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VAU - Vault Minerals

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Volatile indeed.

As we saw today, the price sort of jumped - by its average mind you. It will take some time yet to see the price hit 24c again. I didn't end up selling my holdings and I also think tomorrow will be an up day.
 
beatle said:
Just to correct a few points made by various posters over recent days.

Firstly, RED has no debt at all. It is working off funds raised through placements via considerable insto's. It has got an offer of a standby debt facility of $8mil, but it has not drawn on that. It is expected to complete commissioning with circa $17 mil still in bank.

My NPV valuation of RED based on a flat gold price of US$1,500/oz plus exchange rate of $1.03 (ie with A$higher than US$ which is not the case any more!) suggests Siana is worth 39 cents per share.

The Base Case Feasibility study was based on a US$800/oz gold price - it is likely that there will be a change prior to start up for the resources/reserves since the feasibility study originally were determined on resource outlines of US$650/oz. This may add another 15 - 20% of gold into ore reserves.

The plant was envisaged to operate at a maximum rate of 1 mtpa although the economic resource modelling presumed operating at 750,000tpa. The max milling rate of 1 mtpa was to be achieved in year 4 of the schedule when open pit and underground ore was blended into the plant. With the changeover in the SAG mill to a new one (an old SAG mill had planned to be refurbished) with variable speed drive and a rated capacity slightly greater than the former planned mill its likely that the milling rate will over-achieve 1mtpa subject to ore being available. With an expectation of reserves being increased due to the re-estimation by dropping cut off it is likely the annual milling rate will increase beyond the milling schedule as per the base case. In addition apparently the pumping capacity and tankage is in excess of original expected requirements, thus increase in plant throughput on an annual (and thus monthly) basis is anticipated.

Also, note that whilst the operating costs in the base case are estimated at US$351/oz, with that base case being a couple years ago its more likely the operating cost will now be closer to US$400/oz.
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Beatle thanks for the information this certainly helps me a lot
Cheers
 
Some of you guys have picked this move up by RED very well, but I hope you don't just sell out for a small profit as the true reward is likely to come once RED pours first gold, due in November.

In addition I'm hoping we get an announcement out in the next month regarding its review of an upgrade to its reserves position, and hopefully a revised mine schedule to accomodate that upgrade (so I can recast my cash flow model!).
 
I'm actually getting very concerned about this being a dead cat bounce due to EU politicians denying the latest rumors, and will probably sell today. I do plan to buy and hold at some stage though, just when I'm confident there will be a sustained uptrend.

The price of gold has done really well in this week, though it's now in an 8 hour downtrend (sorry no chart).

Bloody market needs to develop a backbone and give us some clear direction. Until then, it's rally riding for me.
 
I think the eason you are forecasting a "dead-cat bounce" is due to the lack of volume today and minimal corroboration with the foreign markets.

Last nights EU went absolutely crazy - but the DOW lost steam. I was expecting a 90 point finish in the green, but we have been hovering on very little investor interest.

The current RED pric action does not suggest to me a quick bounce up to peaks - rather it is suggesting a sideways trending market lacking in information.

Although - the 9.5% and current 8% hike is making me feel at ease and has allowed me to invest some extra capital and average down.

My target still remains in the 0.285c region for the near term unless ofcourse we see a QE response - which in my view will not shake up markets for long, it will just give people the oppertunity to bail.
 
i've been perusing the financial stmts and noticed the $4.4M break fee they paid to exit the gold prepay facility. Ouch, about 17% fee. Their capital raising was $50m cash then to have that cost is not a good look.

Reading the capital section reminded me that our local partners (from the many Top 20 on website) MCC/ Southbridge( from memory) have sold down most of there shares. Wow, you'd think they'd have better advice.

the thread is picking up more readers...good.
 
mgm1a said:
i've been perusing the financial stmts and noticed the $4.4M break fee they paid to exit the gold prepay facility. Ouch, about 17% fee. Their capital raising was $50m cash then to have that cost is not a good look.

Reading the capital section reminded me that our local partners (from the many Top 20 on website) MCC/ Southbridge( from memory) have sold down most of there shares. Wow, you'd think they'd have better advice.

the thread is picking up more readers...good.
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So the majour investors have sold down their shares?

Isn't the exit from the Gold prepay facility a strategic move to secure more profits?

RED5 Limited's financial surplus is meaningless in many senses - after all is paid for, and plant operational, a level of surplus is good looking for the books, yes. However griping over the exit fee isn't particularly a worry.

My concern is the SP. If the majors are selling down, and even Matthews unloading many millions of shares - what chance do we have of an on market fair valuation?

I am dieing to see the new peak - so I can bail. This stock will not pass resistance for quite some time (24c) and I dare say that targeting 30c+ for the near term is just not feasable.
 
