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VAU - Vault Minerals

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hi beatle -glad to hear your're back in good health.

What did you think of the Mapawa results ?

Did it raise an eyebrow about the "43.1g/t gold being recorded within a broader intersection of 37 metres at 3.0g/t gold and 3.6 ppm silver " ?

Most of the intervals looked small (depending on where they are located on the site??) but MD0013 at 269m looks pretty darn good. :)
 
Hi Mgm1a, thanks and by the way some excellent analysis and posts of yours whilst I was away.

With regard to Mapawa its very frustrating as the drilling has only continued to tease us, and you are quite correct that without the holes being plotted out (and I haven't had the time to do so yet) its hard to get a better sense of how its coming together, but we have to rely on RED's geological nous.

There is no doubt that the mineralisation is widespread and RED's final comments "Current drilling has stepped out 300m, 500m and 1,000m to the west to probe the potential of the system. The interpretation of this partially blind porphyry based on 13 completed holes is that the system probably dramatically increases in size with depth" gives me hope that the system remains a potential elephant - also knowing that RED has another few large porphyry targets that have been hardly touched (esp on the Siana MPSA), and that knowing that Boyongan with +100 million tonnes sits within 20 kms of similar lithology/similar alteration styles gives me confidence we will find sufficient mineralisation for a standalone porphyry operation, but it will take a while to get it together.

The higher grade quoted towards the base of MD13 is similar to some of the grades reported at surface within the trenching programme (38 m @ 2.5 g/t etc), so its another positive confirmation of the mineralisation being widespread.
 
Hi fellow RED members and others, recently I came across another new ASX listing of a company called Mindoro Resources (MDO). It has a nickel laterite operation running not that far from Surigao. In addition there are a number of copper/gold prospects held. The purpose of letting you know this is that their website has some technical information on the typical Philippines copper/gold porphyry deposits which I have found quite informative as I do not have Beatle's technical background and knowledge. It has helped me understand more about seeking "elephants". AB:cool:
 
Hi Anderbond, and a most informative prospectus you refer to for MDO which in part provides a broader regional perspective of gold-copper projects in and around Surigao - I wish I deserved some of your flattery AB, but as with you I am also picking up information along the way.

RED price appears to be picking up a bit of steam over the last week, maybe as gold price slide has steadied a tad, and from other posters on HC etc there now appears to be a few more brokers and others (Fat Prophets) starting to recommend RED as one of the picks in the smaller gold producer space. Even CB2's found another positive TA commentary in HC. I still have a view that on Siana alone RED is valued in the low 30's.

We still are none the wiser about whether it will take on US$25 million debt to add to its already significant cash coffers.

And as each week goes by we are just that bit closer to the first gold pour - surely that will ignite the market as it gets closer!
 
beatle- Two things that the market tends to hang its hat on when it comes to gold producers are- production cost per ounce (relative to the price of gold) and the target for the # of ounces to be produced per annum.

I've followed your posts and you seem pretty clued in on RED. Do you know:

- at what gold price RED is valuing their JORC?
- what their projected per ounce cost will be?
- what their annual production target is?

I was comparing companies like FML, RMS, SLR and seeing how the differing numbers in those categories really made a difference to the sp (beyond other measures like # shares on issue)

Cheers
 
Hi Ubtheboss, good to be able to post on a day when the gold price is looking stronger! Whilst RED's valuation based on Siana already assures us of a fundamental value in the low 30's cents range on a gold price around the 1,300 plus mark, the market seems to be more inclined to react to the "direction" of the gold price (especially if its going down!) rather than the absolute price (probably because the valuation is based on forecasting gold price for a number of future years).

Now to the specifics of your question re RED:
You may have noted that RED has provided a year by year summary of cost of production, total gold production etc as part of the BFS a while back - that summary, reported to the ASX on 16 July 2009 provides the basis of the cashflow analysis that MGM1a and myself have used for the company. However, since that time there have been other variations, which impact on the financial analysis, some of which can be provided for, such as the equity/debt mix to cover capital costs plus working capital (but we are still waiting for RED to decide if it will take up a debt component - that is why I have not been quoting a valuation to the detail of specific cents value whilst its uncertain whether the debt will be provided and on what basis, not that the debt will have a huge impact on valuation since a lot of the debt is surplus to Siana requirements).

