VAU - Vault Minerals
- Thread starter Uncle Festivus
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Its a glass half full, or half empty day for RED today IMO!
If we look at some of the small gold producers/explorers today, this was actually not a risk off day for the goldies - to name more than a few: SLR, BDR, IAU, AZM, NGF, SBM, OGC, MML, IGR. Thus there was in fact a lot of demand for gold stocks, whether its the better explorers, or mid or small gold producers, not a risk off day whatsoever for gold stocks.
Watching the trading in RED the past few weeks and wondering why there is so many shares being added to the sell side continuously while the buyers have slowly been building before getting slammed back time after time. This happened a while back when RED got taken back to 16 cents. That's why I made the comment earlier today that it seems very similar to when Matthews was clearly trading out a while back, on market (crazy!). I believe that today was deja vu, and the close was just the same style of trading, and for me its like watching Matthews fingerprint on the trades!
And why is it glass half full? Because I would imagine that Matthews has been trying to get out completely for a while and has had limited Bids to sell into. NOW we are getting those buyers eager to get into RED at this time before RED makes some more positive announcements regarding Siana commissioning, fused with the move up by the gold overnight.
This may well provide the mechanism for Matthews to exit completely in the coming weeks, thus not affecting RED's expected run up once production begins. This must be a positive for us holders who would prefer to see Matthews out completely, he was useful for a long period of time but has hurt RED's share price in the past couple of months.
I know this post will be a contraversial view, and it may well be completely wrong, but seems to me the volume of trading today and the dumps through the day confirm its the correct conclusion.
But to be honest I really can't understand this crazy style of trading. Why doesn't he do a deal with another insto and simply exit in one hit, surely he would make more money out of it!!!
If we look at some of the small gold producers/explorers today, this was actually not a risk off day for the goldies - to name more than a few: SLR, BDR, IAU, AZM, NGF, SBM, OGC, MML, IGR. Thus there was in fact a lot of demand for gold stocks, whether its the better explorers, or mid or small gold producers, not a risk off day whatsoever for gold stocks.
Watching the trading in RED the past few weeks and wondering why there is so many shares being added to the sell side continuously while the buyers have slowly been building before getting slammed back time after time. This happened a while back when RED got taken back to 16 cents. That's why I made the comment earlier today that it seems very similar to when Matthews was clearly trading out a while back, on market (crazy!). I believe that today was deja vu, and the close was just the same style of trading, and for me its like watching Matthews fingerprint on the trades!
And why is it glass half full? Because I would imagine that Matthews has been trying to get out completely for a while and has had limited Bids to sell into. NOW we are getting those buyers eager to get into RED at this time before RED makes some more positive announcements regarding Siana commissioning, fused with the move up by the gold overnight.
This may well provide the mechanism for Matthews to exit completely in the coming weeks, thus not affecting RED's expected run up once production begins. This must be a positive for us holders who would prefer to see Matthews out completely, he was useful for a long period of time but has hurt RED's share price in the past couple of months.
I know this post will be a contraversial view, and it may well be completely wrong, but seems to me the volume of trading today and the dumps through the day confirm its the correct conclusion.
But to be honest I really can't understand this crazy style of trading. Why doesn't he do a deal with another insto and simply exit in one hit, surely he would make more money out of it!!!
How is it heavily sold off when it is flat for the day?
While 6m is above average volume it is nothing out of the ordinary, I personally don't see anything about today that was bullish or bearish.
Hi all, hi Beatle. I just want to thank you mate for replying to my last post. RE, consolidation. You mentioned a few important points. 1 in particular that i hadn't considered was volume. It will certainly depreciate dramatically, and have an impact on volatility. It will definitely take some getting used to if voted in. I'm pretty sure i will be voting yes.
