VAU - Vault Minerals
- Thread starter Uncle Festivus
- Start date
Hi Jancha, you are quite right about you asking one specific question re the mine opening. But you did put forward a general comment that appeared to be regarding DBA, and I do want to put that query out of your mind - DBA is no longer a beneficial holder of stock in RED, thus has no involvement in trading in RED (until it becomes a beneficial holder of course!).
I've watched the ongoing trading of RED at times in detail, and consider that the price is being manipulated with this algorithmic trading that's occurring. Although I only have circumstantial evidence and nothing to confirm it, from my observations it seems that the buyer and seller is on both sides of trading and effectively forces the trading into a band that it wants to achieve, and most of the buys and sells effectively cancel out the trading, so at the end of the day there is a minimal net position achieved by that trader - I would assume its a fund manager/insto that has invoked that trading style, of course this is just a theory I put forward.
I'm not criticising that style of trading as it enables liquidity in the daily trading of RED, and proves to me that the longer term movement of RED is UP!!! Toward I can't see it getting too far out of the 18.0 - 18.5 band, with a VWAP close to 18.5 cents.
I've watched the ongoing trading of RED at times in detail, and consider that the price is being manipulated with this algorithmic trading that's occurring. Although I only have circumstantial evidence and nothing to confirm it, from my observations it seems that the buyer and seller is on both sides of trading and effectively forces the trading into a band that it wants to achieve, and most of the buys and sells effectively cancel out the trading, so at the end of the day there is a minimal net position achieved by that trader - I would assume its a fund manager/insto that has invoked that trading style, of course this is just a theory I put forward.
I'm not criticising that style of trading as it enables liquidity in the daily trading of RED, and proves to me that the longer term movement of RED is UP!!! Toward I can't see it getting too far out of the 18.0 - 18.5 band, with a VWAP close to 18.5 cents.
Hi beatle and thanks again for your insight and views.
If possible would like you to do a comparision with NST & RED and see which one is of better value. NST is already producing 10,000z per month and earning an income. Currently has a sp of 54c with 300ml shares. RED not producing as yet and a sp of 18.5c with 800ml shares.
RED has a greater sovereign risk but has no carbon tax. NST has no sovereign risk but the prospect of a carbon tax down the track.
Beatle you place a value on RED at 40c? What value would you place on NST?
I hold red
If possible would like you to do a comparision with NST & RED and see which one is of better value. NST is already producing 10,000z per month and earning an income. Currently has a sp of 54c with 300ml shares. RED not producing as yet and a sp of 18.5c with 800ml shares.
RED has a greater sovereign risk but has no carbon tax. NST has no sovereign risk but the prospect of a carbon tax down the track.
Beatle you place a value on RED at 40c? What value would you place on NST?
I hold red
Jancha,
Your figures are a bit off there. RED has nearly 1300ml fully paid shares, NST has 305ml. NST production on average is around 7250 oz per month with double the cash costs than those estimated for Siana. Paulsens has only got around 3 - 4 years of life left in it at current rate, Siana has 10+ years @ 7250 oz per month.
NST seem to be burning up alot of their earnings on exploration. Their site costs are nearly $1000/oz and they have only 16m cash.
Hi Jancha, I haven't followed NST in detail other than knowing it had taken over from Intrepid at Paulsens, and that recent production is from underground operations. Just to be able to provide you with a more informed comment I reviewed the last operations quarterly to answer your question.
As Skip1jz has noted, the recent production suggests that the performance at Paulsens is more like about 7,000oz per month, and total site costs of production are around $920/oz. Gold production is similar to the start up production for Siana but soon thereafter Siana increases to around 8,000 ozs, then progressively moves towards 10,500 ozs per month after a couple of years. But Siana gold site costs are estimated to be well below that of Paulsens, less than half at below US$400/oz.
There are also a few other very significant points to understand with any comparision and valuation of the 2 operations:
Paulsens has an Indicated resource of around 140,000 oz (plus 250,000 ozs Ashburton), but this is not a reserve. The issue being to convert a resource into a reserve requires a mine plan and schedule to confirm its profitability. Therefore any DCF analysis of Paulsens is taking a view of the transfer of resources into reserve category. I'm not disputing that there are likely to be economically viable reserves at Paulsens (its producing profitably now) but how much converts is not well understood by the market (clearly the company will have a much better knowledge of that but I couldn't see it in my quick review).
In the case of Siana, it has had to go through a considerable Bankable Feasibility Study which was required to provide a whole of mine life estimate of reserves. These reserves, totalling 853,000 ozs have been laid out in a production schedule so that it is easy to establish a DCF analysis. The rigours of that information has been vetted by a number of experts who have done so on behalf of various banking institutions. Thus the confidence on the economics of Siana are well laid out for all to see.
