whilst I am resentful of what RED has done, I will not use that as the basis for making my decision on which way to vote.
Having given it a couple of days to consider the machinations of how both options may play out, I will probably vote FOR the Resolution, as I am concerned that there is a risk, even if its slight, that without the approval RED may not be able to finalise the pre-payment loan of US$25,000 - that was confirmed to me when I made the inquiry earlier this week. If that was the case, then a NO vote would seriously affect the development schedule at Siana, as without any further placement approval and no ratification of the tranche 1 placement, RED would have to go to another General Meeting to seek any additional capital raising via placement and in the case of a rights issue or SPP (which I am dead against as it will kill the share price for a considerable period of time at this very critical time!).
I believe therefore that it is in all our best interests, even small shareholders, to vote YES, to make sure that RED does have the cash to develop the project.
I will state further, that I am completely disappointed with the arrangements for the finance, I believe that RED has not acted in the best interests of all shareholders with this funding arrangement, but they have already put it in place and there is no alternative possible at this time that can provide us all with a better outcome with less risk and better reward! Therefore in voting I have decided to accept the better of 2 not so great alternatives. I have accepted that the valuation of RED, on the basis of Siana alone, will drop from high 30's cents, down to low 30's cents. (The exact value now is changing hourly depending upon what gold price and exchange rate you use!).
Mgm1a's suggestion of voting against any of the directors up for rotation as a protest is actually a reasonable suggestion as clearly any insto's voting will support their re-election so they won't be removed but our protest will be registered. In addition I believe that anyone going to the AGM (and I may decide to make the trip) should grill the board on this placement issue with vigour! And once again, I am not talking about price of the placement, I am referring solely about the quantum of the placement and the inefficient use of share capital!
If anyone who reads this post and agrees with my view, but has already put their vote in, they can rescind that first vote by sending in another changed vote by simply putting a later date on the voting slip - it will automatically override your earlier vote.
HI Beatle and all other RED club members. Quite a few interesting points Beatle. You certainly have a way with words, and thats in a good way mate.. I hadn't realized you had been to Siana. I may get there one day, until then i might just sit back for a bit and see where my holdings take me!
In regards to your last post, SPOT ON !! I really couldn't have said it any better myself. No i mean that, lol.
Lets face it , it is a major risk to go against the RES 10. There are so many projects, margins, milestones at jeopardy. The main thing at this stage is SIANA. We are trying to get it up and running and the more we disagree, the further it would be halted back from development. I have ticked 5,6,7,8,9 and was just waiting on a bit more feed back from like-minded people such as yourselves before i sent it.
And lets not forget to mention the share price, currently sitting near all time highs, well close enough anyway. Its certainly far from high 30's and even low 30's. But realistically why do we even invest in RED? Is it because we just love management so much, we'd thought we'd throw some money their way and hope for the best out come? Or is it because we believe in RED and value RED as a company. Lets be truly Honest. We are all in this to make money, from the MD at the top down to us smaller shareholders. WE are not in it to whine and moan and criticize about the way it should be done. We are in it to make a buck !! To watch that Sp soar. And if the fundamentals are right behind the company, then why not invest.
I will be voting for Resolution 10 as i believe in RED as a company and believe they will be producing gold in the second quarter of 2011 !!
In regards to your last post, SPOT ON !! I really couldn't have said it any better myself. No i mean that, lol.
Lets face it , it is a major risk to go against the RES 10. There are so many projects, margins, milestones at jeopardy. The main thing at this stage is SIANA. We are trying to get it up and running and the more we disagree, the further it would be halted back from development. I have ticked 5,6,7,8,9 and was just waiting on a bit more feed back from like-minded people such as yourselves before i sent it.
And lets not forget to mention the share price, currently sitting near all time highs, well close enough anyway. Its certainly far from high 30's and even low 30's. But realistically why do we even invest in RED? Is it because we just love management so much, we'd thought we'd throw some money their way and hope for the best out come? Or is it because we believe in RED and value RED as a company. Lets be truly Honest. We are all in this to make money, from the MD at the top down to us smaller shareholders. WE are not in it to whine and moan and criticize about the way it should be done. We are in it to make a buck !! To watch that Sp soar. And if the fundamentals are right behind the company, then why not invest.
I will be voting for Resolution 10 as i believe in RED as a company and believe they will be producing gold in the second quarter of 2011 !!
Thanks Moit for both your compliment and also your view which I agree with, and you have got a way with words yourself. I'm a bit disappointed with some of the posts on HC at present, seems Smity et al are trying very hard to stir us small guys up (I congratulate Fatsoh with his analysis), and although I'm disappointed with the alternatives we have been faced with I won't be cutting off my nose to spite my face! Even at 33 cents (plus whatever Mapawa will contribute later on) RED is remains a bargain, and with these extra heavy hitters waiting in line for our vote I'm sure they will be very motivated to add some premium to Siana valuation soon after the AGM (but don't expect it the next day!).
As a matter of interest MML has gone through the roof (even though its retracing a bit today), and at a market cap of over $1 billion demonstrates what could happen to RED once we have got some strong Mapawa drilling information (note one of my previous posts that I don't believe they will put anything out for Mapawa until just prior to the AGM in order not to upset the voting outcome - that's just my view of course!). Thus if RED managed to get a similar market cap based on excellent Siana gold production plus Mapawa drilling, then RED can still get to $1.00! Ok MML has done everything right with marketing etc, but maybe once the development of Siana is behind us then marketing will become a priority with RED too.
(As an aside Moit, we could certainly agree to meet at Siana at the time of the mine opening, Fastbuck etc has suggested they may be able to get there - just don't eat the volut (spelling?) if you go!).
As a matter of interest MML has gone through the roof (even though its retracing a bit today), and at a market cap of over $1 billion demonstrates what could happen to RED once we have got some strong Mapawa drilling information (note one of my previous posts that I don't believe they will put anything out for Mapawa until just prior to the AGM in order not to upset the voting outcome - that's just my view of course!). Thus if RED managed to get a similar market cap based on excellent Siana gold production plus Mapawa drilling, then RED can still get to $1.00! Ok MML has done everything right with marketing etc, but maybe once the development of Siana is behind us then marketing will become a priority with RED too.
(As an aside Moit, we could certainly agree to meet at Siana at the time of the mine opening, Fastbuck etc has suggested they may be able to get there - just don't eat the volut (spelling?) if you go!).
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Hello Beatle and Moit. I wish to congratulate you both on your well thought out posts in relation to Res 10. I don't believe that the way to register a protest vote against management is to jeopardise the finances of RED in doing so. Many companies finances are stretched and limit the exploration and development they can undertake. We are not in this category! I hope that RED management will use their capital wisely in fast-tracking the expected good results from Mapawa after getting Sianna to production.
I rarely post as I am not in a position to contribute technically and there is so much waffle already on RED on HC that I am not going to add to it here.
I value the posts on ASF as being a vital part of my research.
I will be voting FOR Res 10.
Cheers.....
I rarely post as I am not in a position to contribute technically and there is so much waffle already on RED on HC that I am not going to add to it here.
I value the posts on ASF as being a vital part of my research.
I will be voting FOR Res 10.
Cheers.....