1.1: Company Overview: Red 5 Limited (ASX: RED) is engaged in gold mining and mineral exploration activities. Its operations are located in Western Australia’s Eastern Goldfields Region. In June 2024, the company merged with Silver Lake Resources. Kalkine’s Gold Report covers the Investment Highlights, Management Insights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.   

1.2: The Key Positives, Negatives, Investment Highlights, and Risks:

1.3: Top 10 Shareholders: The top 10 shareholders together form ~33.74% of the total shareholding. Van Eck Associates Corporation and Regal Funds Management Pty. Ltd. are holding maximum stakes in the company at ~9.20% and ~5.16%, respectively.

1.4: Key Metrics: RED registered an EBITDA margin of 31.4% in FY24 compared with 22.7% in FY23. Below is captured the metrics showing the trend of cash and current ratio:

2.1: Recent Business Updates:

2.2: Financial Insights:

2.3: Historical Financial Trend:

4.1: Price Performance and Technical Summary

The stock price has gone down by ~15.28% in the last one month and over the last 6 months, stock prices declined by ~10.29%. The stock has a 52-week low and 52-week high of AUD 0.205 and AUD 0.495, respectively, and is currently trading below the mid-range of the 52-week-high-low levels. RED was last covered in a report dated ‘5 January 2023’.

4.2: Fundamental Valuation

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 3 September 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.    

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.