VAU - Vault Minerals

Hi Beatle and others, I posted a long commentary this morning but somehow I must have stuffed up getting it into the system. So rather than recreate it, I will summarise:
I will vote in favour because I continue to have great confidence in senior management to both get Siana up but also to create substantially greater medium term value with Mapawa and other highly prospective sites within the held areas. I have come to the view that while Siana is the immediate centre of activity in the short term, it has virtually become a given and the real driver of the SP will be Mapawa and anything else they find. Beatle correctly points towards the MML SP. It seems to me that RED has some chance to emulate or even surpass the future prospectivity of MML, so in a sense, the future RED SP may surprise even the more optimistic of us. I personally think senior management has done an outstanding job in getting the Siana project to where it is, start the process of identifying the future of Mapawa, PLUS get a number of the shrewdest global institutional investors on board for the next phase. Sorry Beatle but I do not subscribe to the idea of replacing the MD. I believe he is a very conservative operator, and in my mind that is really what one wants with this kind of investment. The marketing aspects will be taken care of in due course.............in fact they have started already by virtue that the North Americans and Londoners are on board. A future listing in Toronto and or London is not out of the question either. It is in fact very difficult to attract larger institutional support to these projects as there is a massive smorgasbord of opportunities available across the globe from which to choose.
So to complete what is meant to be a short message, I remain completely supportive of management, cannot agree with many of the comments that I have read here and on HC (as there is far too much greed or some other agenda at work with most of them) , and will vote in favour of Res 10. AB

Hi Anderbond,
Well done with your last post exactly as I have been thinking re the CR and other aspects of the debt package.This should put Red5 in an enviouse position with Sciana nicely bedded down and the prospect of much larger resource to come from Mapawa.This will only be posative for all shareholders.

well after reading some logical and unbiased posts i have changed my no vote to yes, i would rather take a bullet to the foot rather the guts, if siana will be worth the low 30s with the exstra shares out then that be it , but what aso needs to be concidered the extra cash will surport the sp until spent and if spent????, i keep thinking of the 20 mill set aside for mapawa thats a hell of alot of money to spend drilling, they must know there's something huge down there to splash 20 mil on , if we can pull a few cents with some good result from further drilling this will more than make up for the extra shares ....my veiw only

Hi all, beatle, anderbond, mardo et al thanks for insights
My view is that i don't want to get bitter about these things - i will tick the abstain box. I don't agree with Yes, and I also don't want a No to hold things up (haha , as if my holding could, even if i multiplied by 100!)

I was impressed by directors, i hadn't realised their experience but have decided to vote against Resol 4, Gary Scanlan, as a protest, not that he has done anything wrong. I also think it not constructive to vote against other too! One is enough to get message across without disturbing the business.

I am expecting the company to explain itself more:
* they need to re-define the business strategy (the web and anns. clearly state the focus is, just, to develop Siana....this now appears old-hat and redundant..but they need to expound to include Mapawa and a possible vision of a greater play in the region). Something for the MD to do now that there is a PM on site.
* more attention to regular update on progress: with insto holdings bedded down for long term and rising POG there will be less free float but any occasional rebalance of one or two instos will hose the SP quickly

I believe the extra dilution for $10m extra should translate into extra oz. within a short period and would expect the AGM would outline it better than being just extra "working capital" as in the explanatory memorandum

Too far for me to get to the AGM (over the ditch and far away) but i'd like to

good luck to all.

Wow, so many new posts since I checked it, with many wise views expressed, and great to get JeffTH's post as well!

I guess most of us longer term holders can see the merits of voting FOR resolution 10, whether it be because we really believe that management have done a great job and should support their objectives, or because we believe its in the best interest of the company going forward despite the extra shares issued. I hope for RED's sake (and therefore our sake as shareholders) Resolution 10 does get through, and that Siana is guaranteed of final development in the second quarter of next year - that alone is probably worth a few cents on the share price, and it will hasten a premium to valuation.
I would like to think that the new insto's can demonstrate their support to RED with on-market purchases, in a similar fashion to Baker Steel, and previously by Matthews. I believe that the insto's are doing very little of the buying/selling at present, just trying to maintain the share price in a tight range prior to the AGM.

