So does this mean that the next announcement is the Stage 2 decision?
From the articles regarding where Ansteel believes that IO price is headed and now having control of the mine this would mean that there is nothing standing in their way to expand the mine to bring down costs while the IO price is falling.
What GBG management need to understand is this is not a green light to spend the $35 million on marginal projects that will not be able to secure funding to progress to funding. They instead should utilise the funds to continue to invest in the expansion of Karara or to bring a cracker of a project to shareholders to restore the wealth destruction.
What management have proven is their inability to take an exploration project to production without the wealth destruction of minority shareholders.
The question is now that management have confirmed what the market already knew, ie that GBG would be diluted within the next 12 months, this does not put GBG in any better position other than to confirm that there will be no need for a capital raising in the short term.
With 47.5 million shares short sold some may be unwound as the share price may have found a floor, but it is not realistic to beleive that we will see the share price recover (other than an initial spike of shorters closing positions) considering the negative sentiment of the IO industry.
Until costs and revenues are disclosed it will be difficult to see the current status quo changing.
GBG Price at posting:
9.5¢ Sentiment: None Disclosure: Held