As for dumping of the shares. I agree with you also. To be honest its giving me the #$@*#. If it is Mathews, yes we are used to it and yes its an opportune time for them. Because people are keen to jump on board. But for us long termer's this is OUR TIME that we have been waiting for and i feel whoever is responsible should be ashamed of themselves. RED is being held back from its potential, especially with gold on the rise. And so close to game time. We are missing out. They have really timed it well. There was only 2 shares at close, the difference between finishing at 18.5c. It was a cat and mouse game and i believe the one person is responsible. Something else to look out for is the lots of 100000 at pre-open to entice the market then pulling just prior. Its been going on for a week. I hope it doesn't go on for to long..
Not a happy camper. Cheers Moit
As for dumping of the shares. I agree with you also. To be honest its giving me the #$@*#. If it is Mathews, yes we are used to it and yes its an opportune time for them. Because people are keen to jump on board. But for us long termer's this is OUR TIME that we have been waiting for and i feel whoever is responsible should be ashamed of themselves. RED is being held back from its potential, especially with gold on the rise. And so close to game time. We are missing out. They have really timed it well. There was only 2 shares at close, the difference between finishing at 18.5c. It was a cat and mouse game and i believe the one person is responsible. Something else to look out for is the lots of 100000 at pre-open to entice the market then pulling just prior. Its been going on for a week. I hope it doesn't go on for to long..
Not a happy camper. Cheers Moit
I note that the Annual Report page 5 says, in part, "Major changes include....and purchasing a new SAG mill rather than refurbishing a used mill"
Some years ago, and it seems prior to the earliest of the announcements on the Red 5 site, Red 5 management announced the purchase of some sort of used mill, in W.A. as I recall, the cost and transport of which cost many millions. This was seen then as speeding the process and saving money. Would anyone know if this quoted para refers obliquely to this earlier mill?
As well as voting against the share consolidation, (which will not change the price as quickly as increased yield will, from my observation of other companies following similar "clever" stratagems) I am voting against the increased remunerations all round.
When increased remuneration is attached to increased dividends they will get my vote.
PS in my opinion Mathews or anyone else is entitled to sell what they want when they want.
Some years ago, and it seems prior to the earliest of the announcements on the Red 5 site, Red 5 management announced the purchase of some sort of used mill, in W.A. as I recall, the cost and transport of which cost many millions. This was seen then as speeding the process and saving money. Would anyone know if this quoted para refers obliquely to this earlier mill?
As well as voting against the share consolidation, (which will not change the price as quickly as increased yield will, from my observation of other companies following similar "clever" stratagems) I am voting against the increased remunerations all round.
When increased remuneration is attached to increased dividends they will get my vote.
PS in my opinion Mathews or anyone else is entitled to sell what they want when they want.
my vote will also be against, have been in pna, arx, epy all gone down after consolidation , arx consolidated its sp went from .30 now just .013 epy just as bad , in fact i don't know of any company's share price thats moved up after consolidation, hope someone can name afew...
Because gold price went up (and rallied quite a bit), which usually means red shares would go up.
Plus look at the volume, 3-4 times the average and yet the share price remains the same. This could only mean someone is getting rid of a large volume of stock.
Looks like a large holder has been dumping a portion of their holdings, keeping RED share price capped for now.
I think 6m is definitely out of the ordinary, I haven't seen RED trade that much in the past 3 weeks. (Usually 1-3m)
I see it as slightly bearish. Just that someone is getting rid of a large volume. Who knows could be his mistake, but they probably didn't want to hold too much small caps going into tomorrows big decision.
Other gold equities rallied hard today, e.g. MML (which I also hold). Just a little worried that RED may stay stuck at 18c for a while yet. Really strong demand for RED today yet equally strong selling.
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It really makes zero different as far as the share consolidation goes.
Whether the share price is 0.20, $2, $20 or $2,000,000 - so long as the market cap is the same, you will buy the same $ value of shares for the same % proportion of shares.