Once the AGM is over and hopefully have approval for the placement we finally get on with the re-rating. I am very interested to see some more information on Mapawa exploration, and I hope if this placement is approved that RED increases its field activities within both Mapawa and Siana MPSA's with low cost exploration to demonstrate the prospectivity of each area for additional gold/copper porphyry deposits, that will surely put a rocket to the share price once the market becomes aware of how extensive the mineralised systems are in the district!

fastbuck1 said:

well after reading some logical and unbiased posts i have changed my no vote to yes, i would rather take a bullet to the foot rather the guts, if siana will be worth the low 30s with the exstra shares out then that be it , but what aso needs to be concidered the extra cash will surport the sp until spent and if spent????, i keep thinking of the 20 mill set aside for mapawa thats a hell of alot of money to spend drilling, they must know there's something huge down there to splash 20 mil on , if we can pull a few cents with some good result from further drilling this will more than make up for the extra shares ....my veiw only

Click to expand...

Agree - I too will change my vote to yes after considering all points raised.

Just as an aside from all the AGM stuff, RED is a buy on the MACD signal at the moment. I'm thinking next week might be a good one for the SP.

As you were..............

Hi all RED club members and hi jeffTH. id just like to thank you for your kind words. I also hope management will fast track the expected good results coming out of Mapawa and get Siana to production. I have absolute faith in them, that thats what will happen.

I know i mentioned in my previous post that we are not invested in RED 5 because we love management, but because we believe in RED as company. But at the end of the day, we should really be taking our hats off to management from taking this company to where it stands today. They have truly exceeded themselves in the development of Siana, from explorer to producer status, and will possibly re-use their skills again in transforming Mapawa from a drill site to a possible gold mine, (But with a potentially HUGE copper, gold porphyry deposit). Everyone on the board of directors are doing a specific job, and in my view are doing it well. I'm sure none of us could sit in there seat and do the same. (Maybe Beadle and AB), lol, but certainly not MONKEYS !!! I admit they can be a bit lax in there announcements, but lets not forget that what they are doing, may be a first for some of them and are extremely busy and probably working around the clock to meet the expected deadlines to achieve there milestones...

JeffTH, you are certainly correct in what you say about the WAFFLE on HC. I think its rubbish and in my view and if they want to continue to rubbish RED as a company and its management, then why invest in it. If they cant appreciate the work that is being done then i think they should just move on...

Beatle i would love nothing more than to take the flight to the Phils, for the opening of Siana. I'm just not sure what my goings on will be at that stage. But will certainly keep it in the back of my mind. What is volut? Google had nothing, well not that i could find anyway.

Its great to see we are ALL jumping on board with the vote of YES to resolution 10 and as Beatle said and in my biased view i think it will most definitely only push the share price in one direction once the AGM is finalized and thats UP. That re-rating could be closer than we think.

Hi Moit,

Moit, As you will see from my post yesterday, I fully endorse everything you have said.
Now, I am sure Beatle meant Balut, not Volut. Balut is a duck egg that has an embryo inside, and is boiled then served. You crack open the egg shell, drink the juice surround the egg white(tastes a bit like thin meat soup) then eat the egg with the embryo. If you like you can break open the egg white to see the embryo which will be a little formed bird complete with beak, eyes etc. It is considered a delicacy, and when I was visiting Siana and staying at Surigao, I had dinner with GE and about 20 others including GE's offsider, some senior site staff, the restaurant band etc. A big dish with about two dozen Balut came to the table as part of the feast for the evening. A memorable evening, except I was suffering from dirty water poisoning, and ended up with a real bad bug in my intestines. So, the message is enjoy the food, don't drink the water or allow ice in your drinks, as you never know!
By the way, Moit and Beatle, if I can manage it I intend to try to get to Siana for the first gold pour. Cheers. AB

Sorry. I stand by my view that I most certainly will vote NO....the dilution is not only totally unnecessary, it also removes the "marginal" buyer from the equation...ie those instos that may buy into a compelling investment, on market, rather than just accept a lay down misere offer at an over-generous discount to the current share price. From my recollection, RED went into a trading halt at 22c....a 10% discount is the norm in a new raising such as this, implying a price of say 19-20c. But no, our esteemed board chuck out shares like cheap confetti to the lucky offshore investors and make it sound as though we are lucky to have these guys on our register!!!!
I don't care what anyone says, a further possible 30% dilution is unacceptable to me, following the hefty dilution foisted on us at the same time last year.
For management to suggest, apparently, that a "yes" vote is necessary to enable Sprott's free kick to get off the ground further raises my hackles. Do management really believe shareholders will swallow that one?
By the way Beatle, read your private messages.

