Hmmm.. progress but slow especially relative to the cash...

Hmmm.. progress but slow especially relative to the cash position.

At least they have $19m to burn through before they run out and need a cap raising ($10.8m cash + $8m undrawn loan).

A concern to me is this:

In their cash flow report they estimate gold sales revenue of $11m for Q3 CY2012. Ignoring the silver content (and very roughly of course) if you assume a $1,600 gold price then that means only 6,875 oz of gold will be produced - for the entire Q (This figure would be lower if you included Ag).

This doesn't match up with the narrative that full ore mining will commence from the Northern part of the pit and the Mill will ramp up from mid Aug (2 weeks away).

Given the FY13 guidance of 75k oz hasn't changed that means a solid 18k oz per Q. If the first Q of FY2013 is likely to be 11-12k under this level then things will have to go seamlessly for the remainder of the year and operate well above prior intended throughput rates. Do RED management have a track record of delivering here?

Possibly lower SP ahead, especially if the ECB and FED disappoint the market later this week.

Cheers
John