The bit at http://www.businessspectator.com.au/news/2013/10/14/resources-and-energy/gindalbie-appoints-harris-md has the words: “In a statement to the Australian Securities Exchange, Gindalbie said the appointment was in line with its previously announced succession plan, after Mr Netscher agreed to extend his contract until the end of the year to ensure management stability during the Karara project ramp-up.”
What earthmoving company named after Alan Brierty is going to do well out of its contract with the Karara project? No reward for guessing the right answer. What is Mr Market going to do when the company posts good metrics for the six months ending 31/12/2013? Push the SP up to at least 50¢, in my opinion (NTA was 47.8¢ as at 30/06/2013). If this turns out to be correct, only folk who hold shares in a company that has an ASX code that means an axe in Dutch get a reward.
Bell Potter's 70¢ valuation at http://www.brierty.com.au/files/Bell_Potter_Research_Note_Feb_13.pdf is dated February 2013, so it is about time BP updated it.
The spurt of earthmoving work for the Kararara project will peak during the half-year year ending 31/12/2013, and BYL currently has its feelers out for additional mining contracts, otherwise the peak-load resources employed at Karara will need to be redeployed into BYL's civil works business, which is BYL's core business - so this is not a huge threat.
As an aside, the Belamack business is currently in its last phase, which I view as a positive, because it was not lucrative and sucked up heaps of capital in its early years, and because it will throw off cash when the last properties are sold.
Both the above two matters are mentioned in the recent Annual Report – to wit:
“MINING
Mining will continue at Karara in the 2014 financial year, initially at increased production levels before reducing to previous production levels in the second half of the year.
The Group has the capacity to do more mining work in the 2014 financial year and is actively seeking opportunities with several potential clients. The company is tendering on several mining opportunities and expects the outcomes of these to be known in the first half of the financial year. There are also other opportunities that will be available in the second half of the year that the Group is currently targeting.
BELLAMACK
Construction of lots at Bellamack will be complete by October this year and it is expected all lots will be sold and settled early in 2014.
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