we are getting closer...

Just running a ruler over their finances and potential (all is just my amatuer view).

From the march quartley they had around $0.5m cash left. They have since raised $2.88m from a placement.

The quartley also stated that around $1m would be spent this quarter (to jun 11):

	$m
Exploration and evaluation	$0.25
Development	$0.15
Production	$0.45
Administration	$0.13
Total	$0.98

So they have the cash covered for this quarter and if they spend the same amount next quarter (end Sep) they don't need to raise any further funds until possibly Sep/Oct however they have stated that... "Gulf on track for 30,000tpa vermiculite production by September Quarter 2011." So perhaps cashflow will start to come soon.

Dependant on what you think the price of vermiculite is then revenue can range between $9m/a and $24m/a (based on premium prices). The unknown is the cost of production.

I believe the 30,000 tpa production is not enough to cover their ongoing costs of exploration etc (just IMO) and we need to hear more about how quickly & when they can ramp up output.

What I do really like is they have already contracted sales to a major customer, long term demand outstrips supply globally (and supply is decreasing).

There was also a comment (not sure the source) that Vermiculite could be used as a source of renewable energy (and this adds blue sky potential) plus there is a possibility their acerage may contain REE's.

There's alot to like, but short term cash burn and potential cashflow timing will continue to weigh on the SP (notwithstanding general market sentiment attached to the spec end of the market).

I don't think it will take much to rerate this stock as the potential seems huge and the board calibre and major shareholders also speaks volumes.

Looking forward to their next quartley activities report to see how close we are to producing 30ktpa and how quickly we can double and triple and quadruple output.

GLA

Maddoc