Ann: Quarterly activities report , page-11

cashme, you "could see this sort of report coming for a mile" because I estimated this result exactly two (2) months ago (28 Nov 2012). The 4,850k oz gold production is almost midpoint of the earlier 4-6k oz gold estimate. See:
http://hotcopper.com.au/post_single.asp?fid=1&tid=1892891&msgid=11049094

We also knew in late November that RED would barely be cash flow positive. More critical, RED sold only 80% of its production. If the produced gold and silver were sold during the quarter, net earnings would be almost zero.

Now, let's tune out the Pompeii doomsayers and focus on facts to predict the future.
1. The main systems (water, power) seem to be in place. Sure, the power lacks full main grid (uses a lower Kv temporary line), but Happycats warned us long ago that mining firms there should never rely on the grid anyway!

2. Ore processing has improved dramatically -- December processed 54k tonnes, which was almost 50% of the quarter's extraction and about 60% of the plant's monthly maximum processing capacity (limited by ore availability, not plant problems).

3. Contractor issues are being resolved, but CJ is too ambiguous about whether RED has already rented Galeo equipment. And why wasn't the contractor terminated 6 months ago for failure to perform? Were there other competent contractors or hire equipment available?

4. Timber7 warns of higher operational costs. Sure, but how much higher costs? I think the stated modifications and with earlier power and pump equipment costs are minimal compared to overall plant commissioning and waste stripping. And how does RED compare with operational costs for OZ miners ($700/oz and rising). But important to keep an eye on costs.

5. January was NOT good with (if we're optimistic) maybe 10 days of ore processing. Assuming the new water pump does the job and the power plant is operational, we might see good results for the rest of the quarter...maybe.

My estimate for next quarter drops from 14k oz gold to about 12k oz gold.

As for the board's performance... these results provide strong indication of a failure to fulfil minimal due diligence. The board should reasonably have been aware of and acted on these problems up to a year ago (power, water, and maybe contractor and former site mgt). As such, the board should reflect on their future in these roles.