state of play

Since BBP came out of the last trading halt there have been three positive announcements:

1. GBG buying 10.63% of BBP at avg 8.4c.

2. A substantial electricity supply contract to the BHP Billiton Olympic Dam project for two years commencing 1 July 2009.

3. WA gas tariff increase of 22%.

GBG buying a large stake is obviously a good sign. Sir Ron Brierly/GPG make their money from this type of investment. They must be laughing they have been able to get it for a song. Interesting that their largest purchases were after BBP came out of trading halt and the largest at 9.93c on 2/6.

The supply contract to BHP is considered significant by BBP. In the announcement it says:

"Ross Rolfe, Chief Executive of BBP, said: “The finalisation of this contract marks a further important step in management’s efforts to stabilise BBP’s earnings. This agreement, along with the recently announced Flinders Osborne Trading transaction and the completion of the Alinta EATM and Kwinana transactions, provides clear evidence of the progress being made in dealing with key
challenges facing the business.”

Finally the WA gas tariff will be a significant boost to revenue.

Of course the banks could still accelerate the loans meaning BBP would almost certainly go into administration. More likely imo is that this will be used as leverage by BBP to extricate itself from the BNB managment contracts and that combined with recent progress and forward outlook will be enough for BBP to carry on as a going concern.

Should that be the case imo there is no reason the SP shouldn't be north of 50c in the next twelve months.