Far East Capital Newsletter
Red River - a welcome success that is yet to be acknowledged in the market
29 Jun 2019

In This Issue


Red River - a welcome success that is yet to be acknowledged in the market

As our financial year comes to a close it is difficult to find much to complain about. The Dow has had its best June Half since 1938. Our All Ords and Mining indices are hitting new highs. The iron ore and gold prices are looking strong even though the trade war dominates the news. Who said that the war was bad for business? The Sabre rattling with Iran and other international spats are not causing the markets any concerns. It seems that all the doomsday fears have been swept aside.

Looking at the bottom end of the market we are once again seeing that new stories are offering much better pickings. The best strategy is to dump those companies that have failed to live up to expectations. Remember that this end is more akin to gambling given the risks, the challenges and the untruths. Abandon those companies that have been stuffed full of stale bulls and look for companies that have tailwinds rather than headwinds. Avoid those companies that are running out of cash with share prices below 2-3¢. Expect more rare earth stories to come to the market but remember that the scramble to gain the spotlight might just be that. Picking up a prospect isn’t a guarantee of success in any commodity, even if it does breathe some short term life into a share price.

We first mentioned Red River Resources (RVR) a few years back, in about 2016, after a site visit to the Thalanga zinc mine up in Queensland. It was then that I heard the plans that Mel Palancian and his team had to reopen the zinc mine that was previously operated by Kagara Zinc. It all sounded reasonable enough at the time but the Company still had a number of obstacles to overcome, with finance being the most intimidating. Re-commissioning still had to be undertaken. Fast forward three years and I can report that the Company seems to have delivered as promised. 

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