Sam, I've got to agree with you - But when Van Eck gives a company the flick, the SP can be decimated - look at what it did to RMS and others, where it created a great opportunity for investors who could spot value and a market over reaction. (I've changed my sentiment to BUY)
This big SP drop is out of sync with comparable gold stocks - todays announcement of a demotion by Van Eek is something I didn't see coming nor I suspect many others who follow RED .... but the retreat from highs is a technical warning, which retail investors can ignore at their peril.
Van Eck's exit didn't happen overnight - the erosion of the SP since the SP high of 49c has been gradual, and Van Eck got much better average prices for its investors than todays SP - todays fall is due to other market actors reacting to Van Eck's divorce announcement.
If Big RED's fundamentals remain intact, then this should indeed be a buying opportunity for this who believe gold has upside and are 'light on' RED ..... but if RED's fundamentals have a (new) flaw .... why was the market not informed ??
For those who have doubts about the future direction of the gold price, look around at the bullishness in the gold mining sector and ask, would rationale informed investors be buying lots of wannabes if they weren't positive on gold .... or are they just dumb arse speculators ??
People should also have a look at CMM (Capricorn) announcement on the 14/6/24, where they again bought back some of their gold hedges to "increase their exposure to higher gold prices" ..... the remaining hedges are at A$2350/oz (worse than RED's dare I say).
While you're at it, have a look at CMM market cap and its annual gold production ..... less than 1/3rd Big RED, although they claim a relatively low AISC, using the same mining methods as RED but with a much lower average grade .... how do they do it, and why wont a fully developed KOTH equal or do better ??
Now I'm not suggesting the new BOD go out there and buy back lots of RED's remaining hedges, because hopefully the new MD and his big BOD have lots of better uses of that cash and RED's new credit worthiness.
This Van Eck slap down should be added incentive for the new MD's first address to the market to be monumental, with a resounding message of RED's strengths, and current and future directions, including rationalisation of a subpar assets and of course a share consolidation .... lets hope the BOD have ensured that the new MD is fully charged and ready to prove his doubters wrong. But until he does, the SP will remain sub 40c ??
"Van Eck Associates Corporation has reported a change in their substantial holding in Red 5 Limited, with voting power decreasing from 18.08% to 9.27%. The change occurred on June 20, 2024, and is detailed in their latest filing, reflecting adjustments in their interest across various securities. This shift indicates a significant change in their investment strategy or portfolio rebalancing concerning Red 5 Limited’s shares."
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