The other point to know is that Paulsens pays its way with a tax of 30% on profits, as per usual operations. Siana, in accordance with new developments in the Philippines doesn't pay tax for the first half of its operations, which at this point is determined to be 10 years (ie first 5 years tax free - although in RED's usual conservative manner they have quoted first 4 years tax free to date, I'm sure that will change once the development schedule is handed in to the Philippines authorities). This clearly has a considerable impact on the first years of production profitability not having to pay tax in any NPV valuation.
I hope that gives you some more information to consider with regard to Siana.
As Skip1jz has noted, the recent production suggests that the performance at Paulsens is more like about 7,000oz per month, and total site costs of production are around $920/oz. Gold production is similar to the start up production for Siana but soon thereafter Siana increases to around 8,000 ozs, then progressively moves towards 10,500 ozs per month after a couple of years. But Siana gold site costs are estimated to be well below that of Paulsens, less than half at below US$400/oz.
There are also a few other very significant points to understand with any comparision and valuation of the 2 operations:
Paulsens has an Indicated resource of around 140,000 oz (plus 250,000 ozs Ashburton), but this is not a reserve. The issue being to convert a resource into a reserve requires a mine plan and schedule to confirm its profitability. Therefore any DCF analysis of Paulsens is taking a view of the transfer of resources into reserve category. I'm not disputing that there are likely to be economically viable reserves at Paulsens (its producing profitably now) but how much converts is not well understood by the market (clearly the company will have a much better knowledge of that but I couldn't see it in my quick review).
In the case of Siana, it has had to go through a considerable Bankable Feasibility Study which was required to provide a whole of mine life estimate of reserves. These reserves, totalling 853,000 ozs have been laid out in a production schedule so that it is easy to establish a DCF analysis. The rigours of that information has been vetted by a number of experts who have done so on behalf of various banking institutions. Thus the confidence on the economics of Siana are well laid out for all to see.
The other point to know is that Paulsens pays its way with a tax of 30% on profits, as per usual operations. Siana, in accordance with new developments in the Philippines doesn't pay tax for the first half of its operations, which at this point is determined to be 10 years (ie first 5 years tax free - although in RED's usual conservative manner they have quoted first 4 years tax free to date, I'm sure that will change once the development schedule is handed in to the Philippines authorities). This clearly has a considerable impact on the first years of production profitability not having to pay tax in any NPV valuation.
I hope that gives you some more information to consider with regard to Siana.
Thanks on that research beatle. Been looking at another Gold explorer of late (WWW). Dont hold but noticed after their announcement yesterday they had 30% spike. ATM i dont like the market for the short term and only feel confident looking at gold companies. RED does look the best however as you stated with it coming into production at low costs. The only small worry for me being sovereign risk.
Anyway would love to know if there's any extra gold in them dare hills 30km away at Mapawa.
Understandably RED has been low key on this and consentrating mainly on the up and running of Siana but at least there's that added bonus of another mine being close to their infrastructure. Lets hope.
Anyway would love to know if there's any extra gold in them dare hills 30km away at Mapawa.
Understandably RED has been low key on this and consentrating mainly on the up and running of Siana but at least there's that added bonus of another mine being close to their infrastructure. Lets hope.
Hi Jancha, good to hear from you and interested to hear of some of those companies that you are looking at within the gold sector. I guess with the recent over-heating of the gold price there may be some shares come off in share price so its a time to do the research rather than jump in without some due care.
With respect to RED I do believe that it sits in a place on its own. Its due for a significant re-rating once the Siana gold project comes on line, and with a fundamental valuation (based on DCF on base case feasibility study information) of more than double its current share price you can expect it to move upwards as commissioning and production moves along. Not long to wait now!
With regard to WWW its certainly got an interesting shareholder base, and sounds like it could go for a run IF the drill program proves that there is more than surficial gold around. But clearly it is a speccy and therefore you can't bet the house on it, whilst I have bet the house on RED (I want 2 houses, lol!).
With respect to RED I do believe that it sits in a place on its own. Its due for a significant re-rating once the Siana gold project comes on line, and with a fundamental valuation (based on DCF on base case feasibility study information) of more than double its current share price you can expect it to move upwards as commissioning and production moves along. Not long to wait now!
With regard to WWW its certainly got an interesting shareholder base, and sounds like it could go for a run IF the drill program proves that there is more than surficial gold around. But clearly it is a speccy and therefore you can't bet the house on it, whilst I have bet the house on RED (I want 2 houses, lol!).