The unknowns that have developed since that basic BFS analysis relates to more recent work that has been done, to improve the ore:waste ratio about the haul ramp (now there are 2 ramps - originally 1 was provided for but now there are 2 slightly narrower ramps thus improving the ore:waste ratio) and RED has also added some additional material (at marginally lower gold grade) to marginally increase mineable gold inventory. Additionally a mate of mine who recently visited site believes, but not confirmed by RED management, that the mill throughput is slightly above the original specification (note that RED purchased a different mill than the original unit bought second hand) which will improve annual ore throughput (and therefore a slight improvement in unit operating cost, $/tonne, but how that reflects in $/oz is unquantifiable until we know the slightly increased reserve delineated with the ramp and ore zone variations).

As a summary of the original BFS, the open pit resource was subjected to a Whittle 4D pit optimisation based on a gold price of US$650/oz gold and US$10/oz silver. The financial analysis used quoted for the base case financial analysis used by RED at that time was US$800/oz gold.

Gold production was originally expected to ramp up from 45,700 ozs gold (first year is a part year), then 72,200 oz, then 90,300 oz, then 127,100 ozs (year 4). The production schedule covered the reserve life of 10 years (but a minor fraction of that production schedule includes resource not included as reserve). The AVERAGE total cash cost of production over the 10 years estimated is US$351/oz, but that includes the operating costs of both underground (commencing in year 4) and open pit. It indicates that the operation is very robust over a much lower gold price.
 
Its a pleasure Ubtheboss, I wish the RED share price was a bit more pleasurable (lol)!!!

I believe that once the water level in Siana pit is dropped with the current dewatering process underway, IF RED decides to put a photo of the partially dewatered historic pit on their website and a status report to the market, it could be the initiation we have been waiting for, especially to those long doubting thomases who don't think the project will ever produce gold - I can imagine that RED must be half way through that process now, although I understand that they were not in a hurry to dewater to base too soon for logistical reasons (and of course it depends on when the major rains in the area have slowed).

Just a pic RED, say in a couple of weeks time, thats what I would like to see as part of their PR (HINT!!!).
 
Hi Red 5 members. Received this in my in box today, from Andrew Richards of Petra Capital. I make a point that I dont know Andrew. The email was dated 31 Jan 2011.

To quote:-

Siana - Heavy Rains Impact

1.5m of rain received in January at Siana = 3x average

Build progress has slowed

Production target of early May will be missed



Despite rain, progress had been good

Mining pre-strip has progressed ~50m vertical

Grid power connected and reticulated on site

Refurb of emergency power plant 78% complete

Concrete foundations for all 6 CIL tanks and cyanide detox plant completed

All major equipment complete and awaiting delivery to site – SAG Mill, rolls crusher, apron feeder

75% of capital cost now firm orders/contracts



Finance – fully funded

Cash at hand $81M

US$25M gold prepay facility (Sprott) – discussions on drawdown or as a standby facility ongoing

Capex to complete construction - $57.6M

Additional US$10M in working capital required to get to steady state production

US$10M in exploration budgeted 2011



Mapawa

Best results include 37m @ 3.0g/t Au, 10m @ 1.6g/t Au & 0.3% Cu

Based on completed 13 holes – interpretation is that the system probably dramatically increases in size with depth – further drilling required

Assay results for a further 4 holes are awaited

Due to rain drilling has been temporarily suspended



Comment

A disappointing outcome but a temporary setback only

We have pushed production back 2 months to early July

FY11 NPAT of A$6.5M reduced to loss of A$1.4M

FY12 NPAT reduced from A$49.8M to A$43.7M (PE 5.0x)

FY13 unchanged at A$45.5M (PE 4.8x)

NPV unchanged at A$0.27ps

We believe significant rerating is likely with RED 5 as we approach first production with target shareprice of 27cps (+60%)



Regards



Andrew Richards

Petra Capital Pty Ltd


I hope the information above is helpful and is not much of a repeat of previous posts.