I agree with you; load of nonsense probably taught at business school by people who don't know maths. Of course I'm generalising a bit but
Not sure if I agree with that assessment. In my view it was bought up more so than it was sold down. If you look at the trade volume per price, most took place at 0.185, and some at 0.190 - which is pretty good considering the stock started the day at 0.180.
The buyer-seller gap has also widened with more buyers once again.
It is the fundamental nature that mining companies be valued based on the volume of their deposits and the price of their mineral, however this is far from the only thing the market looks at. Furthermore, just because it didn't go up with gold does not mean it was sold down regardless of that. Clearly there are much bigger issues ongoing (such as the expected overnight European plan).
I would not say it is 3-4 times average, but rather returning to average after a few weeks of below average volume. Furthermore, it does not mean someone was dumping a lot; it could simply mean there were a lot of traders which tried to take advantage of the gold price movement and buy at the lower bound to sell at the higher bound (guilty). Furthermore, as I've said previously, overall, in terms of volume and price there were far more trades above 0.180 than at, so I would dispute that it was completely flat.
Honestly, how can you look at the last 3 weeks and reference that as the average? How about last 3 months at least?
We are all entitled to our opinions of course. Mine is that some proportion of holders are betting a certain way on the European announcement tomorrow, and have decided to use the gold rally in order to sell off their holdings into very buoyant buying today.
I would not be worried about RED, and in my view we will get a clearer picture once Europe finishes it's grand plan - be that overnight, by the end of this week, or next...
Wow, I opened up this ASF to see an avalanche of posts on many interesting topics, its great to see the activity, and oh how things have changed in that regard for RED. Looks like RED is more than a pennydreadful now! We now have 110,000 odd views in 1,410 posts, primarily happening in the past 18 months. Real cool...
Thanks Moit for your comments, from my point of view its a real pleasure to know you and the other posters via this site. And whilst we all may have slightly different views and objectives, seems like we all have been able to collectively develop an understanding of the issues and factors relevant to investing in RED from various angles and points of view. I've found it quite beneficial, particularly whilst it has allowed me to vent my frustrations at the highly discounted price too!
And eh Moit, I had to laugh when you referred to Fwpike and Resolution 10, lol!
Now in relation to Fwpike's comment about the mill. Now you are testing my memory, it becomes patchy on some details, but I will give you my general recollections. The original feasibility study and plant design started a @#$% long time ago, around 2005/2006. At that time there was a dearth of mills anywhere in the world, due to increased demand from the mining/construction sector. Even prior to getting too far down the track with the plant design it was decided by management that it made sense to secure a mill to reduce lead time. Naively management thought there was only a couple of years before they would be in production at Siana!
So they sought to secure a mill and source a mill, one of two available, located in the Philippines. I don't recall where exactly, but it certainly was somewhere in the Philippines, not WA. The sister to that mill was purchased by CGX for its Masbate operation. Subsequently, with Masbate coming online far sooner than Siana CGX has their mill up and running, but in fact it had a major structural defect that caused its failure on startup. Since that time RED clearly had concerns with its mill, and even though it was put into a workshop for major refurbishment it was clear that reliance on that mill was a potential risk for the project. Thus CGX has managed to get more of the associated gear from RED re that mill, and hopefully ultimately RED will be able to sell the mill shell off, but I think they have lost a fair amount of money on it - its original cost was around A$1.5 million, and with other gear they got a A$2.0 million credit facility through Soc Gen. (My memory is not too bad after all!).
As for your comment Fwpike re anyone is allowed to sell at any time. Of course they are allowed to sell, but knowing how many shares that Matthews has got (and had!), I would have thought it was smarter to sell down off-market, or at least with an agreed buyer sitting there to take up the shares. Instead we have to sit here waiting for them to get off the screen for a few months. Don't get me wrong, I am happy if they sell it down a bit more because I will be buying some more too if the price gets ridiculous (its ridiculous already though). In fact I would have thought that RED could facilitate this selling out process, but clearly Matthews and RED don't see eye to eye if I am reading it correctly! Earlier on Matthews was critically important to RED, their investment was key to maintaining RED's share price at a crucial time, but now with the sell down it is a bit frustrating, but to be honest I can't understand it, having waited so long to make real money out of the investment!
