Ann: Gulf Finalises Terms for US$10M Cornerstone Investment, page-179

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MasterPiccolo

1,162 Posts.

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04/12/16

07:26

Post #: 21087467
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Originally posted by tt2000 ↑

There are roughly 1.2bn shares.

in 21 days an investor is subscribing to 10% equity for a $10M USD cash contribution

In 21 days, (assuming the investor comes through on their agreement - which has now been finailsed)

1. GMC will have a cash backing of $13M AUD / 1.2bn x 0.90 (90% interest) = $0.01

2. If the investor is valuing 10% at $13M AUD, then it figures he must value 100% at $130MAUD
130 x 0.90 / 1.2bn = $0.10.

The other important thing here is that someone with USD$10M isnt't just going to be throwing it away, he will no doubt be expecting a return on this, so it is very likely that this is his lower end of his valuation.

GMC will have enough cash to purchase the 2 smelters, they've signed supply agreements for 1,000 tonnes per month from 2 suppliers of manganese and from the investor presentation will be cash flow positive from middle of next year.

Have a look at management's cash flow forecasts on there...

Once GMC has the $10M cash in 21 days, it should be in for a re-rating as it closes the discount to the $0.10 Investor's valuation.

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Looking forward to the coming re-rate this week and the weeks to follow as GMC becomes de-risked with strong cash flows. Also anticipating operational updates to flow through steadily now that funding is a lock.

GMC Price at posting: 3.1¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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