share register

Trading activity in RED over the past few months has increased appreciably as interest in the company has extended due to many stars aligning, including:

1. Positive milestone completion on many aspects of the Siana gold project;

2. Substantial increase in gold price;

3. Increased shareholdings by bigger groups, such as Bank of America;

4. Proposal to commence drilling at Mapawa;

5. Many ASX speeding ticket queries (LOL!), with clarifying statements forced on management as to its activities.

During these months RED has substantially increased in price, and the involvement of considerable different groups of investors, ranging from day traders to short term traders, to longer term investors, has appreciably increased share trading activity and liquidity.

NOTWITHSTANDING all these positives, RED REMAINS at a CONSIDERABLE DISCOUNT to fundamental value, based on the proposed expanded share capital base (of 940 odd million shares).

RED share price, along with other gold companies (producers/explorers/developers) is now being affected by uncertain views about future gold price. Due to it only just achieving Notice to Proceed on its already completed Bankable Feasibility Study, amongst other notable achievements, I am of the view that RED has not fully enjoyed the full share price appreciation that other more advanced gold producers have managed in the same period.

It should be noted that RED is on the brink of some major irreversible events :-
1. The drilling at Mapawa and testing its potential for a major porphyry deposit;
2. The engagement of contractors related to Siana development;
3. The issuance of 290 million shares at 15.5 cents to 31 insto's and fund managers.

Whilst the gold price has fallen off its historic high of US$1,220/oz, make no mistake, RED is in the process of transition from explorer to gold producer, on a LOW cost, LONG life, gold mining operation.

That transition has NOT fully been translated into share price value. The final de-risking of project development, with the shareholder approval of the second tranche of placement under the finance placement assures shareholders the opportunity to finally agree development at Siana, and the gradual increase in share price to fundamental value in excess of 30 cps based on the expanded share base - with Mapawa value yet to be determined (but blue sky value is considerable IMO).

Whilst some might consider RED's current share price of 16.5 cps is a great outcome compared to its low point just over a year ago, of around 2.5 cents, shareholders must recognise the true value increase in RED over that period, with completion of a Siana gold project BFS that confirms project viability at a base case US$800/oz gold price, with:

1. Gold production rising from around 50,000 ozs year 1 to greater than 120,000 ozs in year 4, with AT LEAST 10 years gold production resources already delineated in the BFS, to produce just under ONE MILLION OZS of gold.

2. Gold operating costs average US$351/oz over the 10 years of operation, with likely decrease based on zinc circuit inclusion year 3/4.

3. NPV/IRR of Siana:
Base case US$800/oz - NPV = US$145.5 million / IRR 38%
At US$1,000/oz gold - NPV = US$251.7 million / IRR 55%

4. EPS rising from 4.3 cps --> 11.0 cps (ie PE based on current price of 4 --> 1.5!!!) over the first 4 years.
Assuming a PE more in line with gold producers on long life, low cost operations.

RED will NOT remain at this current discount price whatever the gold price does above US$800/oz!!!