Hi all
Haven't looked in for a while but find it interesting that the concensus here appears to Be for the issue. I was all for it originally as I thought I am investing in the company and should have faith in the directors. I thought the extra cash was required because sone big discovery was imminent. After a while I figured if they needed the extra cash they would have asked for it when they announced the raising. They asked fir enough to get us into production I believe. It seems that as a result of offering the cr at such a discount has attracted more support than expected, and I can't help but feel they just think the money is there why not take it. I really think that if there ibms anything at mapawa it won't go anywhere until we drill it, and if we had to earn the money to drill we might be more thorough and careful how we go about it. My concerns increase hearing people on hc referring to companies that have moved 19-20% on good announcements. While I know there is a lot of rubbish on hc and I'm probably contributing the one thing I noted with many companies mentioned was that a lit had 300-600mill shares on issue at the moment. It seems were issuing as many shares duscounted as some of these companies have in total. Surely unless an absolute monster is dug up at mapawa it is going to be hard for a significant rise to take place. Even if you believe thus to be the case, why not make an announcement, watch the rise because if lower share base, then raise capital. Even better we all seem happy that we are still in schedule to produce early next year and surely 20,000 oz gives us 20mill dollars if cost is 400 per oz. This seems to be the site for the sensible investors so I am curious what you guys think of my logic. I just feel like I'm missing something here, the money wasn't needed previously and is only being taken because it was offered. Who wouldn't offer 17c for a share that seems to be happy at 20c, and surely there can't be a great downside going into production?.

In reply Andrew I have decided to list what I see as the main points for and against the Resolution:
Vote FOR Resolution 10:
Positives
1.Removes uncertainty of cash liquidity crisis for RED;
2.Removes the uncertainty of development of Siana and drilling of Mapawa;
3.Brings onto the register major N American insto’s;
4.Enables the ongoing commercial arrangements between RED and other parties to carry on and to continue positive relationships between those parties.
Negative
1.Issue of 18% additional RED shares which will have a dilutionary effect, as an example it reduces Siana valuation for RED to decrease from about 38 cps down to around 33 cps (depending upon gold price used).
2.Potentially provides a short term trading opportunity for already on the register instos’s that only want to retain their current holding by selling down shares for a small profit (around 3 cents per share). (I have been assured by RED that this has not happened to their knowledge)
Vote AGAINST Resolution 10:
Positives
1.Removes the extra share dilution;
2.Removes the possibility of a short term overhang in shares being sold by existing RED insto’s (likely to disappear after the AGM).
Negatives
1.Adds risk of cash crisis for RED – without ratification of Resolution 10 RED cannot raise any additional funds without another General Meeting being called;
2.Adds doubt on the development schedule for Siana and drilling of Mapawa, possibly of many months. A delay on gold production could result in RED missing this current uptrend in gold;
3.Any faltering with delays in Siana development could unnerve some shareholders/investors and have a medium term negative impact on share price;
4.The commercial relationships already entered into between RED and insto’s will be disrupted, and the relationship could be affected going forward.

You may be able to argue other points for or against, I’m happy for you to raise those other points if you consider them to be relevant or even more important to those that I list above.

On balance I believe that the negatives of voting against Resolution 10 are far too risky, therefore I have decided to vote FOR the Resolution.
This does not consider what should have been done by RED, it simply states what the outcome could be if the vote is FOR or AGAINST.