Cheers. Bf
 
"probably dramatically increases in size with depth", maybe they should have added "we hope". Hope that doesnt translate to nothing significant found so far, but seems to be the case. Re the start date for the mine the only date you can be sure production will not begin by is whatever date they pick. Ive never heared of a project yet that has been finished on time, so thats just par for the course. I assume that the deeper the resource gets at Mapaw the moreexpensive it is per oz to extract?
 
Looks like RED will continue to consolidate around current price levels until there is clarity on the timing of the first gold pour! If one hasn't already got their fill then its a good time to do so, and for us that are up to the eyeballs its a time to take some time out from looking at the RED screen! I am very comforted that we now have a few big brothers looking after our interest, and surely when its closer to that first gold pour they will be leading the way to pushing RED to higher prices!

As for Mapawa, it seems that the lab plus the weather plus the steel rod industy have conspired to make this a long drawn out affair.

I hope that RED management can get their PR worked out whilst they have some time to do so, to ensure that when there are runs on the board then they have the capacity to market the story!!!
 
RED share price seems stuck in a sodden rut at the moment! And yet there is trading liquidity, with Bots trading between themselves, a bit like posting to myself on ASF at the moment, lol!!!

BUT as each day goes by brings us closer to that first gold pour!!! I had a chat with one of the directors the other day and he confirmed to me that they are progressing now onsite, and the rain is not the problem that it had been. He was very positive about how things were progressing after some frustrating times in January with the rain bucketing down at that time.

I came across this interesting link posted on HC by good old Yuyu (thanks mate, keep the faith!), and I copy it here hopefully he won't mind me doing so! It relates to exploration by a Canadian company on the ground adjacent to Mapawa (it was mentioned earlier by others too, but whilst pondering when RED is gonna break 18.5 cents it passes the time refreshing ones memory!):

http://www.rugbymining.com/pdf/news/Rugby_news_110209.pdf
 
The buy depth at 18c is now 2.5m - I had been expecting a dump into this for last 2 days - but not to be -excellent sign that selling may have stopped or rather that the seller is refreshing the sell point at 18.5c as it empties.
The for the last few days the inevitable 18c close!
Given those facts and the solid fundamentals plus the sell queue at 20-22 (readers of ASF,HC) this is looking pretty solid (but still underperforming!!).

Beatle have you heard anymore regarding the dissension votes in the last AGM regrding Dundo , JAckson re-election?
 
beatle said:
RED share price seems stuck in a sodden rut at the moment! And yet there is trading liquidity, with Bots trading between themselves, a bit like posting to myself on ASF at the moment, lol!!!

BUT as each day goes by brings us closer to that first gold pour!!! I had a chat with one of the directors the other day and he confirmed to me that they are progressing now onsite, and the rain is not the problem that it had been. He was very positive about how things were progressing after some frustrating times in January with the rain bucketing down at that time.

I came across this interesting link posted on HC by good old Yuyu (thanks mate, keep the faith!), and I copy it here hopefully he won't mind me doing so! It relates to exploration by a Canadian company on the ground adjacent to Mapawa (it was mentioned earlier by others too, but whilst pondering when RED is gonna break 18.5 cents it passes the time refreshing ones memory!):

http://www.rugbymining.com/pdf/news/Rugby_news_110209.pdf
Click to expand...

Hi Beatle did you happen to mention to the director you were talking with about pr problems that exist, the only way we will see upward price movment is with ann large or small, no matter how good a project is a investor will alway be looking for greener pastures if bordom strikes.
 
HI Mgm /Beatle
The big problem with the Red SP is that it is not moving up with the improved sentament with gold price (now up $70 over past 3 weeks).I agree we seem to be at a mexican standoff with the 18-18.5 nearly all week and i cant see much change untill we get some sort of update from the company.During this slow time of the build it would be great to get just a few photos of their progress or maybe nothing till the next quarterly due end of April.In the meantime this is a longer time hold anyway.
 
