Ann: Cornerstone Investment Update, page-41

(got asked by the Mod's to state this is my own letter, which it is)

The following is my own letter:

Dear ASX,

I refer to the following:

ASX LISTING RULES Guidance Note 23, Section 9;
ASX Listing Rule 12.2 ‘Financial Condition’;
GMC’s Quarterly Cash Flow Report (Appendix 5B), 01/02/2017; and
GMC’s Quarterly Cash Flow Report (Appendix 5B), 31/10/2016.

GMC have reported a net cash outflow from operating activities (Appendix 5B, item 4.2) of:
$0.557M for the September 2016 quarter; and
$0.913M for the December 2016 quarter.

GMC have also reported as cash balance of $0.683M as at 31 December 2016 and have recently appointed the following full time positions (which will increase the consumption of cash):

• Operations Manager
• CFO Full Time
• Construction Superintendent
• Electrical Project Manager

Pursuant to Listing Rule 12.2 and Guidance Note 23, I believe it would prudent that ASX send the entity a query letter asking it to respond separately to each of the following questions and provide the following confirmations:

• Does the entity expect that it will continue to have negative operating cash flows for the time being and, if not, why not?
• Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
• Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
• Please confirm that the entity is in compliance with Listing Rule 3.1 and that there is no information that should be given to ASX about its financial condition in accordance with that rule that has not already been released to the market.
• Please confirm that the entity’s responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of the entity with delegated authority from the board to respond to ASX on disclosure matters

Furthermore if GMC are relying on funding from Pak Marthen, I believe it would be prudent for the ASX to clarify:
What additional assurances Pak will be providing to GMC, given that Pak has already entered into a binding term sheet on 15 November 2016 and has failed to honour his binding commitment to transfer USD $10M within 21 days despite the due diligence enquiries into Pak’s ability to fund the transaction as disclosed to the market on 15/08/206 via the ‘Response to ASX Query’.

Please feel free to contact me directly if you have any queries to wish to discuss.