gindalbie metals - a rational analysis

Hi guys,

I have been reading your posts for while here, and all I can say is that some of you have surely been losing their minds and objectivity on GBG shares. I do understand that some of you are currently losing a lot of money, but screaming and spreading fears around do not help, at first, yourself and, then, the others. Those are surely not clever shareholders and, honestly, I am getting tired of these guys.

Now, take a breath and let me explain to you my point of view over GBG. I am not a magician or a finance genius, but I like "playing with rationality":

GBG: the company management has been performing poorly not much in dealing with the development of the plant (honestly, very complicated considering the size of the project) but in providing fair information to the share-market. I believe, sometimes, they have been far over-positive in stating timing and targets company was going to achieve -> result: share-holders and company's share-market perception have been continuosly bashed by under-achieving announcements. Company finances are pretty bad, true, but another equity raising is very unlikely as, I think, it would not be successful and would result in a pretty much "final extinction" of the already shrinking "share-appeal" of GBG.

Alliance with ANSTEEL: the GBG alliance with Ansteel is the real strong point of this stock. It does give GBG not only a solid, strategic client, but also "A FRIENDLY BANK". Indeed, a bank: Ansteel is lending and giving in cash to GBG at incredible favourable rates (for GBG) - "like giving water to plants", simply put. WHY? Well,there is much politics involved, I believe: proudy Chinese people would never accept to see one of their biggest investment in Australia resulting in a big failure and, of course, ANSTEEL represents exerting soft-powers of the Chinese government over Australia: they won't give up for any costs. TAKE OVER? To me, not possible. WHY? Again, politics: if the Karara Mine would become entirely owned by Chinese, it would rise political suspicious and blockade - Karara project still has to deal with local politics (harbour, royalties, etc), therefore, an Australian partner is badly needed.

CAPACITY EXPANSION: Take a breath, again...I am quite sure, they will go for it. First, read this..http://gindpublic.powercreations.com.au/images/gind---aechohchem.pdf ...it already sounds like "alia iacta est" - the die has been cast. After all, the Karara plant has been designed for a 16mt capacity - so, right now, it is like testing a Ferrari that needs some petrol to be driven full speed. If you have an "Ansteel-petrol station" just behind the corner... things are easy - right?

MAGNETITE AND IRON ORE PRICE: Here another strong point for GBG and the Karara mine. Even if I see the iron ore price slightly going down in the near future ($110-120), demand for Magnetite is on the rising for different reasons (have a look here: http://www.magnetitenetwork.com.au/ ) and price is made up with premium FE%. I believe, Magnetite products are the future and that is why Anstell/China (biggest iron ore importer) is investing heavily on that..

NEWS FROM THE HARBOUR: Harbour capacity and its sea condition limits constitute probably the biggest obstacles as you can see at the moment (http://www.gpa.wa.gov.au/uploaddocs/trans/shiplist.htm# ). Even GBG management cannot do much about this, ships are stuck waiting at the harbour due to bad sea conditions. However, you can also see 9 ships scheduled for IO Karara - beating 6 of IO MGX for the first half of the month (1 ship already delivered)... production is ON and looks on rising. Furthermore, I read an article last month reporting WA government considering Geraldton expansion - not sure if it was just political rethoric or what, all I can say, at least, someone is already thinking about it..

SHARE PRICE: there is no way, the current share price mirrors the real potentialities of GBG and the Karara mining project, especially considering that plant is about to start running at full nameplate and making profit. Do not ask me when it will exactly happen - share price is so low exactly because few now trust GBG management annoucements(read above). However, I believe, the share wont go under 0.15c as it has simply reached the bottom... and it is also likely to raise in the short term as it may attract some "late-comers" who, after the interest cut, may search for a forgotten stock "about to jump".

To sum up, I believe, the share price will soar up sooner or later (double? triple?) - the risk remains fully and JUST on the "timing". So, Whoever is already on the GBG cruise better relax and wait on his seatplace or at the cruise's pub - Whoever may be interested in having a luxury cruise for a "discounted price", hurry up...


This is just a personal, rational opinion. Let me add that an investor who can easily fell into a negative mindset, forget the reasons for his investments, and do not see opportunities even when the share-price declines will always lose money on the market. It is matter of fact.