VAU - Vault Minerals

Hi wangt89,

It is Mapawa I think you mean. They have stopped drilling at Mapawa and are concentrating on Siana. Are now drilling some of the extensions. Expect more announcements in due course, although the coy reports abysmally slow assay turnaround, something that has been occurring over past couple of years.
Note there was no mention of any typhoon disruption in report. AB

Thanks AB for the correction, although that furthers my point as myself (and i guess more so for some of the newer members with an interest in Red) are slowly forgetting about Mapawa given the limited market updates/news. With that said, I think Red is holding up quite well amidst the current economic outlook. Keen to see this one through.

Wet weather hindered Mapawa progress so they moved machinery over to Siana to increase momentum on the project.

This Ann has come at a good time, and then at a bad one. Good, since the Gold price is up - bad since the market is taking a beating.

Here is a look at RED from a different perspective here we have a chart on daily settings showing a decent incline over the last few months except for the last month or so it has broken south of its trend lines, this IMO makes RED a bargin at 16.5 cents and should be trading at about 22 cents.
As we can see RED is travelling in a sideways motion ATM


Now lets have a look from a different angle (a monthly chart)
As you can see this shows RED still trading inside its trendlines (just) but certainly not south of its trendlines and it could see trading of about 23 cents at some stage this month (im not saying that it will stay there but I personaly think that it will top out at these prices this month at some point in time).
RED has been on a steady incline (in a volitile market) on the monthly chart and I dont see any reason for this month to be any different.

Im open for discussion on this matter on a chartist point of veiw.
BTW I call the monthly chart the Beatle chart as it gets rid of all of the daily fluctuations that so many worry about
LATE NOVEMBER 1ST GOLD POUR!!!
I would like to see a new valuation by Beatle.
Clearly I hold a heap of RED.
DYOR
Cheers
Dougs Antiques

Hi All RED followers, and thanks for the charts DougsAntiques - just to get it correct though, although I don't mention it I do ride the daily emotions as it irks me that day by day RED is yet to go through its major re-rating of price despite it getting so close now to commissioning and first gold pour thereafter!

Great to see the announcement confirming a signficant upgrade to Siana resources yesterday, and various other confirmations that came with the announcement:
1. The overall pit depth could increase by around 100 metres, thereby deferring the underground development and delay underground mining by a couple (?) of years;
2. The confirmation that the plant is now rated at around 1.1mtpa --> increased throughput means lower cost per tonne.

What it will also mean is that the current cash flow model that I use will give a minimum estimate of valuation, not the true valuation estimate based on a revised production profile and cost forecast, until an update production schedule is announced (which is rarely the case by any miner).

At some time in the coming weeks I would expect the price of RED to reflect us moving towards production, unless the gold price deteriorates appreciably. As we have observed in the past week, the A$ has come off the boil as well and that has offset, almost on a 1 to 1 basis, the US$ gold price. And with the A$ coming off the RED share price has come off by about 12% in terms of US$ share price as a bonus for any US based insto interested to buy more shares.

Thanks Beatle for your synopsis of the resource upgrade announcement yesterday. Your 'between the lines' analysis is most informative.

There is a new Petra Capital research report posted on the Red5 website which is well worth a look. NPV 0f $0.37 per share. Projected PE's of 4.4x in 2012, 2.3x in 2013, 1.6x 2014.

If anyone has insights into the way silver credits are treated when the company quotes cost of production of $360 per ounce (i.e. is it after silver credits?). Would appreciate any insights re this.

Cheers
Geez

Hi all, As you all will know RED had a 3 tick bounce up today on low volume...thats a great sign of those wanting RED, being prepared to pay more than the base price for it.
More importantly it meands that sellers are learning not to give it away so cheap.
IMO tomorrow will see 19 cents or more based on todays chart of supply and demand.
I done a bit of evaluating today and I found it all very promising (thats if I done it right, so please let me know if its not right)

So we have got meaured and indicated 1323325 ounces of gold and 1258380 ounces of silver.
And probable 464503 ounces of gold and 1167458 ounces of silver
And infered 857370 ounces of gold and 455512 ounces of silver
Total of 2744748 ounces of gold
Total of 288130 ounces of silver
At todays prices that is a staggering $4391596505 US dollars (so lets work with this figure and this doesnt include the sale price of the silver)
Lets say that production is a generous 25% of this figure $1097899126 US, this leaves a ballance of $3293697378 US.
Now lets give RED a 50% discount (which is more than plenty) just to allow for a volatile market and variations in gold and silver, now RED is worth $1646848689 (wow thats still a huge figure) divide this by the amount of shares which is 1283597526 this brings us to a share price of $1.28 US $1.33 AU
Would it be fair to say that this is likely in the next 12 months with all variables the same as they are today in 12 months time?
Im sure that im grosely wrong...... I think that I should just keep selling antiques and leave the stock valuations to others.
Anyhow here is todays chart and once again im open for discussion on all that ive posted here today.
Cheers
I hold RED
DYOR

Given there's another uptrend forming on low volume, what are your thoughts on a possible head and shoulders forming DA?

