gindalbie metals - a rational analysis , page-57

Hey aaa53,

I share your concerns about GBG and I acknowledge the fact, GBG is running on dangerous grounds. However, I still see reasons for optimism.

Quoting from the last quarterly report,here we have:

Estimated cost (this quarter): 32,700 (inclusive 30 million loan back to Ansteel that may not be paid or paid later)

Cash (end of previous quarter): 41,051 (inclusive 30,000 loan from Ansteel)

So, at least on paper, there should be enough cash to survive this quarter as they are not expecting to give extra cash to KML, which just got, in April, extra fresh 60 million cash from GBG and Ansteel: should this be enough?? Well, I think and hope so.

GBG and Ansteel each gave KML 50.000 millions during March Quarter, when Magnetite production fall 50% due to "minor delays", they said.

Comparing data from previous announcements, I found out current situation in shipments:

March Quarter: 20 (DSO) + 5 (Magnetite)= 25 ships

June Quarter (so far): 1 (DSO) + 4 (Magnetite) + 1 (unknow) + 9 (unknow, scheduled by 17/05) = 15 ships.

My opinion - forecast: June Q will beat March Q for shipments and %FE --> KML should be able to reduce loss and manage everything within its current cash deposits.

KML is supposed to start producing at full nameplate,selling magnetite at 68%Fe by the end of June-> which would lead, according to GBG management, to positive cash flow from september quarter (the next one).

I reckon, it is a race againt time: the matter here is whether trusting GBG management announcements one more time or not. Surely, sea conditions are not helping much at the moment (cannot evaluate consequences on business), but, without any doubts, KML production and shipping are increasing (source: port departures), which would mean, at least, less cost for KML during this quarter and would mean GBG not giving extra cash to KML.

I think and (hope), GBG giving cash to KML has stopped and the way round will start soon (september quarter?).