05-Feb-2024:

Here's what the MoM boys had to say about it all today in their podcast:

Red5 Dangles the Carrot for Genesis in $2.2Bn Merger with Silver Lake | Daily Mining Show - YouTube

Chapters:

0:00:00 Preview

0:00:00 Introduction

0:01:08 Silver Lake's alternative marketing strategies

0:07:02 Red 5 MERGING with Silver Lake Resources

0:43:00 Potential Lynas and MP Materials merger

0:44:29 Centaurus get Environmental approvals

0:45:09 Silvercorp/Orecorp update

0:45:36 New Copper producer on the ASX

The short version:

The best thing about SLR is their large cash balance. The worst thing about RED is their debt and lack of cash, and to a lesser extent their out-of-the-money hedgebook. Putting the two companies together certainly makes sense for RED, as they need SLR's cash, and SLR will have better prospects to spend their cash on than they appear to have currently - in terms of exploration spending in highly prospective areas. And it will frustrate the hell out of Raleigh Finlayson at Genesis (GMD) who wants Leonora all to himself (or within his company, Genesis Minerals). Luke Tonkin might not have stopped the Gwalia sale from going through (from SBM to GMD), but he might just end up with RED, unless this deal gets trumped by Raleigh/GMD with a better deal.

For my longer post about this in the "Gold as an investment" thread - click here.

Luke Tonkin, above, the MD/CEO of SLR, will keep his job and be the MD/CEO of this larger new merged entity if the scheme is implemented and RED acquire SLR. RED's current MD, Mark Williams (pictured below), and RED's CFO, David Coyne, will both lose their jobs.

Below, RED's KOTH mill and underground mine:

Red 5 KOTH goes back underground - Australian Mining [7-Apr-2022]

Disc: I do not hold RED or SLR shares. I hold GMD shares, who may also be interested in RED, as I discussed here earlier tonight.

16-Dec-2022: Commercial-production-declared-at-King-of-the-Hills.PDF

RED have provided an operational update and some production guidance for H2 of FY2023.

Their SP is currently unchanged at 18 cps. That's actually a decent outcome on a poor day for the market and the gold sector, with the entire sector either down or flat, except for the two non-currency-hedged physical gold ETFs (GOLD & PMGOLD) being slightly up. Many of the producers are down between 2 and 5%, and yesterday was also a day of mostly red. Not a good week for the sector.

As I said when Pantoro (PNR) announced their first gold pour at Norseman recently, these minor milestones are good, but they don't tend to cause massive positive reratings. What will be far more important for RED is the reliability and production numbers at KOTH over the first year of production. The market will be looking for them to hit or beat their ownn guidance obviously, and for no major problems to develop at King of the Hills (KOTH).

Disclosure: I do not hold RED shares, although a good number of my holdings are in the Red today.

24-June-2020:  Operations, production and guidance update

So far today, RED (RED 5) are down almost -34% on this downgrade.  Not everything that glitters...

I lost money on RED when they were mining gold in the Philippines - and now that they have their gold mines in WA they are just doing it all again.  Overpromising and underdelivering.  All very underwhelming. 

There are always plausable excuses, but in the current gold price environment, with prices near 7-year highs in US$ terms, and making all-time highs in A$ terms, and with 25 ASX-listed Australian based gold producers (whose production is at least 70% gold) to choose from - plus another 140 ASX-listed gold explorers and project developers all looking to become gold producers as soon as possible, people don't need to be in a company like RED who are buying old mines and processing plants that the bigger players (like Saracen) have finished with, and then they struggle to get them running properly.  So many better companies out there.  I can understand why people are dumping RED today.