Red Eagle Swings, Hits
Red Eagle Mining went public a year ago at $1.25 a share. The company had two major former production projects in the heart of the Colombia gold district. Since then they have added another former producer.
Gold was about $1500 an ounce when they went public. Today it’s $100 higher. In general, gold exploration companies want one of two things: They want high-grade vein systems or lower grade bulk tonnage. Red Eagle announced 6 meters of 31.9 grams gold per ton recently. That’s a wonderful wide high-grade intercept. Then they announced a 35.5-meter intercept of 2.28 g/t gold. That’s a nice bulk mineable intercept. Take your pick, they have the best of both worlds.
I can’t help but wonder what the initial investors who paid $1.25 for the shares thought as Red Eagle did everything they said they would do as the shares plummeted nearly 80% to $.27 a share earlier in June.
I have been looking for a bottom for months now in gold/silver and the metals shares. As I predicted, we saw it in mid-May. It’s very typical that after a major bottom, the market will do a retest of the lows about 6 weeks later. I wrote about that recently as well. We have had what looks like a retest to me.
You profit in any sort of investment by seeing what others miss. It is beyond irrational for a company as solid as Red Eagle to collapse 80% when they are doing everything right and the commodity they are looking for is going up. That’s not a disaster, that’s an opportunity for those capable and willing to think for themselves.
This is the investment opportunity of a lifetime. The Bank for International Settlements is considering adding gold as a Tier 1 asset. That means Central Banks could use gold to back their required reserves at a value of 100%. Central Banks will start buying gold with both hands. That is a Sea Change.
Red Eagle is cheap now but it’s not going to be cheap for long.
Red Eagle is an advertiser. I have been to visit their projects twice. I like management; they do an excellent job of communication during what have been rough times. They have a strong cash position and are drilling. Look for more results down the pike. We are biased and you are responsible for your own due diligence.