VAU - Vault Minerals

beatle; yes the MCC ann. got me thinking enough to do more research on coy structures (confusing) and then to ring co for 1st time on one particular feature the other night

I understand they want to keep the restructure low key..they are very respectful towards all parties and cultures concerned in-country.....on the matter u indicated of the 40m shares I don't see this as being a problem - the MCC party has sizable cash to enjoy and you will find person involved there (from desktop research on internet anyhow!) is smart enough to know the full value of the shares will accrue over time so won't be dumping anytime soon.

RED as you correctly point out the quality of the tenament ownership has increased, RED gets more % and also must now contribute more to capex!

Still good...but its still not running hard enough to fund me back into ORE

The biggest frustration with RED for me (and I'm sure for many others, especially the long term holders) continues to be the very slow build up in price at times even when they put out mind-blowing announcements like the past few days. It appears that the big backers much prefer to see a gradual move up, and from my observations I wouldn't be surprised to see that the big buyers remain as the big cappers to any significant movements upwards! (I think I would have a different tactic, lol!).

With regard to MCC, yes RED do have to fund more of the capex etc, but in fact have been doing so all along (also the other activities such as exploration) but now they get the benefits with regard to the revenue. I'm encouraged by your view Morton_Mains about the vendors of MCC shares that they won't consider a sell down any time soon, and of course are constrained any how with the escrowment of shares (and money it seems).

I hope that the MCC acquisition will speed up the project finance announcement, due out soon, and this must become the turning point for the share price to move up on a continual basis until at least the DCF valuation of Siana, with the add-on value of Mapawa of who knows how much, to push it up as results become available for holes 2 onwards. Lets hope that RED does put out an explanation of the exploration strategy with these early holes that clearly spells out their aim of trying to delineate the high grade zonation to the porphyry, as without that some less technically informed investors might make the wrong assessment that its a pup when its in fact an adult great dane!

Anyone please have it noted that I hope to meet up with the long termers planning to be at the mine opening next year, for a re-union of us all. (Of course provided we get an invite! - I hope Anderbond still plans to be there). (OF course I would also like to catch up with the newer investors, including Yuyu (I'd like to hear his thoughts regarding his Nissan racer!).

RE: Anglo Ceasing to be a shareholder in RED5

Well the cynics may well say that anyone who puts a positive spin on a major selling out of a stock is full of bull. Here goes my bull.. :

Anglo moving out of RED is a fantastic result for RED and its shareholders!!!

Anyone who has read my previous posts on another site, would know that I have been a continuing outspoken critic of Anglo in RED, for the particular reason that they have held out for a slice of Mapawa due to the opportunistic situation it was able to establish at a time when RED was well and truly a minnow without the capability to finance the ongoing development and exploration at Siana and beyond. That time has well and truly passed, and RED has no need for Anglo sweating on past "strategic alliances" announcements that didn't deliver a dime to RED for some sweetheart deal for Anglo in Mapawa.

All along Anglo was just hanging out its hope to retain a cheap entry into Mapawa, and probably (but I have no proof of this) with the threat of it dumping its shareholding in RED as an issue for RED to manage.

The former "strategic alliance" RED announced a number of years ago was actually one of the biggest skeletons left in the old junior RED IMO, and to know that RED is now completely off the hook with Anglo is great news. That means any future deal on Mapawa is not constrained by that past deal, and maybe the removal of Peter Rowe as a director a couple of weeks ago was the writing on the wall for Anglo in RED (Rowe was formerly a big wig in Anglo).

Now Mapawa is all of a sudden left to its own merits and value, and RED will get its best return based on that outcome. Remembering all along that Anglo under the proposed alliance was only ever going to get involved in the event that Mapawa was a huge project, ie it effectively negotiated a cushy put option with minimal downside risk outside of spending a few hundred thousand on the first couple of drillholes at Mapawa. Now RED has ALL the upside (AND MORE with the acquisition of MCC).

I believe that Anglo leaving the shareholder list is a great longer term outcome for RED!!!

And the fact that Anglo was able to sell down its shareholding so easily whilst the share price was on an UP is a real positive indeed for RED going forward.

