giddy up !, page-168

Stoeger,

I don't agree that the company is relying on the lenders to keep the door open. I think it is the other way around and the lenders are relying on the company to keep the door open. All of the company's debt is in the form of notes and I don't think these lenders have much control at all.

There has been a lot of comments about negotiated agreements to the covenants for the $120m credit facility but Boart announced in its annual report that none of that facility was drawn upon at December 31st. That credit facility is there to keep this company alive should the situation worsen and the Board has managed to keep it there and available.

I do agree that it is massively risky right now. But I think it is like backing a horse at 5 to 1. In my view the company will either go broke or it will eventually recover and if the latter happens, the share price will almost certain go above a dollar. This company which still claims to be the world's largest drilling company has a market cap only just above $100m and that figure will fly if things turn good. That market cap was $2.2 billion in early 2011. If mining does get to return to where it was back then, just imagine what price Boart would be.

The Boart shareholders are very dependent on the gold price in my view. If it falls below a thousand and stays there for any length of time, we will most likely be dead. If it recovers to $1600 or so, then our bet will win. Like most punting, you lose the lot or have a big win and that is where we are right now. I don't know what is going to happen to gold - wish I did.

With these odds, there is a chance that somebody, with better finance, will make a bid for our horse while we watch the race.

GPASAS