It might be that Matthews doesn't agree with the consolidation process, so has decided to get out beforehand, but seems to me he has made the prophecy self-fulfilling!
As to which companies have recently gone through consolidations, well there are consolidations and there are consolidations! It depends very much on how/why they reconstructed their share capital. The reason why a lot of people don't like them is from personal experience having been invested in smaller companies that can't raise funds in the market and have to consolidate to raise cash.
But there is a slightly different class of company, not pennydreadfuls, that reconstruct their capital due to either mergers or similar. Those companies include companies such as Altona, AOH (Finnish copper/nickel assets merged with Universal's Roseby copper project), Ozminerals (after its selldown of assets), to name a few. The short time frame during the consolidation process is completely over-ridden by the events post consolidation and sets the company up for far great success.
In the case of RED you have to recognise that this resolution will only happen to succeed if the many instos on RED's books back the idea. AND if they back it then imagine the limited stock available for any new investors, bearing in mind RED has 30 odd instos holding around 65% of stock available. I can see RED shooting up on a completely different tangent once the consolidation is bedded down, and with limited stock available it will become a must sought after gold producer! It certainly will get top dollar in the event of any opportunitistic takeover attempts!
Thanks Moit for your comments, from my point of view its a real pleasure to know you and the other posters via this site. And whilst we all may have slightly different views and objectives, seems like we all have been able to collectively develop an understanding of the issues and factors relevant to investing in RED from various angles and points of view. I've found it quite beneficial, particularly whilst it has allowed me to vent my frustrations at the highly discounted price too!
And eh Moit, I had to laugh when you referred to Fwpike and Resolution 10, lol!
Now in relation to Fwpike's comment about the mill. Now you are testing my memory, it becomes patchy on some details, but I will give you my general recollections. The original feasibility study and plant design started a @#$% long time ago, around 2005/2006. At that time there was a dearth of mills anywhere in the world, due to increased demand from the mining/construction sector. Even prior to getting too far down the track with the plant design it was decided by management that it made sense to secure a mill to reduce lead time. Naively management thought there was only a couple of years before they would be in production at Siana!
So they sought to secure a mill and source a mill, one of two available, located in the Philippines. I don't recall where exactly, but it certainly was somewhere in the Philippines, not WA. The sister to that mill was purchased by CGX for its Masbate operation. Subsequently, with Masbate coming online far sooner than Siana CGX has their mill up and running, but in fact it had a major structural defect that caused its failure on startup. Since that time RED clearly had concerns with its mill, and even though it was put into a workshop for major refurbishment it was clear that reliance on that mill was a potential risk for the project. Thus CGX has managed to get more of the associated gear from RED re that mill, and hopefully ultimately RED will be able to sell the mill shell off, but I think they have lost a fair amount of money on it - its original cost was around A$1.5 million, and with other gear they got a A$2.0 million credit facility through Soc Gen. (My memory is not too bad after all!).
As for your comment Fwpike re anyone is allowed to sell at any time. Of course they are allowed to sell, but knowing how many shares that Matthews has got (and had!), I would have thought it was smarter to sell down off-market, or at least with an agreed buyer sitting there to take up the shares. Instead we have to sit here waiting for them to get off the screen for a few months. Don't get me wrong, I am happy if they sell it down a bit more because I will be buying some more too if the price gets ridiculous (its ridiculous already though). In fact I would have thought that RED could facilitate this selling out process, but clearly Matthews and RED don't see eye to eye if I am reading it correctly! Earlier on Matthews was critically important to RED, their investment was key to maintaining RED's share price at a crucial time, but now with the sell down it is a bit frustrating, but to be honest I can't understand it, having waited so long to make real money out of the investment!
