Hi Gindaldan, With good intentions, could I make just a couple...

Hi Gindaldan,
With good intentions, could I make just a couple of quick points on comments from your recent posts?

Future shares on issue will eventually be significantly more than the 704m GBG states. You often quote GBG’s figure but that only refers to shares “on issue”. Firstly, it does not take into account unexercised options. So to quote that in the context that you do, as a sort of maximum, is incorrect. There will be well over 800m from memory. Obviously too, as I’ve stated before, Ansteel’s stake in GBG will drop to around 32% or so (from memory) on exercise of all options which differs again from GBG's releases.

You disagree that GBG will have to issue more shares at some stage.
Unless they sell assets, where will their cashflow come from to replenish expenditure?
I think you may be including KML’s cashflow as being GBG’s. GBG will not see a share of any profits from Karara for at least 3 years. GBG does not have enough cash behind them to last 3 years of administration, development and exploration expenses with no cashflow.

If what GBG says is true, and concentration is centered on Karara, then development of Warriedar etc. and their own 100% deposits will be postponed to a large degree. I seriously doubt GBG can avoid developing these deposits quickly- since they have now lost the vast majority of their JORC’d hematite resource. They have significantly less than 10mt currently! Where will they get the cashflow or funds to develop what's left or explore further? Debt, or placements.

Another clue, Ansteel will be expanding their footprint in Australia through GBG exactly as Minmetals has planned through Oz. GBG has no excess funds to be a part of any expansion without issuing more shares. They will not wait another 4 years to do this when bargains will be available over the next 12 months! Mark my words on that!
Funds again? Well, debt, or placements.

Also you often refer to hoping Lodestone can be developed solely by GBG. Although I’d like to see that happen too, I’d have to disagree that it probably could. GBG will not have the funds or ability to borrow up to $1b on their own for a long while unless you’re talking 8-10 years away which is not really relevant. Concentrator alone would cost upwards of $600m (and Karara will need another 1 or 2 by then), let alone all the other development costs. And let’s hope Karara’s concentrators are flat out doing their own ore!!!

Another point is that Lodestone IS NOT the same as Karara as you hoped. It will be far more costly and risky to develop with less of a resource that is a much harder and costly type of deposit to mine. Quotes of “similar magnetic intensity” etc. from GBG are just to make shareholders feel nice. Lodestone will need a JV partner (Ansteel obviously) for the above reasons of funding and risk. That’s straight from discussions I’ve had with GBG.

Mate you do a good job in your posts- keep it up! I enjoy your genuine efforts and hope you don’t take offence to my comments. Thanks.