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Hi Beatle
Im around until next tuesday keeping an eagle eye on red movements. Over xmas im hoping to catch up with a distant family relative in NZ who is apparently a well respected fund manager. He recently left a major NZ fund management company and their recommendation went from Reccomended to AVOID. This is the first year that ive really thought about sharemarket and companies i'm investing in so i hope to get some inside info from him. Im very interested in weather he has heard of Red, and moreso his opinion of matthews and baker steele as they seem to be our major longer term holders.
I get the definite feeling that one issue to be mentioned will be shares on issue. I recently followed matthews into REY and notice only approx 300 mil on issue ( again the amount red ADDED to its shares on issue). After CR at similar discount if not smaller it has gone from 22c previously to 30 today. Mathews is certainly one of the remaining reasons that i keep the faith in Red i must admit, if i see a reduction in substantial holding from them i will really be concerned. Im also hoping to find out if he has any info on the technicalities of trading such as bot trading, blocking bids and offers etc. I know he moves some substancial parcels of shares but never thought to ask how they do it re bots etc. Should be interesting.
Hopefully if nothing else gold will go for another jog past 1420 oz to give us some price movement.
Im curious as to what will make the RED price move significantly between now and gold pour, as there "shouldn't be" any question re production actually happening , and we have a pretty well known resource it appears at Sienna. It seems all the variables re Sienna are now known, other than POG at pour time. Unless i'm missing something either POG or Mapawa announcement are the only factors. The valuations you have on RED at 30c+ in production must be well known to investors now so what are they waiting for. Anyway Time for sleep so good luck to all and hopefully something occurs to make us all happy.
 
Hi Andrew, it sounds like you will get some interesting commentary if your not too distant from your relative, Lol!

When you say ..." He recently left a major NZ fund management company and their recommendation went from Reccomended to AVOID." - are you referring to a recommendation on RED?

As for pricing of RED, the fundamental value as you will realise from our past discussions, relates to the NPV on a per share basis. As you correctly pointed out, we have done to death a fundamental value for Siana of 30+ cps. But of course it will move around that value depending upon general market sentiment and RED trading momentum. As for Matthews stake in RED, I believe that Matthews may well have been diluted down a tad for JP Morgan et al to enter through the last capital raisings. Personally I don't see this as a bad thing!

As for when will RED share price, if ever, move towards its funamental Siana value, well I can't see it sitting at this current price range once its confirmed that it has successfully made the transition for explorer to significant gold producer - and assumedly that puts a limit on how it can trade at this current discounted level to about May 2011 or thereabouts, assuming things are on track at site.

And on a separate issue, Mapawa potentially holds a wild card for RED, although I am led to believe that most, if not all, insto's have invested in RED for Siana and Mapawa is just cream at this stage!

All the best to your time in NZ.

Regards,
Beatle
 
Hi Beatle
Re the Nz relative- it was his ex company that was re rated, indicating to me that he is well respected in the industry (must admit I dint know him that well, I was aware he was in the industry but didn't realize how far up he was) I would like to see if he has even heared of Red, but as I say unless his company is recommending red I imagine he will brung up the shares on issue as a problem, well see.
I am curious why red is lagging now that there should theoretically be absolutely no doubt that a mine will be built, if they can't build it with current finance they should be shot. That being the case it seems the market is not overly impressed. This could be a distorted view though I think because a good number of the recent new instos may never have had any intention of holding for long term and are just profit taking IMO. Just seems that at this point all variables are known about sienna and were valued at current levels based on that. Significant movement appears dependent on pog or new news. As I said best thing for me us surely the downside is limited, which used to be one of Rivkins favourite rules before considering upside.
 
