Ann: Pending close of Bullseye takeover offer, page-8

I agree in part with GW, especially his 4th point but I don't think the BOD got this one wrong - they have only offered $4m (more is on offer if due diligence confirms value) ... a paltry sum and any take over is conditional on the resource estimates by Bullseye are accurate and that there are no other issues ... such as financial poison pills. If this was a high grade 200k oz deposit (presumably with exploration upside) then it would be a useful add-on to Darlot's potential and increase Darlot's LOM .... and act as a template for the acquisition of other similar orphan deposits looking for a mining / processing solution. Ideally, KOTH will develop as hoped, and all its ore will go through its new dedicated plant .... so, Darlot will need to develop its potential further to fill the KOTH ore deficit .... a task the BOD is confident can (and is) being done.
If it turns out that RED offers Bulleye's shareholders much more, then rest assured it will be worth much much more. As for dilution, what's $4m or $40m more shares if the reserves and resources, and MC is greatly expanded ? Moreover, the ability to raise capital will be affected by the markets perception of the value of assets held and the one term ability to repay. What makes a loan dangerous is its covenant ... wrong structure and REDs assets will end up with the likes of MacBank .... if one or both the major shareholders participate in a cap raise, no problem.
As for Bullseye's shareholders posing some threat .... the minority shareholders behind the push to join RED are being screwed by the Bullseye BOD and will be grateful refugees, and, as for the Bullseye BOD ... well there's 2 chances of them getting a position on the RED BOD ... and Buckleys is one. And, barking dogs have never worried this MD and BOD in the past.
The Siana situation is tricky .... here RED shareholders have to keep 2 things in mind ... its a proven high grade asset with established infrastructure, ready to go (and lots of capital has been sunk in)(future tax loss is worst case analysis) and the BOD, particularly the MD, have a sophisticated understanding of the Phillipines form their long association, and have maintained the asset and and its relationships with the local community very professionally .... its like working in a 'minefield' ... hasty headstrong rushed steps can lead to a blow up that creates irreparable damage .... the BOD believes that there's significant residual value in Siana, and based on their strong record to date, we should trust our generals.
The question on my mind now is do I buy more at these great entry prices or do I wait for the better prices .... I have no fear of a cap raise, as it appears that will signal big things a ahead for RED. Broker and institutions waiting for a profitable and cheap entry into RED remain disappointed.
The BOD is not going to do a cheap, highly dilutive raising that would reduce the value of its major shareholders, who thus far have fully backed them .... the current malaises in the POG are causing a lot of jitters but the fundamentals of gold remain .... so more patience is required.