RED

1.14%

44.5¢ red 5 limited

SLR merger opens up cash to utilise economies of scale to...

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Theeagle15

872 Posts.

137

17/03/24

10:34

Post #: 72925871
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Originally posted by JoeKing2: ↑

To throw in a bit of balance, although its market capitalisation has increased since March 2022, RED's share-price now is less than what it was 2 years ago. For quite a number of other gold stocks, both their market caps AND their share-prices are up over the past two years.

For RED, part of the reason may well be that there was too much optimism regarding the construction and commissioning of KOTH, and around March 2 years ago, the share-price was really way too high. I'm sure a few too many investors "bought high" in this optimistic period.

When extra funds were subsequently required, the capital raise caught everyone by surprise (the Board too I'm guessing) and I reckon the company actually suffered a fair bit of reputational damage. At this point, I'd suggest the share-price was way too low and while many investors "bought low", many others probably thought "one capital raise too many" or maybe even "don't throw good money after bad" and let the opportunity pass.

However, as KOTH has been performing at or above what it was supposed to, shareholders in RED have done well lately. Clearly, KOTH's successful operations have de-risked the company a bit.

But I'd suggest even more importantly for a relatively high-cost producer like RED, the real driver for the share-price has been the spike in the AUD gold price and the much higher than originally forecast margin they're making on the unhedged ounzes of gold they're currently selling. A related factor may also be that analysts are factoring in even higher levels of earnings post hedge expiry based on the slightly higher forecasts of the AUD gold price they're now incorporating into their models.

As I've alluded to on this forum before, my only concern with an investment in RED relates to what factors can drive FUTURE out-performance of the stock. The clearance of the company's debt and the expiration of their hedge-book are both factors fully known to the market, and despite what a number of HotCopper posters suggest, there's no reason to suggest to me that RED shares would suddenly "re-rate" once debt and the hedges are cleared.

I don't wish to sound negative and upset many in here who are real RED devotee's, but as I said in my opening line, I'm just trying to throw in a bit of balance. My sentiment on the stock remains "None".

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SLR merger opens up cash to utilise economies of scale to dominate the Goldfields(gold rich district KOTH and SLR mines are in) .

It’s the concept that winners keep winning.

While small micro caps have to keep capital raising in this high interest rate environment where capital is harder to obtain. Making them easy targets.

GMD vs RED vs NST

RED Price at posting: 36.5¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

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(20min delay)
Last 44.5¢		Change 0.005(1.14%)		Mkt cap ! $1.541B

Open	High	Low	Value	Volume
44.0¢	44.5¢	43.0¢	$7.563M	17.14M

Buyers (Bids)

No.	Vol.	Price($)
9	388167	44.0¢

Sellers (Offers)

Price($)	Vol.	No.
44.5¢	720009	7

View Market Depth

No.	Vol.	Price($)
3	228549	0.440
2	83549	0.435
13	375330	0.430
13	348387	0.425
10	698418	0.420

Price($)	Vol.	No.
0.450	267227	8
0.455	326322	9
0.460	207464	9
0.465	381861	6
0.470	273334	5

Last trade - 16.10pm 14/06/2024 (20 minute delay)


Last 44.0¢		Change 0.005 ( 0.16 %)
Open	High	Low	Volume
43.8¢	44.5¢	43.0¢	8029811
Last updated 15.59pm 14/06/2024 ?

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