GMC (ASX) Ann: Gulf Secures A$10.8M Cornerstone Investment

Originally posted by woltage ↑

Here's how I see it @ a share price of 0.022 (MC = $66 mill, therefore 3 Billion shares on issue fully diluted)

Don't consider the options
GMC gains $10 mill in cash, but the MC increases by $15 mill. To re-balance GMC needs to lose $5 mill in value = 0.0206

Do consider the options
GMC gains $13.5 mill in cash, but the MC increases by $30 mill. To re-balance GMC needs to lose $17.3 mill in value = 0.0181

So my guess is it will hang around these levels for a while or drift lower, cash depletion offset by progress in construction.

Expand

2.7bn shares and 1.6 bn options; plus
0.7bn shares and 0.7 bn options to investor
gives 3.3bn shares and 2.3 bn options

At o.022
3.3bn x 0.022 = $72.6M
2.3 bn option x 0.022 = $50M less the cash of 0.005 x 2.3bn (11M) = $39M
Adding the above gives $111M

Separately, on 12/03/18 GMC released announcement 'Gulf's Kupang Smelting Hub Facility Fully Funded' with terms of Convertible Note being:
The Convertible Note will automatically be converted into 25.1% of the equity of PT Gulf by way of
new shares to be issued by PT Gulf to PT JGI (“Project Investment” upon achieving the following
conditions precedent (“Conversion CPs”:
non-occurrence of any developments having or likely to lead to a material adverse effect on
PT Gulf;
The parties will endeavour to satisfy the Conversion CPs at the earliest possible time and in any case
not later than 31 August 2018. If the Conversion CPs are not satisfied or waived by 31 August 2018 (or by such later date, if any, agreed by PT JTS), the principal of the PT Gulf Convertible Notes becomes repayable by PT Gulf, together with interest of 15% per annum from that date to the date of repayment.

Given GMC have now signed another term sheet for $10.8M, do you think this means that the CPs above remain unsatisfied and GMC will have to payback the Convertible Note and lose the Standby Facility on 31/08/18.

If so, GMC would be heavily dependent on the term sheet with the investor for this $10.8M.

If you refer to announcement on 05/08/16, GMC previously signed a term sheet with Pak Marthen (an Indonesian investor).
On 09/08/16 GMC was suspended until 15/08/16 when ASX requested GMC provide:
Please advise what (if any) due diligence enquiries were undertaken by GMC on the financial and other capacity of Pak Marthen to perform his obligations in relation to the transaction referred to in the Announcement prior to signing the term sheet.
Despite GMC providing satisfactory evidence of the above, the deal with Pak Marthen still failed to complete.

I wonder if history will repeat - thoughts?