G day Beatle, thought I might join you on this site as through a couple of HC contributors have realised you are still actively posting which is wonderful news! I just returned from a trip to Japan so have been a little out of things.
I completely agree with your points made in respect of Anglo, in fact I was a bit staggered to realise last year they were still in there so it is great to see them go. Also your other points in respect of RED moving to 100% ownership of everything is as you say much more than a tidy up of ownership structures as in the announcement. It all highlights the conservative approach of our management which is good I guess. One thing that blew me away was the references made by management about Mapawa in the drill hole announcement to other projects. I could not believe that Greg would do this on the basis of the work done to date, so I firmly believe he must be very confident about where it will all go. I remember discussing Mapawa with him when I spent a couple of days there a while back and it is fair to say he was excited about Mapawa then, so here we go lets hope! Also it is my intention to be part of the fun there if we get an invite. Even without one I would like to be there to celebrate! Thanks for most informative and incisive thinking Beatle, it is much appreciated. AB

Great to read your post Anderbond, and of course we have many common views regarding RED. (I'm quite peed off about not being able to post elsewhere but I have a feeling someone on another thread who has kept getting many of my other posts moderated and suspending me unnecessarily has some significant pulling power on that site, its a shame as otherwise it is a good site with a large following of good posters especially with RED but clearly has some political bias!). From my short time posting here there seems to be much more reasonable and fair latitude to make comment as in a democratic system, although the number of posters is clearly considerably less, maybe over time it will improve!

I agree that the last time BEFORE the drilling that I spoke with GE he was very excited about the size and intensity of the geophysical anomaly at Mapawa, and since that time AFTER RED got an idea of the gold grades (but before it was announced) it seemed even CJ was a bit more open open about discussing bulk gold tonnages (I wish I had picked up on that earlier!).

Now though, from my reading of the announcements and also a quick discussion with GE he is more guarded about hole 2, particularly as I have outlined in a previous post here, that it may well be in the lesser gold mineralised pyritic zone usually found typically in the outer alteration zones found in porphyries such as this is. But since the hole was targeted to establish the limits and is actually positioned at right angles to the first hole, any lower grades (and lesser thickness of mineralisation) is not altogether negative, but just confirming the limits to the extent of mineralisation (but on the other hand it went about 100 metres past its original planned depth, so GE might be playing his cards close to his chest!). Unfortunately RED is demonstrating its conservatism in the method of going about the drilling trying to establish limits to the mineralisation rather than to continue to drill pin cushion style that works much better for company share prices but doesn't quickly give an idea of size (cf with ROL that has used the first few holes to drive the price up very high and raise money at fantastic prices - I haven't followed ROL in its more recent drilling though!). (The vector drilling strategy that RED is employing is how Boyongan was approached in its early days by Anglo American and I suggest has more to do with maximising drilling efficiency for the longer term than to get the share price up in a hurry!).

Its a shame that the gold price dropped so significantly last night, so I guess we are going to have many ups and downs over the course of the next months whilst RED bed down the finance etc, but lets hope when they have to put that debt facility the gold price is reasonable (whilst not called such, they basically have an old gold loan facility being offered to them by Deutsche).

(BTW I suggest that some of the things I have posted here would not be suitable on the other site so best not to copy it there!).
I intend to keep posting here since the other group say that they are doing an investigation as to whether I have been using duplicate accounts which is clearly just a reason to suspend me for as long as it suits them! (Its like being in a communist country where there is no free speech!).

A few points to consider with things that have happened over the past weeks with RED:
1. Anglo has sold down 14 odd million shares. That is a positive for RED IMO as it removes an obstruction to any serious major company that may want to do a deal with RED on todays commercial terms for JV's (on Mapawa) or takeover based on the "new normal" - JiZin for instance, the huge Chinese mining group that has taken over Tampakan and has indicated its interest in getting more Philippine based resources will be amongst that group. (I understand that at least 1 company has already approached RED with an expression of interest out of the blue (RED is not seeking any JV on Mapawa).

