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0.6¢ gulf manganese corporation limited

Ann: Gulf Finalises Terms for US$10M Cornerstone Investment, page-120

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yuyu52

2,927 Posts.

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16/11/16

15:29

Post #: 20663825
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Originally posted by tt2000 ↑

Just had a chat with GMC directly, will summarise key points below.

1. The agreement with Pak has now been finalised and executed (in Indonesia this is notarised which has now occurred) and cash is expected in 21 days. All terms have been satisfied. The written recommendation from Bupati is no longer required as they have moved the location.

2. The agreement with the suppliers for the first 2 furnaces is binding (and will be notarised just prior to them actually starting the supply). There are numerous other supplies in Indonesia for the remaining supply.

3. I was concerned as to how power would be supplied beyond the 2 smelters (which will be powered from the grid). I was told that beyond this there will be a requirement for additional power plant infrastructure but GMC were in negotiations where a party provides the power for a fixed rate for no upfront capital (i.e. the rate includes the capital charge). This means there is no capex requirements from the power point of view.

4. I asked about whether any other capital raising would be required. Was told that the $10M injection will be enough to get the 2 smelters operational after which GMC becomes cash flow positive. Thereafter, Pak has an option to purchase an additional 10% stake for $10M USD.

I raised some other points, but not as material as the above.

Whilst only a brief discussion, it did fill me with confidence that this whole Project seems to be planned in such a way to minimise capital requirements.

Bring on the 20 days and the cash.

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21 of business days or just 21 days?

tks

GMC Price at posting: 2.5¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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