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VAU - Vault Minerals

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I refer to the comments previously by Hugh_Jarzz et al elsewhere, and a further article by some filipino journalist

http://www.mb.com.ph/articles/259706/copper-firm-invest-5billion-rp

quoting MGB Director Edwin G. Domingo regarding "...Freeport McMoRan Copper and Gold Inc, world’s largest publicly-traded copper company, has expressed interest to expand mining investment in the Philippines to as much as $5 billion with its vast and contiguous exploration prospects ". The above noted weblink does not refer to RED in the article, although another filipino press refers specifically does refer to RED

:http://www.bworldonline.com/main/content.php?id=11771

“Freeport-McMoRan is willing to invest as much as $5 billion in the Siana gold project in Surigao del Norte, which is operated by Australian miner Red 5 Ltd.,” Edwin G. Domingo, MGB director, told reporters late Friday. The firm is also studying the Batongbuhay mine in Kalinga.

It therefore appears that the reference to RED may have been taken out of context with the further comment by MGB Director Edwin G. Domingo regarding Freeport-McMoRan involvement with RED, BUT as jonnyboy relates elsewhere on HC and I agree entirely, is:

"I think the main thing of note is the Philippines government is actively trying to attract big miners to the Philippines as the article states the "government pursues incentives for mineral development and processing" this can only be a good thing for Red."

Further to that, clearly with the election out of the way and the newly elected President winning with a clear majority, someone who has already spelled out a message of wanting to develop business in the Phils, there is NO likely increase in sovereign risk unlike Australia where uncertainty remains to overhang the mining industry. The benefits that RED get from investing in its Siana gold project, and the inducement to explore at Mapawa, is NO capping of its potential rewards from profits, and in fact RED will actually get a further inducement from the taxation regime in that it will get a tax-free holiday for the first 50% production indicated on mining/milling schedule. If Mapawa comes up as a viable independent project, then THIS ALSO, as a separate project, will qualify for tax free status of the first 50% production!

(Mr KRudd please take note of that!!! Mr Henry, you really believe that your idealogy has not increased sovereign risk in this country - I would like to know what your definition of sovereign risk is!).

Anyway, RED has got all things going for it, apart from its share price, which I can't see sitting at this level when the finance comes through!
 
Yawn at SP.

Two upsides that market need to check out.

Firstly, with recent movements in POG to $1200+ and AUD/USD off its 90c perch (however temporary it may be I'd hope they could grab some Fx cover) & moved to just under 100% ownership of Siana, my NPV model is now suggesting an SP, in cents, that unbelievably starts with a 4.

I have in past been reluctant to ascribe any modelled number beyond "mid- to late 20's" as being realistic, but with market changes & RED having been fortunate in past with its timing, so maybe they can get the finance, get some cover for both POG & Fx secured, to get closer to a 30c+ (choke! splutter!) number.

Secondly, I listened to the MML's Singapore small caps preso and check back on their preso slides of 10/5/10 and on a map they show a dot for the Siana project as being " >2moz". Do they know something we don't? :) Well they are in the neighbourhood and in same business so... maybe!
 
Hi Mgm1a, I concur entirely with your comments and view on discounted cash flow basis with regard to Siana value currently attributed to RED share price based on the current gold price, of around 40cents (compared with a current share price of 13 cents - unbelievable!).

I wasn't exactly what you meant about RED increasing its holding to 100% (I know you are aware of RED now having acquired Merrills interest by making it a subsidiary) and this gives RED effectively 97.6% stakeholding in Siana, but actually its not possible for them to hold any more due to the legal requirements of Philippines law regarding MPSA's - the other stakeholding I understand is held by RED's employees in their (equivalent to) super fund. This also enables RED to comply with all the requirements of Phils law that enables them to get the tax break for 50% of the life of Siana gold production (unlike MML which cannot qualify for such since the MPSA is held by a different legal entity and MML works via a production entity owning the processing facility, which doesn't enable the tax break to be valid). (I am not trying to rubbish MML's circumstance because clearly they are producing a lot of cheap gold due to efficient mining of a high grade underground resource).

