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VAU - Vault Minerals

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I wouldn't take much heed to the article. The video has nothing to do with a "gold bubble", and the article assumes that we were in a bubble to begin with.

The POG at the moment is quite higher than the feasibility studies assumption of $1200/oz with a COGoods under $400/oz which was valued at $0.26 by brokers. Since the increase in gold to 1900 valuations changed up to a rough $0.50 and up (I won't give all the outlandish valuations here, you can read them in this thread).

Now; with market conditions the way they are, and their quick departure is a pipe dream, priced into a POG of AU$1500/oz, I say a fair value for this stock to trade would be between $0.26 and $0.30. My personal target is $0.28 - $0.285 at which point I will initiate a complete offload. Remember, I am pricing in the sentiment. If the sentiment was different we could see much higher prices in the short/medium term - however I cannot comment on the long term. This stock is desperately undervalued, and may see excellent profits for traders in the coming years.

We were rather close to the target in eary Sept' at $0.24 where a Doji candle signaled a reversal, but market conditions priced in as well. Now; you are probably wondering why it is that there is hope for the target. Well the answer to that is the contradiction in market sentiment by insto's, who have increased holdings and averaging down against retail traders who have been in a "panic sell" mood since last week. This has not stopped some retail investors though from purchasing sufficient amounts of stock.

So even though the market sentiment at the moment is bearish, it has not stopped many people from jumping in, mainly insto's; and like once said to me, "If it is good enough for them, it is good enough for me".

I am doing my best to learn and trade effectively. I advise your own research be done, and hink 10 times before pulling the trigger on your hard earned cash. My optimism can very well be someone elses pessimism.
 
The drop in gold price is mostly due to 2 things;

1. CME Group increasing margins.
2. From my POV, the price of gold has for some time now had a perpetual QE priced in. Now that there's a prospect of no QE (at least for the foreseeable future), it corrects.

Either way, gold is on a long-term uptrend, no question about that. As RED's sp bottoms out here, it will probably be the last good opportunity to buy in, and I will certainly be loading up once again, this time hopefully for a few months at least
 

Glad you are optimistic on RED.

I myself have realized profit, held, realized loss but refuse to sell.

My patience is running short, and this "correction" is an array of damaged technicals. With the nullified uptrend, one has to rely on large buying based on fundamentals and won't see any sharp rises.

Imo - target for Nov' production is below 30c, above 24c - providing this current 16c price is maintained as a strong support.
 
I am contemplating buying in at these prices, just a small parcel for a quick profit.

All gold stocks have been hammered at the moment including 2 of my favourites. I think this could make a good rebound once the dust settles. Hopefully it will go a bit lower to bag a few more for my poor

 

If it doesnt drop any lower than this, which I honestly think it will; it will trade sideways for a while.

I am clear in the red on this one, and still have not decided my course of action. Though my strategy before buying was to buy and hold for key dates, I am emotionally extremely frustrated.
 
theartglasshouse said:
Such is the current markets. Need to keep a level head and be sure of your investment(s) at this time. Only you can decide on whether you should sell or hold. Good luck with your decision.
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Lol, Thank you very much.

By the sounds of things you seem to be very confident in your decision; send some of that my way, haha
 
I wonder how low gold will go...

$1,300

$1,100?

This is going to put a huge dent on all gold shares... ouch. (short term at least) So much for a safe haven.
 
Chasero said:
I wonder how low gold will go...

$1,300

$1,100?

This is going to put a huge dent on all gold shares... ouch. (short term at least) So much for a safe haven.
Click to expand...

Hmm I think Gold will trade in a wide range for a while but if it does steep to prices as it was at the beginning of the year then that would just be a kick in the teeth.
 
Don't worry.

Rumours are going to be flying about QE 3 no doubt in November. Gold prices should shoot back up with governments running to their printing machines.

Who knows what the future holds for RED. I just hope they announce something in October as planned. (That's when I'll think about placing some money, when there's actually results..)
 
LostMyShirt said:
Optimism shattered today. Fresh decline to 11c on the table.

The jig is up - RED is DED.

Was fun while it lasted.
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I wouldn't be so quick to judge, today's movements had little to do with RED as a company in my view.

