VAU - Vault Minerals

Consider some key points on RED:

1. Siana BFS completed at US$800/oz and confirmed a robust gold project. 850,000 ozs gold over 10 year lifespan on current reserves, cash operating cost , US$400/oz . RED owns 97.6%.

2. RED has A$58 million cash in bank with A$42 million to complete plant build. Also a standby debt facility of $8 million available.

3. Development at least 50% completed, with approx 10 weeks construction till plant commissioning. First full year gold production of around 90,000 ozs gold.

4. Indicated first few years PE based on current price of 12.5 cents around 3!

5. Substantial shareholdings held by large funds management groups including Matthews Capital, Baker Steel, JP Morgan, Sprott Asset Management, amongst others.

6. Current market cap of around $160 million!

7. Two of the RED directors have bought shares in the past month!!!

Once news gets out that the project is about ready to pour first gold it won't be sitting around 12.5 cents IMO.

Hi Beatle

Agree! It's such a compelling investment - the fundamentals don't lie and at some stage the market will wake up to the opportunity - we already have, many more will come. The fundamentals don't change irrespective of negative market sentiment. I guess that's why I've slept well over the past month despite the SP being hammmered.

Re your point on first full year gold production of ~ 90,000 ozs - have I missed something? BFS stated 45,700 Yr 1 and 72,200 Yr 2. Interested in your input re these numbers.

Cheers
Geez

Hi all RED club members, and hi to the new comers.

Some more interesting thoughts, once again Beatle. You say only 10 weeks. Its certainly a nerve wracking wait. Ive got now idea how you have lasted the best part of 12 years. Lets hope all followers are rewarded nicely, substantially, lol.

We are starting to see great support in buyers, compared to sellers, especially at 13c. With a bit of luck DBA have finished there selling down, and hopefully this is the start of a great run up.

It would be nice to see RED at near previous 12 month highs (19-20c) before a commissioning date is announced. Bring on the sag mill completion, bring on the inaugural gold pour date...

Just my thoughts, cheers Moit

Hi All RED followers, great to see the last few days performance, and you gotta laugh at the contrived price at the close today with a mere 1508 shares to push it up to 14 cents. I'm sure it will look good from a charting point of view, on the high of the day at the close. But I'm more convinced of the fundamentals which suggest to me its a screaming BUY!!!

No GeezeUGuys, you didn't miss anything with the BFS and the first couple of years gold production according to the BFS. Of course that quoted 45,700 ozs in the first year did envisage a part year only and the second year is more in line with what might be expected based on the BFS for 2012, for the full year. But I have used some poetic licence, which may or may not come to fruition:
Since the BFS was completed there have been various changes with the project - the main being the purchase of a new SAG mill, which has got around 15% increased mill throughput compared to the old mill that was being refurbished. That will either impact on higher gold production at an accelerated mining rate, or alternatively an increase in tonnage at slightly lower millhead grade (with reduced costs tonne milled). You will note that RED has been able to increase resources with both a slight change in haul ramp position (and additional access ramp also included) and an increase in lower head grade due to high gold price.
So it might be that Siana produces around the same 73,000 ozs in gold per annum (with increase in gold inventory in resources, or at a higher annual rate, both alternatives at a reduced cost $/oz. And of course, it gradually builds up to around 130,000 ozs gold in subsequent years.

Whatever, RED is going much higher IMO.

Hi Moit, its been a long time coming, but I can feel THE time is just about there now! I look forward to the official mine opening in around November with project about stabilised at that time! I hope to see others there at the time - I expect AB will be there for one.

Hi Beatle....Yes I will be there! It is interesting that the focus has shifted away from Mapawa.
I don't think it is a big concern as all along the Board's stated objective has been Siana. That is where we will get our initial lift off from in the coming weeks. Perhaps Mapawa was likely to cause doubts about their strategy if as happened they failed to hit an elephant early on, so quite rightly they have put it aside temporarily to focus on getting into production at Siana. Could also be that some of the insto's had a few things to say as well. But I hope they announce the gold pour date soon as new wife is still spending in Japan.(lol) AB

Would like to join you there Beatle and others when all is commisioned..but alas.. some of us still have to toil at the office and pay bills.. but as a frequent visitor to the Philippines.. (wife is filipino) I am sure to head that way hopefully the next time we go over to see it in full operation and get a full understanding of the scale of things and get the lay of the land.. Very intersting day today (I thought) to see a bot buying small bite size chunks at .14cents and seeing the frustrated few dropping down to sell at .135cents..to make afew quick bucks..but like you and the other true believers..when the the time draws near to gold pour.. I believe .135 cents will be a thing of the past.