I also am interested in your comment about MML having got Siana dotted as a +2 million ounce deposit, maybe they are also referring to past production to some extent, but that also maybe is a reflection of how differently MML has successfully sold it to the market. I hope RED can take a leaf out of the book of MML which is close to surpassing market cap of $ 900 million! (Cf RED market cap of $ 130 million).

RED still does need to put away the finance, and I understand that the banking syndicate are basically there now but require a slight variation to the lending entity, being the consolidation of Greenstone and Merrills, before the final finance is offered unqualified! This will take some minor variation on the legal establishment of the consolidated corporate entity. (I understand it could be another 4 weeks for this to happen).

I agree that RED has been fortunate that the gold price continues at these high levels and it is frustratingly close now, and it would be good for them to put away some hedging - I personally favour forwards IF the banks will allow that without any margin calls up front, and that this should cover 70% of the open cut mine recoverable ounces. I have a sneaking suspicion that the board may favour puts (which will cost some millions) or put/call collars (which can be established at nil cost).

Come on RED, maybe only 4 weeks to go now!

Lets see how it works out.
 
Hi All,
I have not seen any comment on the political stability of the Mindano provence in postings of Red. It is quite unstable which may have an impact on the price of extracting gold. Not wishing to rain on anyones parade:
Private armies control much of the provence see maguindanao massacre 23rd November 2009, other areas are controlled by Moro Islamic Liberation Front MILF(not the American Pie milf) also National Peoples Army NPA. Noi Noi Aquino the new president of the Philippines may not be open to corruption but much of the government is.
Just my 2 cents worth, chowur
 
Hi Chowur,

With reference to political stability and security, the Surigao del norte province is in the most stable and secure part of Mindanao and has been part of the historic mining zone for many decades (when siana was mined previously firstly as an open pit and associated underground workings). Both MML and RED have demonstrated that in parts of Mindanao secure geological and mining activities can be undertaken with complete safety and the backing of the local communities.

There are parts of Mindanao that definitely are less secure and present much more of a threat to mining activities, but RED's location is not in one of those areas. Yet there are also mining operations in some of those areas and have had no disruptions, and I refer to the TVI operation down in Zamboanga province as one good example. Tampakan is also in a less secure area, and does not have the same level of community support that RED has enjoyed (in a similar way to MML) - by the pro-active support both of these companies have developed with the local communities. This support was demonstrated in the case of RED by no party opposing the environmental licence application for its Siana development.

If you are uncomfortable with sovereign risk, I suggest you start to consider pulling your investments out of Australian mining operations, either developed or yet to be discovered, with KRudd demonstrating its likely capping of company profits to support and prop up other floundering industries!
 
G'day guys, I agree with Beatle's assessment of the risks involved with both RED's operations and also MML's. They both enjoy extensive community and government support and provide much needed local employment in their respective areas of operation. There is a video of a very recent presentation given by GD of Medusa at a conference in Singapore in which he comments on the local and government support.(among other interesting things).
The RED share price has held up through the recent downturn but can be said to be languishing. As a comparison, I have today been checking the SP of Triton (TON)where the former Technical Director of RED,LG has now taken up the MD position, and note it is trading today at 13c, similar to RED. But there is a HUGE difference in the current state of play, TON is very much in the exploration stages, compared to RED nearing production within 12 months.
The market is a strange beast indeed. I note that a number of Phils based projects are receiving reviews /writeups in overseas e-letters and bulletins, and there is interest particularly from North America/Canada and elsewhere.
I feel that in some ways MML has led the way and shown what is possible with multiple exchange listing, a constant feed of updates ,plus "spreading the news" at international conferences. Let's hope that in the coming period, our senior management pick up on some of these initiatives to build further interest in RED and help push the SP along to levels that at the moment we dream about. AB
 
Hi Anderbond, it remains so frustrating with RED's share price just sitting around current levels with all investors sitting on the sidelines. I noticed on HC that Oramon350 had made a great post (see following) which clearly will add more buyer support to RED:
"FatProphets has started broker coverage on RED last night, with a recommendation to buy. Here is an extract:
"With the price of gold expected to continue to rise, we think now is an opportune time to build an exposure to a low-medium cost emerging gold producer.

