re: as i said - macbank pick of the day My response to Cso1 on...

re: as i said - macbank pick of the day My response to Cso1 on SS Sabre.For what its worth.I am trying to be objective but when I hold Gip its a little hard to do so!

In reply to: cso1 on Thursday 03/11/05 09:34pm

Thanks for the clarification of the situation as it currently stands Cso1.

There are some interesting moves taking place atm particularly with regards to a consortium recently set up between ZFX/Mistu/HDN(http://au.biz.yahoo.com/051010/19/av23.html).With HDN's ground quite close to the Greenbushes facility,and the yet again apparent delay in the arbitration for the off-take contract price between Cabots and SGW administrators,one gets the feeling this might be coming to an ugly end for SGW creditors with the vultures starting to circle the SGW assets carcass.If the cash that the SGW administrators sunk into the mines(a while ago now)hasnt had the desired effect of upping mine/plant efficiency to a stage that prospective buyers would be prepared to fork over upwards of $300M(valued at $500M?) for these assets then one could be getting doubtful that a sale(at a decent price)or refloating of the assets will ever take place and that really only leaves one other option.Interesting however that ZFX/Mistu see a longer term value in the tantalum industry obvious from the above article.

One of the problems with these assets is the proximity of the mines/plant to each other.One has a dubious resource life(Greenbushes)but a large processing plant(2Mtpa) and the other(Wodgina)has a better mine life but with a smaller plant that no-doubt suits the off-take customer.One gets the feeling(and thats all it is a feeling)that because of these factors likely buyers of these assets will not be all that interested in maintaining them as a complete entity and we will eventually see a sale of these projects separately.

Sad for the creditors if it does pan out this way but it was forever thus in these situations of a collapsed company.Rarely does it ever work out in the favour of the creditors.Although ironically ZFX turned out to be just one of those situations and perhaps this might be why ZFX management might be seen as a white horse for the SGW assets.However one cant resurrect something if it doesnt have something to keep it alive and without a decent resource thats just where (particularly)Greenbushes stands atm.

sgw/d.