I am known as a big supporter of RED (some say "ramper", Lol),...

I am known as a big supporter of RED (some say "ramper", Lol), and I accept that my bullish posts may give one that impression. AND I have a big position in RED (and aim to continue to do so, maybe even build on it at these prices. I have held shares in RED from a time when it was basically a speculative gold explorer, well before Siana was even part of its portfolio, let alone now a completed Bankable Feasibility Study. (And I might add that I have also bought shares at appreciably higher than current share price of 13.3 cents!).

In this current market, where there are mixed signals, I thought it might be appropriate for others either in the stock or contemplating it, to consider a few facts as to where RED is positioned currently.

I will try not to just duplicate other prior posts, but obviously in summarising some of the key facts I must do that to some extent.

1. RED has a BFS already completed, which points to a LONG LIFE, LOW COST, gold operation at Siana, its stake being 90%.

2. RED previous to Dec 2009 had cash amounting to $20 million (+/-) from a fund raising in Nov 2007, which it is using for its ongoing activities around Siana and its 80% stake at Mapawa.

It has subsequently raised a further $15.19 million (gross - Tranche 1 funds at 15.5 cents), and in the process of raising a further $29.76 million (gross - Tranche 2 funds at 15.5 cents).
[I understand from a reliable source that ALL but 2 insto's subscribers under Tranche 2 funds had deposited funds by 10am last Friday and the other 2 placees were depositing funds today, Mon 25 Jan 2010, under that placement.

Therefore, RED will have total cash in bank from funds raised principally at 15.5 cents, of $64.95 million (less costs).

3. Discounted cash flow analysis can easily determine fundamental valuation of Siana, and from Independent and separate sources (Southern Cross Equities), Mgm1a, and myself, it is clear that RED currently trades at a significant discount to NPV valuation:

Southern Cross Equities has estimated a 12 month estimate of 27 cents, completed in Nov 2009 (based on a variable gold price but around US$1,000 PLUS 10% increase in operating costs at Siana;

Mgm1a and myself, separately and independently, give similar DCF valuations around:
Gold Price Mgm1a Valuation Beatle Valuation
US$800 Not published 19 cents per share
US$900 23 cps 22.5 cps
US$1,000 27 cps 27 cps
US$1,100 32 cps 32 cps
US$1,200 37 cps 37 cps

My estimates of P/E are around 2 - 2.5 over the range of current gold price movement, at 13.5 cents price, this means that it is substantially discounted with respect to its LONG LIFE and relative to its peers.

4. In the same general area of Mindanao but 150 odd kms to the south, MML has a gold operation which is currently low cost and high grade, with reserves of about 3 years in high grade, and has a market cap of around $570 million compared to RED with a market cap of around $102 million. RED's proposed gold project is in a similar historic gold producing area and will have similar gold production levels but over a considerably greater life then MML based on current reserve positions.

5. Wise-Owl has classed RED as a continuing HOLD in its portfolio.

Smart Investor apparently has recommended RED in its Feb 2010 publication (I have not seen that personally).

6. Mapawa drilling commenced in late Dec 2009, targetting a significant geophysical anomaly just under 1 km in diameter. No value has ever been attributed to Mapawa. Drilling of hole 1, which is targetting the porphyry mineralisation to about 500 metres is in process.

7. Currently the market has gone backwards, with RED following suit despite it now being in the best position it has ever been in, and remains substantially discounted to its indicated fundamental value.

Clearly you can't hold back a rising tide (technical analysis suggests it has broken its uptrend lines) but at some point its price becomes so cheap that it is unlikely to go back any further unless gold was to absolutely kark itself.

I HOLD, I don't say its time to buy, but I certainly think that at some point its going to be a real bargain!