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04/07/23
04:26
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Originally posted by JoeKing2:
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colincj - I can fully appreciate that you're not a huge fan of RED's management for the reasons you set out. However, I reckon it's worth reflecting on some of the more positive things they have achieved. They DID get hold of the KOTH tenement in the first place from Saracen. And at a time when gold miners weren't flavour of the month, they DID get up a BFS acceptable to bankers. And then they raised capital to fund a portion of KOTH with what appeared to be quite brilliant timing when the Ukraine situation blew up. And they DID manage to have the construction of the KOTH facility come in on time and on budget despite rising cost pressures within the construction industries nationwide (and particularly in WA). Let's not forget COVID made things a bit more difficult again. The Sianna mine had been closed because of forces outside their control. Disposing of this problematic asset in the Pacific and concentrating management time and resources, and shareholders capital, towards developing a new mine near Leonora in a Tier One location seems to me to be a fairly reasonable call on balance. Despite the enormous amount of shareholder funds effectively written off as a result, I have the phrases "don't throw good money after bad" and "know when to cut your losses" in my head. The two most recent capital raisings have certainly damaged the credibility of management and RED's Market Capitalisation (which is down more than 40% from its peak). Despite traders selling down shares over recent times, I see no references to management selling shares (in fact, they've been buyers) so they must at least think the business will be operating better in future. Even with regard to the most recent capital raising, it's interesting to look at some of the analysis done by Patron. There seems to have been a vast (and expensive) build up in ore stockpiles in early 2023 which impacted negatively on cashflow but which will soon start to see those cash outlay's recovered and banked. The KOTH mine seems to be producing at levels originally forecast (though ASIC costs appear to be higher) so management hasn't really done too badly on this front either. If management continues to deliver results into the future like they have in the last 3 months, and they regain a bit of credibility from doing so, they might even begin to score some kudos for what they HAVE actually achieved. But more importantly, I'd hope such outcomes might see the Market Cap. of RED rise back up to the billion dollar range again. This might rely a bit on the gold price not crashing but that aspect is outside the control the management of every gold miner in the world. Not ramping, just attempting a bit of balanced reflection.
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You said "The Sianna mine had been closed because of forces outside their control. Disposing of this problematic asset in the Pacific and concentrating management time and resources, and shareholders capital, towards developing a new mine near Leonora in a Tier One location seems to me to be a fairly reasonable call on balance. Despite the enormous amount of shareholder funds effectively written off as a result, I have the phrases "don't throw good money after bad" and "know when to cut your losses" in my head." My view is and always has been that this board signed up to run Siana, didn't like going there (I complained directly to the Chairman about this) and so ran away. They should have resigned in my view. I would dearly like to know how well the new owners are doing at this so called "difficult" mine.