Hi all RED club members.
Some interesting posts of late, great to see. I'm wondering where the expected Siana drill results are, that were due out end of last month. I expected them in the quarterly activities report, or if above average results an announcement on its own. We are due for our monthly Siana construction update, maybe their in there.
Jancha its interesting you noting other potential Goldie's, there all going to my watch lists, lol.
Anyhow RED holding up ok, though would like it to drop a little to collect some more. I still cant get over how Beatle jagged the drop at 14.5 the other week. He's an arsy bugger, lol. Keep up the good posts everyone. It makes for an interesting read. Not long now guys...
Some interesting posts of late, great to see. I'm wondering where the expected Siana drill results are, that were due out end of last month. I expected them in the quarterly activities report, or if above average results an announcement on its own. We are due for our monthly Siana construction update, maybe their in there.
Jancha its interesting you noting other potential Goldie's, there all going to my watch lists, lol.
Anyhow RED holding up ok, though would like it to drop a little to collect some more. I still cant get over how Beatle jagged the drop at 14.5 the other week. He's an arsy bugger, lol. Keep up the good posts everyone. It makes for an interesting read. Not long now guys...
Hi Skip1jz, I can give you a little potted history of Siana prior to RED (through its wholly owned Greenstone Resources, its Philippines compliant corporation subsidiary).
Siana was mined by various Philippine entities as a high grade underground operation from mid 1930's to 1960, producing just under 600,000 ozs, then as an openpit from 1960 to 1991 producing another 300,000 ozs. It was hindered by lack of capital in its open pit phase which hampered the ore from being mined and processed efficiently, and those inefficiencies plus a low gold price finally caused its closure in 1991.
That historic production is important from the point of view that mining is not new to the local population, and RED has further demonstrated its genuine intentions for the locals with community based assistance in the way of medical and dental services, the improvement of water quality and education services, as well as other community based programmes. There is very good community support for the company and its development at Siana as demonstrated by the environmental submissions getting unanimous support by the locals.
Siana was mined by various Philippine entities as a high grade underground operation from mid 1930's to 1960, producing just under 600,000 ozs, then as an openpit from 1960 to 1991 producing another 300,000 ozs. It was hindered by lack of capital in its open pit phase which hampered the ore from being mined and processed efficiently, and those inefficiencies plus a low gold price finally caused its closure in 1991.
That historic production is important from the point of view that mining is not new to the local population, and RED has further demonstrated its genuine intentions for the locals with community based assistance in the way of medical and dental services, the improvement of water quality and education services, as well as other community based programmes. There is very good community support for the company and its development at Siana as demonstrated by the environmental submissions getting unanimous support by the locals.
Lol Jancha, I know the feeling! (Its a bit like that joke, how do you become a millionaire - start by being a billionaire!).
I read on HC that the technical traders expect it to fill a gap left at 16.5 cents. I have no idea if that is the reason but if it is then perhaps we can assume the gap is filled, now get back up there please, lol.
Actually I have been in RED long enough to be insulated by the day to day trading (except to buy more at times of weakness, although I didn't buy any this morning at 16.5 as it caught me off guard!), and remain completely comfortable that we will see a significant re-rating in the coming months. Why don't I trade some of my shares - I'm too scared that the day I sell some I will miss the move and also I have a favourable tax position due to holding quite a few in my personal name too (aside from a few other accounts). Fundamentally RED is looking better now due to the gold price and slight reduction in ozzie dollar strength, and knowing the mechano set is steadily being put together and the mine almost drained of water, I feel very relaxed that the project will come on at least as good as the base case, but with the possibility of some elements such as reserves, costs being reduced due to a re-hash of the resource and optimisation based on higher gold price thus lower gold cut-off grade reporting into more resources.
I read on HC that the technical traders expect it to fill a gap left at 16.5 cents. I have no idea if that is the reason but if it is then perhaps we can assume the gap is filled, now get back up there please, lol.
Actually I have been in RED long enough to be insulated by the day to day trading (except to buy more at times of weakness, although I didn't buy any this morning at 16.5 as it caught me off guard!), and remain completely comfortable that we will see a significant re-rating in the coming months. Why don't I trade some of my shares - I'm too scared that the day I sell some I will miss the move and also I have a favourable tax position due to holding quite a few in my personal name too (aside from a few other accounts). Fundamentally RED is looking better now due to the gold price and slight reduction in ozzie dollar strength, and knowing the mechano set is steadily being put together and the mine almost drained of water, I feel very relaxed that the project will come on at least as good as the base case, but with the possibility of some elements such as reserves, costs being reduced due to a re-hash of the resource and optimisation based on higher gold price thus lower gold cut-off grade reporting into more resources.
