There are lot of new investors to GMC, so I thought I would bring you up to speed on the present situation as I see it, as well the opportunity that presents. I have included at the end the identified strengths and opportunities for investing in GMC. However, these are MY reasons, you need to do your own research and investigation.
However, nothing is certain in this world and risk is always present.
Please DYOR and GLTA.
GMC's Purpose: Develop Indonesia's First Premium Manganese Facility
1.Manganese
- Manganese is the 4th most used metal after iron, aluminium and copper.
- Manganese is essential for steel production: 85-90% of the worlds manganese is used by the steel industry.
- High-grade manganese ore reduces alloying costs by facilitating the reduction process in steel making and decreasing coke consumption
- Other uses: Dry cell batteries, agriculture (fertiliser), health and special alloys.
- Indonesia has substantial high-grade manganese ore deposits, which GMC will be processing.
- Demand for manganese is projected to soar 40% in the next 10 years through China's increasing urbanisation and continued industrialisation
- To understand more about manganese, see this 101 document
http://gulfmanganese.com/wp-content/uploads/2016/07/Manganese-101.pdf
2. Location
- Kupang is the capital of the East Nusa Tenggara (ENT) province and the capital of West Timor.
- After a recent site visit, Triple C identified that the location is a key advantage for operating a Smelting Hub.
- It is situated next to the power plant and within proximity to the Tenau port (about 5km).
- Scalability - High unemployment in Timor will provide a ready source of labour.
- Proximity to Asian markets
- You can see a fly through of the proposed plant - http://gulfmanganese.com/project-fly-through/
3. Construction of the Processing Plant Progressing
- Site preparation started in June 2017, with siteworks clearance.
- It has commenced construction, and is well under away.
- Construction is scheduled for completion in Q2 2018.
- Early start-up of Cash flow using low cost processing and Mn lump sales
- A five-year lease has been secured for the land, and rent has been paid for upfront.
- Power supply which is in close proximity and a contract has also been secured.
4. Cashflow via DSO (Direct Shipped Ore)
- Sale of Direct Shipped Ore (manganese concentrate) during construction phase has the potential to be a significant near-term value catalyst targeting commencement of first sales Q42017.
- Offtake agreement signed with Renova Group for the sale of up to 60% of manganese alloy to be sold through Renova marketing subsidiary Afro Minerals.
- DSO sales to potentially generate between US$1-1.5Â million per month starting Q4 2017.
5. Low production costs
- Projected production costs are 20% lower than the industry average with projected margin of USD20 million per annum USD700/tferromanganese alloy.
- Expected to receive tax free status for the first 10 years of the project.
- To begin with GMC will be utilising two refurbished smelters to commence operations, with revenue earnt to expand smelters from 2 to 8 over the coming years.
6. Supply Contracts in Place for Manganese
- Supply agreements in place to under-pin Manganese ore supply with four local manganese mining companies for supply of ore additional agreements to be confirmed in Q4 2017.
7. Strong and experienced management team
- Experienced management team in mining and processing resources.
- Knowledge of Indonesian language and culture.
- Knowledge of setting up processing operations.
- They have skin in the game, and the CEO has recently increased his stake in GMC, if management lose, they lose.
8. Community Engagement
To be successful, GMC have put in place several initiates to mitigate the risk of having a processing plant in a foreign country, such as Indonesia including:
In fact, the development of the Kupang Project will provide a number of socio-economic benefits to the Kupang area and wider community, including:
- Significant levels of ongoing direct employment
- Employment of contractors and sub-contractors
- Improved local infrastructures
- Staff training and education programs
- Use of local professionals
- Social development funding to be spent in the area.
- Gained multi-level Government support.
- Local workforce to be trained and utilised where possible
- Several key positions for locals
- Putri Nukartini. Legal Advocate and Government Liaison - Indonesia
- Louisa Taulo, Operational Manager - Indonesia.
- In July 2017, before any civil works and land clearance program commenced a blessing ceremony was held in July 2017.
- Appointment of a President Commissioner of wholly-owned Indonesian Subsidiary, PT Gulf Mangan Grup ("PT Gulf"), Mr Iskandar Ali. https://hotcopper.com.au/threads/ann-gulf-to-appoint-president-commissioner.3681534/#.Wf8GkbpuLIU
Iskandar Ali's appointment will bring to the Gulf team a wealth of local knowledge, political expertise and business acumen during this important phase in the Company's development.
"Mr Iskandar Ali B.Econ.Sc, MM. is a retired two-star general in the Indonesian army with a military career that spanned more than 30 years, a former local politician and is an alumnus of the National Military Academy in Magelang, Central Java (Class of 1975). A highlight of Mr Iskandar Ali's career was his appointment as the Chief Financial Officer for the Indonesian Army from 2001 to 2004. His final assignment in the Indonesian Army was as a Senator at Parliament House, representing the military faction in 2004.
Since his retirement, Mr. Iskandar Ali has remained active within both the political and business communities. He is one of the founders of the People's Conscience Party in Indonesia and has held the position as President Commissioner at PT Goodway International since 2013. PT Goodway is listed on the Indonesian Stock Exchange under the name PT Hotel Mandarine Regency Tbk. It is an Indonesia based company which owns and operates hotels, namely the Goodway Hotels. Complying with licences and approvals."
9. Market Analyst Report – Target Price $0.028
10. Identified Weakness & Threats
Weaknesses
- Limited Indonesian proven mineral resource base (JORC) to underpin development.
Threats
- First smelter to market will gain a strong hold on ore supply
- Other companies entering the smelting business
- Potential loss of export of other permits if milestones not achieved.
11. GMCs Next Milestones
GMC have stated that their team is solely focused on prudently managing the development of the Kupang Smelter Hub Project.
Fourth Quarter 2017
- Complete Civil & Structural Engineering
- Commence operator recruitment and training program
- Asian Investor Promotional Roadshow
- Receipt of all building and regulatory approvals for Kupang development
- Completion of smelter refurbishment
- First two smelters shipped to Kupang
- Arrival of furnaces in Kupang
- Continue evaluation of Indonesian ore sources.
- Commence DSO sales.
First Quarter 2018
- Establish Community programs
- Continue site construction
Second Quarter 2018
- Complete Site Construction
- Commence furnace commissioning.
* Disclosure I hold both GMC & GMCO