Hi again
I've been messing around on hc with some figures but no- one seems to want to comment on weather I am correct or am missing something, wondered if anyone here could help. If we were to reach 30c by production, and produce say 50000 oz in first year that would equate to 3.8c per share earnings on 1.3billion issued. At 30c per share that would give us pe ratio of approx 7-8. At current levels pe would be approx 5. With those figures if they are correct the shares on issue certainly don't seem as bad as I pictured. Also noticed after pointed out by poster on hc that the new substantial holding of jp Morgan was mainly held (50 million shares odd) by their uk asset management fund, which is apparently another respected fund run by Ian Henderson, although I haven't looked deeply into how well they are rated. I had jp down as a broker/ dumper but now seems they also would be planning to hold along with Matthews, baker Steele etc. Maybe things are looking up because if we get gold out as expected and Nothing happens at Mapawa god forbid then surely we will still be on a pe higher than 8???. Something very strange there. Anyone know a typical pe for a producer?? Mml seems to be at around 15. if we got Same pe on 50,000 oz at 1000 per oz (earning .038 per share?) that gives us a sp of 57 cents. That's what I'm talking about.
 
I have my doubts over RED. Charlie Aitken likes RED5 but he also liked OZ Minerals and that was a huge mega loser. I'm a bit hesitant to buy into this yet.
 
Hi Gumby.
Charlie , is he with southern cross. I would have considered them as also rans compared with Matthews capital, baker Steele, and now apparently JP Morgans UK based resource fund, all of who are now substantial shareholders in red. My main reason for staying in is Matthews , who are regarded by some such as bloomberg and Australian business spectator as one of the top performing fund managers in the world. Before the cr they held 20% of the compAny. I also followed them into Rey, (a coal play)at around 26c couple weeks ago. That one hit 35 this week. What exactly is making you nervous may i ask?
 
Charlie Aitken is a sharebroker who writes a daily strategy note called "Under the Southern Cross"...and yes, he is a Director of Southern Cross Equities. Not sure why you would call him, or them, "also-rans" given that they are stockbrokers, not asset managers. And I think in a global context, JPM, and more particularly the JPM Natural Resources Fund would leave Mathews Capital for dead, certainly in terms of FUM but also in performance measurements over a 5 or 10 year period.
 
I got the impression that southern cross was as you described and charlie aitken after a short bit of research is as you say a commentator. I didn't mean to offend anyone with the also rans comment but got the impression southern cross were like tipsters that put out a load of reccomendations and some pay off some don't. Wouldn't want to put much money in on their word hoping they picked a winner this time. Also ran as in they are in the picture with red, but I would be more concerned if Matthews or other fund managers commented on red. Re the comparison of funds under management I don't think myself that that is such a big deal. These giant fund managers are IMO the ones bleeding us dry with fees and average performance, and the only good thing with them to a degree is the name. If you said AMP were major holders i would say same- massive funds under management but nit much going on. Im certainly no expert in all this stuff but am finding these discussions very informative for research. Feel free to tell me if im seriously underestimating both jp and amp, but it seems to me massive funds under management is mire about security than outperforming rmthe market. Over xmas i might try ti find details on matthews v jp morgan funds performance over 10 years. I know that in finding reference to the JP uk resource fund I haven't yet found any extensive performance figures to compare with Matthews, but I certainly read in more than one place including bloomberg USA that Matthews and phil Matthews were rated in the top precentage of fund managers in the world. Didn't look at the time to see if jp uk fund was there as well as Matthews is obviously only "one of" the top managers so there are others.
 
A couple of points
1. Without defending the stockbroking industry, I think your description of one of it's better operatives as a "tipster" is not just derogatory, it ignores the fact that anything Charlie Aitken says is backed by the analysts working for the company, his own wide net of business contacts, and his own intelligence and acumen, picked up from his years in the investment industry.
2. I agree that size alone in the asset management industry is not the be all and end all, BUT, the more successful a fund management group, the more likely it will be that investors will invest with them to participate in that growth. Talking about AMP or any of the other big Aussie groups is a waste of time as regards a coy such as RED as it simply doesn't meet their mkt cap parameters...anything under $1bn mkt cap is regarded as a small cap and they probably CAN'T look at it until it actually starts making money. Mathews is a specialist group which doesn't have the same restraints as the larger funds.
3. Information on all these funds, AND their performance is available on the net....I suggest you spend a bit of time researching them, if you're concerned.
 
