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VAU - Vault Minerals

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I bought another 50000 today despite being a bit behind the 8 ball. All goldies have been performing unusually ordinary over the last day or two. IAU, IGR, RRL, NCM, etc

I still believe that any co, coming into production will have their day in the sun. All the above mentioned plus many others have taken a beating. And as long as the geopolitical and dodgy monetary stuff keeps on, precious metals can only go one way, hiccups taken into account.
 
Good for you buckfont, I also feeling nervous about the SP ! but lest we forget their 2009 BFS used $US800oz (can't find AU/USD)
My Dec 2010 NPV used $1300 & 0.96 AUD/USD
May 2011 NPV $1500 & 1.09 will still give me the same answer !

RED's EV is only about $40m above the $139m book value of hard assets & accum project development costs. Nuts! if mgmt deliver


Beatle - i can't figure out whether BoA is the lender or the borrower with all their notices!
There was a swag of Notices for a raft of companies on Friday because ASIC granted a (free ride) Class Order CO 11/272 which lets stock lenders NOT disclose their holding on the basis they have lent it out!. The exemption is from the new ASIC guidance on disclosure found at :

http://www.asic.gov.au/asic/asic.ns...isclosure for securities lending?opendocument

It all too heavy for me......
 
mgm1a said:
Good for you buckfont, I also feeling nervous about the SP ! but lest we forget their 2009 BFS used $US800oz (can't find AU/USD)
My Dec 2010 NPV used $1300 & 0.96 AUD/USD
May 2011 NPV $1500 & 1.09 will still give me the same answer !

RED's EV is only about $40m above the $139m book value of hard assets & accum project development costs. Nuts! if mgmt deliver


Beatle - i can't figure out whether BoA is the lender or the borrower with all their notices!
There was a swag of Notices for a raft of companies on Friday because ASIC granted a (free ride) Class Order CO 11/272 which lets stock lenders NOT disclose their holding on the basis they have lent it out!. The exemption is from the new ASIC guidance on disclosure found at :

http://www.asic.gov.au/asic/asic.ns...isclosure for securities lending?opendocument

It all too heavy for me......
Click to expand...

It is heavy and I wont say I`m going nuts but what the squirrel does at the approach of winter, he will look after himself and his `family`with those nuts and make sure he has the wherewithal to protect his collection over the bleak periods that will follow. And as long as night follows day springtime always comes
 
Hi Mgm1a, I congratulate you for your post (on another forum) that checks out the gold stocks being affected by this "apparent virus" of having been stung by BOA etal. As to your comment about whether BOA is the lender or the borrower, I am of the view that BOA is the lender, and I've got a feeling that it lent out cash to Matthews for their investment purposes (not necessarily for just, or any, RED share purchases). I wonder if it relates to BOA declaring its "theoretical ownership" by way of its collateral in RED shares, and maybe those collateral arrangements have now ended, not sure for what reason though. Certainly there has not been anywhere like the volume of shares traded that could enable a ceasing share ownership within the period by BOA unless it was simply a lending position!

As to your comments about RED at the time of the Base Case Study, as you correctly point out it was at US$800 for the financial analysis, but no A$ was given in that study that I am aware of, as it related to the US$ NPV only. By checking historic A$ moves at the time of the July 2009 release I think that 80 cents conversion is the appropriate exchange rate to relate it back to A$ equivalent (I haven't kept my old cash flow models used at that time as I have just changed the dollar exchange rate as time has gone by), but if we do assume it was 80 cents exchange rate versus $1.10 that we see today (close enough to, of course) we can see that the old financial analysis is severely less attractive compared to its current value:
$800 and 80 cents = A$1,000
$1,540 and $1.10 = A$1,400, ie 40% higher A$ value of gold!

I really can't see RED staying down at this level for much longer as I have no reason to doubt that gold will be poured, in considerable quantities from around August. Thats got nothing to do with the trading antics that are currently being played out, and unlike Yuyu's comment of there being no gold, THERE are tonnes of gold, and RED will get it out in due course!!!
 
The daily weather /rainfall reading for April for Surigao (close-ish) have been posted & shows more rain-less days and much less rain than previosu months. Hooray
 
Hi Guys, Good to see you are all so much on the ball with RED. I have been forced to sell 150,000 @ 15c (late last week)in order to raise a little money to cover Stamp Duty on a property purchase I have made recently. I was spitting chips at being forced to sell at this price as in my early planning I was expecting that by now RED would be somewhere north of 20c. I was staggered to see the price head down below the 15c and is still below as I write. I am hoping to buy them back upon receipt of some other funds expected. I would find it ironic if I manage to buy them back and effectively end up with a profit on the transaction. I am not particularly happy even if this does occur as I am still of the opinion that the SP is being played with and just hope that eventually the "players" get severely burned for their efforts. The report published a couple of days ago does not add anything new, but reaffirms where things stand, and that they will recommence drilling at Siana soon. Maybe if some positive reporting comes from this, it will push the SP up somewhere to where it should be. The new missus has decided to go to Japan for the month of June, so I am off the hook (for the moment) with the Grrenbelt excursion. Keep smiling everyone. AB:cool:
 
anderbond we are all staggering.