The entire day I was glued to the screen ready to buy. Gold was trading in a tight range of around $1630-$1660 and RED's sp was not moving much at all, then towards the end of the day gold dropped below the range down to around $1580 on ASX close (someone correct me if I'm wrong on timing) - and this is when RED dropped.

After close gold dropped further to $1537 and has since rallied back to $1630. The question is, will it be a bull trap or is there genuine support around the $1600 mark.

My (extremely short term) prediction is that if gold holds up overnight, so will RED on the ASX tomorrow.


In the medium term it all really does depend on the price of gold, there is not much else to say. There is talk to a possible correction all the way down to $1300s, in which case I would imagine several of the posters here will have to revise their valuations.


The best thing to happen right now for RED is for there to be enough problems in the world to induce QE in EU and USA before the year's end, which I'm sure will cause it's sp to rocket. My personal opinion is that a massive QE3 in USA is inevitable, but it will not necessarily come until some time next year. On the other hand, they may well time a grand QE with Europe at the November meeting where EU's plans will be decided. It's out of the hands of us mere mortals

But I do not fancy being able to predict that far and accurate

Of course on top of this, production will begin very soon, and there will probably be at least one lead up announcement.


Lastly it should be remembered that RED's production costs for Siana are $351/oz, so they are not in any danger whats so ever of being unprofitable. It all depends on how much valuations will change and what future gold movements will become priced into the sp.

I'm watching carefully on the sidelines. This is a quality stock that I definitely would like to hold for a while, the trouble is picking the right price.


Can someone please share their thoughts on valuation if gold is to be going sideways at $1300?
 
All i have looked at the figures on what Red 5 has said they will produce and even at $1000 an oz they will have there loan paid off in 2 years i have worked also on silver at $20 an oz.
which will leave 8 years of profits with out touching there other lease Mapwana.
I am sure there production rates would be conservative as while running a mine there is shutdowns for maintenance which is always on going and if they have a good mine manager in place and good maintenance planner this can be accomplished with minimum down time.
Can any body tell me what the tonnes per day the milling circuit can produce per day so i can try to work out what is possible (this is only something i am playing with as i spent a lot of years building gold mines many years ago)
Anyway just looking at the markets there seems to be a lot of panic selling so i will stick it out and try to scratch up some $$ to buy some more if it gets to 11c
 
Chasero said:
I wonder how low gold will go...

$1,300

$1,100?

This is going to put a huge dent on all gold shares... ouch. (short term at least) So much for a safe haven.
Click to expand...

You mite want to have a look at the 8 year POG chart, you will see that buying into significant price falls has always...repeat ALWAYS been profitable over the mid/long term.

I've made alot of money buying and holding Gold stocks thru price weakness and selling into strength....However i must say that i haven't brought a gold stock for maybe 18 months so have only been selling since early 2010.
 
Just to correct a few points made by various posters over recent days.

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

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

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

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

Also, note that whilst the operating costs in the base case are estimated at US$351/oz, with that base case being a couple years ago its more likely the operating cost will now be closer to US$400/oz.
 
I trusted my gut and bought a parcel today.

QE 3 around the corner.

If not that, then the announcements in Oct should stir up some interest in the market. Fingers crossed.
 
Welcome aboard Chasero, lets hope we can share some positive sentiment in the market in the weeks to come.

Personally I prefer not to look too closely in the daily movements at the moment as the whole market is completely being tossed about by factors way beyond our expectations. But I'm with you that in some time in the future the USA will announce more QE at which time gold should regain some more strength.

RED's time is yet to come, when it actually starts production will be a bonus, especially as it becomes clear of the operating costs, production rates etc. I consider the fundamental valuation based on NPV underpins the longer term price and whilst we have these current upheavals in the market I hold that valuation close to keep me from drowning in the bad news!

But I would suggest that trying to predict the daily movements in RED (or any other share at the moment for that matter) is simply throwing darts at a moving target!
 

I also bought some of MML. I'm too greedy
 
I bought in today as well with a slight profit on closing. Have some cash to top up if it goes lower and have my sell out price set along with the date as well. I think this could go well in the next few months.

A good recovery in some gold stocks today. Still volatile times though...
 
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