Sorry Hugh wasn't intending to be derogatory to anyone although in hindsight it is. I know I can be a bit abrasive but I like to get to the point and the pertinent info as quick as possible. On many of these chatsutes there seems to be a lot of" I know something really important but I'm not telling you, and I'm not telling you where to look dyor dyor etc" why not just share the sources or info if it is pertinent to the company, I thought that was why we are here. As you mentioned all the info us on the net, do you have any preferred sites that you refer to for that type of information.

I'm still wondering if anyone can help me re the calculations of current price v possible sienna first year earnings. Am I correct in arriving at potentielal EPs of approx 3-4 cents and pe of 5 if that were to occur at current sp. I would have thought this wiuld be a different way to look at valuation and see some possible blue sky with 1 billion shares on issue but as yet no one has fomented on wether I'm anywhere near correct. Not sure if that's cos I'm so far out that it's pathetic, or what the answer is. If anyone can confirm I am at am not in the ballpark that would be appreciated.
Thanks for your comments Hugh, I'm still trying to learn how to "dyor" as everyone keeps saying so any help us greatly appreciated. My comments on southern cross were definitely not researched to any degree, and were just off the cuff opinions.
 
andrew 65, my model shows after tax eps as follows
Y1 Yr 2 Yr3 Yr 4 Yr 5
0.029 0.045 0.062 0.090 0.053

I think based on it being a cash producer, with prospective resource at Mapawa and also at further depths at Siana that 5x would be too conservative particularly if POG is as high as we think it will be
 
Hi MGM
I guess that's the difference in moving from cash losing explorer to cash earning producer. It's a totally different method of valuing, but to my reckoning makes the billion plus shares on issue not such a massive issue as I first thought. Based on your model first year eps if .029, if we had a pe of 15 which sounds around where it ought to be based on others in the sector, that gives us sp of 43 cents per share. I'd gladly take that for starters, and that's with absolutely nothing from mapawa. I guess once in production the shares on issue is not as important as the earnings per share, and if mapawa even turns out nit to eclipse sienna but just be similar that would still effectively double eps if it could be mined in parallel with sienna without compromising output capacity.
 
Hellooo, where'd everyone go.
I thought i might get a bit of feedback especially from Beatle and others on this site re the EPS and PE method of valuing the company. This certainly seems to open up the overhead barrierswrt shares on issue when looking at eps of 3 or 4 c. Seems an income of $40,000,000 with cost per oz approx $400 on 40,000 oz would easily give figures around 3c per share. Am i missing anything as i assumed when they discussed cost to mine per oz as 350-400 i thought that took in everything. Probably not that simple. At 3c per share and what must be a cheap pe at 15 we still get 45c, double current levels. I got pretty excited when i saw this way of regarding current shares on issue- but suddenly everyone seems to have buggered off?? are you there beatle, anderbond etc or is christmas shutdown already in action. Any way best wishes to all if youre away already. Id like someone to let me know if im close to reality or something obvious is missing as ive said previously im still trying to learn the ropes re valuations etc. Seems much easier to hold a fluctuating share when you have confidence in your own valuation. Any help please, am i on the right track??
 
Hi Andrew etc, sorry for the lack of posting, in fact its just by chance that I have got online. After such a long time of pouring over reports and spreadsheets and charts I made an agreement with the missus to have a completely different Xmas/New Year break, that includes no work, no laptop etc! (So now I am cheating just a little bit by getting into an internet cafe!).

With regards to your recent posts Andrew, your general comments re PE etc are quite valid and based on Mgm1a's analysis which has always been very similar to mine (albeit he has now provided for the Sprott debt whilst in my most recent analysis I didn't include that but the difference is negligible in terms of a slightly increased finance cost), I suggest your conclusions about RED's current share price remains highly discounted if it successfully transitions into gold price (always subject to gold price of course).