Hi Red team
Thanks to Rabbit for alert on August Top 20 on website - more info than Top 10 as previosly
From what I can see most of the activity and silly games coming from the Merrill LYnch/JP MOrgan Aust nominees -down 60m in a month - can't figure out these nominee companies - they may be selling down to the declared substantial notice of 73m which means they may have another 50m to go
All in all very positive.
I notice that the 5 majors, Matthews,Baker Steel, JP MOrgan, Sprotts, Lujeta absolutely no movement since last big 3B notices in Feb. - they are holding tight.
No.6 Equity Trustees added 3m in last month
No. 7 David Teoh no movement since last ann rpt 39m but perhaps Seng Bee Teoh a relation with DTeoh?
Notice the pattern????...big players not moving a single share
Good to see previous Exec Technical Director Allen Govey also has not sold a single share since resigning MArch 2010
Some smaller moves below , Bell POtter( they did the research) +17m, Gary B Branch (google shows to be a GP from NSW- super fund)+9m, American (remember the american roadshow)Hedge Fund Focus +7m
Dropping since annual report David Cumming -7m
Thanks to Rabbit for alert on August Top 20 on website - more info than Top 10 as previosly
From what I can see most of the activity and silly games coming from the Merrill LYnch/JP MOrgan Aust nominees -down 60m in a month - can't figure out these nominee companies - they may be selling down to the declared substantial notice of 73m which means they may have another 50m to go
All in all very positive.
I notice that the 5 majors, Matthews,Baker Steel, JP MOrgan, Sprotts, Lujeta absolutely no movement since last big 3B notices in Feb. - they are holding tight.
No.6 Equity Trustees added 3m in last month
No. 7 David Teoh no movement since last ann rpt 39m but perhaps Seng Bee Teoh a relation with DTeoh?
Notice the pattern????...big players not moving a single share
Good to see previous Exec Technical Director Allen Govey also has not sold a single share since resigning MArch 2010
Some smaller moves below , Bell POtter( they did the research) +17m, Gary B Branch (google shows to be a GP from NSW- super fund)+9m, American (remember the american roadshow)Hedge Fund Focus +7m
Dropping since annual report David Cumming -7m
Great research note Geezuguys, and FINALLY an analyst prepared to put out a valuation that is more in line with my thoughts! The DCF valuation of 46 cents per share is in the range of what I have been talking about in isolation for such a long time based on current gold price. It makes me stronger in my conviction that the analysts are simply too scared to dare put out a valuation so much higher than the actual share price, but this time Evans has shown it for what I consider fair value. Now all we need to gold price remain in a similar range and for RED to produce gold in November, then the re-rating will be on its way!
AND RED today has been GREEN for some of the trading session, in amongst a market full of red!
AND RED today has been GREEN for some of the trading session, in amongst a market full of red!
I have a question about this security, if someone could enlighten me; why is there optimism about a share that has never breached the 25.5 cent mark, yet is getting a 40+cent projection according to certain posters? The broker research I have is giving me a target of 27 cents in 12 months, so that can hardly be classed as rapid growth.
Is there something about this stock I am missing? I'v read the announcements, and have been analysing the charts. At the moment, there is an uptrend I will admit - but something about a company that has been on the ASX since '97 and not breached the 25 cent mark, is beyond me completely.
I'm hoping someone here will enlighten me.
Is there something about this stock I am missing? I'v read the announcements, and have been analysing the charts. At the moment, there is an uptrend I will admit - but something about a company that has been on the ASX since '97 and not breached the 25 cent mark, is beyond me completely.
I'm hoping someone here will enlighten me.
new trade i think you are focussing on the graph and price too much rather than the value and the quality of an investment in a market of extreme volatility.
this has been recently down to 11, 12, 13 so i think a target of 27 (quite easily in a year) would qualify as high growth. But I don't think many are looking for high growth
the company is about to produce after many years with parsimonious cost control, no surprises, huge stable top 10 support, fully funded (last at 17 so you know anywhere around here is OK), no hedges, good community and govt support, high grade low cost....gee...i feel so pessismistic..let me get out and put my money into something else that is subject to recessionary demand and... whos going to want this gold anyway? Right?
You can't just look at the number brokers target but their methodolgy and assumptions.
The Petra Capital 16/6 NPV is 27c using 1100 -1300
The Casimir capital NAV, is 17c using POG $US950 and 5% and they have a 27c target.
