ipo not bad for gip, page-6

Indeed, there is a mistake in the wording, the second Australia within the text line should be ommitted. I also agree that it is a kind of bad marketing, to have three Adobha-Companys (A.-Eritra/A. Resources Limited [ARL] and A. Resources Australia, the "daughter" of ARL).

I can hardly see that ARL will issue 70 million shares. This would lift the market cap. up to 14 Mio AUS (with a share price of 0,2 AUD). ARL has two assets - the 80% of A.-Eritrea, valued 4,4 Mio AUD, and the 40% interst at Stellar, valued 0,8 Mio AUD, all together 5,2 Mio AUD. With a price/share of 0,2 this would mean at least 26 Mio shares (of which GIP would hold roughly 15%). Who should give 14 Mio AUD (subscribe 70 Mio shares) for assets only worth of 5,2 Mio AUD, at least according to ARL itself?

Stellar has a current market cap. of 21,76 Mio AUD. Heemskirk is thought to represent most of this value, let`s say 66% which means 14,36 Mio. GIP owns 40% of this value means 5,74 Mio. Assuming the market follows this line of valuation, ARL should be valued with 10,94 Mio AUD and if indeed issuing 26 Mio shares, their price should rise to 0,42 AUD.

And how about the fair value of A.-Eritrea, being far, far away from any scoping or pre-feasebility study? Is it really 4,4 Mio AUD? Only the market (the share price after the IOP) will tell.

Any failure of the IPO to me seems unlikely. Gandel would not make these offers to GIP without knowing that there are enough investors around (including him self) to fund this deal.

transmeta