announcement out, page-6

hi smilez, you mentioned grades and only high grades will take us back to where we were, oddly enough this announcement relates to the Bungalein site where we did actually get very good results, there is enormous potential here.

to todays 1 seller in the auction time, YOU FOOL, why on earth sell down 8% at the close of the day???
with the announcement today perhaps shoring up funds for a while and PERHAPS no capital raising to be done in the near future, find it a very unusual sale.

we dropped more today on a supposed good announcement than we did on the poor T1 and T3 results, oh brother.

to todays annoucement, were do i start, please persist with me here, tell me if i make any sense ( probably make more sense than todays announcement )

We have a new option to aquire GBMs phosphate Assets, Singapore based Swift Venture Holdings Corporaton.
my god, our previous proposed phosphate JV was with Resource Kings, also from Singapore. I tried to google this company and got nothing, guess what, snap, cant find anything on SVH.
Where do we find these guys, have GBZ put up a notice board in Singapore suggesting JVs and all we get are tin pot companys replying, will these guys have the money this time????

OK, move on to the second paragraph of todays announcement.
SVH acquire 80% interest in the phosphate assets by subscribing for a placement of 28 million shares at an issue price of 10c and 28 million options exercisable at 20c on or before 30/6/13. Total subscription value to be paid by SVH is $2.8 million.

Where to start here, firstly this is an 80% interest, the Resource Kings deal was 90% so a slight improvement, remembering on 6/4/10 the announcement to state the JV wasnt going ahead with RK stated " phosphate assets are increasingly valueable particularly in an improving market and we remain confident of attracting a strategic partner to further development of the asset", well that has PERHAPS been achieved while retaining an additional 10%.

But what is eating me here is the 28 million shares they will get, ok , we will get $2.8 million but look at the dilution compared to the Resouce Kings deal when only 8 million shares would have been issued, how is this a better deal??? they will own a larger % of GBZ than Resource Kings would have and they have only coughed up $200k more and sacrificed 10% of the site.

What disturbs me greater though is the 28 million options exercisable at 20c before 30/6/13. this sounds very much like the strike price of the options entitlement we havnt even voted on yet?? what the hell. Are these unlisted options or will they be listed if the options entitlement gets up??

OK, next paragraph.

SVH has paid $280k for a 60 month option until August 30 in which to complete due diligence and pay the balance of funds totalling $2.52 million ( and get 28 million shares )

Will this date be met, we will see, the last time the phosphate deal came up this was put before shareholders for a vote by the way, this time no consideration, and then preceded to be 2 months late, lets not even touch the PPC deal punctuality.

Next paragraph

of the placement funds, 600k allocated to phosphate exploration which GBZ will manage. GMN retain 20% free carried interest until completion of banking feasibility study. so basically of the $2.6 million we have to spend 600k or almost quarter of the funds we got in exchange for 28 MILLION shares coming out of our pocket??
and i have a big question mark over the 20% figure.

on 22/7/08 we announced that we had purchased these tenemants off Newcrest Mining with a 2% royalty to be paid on the successful mining of minerals on those sites.In the announcement on 10/11/09 regarding the first JV attempt it mentions a 2% royalty, nothing mentioned this time.

I have read the announcement regarding our purchase of these tenemants and i can see nothing to state we dont have to pay a royalty. Manangement may not have mentioned it as this deal is up to completion of BFS, while the Resource Kings deal talked of RKs responsibility for all further development and mine related costs after an initial 635K spent of the $2.6 million we would have received. So if this deal is up to BFS stage, who pays for the development and mining cost???
this deal is very similar to the previous deal, this is one slight variance, who coughs up the dough to go mining.

and once we have spent our 600k, what then, who will be responsible for further drilling, surely they wont go, yep, that 600k of drilling is great, i will start up a $50 million mine!!

Next paragraph

if option is not exercised GBM will retain the option payment and SVH will get 2.8 million shares issued at 10c AND 2.8 million options exercisable at 20c

WHAT THE HELL?, this is mind boggling, who is the salesman here, for a poultry 280K they will get those shares and options if they walk away. WE HAVE THE ASSET, the $280k is for their right to do due diligence,nothing else, this is what you get when you have accountants and geoligists running a company.

why will they get those shares, NO NO NO!!!

This smacks of desperation, yes it avoids doing a capital raising if SVH take up the option, but boy, how much are we giving away??

I give this announcement a 2 out of 10

we may have avoided a capital raising and we gave up 10% less of the land, but there are more holes in this announcement than swiss cheese and poorly written.

what do other holders think, am i being too critical, please point out the well written, no holes statements.

finally last paragraph, phosphate assets have been leveraged to potentially raise funds at a premium to GBM current price.

Its announcements like todays that make this at a premium to our current price, overall i think WE have been leveraged. what will SVHs due diligence entail, checking out our other prospects like Milo, Malmsbury,T2 perhaps??

sorry, not happy with this one.