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Chinese player swoops in on embattled WA lithium miner, page-50

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atom99

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30/11/19

13:18

Post #: 41725940
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Originally posted by red-frog: ↑

Rob, I’m not sure if all GXY’s shareholders would be furious if funds were diverted to buy an existing business that will enhance their own existing business also.

The replacement cost of the plant and the cost and time factor to prove up a new deposit, then get approvals is huge.

The best time to buy an asset is usually when it is in distress. No point buying in a boom and paying top dollar. GXY’s share price is low in reflection of the market conditions, though the chance to leverage off a distressed asset more than counteracts the sp imo.

Buying the debt for a small amount of interest wouldn’t have been at the forefront of GXY’s mind when handing over the $40m. There is no more security of the previous investment by purchasing the debt as they are still only another shareholder, unless they get involved in the process. They lose big time if A40 is liquidated. Yes, they eventually get back the debt plus some interest, but that’s it.

Anyway, we will all find out what the GXY board have in mind very soon.

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https://www.watoday.com.au/business/companies/chinese-player-swoops-in-on-embattled-wa-lithium-miner-20191129-p53fgc.html

A40 Price at posting: 8.2¢ Sentiment: Hold Disclosure: Held
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