Thoughts on Red 5 LTD (RED)
Hi James and Team Can we have your current view on Red 5. Since the Red 5 and Silver Lake Resources merger Red 5 seems to have come off more than other gold stocks. regards Debbie
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Answer
Hi Debbie,
As with any deal, there are some risks and this is being reflected in the underperformance by RED. Silver Lake is running down older mines at this stage, and cost blowouts are common as mines age. Also, changes to the mine plan at KOTH pose a threat, and as we know markets hate uncertainty. We remain positive towards the gold sector but anticipated ongoing volatility by RED as investors second guess the success of the merger.
- MM is long new look Red 5 (RED) in our Emerging Companies Portfolio targeting 60c.