I did some delving having been alerted on the other channel that teh RED website is updated with photos and the Top 10 shareholders.
Big movements - Deutsche Bank has disappered but may be in nominees.

JP Morgan appear to have purchased 84m since their Notice of Initial Substantial Holding in Nov'10, but haven't file a Change notice.

If that is right (presuming the increase isn't for other holder with them as nominees) then that represents a 12% holding and places them in number 3 behind Mathews and BoA
 
Some most interesting delving Mgm1a re JP Morgans increased shareholding!

Just in following up with our previous discussions re BOA and its apparent ceasing to be a substantial shareholder, I made a few more inquiries, and whilst its not 100% certain as no one will make a definitive statement on BOA's situation for obvious reasons, it appears that ASIC have given relief to certain financial institutions (in this case BOA) from having to file substantial shareholding notices where they hold stock on behalf of the actual shareholder (in this case likely to be Matthews) as some form of financial arrangement (which relates to that class action comment in the substantial shareholder notice of 29 April). And thats the reason why all those notices occurred for BOA on 29 April, for all those stocks, including RED. (Maybe this conclusion has been reached by someone else on another website, but I am simply too tired tonight to check whether that's the case!).

I suggest that this forced "panic" may have been a very successful coup (or con!) by someone wanting to get more stock cheaply!!! And it worked, to all our disgust!

Anderbond, I understand the problem that you face, and hope that you are able to maintain the rest of your shares, I would hate missing out on catching up with you at the time of the mine opening ceremony! In fact I couldn't control myself, and have got another 350,000 shares in the past couple of days (and my missus is not in japan, lol!) - I don't like the way gold is moving tonight, but when you translate it with the also falling aussie dollar, the A$ gold price remains robust (but marginally down off its highs)!
 
An exciting announcement this morning, with a number of different aspects being completed or underway:
1. Concrete pours to SAG and crusher/ROM pad area;
2. SAG mill, standby generators, plus crane being shipped to site;
3. Open pit water level dropping rapidly;
4. Senior management positions filled;
5. Depository receipts in process of being arranged for trading in USA to increase shareholder reach.

All very positive undertakings and its reflected in the share price movement plus increase in volume (even taking out the crossing before market of 85.7 million shares).

Go RED Go (UP!!!)
 
Hi all RED club members...
It was a rather exciting announcement yesterday regarding construction phases at the Siana mine. Those pictures say a thousand words. Looking at how far they have progressed in a month or so, with the leach tanks, sag mill foundations and frame work for retaining walls and so on. I'm taking my hat off to Red management. They are obviously not mucking around now that the rain has virtually gone. In fact I'm starting to feel pretty proud to be part of it all...
Not long now guys...
I was a little curious as to why the market didn't react more positive yesterday, though it did hit 15.5 cents, just bounced back late in trading. Market sentiments are pointing toward a great day today. Lets hope Red can regain a bit of yesterdays mornings flurry, but stay there this time.
Beatle, i was reading your post a couple of days ago and noticed you had purchased another 350 000.( WOW...) Well I'm also taking my hat off to you mate. If i could do it, i would as well. Instead ill just settle for the mere 50 000 Ive recently bought. lol
Lets go RED, start warming to your new surroundings...
 
Hi Moit, I agree with you that the announcement is actually a very positive sign, and I really can't understand also why it didn't go higher (and who do you think bought the shares at 15.5 cents - 200,000 of those bought were mine, lol - but I KNOW its going up, I just don't understand why its not on the way up now!).

As for the trading yesterday, I firmly believe someone is still playing with us, trying to put a lid on a significant move upwards - no one can tell me that RED, with a current market cap of around A$180 million and indicated net profits from gold reserve sales in coming years of more than double that isn't a huge anomaly that simply won't last! My view is that RED won't continue at this low price in a couple of months when the pics we see are of a completed plant and water in the pit is gone, and haul trucks are being filled within the pit area!

I don't believe JP Morgan, Matthews, Baker Steel etc have finished with their investing in RED.

IN MY OPINION THIS IS THE LAST CHANCE TO SET YOURSELF BEFORE THE BIG MOVE UP, it might take another month or so, but then its gonna be as Carol King sang (a few years ago, lol) - Its Too Late Baby!!!
 
