During a previous announcement the cash position was very tight assuming a lot of things went according to plan. At this stage, the fact they are not making the higher grade magnetite until June may result in cash flow issues. In addition, the CAPEX that is "broadly in line" with revised budget basically tells you they have gone over.
No doubt management have been seeking options to get additional cash, eg. speaking with bankers etc and this has lead to additional shorting of the stock in my view. I'm assuming anyone on margin financing would either have triggered or is close to triggering a margin call which is/would further exacerbate the price decline.
Get cash ready for possibly 12-15c share price. 25c suddenly seems a high entry point.
GBG Price at posting:
18.0¢ Sentiment: LT Buy Disclosure: Held