In fact in some much earlier analysis I did include PE and EPS work, of course no with the expanded shares on issue, and I remain very comfortable that RED will move appreciably higher once it successfully moves into production - now less that 6 months away!

I have got a good mate who is currently onsite looking at the project and I am expecting some commentary from him when I get back home, but it won't be for a couple more weeks (around mid January), so I will be happy to share that information once I get it. My only knowledge re current status is that Siana remains basically on track, subject to weather still expected to cause havoc since they are in the midst of the rainy season, but slippage due to weather will only be a few weeks at most. But I will post a more meaningful update of status around mid Jan.

In the meantime I wish all a Merry Christmas and Happy New Year, have a RED wine occasionally but don't drive if you do have a drink - I want to share our good fortune with all our RED club members in 2011, a year I believe we will have much more than just the first gold pour, we should all also enjoy share price appreciation finally!
 
Hi Red members. Received in the mail today an offer of Wilson HTM`s research paper on RED 5. Complimentary of course. WHTM in their introduction have a target price of 0.29c.

I`ll be interested to read it although I would have no comparison research paper to compare it to, apart from the info on this thread. Must be going through the shareholders, to drum up a bit of business? Surely not;)

Anyone else received a similar correspondence? Just curious.

Merry Christmas and Happy New Year to all. Bf
 
I got the letter also buckfont. Don't really see the point in reading their opinion as everything we need seems to be in the announcements- ie as long as we star producing as planned or near enough we become cash-flow positive. If we use their valuation at 29c then with a pe of 15 we'd meet to make 1.9c per share which equates to $25 million income. In theory at current gold price and with cost to produce at $400 per oz a fairly simple calculation gives 25,000 oz of gold required to be produced.should be easy. Only thing I'm not really clear on is when the gold prepay has to be stumped up, as I guess that takes 25,000 + oz out of the earnings equation at some point. Anyone clear on how the prepay works as in when it must be paid.
 
Hi Red followers.

Lots of Big boys corporate activity today with 11.8 Mio shares traded,mostly in big crossings.Total shares traded in previous 5 days was about 6.5 Mio.Lets hope this is a bit of a pointer to some drilling announcements in the new year as their last drilling results are well overdue for Mapawa.
 
Attn.Beatle,MGM,Anderbond and others.

Thanks you guys for some great informative posts during 2010.
I have followed Red for a lot of years on & off and can finally see some great rewards to come over the next 12 months or so.Red 5 will go into production during a gold boom with some very promising exploration upside from Mapawa and plenty of cash to fund mine and exploration.
I wish you all a prosperous new year and greatly appreciate your posts .

:):)
 
Hi to all RED clubhouse members and a Happy New Year to all! I am just back from 3 weeks in cold cold Japan so am happy to be able to enjoy the Sydney warmth again.
Have come across some web articles re recent rebel activities on Mindanao. In particular it appears that there was a display of armaments by members of the New People's Army in Surigao del Sur. Alleged to be connected to extortion activities and that seven mining companies have reported cases of extortion.
Beatle, I note you have a friend about to return from the site, so perhaps your friend can throw some further light on what is happening. As previously noted in past posts from contributors, Siana and Mapawa are at the northern end of Mindanao, so I will be surprised if there is any effect on operations but further information if available will be appreciated. AB
 
Hi RED fans and others, my recent contact with the company has resulted in the following:
Siana development build is running more or less to schedule despite abnormal rains and company still believes first gold pour will be in early May. There has been increased New People's Army activity on Mindanao but Siana is not affected so far (there is good understanding of the benefits of the coy's programmes with the community).
Still suffering assay delays plus some deeper drilling problems with Mapawa. Next drilling report expected within week or two, followed by quarterly report.
Thanks. AB
 
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