Bell POtter 29 July have target 25c using 1225-1500 range
My NPV model come out at 27c, using POG1300 flat over 11 years - i am just about to revise it.
To appreciate the effect of rising POG consider that the Evan PArtners using 1700+ comes up with 46c and cash balance of $466m in 4 years.
Current EV is around $70m - truly silly for a near term producer of gold. RED offers high safety margin which eventually attract a premium.
good luck
this has been recently down to 11, 12, 13 so i think a target of 27 (quite easily in a year) would qualify as high growth. But I don't think many are looking for high growth
the company is about to produce after many years with parsimonious cost control, no surprises, huge stable top 10 support, fully funded (last at 17 so you know anywhere around here is OK), no hedges, good community and govt support, high grade low cost....gee...i feel so pessismistic..let me get out and put my money into something else that is subject to recessionary demand and... whos going to want this gold anyway? Right?
You can't just look at the number brokers target but their methodolgy and assumptions.
The Petra Capital 16/6 NPV is 27c using 1100 -1300
The Casimir capital NAV, is 17c using POG $US950 and 5% and they have a 27c target.
Bell POtter 29 July have target 25c using 1225-1500 range
My NPV model come out at 27c, using POG1300 flat over 11 years - i am just about to revise it.
To appreciate the effect of rising POG consider that the Evan PArtners using 1700+ comes up with 46c and cash balance of $466m in 4 years.
Current EV is around $70m - truly silly for a near term producer of gold. RED offers high safety margin which eventually attract a premium.
good luck
Like I said, 27c is reasonable. It will be their all time high, but still reasonable. I am trying to find whether or not RED5 has had a large operation like this before. Keep in mind this company has been on since '97, and it is no Mt Isa Metals. MET (Mt Isa Metals) were sitting on 3c, and a jump to 90c in a year. That is growth, and rapid. A 17c stock getting a projection of 27c by brokers, and 47c by members, that has never breached 25c is a little worrying. This company is not new, it has been around for a long time.
The level of optimism in this thread is overwhelming. In the November gold pour, if we reach 27c, that is a reasonable target, but not heavy growth.
So if someone is able to tell me a justifyable reason as to why this company will be re-evaluated at 40+c, then I am all ears.
Again, I admit there is a daily up-trend, but nothing that I can see is going to breach the resistance. My analyzation is a mix of charts, fundamentals and broker research. If I am missing something, please tell me, because this stock is getting such a good review, with no justifyable reason or any history to back it up.
However, the only good reasoning I can see here is the POG projections, if steady until November and onwards (providing currency is still shot), than a 1700+ range and target of 47c MAY be viable, perhaps!
I'll admit, I am keen on the current projected target of 25c, but not higher. I am increasing my own holdings for a nice packet at EOY11 - I don't se it reaching 47c in December. If I am able to be convinced and my confidence rises. I may hold until post EOY11, and perhaps re-evaluate my position first/second quarter 2012.
If you find RED worrying could you please enlighten me on what other companies on the ASX have the potential to have a 100% gain in the next few months (without it being a massive gamble). Or better still another MET?? The only speculative part of RED is how much more deposits do they have in the ground? And i cant see gold going down in a hurry so where's the risk? Companies that jump from 3c to 90c in a year? Wow let me know when the next one comes along preferablely before it gets to 90c tho. I'd be happy with a 100% gain and i'd be confident to say that most other people would be to:eek7. Boy some people are hard to please.
If you find RED worrying could you please enlighten me on what other companies on the ASX have the potential to have a 100% gain in the next few months (without it being a massive gamble). Or better still another MET?? The only speculative part of RED is how much more deposits do they have in the ground? And i cant see gold going down in a hurry so where's the risk? Companies that jump from 3c to 90c in a year? Wow let me know when the next one comes along preferablely before it gets to 90c tho. I'd be happy with a 100% gain and i'd be confident to say that most other people would be to:eek7. Boy some people are hard to please.
The only worrying part is the projections. I have no doubt that RED will gain post production. But to gain up to 47c, the price of Gold would have to hold out, or increase, and then and only then, will further gains come about.
I found MET, by searching small caps. I didn't have a clue they would rise to that price, but when I had to pull my $1000 away because I was desperate for cash - and a year later I saw I would have made a 28K profit, I almost cried.
The only thing I can see here is that after production, according to projections, a 27c price is viable. But is this really heavy growth? 25c is the barrier, and since '97 they have not pushed it. Considering the price of gold, perhaps 100% on the 17c mark may be viable, but to hit a target of almost 50c, in my opinion it is wishful.