Hi AB, Desjosie and ALL RED followers.

(WARNING - This post is not recommended reading for anyone who doesn't want to read negative posts!).

Mapawa - AB, this is only MY reading of Mapawa. I think that since Lance left the group Greg has had a slight change (ie drop) in confidence in making predictions of where to focus the exploration drilling at Mapawa. If you read the last few announcements on Mapawa exploration there was a mention that maybe the core of the mineralisation is at depth, and this coupled with the fact that the last holes which didn't get the same big hits as the first holes, suggests to me that he didn't want to carry on the exploration without some more inspiration. I understand that RED has appointed some more explorationists in the last couple of months, but not sure if they also have porphyry experience but clearly that sort of experience would be beneficial.
Personally I believe that either alone or in aggregate RED does have another big porphyry sitting within its MPSA's - bearing in mind that Madja etc from earlier much less intensive exploration seemed to be also of great interest to the Anglo geos that were involved with boyongan up the road, but due to no funds at the time RED didn't go very far with its exploration in that part of the Siana MPSA. And I understand that there are other very interesting parts of the Mapawa MPSA outside of LSY prospect.
In addition, there is clearly more resource to be delineated at Siana adjacent to the existing resource, and I'm confident we will get news of the latest drilling results soon enough from that drilling recently commenced.
Just remember though that Petra's valuation for RED, (I think it was 27 cents - correct me if I'm wrong) is totally related to existing reserves at Siana. And also they estimate that despite assuming a falling gold price in following years. I believe that methodology is flawed as they still assume rising opex costs. My valuation remains in the mid 30's (of course depending upon the starting gold price, which has shot up again overnight!).

Desjosie, yes I hope that we can share the rewards of RED's efforts finally even if I must represent you at the mine opening, lol! Mind you, even with your wife being Filipina I'm sure she wouldn't have much interest going to Siana and looking at a giant hole in the ground with lots of noise in a processing facility - even if you see the odd gold bar! (Only us mining types get excited over that!).

I didn't enjoy that BOT at work yesterday and the small dump at 13.5 cents, I felt like deja vu - it had the same characteristic of what was happening a few weeks ago when the DBA was unloading shares. So I wonder if the push up will be delayed a bit longer.

AB (seems your wife is always in Japan!) - When you're at the mine opening just look for an old guy with white balding hair!

Hi Beatle, Thanks for your insights in respect of Mapawa. There is no doubt the emphasis has receded on this, and I am not surprised at your comments as they make sense. One thing that does concern me a little is that there has been a build up of senior staff since Lance's departure, but I am not too sure that as shareholders, we are yet seeing any benefit from the significantly higher salaries bill. Also, given that the doubling of last year's capital raising where an additional $25 m was raised (thereby further diluting us all) and the reason provided at that time (accelerated drilling of Mapawa), the cash in bank relative to outstanding mine build costs seems to indicate that the additional capital raising is now being used for the general costs structure. I acknowledge that the rain issue has slowed things down, but still feel that the cash position is somewhat less than it should be given that the Mapawa thought bubble seems to have popped. AB

Hi AB, good to read your post once gain.

With regard to all drilling, and the increase in senior salaries, I think that they have brought on some more fire power with regard to geos and may be doing some behind the scenes work in preparation for the drilling activity that has been so affected by the rain. In fact I wouldn't be surprised if that is one of the reasons for them re-evaluating the mineralisation at Siana, and hopefully that will bear some positive intersections in the first lot of holes they are currently drilling. If you recall some of the last holes drilled that were not included within the resource estimation work yield some long intercepts at high grades, and hopefully they are following up on those intersections. It would be a great addition to the overall resource position at Siana.

