Red 5 (formerly Greenstone Resources)

RED have just announced they are going ahead with a shareholder purchase plan to raise funds to follow-up at Indee and initial drilling at Siana (Philippines). Indee is a good project, but I think Siana is where the main game will be at in six months if initial drilling comes up with the goods. Driling results probably won't be out till Xmas.

A snippet from ASx report 25 Sept:

'The initial drill holes will be targeted at three highly prospective areas in the vicinity of the current Resource. Deep (500m+) diamond drill holes will be drilled below the current Resource to test the
down dip extension of the mineralisation and to test a new high-grade target that has been indicated from previous underground sampling. A second zone will be tested along strike and north of the Resource. A
third, bulk-tonnage, target north-west of the Resource will be tested with drill holes to a depth of approximately 150 metres. The drilling of this target is designed to confirm a number of previously recorded drill intersections including 158m at 2.4 g/t Au and 48m at 4.9 g/t Au from or near surface.'

And a bit of history of Siana:

'The Siana Gold Mine, located in the established mining region of Surigao del Norte, has past production totalling 4.9 million tonnes at 6.3g/t. Open pit mining ceased in 1990 following a pit-wall failure, and flooding after continuous cyclonic rains. Earlier underground mining operated to a 9g/t cut-off grade leaving large
volumes of mineralised wall rock in-situ.

The property benefits from favourable infrastructure including grid power, easy access to the national highway and major regional city and port proximity.

Siana is located in a richly endowed mineral field with numerous epithermal gold systems and porphyry copper-gold deposits including the recently announced 15 million ounce gold equivalent Boyongan resource, owned by the Anglo American/Philex Gold Joint Venture and
located six kilometres to the northwest'.

Although any estimate at this stage is a guess, I think that Siana and its immediate surrounds could easily be a 3 million oz plus resource at grades of 2.5-3 g/t. However, RED's objective over say the next 18 months might be restricted to getting to say a 15 mt reserve, sufficient to support financing for a 2 mtpa operation. This is just my view.

Red 5 have slide show in their website for anyone who is interested:

http://www.red5limited.com/database/july2002brokerpresentation.pdf


Angus

I hold RED