Hi all. Wow! Bill Bloking has been busy and I’m excited. This is...

Hi all.
Wow! Bill Bloking has been busy and I’m excited. This is going to be a long post so I’ll split it into 3 parts under this thread heading.

I’ve been spending some time reading through and digesting all the information in this radical news. It excites me greatly as it has potential to resolve all of our near term critical issues and transform the whole future of the company.

Firstly the cons.

1. It’s not done yet. I’m definitely supporting it for reasons I’ll outline below but it’s all subject to shareholder vote so it may not happen. Also the capital raisings may not be fully supported.
2. The price of the deal. I’d like it higher for sure and Landzt raised the issue about valuation of Coburn with $30 million expenditure behind. The reality is we have to deal with the reality that is - our current market cap. Strandline are buying us as much as we are buying them so we have to deal from our current position. Philosophically, it is what it is.
3. Whilst I’m excited and very positive about this news, there’s always a price to be paid for any good news. In this case it sums up as dilution. Basically if it goes all ahead, full raising is completed and a shareholder does not participate then they will be diluted to 53.5% of their current position. I won’t be allowing that to happen for me however if I were then I would not be perturbed as my reading of this is that the potential of the pie has gotten significantly larger and much more secure – that’s worth the price of 46.5% dilution if someone doesn’t want to participate.

Now the Pros:

1. Capital, Capital, Capital.

This deal recapitalises the company with sufficient cash behind it to get through at least 12 months of activity. This addresses the very pressing problem of lack of financial strength. We’ve been on the back foot for ages trying to stay afloat while getting somewhere with our assets and it’s significantly weakened our hand in negotiations. The time that buys will, I believe, be dramatically valuable for GUN shareholders assuming the following:

1. Mt Gunson JV with Torrens Mining will be getting towards the end stages of feasibility studies which I expect to be very positive.
2. Mineral sands markets should be stronger than the current trough they have been in for the last couple of years
3. The AUD is expected to be lower which improves the economics of our Australian assets in international terms
4. We’ll have at least 6 and up to 12 months of further exploration of our assets to drive us up the value chain