Hi all RED club members, hi Beatle.
Beatle, you are quite right in what you say in regards to acquiring those last chance shares. I firmly believe this is it. What i don't understand is why people are still selling. I don't think they are going to get them at a cheaper price of where it currently stands. As for your 200k purchase at 15.5 cents Beatle. There will come a time in the very near future where we will look back and say how lucky we were to pick up shares at that price.
What i am curious about Beatle is that sweet success story of MML. I know that RED has been compared to Medusa for quite some time now. Being just up the road helps a tad as well. I realize it has been a hot topic for a while now on the RED thread and i am doing a lot of research to find for myself. I just cant get my head around the fact that MML went from 37 cents to 8 dollars in two and a half years. Can you shed some light on the similarities between the two?? And maybe where MML was at the stage RED is at now. Can RED be the next Medusa Mining?? Cheers, Moit
 
Hi Moit, you pose an interesting point re MML and I for one know nothing about the fundamentals of the company. I have done some quick numbers though to help compare MML with RED which might assist.

Current MML SP is $7.90. Forecast EPS is 54.7 cps for 2011 F/Yr and 62.0 cps for 2012 (N.B. CommSec research). Shares on issue are approx 188,227,848 which gives a market cap of Approx $1,487 million. This means earnings are projected to be $102,960,633 for 2011. Its forward PE ratio is 14.44 which is right on sector average PE (14.54)

RED has a lot more shares on issue: 1,283,597,526 (to be exact) times current SP of 14 cents = curre.nt market cap of approx $180,000,000. For RED to have a market cap of $1,487 million (i.e. identical value to MML) its share price would need to be approx $1.16. Conversely, if MML had the same number of shares on issue as RED has, its share price right now wouldn't be $7.90, but $1.16.

So basically from a pure numbers perspective, RED can have the same market capitalisation as MML when its operating profit (after tax which I believe is minimal in the first 4 years) reaches $102,960,633. Sounds logical!

If we refer to the BFS document issued by RED on 16 July 2009 it provides in Table 6 production estimates. The way the timing is looking RED's production Year 1 will almost exactly sync with our financial year (July 2011 to June 2012). Targeted production Year 1 was estimated at 45,700 oz Gold and 245,800 oz Silver (although recent indications are they will be more aggressive with their targets from the outset). If we do the math using $1,000 net gold price (after deducting operating cost of $US351 per ounce) and $30 per ounce for silver, the operating profit for Yr 1 comes in at $53,074,000. Hey presto - we're already half way to MML's net profit!

In Yr 2 RED projects at 72,200 ounces of Gold and 191,900 ounces of Silver = $77,957,000 and the ounces grow by 25% in Yr 3 and 40% in year 4. This is only using $1,000 gold (i.e. net price after $351 is deducted) and $30 silver. Big (huge!) probability that gold and silver prices will be far higher!

I know this is simple modelling so please excuse any glaring gaps I might not have considered - but which ever way you cut it, RED is bloody cheap (as you have been highlighting Beatle)! Using my basic Yr 1 math, it's on a forward PE of 3.4. Looking forward to Yr 2 production and the PE at current SP of 14 cents is less than 2 times!

Back to MML - as I said earlier, I don't know what the proven reserves are or any of the resource details but I'm assuming they have a much larger proven resource than RED currently has. In a year or less we would all expect that RED would be revising its resource significantly higher.

I have also noticed in recent times that MML is well recommended by a strong variety of Brokers, including some of the larger players. Getting more of the Brokerage houses on board counts for a lot in a stock's valuation over time. It's a very important part of the role of a CEO (particularly for small caps) to get out there and woo (i.e. inform, educate, seduce) the broking community. RED will have to pick up this part of its game in due course once producing.

Cheers
Geez
 
Hi Moit and Geez, an absolutely great comparative analysis and commentary of RED re MML Geez!

Both RED and MML have considerable things in common, but also many other things vastly different. And from your financial comparison Geez you clearly provide great insight as to what the potential upside is for RED. Having MML already up there, both producing considerable low cost gold with huge profits, in a way shows to the uninformed investor what RED could achieve if it begins to turn market sentiment around.

Why MML has been so successful though, is that it didn't start with a clean sheet of paper, it didn't have to go through the process of getting MPSA's granted, and it didn't have to put a processing plant in place - each of those things were facilitated by the fact that MML acquired a small already established operating underground mining operation, and has subsequently beefed it up over time. That has cut considerable time off the front end of developing the project and has allowed MML to raise cash at higher prices so its share capital didn't suffer the same amount of share dilution.

AND since RED continues to trade at substantially below its indicated NPV's and as Geez points out MML runs now at a P/E of around 14 whereas RED's indicated P/E is around 3.4! Thus RED is cheeeeeeep!!!

BUT RED needs to get its operation up and running so that the market will start to change its mind about the ho-hum talk and recognise RED's actions based on actual production and profits. That is probably no more than 4 months away now at the latest! I understand that the project area has been bathed in sunshine now for at least a week and prior to that there were the odd days of sunshine and some rainy days, but most importantly the vital concrete pours are now well and truly set in stone!

