Hi MIS,I agree with you, RED has more upside than SAR, but.....

Hi MIS,

I agree with you, RED has more upside than SAR, but.. quite simply more risk too.
Also, for better or worse, the market has decided to pay a hefty premium for producers with a production profile above 300,000 a year, and have done so for multiple years... RED is not there yet.

So far in this gold bull market, the big winners have been NST, SAR, EVN, RRL, SBM (well.. kind of) and then you just go down the list,and (yes this is a very general statement), but... the big money wants proven producers.
One day RED may be one, but.. not yet, why else is it not valued at $500-600m for its Darlot production alone.

Many said that when NST hit $3, that was it... when it hit $5... they said that was it, yet its SP has indeed tripled from there!

On a very broad valuation metric, the 'market' valued good producers as much as $750m per 100k p.a. So... when SAR hits 650k p.a in 2021, then, if they continue to prove they can actually run profitable mines, their MC could be around $5b, and in 2022-23 with another 150k added, it will be closer to 6.5b. That excludes dividends. RED is a way off those (which is another reason why a premium will be paid, in world where interest rates are basically zero, money will be chasing yield).

Anyway, my own rationale is simple, I want to protect most of my capital, so.. SAR. But... I also want some upside, RED.

There are going to be many changes into the future, no doubt about that, all one can do is try to be agile, whilst also investing in what will hopefully outperform the many other assets that are likely to struggle... for decades.

Good luck to all holders.