I am still very hopeful of Mapawa coming up with the goods, and believe that at the very least its possible to get around 100 million tonnes grading about 0.8 - 1.0 gt Au, delivering around 2 - 3 million ozs, give or take a bit of course! And that would probably hold its own in developing a stand-alone new project. But there is lots of work to do at Mapawa, and also in surrounding locations where there might be another large mineralised system lurking.

As for the cash raise, well I think we all vented some degree of frustration at the time and I was actually vehemently opposed to the excessive cash raising at the time until I realised they had got themselves into a corner that they couldn't extricate themselves from easily without shareholder approval. Clearly they didn't work it out very well, and I assume it was due to the lack of interest by project financiers to extend credit easily. In the end they did the best that they could do, but raised about $10 million too much which is the bit of dilution that we can live with. At the time I recall CJ suggesting that some of the bigger funds groups, such as JPMorgan requiring certain equity before they would get interested to invest, but actually those groups don't seem to have stepped out aggressively to push the share price higher since getting the cheap shares, and now they are sitting waiting for Siana to come online I assume.

I guess we will see in the next couple of months with the new annual report due out, as to who is being paid what, I would sure be peeved if I saw the main players with significant salary increases bearing in mind the pain they have caused us all over the past 12 months!

Although I might be jumping at shadows, I get the feeling that RED is FINALLY trading with someone acting quite acquisitively!!! This might be a sign that the tide is turning, perhaps there is good news around the corner...(about bloody time, lol!)

beatle said:

Although I might be jumping at shadows, I get the feeling that RED is FINALLY trading with someone acting quite acquisitively!!! This might be a sign that the tide is turning, perhaps there is good news around the corner...(about bloody time, lol!)

Click to expand...

Tend to agree with you beatle the tide seems to have turned.
On board now for the long haul. I think the potential profits far out weigh the risk. Unlike you beatle just a small holding of 300k.
I like the fact RED have left Mapawa alone while the uncertainty in the market hangs over head. Any hold ups or bad results would only drive REDs sp down.
Hang on. Would'nt be better to pick RED up at a cheaper price??
Any chartists thoughts on REDs direction from here..

Have a look at the course of trades today for RED. There are alot of small trades only worth a few hundred dollars at 0.145, anything of significance is 0.14. What would be behind this?

Hi campers! Campers = sitters ? buy and holders?

I was never a gold bug until I got into RED. ...time for you to check out Erste Group if you are wavering about gold. Here is an Austrian bank with half asset size of ANZ, 17m customers, 55 thousand staff....and obviously a couple of them got together to write a report ......significant that it gets published. See release http://www.erstegroup.com/en/Press/Press-Releases/Archive/2011/04.07.2011

If that wasn;t positive enough - I have skimmed through the download at the bottom of the page which has some great data and comments; e.g. mines will be needing /demanding a floor POG 1400 just to start thinking about doing anything.


The RED website now has the June shareholders - the %age seem to have got a little askew...anyway JP Morgan Chase are the net gainers of 52m shares - some movement off their Aust. Nominees but overall up 52m. This may be the DB block of shares? The others sitting tight.

As I mentioned on another site, RED seems to have de-coupled from the overall market today. Might be a sign of good things to come???

Then again (being a RED holder for a while now) maybe not......SIGH

Got on board at the right time by the look of it. In at 12c and already a gain of 12k in a week. One 11mil sell off this morning may have something to do with it anyway i would have thought the likes of beatle & co would be crowing by now or maybe they're still lying unconsious on the floor under their desk.

Hello All,

It is nice to see beatle and AB are still around (and posting!). I still remain confused as to the cause of the fall in sp from 20c to 11c that occurred over the last few months, but took the chance to load up on a little more. it looks like RED is finally moving, (touched 16.5c today!) before dipping back to 15.5. But we are definitely heading in the right direction. I do like the news of the november start; it is alot later than I had wanted but at least the company has finally decided to let us, the small shareholders, in on a date. Assuming they deliver (on time), i would expect a steady rise to 20c in the upcoming weeks and months. This is assuming that nothing goes wrong, and positive drilling results that is due in a week or two. All in all, think i hibernated long enough ^.^.

