Dear all HC members: What follows is an account of an extended...

Dear all HC members:
What follows is an account of an extended conversation I just had with Andrew Meloncelli, the Company Secretary. Here are his qualifications, taken from the GXY web site:

Andrew Meloncelli B Com CA F.Fin FCIS
Company Secretary

Mr Andrew Meloncelli commenced his career with Pricewaterhouse Coppers and has extensive experience working as a Company Secretary for resources companies listed on AIM, ASX and TSX in the areas of corporate compliance/governance, finance, investor relations, prospectus fundraisings, systems implementation and taxation.

Andrew holds a Bachelor of Commerce Degree from the University of Western Australia, in addition is a Associate Member of the Institute of Chartered Accountants in Australia, a Fellow of Chartered Secretaries Australia, Taxation Institute of Australia and the Financial Services Institute of Australasia. Andrew was the founding Company Secretary of Novacoat Holdings Limited (now Decmil Group Limited) listing on the ASX in 2005 and is a former assistant Company Secretary of an S&P/ASX 200 Index Company.


You will be interested to hear that he does read HC posts and knows what is discussed here. I will also report that he confirmed that Galaxy has written to the ASX regarding the trading pattern and what might or might not be going on there. Confirmed.

Andrew patiently walked me through the sequence of events leading up to the present time and what I post here is my understanding of what he told me. If you have doubts, I urge you to call him as well. Don't guess or suppose...ASK.

The concerns about the 4% Creat holdings are "rubbish" as he told me. It is just part of the process of the eventual 19.99% holding. On 10 February, there as a 90% re-approval vote for the tranche. It is a done deal and it will go ahead no matter whether the funds are raised by CRHL or not. Creat will underwrite the deal.

Galaxy expects to have the $25.6m banked in April.

Andrew pointed out that in June of '08, GXY had 1000 shareholders. Today that number is 6000. A cause for concern? Methinks not.

By July (about 14 weeks away), the company will be mining (not pre-strippiing...that's going on as I write) and they will be building their spodumene stockpiles. Everything is on track or ahead of schedule.

The plant in China will be completed in November and the first ore shipment will leave Australia in September or October. He pointed out that a clear advantage of the location of the plant, some 2 hours north of Shanghai, is that the distance from the underused port facility to the factory is about 400 metres.

Project financing is the most important aspect of any explorer's transition to producer. GXY is ahead of the field by many lengths on that account, and the entire Creat loan will be paid back within 2.1 years according to the modelling.

Finally, regarding GXY's admission to the ASX300: It is logical to assume that fund managers and institutional investors will be more likely to take a position in an ASX300 listed company rather than the obverse. Take from that what you will. And now it's time for my own take on the sp movement:

I believe that the suppression of the sp is being orchestrated by those very fund managers and instos. It's not conspiracy theory. It's just common sense to think this way: My fund will be investing in this ASX300 company when it is listed there in not too many day's time. I want to take a position in that company at the lowest possible price. I will short or do whatever is necessary to drive the price lower between now and then. Make sense to you?

Can't wait for the barrage of cynicism, but perhaps also for a few thumbs-up.

ST