'Why would GBG need a cr? It is shipping ore to China now, revenue will start rolling in soon. ?????'
Simple as I said its a JV that receives the money for shipping the ore. The JV is an entirely separate legal entity to GBG. The JV is owned 50/50 by GBG and Ansteel, whereby both parties would have to agree to pay a dividend for GBG to ACTUALLY receive any cash for the ore shipped.
No one, at this point, can speculate if they would be in a position to pay a dividend during the year ended 30 June 2014, especially if the expanion plans go ahead. BUT as I said the dilution would be minimal, ie 20-30 million and we would expect our market capitalisation to be much higher.
SECONDLY:
If there is a significant cost blow out we are going to need to inject further capital into the JV entity. Both Ansteel and GBG need to do so (as has already happened). Our current Debt/Equity is about 70/30, so it is highly unlikely the banks would let us leveraged further with more debt. Therefore a dilutive equity raising would occur for GBG to cover there contribution requirements. I'm not saying there is a cost blow out, but its a risk. To date the quarterly indicates we are within the revised budget. Nevertheless its a risk, and I believe its weighing on our shareprice.
Let me know if this makes sense. I can try and explain it a different way.
*I haven't bothered proof reading any of this* :)
GBG Price at posting:
32.5¢ Sentiment: Buy Disclosure: Held