Anderbond, most appreciative of your explaining of balut, and thanks for correcting my spelling of it - to be honest its something I don't really want to experience again, thus my reason for warning those going to the opening! haha! (You sure you had a problem with the water and not the balut itself?). Your description was far above what I would have said, and to be honest I didn't taste anything but feathers! But having everyone watching me I knew I just had to gulp it down!!! (A bit like what happens in some of the Amazing Race episodes I guess).
I am almost 100% certain that I will attend the mine opening next year, as after all this time I want to see how things have come together, especially since I expect to be a shareholder much longer as well!
Moit, I appreciate your thought out comments, and I consider you to be a true RED club member of the highest order! Just try to swing those charts so that the technicals start looking good for a GAP UP, and I will apply for you to be put in the RED hall of fame, lol!
(Seriously though, I do believe that our fellow RED posters have been a real bonus for me in posting on ASF, and any posts, even critical but with a constructive element to the post, is surely something that we can all consider, and possibly be a great benefit to us all. I have no problems in pursuing any relevant issues raised with RED management if others don't have the time or interest to do so).

Thanks for taking the time to make a considered reply as always Beatle. The only question I have is that the majority of your points in favor seem to be the financial security and support of the instos going forward to production. The thing that confuses me is I thought the money they originally asked for in the cr was sufficient to fully fund sienna and provide capital for mapawa. If we were remaining an explorer and continuing to burn cash would agree with these points but surely the upcoming production should provide necessary finance. I also may be very naive but dont understand why we need additional new instos on board when we will hace our own income. Im all fir matthews etc getting a oayout if they have really been in from day 1, but why the newbies? I believe you mentioned previously that sienna would be profitable at a gold price of 800-900 dollars. Do you think gold will significantly retrace from here unless something major changes in the global economy? I guess none of us can answer that these days. I simply cannot understand why we would need this additional financial security if we are still truly on schedule to pour in April- or even June- July. It's November now. Sorry to appear negative but I too am trying to figure the best vote to enhance my holding. As I'm sure your holding in red is way above mine I'm interested that you recommend the yes vote.

Hi Andrew, put very simply, you assume that RED has sufficient cash to complete the Siana rebuild if they don't have Resolution 10 approved. If they don't get it approved, then they may not get the US$25 million from Sprott since it fails the requirement for the loan funding conditions set out by Sprott, and thus they miss out not only on the extra placement amount, but also the loan. That could then jeopardise the final Siana construction!

I don't want to risk the uncertainty that Resolution 10 being voted against brings with it.

So I am not saying i like it, but for our own investment security I am saying RED needs to be assured of the funds, therefore the Resolution should be approved by all shareholders. If the placement was of a lesser amount, say $10 million then it would meet the test AND reduce the dilution, but unfortunately RED has not done that, they have agreed to much more.

Thanks beatle, that short summary certainly clarifies the concerns for me. It seems the major concern is the sprott loan facility. Can you summarize the issue with that as I thought sprott finance was also agreed in combination with the original cr amount, not as result of the additional funds offered by the oversubscription. One thing you could hopefully clarify for me, as part of the original agreed cr did we need to have the holder approval anyway, or is that purely because of the extrA shares added. Hope you don't mind me labouring the point but this company has become my main holding so I hope to see it go big someday. I see little downside but any dilution must limit upside.

Hi Andrew once again, and I have no problem replying to your questions, its a very important issue that certainly needs careful consideration. In reply to your question this time, and i will say that my answer is based on reading the relevant RED ASX announcements plus subsequent discussion with management, but other than that of course I am not privy to the actual documentation with Sprott nor any discussions that have occurred with Sprott in the negotiations.
Thus, my understanding of it is that Sprott's loan has a number of conditions that need to be met before the final offer and drawdown can be made. One of those conditions is for RED to raise a minimum of US$25 million, and that was to be achieved by the aggregation of placements of that amount - the first tranche of the placement has been made and totals around A$17 million. the next tranche was to be at least another A$8 million (if we assume parity of US$ to A$), but RED was inundated with offers of placement funds by various large N American fund groups (4 times oversubscribed) plus the existing insto's (mostly Aust). Therefore RED decided, in its wisdom, to take additional funds which not only allows that minimum equity raised from the original plan of taking up $15 million (if you recall the first plan to raise US$40 million from US$25 million loan plus $15 million equity) to a significantly larger raising that now stands at $33.7 million (for the second tranche placement).

