This thread is for serious discussion of GDN's prospects at this time. Any who wish to argue for argument's sake or attack other's opinions please continue to use the other threads.
Like many others today I was disappointed with the free options hitting the market. However I believe it's important to understand why they had to be offered.
Many here would remember that a debt-funding agreement was executed on 1st February 2010. Some may have forgotten the conditions of the agreement. This was stated in the announcement of February 1st:
"Under that arrangement, the Company will receive AU$2.5 million on 1 February 2010, with an option for an additional advance of AU$2.5 million as agreed by the parties. . . . The principal amount of the loan is AU$2.5 million dollars, for a term of six (6) months at 8% interest during the term. The lender is Social Investments Pty Ltd ("Lender"), and the loan is secured by a fixed and floating charge over assets of the company. The loan may be repaid at any time before the term expires."
So the loan was secured by a fixed and floating charge over assets of the company. The company later made a share placement which included the free options to repay the majority of the loan so as not to be in a position where they would lose control of the assets of the comnpany. This loan will expire at the end of July.
I don't know what sort of funding arrangements GDN has in place but the fact is UNTIL we start receiving cashflow from gas sales, money to get to the point of production has to come from somewhere, hence the low SP IMO.
IF and WHEN gas sales can begin, GDN's status changes immeasurably. That is why it is crucial, as it always has been, that PB#3 becomes a producer. Forget about the size of the flow rates, it's all about cashflow.
Genuine discussion welcome.
GDN Price at posting:
7.4¢ Sentiment: Hold Disclosure: Held
