RED 5 & SLR NEW ENTITY VALUATION:, page-2

Welcome Ratioal01. lm not sure too many Red5 holders hold the view that the company would starve going forward without the merger. Facts are that Red5 is currently ahead of production estimates, is paying down debt easily and has just 26 months until current restrictive hedges are paid out. Based on this criteria, its a long bow to suggest Red5 has a bleak future going it alone. Given also that we are just entering what is likely to be quite a long and sustained bull gold market going through to the next 5 years at least, with many US gold commentators l have been reading - saying US $3000 will easily be breached ($2500 US before December) - one might construe Red5 in its current position is very uniquely placed with or without the proposed merger.

My own opinion is that both companies will benefit if the merger is agreed. If not, then Red5 will grow incrementally in line with the rising gold price anyway.

Your metric of 2.5 to establish a fair value SP is exceptionally low when 5 is considered low in a depressed gold market as currently exists. Depressed gold market not meaning the gold price but investor sentiment to gold mining stocks globally that drastically lag the precious metals new highs. This investor sentiment will change, and when it does, it will be fast. Many gold mining stocks share prices will see 2x and 3x re-rates simply because they have been neglected and not through any staggering efficiency increases, although obviously a rising gold price helps all miners ( even the hedged ones).

My prediction is Red5 is worth a dollar or more on a stand alone basis when general investor sentiment to the sector changes and if those gold price predictions are ticked off along the way. l would welcome a 55 cent SP by July, with the caveat it is just the beginning of a long price asendency.