It will certaily be interesting to see if there are any substantial holder changes in the near future as i saw quite a few trades of the 2,4,16,32 type bot trades this week. The big question is who is building or getting rid. Either way why would you give in now? Will be interesting to see what POG does if it gets back to the $1420 levels, seems a bit soon for mine, a bit more consolidation would have been good. If it pushes on up as we start production guess we'll all be happy
 
RED continues to tread water at present, regardless of the gold price and the markets general sentiment. i see that as a good thing as it does show that the price has been able to resist a slump like many other small stocks have suffered the past few days.

I believe that it will remain in this holding pattern for the time it takes to confirm that there is real progress on the construction at Siana. From my most recent update the rain has not fallen away so quickly as has been the general case in Feb for the Surigao region in past years, thus it has made things such as concrete pours out of the question (the mill foundation is yet to be poured). Despite this all the extraneous things that can be done on site have been progressed and of course the off site construction work, as much as can be done, has progressed as well.

Therefore as soon as the rain cuts out the onsite works will begin in earnest for the final move towards commissioning. Nevertheless its likely that the commissioning will be late june or thereabouts. I understand that the pit dewatering was slowed due to the high volumes of water being drained from natural rain runoff into the river system toward Lake Mainit, to ensure that it didn't exacerbate the situation (even though the Siana water is of high water quality and would in fact improve the clarity of the water being introduced into the rivers from natural runoff!). Notwithstanding this, the dewatering has progressed sufficiently so that the first bench of the old pit is now visible, and the first phase of dewatering has demonstrated that the pumping capacity is substantially more than necessary to complete the dewatering as required when its more suitable to complete.

I agree with Mardo that some pics of the Siana construction and dewatering would go so way to help those more frustrated shareholders get an idea of how things are going.

I still believe that whilst RED is in this holding pattern, that its possible to build up a position in readiness for the final move upwards once the gold pour nears - of course, always subject to your views on gold price, state of the general market etc. Those of us choc-a-bloc with RED shares its just a matter of getting ready to count our money (sort of, lol!).
 
Hi Beatle....just think how much more money we should be counting, were it not for our fearless leaders!! No skin in the game to speak of....guess they're not as optimistic as we are!! I have lightened my holding marginally and built up a stake in Beadell, but I'm still here.
 
Hi Hugh_Jarz, good to know you are still around, even if you have lightened up. I must admit I look at all the lost opportunities too of the money invested, but now for me its a matter of seeing it out and not missing out at some vital stage that has a limited timeframe to play now. In the meantime I have invested in other far more speculative resource explorers, on a limited basis, and mostly enjoyed the ride - its been a phenomenal couple of month for most of the smaller end of the market, and its so frustrating that RED has failed to get it together.
As for your comment about skin in the game, I agree that all bar one on the board has no significant equity position in RED and its a strange thing that the one that does have real equity fails to see how he could benefit financially by stepping to the side to let a more capable guy take over the reins of the company whilst he directs project operations. I guess I will never understand that, but then its all about ego which I have never let stand in the way of an obvious process, personally speaking. I do suggest that you should be ready for a time, soon, when RED might start to out-perform the market, at that time if you haven't had your fill then you might regret it.
 
Only pared about 10% so still a significant holding for me...can only agree 100% with your comments which highlight, for me, the underlying problem with this company ie management's egos! They just aren't as good as they think they are. I am encouraged by the progress at Siana, despite the adverse weather, but remain absolutely dumbstruck by the time it is taking to delineate Mapawa....getting on for 18 months now and I reckon they have only scratched the surface of what could and should be a priority, along with Siana....after all, the additional funds taken at the last raising were supposedly to REALLY crack on with the drilling of Mapawa. I have yet to see any extra effort made there yet except for the extra effort made in justifying the lack of progress. A PR appointment should be a priority as relying on the odd poster who has an "in" with Jackson or whoever, is definitely NOT the way to disseminate news to your wider shareholder base. I was a tad surprised to see Mathews Capital buy more to get back to 19.9% or thereabouts and was wondering whether their decision has anything to do with the review of the iniquitous gold loan agreement with those Dick Turpin's of the Canadian market ie Sprott!
 
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