4c qrtly, page-12

What I'm struggling with is how to work out the potential short term and longer term earnings...

1. GB Galvansing Pickle Liquor

Processed 5,000 litres, another 25,000 in process (or in store) and another 20,000 litres to come (for intial trial of 50,000 litres). Producing iron oxide, zinc,gypsum. How much and what is it worth?

The next stage (if phase 2 works) is expected to process (at least) 1,000,000 litres per annum (for a capex cost of $2.85m). Would be interesting to understand cashflow projections based on baseline commodity prices. I'm not sure even how to work out a ballpark figure for this (can anyone else help).


2. Zeehan Residues

Well they've finally got a way of dealing with the EAF dust liability. They have stated that the cash revenues from the blended export will be limited, however in my mind the worth is in reducing their liability and getting part if not all of the EPA bond back. 12,000 tonnes to be exported in Feb (but how much of that was EAF dust??) and they have 36,000 tonnes of the stuff. So even if the export deal was even slightly EBIT accretive then brilliant. So how long will it take them to reduce their stockpiles? Can they get a partial refund of the bond as the liability reduces? Every $1m dollars is worth about 0.5c per share and it all goes to the bottom line. So longer term (how long, not sure) this is worth 2c + to SP.

3. Middle East project

Not enough information to do any calc on short or long term worth??

4. Anglo Gold Ashanti project

Again not enough info to calculate anything meaningful but they have stated in their forum that even if the intial study was very succesful there is no current revenue project there - so must just be consulting fees??


5. Green Resources

They still have 7 % of this. But 7% of what? Are there any short or medium term revenue generating optons that are being explored??

6. Brown's Sulphide project

Isn't this on hold?


7. The great news is NO DEBT and CASH in bank of $4m (worth 2 cents per share).

8. and finally the other good news is they'll start getting cash from BSM for the royalty payments in Sep 2011. Thats $5m



So my rough calc of current value based on above (with all the questions and uncertainty) is:

Cash = 2cps (minus opex) so call it 1cps
Bond Refund = 2 cps
BSM = 1.5cps (NPV)

Pickle Liquor: 0.5cps (no idea, just a guess)
China: 0
Other projects:0

Total = 5cps

So IMO still undervalued at current share price and plenty of irons in the fire. But very much looking forward to their strategic review to get a clearer idea of where the short and medium term earnings are coming from as the realise alot of their known cash.

Apologies for the long post - but trying to get my head around it all.

Good Luck All

Maddoc