HI Jto_1, good to see you are on board RED. (But with no...

HI Jto_1, good to see you are on board RED. (But with no sentiment, - if you have already realised, my sentiment is RED's a LONG TERM BUY, Lol!).

About your questions (sorry that this has to be a LONG post to reply suitably!):

Mapawa - I can only go by all the past reports that RED has announced with regard to Mapawa, which refer to historic drilling from Suricon and the "potential resource" in the topmost section based on those drilling results.

What we know is that Suricon also provided the original drilling information for Siana, and whilst that information was not considered to be suitable for providing a JORC compliant resource at Siana based on the Suricon data, RED's subsequent drilling of Siana confirmed the integrity of the Suricon drilling as a basis for establishing the resource (based on RED's own diamond drilling) of Siana mineralisation.

Similarly, the argument runs that the historic Mapawa drilling by Suricon is likely to provide a good basis for the RED drilling program planned for the top-most sections of Mapawa. RED has therefore given indication that the top-most sections are likely to provide a resource around 3 - 4 million tonnes, at a grade somewhere between 1.5 - 2.5 g/t. Based on Suricon drilling this mineralisation is typical of similar bleached caps overlying deeper copper sulphide mineralisation associated with large porphyry copper/gold systems. It is devoid of cyanide consuming minerals (such as copper carbonates/oxides/sulphates) and likely to fit well within the current processing facility at Siana (ie no increased cyanide consumption and good grinding characteristics).

Your question regarding Anglogold is very interesting and may ultimately become the subject of increased scrutiny by interested parties (including shareholders!). The Anglogold position is not clearly stated in the public arena at present other than what has been previously announced to the market back in 2004.

Originally there was an announcement in 2004 which referred to "the strategic alliance and the right to direct equity joint ventures on a pre-agreed basis transaction" at the time of a significant placement ($5.487 million) to Anglogold.

Following that initial Anglogold announcement the following quarterly (Sept 2004) gave more specific details outlining the arrangement:

... "The terms of potential future separate JVs have been pre-agreed and are valid for two years, subject to AngloGold Ashanti maintaining a minimum 12 percent
shareholding. These could include separate JVs on three designated areas – the Madja copper gold porphyry, Mapawa (post MPSA grant) and Siana outer targets.
Expenditure commitments on each JV are a minimum US$1.5 million for no interest in the first year, a further US$4 million for 65 per cent of the Red 5 interest, and a
further US$5 million for 75 per cent of the Red 5 interest. During the minimum expenditure period Red 5 is the manager."

Based on that explanation quoted above (which I assume remains current) Anglogold has lost its right to participate in the Mapawa MPSA specifically because it has not retained its 12% equity interest in RED - it currently holds 10.2% equity interest in RED - and that equity position will be further diluted once this proposed large share placement issue is completed (unless Anglogold is a placee!), the first tranche likely to proceed once monies are in - presumedly any day now!

Clearly Anglogold would prefer to retain its right under the "strategic alliance" in the event that Mapawa does indeed hold a world class porphyry copper/gold deposit (note that the LSY prospect is only the FIRST target on the Mapawa MPSA!!!), but the simple fact is that Anglogold has not met its equity under that arrangement. This in my mind removes a question that I too have had of the alliance, bearing in mind that the original agreement was made in 2004 and supposedly ran for a 2 year period (but complicated by the fact that Mapawa MPSA grant only happened earlier this year) could never have been pursued as it was never envisaged to take so long to have the MPSA granted.

I suggest that unless there is any subsequent agreement between the parties (that has not been made public) then there is no issue unless Anglogold wanted to pursue it. In that event, with Mapawa having the potential to be a world class deposit based on the latest IP anomaly assessment, I suggest that RED shareholders would have the right to consider and vote on anything being farmed-out from RED that was considered of substantial value to RED, and I am sure ALL shareholders would over-turn any decision of RED management to agree to Anglogold getting a free kick from a past strategic alliance that was not consummated by the parties within the timeframe envisaged and with the minimum threshold RED equity held by Anglogold subsequently being breached.

I understand that there is no deep drilling information for Mapawa completed by Suricon, so we are therefore dependent on:
- Positive shallow drilling by Suricon outlining the gold resource;
- Positive outcome of the recent geophysical IP work;
- Positive geochemical sampling signature at surface; and - Positive surface clay alteration products/quartz stockworks;

all of which are indicative of a major porphyry system being present.

With regard to Siana, the mineralisation is confirmed to be open at depth and also along strike in shallow underground positions, both that require follow up drilling once development works proceed - note the announcement post the latest underground resource delineation of drilling confirming intersections referred to in the announcement of Feb 19 2009:

.." Drilling completed post Resource estimate (Hole SMDD134 - 5 metres at 25.4 g/t gold and Hole SMDD135 - 3 metres at 31.6 g/t gold) demonstrates high grade extensions adjacent to the northern limits of the underground Inferred Resource indicating potential for early access from the proposed decline.."