Way Forward, page-16

The Quarterly should be out soon.

With SLR the July Quarterly usually provided forward guidance for the next 12 months. Let's hope RED keeps it up. Here is what I am looking for:

1. What the company will do with the 412 million RED shares it owns. Ideally, they will be cancelled. We don't need a share overhang or alternatively if the company wants cash, it means they are looking at another takeover. We don't need another takeover at the moment especially if it's GMD which is overvalued and has lots of upcoming Capex in the pipeline. LT and the board need to keep their egos in check.

2. Plans for Sugar Zone. I don't expect much from SZ but if it can be brought back online at 50,000 ounces per annum at $3,000 per ounce ASIC I'll take it. I don't expect the pause will change the production profile or costs by that much but if gold remains at $3,600 an ounce it's another $30 million per annum in the kitty and they may at least find better lodes as they excavate the mine further.

3. Plans for Cock-eyed Bob. Last time CEB got a mention there was talk of reopening it in FY2025. A second underground mine at Mt Monger on top of Daisy to add to open ore ounces will deliver a higher margin. CEB was a relatively shallow underground mine so if that is reopened it will provide confidence for a longer mine life at Mt Monger. MM also has a few other prospects - Maxwells, French Kiss and Lorna Doone. Flora Dora and Daisy have delivered some excellent discoveries in the last 12 months which bodes well. More exploration and reporting of those results would be appreciated.

4. Plans for Deflector and Rothsay. Reserves are running low at Deflector albeit there are 812 ounces at 10g/t in resources at Deflector and 326 ounces at 9.1g/t in resources at Rothsay so I'm sure there are still years of mining left there, but it would be good to see some reserve conversion. Same for Spanish Galleon - will we see a maiden resource there in the near future? I'd like to see a lot more exploration at both of these sites, especially Rothsay as there seems to be a few historical mines that might be worth punching a few holes into.

5. I know very little about the RED pit. Are there underground or satellite prospects that could lift the overall grade of the mill feed? Does the attached drill result from last August bode well for shallow high-grade ore from one of the lodes or did the discovery of the nugget make this look better than it is?

6. In terms of ASIC, it will be good to see what the forward guidance is both in terms of ounces produced, costs and what capex will be needed for stripping that isn't included in capex. It's always what isn't included in ASIC that needs analyzing as managers love to exclude costs from ASIC to overinflate their ability.

7. If forward guidance is 440,000 ounces w/t SZ that means 36% will be hedged at around $2,700, assuming the rest is sold at $3,500 and an ASIC of $2,000 that should deliver about $530 million in operating cashflow. Assuming $100 million capex, $55 million in exploration and $75 million in royalties and administration costs should hopefully see free cashflow of $300 million p.a. or $75 million quarterly skewed to the latter six months due to higher hedging.

Worth pointing out Luke Tonkin reports to the board so hopefully they will insist on greater disclosure going forward.

Welcome feedback from RED shareholders as to expected capex for stripping going forward and/or prospective higher-grade pits that could lift overall grade.

Below 40 cents is an absolute bargain for this stock given known knowns. My gut feel is that the share price is being accumulated hence the very large bids/sells to keep the price in a tight range until accumulation is over. Of course, all of this can change with a disappointing or better than expected forward guidance.

GLTA/IMHO