Mgm1a, a very interesting point with regard to the "Funding Extinguishment Cost", ughhh. It really was an ugly part of RED's financing initiatives to get Siana developed.
LostMyShirt yes it is a past event which doesn't have significance now but it is something that irks shareholders of that time (which we were) and that entire saga of funding resulted in a considerable increase in shares on issue.

LostMyShirt, the bigger shareholders (instos), apart from Matthews who seem to have gone quiet recently, have not indicated any selling whatsoever.

Personally with regard to short term price targets, it seems that the current market volatility and gold price fluctuations will continue to dominate RED's share price despite it getting ever closer to first gold production. While I have topped up a little in past days seems like it might get cheaper before it moves up. BUT I remain confident that RED, once in production, will be a bargain as the market appreciates its monthly cash flows and operational profits. Of course that confidence doesn't lead me to believe its price is going up soon as it certainly can't fight against the huge groundswell pushing it down with other resource companies.
 
Hi all RED club members...

By the way i see it, RED is cruising along with the rest of the market and gold price fluctuations.

Lostmyshirt, mate, keep in mind just a few months ago, RED shot from 11 cents to 24 cents in just a couple of months and off really NO announcements, other than a couple of monthly construction updates. We are expecting more reserves to be announced, due to lower cut-off grades and also a commissioning date that is inevitable. Not to mention a mine that will be pouring GOLD in November.

When RED starts to go, ( and it will, ) it will take off like a RED ROCKET!! As it always does. The big boys, instos and us retail investors will be jumping on board pretty quickly as we've all seen before. so hang in there, don't panic and just try and top up if you can and lower your average a little. Just some friendly advice.

Cheers Moit. :)
 
Great to see your post Moit, and your overall view. Lets hope gold stays within a reasonable range, assuming gold is poured satisfactorily in the next couple of months the gold price is the only danger to RED shooting above that 24 cents resistance - that means gold needs to remain above US$1,000!
 
The erratic swings in views of LostMyShirt are the only thing bringing me ammusement with RED at the moment.

It has been a very tough couple of weeks but I will continue to hold for first gold pour I guess :confused:
 
PT Cruiser said:
The erratic swings in views of LostMyShirt are the only thing bringing me ammusement with RED at the moment.

It has been a very tough couple of weeks but I will continue to hold for first gold pour I guess :confused:
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Watching daily price action makes me change my near term view. I probably should refrain from divulging them. Although, I will say that my views regarding RED's price action are in no way reflecting the status of the overall company. If you feel that my view is comical, then please refrain from commenting on them. You sure you are not amused with the price action? Glad I can bring some light to your day...

Moit; The SP fluctuations with no announcement indicates that people saw the value in near term producers because of fluctuating gold price. The exit from the pre-pay system tells me that RED has very high hopes on POG renaining well above 1300/oz, and even have outlayed capital to secure near term max profit on their reserves. I consider it good news that they exited, and also believe their strategy is not purely speculation. Good thigns will come out of this company.

Now; something I have been ponering for quite some time. Would RED be a good candidate for a takeover by some larger player?
 
LostMyShirt, re takeover potential. If you care to scroll back through the posts in past months you will see a number of posts that discuss the possibility of a takeover of RED. But summarising my view on that possibility:

The Siana gold project has sufficient reserves/resources/potential to attract a current gold producer in the middle tier bracket (say MML or SBM etc). It doesn't have enough gold in total to attract the likes of a big gold producer such as Newcrest or international gold producer.

The Mapawa project has the potential to attract the bigger players if resources start to move towards 5 million ozs, which is possible once exploration becomes active and with more definite success in finding the locus of mineralisation.

Whilst RED remains at a completely discounted price at present its unlikely that any gold company would consider a takeover prior to successful commissioning of Siana and a more definite understanding of the operating costs involved. By that time RED is likely to move closer, if not at a premium to, implied NPV valuation of Siana. Any takeover would therefore be less attractive at that time due to a premium to that underlying value likely to be present at the time. BUT if Siana does perform as we expect and share price doesn't move considerably higher THEN RED will definitely be a true takeover target. IMO of course!
 
beatle said:
LostMyShirt, re takeover potential. If you care to scroll back through the posts in past months you will see a number of posts that discuss the possibility of a takeover of RED. But summarising my view on that possibility:

The Siana gold project has sufficient reserves/resources/potential to attract a current gold producer in the middle tier bracket (say MML or SBM etc). It doesn't have enough gold in total to attract the likes of a big gold producer such as Newcrest or international gold producer.

The Mapawa project has the potential to attract the bigger players if resources start to move towards 5 million ozs, which is possible once exploration becomes active and with more definite success in finding the locus of mineralisation.

