I have been offline for the past week, its been a time to...

I have been offline for the past week, its been a time to twiddle my thumbs, and just re-consider the situation that any RED shareholder may find themselves in currently.

I have often wondered how to ever achieve more profits from my share investments. And I thought of Fastbuck with his RED share purchases at the depths of the GFC when RED was trading at absolutely nothing. Since then RED has been priced more respectably, but ALWAYS LESS than 50% of its indicated NPV for its share of Siana. REGARDLESS OF GOLD PRICE.

WE KNOW that Siana (RED's equity only) is profitable even BELOW US$800!!!

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AT THE CURRENT GOLD PRICE of US$1,080 RED's share of Siana at a 10% discount rate is worth (NPV) = A$270.6 million = 30.5 cents (including $19 million cash - recent funds excluded which are assumed to go into project development).

Average annual EPS for Siana (ie Life of Mine) = 6.4 cps!!!
At a share price of 12 cents this represents a P/E of 1.9 (Life of Mine)!!!


All of this analysis ASSUMES NO VALUE FOR MAPAWA, regardless of whether there is a mineralised gold cap (this is likely to come up based on historic drilling of Suricon), or the BIG Mama, which is being sniffed at by the drilling of hole 1 currently which has already confirmed sulphides at the predicted level, and is continuing to AT LEAST 450 metres!

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If you look at it differently, FROM A CASH PERSPECTIVE, current cash in bank, with the recent increases in cash by placements totaling around A$43 million (net) at a placement price of 15.5 cents per share to 31 institutions, plus $19.0 million already held

= A$62 million = 6.5 cents in cash!!!
This represents 54% of current share price at 12 cents!

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So, MY CONCLUSION IS that IF RED share price is to drop any further, and maybe 11 or 11.5 cents is that base level, THEN we are looking at a similar entry point to that which Fastbuck took advantage of during the GFC!

At some point towards the start up of production we are sure to see RED trade at higher levels to its indicated NPV (in terms of share price), whatever the gold price of the day, once it production!

So I'm rustling up sources of cash to have another (Fastbuck-style) splurge! In fact, now I WANT RED SHARE PRICE GO DOWN A LITTLE FURTHER SO I CAN TAKE ADVANTAGE OF THE GLOOM!!!

So for a change I will say, down RED down (but only temporary of course, Lol) - and Mapawa MAY affect my strategy if it really hits paydirt (which I will also be happy about anyways!).