GXY emergency offer for Alita?, page-41

Hi @Thesi good to see you're still accumulating and supporting the company, despite the sector wide assault. Looks cheap I reckon.

You raise some very interesting points. This is child's play for Bacchus, he sprinkles deals like whats about to unfold on his corn flakes.

So heres what I thinks occurred and predict will occur.

Pre default:
GXY, Jiangte and Triabecca all held around 5% holdings in A40. The writing was on the wall for A40 and they needed a way out before they got gobbled up by one of the majors. A40 private placement to GXY $22.5m and Jiangte $10m. This gave GXY and Jiangte both a blocking stake for any potential take over of A40.

A40 directors - Can see the writing on the wall as the inevitable situation of Bald hills going into care and maintenance was unavoidable. They hold EGM and pay themselves additional performance rights.

Enter Tribecca - Tribecca get commitment from GXy and Jiangte that the 40m debt owed by A40 will be clear plus additional penalties. Say $50m debt net. Tribecca dump the majority of their 5% holder sending the share price sub 10cents.
Tribecca use the mining permit to trigger the default of the loan.

Due to the blocking stakes held, A40 can now only be taken over for in excess of 20cents (GXY and Jangte will not settle for less) or by either Jiangte or GXY or both via a JV.

I dont want to jump the gun as I do not have anywhere near enough info yet and nor does the market, however it seems like playing out extremly well for both GXY and Jangte here. Conversely awfully for A40 holder. And I mean awfully.

Given joint ownership between GXY and Jinangte currently stands at approx 23% they really only need to clear the tribecca debt + default fees and purchase the remaining 78% of the shares..... Sooooo.

Post default:
Current market cap au$120m less au$40m debt. Lets call it au$80m.

80m X .78 = au$62m

GXY and Jiangte could split the debt and the remaining market cap 50/50 to form a JV at Bald hills.

Costs to GXY:
debt 40m
Penalties 5m
equity 62m
50% (107m/2) au$53m
US$37m


GXY will access down stream via Jiangte. This is the kicker.

Tribecca get their capital back.
Jiangte secure their supply and ownership.
GXY build the asset base and access to down stream via Jiangte.
A40 avoid VA


The other scenario is Jiangte and GXY let A40 bleed out, enter VA and carve up the assets in a fire sale at the bottom of the cycle. Either way GXY and Jiangte are extremely well place to clean up off A40 failure.