Hurricane said:

Given there's another uptrend forming on low volume, what are your thoughts on a possible head and shoulders forming DA?

Click to expand...

IMO (and its not a professional one) in regards to a head and shoulders formation/reversal forming is a fair possability on the basis that the ASX was up over 3% today we could just as well see a 1 tick drop (3%) as easilly as a 2 tick rise (6%) im hoping that the sellers hold their cards close to their chest.
If the price action stays on even keel all day I woulndt be suprised to see some sell off late in the day creating the bottom of the shoulder/reversal.
If the day starts off strong I think that RED will go on with the task at hand and edge closer to my estimated target of 23 cents for trhis month.
I stand by my thoughts on the volume V rise today and if we have fair trading overnight with gold rising we will see a fair result tomorrow with RED as long as the sellers remain tight.
DYOR

I am hanging in there i had the chance to make %50 but decided to wait , indicators say this will be a mine that make a lot of people happy long term(sorry i have not added charts still working on that to make it understandable) i am trying to come up with charts but it is proving difficult as i have minimal experience with shares, But i have built many mines over the years and this looks a goer
Cheers
Des

Long time holder and lurker, first time poster.

Anyone catch this news? Google had more links. I believe it is S-E from the Siana operation?
http://www.pia.gov.ph/?m=1&t=1&id=57698

Dave - RED has complied with all environmental requirements, it has got full endorsement from the local community. It provides considerable financial support for a variety of different community based programs, including medical, dental, education, plus micro loans for small business enterprises, plus water purification and reticulation. It employs labour from each of the adjacent villages based on an agreed basis with the head person of each h village. There is no disputes whatsoever between RED and any of the groups referred to in that newsletter.

Geez- the operating cost of US$351/oz previously referred to in the feasibility study did not use silver credits, it was based on gold ounces alone. With the significant revision upwards in gold in resource it is likely there will also be an increase in a revised mining reserve, using the lower cutoff grade of 0.8 g/t for open pit ore. As a consequence this will result in an increase in the overall operating cost $/oz, but the overall economics of the revised mining schedule will provide an overall higher NPV (and thus higher valuation for Siana value in RED share price). I hope that RED will publish the revised mining schedule and associated costs, but its not usual practice by mining companies to provide so much detail - since RED trades at a considerable discount to its NPV I believe its in RED's best interest to publish it for us to know exactly the expected gold/silver production on a yearly basis less costs forecast.

(Geez, thanks for providing the fact that the Petra Report and valuation is now on the RED website - DougsAntiques, if you look at that valuation will note Petra's valuation of Siana is 35 cents per share, which is based on valuing Siana gold/silver production discounted for time value of money - your analysis is what I would prefer but isn't correct unfortunately, lol). By the way, I believe that Petra's valuation is undervaluing RED, but its a start!

Hi RED fans, Bell Potter has released an updated 12 months target price of 30 cents (previously 28 cents), using a 1.2 multiple of NPV and based on US$1,000 per oz and AUD/USD of 0.85. If USD$1,500 per oz and AUD/USD of 1.00 then price target rises to 38 cents which is close to the Petra target. Cheers AB

Beatle, thanks for the info. I wasn't worried, just found the info interesting. I have noted in previous company docos that they were working with local communities but you know how lots of companies sprout that stuff to get a warm fuzzy feeling

No problem Dave, and its a fair concern if people don't know the true situation.

I have been onsite now 4 times, the most recent time just a short time ago, and it has always been a prime consideration for me and anyone investing in the Philippines. I can confirm also that I did speak directly with a few different board/management people in the past day to confirm the situation, that's why I made the comment that the company has not been approached the relevant group.

As additional background, Siana is an old mine and at the time of its abandonement in 1989 was left in a fairly ordinary state of disrepair, with old equipment, stockpiles and tails dumps left without a long term thought in mind. With RED now onsite and being onsite since late 2003 they have improved the overall scene on the previously disturbed footprint of old works, and they have got a fully integrated environmental plan for the future area after mining. Additionally since there has been no need to disturb any primary forested areas, just deepening and broadening the existing pit on already cleared areas, RED has a good head start compared to projects involved elsewhere that require large scale strip mining (such as with Taganito).

