gindalbie metals - a rational analysis , page-8

'Gindaldan, I understand your concern. But if you read my analysis, you would also understand that, at least from my point of view, GBG is simply "indestructible" because of Ansteel and, Ansteel will keep lending them money without limits, in exchange of, probably, a bigger stakes or a VERY favourable interest rates. It would be too costly for Ansteel/China to walk out from the project right now and it would be too costly for them to take over (an Australian partner is clearly needed for political and "logistics" reason). I do not see any risks for GBG not to "survive" - they will do need some time to buy back debts, that is for sure - but debts are nothing when you have a cash machine like the Karara mine project will very likely be (and this is the opinion of Ansteel too, clearly).'

That statement couldn't be more wrong. GBG is really just selling its only valuable asset to fund its shortfall of cash. Karara is not a cash machine, its severely cash flow negative at present mate.

Why take over GBG or KML when you're partner (GBG) is cashless. They may beg in the end.

Ansteel won't let KML go under, but it could swallow the whole thing for a very small amount. That is the risk, FIRB would probably approve it as otherwise KML may go under.

Once this is cash flow positive all will be good, but it might be a long journey to get there and time is running out (ie no cash to fund the huge cash burn).