ann out!, page-38

All,

Have to say that I agree with Gindaldan and more.....this was an f'ing terrible terrible announcement.

I always have been very positive for GBG/KML in the long term but this company needs to start telling it straight to the shareholders imho. This announcement is nothing more than face saving exercise.

Let's review. I am trying not to be negative here but given the reporting track record in the last few months here it goes....just my opinions only and purely speculation on the announcment.


'Polishing circuit completed and commissioning underway, representing the final component of the
plant to be brought on-line. Previously flagged filtering issue with the tailings system now fully
rectified.'

This means only one thing.....they have managed to build...BUILD..the polishing circuit. This thing was supposed to be commissioned by the end of April. It clearly states that they are only now commissioning it. It has only produced 'batches'....what are the batch size and how much actual 68% concentrate was produced????? It could have been two one tonne 'batches'?

I have built a plant to achieve first product by a certain date....we were contractually obliged to or incur massive LD....we then ripped the damn thing apart and put it together properly and finished construction. At least they have finished construction.


'Ramp-up towards nameplate 8Mtpa throughput capacity well advanced, with most key areas of the
plant having operated for periods at this production level.'

How long? which areas?? even more critically, what parts of the plant have not operated at this level??? It also goes on further in the announcement to reinforce the fact that only 'individual areas' had been achieving their own nameplate.

'Focus now on aligning and fully integrating all operating components of the Karara Concentrator to
achieve consistent and reliable steady-state production. This is anticipated to occur in the
December Quarter.'

They are no where near completion if they are only working on integration now!! This means that we have three more months minimum before they're even close to achieving nameplate!!! and that's if they stick to their revised revised revised revised revised estimate

'Shipments continuing with 80 completed to date for 4.8 million tonnes since start-up in October
2012, comprising 3.5Mt of DSO and 1.3Mt of magnetite concentrate.'

So they have shipped 370K tonnes of DSO and 340K tonnes of magnetite in the month. This is the only bit of positive news, 8.5 mpta run rate. At least they're sending some sort of tonnage out the blooming gate to halt the huge overspend on cash. I would hate to think were the budget now sits!!! 6-8 more months than expected and they're running at $75m short a month. No wonder Ansteel had to step in.....GBG would potentially be on their 6th or 7th cap raising/loan right about now if they hadn't. I reckon 9.5c would have looked a princely price if Ansteel had not bankrolled any further cash requirements. With hindsight you can see exactly why they did though, they would have lost another huge chunk of their investment in GBG without it.

Anyways, I am struggling to find reasons to not sell.