There is a degree of cognitive dissonance in the lack of correlation between the strong A$gold price and the SP of RED, and other beaten down gold stocks like mid tier darlings SLR and RMS, which are at multiyear lows, despite profitable production.
I have mentioned repeatedly in my comments, that a lot of selling, especially overseas is from "passive" index funds because fund investors are withdrawing funds and hence the funds have to sell their gold shares held in proportion to there holding which is mostly relates to MC.
N.B. this is not a comment on the fundamentals of these stocks, but overall market sentiment to the sector and the market at large.
Hence the GDX and GDXJ are at multiyear lows, and that selloff is reflected in the ASX GOLD index as well.
Added to that effect, is the local concerns about pressure on AISC's and development costs, secondary to labour shortages, increased energy costs and a tightening capital market. This has mean't the some projects have been aborted, some put on hold, and certain companies like Dacian are about to disappear in an M&A process.
Companies like RED that have just completed construction on time and on budget (because of fixed price contracts with the premier companies in WA) and RED's new KOTH plant is powered by 90% gas (10%solar) is located close to the gas pipeline and has a fixed 3+2yr fixed price (pre recent rise) and has long term contracts with MacMahons etc, that will help control costs.
Other gold miners, with good deposits and good infrastructure and management, are well position to weather this storm and be in a advantageous position to have favourable M&A with distressed assets or a marriage with a partner of equal status and endowments.
RED and other mid tiers that are currently "undervalued" at current A$POG, will be rerated heavily as time goes by IF IF IF, the A$POG remains strong, and the labour situation improves and energy costs abate to more moderate levels.
Not all of these will happen at once, thanks to the continuing Ukrainian war, the world shortage of skilled labour, and restricted immigration etc.
But with rampant inflation not likely to ease for the next 12-24months, it's unlikely that the gold price will collapse.
RED's strategy for this situation will soon be announced in the full FY year report due by end of July, and before Diggers&Dealers conference.
I suspect they will emphasise robust operational performance of the new KOTH plant, with an ambition to work towards name plate capacity of 6mtpa over time, and will gives assurance about the long term ore supply that will make KOTH the dominant regional processor for decades.
RED has no legacy issues to deal with, will pay off its debt expeditiously, and will be a cash cow for decades .... and a desirable M&A partner.
RED remains outstanding value at current SP. .....
Remember, most of those selling are being forced to sell by redemptions, or mere short term technicals, NOT because of fundamental analysis.
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