@MRRCIt's a good question and todays drop clearly suggests...

@MRRC

It's a good question and todays drop clearly suggests insiders at play. For what reasons I don't know. As you can see the forward gold price is almost $4000 AUD so RED should be a much higher price given its long mine life at KOTH.

Having said that the company directors are now in breach of their continuous disclosure obligations. It's absurd that forward guidance hasn't been disclosed and it appears that they will present at Diggers and Dealers with no forward guidance. Does anyone seriously think that management don't know what the next 11 months of production is going to be by now? If they don't then they should be sacked.

Re share price its always dangerous to try to explain daily movements but following issues are at play:

1) Share overhang - 412 million shares. The fact the company can't disclose their intentions with these shares is just more evidence of how unethical the board is. They don't need to monetarize them as they should have $600 million in the bank in 12 months. The fact they haven't cancelled suggests to me insiders know a corporate deal is at hand. Given the grubs on the boards can't disclose forward guidance which management and insiders would clearly know then it's a very real possibility shares are being sold off in advance of potential M&A.

2) M&A - Is RED looking at GMD - strangely enough GMD has a higher EV than RED despite producing less than half the ounces and generating no cash last quarter - go figure. If RED is undervalued then GMD is overvalued.

3) Uncertainty generated because no forward guidance provided. Although mentioned above there is no doubt shorters can feed on the uncertainty and stupidity of management who incapable of meeting their continuous disclosure obligations.

4) Overhang from merger. Did deals get done and swaps take place to get merger over the line and are these swaps unwinding at prices when deal was first agreed upon back in January when gold was at $3000 AUD. 37 cents is 127 cents pre-merger i.e. 37 * 3.434. The closing share price of SLR was 1.26 the day the deal was announced.

RE valuation discussion about 50 cents - someone said that's too expensive. I disagree. Excluding the 412 million treasury shares there are 6.4 billion shares on issue. 50 cents is $3.2 billion less $400 million cash leaves $2.8 billion EV which works out at $700 for each ounce of reserve when margins are more like $1,400 to $1,600 per ounce. Then there is the 8 million of resources and plant etc.

Provided there are no unknown unknowns (big if with this lot) I think shareholders just need to sit it out.

The price will eventually move once the corporate activity has finished.

Unfortunately, I don't know when that will be.

GLTA/IMHO