RED’s 3QFY24 result was solid with gold production, gold sales and cash balance all within 1% of our forecasts. Production was down sequentially, largely due to planned and unplanned maintenance of the process plant at King of the Hills. We reiterate our BUY rating on RED and lift our price target 2% to A$0.51 to reflect further strength in gold prices and reiterate our BUY rating. Progress on the proposed merger with Silver Lake Resources (SLR AU, HOLD, A$1.50 price target) presents the key near-term catalyst for RED. We note that RED and SLR are currently trading broadly in line with the proposed 3.434:1 merger ratio.
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