Fatsoh, as a general commentary that may well be the case, but...

Fatsoh, as a general commentary that may well be the case, but my view is that you must always be careful to generalise when the gold market is so diverse, with specs and punts, gold producers (big and small) etc.

From my view, the gold market is highly crowded, and you MUST be very selective with stock picking to get the best return. (AND for many years RED has not been a good performer, I am the first one to accept that of my favourite gold stock!).

During times of high volatility we usually see the bigger gold producers as the preferable investment into gold equities, and their share prices reflect the underlying gold fluctuations more closely with what are perceived to be lower risk entries to get exposure to the underlying metal. And over time, once the bigger stocks look over-bought then investors move on down to the second/third tier gold producers and those gold explorers showing promise.

But in deciding what stock to invest in is quite difficult most times, and there is a lot of guesstimation due to whether potential and mineralisation will ever translate into resource and whether that will translate into reserves.

RED stands out for its simplicity of where it sits at present:

My view is that RED has considerable appeal for a number of reasons, notwithstanding that its still not in production, and in fact is the reason why its enjoying such a low market capitalisation at this time:

1. It has a large reserve that will translate into long life, and the BFS confirms its low operating costs.

2. Its easy to value Siana and therefore RED's stake in it, based on the DCF that determines NPV. That calculation points to RED being substantially undervalued at present.

3. With its tranformation into gold producer RED will enjoy are marked move up in market capitalisation reflective of the value of its stake in Siana, PLUS a premium. And of course, market cap increase --> price increase! Simple as that!

For me its not a matter of IF RED will ever go up, its a matter of WHEN RED will go up!

There will be other gold stocks that will go up (and down) in the meantime but to take positions in them will speculate on the price of gold and the luck of their drilling outcomes. RED does not need any luck to ultimately get its NPV out of Siana subject to a gold price above about US$700/oz!