Not looking good for GMC, page-258

Vegies

I would not take too much notice of mr wise as he has been in and out of this stock several times, when he is in it is gold and when he is out it is tin.

There are some issues with it that I see

When asked recently how much finance was needed to get all 8 furnaces up and running one user 'guessed' 30 m and another wrote 30 - 40m

However the CEO in Perth only a couple of weeks ago said it was 40 to 50 m just to get the first 2 completed and the 3rd and fourth up and running. That means over 100 m is required to get all 8 up and running which is a lot for a stock with currently no revenue and a MC of 25m

The DSO is for 103k tons per year for 3 years and none has been sold to date and the last price I saw that GMC was paying for the ore was $3.25 dmtu. The price of high grade ore is currently $3.77 dmtu and has come down by around 50% this calendar year so they are not going to make much if anything from the DSO at current prices.

Also the recent presentation for the furnaces shows they expect to sell the alloy for $1900 per ton but again the price is well down on 18 months ago and is nowhere near $1900 per ton now. The furnaces are fully refurbished but are old technology and are not low cost so initially at least will run at a loss. The costs where published some time ago so are in the public domain should you care to check.

So the main issue as I see it is neither of the product streams will make any money at todays prices so why would anybody finance them? That will not always be the case and alloy prices are expected to recover in the second half of 2020 but you will struggle to finance a project based on that.

I think this is the reason GMC has made zero progress this year and to be honest I think that is the best they can do, sit and burn as little money as possible until the product streams become profitable.

I wish the long term holders good luck with this but too risky for me.