gindalbie metals - a rational analysis , page-46

Hi SuperWealthy
I have to agree that things are not looking too flash for GBG. My forecast is that Ansteel will continue to lend money to GBG and convert to shares in Karara until they have perhaps a 70% controlling share of the Joint Venture.

Quote from Karara Operational and Funding Update 30 April 2013:
“Ansteel has also granted an option to purchase the second $30 million loan at its face value (plus interest at a rate of 6% per annum). The arrangement replenishes Gindalbie’s cash reserve to more than $35 million and provides a significant timeframe to investigate options to accommodate exercising the option to purchase the loan, including the sale of its lodestone Magnetite Project and/or the development of the Shine hematite DSO project.”

So before the loan GBG had just $5 million in hand.
When I bought my first parcel of shares in January (at 34c)on the news of the first magnatite shipment, many on Hot Copper claimed the last CR at 25.5 cents to raise $40 million from instos and $22 million from Ansteel was an unnecessary dilution of shares as sufficient funds were on hand to see us through to cash flow positive.
Now, after GBG has said “no material issues” and “broadly on budget”, in reality GBG is skint and Karara (KML) may be short on funds to pay the $60 million interest due in November.
Just how much cash is Karara holding, and what effect does the amount of $22 million payment withheld from a contractor for “non performance” (my words) have? Golly gosh, wasn’t this problem a “material issue”?
Is anyone able to construct a Statement of Funds for GBG and Karara?
I could do GBG’s side: $35 million less $30 million loan = $5 million.
It is the Karara figures we know little or nothing about and for which GBG will be required to stump up 50% of funds whenever required, and we just don’t have it.

If the nine ships lined up at Geraldton don’t sail at three per week to produce some income, then I will consider selling down at a loss. GBG looks like a great story, but the last pages may be missing.

Jim, really cantankerous, getting mad as hell at management spin