financing coburn, page-7

The forecast numbers for GUN look compelling but to use someone else's words, they have a "small company, big project" dilemma. Everyone negotiating with them knows the amount of cash GUN holds and their mkt capitalisation. Trying to sell 40% of the project for $50m+ (NPV @ 40% is $120m and rising) is a challenge. A lot of time has elapsed so the interested players are probably playing the game that "you need us more than we need you".

Although I hope the price of zircon will continue to increase to the point that someone will have to make a play (takeover or buy an interest in Coburn) an asset is only worth what someone is willing to pay for it. I doubt that a bank will finance 100% of Coburn so some kind of hybrid debt (convertible notes etc)coupled with a large equity raising (with some attractive rights attached to the shares issued I would imagine) may be the only option if a strategic investor does not make an acceptable offer.

I do feel that something may finally be occurring after many years of work and a lot of patience but now is really the time to resolve the financing.