my 20 cents... soon to be $2

Evening all,
long time no post for me, but I assure you I've been here lurking away, watching, waiting.

Just thought I would chuck in my view on our current situation here. Which appears to differ somewhat to many of you...

Obviously the share price consolidation is causing some concern. Lets not forget that the SP is a reflection of the overall market capitalisation of the company. Number of shares times SP. Easy. So all things being equal, the consolidation should have not net impact on the overall market cap. Correct? Well maybe not.

The biggest benefit associated with the consolidation is the reduction in SP volatility. We will not see daily moves of 10%+ or similar unless things are very good/very bad.

While we may be happy investing in shares sub $1, there are differing views out there. See below for definition of a penny stock (remember Red is looking for US insto investors)
http://www.investopedia.com/terms/p/pennystock.asp#axzz1bh1FgC4s

While it is old (2003), a read over this may be of interest discussing "Conventional wisdom holds that institutional investors, particularly mutual funds, automatically unload all holdings of stocks trading below $5 a share." Referring to Gateway Inc (US technology Co.)
http://www.cfo.com/article.cfm/3011203

My point is there are differing factors for individuals and instos in choosing investments. I would rather Red appeal to Mutual Funds and instos than traders chasing those 10% swings.

Ultimately Reds value does not change here, just the number of shares on issue. Fundamentals remain the same. It's a matter of how Red is perceived as an investment, and remember for many perception is reality.

Oh and as far as a Cap raise is concerned. Don't forget quarantined funds for Mapawa, given no drilling right now I'm sure that cash would be used before any cap raising. Then we have the $8 million standby facility.

Further to that the annual report states:
"As a consequence of the favourable movement in exchange rates, the revised forecast capital cost is A$81.0 million compared to an original budget of A$96.0 million." In reference to construction at Siana.

First gold pour next month. Given the current gold price I would expect the potential EPS to drive us forward. Be it 30 cents at pour or $3, either way I make the same coin.

As for a consolidated share price of $5, well that's a market cap of a bit less than $650 million. Missed the 5 bagger boat (given we aren't at 10 cents now), but I reckon there is still value to be had. Be it 20 cents of $2.

Cheers all,

JB

Back to my hole I go ;o)