So RED5 will seek to produce over 100koz p.a. and that will line...

So RED5 will seek to produce over 100koz p.a. and that will line them up for a re-rating if they can deliver the gold for a lower AISC in the longer term. While they expect the AISC to be between $1350-1550/oz, with some luck, they can do so at the lower end of the range. When production becomes commercial at King of the Hills, this may help reduce the AISC. The Darlot mine gold grades are looking quite encouraging too.

Since they acquired Darlot and KotH last October, they have increased the resources from 624koz to over 1.6Moz. Reserves have also increased to 307koz for these two mines, after taking into account depletion from production.

All in all, their Eastern Goldfields acquisition has been a turnaround for them albeit with high costs and decrease in their cash over the two quarters. They have no debt and given that they now have Siana mine ready to go if they can spend the $46m or so to restart it, I believe that a bank would be willing to lend them $10-15m to help them along the way. It would not be a problem.

The more I look at this, the more it reminds me of Ramelius Resources back in mid to late 2014 where they faced hiccups in their Mount Magnet mine and then acquired the Vivien and Kathleen Valley gold projects. Their stock price got trashed to as low as 4c in late 2014 but as soon as they reported a good Dec 2014 quarter with increase in cash reserves due to realised gold price exceeding AISC, they began to turn around. And after the options expired in Aug 2015, the rest if history. Is RED5 like Ramelius Resources back in the day? Well... time will tell but I am quite encouraged by how this whole situation is playing out.

Glad to be holding RED5, despite having experienced much pain before. But it is the most painful holds that one may see the biggest dollar returns afterwards.