Ann: Strong Quarter Underpins Acceleration of Debt Reduction, page-17

This is an interesting interview with a few pearls that apply to RED and specifically to KOTH.
1. The cost of development escalated substantially during COVID, and hasn't regressed much since.
2. The increased cost (allied with inflation and in Aussie, skilled labour shortages ) has made banks leery of lending.
Moreover, restrictive covenants make many projects "too hard for now" leading to indefinite postponements. The straight jacket imposed on RED, especially the injudicious hedging is but one example of the hurdles that RED's much maligned management had to cope with - the slower progress of the KOTH commission lead to unexpected costs, a blowout in "deferred payments" that lead to the last CR that blindsided true believers ... that now is in the rear view mirror, and there's no way RED would be signalling an increased debt repayment while allowing a blowout of "deferrals" - NO MORE CR's will be required unless RED is needing to fund expansionary M&A.
3. The cost of exploration remains high, and in the case of greenfield projects, is not being recognised by the market, is drying up, and making CR very problematic.
BUT, this is not the case with RED where its outstanding drill program, continues to expand the resources and reserves, and validate a successful aggressive mine plan that underwrites KOTH's longevity, and further KOTH expansion, Leonoras lowest cost mill. This is fundamental to KOTH's attraction for further regional consolidation.
4. The cost to RED's Leonora peers to upgrade their old, lower volume, less efficient plants is problematic and will remain a drag on progress.
5. With the average AISC around US$1200, margins are at an all time high and he expects this to continue (despite high oil prices) as the interviewee is confident that the POG will make new all time highs next year, while the market sinks into recession

This quarterly should be reassuring, as RED continues to hit guidelines and exceed its business plan:
1. KOTH production steady at 5.5mtpa, despite programmed shutdown, but management is hopeful for 6 mtpa with AISC's at or below A$1850/oz.
2. Although grade dropped to 1.5g/t (still very attractive) KOTH remains very profitable - big is better - big compensates for low grade - this is what makes KOTH so attractive for M&A - its low processing cost, its centrality, combined with its expansion potential .... SLR recognises this and surely too GMD.
3. Increased debt pay down, will remain a high priority, and once low debt, + low/no hedging ... RED will be unshackled and will soar.