2. Mapawa grade, at 1.0 g/t is HUGE!!! IF Mapawa is to be developed, unless there are differences to it than at any other porphyry style mineralisation it will be developed as a huge open pit, it would not be developed as an underground. Note that grades in the top zone have already been drilled by Suricon with indications of grades in the 1.5 - 2.5g/t range, thus it has fantastic likelihood of being developed as economic proposition with ore grades at surface ie unlikely to be handicapped by large overburden pre-strip that was an issue with Boyongan when it was assessed for development a couple of years ago (but since then commodities prices have risen appreciably so its more likely to be economically viable now - Philex the owner of Boyongan would do well to consider a JV with RED to co-develop a large project consisting of Boyongan and Mapawa, of course, IF Mapawa continues to prove its mineralisation extends beyond 1 hole!).
(Hole 2 at Mapawa is not expected to be as good as hole 1, but hole 3 is a biggy!).

3. Project finance for Siana development is due any time soon. When that is finalised, that should be the trigger to a re-rating of RED based on valuation solely of Siana (which suggests at current gold price ~33 cents cps). With upside of Mapawa the current RED valuation is around 45 cps.

4. The ups and downs of the market and commodity price will also have its effect on RED, but this should be to a lesser extent when the market is assured that Siana development is underway with debt finance approved.
This likelihood has been increased with the recent acquisition of Merrill Crowe Corporation, increasing equity of Siana by RED and its employees to 100% (also Mapawa from 80% --> 100%) and ensuring ownership of each MPSA is now under RED control.

Soon it should be up up and away!

Hi Beatle, I see that it appears Anglo has not yet exited but continues to hold a little less than 5%. Hopefully they will exit in full soon. I also see gold took a hit late last week, but I am not concerned about that as I do not believe this has too much bearing on RED at this stage, but of course will be more important as matters move on. Moreover, in another report I receive daily, it appears that a heck of a lot of shorting in gold(and silver) takes place constantly attributed to three or four of the big US investment banks. No one seems to really understand why, although the conspiracy theorists believe there may be a connect somehow through to the US government. But still no answer as to actually why this seems to happen. The fundamentals for gold remain very positive so I simply shrug these things off. I was interested to read your comments re the second drill hole at Mapawa, and GE's more circumspect approach. As you point out, the conservatism of RED management and drilling approach is not designed to try to make the market get overly excited. But the first hole results and comparisons drawn by management to other projects are very very significant imo. The third hole will help delineate more of what we have got. In the meantime, Siana is proceeding well by the looks of it, and I expect the announcement re the financing deal cannot be far away. AB

Hi Anderbond, yes I agree with you that it will be good if Anglo get out completely, and of course we won't now know if/when that happens as they don't have to report any further sell downs as they are no longer a substantial holder - they may well have sold more in the past days! I am much more comfortable with them out - in fact when the original JV deals proposed (but never consummated with Anglo) I was an outspoken critic of the outlined deals (outspoken directly to GE and he took exception to my comments at that time) as it really gave them a cheap "put option" into Mapawa. (Its just as well the MPSA was not granted at that time IMO).

As for your comments about gold price, etc, I do hope that the gold price will be in the current range as it does affect general investment sentiment, and also at the time of putting in place the debt there will be a selling of gold (totalling US$15 million, ie ~13,200 ozs gold) as part of the facility if it remains structured the way it was originally offered to RED). Once the debt is bedded down then its all about getting on with the development, and I'm sure that as project activity heats up then that will arouse many others aware of that activity! (I would love to closely scrutinise the share trades at that time to see how/who it affects the market for RED shares).

With Mapawa, I believe that GE (and CJ for that matter) is quite confident that RED has got a huge bulk gold deposit in the making, but will be careful until some of the next holes are drilled and assayed. But the danger with hole 2 is that if it is not so great (as expected to be the case based on typical zonation of porphyries) it could create a deal more angst with certain investors who seemed to have got involved more because of the Mapawa story, rather than Siana which is worth so much already.

