Mgmia, I agree with your analysis, maybe our cash flow models...

Mgmia, I agree with your analysis, maybe our cash flow models are slightly different (by the way I assumed a 10% borrowing cost, not 8% as you did, as well as a 10% discount rate, not 8% that you used but I used a slightly different silver value, of US$15.00, currently its about US$17.00 spot price compared to your US$13.00).

With regard to the tax free period, in fact from my understanding of any new development there is a tax-free threshold of 50% of the indicated start up life, and since the current Siana resource life is 10 years on cash flows, the likelihood is that in fact it won't be a 4 year tax holiday but more likely a 5 year tax holiday. RED management however has used 4 years for their own analysis and so I used that rather than take a more aggressive view of tax.

The other real consideration, is that Mapawa, which is likely to add to the overall life (and therefore increase value) of the current Siana operation with trucking the 30 odd kms to Siana of ore around 2.0 g/t, and that is expected to provide another 3 to 4 years of Siana life, but actually may complement the rate of production from about year 3 or 4, as the pit deepens and the development of underground decline advances. That will allow a blending of the softer Mapawa ore with harder underground ore in subsequent years but up front may provide more flexibility with ore scheduling at the time of commencing decline development.

Additionally, IF Mapawa doesn't have the BIG porphyry under the gold cap (which has been established from the drilling from former operator Suricon) then that open pittable ore would become another candidate for a tax-free holiday!

The BIG question is whether there is a BIG copper-gold porphyry sitting underneath that gold rich cap! If that situation does occur then the overall development of Mapawa, in its own right, as a provider of lower grade oxide gold ore and mixed copper-gold ore into a separate processing facility located at Mapawa will determine the decision to commence the tax-free threshold for Mapawa ore - ie it might not be most economic to commence mining a lower grade of gold ore to Siana and at that time commence a tax-free period of production, it may be better to remain paying tax through the mining and processing of the cap to Siana and then once mined out with the new development at Mapawa starting, to then commence the tax-free period.

Of course that discussion is all about IF there is a major porphyry copper-gold deposit hiding (lurking, Lol) under the cap.

I can see that whilst the last couple of trading days for RED has not been positive, it will finally allow some attractive buying at current prices that some may regret not buying into once the dust is settled.

Of course the next question is how will those new insto's support RED in the coming days. I hope they are motivated by the likely highly attractive financial scenario down the track, and start supporting it now!