I am Back again.
Wow gold is responding well to all U.S data. In the last month gold has responded to:
U.S non farm payroll / U.S Pce / U.S Cpi / Interest rate and bond yield info.
Today we are looking at a U.S Cpi Print for March up 0.4% and Year on year of 3.5%.
Gold down (Comex paper) now gold bounce back and heading back to where it should be.
Gold is not in a bull market it is keeping pace with Rederick
Golds spot price is learning to ignore fake economic data.
As recent as the a year ago we would wait a week or two for Gold to rebound to economic data.
Gold is now responding positively within 12 hours, it is finding strength globally.
On to Red 5 and Slr, I only hold red 5 and never held SLR shares.
Red 5 gold production since cap raise on target and meeting all expectations.
SLR gold production about equal to red 5 per ounces sold. Equal better or worse do not argue it is close enough.
Gold price is on fire , macro and micro extends Gold's price even further.
So if RED goes alone that is great, Hedging x 2 is not something you can totally control when you have major banks, players , in play.
3 billion shares out there is somewhat hindering in terms of Book Value Per Share , shareholders equity , yet overtime will rebalance to the positive.
Slr plenty of cash , plenty of cash , plenty of cash. Unfortunately Gold Miners in general are not and have not paid out much in dividends. Cash burn through would be my concern when rebalancing SLR Book Value per share , Share holders equity.
Combined entity =
So let us look atthe future:
Red 5 and SLR Merger as per information re: 1/2 yearly reports etc:
Let us start with anew book Valuation:
SLR Book Value =$1,135,865,000.00 + Red Book Value $356,348,000.00 = $1,492,213,000.00
Total shares whennew company is merged = 3,460,000,000 + 3,287,217,190 = 6,747,217,190
(Did someone say share dilution. Notmy favourite Friend either).
New book value per share (Here itgets interesting). New Book Value per share $0.22.
We have over doubled RED 5 BookValue (shareholders’ equity per share) Positive for REd 5 and SLR share holders I think so.
Take from this what you will.
My personal takeaways:
Red 5 without merger come June 2024 price $0.475 this is BVPS ($0.095 x 5).
SLR without merger = $2.48 10 year price high as per 2020. That is as good as it gets and is only 2.34 over present book value.
Straight away Red 5 and SLR valuation , immediately after merger within 2 weeks , $0.22 (Book Value Per Share) x 2.5 = $0.55 cents per share. This price will rapidly run to $1.10 per share within 6 months , With Gold price holding U.S $2,300.00 OZ or better and Free cash exploding thus improving BVPS even with 6 billion shares forced under our belt.
The end result is the merger will:
Increase share price based on book value per share , share holders equity , for both SLR and Red 5 share holders.
It is a safe and conservative price initially with potential for fomo and sentiment buyers to rapidly move in when seeking second tier gold miners as a place to park their depreciating fiat.
No matter what happens Gold is on fire.
Both companies are in gold and will do well whatever the outcome of the merger.
All is well with Gold and I wish all a very prosperous journey.
(20min delay)