I think we have all found RED to be less market savvy than other spruikers who like to turn a successful hole into a gold mine in its own right! While its good to be conservative and careful with the work, there is nothing wrong with taking advantage of hype in the market place!

Wise_Owl Recommendation.

I understand that Wise_Owl investment magazine has recommended a Hold on RED to its investor base, with an update to its previous Buy recommendation some time back.

Its good to get another completely independent group such as Wise_Owl to put out such a recommendation.

Beatle, I agree that it is great to see Wise-Owl continuing to support the stock. However they have dropped their recommendation back, presumably to reflect the increase in the SP. I know Wise-Owl previously recommended the stock which you will recall got some daily press coverage (last year sometime) but I cannot recall what the price was at that time. I would love to know the latest recommendation from Southern Cross as they have previously been strong supporters. AB

Anderbond, Wise-Owl first recommended RED as a BUY on 20 Sept 2009, and the closing price just prior to that recommendation (18 Sept) was 11 cents (Open 10.5/Low10.5/Hi11.5). At that time their 12 month price target was 19.0 cents (so they got that right, but oh so low an estimate in my view!).

Southern Cross Equities (SCE) is interesting. It has been clearly spelt out that SCE brought clients into the latest placement (I think more from the London side), and we all got that following investment advice (Jenesequoi I think must be tied up with SCE as he knew about it before most others) with a 12 month outlook forecasting 27.0 cents. But that was some time back, and I feel as though SCE placees in the prior ($35.0 million placement made in 2007) placement have slowly lost their interest, and maybe they have also been dropping shares (bearing in mind that placement was allotted 350 million shares at that time) more recently. I think there were a few different changes to the people at SCE in the research area, which has hampered the following research (but I might be wrong on this).

I think it would be good for a few other groups to start following the story, and I guess this can only be done with the news coming out of Mapawa, and once RED wants to pursue this. I have a feeling though that Petra Securities has done a good job of keeping their clients (wholesale investors) updated, but it needs a bigger push on the retail broking front IMO to get the price moving much higher - but RED don't really have any need to do that at this time, they are more interested in getting the project activities advanced.

Hi Beatle, I agree that the focus by management should be on getting into production, so it is still very early days when it is all said and done. I am encouraged by the success of the CR earlier this year, and the fact that the final piece will be announced soon. I am of course referring to the finance package. I see that MML is moving positively again. GD seems to have the knack of obtaining the market's attention, and I see they are now moving to list on the main London board. However, we know that RED is now supported by a good number of institutional investors, so it is only a matter of time. Perhaps Mapawa is the key to lighting the fuse! By the way, are you favourably disposed to SIH? AB

Good morning Beatle, I have learned this morning that Lance Govey has been appointed as Chief Executive Officer of Triton Gold effective from April 6th. Having spent the past 8 years at Red as Director - Technical, and with the state of play with Red, I am to say the least staggered by the news.I thought I would as if you were aware of this? What do you make of it? Has there been dissension in the ranks or is it just a normal job change? Your thoughts and any comments will be much appreciated. AB

hi beatle

agree, anglo have been of no use to RED's cause - won't bother me to see them exit, as will give us some time to collect some more at these levels - only 40 odd mill to go - lol

Great to hear from some of my old mates here, shame I can't post in HC but at least its good to be able to keep in touch through the goodness of ASF! (HC by comparison might have a bigger following, but when you take into consideration the moderating bias factor on HC I believe that ASF is miles better - there's nothing better than free speech provided its within the realms of the subject and not defamatory or other!)

Regarding your comments and queries:-

Anderbond:
1. Yes I have spoken with Lance since he left RED and started at Triton. I was concerned that if he knew more about Mapawa that it could imply he didn't have a high regard for its future (knowing that many geologists like to be associated with big new discoveries, so I thought it could mean Mapawa had no potential).

Firstly you have to recognise that Lance is not a young man (I think he's about 57 years of age), and having spent 8 years in Philippines he has been slowly drained of enthusiasm for such places!

Also recognise that Lance made the decision to leave RED in January, and he had just prior been on a holiday to the Mediterranean, his first real break from work for a few years - sometimes those sorts of breaks impact on ones attitude and outlook.