It might be that Matthews doesn't agree with the consolidation process, so has decided to get out beforehand, but seems to me he has made the prophecy self-fulfilling!
As to which companies have recently gone through consolidations, well there are consolidations and there are consolidations! It depends very much on how/why they reconstructed their share capital. The reason why a lot of people don't like them is from personal experience having been invested in smaller companies that can't raise funds in the market and have to consolidate to raise cash.
But there is a slightly different class of company, not pennydreadfuls, that reconstruct their capital due to either mergers or similar. Those companies include companies such as Altona, AOH (Finnish copper/nickel assets merged with Universal's Roseby copper project), Ozminerals (after its selldown of assets), to name a few. The short time frame during the consolidation process is completely over-ridden by the events post consolidation and sets the company up for far great success.
In the case of RED you have to recognise that this resolution will only happen to succeed if the many instos on RED's books back the idea. AND if they back it then imagine the limited stock available for any new investors, bearing in mind RED has 30 odd instos holding around 65% of stock available. I can see RED shooting up on a completely different tangent once the consolidation is bedded down, and with limited stock available it will become a must sought after gold producer! It certainly will get top dollar in the event of any opportunitistic takeover attempts!
There are many reasons to sell, (one's wife wants a new car, divorce, a better more immediate trade in the offing, want to lock in a profit, need money for any reason) that are totally separate from the vendor's perception of long term value of the shares being sold. There is however really only one reason to buy. Therefore the fact that the share price is holding its own against strong downward pressure, ie people are buying, is encouraging to me.
None of this is relevant to the proposed pay rises and share consolidation that are of the moment. I see no reason to grant big pay increases just yet. The fact that there will soon be more money to go around isn't relevant unless are least some is headed my way in dividends. Red's head office/board/senior management costs in relation to income is quite high in my opinion for a relatively small mine. And if these guys have wasted millions on unused crushing equipment then I see less reason to grant large increases.
IMHO , the effect of not voting down the second tranche of shares in Res 10 has been that we now have a large block of shares bought at 17c in oder to raise money that doesn't appear to be necessary. The holders of these shares will once again IMHO sell into any reasonable price rise thus taking short term profits at our expense and keeping a lid on the share price at our expense. I wasn't able to stop it but I do not regret trying
None of this is relevant to the proposed pay rises and share consolidation that are of the moment. I see no reason to grant big pay increases just yet. The fact that there will soon be more money to go around isn't relevant unless are least some is headed my way in dividends. Red's head office/board/senior management costs in relation to income is quite high in my opinion for a relatively small mine. And if these guys have wasted millions on unused crushing equipment then I see less reason to grant large increases.
IMHO , the effect of not voting down the second tranche of shares in Res 10 has been that we now have a large block of shares bought at 17c in oder to raise money that doesn't appear to be necessary. The holders of these shares will once again IMHO sell into any reasonable price rise thus taking short term profits at our expense and keeping a lid on the share price at our expense. I wasn't able to stop it but I do not regret trying
Thank You Beatle for your clarification on the matter of the purchased equipment. You are indeed remarkably well versed in matters Red.
I can't say that I agree that consolidation will make stock more scarce. The holder will still want to sell, and the buyer to buy, so many thousands of dollars worth of stock regardless of the numbers bought and sold.
I can't say that I agree that consolidation will make stock more scarce. The holder will still want to sell, and the buyer to buy, so many thousands of dollars worth of stock regardless of the numbers bought and sold.
Maybe Mathews did try to flog their original parcel of 227m shares but had no takers at their price. The notice Mathews lodged on 31st Aug showed that they still had 104m shares on hand. Since then the turnover of shares in RED has been approx 200m, so IF Mathews is selling then the selling should be cleared before the first pour. IMO of course
Very happy to provide any information that I can Fwpike, but to be honest its the things that I have forgotten that makes me worried, lol!