With regard to MML, it is a considerably lower cost operation whilst its Co-O resources remain due to the much higher head grade of ore, in the teens g/t, but I say resource as being in a more difficult environment to convert resources into reserves its problematic as to how many more years of viable mining will remain ahead of it. But whilst the sunshines you should bathe in it and MML has certainly done that whilst RED has copped a hammering with the rain!

RED's reserves are roughly double MML's in terms of ounces of gold, and extend over a 10 year horizon, but its P/E ratio around 3.4 times makes a farce of its current share price. AND to boot, RED does not have a 4 year tax holiday as Geez suggests, but a 5 year tax holiday - RED management have been ultra-cautious to the extent of not wanting to provide a more bullish estimate prior to it being granted by the Philippines govt, but its based on 50% of mineable reserves on start up as per its application and RED will be applying for a 10 year life on start up!

And yes Geez, you are quite right, that RED CEO needs to commence the turnaround of market perception, and that should be possible in the coming months as the project comes up towards commencement.
 
Very good reading.. from both Geez and beatle..didnt understand much of it (being a newbie) but it was interesting..
 
You should never use PE ratios on 1 mine companies, the mine is not perpetual.

Also if you want to make a prudent valuation you have to set relative conservative commodity prices. There is not a "HUGE" probability of higher silver and gold prices during RED production, consensus estimates put initial RED production at gold price peaks and as production ramps gold price is expected to drop, perhaps very quickly.

Ofcoarce the cash cost over there in PNG is bloody low so you dont have to worry about turning a profit, but assuming $1500 gold price for the life of the mine will significantly overvalue future cash flows and underestimate the risk inherent in commodity price volatility.

I agree that fundamentally RED is cheap though.
 
Hi Beatle and Geez. Thankyou for your very thought out and informative posts to my questions. Very much appreciated. I havnt got time to write at the moment but will get back to you on a later date. Thanks again, Moit
 
Hi all
hi tabjockey. Just wondered do you really believe gold will go lower. Seems to me its rise is due to the global realisation that the us dollar is nothing more than an a4 sheet sliced up and printer by the tonne whenever the us pleases. Until the us changes its monetary policy there is no reason for gold to fall as it is the only viable alternative to the dollar. As far as i can see from current announcenents coming out of the us there will be no changes in the next few years, and if anything the us will collapse rather than fix the problems. They simply do not know how to control their debt. I would suggest any concensus estimates that suggest gold will fall must be backed by the belief that the us can sirt itself out. Do you really believe that. My only fear is that in the next year or two the price of gold will be the least of our worries. Gfc from hell will be next if something doesnt change, and by all accounts thise that made all the decisions during gfc are still there.
 
Hi All RED posters, great to see all the posts at the moment. And gee I can't believe RED has fallen further, with a market cap now around A$170 million!!!

I would like to reply to TabJockey with regard to a couple of points:

1. Firstly, just to confirm that RED has got 1 project at the moment, its located in Philippines, not PNG. It has got the potential for another much larger resource at its Mapawa MPSA about 20 kms up the road (potentially a substantially much larger gold resource within a Boyongan like porphyry - I suggest you check out the exploration intercepts to date, up to a few hundred metres around 1 g/t).

2. I agree that any mineral project is a non-renewable resource, and the most favoured means to value such are NPV values. The P/E values are still used, and on a relative basis RED's P/E is considerably below industry standards - and the fact that its Siana mine has a life of at least 10 years based on mineable reserves gives an idea that a P/E of around 3 is very cheap based on current share price.

3. Gold price is always an essential consideration. Just remember that the gold price, in Australian dollars, peaked almost 12 months ago (June 2010 - ref to: http://www.xe.com/currencycharts/?from=XAU&to=AUD&view=2Y ). Since that time the aussie gold price has declined as a result of the substantially increased strength of the aussie dollar. This in itself is almost a natural hedge, as we have seen recently that any significant dips in the US$ gold price has been accompanied by a significant dip in the aussie, and whether its a 1:1 correlation in the future is hard to predict, but I suggest that any drop in the gold price over the coming year is likely to be accompanied by a simiar drop in the aussie dollar, particularly since most of the recent increases in US gold price has been attributed to a drop in US dollar exchange value. Further, please note that Siana has an NPV based on its 2008 US$ valuation at US$800 close to the current market value of RED notwithstanding it has now got a fully funded project getting readied at present, and obviously a considerably higher gold price for the forseeable future.
 
RED trading is on low volume so I guess its a bit uncertain as to whether this current minor uptrend is leading to any more significant rise, BUT at least the share price is up against the medium term downward trend. Perhaps if the market becomes aware that the concrete is getting harder (lol) then the price will move up further on higher volumes. (I'm praying for it anyway!).
 
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