Lance told me that he had not formed a view of the potential of Mapawa other than to say that the geophysical anomaly was exceedingly large and clearly from the first hole had demonstrated the right rocks (similar to Boyongan poyphyry), but it was now just time and drilling that would confirm whether it would become the big daddy that we all hope for. He also confirmed that he had no intention of selling his shares and thought they were considerably under-valued, even if Mapawa didn't stack up - but that Mapawa could well stack up in its own right.

Lance is the CEO of Triton, and he is back with an old mate of his from CSR days (30 odd years ago), so the move across to the key management position within the company must have been very tempting, and also that all the projects are WA based where his home is.

Lance didn't have any negative comments about RED or the people or the project, but that he had enough of travel and was looking forward to settling back into WA.

2. As for GD and MML, IMO its a reflection of a more pro-active marketing approach, but also MML is benefiting from it already being a producer. You have to give credit to GD for his PR which is first class, and even though GD and others (Councilgritter esp) has confirmed that MML will never consider a tie-up with RED its one of those opportunities to take advantage of the differential between a company in production with a share price premium and a soon to start producer with a huge discount. MML IMO could really benefit by such a merger for the longer term, but clearly egos and motivation are very hard to merge as well, Lol!

Unlike MML, you also must recognise with RED that both Siana and Mapawa will enjoy a tax holiday for the first half of its indicated start-up time at the time of the final submission of each project to the Dept - that means Siana gets at least a 5 year tax holiday (in the feasibility work RED allowed for only 4 year tax holiday), and with Mapawa possibly developing into a separate gold development it could possibly have a huge tax-free period (potentially of more than 10 years!). Only new MML projects outside of its current production area are able to attain that tax free holiday.

3. As for SIH, I have done a fair amount of work on this previously and personally I wouldn't touch it with a barge pole if you intend to invest for a longer term period. Clearly its share price is showing signs of moving north currently but its a dog IMO. (I believe that a couple of brokers are being approached currently to try to raise more money and increase profile of the company). The issues for me are mainly technical, and there are some practical issues related to access within parts of the COW as well, and note also that its stuck up the top of a mountain (up about 1 km in height) with pristine jungle close by (previously located within a proposed national park boundary), but I won't say more than this (other than to say beware the spivs!).

Remember also that SIH has to pay 100% of all exploration AND 100% of development capex to get 75% beneficial interest, with Antam only paying its owed amount to SIH on the basis of 80% out of free cash flows from production - that means SIH must pay out another say US$60 plus million to get 75% interest and it simply won't work with banks nowadays, especially with repayments impacted by cash flows from Antam as well. And consider what that will do to the shares on issue (currently 490 million) - if you think RED has had a long gestation then SIH will be much longer and much harder with no guarantee it will ever get to final feasibility due to some technical factors that are BIG issues!

BTW I suggest that HC has some interesting posters on the SIH site though (I think that one of them has accused me of having multiple accounts on HC which is why I am suspended from HC, so its close to the bone with me as well!).

Fatsoh:

I believe that Anglo may have sold some more shares than those indicated, but since it doesn't have to make any more announcements we won't even know about it now (provided the complete sell out occurs before the next update of the Top 20 in the annual I guess). I believe that Anglo threw their hands up when they realised they had no chance of getting a cheap entry into Mapawa along the lines of the earlier JV proposals. And with Peter Rowe off the board clearly the board didn't have any reason to honour a previous proposal that didn't ever get full agreement from both sides. I was an outspoken critic to RED early on when the Anglo deal was first proposed, so I was always concerned about it being a legacy of the time when RED had no cash and was dependent on a bigger corporate for financial support. Now that is not a relevant consideration.

With Anglo out of the way there is more chance to have other corporates take an interest - Anglo with a substantial holding could have bought more to pursue a blocking strategy if Mapawa really heats up - bearing in mind that Mapawa has the potential to absolutely dwarf Siana despite Siana being worth around 33 cps to RED.

As for share overhang, I don't think its an issue with the ensuing debt finance announcement expected out soon. I believe that the insto's will be falling over themselves to take more shares once the development is on its way with all funding established.