Red 5 Limited is a speculative play on gold, the Philippines and exploration at Siana and less so at Mapawa. The stock is recommended as a BUY for all Members".

I am sure this will infuse more life by bringing in fresh new investors into the mix, something that must be a real positive for RED's share price! Maybe the games the current insto's are enjoying with the share price will not be so easy to carry out!
 
Hi Beatle, are you legal again with you know where? Or just good friends with someone who has helped? Still not much happening but volumes have reduced but seem steady. One would think there is no longer sustained selling or sustained buying so I guess it is a waiting game now for all of us. POG is still heading in right direction so sooner or later the SP will break out. I am tranquil as I have confidence in progress and in management. Still thinking about being there to celebrate first production. AB
 
Well, having said earlier today volume seemed to have settle, today I see more than 6 M shares traded, so the selling obviously is yet to stop. Presumably it is stiil Anglo, or it could be disaffected holders from the earlier CR from a few years back. But it doesn't really matter in the scheme of things as it won't stop ongoing progress. AB
 
anderbond

A lot of the trades were cross trades, at least at the end of the day when I checked on stocknessmonster.com (including the 2.5 mil)

Some of the selling could also have been panic dumping in reaction to the Indophil News. I've sent an email today to RED 5 asking for clarification on the policy/situation of the govt in the Siana / Mapawa area - no reply yet.
 
Auscan, thanks for the info. It is possible that the proposed local legislation at Tampakan might have shaken out some nervous investors, but it is extremely unlikely that this would affect Siana's development. Siana is in the north of Mindanao and has strong community support, while Tampakan is in the south and has a history of opposition from the local Catholic Church and others. In any case it seems that outlawing open cut mining is beyond the scope of local legislation according to reports. On another tack, I have just discovered that RED seems to be listed on the Berlin SE, currently at 0.09 euros. In addition, Reuters has recently released a 12 page research report on RED which is available at a cost. Does anyone know anything about the listing or the report please? Beatle if you are around maybe you are up on this? AB
 
Hi Anderbond/Auscan,

Sorry but i've been out of contact the past week, trying to stay away from the market to avoid the frustrations!

As for Indophil and the revelation of a ban on open pit mining at Tampakan, Anderbond has covered the considerable distance of the two RED projects from Tampakan, and further it should be noted that the Tampakan area has long had an element of opposition to mining in the general area. In contrast through the environmental clearance process RED had unanimous local community support. This is more particularly important for any likely future development at Mapawa rather than Siana, as Siana has already been an operating open pit, with the various elements of open pit, tailings dams and various waste stockpiles located within the Siana MPSA area. Thus RED will unlikely be the target of any local stirring that appears to be happening much further south in Mindanao.

As for research reports via Reuters, its news to me Anderbond, and no I have had no recent dialogue with HC, it seems they believe I have been using 2 accounts and therefore will not be reinstated, so I haven't bothered to pursue it any further - I think it demonstrated to me that HC is not a free-speech website that one might otherwise think (probably due to lobbying that certain ASX companies undertake!).

On other matters, again a huge volume traded today (20.9 million shares), and with minimal crossings its a sign that there is considerable liquidity in the stock which is healthy. But with the gold price close to all time US$ highs it staggers me of investors wanting out of RED at such a strategic time! I guess its now only a couple of weeks away from the announcement we all want to read!
 
keep hiding beatle .. it seems to have the right effect

I haven't seen this recommendation myself, but thought I'd relay posts today from hc

"RED got a positive mention on "Your money - Your call" (foxtel) last night."

"Both analysts (one from Wilson's and one from Fat Prophet's)
liked both the fundamentals and the technicals.
If resistance at at 19.5 cents can be broken they had a valuation/target of 34 cents."


have a good weekend beatle ... go the dockers
 
hi beatles and others

RED had a good day on fri due to the exposure on Sky Business. there were quite alot of buying in 1mil lots. Dont think they are in for a quick trade.

