Red 5 could be one of the most undervalued gold producers as well as one of the unluckiest

John Robertson


Red 5 could be one of the most undervalued gold producers as well as one of the unluckiest. Production in the Philippines should have begun in 2011 but unusually heavy rains flooded the open pit, delayed the start and affected production. A fault in the tailings wall forced the mine to stop just as it reached capacity for the first time in 2013. The plant is now production ready. Sufficient pumping and power capacity is available. Before the mine closure, it was slated to produce 75,000 ozs a year with a sub $400 cash cost. The company has received conditional approval to restart. Today, it said the conditions should be met by the end of 2014. It is well capitalised. It is assembling a group of capable operational executives. What's holding it back? Probably, fear of more bad luck.

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


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