management performance, page-22

I’m a little shocked at the response to my earlier post. Even though my husband playfully uses the ‘dumb blonde’ jokes from time to time, I have a very good background in economics. So it’s hard to understand the degree of denial of the economic facts underlying the case of RED and the current BOD’s.

If you combine the companies that the current and recent BOD’s is/was a director in in the past 2 years (RED, IAU, SNR, ORH, IMD, CRC, YTC, CGT and LionGold-A78.SI) their market cap has reduced from over $2.5 billion to less than $550 million for a loss of 78% (excluding Trelawney which would cause a greater loss but Norregaard was not a director). This loss is well ahead of any relevant index on this planet.

On an asset value (net of cash and debt) basis the situation would be worse.

The gain/loss during the time each of these directors were involved in these companies fairs no better according to the following analysis:

*Excludes time Norregaard was COO of Trelawney
** Includes splits/consolidations
*** IMD is a mining service company and not a mining/exploration Co.

Apart from a few exceptions in black, the directors of RED have been involved in companies that have dramatically under-performed against the relevant indices despite the significance of the assets (resources/reserves). The resource base of all these companies is over 39 million oz of gold and 19 billion lbs of copper plus other minerals! And this was during a time of a mineral boom?

I can’t find one other BOD’s holding a collective directorship in companies with such a significant asset base that have been so unlucky with their respective companies share prices. A bottle of decent red from Hubby’s cellar if anyone can point one out.

The nature and timing of the price movement in RED over the past year or so is also very interesting/alarming but I will leave that for another time.

If only Mum and Dad had asked me to analyse this before now.