The fact that RED has sought ratification of the first tranche funds within the same resolution also complicates their situation further, in that now no further fund raising can be achieved by RED without going to another General Meeting after the aGM, IF that Resolution 10 fails to get approved. Therefore RED is now in a precarious position IF the Resolution does fail, it probably doesn't have enough money to cover the total construction cost, certainly that is the case if there is any over-run, and RED must try to seek a change from Sprott of those conditions regarding a minimum equity raising of US$25 million for it to be able to satisfy Sprott of its cash liquidity.

I believe that RED will be in a very uncertain financial position if Resolution 10 fails to be approved! Whilst I don't like the dilution, the other outcome of a failed Resolution could potentially put at risk the final construction of Siana. Certainly to defer its construction for a number of months until shareholders approve further funding, but the damage to the RED share price could be irrepairable for the medium term. Similar to you, I also have RED as my most valuable investment, and I certainly don't want to risk that investment by voting in protest notwithstanding my disappointment with how things have turned out. That is why I consider it absolutely critical that all shareholders vote YES to approve Resolution 10.

Hi Beatle, AB and all other RED club members. First of all AB, I'm really glad i had eaten my lunch before i had read your very in depth description of Balut. I'm not sure id eat a whole serving, but would certainly try it, especially if everyone was looking my way, (beatle). We have eggs here as well, that are classed as a delicacy, they normally come with a rump steak, fries on the side, bit of tomato, bacon. lol... Its interesting you sat and had dinner with G.E. Was it all business, or were there some jokes to be had?? I hope the latter.
My wife and i are seriously considering heading to Siana for the grand opening. It would be nice to finally put some names to faces and shake a couple of hands.
Beatle, id just like to say a big thank you for your kind words. I feel honored to be a true RED club member,(especially coming from your fingertips), lol. I'm not sue about the hall of fame bit as i don't think my holdings would qualify. In saying that i will continue to by more. I'm actually thinking next week, before the AGM.
But on a more serious note, thanks for the pros and cons mate. Very well thought out and executed. Your last post Beatle. You are so correct in what you say. Re, If resolution 10 is voted against, the outcome could be disastrous to the development to Siana, to the company, to the shareholders and especially the share price. I believe the Sp would fall in a heap, (overtime) if it wasn't approved. And on the up-side, absolutely take off if it is. Virtually everything is FINALIZED once this is approval is in place. Siana will be a gold mine, next April. We will be rewarded !!! Thats not even taking in to account the accelerated exploration programme at Mapawa. if it wasn't approved, would we still get that? There are so many thing that come into play when making a decision like this. We just have to use our heads and put them together, as we've done and hopefully make the right choice. Then with a bit of luck, RED will prevail !!!

Hi all.
After further reading into announcements it appears we have no choice but to vote for res 10. It seems the entire equity issue is tied into this vote, not just the additional shares that many object to. I couldn't understand why Beatle was stating a no vote wiuld endanger sienna development as the original raising notice stated the funds they asked for would be sufficient for sienna and 20million quarantined for mapawa. The facts appear to be that the extra equity was never necessary, but thidms vote has been set up in such a way that we are over a barrel. I wonder how many others who were set to vote no are awAre that they are voting against the entire equity raising,and by default the loan. From sprott also. I wonder if this was a calculated approach, rather than splitting the resolutions into acceptance of original issue and acceptance of additional issue. While I think I understand better now, I can't help but feel like I've been mugged. Maybe might post this on hc also if my understanding is correct (could you please confirm Beatle that res 10 is for aproval of entire equity issue and if voted against all finance including equity and gold pre pay is turned down) I wonder how many realize the full ramifications of this vote as I don't think I did.

Sorry, me again.
Just noticed on the explanatory notes for agm res 10, states that A) company has agreed to issue 102 million shares, and b) will issue a further 198 million subject to holders approval. This explanation differs from the wording of the proxy firm as that seems to state the approval is for the first tranche also. If the approval is only for the second 198 million does that still endanger the build. By my calcs we would have approx 17 mil from first tranche + 25 mil from sprott if that still went ahead.