As for getting some more at current levels, I wish I could but I actually bought a stack more when the acquisition of MCC was announced, as I think its the best bit of news we have had about RED - although first hole of Mapawa was a real blessing!

Thats my view anyway.

beatle said:

Regarding your comments and queries:-

Anderbond:
1. Yes I have spoken with Lance since he left RED and started at Triton. I was concerned that if he knew more about Mapawa that it could imply he didn't have a high regard for its future (knowing that many geologists like to be associated with big new discoveries, so I thought it could mean Mapawa had no potential).

Firstly you have to recognise that Lance is not a young man (I think he's about 57 years of age), and having spent 8 years in Philippines he has been slowly drained of enthusiasm for such places!

Also recognise that Lance made the decision to leave RED in January, and he had just prior been on a holiday to the Mediterranean, his first real break from work for a few years - sometimes those sorts of breaks impact on ones attitude and outlook.



Thats my view anyway.

Click to expand...

Excellent naration and very good insight.

Now on a serious mood if I am not offending any one I thought 57 years is the right age for a westerner man to be at Phillipine and make money and enjoy life. Amercian soldiers have left the country long back but the legacy stays.

Seriious side, hardly any young man below 40 will be interested to stay in Phillipine for 8 years and that is fact of life. Why Lance left RED is primarily would be for different reasons and he is privy not to disclose that to others. So I will judge RED on its merit.

The EPCM has been awarded and HotCopper is onto it. That means this could be another BCC - day traders' game.

I could be wrong or biased so DYOR.
DNH .

Highly knowledgable and highly informative stuff. Thanks Beatle, you are an absolute gem. One more, any thoughts on TON? I must admit though , RED is such a no brainer and so undervalued that playing with anything else does not have much attraction. I am sitting on some holdings in a range of promising exploration stocks including THX,WPG, MEO/MOG, & IAU waiting for a good enough SP to sell but starting to wonder if I should just exit them to increase my RED stake further right now before the SP goes higher. The point being that there seems to be far more near term leverage with RED notwithstanding some fairly exciting news coming from the others. Diversification and risk management have their place I know, but ?? AB

Miner: …
”…Now on a serious mood if I am not offending any one I thought 57 years is the right age for a westerner man to be at Phillipine…” – I just want to clarify and get it well understood that there certainly was no intention or reason for me to have a go at people at that age or older (I am also of that vintage, or maybe a little bit older, Lol!).

…”… Why Lance left RED is primarily would be for different reasons and he is privy not to disclose that to others.…”. I don’t disagree with you Miner that why Lance left is not a public matter, and I’m sure that Anderbond would agree also, but in a company where the Executive Directors are so important to have advanced the project over the years it is a natural thing for us as long term shareholders to wonder whether it is a sign of some RED issue.

In my summary I think I made it clear (or at least I attempted to) that there doesn’t seem to be any reason related to issues at RED that could be drawn from his leaving (and in particular no indication of a split of personalities or anything related to Mapawa potential).

Anderbond:
I agree with you that RED is a very unique investment opportunity from a technical valuation perspective, although its also frustrating that it remains so discounted, and that there are many other good resource performers (in the eyes of the market) that have out-performed RED in recent times, some of which actually appear to have inferior project potential, but more successful for whatever reason. BUT maybe we just haven’t seen the best of RED yet.

It has also created a dilemma for me, since I am so convinced about its likely future standout performance that it creates a dilemma to maintain a balance to my share portfolio (that supposed to provide less overall risk). I have in fact added with more RED to my portfolio by culling others that don’t have as much potential or have gone backwards, and so far RED has done me a favour! (And as we know, there are always potential risks in any resources company, even BHP is not immune to the odd risk – for instance commodity price risk, individual project risk etc).

