psyber - Fair enough comment. I acknowledge the PER's I mentioned seem fairly conservative.
Apart from its (current) small size, RED is effectively a single plant, single mine entity and I don't think it warrants the type of PER's accorded to larger miners with multiple operating mines in multiple locations. Also, until the market capitalisation of RED increases by a fair bit, it'll remain off the radar for the larger institutional investors whose briefs wouldn't allow them to invest into such a small company.
Another reason for a bit of conservatism is that RED's operations at KOTH involve processing relatively low grade material which makes its profit particularly sensitive to changes in the gold price or changes in operating costs at KOTH (though changes in the gold prices have upside as well as downside ramifications for RED).
These factors aside, I feel investors are still waiting to see just how well, and profitably, the KOTH operation is going to be. If it starts to produce the sort of results it had been forecast to do, and looks like it'll continue to produce them, then you'd expect this would provide investors with a lot more comfort and see a more generous PER attached to the RED shareprice.
As well, details that the KOTH operation is performing may well entice another gold miner to negotiate a deal with the Smorgons outfit and lead to a full takeover being made for RED. In this outcome, forget PER's - we'll virtually be obliged to take for our shares whatever price Smorgons negotiate for theirs.
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