Hi Jancha, actually I won't be crowing until they hit 35 cents! And that price probably won't happen until much later this year, at the time that the gold is finally starting to pour.

I was disappointed with the announcement of a Nov gold pour, I assumed it would be a month earlier than that, but i guess its better to be conservative and have it brought forward if anything, than be dragged back further as has been the case for the past few months. I won't be surprised though if they do actually beat that November forecast.

Hi WTang89, I guess the recent fall was a combination of a softening gold price, general market weakness, and the DBA backed shareholder who dumped many millions of RED onto the market. But that is now behind us and lets hope the gold price doesn't soften too much before the first gold pour, mind you even priced at A$100 less than current RED remains close to a 2 1/2 times below its NPV backed price!!! So there is plenty of upside potential. I really can't understand that seller of 2 million at 16 cents at the close today. If they have so many shares surely they would do their homework and know the fundamental value is way above current share price, and on a technical chartists interpretation the trend is UP!!!

Anyways, each to their own. Go UP RED.

jancha said:

Got on board at the right time by the look of it. In at 12c

Click to expand...

Likewise.

beatle said:

Hi Jancha, actually I won't be crowing until they hit 35 cents! And that price probably won't happen until much later this year, at the time that the gold is finally starting to pour.

I was disappointed with the announcement of a Nov gold pour, I assumed it would be a month earlier than that, but i guess its better to be conservative and have it brought forward if anything, than be dragged back further as has been the case for the past few months. I won't be surprised though if they do actually beat that November forecast.

Hi WTang89, I guess the recent fall was a combination of a softening gold price, general market weakness, and the DBA backed shareholder who dumped many millions of RED onto the market. But that is now behind us and lets hope the gold price doesn't soften too much before the first gold pour, mind you even priced at A$100 less than current RED remains close to a 2 1/2 times below its NPV backed price!!! So there is plenty of upside potential. I really can't understand that seller of 2 million at 16 cents at the close today. If they have so many shares surely they would do their homework and know the fundamental value is way above current share price, and on a technical chartists interpretation the trend is UP!!!

Anyways, each to their own. Go UP RED.

Click to expand...

Hi beatle. I dont see whats to understand about selling the 2mil at 16c. DBA had there reason. Debt could be the cause or maybe just selling on the uncertainty of USA woes. What would happen to the market if America credit rating falls? Physical gold would rise but what about companies like red?
I think your correct in saying that the gold pour will be earlier than November. They've seen the markets reaction in the past to delays so anything earlier will have the opposite effect. Lets hope so anyway and no early wet season!!
Also i was wondering what effect (if any) would another season rainfall of 4.5 metres have on their production rate? Hope their infrastucture can cope with the flooding once it's in place..

Hi Jancha, another good post and I don't disagree with you entirely if the world economic scene goes through another GFC type crisis, certainly its not a good outlook even if gold is currently showing some strength. Lets hope it doesn't come to that.

Your point about another substantial wet season, and its timing is very relevant, as even in RED's latest report they refer to considerable rainfall in the "dry" season month of June. But the biggest delay with the project has been the process construction involving the pouring of foundations for the SAG mill and fortunately that is now behind us.

Going forward though, clearly flood mitigation was on the mind of RED prior to the construction phase (refer to the announcements around the last AGM time Nov 2010) when they gave an indication of access road flood mitigation strategy.

As for mining, I hope RED do provide sufficient space on the pad for a surge pile of ROM ore (in stockpile) to cover any shortfalls in mining production caused by excessive rainfalls. I suggest its more an issue with regard to access than for the base of the pit as they have sufficient pumping capacity to maintain reasonably dry conditions in the base of the pit even during wet season conditions.

On the trading side, seems today there is someone slowly gnawing at the fodder at 16 cents, and I wouldn't mind betting that once that supply dries up they will move up higher to 16.5 cents, so if you have any thought of range trading maybe you should re-consider, I can't see it going much lower than 15.5 cents from now and likely to jump up when the 16.0 cent feedstock dries up!