GREY:RDEMF - Post by User
Post by
ts9222on Jul 14, 2017 4:03pm
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Post# 26471066
5 g/t
5 g/t5 g/t is usually not that good a grade for an underground mine. Their feasibility study used a $1300 gold price which is higher than the current gold price. As an alternative to praying that the mine will eventually become profitable, you might consider diversifying to a miner not far away in the same country GCM which is currently mining 15 g/t, 3X higher grade, and with production 2X what Red Eagle hopes to get. GCM just recently reported record production and continues to improve.
They are both currently valued at approximately the same enterprise value, so you are getting it for extremely cheap at current price. In addition, you get a 14 million oz deposit for free. Their PEA gave it a combined $1.6 Billion NPV at a very low $500 cash cost (because of huge continuous mineralization and access to low cost power line). Don't get fooled by their non-cash charges. Part of the reason it is so undervalued is people are afraid of the debt, but don't see that a large chunk of it (the 2018 debentures) will be converting to shares at the company's option at a much higher conversion price than the current market price.
It is just a friendly suggestion. An alternative to praying.