I wouldn't be investing into GBG simply because it has the infrastructure
When you think $2.5bn infrastructure asset, also think $2.5bn debt for the JV
Really the value of GBG lies in cashflow and the infrastructure is not worth anything until they clear the debt
If the JV were to liquidate today, it would not be able to sell the infrastructure for $2.5bn to cover its debt
That is why GBG is at $250m.
So no I don't believe it is ridiculous because of this.
If however you believe GBG will not trip over itself and will deliver to production targets, then yes this SP is indeed ridiculous. If GBG can successfully ship magnetite at 8mtpa - the cash flow report in July will be a yardstick for valuing GBG on its cashflow
That is when you will see GBG realising its value. Until then, be prepared for the worse and hope for the best!
GBG Price at posting:
20.0¢ Sentiment: None Disclosure: Held