Whilst RED remains at a completely discounted price at present its unlikely that any gold company would consider a takeover prior to successful commissioning of Siana and a more definite understanding of the operating costs involved. By that time RED is likely to move closer, if not at a premium to, implied NPV valuation of Siana. Any takeover would therefore be less attractive at that time due to a premium to that underlying value likely to be present at the time. BUT if Siana does perform as we expect and share price doesn't move considerably higher THEN RED will definitely be a true takeover target. IMO of course!
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Sorry Beatle, I did rummage through the old posts but skimmed through it and didnt take notice of your previous opnion.

Thanks for your summary; I agree with you completely. The reason I mention this is because I had read an article on, I believe it may have been BBC or smartmoney, which basicaly read that growth outlook for large miners is bleak, and time/costs of new explorations would be too much, thus it is easier to take over smaller companies with decent mines etc. The article made a lot of sense to me, and wondered if Siana would have an attraction. You cleared that up for me already - thanks very much.
 
Always happy to assist if its within my area LostHisShirt (you really should change that name, lol).

I should also add that RED has considerable exploration potential within the whole Siana and Mapawa MPSA's outside of the immediate Siana gold mine and Mapawa LSY Prospect areas. In particular we have been provided with sketchy past exploration of porphyry gold prospects in the Siana MPSA as well as mineralised outcrop (base metals plus gold) elsewhere in Mapawa MPSA. Each of these occurrences could concievably add considerable blue sky value to RED in due course once they have the exploration work at the minesite sorted out (which may also provide additional ore feed to the Siana gold plant).

I was pleasantly surprised that RED displayed some strength towards the end of the trading today, and lets hope that it continues to strengthen in coming days and move towards that ever-lasting resistance level of 24 cents!!! I'd love to see it blown out of the water for good (then it becomes a support level from what I understand of technical charting interpretation).
 
Things in EU are looking good for the very immediate future, so probably not a whole lot of bad news, should see some money returning to Euro from the US which will push gold up. Good jobs data from US as well.

Now might be a good time to be holding.
 
Starcraftmazter said:
Things in EU are looking good for the very immediate future, so probably not a whole lot of bad news, should see some money returning to Euro from the US which will push gold up. Good jobs data from US as well.

Now might be a good time to be holding.
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I should state for the record that I am and will continue to hold.

In my honest opinion; the ASX felt the drop of EU/US markets, but did not feel the rise. The first days gain of 100pts was eaten away slowly over the course of the week.

The emphasis on this stock has dwindled, buyer strength deminishing as we speak and the price trading within a very tight range. We will not see 24c peak for quite some time, and I also believe that even after the pour announcement, high twenties will not be met; low 20's perhaps.

Today is an Algorithm day it seems; my views on the stocks fundamentals are of high regard - the technicals are completely demolished.
 
Don't misunderstand me, RED is not traveling well at the moment due to factors completely outside of its own control, and probably will fall victim to those factors to have its price move south in the coming days/weeks.

BUT RED is at a pivotal time in its history. It is about to transform from gold explorer to gold producer.

During the past year, as the A$ increased in value RED has gone through its high cost capital expenditure program, primarily in US$, and now most of that capex has been spent. That has meant RED has actually had the benefit of a strong A$ to minimise the cost of the development of its Siana gold project. In graphical terms if we look at the 2 year A$/US$ exchange rate you will notice that about the time of RED's capex spend (roughly 12 months ago) corresponded with A$ strengthening:
http://www.xe.com/currencycharts/?from=AUD&to=USD&view=2Y

Now with RED almost at the time of it becoming a gold producer, the main cost elements relate to labour (generally factored in Philippines pesos) and fuel (US$ factored). Fortunately fuel prices are now falling, and whilst the pesos has improved against the A$ in the past month (in sympathy with the gradual improvement in the US$), each of those inputs to the future operating costs that RED will incur, will mean that RED will benefit with it being a relatively low operating cost producer, such that it can now benefit considerably with the increasing A$ denominated gold price:
http://www.xe.com/currencycharts/?from=XAU&to=AUD&view=10Y

From this gold price graph you will note that in A$ terms gold continues upwards, and the operating margin between RED's operating cost base and the gross revenue is increasing. This augurs well for RED once in production.

While RED might be forced lower with the panic in the market at the moment, at some point it will spring back IMO, due to the positive cash flows it will be enjoying. AND I wouldn't mind betting that once we meet steady state production, IF the price doesn't move back up there is likely to be either a takeover by a mid-tiered gold producer OR RED management may actually put in a share buy-back...

Thus I retain considerable confidence that RED is a fantastic buy at these current low prices!
 
Morning All,

It looks like Beatle's hopes of a resource upgrade has been answered. New announcement for RED out. 1.3m Gold and 2.4m Silver (21% increase in gold), interesting times indeed. The last hurdle will be whether Red can churn out the gold and silver as scheduled and the gradual ramping up of production. Would be good to hear some news of the Marampa (been so long since Ive heard anything that it took me a second to remember the name).
 
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