Yes a friend at fat proph has confirmed with me abt the recomm on RED. They have been following it for awhile now but just feel ok to make the recomm now. I guess as it gettin closer to end of the yr, RED is gettin hotter.

I do no aware of RED listing on Berlin SE Beatle. I would think RED would mention it on their website but cant find anything. May be another stock with similiar listing.

anyway i still holding tight to my core parcel, currently over 1mil and waiting for the pay day :).

so what is our target beatle? 34c?? :)
 
32mil shares went through today who sold and whom bought??????is it a good singh or dose someone know something the rest of the market dos'nt
 
I was not making a point but a question

Has Red5 diluted the share base with two many shares and options?

Is management getting too many options?

I still believe that red5 is not well known here BUT a google search brings About 24,600 results (0.32 seconds)

red5 limited gold australia
 
Its good to see that RED is holding well in todays down day , in the market with a 1.67 million volume... September seems to be the pivot in price direction moving forward being 3/4 of 2010 as was mentioned in an earlier announcement re: mine Developement... Time is ticking away , and seems the stampede will happen Very soon ...only few months to go , and the POG is headed for a prediction of $2000 by years end (as per analysists) it all looks like that the stars are aligning for RED in the coming months and we're only at the ground floor level of our journey
 
Hi All, and my apologies for not posting anything more recently on RED. I am now traveling and will continue to be out of contact much of the time over the next couple of weeks.
I haven't been in contact with RED for a while, so am not aware of how the latest developments are going, other than to know that behind the scenes there is much activity on various fronts:
1. The project finance is being finalised, and the latest efforts have been to reorganise the philippine corporate entities to the bank's satisfaction prior to getting the offer of finance, on the same basis as previously outlined, being a US$15 million facility on effectively a gold loan drawndown at the days gold price (which continues to look good) plus other facilities to the total amount required. I understand that is expected to be completed in the first couple of weeks of july, if not earlier. (I wonder also that maybe the bank wanted also to delay the finance offer to post finalising the handover to the new philippine president to see how things develop, and it seems that handover is going to be very smooth, also knowing the NoyNoy's election is a very popular and positive outcome!).
2. RED continues to complete all project work as required prior to project finance offer, and that entails considerable works about the processing facility and mine locations. RED has sufficient cash in hand to maintain those development works prior to receipt of project finance.
3. Mapawa deep drilling continues, with Hole 3 already in the right rocks, but am unaware of the depth its currently at. Also, RED has arranged for a second drill rig to maintain the momentum of drilling at Mapawa, with that rig focused on the shallower mineralisation expected to hold around 3 - 4 million tonnes at grades from 1.5 - 2.5 g/t gold. This will either be ideal additional feed into Siana, or in the event of success at deeper Mapawa will provide an ideal starter into production on a separate Mapawa operation (clearly much later down the track if it occurs).

Based on the current gold/silver prices and aussie exchange rate RED valuation for Siana alone plus excess cash beyond project finance is
41 cents!!!

That means currently RED is trading around ONE THIRD its technical valuation.

One might be arguing that management have not done much in terms of publicity recently, and I guess with the end of the financial year upon us maybe they are wanting to keep things on hold until some of the other activities come to fruition, but personally I don't think it hurts to make good with their suggestion of the photos on site of current Siana project activities. Maybe they are just holding off a bit, but keeping investors and shareholders up to date can't be a bad thing I would think

(BUT it allows the more bold within our ranks to pick up shares at a bargain basement price!).
 
Thanks for the update Beatle,

Looks like everything is going to plan but one has to wonder why the stock has lost 13% this week esp. today with a 7.14% drop on increased volume.

Maybe time to pick up some more RED :rolleyes:
 
I note latest substantial notice from Bank of America they have bought a further 18 mio in the last month and are now holding 11.5% of red 5 or 112.4 mio shares.Do they know something that we dont as this is a large stake for a major to build in a company of Red 5 size.Surely this must be posative for SP.
I am a holder of Red 5.
 
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