Fair enough. I can do a short version with less dramatics.
Galaxy declared a sub-holding in A40 in June. In early August, out of the blue, we get notice of a substantial impairment change on Mt Cattlin assets. The wording is strange and they hadn't even arrived on the exact figures yet.
Perhaps I'm wrong, but the announcement struck me and others here as odd. It would normally be a procedural item in the financial records. Why release it early?
However, in between June and August, Galaxy would have become aware that the A40 CR funds were not going to stop A40 from defaulting on the Tribeca loan. Or that Tribeca was getting very nervous about the debt.
There is, of course, an absolutely straight forward reason for write-downs but I'm also making it clear that it appears to indicate that Galaxy were planning a move on A40, preparing everything they would need in advance. The important thing was that they had their own detailed view of what Bald Hills may be valued at, via a comparative study of their own, not entirely dissimilar, plant.
If you read the last announcement from A40 about a request for a time extension, then you'll see that the issue of Bald Hill's impairment is exactly what receivers are now dealing with.
GXY Price at posting:
$1.16 Sentiment: Buy Disclosure: Held