As for the companies that you mention, to be honest I have not followed any of them in any detail recently to give a good critique of them, and that demonstrates that there are many other companies out there with the potential to be star performers that I haven’t identified yet. With regard to Triton (TON), until I found out that Lance had moved to that company I hadn’t even heard of it! Its Salmon Gums project, within that Albany-Fraser block made famous by Tropicana clearly has lots of potential based on the drilling results to date, but of course how it pans out depends upon speculation that we as potential investors have to cross our fingers on!
As for THX, it has an interesting uranium play that has colossal grades, as well as great nearology to Sandfire through its soon to be restructured base metal portfolio. I held shares in the company quite a long time ago but I decided that its price was high reflecting its speculative value with uranium and despite the high uranium grades at its Pine Creek project I decided the market had gone off the boil for uranium stocks at the time.

As for WPG I haven’t followed the company but I do like the iron ore space and its seems as though its portfolio has stacks of potential based on a quick review of its recent presentation. I won’t go any further than that about the company. (Its amazing the extent of iron ore laden companies in Australia.

I worked in iron ore a long time ago, well before it was ever famous, and its just unbelievable how much the iron ore industry has gone beyond the principal miners in the Hamersley Range, Middleback Ranges and Savage River! It seems that even the small iron ore explorers that have prospective ground in the middle of nowhere can get (principally Chinese) buyers to provide funding in some form or other. How things have changed from years gone by – when I worked in that industry no one wanted the job I applied for, as it was like being sent to the Siberian salt mines!).

As you may know from my comments re SIH, I have concerns about Indonesia and tenement access etc, and the recent changes to Indonesian Mining Law may provide some slightly increased level of confidence to owners holding ground that were formerly KP’s. But the issue with respect to Forestry areas is still a primary risk, and the fact that Central Govt may not provide sufficient control over areas that are ruled by provincial govts and bupatis with a different agenda makes investment risky.

Therefore I am not a real fan of IUA for Tujuh Bukit despite it having very exciting intersections announced to date. If you can get more confidence on the tenement side then it’s a very exciting exploration play, and given Paulsens to continue to 2011 ensures the company has enough cash to explore in Indonesia, but my view is that such large projects need tenement surety that Indonesian Mining Law is yet to demonstrate it can give, particularly for a project that has the potential to be a huge long term operation requiring considerable capital investment. (In comparison Mapawa has the benefit of tenement security already demonstrated via the MPSA route, although I would imagine that RED would seek to transfer title to FTAA status provided the High Court judgement about FTAA legitimacy under the Philippines statute is resolved appropriately in years to come). In the case of IUA if I’m not mistaken I think that its rights over Tujuh Bukit are held via contract with the tenement holder holder – that provides a contractual risk that is not acceptable to most, especially to bankers who would probably find it untenable for lending with lack of collateral security.

I haven’t followed the MEO/MOG arrangements closely enough to comment at all.

Thanks again Beatle for your insights. I have been wondering what to do with IAU (noting CJ is also the Chairman). It is obviously quite a way off despite the Paulsen's cash flows. The news flow with THX has been quite good (a prerequisite with any of these companies) so I will wait until the restructure takes place before making a decision. WPG is an interesting one as they are definitely on the way to production, with possible further good news if the Defence Department alters its stance. I am fairly sick of MEO/MOG but that might be because of the substantial delay in announcing the farmin partner (Petrobas). Also the HC commentary threads leave a lot to be desired with MEO in particular so that has probably coloured my thinking. All in all, it does look to me like the best short term leverage is likely to be with RED.I am also encouraged by your remarks that Lance says he has no intention of selling his RED shares. AB

Hi Anderbond, it seems that many of the resource specs are just paddling along doing their business with little price moves on the up at the moment. RED is in a similar zone, going about their business of all the preparatory work onsite for Siana with the big push to happen once the debt is done.

About LG, he certainly viewed RED as being heavily discounted at present. Therefore I am of the view that as he has been inside the company as a key executive director and knows whats really going on, for him to make a decision to hold onto his shares (which at current share price are worth around $1.1 million!) seems to add further reassurrance to us outside of the company that our investment funds are not significantly at risk through any potential issues that might otherwise be within the company. Further, he also conveyed a sense that the general day to day life, business and mining activities seemed to be going along well with no real risk being seen from the upcoming presidential elections.