cash flow, page-3

There has been conjecture by posters as to the possibility of the eventual takeover of KML by Ansteel. The recent $30 million loan from Ansteel with the condition of transfer to Ansteel of part of Gindalbie’s 50% interest in KML should the loan not be repaid in 12 months has had me wondering just how “friendly” this Joint Venture is. Consider also the longer it is drawn out until Karara is cash flow positive, the better positioned Ansteel is to acquire an even bigger percentage of the Karara JV.

Some posters have pointed out that Ansteel needs Gindalbie for its Australian "face", and that the government would not permit a takeover of Gindalbie or the whole of KML by Ansteel. I found this from the GBG share placement 2008.

Deloitte Independant expert’s report, 19 December 2008
Page 11
A subsection (the third of nine) under the heading:
Other terms of the Subscription Agreement and Deed of Amendment include:
Ansteel and Gindalbie will enter into a standstill arrangement whereby Ansteel agrees not to make a takeover bid for Gindalbie prior to completion of the Proposed Share Placement and similarly Gindalbie agrees not to solicit any bids during this period.

Wow! Just how trusting is that? I won’t shoot if you don’t shoot! (What the Australian government sheriff’s office may think is of no concern to us.)

Let’s hope there are no more delays (immaterial or not), the polishing circuit gets completed by end of June, the ships depart at four per week (when no swell), and the iron ore price gets back to the base $140 per tonne. If that all happens, then just maybe Gindalbie will be able to stump up the required $30 million and retain an “equal?” share in Karara. (I say “equal?” because of Ansteel’s 38% approx. share of Gindalbie.)

Let's face it guys/gals, Ansteel has the money and is calling the shots
James Cantankerous

I have downgraded to Hold from LT Buy. I would say Sell except at 13c you can buy four shares for the price of a postage stamp and still get change.