Ann: Karara Operational Update , page-18

It's fairly obvious that if KML is to be an ongoing concern into the medium to long term future, then Phase 1 production won't cut it. They'll have to double down to at least Phase 2. It's a question of economies of scale to make the thing viable long term. So, yes, the filtration issue and it's impact on the dry tailings system will need to be resolved and one would think within the next 12 - 18 months.

I think Ansteel will continue to support KML, and if that happens, then for GBG, it's just a question of what % they end up retaining.

It's worth looking at a hypothetical scenario where GBG's stake in KML is reduced to 20% of a 16mtpa operation. KML's debt balloons to US 3bn, after Ansteel loans and presales are converted to equity. KML's interest cost per annum is US 180mm. FE benchmark price is USD 100 per tonne, KML's EBITDA per tonne of ore is US 20. After depreciation and amortisation, and tax (could be a paper loss) KML apply the free cash to reduce debt.

Hypothetically, GBG would be looking at earnings after interest expense (but before tax, depreciation and amortisation) attributed to it's share of KML at US 28m or $0.0186 per share. But of course the free cash flow will never flow out of KML until it's debt levels are substantially reduced.

Feel free to blow apart the above, but the scenario is useful to highlight that GBG's current share price may be as much to do with conservative estimates for future earnings as it is to do with it's immediate financial viability.