Selling gold to bailout Europe

There’s been quite a few worst-case scenarios presented for the European debt crisis, but here’s one gold bugs will not like, says Christopher Georgopoulos on Minyanville. Credit default swap levels are telling us there is an almost certainty that Greece will default. There will come a point when the Greeks have sold and cut everything possible and its people will “scream for an exit” from the eurozone. Global markets are pricing in this possibility, but not the much more serious repercussions it will cause. A Greek default would have a domino effect hitting Portugal, Ireland, Italy and Spain requiring trillions of bailout money that simply isn’t there. Here’s where gold comes in. A default would essentially bankrupt the European Central Bank and Germany would be asked to top up liquidity. The only readily available source is Germany’s 3400 tons of gold they have in reserves. Central bank sales of gold on this scale will send gold significantly lower with little prospect of a recovery anytime soon.

Any comments as it would effect RED sp? This could explain the sell off a few weeks back.

Hi Jancha, an interesting article, I've read various sorts of commentaries over the years and of course its a good way to scare the pants off us share investors in gold stocks! Although I'm not sure if its completely correct for this RED thread I thought I would make some comments, both with respect to RED and the general strategy of selling central bank gold sales etc.

With respect to RED, as we know, it is forecast to be a gold producer at Siana sitting within the lower quartile of operating costs for gold producers (currently US$351/oz), based on the current Base Case Feasibility Study. We are now aware that there will be a significant increase in overall gold production scheduled within a new reserve, to be announced, and that will be accompanied with a new operating cost yet to be announced - thus whilst its uncertain whether the increase in its forecast operating cost will take it significantly higher in costs, it is unlikely to be more than US$600/oz). AND that increase in operating cost will be accompanied by a more than signficant increase in revenue thereby delivering a higher overall NPV for RED for Siana.

IF gold price is to reduce to a level of US$1,000/oz, either through some mechanism related to large central bank sales or other reason, then its the higher end of the spectrum of gold producers to stop production, not the lower end of the operating cost curve, with producers such as RED. AND at US$1,000/oz and aprobable drop of A$:US$ to boo in the event of such a dropt, RED will not only remain profitable but remain having an NPV MORE than its current share price of 18 cents!!!

Now back to this particular strategy of Germany selling its entire gold reserves to solve this Greek problem. Not all, but a lot of central bank gold sales do result from bank to bank negotiations, without any intervention or knowledge of the market. IF there was a hint of such sales likely then market would drop the gold price like a brick, and would therefore would not achieve the value that is required to solve the money requirements aimed by the sale.

Now lets get down to the actual value of 3,400 tonnes of gold (and I had to think this through very carefully as the numbers and zeros are hard to come to grips with):

Just for those also finding it hard to cope with the numbers-
1 x 10 to the 3rd power = thousand
1 x 10 to the 6th power = million
1 x 10 to the 9th power = billion
1 x 10 to the 12th power = trillion

3,400 tonnes = 3.4 x 10 to the power of 9 (in grams)
= 1.09 x 10 to the power of 8 (in ounces)

at US$1,650/oz the value of 3,400 tonnes of gold = US$ 180,385,852,090
= $0.18 trillion

At the moment it is suggested that Greek requires around Euro 480 billion (at Euro 1.34 to the US$ this equates to US$134 billion) to sort out its debt problem (for the short term). This means that selling Germany's entire gold bullion (if it is 3,400 tonnes of gold) would remain seriously short of the solution. Of course this also demonstrates the real size of the problem, but also proves that such a large gold sale would not solve the problem.

Any other thoughts or criticisms I'm happy to hear from you.

I still think that RED is substantially undervalued, certainly Bells valuation of around 37 cents is closer than its current 18 cents, but for me it should trade at a premium to 37 cents once in gold production. And that is now less than 8 weeks from now!!!

When was this article written?

It can and will affect the share price of RED if the price of gold plummets - but will still see a valuation way above the current levels.

In my opinion the artciel is merely speculation in terms of severity - I don't think a large institution is going to liquify gold assets in such a large bulk bid that the price would be an over night plummet.

geez - somewhere they disclose using Ag$11/oz within their numbers, I will osurce as I had used in my model.

beatle – thanks for info. Having learnt of rebel attacks, and being heavily overweight here based on conviction, I have sold 90% of my holding yesterday. It was a most distressing decision as I had invested many hours researching and checking events for 2 years with all the ups and downs and was comfortable with the company. I am still emotionally uneasy about doing so but the risk from a black swan event like these thugs seems all too real given that Claver is not that far away from Siana. Making it worst is thinking of my lost profits from 24c not so long ago. Now seeking another high grade low cost mine, but there ain’t that many.

I had tried contacting the company for comment on this risk but GE hasn’t replied to email.
The story may have further to run:
http://www.sfexaminer.com/news/2011/10/japan-australia-worry-over-filipino-mine-attacks

According to the Rebels the attacks were due to the lack of communication between the REbel representative and the copper mining company in regards to allegation of environmental destruction and the non-compliance with the "policy" the Maoists have pertaining to environmental preservation and the mistreatment (on some level) of the local workers.

Seeing as RED boast their operations e-friendliness, community programs and overall approval of the people in the area - I don't think the rebels have a reason to attack.