Actually I don't have a problem with a lot of what you say and think. Whilst I don't want to necessarily or specifically "have a go" at anyone at RED, I agree that management salaries need to be earned, and it has always been an issue to me that RED have made sure they look after themselves relative to the other expenses incurred! In that respect I'm not impressed that the audit committee apparently approved a base salary increase for the MD, from $290 - 440K, an increase of 52% which I consider inappropriate, and the fact that the CFO had a huge salary granted to him, more salary than what a number of CEO's in other small companies get, and yet he didn't take over the work of the Company Secretary! Those are anomalies, and additionally the Chairman, who is a non-exec (supposedly) earned $165k consulting. I realise the Chairman has been instrumental with undertaking a number of tasks that might otherwise be undertaken by an Australian based MD.
I have been an outstpoken critic of the way RED management was set up once Siana became primary focus for the company, and has evolved over time, and why I believe that the MD should be located in Australia and more corporate focussed rather than project focussed. The situation that has developed has evolved to an extent that causes a need for sharing of tasks, which in turn has resulted in higher aggregated salaries to accomodate such inefficiency.
Hi Nasser, not that I want to scare anyone with this post, but as you say, and according to Matthews declaration of 104 million shares as at 31 Auguest, seems to me since then there's been around 160 million shares in total traded in RED (are you sure its 200 million, I stand to be corrected, I just added up the weekly totals since 1 Sept).
I don't believe that the trading we saw in the past couple of months has been always characteristic of how the trading went yesterday which I would presume is more along the lines of Matthews' style. Thus my firm view is that whilst he may have sold down over the past few months I wouldn't mind betting he still holds a fair number, say at least half his past declaration, say 50 million. Of course at that level he theoretically should be putting out an announcement that he is no longer a substantial shareholder but seems he does not necessarily go out of his way to inform the market in a timely fashion!
But in any event, we will possibly get the move up once he pulls out or stops selling, and then it will be an exciting time as we FINALLY get that re-rating, whether it be on a consolidated basis or not!
I don't believe that the trading we saw in the past couple of months has been always characteristic of how the trading went yesterday which I would presume is more along the lines of Matthews' style. Thus my firm view is that whilst he may have sold down over the past few months I wouldn't mind betting he still holds a fair number, say at least half his past declaration, say 50 million. Of course at that level he theoretically should be putting out an announcement that he is no longer a substantial shareholder but seems he does not necessarily go out of his way to inform the market in a timely fashion!
But in any event, we will possibly get the move up once he pulls out or stops selling, and then it will be an exciting time as we FINALLY get that re-rating, whether it be on a consolidated basis or not!
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I've woken up this morning to see RED in "Enquire" status - I don't know what this mean as I've never seen this status in a stock before.
Can someone tell me what the go is here?
Can someone tell me what the go is here?
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The ASX is down with a glitch. All stocks have an 'Enquire' status at the moment.
" why I believe that the MD should be located in Australia and more corporate focussed rather than project focussed. "
Very well put overall Beatle but not sure I agree with the quote above. Not much gold dug in or by head office. If they have too many staff they will spend their days doing make-work things like share consolidations and such that require much scurrying about but which at the end of the day do not produce any more gold.
Very well put overall Beatle but not sure I agree with the quote above. Not much gold dug in or by head office. If they have too many staff they will spend their days doing make-work things like share consolidations and such that require much scurrying about but which at the end of the day do not produce any more gold.
G'day Beatle, just did a quick check & got 215m shares traded since 1st Sept.
I agree that Matthews could be still holding about 50m. I though that they should be able to off load this amount over the next month as am thinking the share price should hold around these levels.
Thx for your posts on this thread
I agree that Matthews could be still holding about 50m. I though that they should be able to off load this amount over the next month as am thinking the share price should hold around these levels.
Thx for your posts on this thread