bear market... where does gbg stand

Some companies have, and will, outperform in bear markets but this bear has far more sinister underlying problems that could prolong the agony for investors. Nevertheless, companies who can deliver the goods and increase EPS in this environment will always be looked upon favourably.

GBG is telling the market they have virtually everything in place, including the funding and the the upcoming Karara 1st stage EPA approval.

Having locked in offtake aggreements, KML have their first 11mt of product already sold, no matter if the global economy does slump for a few years and IO demand slows. Maybe demand will slow significantly, maybe it won't, Instos are currently betting it will, and they control the markets, hence its poor performance.

At the risk of sounding like the rampers on the SDL thread, GBG over the next 3-4 years, should by rights, be an outperformer. Especially considering it will be starting from a position of nil earnings now in FY09, to one of $0.60 - $0.80eps by FY2012. Being a >40 year mine(at higher production rates) with good growth prospects, it should then be awarded a reasonable PE.

Not much doubt GBG can eventually prove up at least 4-5 billion tonnes magnetite from their JV and 100% owned tenements.
Hematite resources will be over the 100mt mark before they even start shipping and they will prove up more hematite quicker than they are able to dig and ship. At the forecast 3-4mt hematite shipped p.a., the resource will be growing far quicker than it is being depleted - so the mine life scenarios presented by GBG are fairly conservative.

Within the next 4-5 years, GBG will most probably have proved up a 2bt "hematite equivalent"(in their terms) resource on their tenements, and at $10pt inground, that's $20b. GBG's share may be $10b, but that still represents close to a $20 share price on an inground valuation alone. Add a valuation from recurring earnings and it's possible to foresee above a $20.00 share valuation in that timespan.

So, with a current diluted MC of just over $0.5 billion, there is a lot of upside and while some have said there is no logic or reason to the current shareprice, there actually is, but that logic will eventually take in to account the fact that while the global economy is slowing, some companies are pressing ahead.
Even if future IO prices halve from their 2008 level, Karara is still an economically viable project as the BFS showed. Will IO prices halve in 4-5 years time? Who knows, but current trade predictions don't indicate that.

***** While all the above sounds entirely possible, it has no influence on the short term share price and it may never come to pass, so please do some research like I have... and don't believe everything you read! *****