gnm, what a crock!

Have not posted on REY for a while...

It had to happen, but this is a crock and ill explain why if you have not worked it out.

Firstly this TA price is based on just 50k shares traded recently on GNM, there is a 50% difference in the GNM 6 month vwap compared to the 5day vwap (which only 50k shares were traded) they have used.

ROFLMAO, how could the GNM TA be taken seriously? If i bought 100k GNM shares last week at $1 then??

This would give 500Mt of coal to GNM and REY a few % interest in GNM? There is no benefit for REY shareholders here, management and Acorn have 28% should be able to push a better deal.

Some numbers;

REY has 153M shares @0.09c ~ A$13M EV
A$1M cash
511Mt of thermal coal
2.5c per tonne??
52 week high 47c
12 week high 11.5c
52 week low 4.5c
TA ~9c...

Rey was previously talking up ++1Bt.

So in summary of few points:

1. GNM vwap of 5 days based on 50k shares traded, the 6 month vwap is probaly half this value.

2. Offer values REY resources at A2.5c per tonne

3. With EV of A$13M REY has spent half there market cap on coal drilling (and oil leases) to get to this resource, taking this expenditure GNM are looking at half the EV again. Another way to look at this is REY spent over 1c/t to find and prove this deposit. If you then include previous work by owners in the 1970s the actual expenditure on REY leases would almost certainly exceed the current TA offer.

4. There should be an independent report to recommend the value of REY, given the above how could 9c be endorsed?

5. The sell down on low volume under 6c just a few weeks before this TA and just after increasing the resource also looks manipulated and should be investigated.

6. REY would own just 3.6% in GNM. (GNM ~800M shares, REY ~153M shares)

7. This is probably the best; REY listed in 06 with 72M shares @ 20c with no resources on the back of Chile copper projects they still own....that IPO value exceeds the TA offer.

8. Although they need a large investor to develop coal projects REY have not debt and are not a forced seller of coal and copper assets.

9. Finally check this below; REY has now enought resources from P1 for phase 1 and phase 2 development with min A$77NPV from the lowest production and CF values.

http://www.reyresources.com/irm/content/investor_brokerreports.html

10. IMO its clear GNM want REY on the cheap before the PFS is released.

Main risk is if directors roll over and play dead and/or no other shareholder/new investors block the bid.

Bought heads and options hard early today and im sure Acorn is doing the same to get over 10%.