1 for 1 at 8c, page-31

There is inadequate information in the Chairman's letter to ascertain if
GXY can remain liquid after its $62 mil payment of convertable bonds in
November, IMO, so for the purposes of this exercise I have to make some
assumptions with little information.

Galaxy Study:

Market Cap: $140.9 mil

Assets:
Jiangsu.........$ 80 Mil
L1 assets......$120 mil
Mt Catlin.......$ 0
Total:.............$200 mil

Liabilities:
Chinese banks......................$117 mil
Conv Bonds..........................$ 62 mil
Total......................................$179 mil

Costs 2013
Corporate:...$12.2 mil
Salaries:.......$ 7.9 mil
Total:............$ 20.1 mil



Assumptions : Production-Revenue & COP to Nov 2013

Production:
May.................600 ton
June................800 ton
July.................1000 ton
August............1200 ton
September......1400 ton ( name plate 1417 ton/month)
October...........1400 ton
November........1400 ton

Total:................7,800 ton

spodumene req’d :
135,000 ton produces 17K ton Li-Carb approx.
Therefore 62K ton req’d to produce 7,800 ton Li-carb.
50K ton already shipped from Mt Catlin.( cost already accounted for)
Therefore 12K ton req’d ex Tallison @ say $400/ton = $4.8 mil

COP (to Nov) including 12K ton spodumene ex Tallison = $15 mil Approx.

Revenue : 7,800 ton x $6000/ton = $46.8 mil

Margin: $31.8 mil ( please note this a guesstimate only. I know that 2014
EBITDA is $20-$30 mil but this will contain $54 mil full spodumene buy-in costs ex Tallison)

Rights Offer say...........$45 mil

By end of November GXY will likely have $76.8 mil
and will have to meet $62 mil in Conv Bond payout which means, IMO, that
most of all other spending will have to be frozen.

Any hiccup in revenue, IMO, would see GXY partially default on its November
Conv shares' obligation.

Since this Rights Offer has more stick than carrot, the company ought to
run an Australia-wide Question and Answer phone link-up so that shareholders can publicly ask the CEO, CFO and Chairman the neccessary questions to
qualify risk before expecting shareholders to risk further funds.

I know that there will be a prospectus but that is likely to be a confirmation of the Chairman's letter rather than a detailed forward cashflow forecast.

I'm not an analysist, just an ordinary investor, and I ask considered comment
on the above guesstimate; not smart assed quips.It is difficult to estimate the cost of running a Chinese plant with 400 workers.

The company has a responsibility to shareholders to put all its cards on the table if it wants shareholders to step up and pay where the banks would not.

Thank you
Moorookamick