For those familiar with RED since 2010, will know that the peak...

For those familiar with RED since 2010, will know that the peak in December 2011 was 239c and subsequently lots of problems overwhelmed the company and the price crashed to a low of 4.4c in August 2015. New management has been able to turn the company around and brokers like Hartleys believe they have over come their problems and are due for a substantial rerate. Hartley's latest RED update was entitled " Could this be the best value gold stock in ht market /" Based on the recent (excellent) quarterly result , and the projection by the company of FY17 production of 72-80koz, at an AISC of US$740-780, Hartley's model (based on spot gold prices) gives an EBITDA of approx $85m, and EV/EBITDA of 0.9, compared to RED's peers which trade at multiples of 4-6. Hence they have, all things being equal, a 12 month price target of 29c ( approx X2.2 EV/EBITDA ). They note that RED has exciting prospects and its in a richly endowed area which may well expand the productive the capacity of their state of the art gold plant's production. RED conform to the highest regulatory and environmental standards, have an excellent relationship with the local authorities and community - see RED website for details.
The audit that the new government is conducting may be a threat to miners that don't process their ores onshore like the nickel miners, and those with an egregious history of environmental issues etc. The audit is due to be finished by the end of August and well functioning companies should have nothing to worry about - mining is an important source of income and employment for the Philippines, and this new government won't be any less sophisticated or forward thinking than their predecessors.
RED is a model mining company, dare I say the 'gold standard' ??
I have become a shareholder after I got an enthusiastic upgrade after the recent quarterly from a long time RED fanatic - being told about Hartleys upgrade of their already bullish view of RED made me push the 'buy button' first at 14.5c then yesterday at 10.5c - IMO such value is hard to find, and won't last unless the US$ gold price goes way down and the AUD (and Philippine currency) doesn't also fall - highly unlikely IMHO.