fantastic news

My god, doesn’t anyone understand the significance of gsw’s post tonight on the Nuevo Leon school’s testing!

This is not just another Mexican article! It is the evidence that we almost have a done deal – and it also tells us the likely size of that deal!

To help explain this, let me go back a little – about 3 months....

....to the Disclosure Document for the Rights Issue (released late June).

This is what it said:

“SBL’s Mexican distribution partner has met with Mexican government officials and anticipates a decision regarding the roll out of the program within the next three months.

SBL is of the view that should the program be approved for expansion, no new orders will be received until at least the start of the new school year in September 2008”
In other words, whether or not new orders are received appears to depend only on the decision to expand the program. There is no mention of having to retender for the roll out (Diinsel, SBN’s agent in Mexico, won the tender for the pilot in 2007 against 5 other companies. It would be extremely unusual to go through such a detailed process for just 2,700 testing units, so this is not surprising).

So what has happened since the Disclosure Document was released?

Quite a lot - including the following:

1. The commitment to program expansion has been made. The Nuevo Leon Education Department (ie the ‘Mexican government officials’ referred to in the DD) decided last month to roll out the testing program in government schools (with the possibility of adding private schools at a later date), commencing late October

But this was to be subject to approval by parents.

2. Diinsel has applied to import ‘large quantities’ of Oraline into Mexico.

3. And now, courtesy of gsw’s post we find that parents have approved the testing and are cooperating with the Government in co-ordinating the program!

In other words, the testing program has the GREEN LIGHT and now we (and the NL schools system) are only waiting for the import license approval.

And there is more!

The article indirectly reveals the number of first round tests. It is around 22,000 (or more than total world-wide sales of Oraline the whole of the last Qtr).

How so? Well, there are 220,000 secondary school students IN 830 schools in NL. Tests will be undertaken in one quarter of these schools (200) and are, according to the article to be applied to around 33% of students in each of those schools. In other words, around 10% of all secondary school students – or 22,000.

They are doing it efficiently – 33% of students in 200 schools is far more cost-effective than 10% of students in 800 schools.

So for me, an order of a minimum of 20,000 to 30,000 units first up (pending import approval) is as close to a certainty as you can get.. And while that number is not huge, it is symbolically important, as the first significant footprint for a saliva testing program in South America. And, of course, it will be a model with substantial flow-on potential – not just to schools in other Mexican States but for non-school purposes as well.

Some – maybe many - of you may have to hear this from the company to believe it. Be that as it may. (And you will – but only when the deals are done and dusted. Which is the way it should be).

But here you have it – big and almost certain news - from gsw. and myself with the SP at a measly 1.2c! (Who needs the company announcements! You hear it first here. LOL).

It is imminent and provides a fantastic opportunity for anyone with the eyes to see and who is not yet set.

And the good thing is, this is just the entrée. With the main course (SiYi), dessert (Oraline 8) and port and cigars (Russia, Poland, Latvia, UK etc etc) still to come! And very soon at that.

Go SBN!