HI GG,GBG was not one I've looked at previously. A bit of a...

HI GG,
GBG was not one I've looked at previously. A bit of a search this evening suggests a strong and established bond between GBG and Ansteel, a big Chinese iron ore player well before the raising you allude to (Ann 7/11/08 for those interested.-Ansteel paid 85c/share, price on previous trading day 38-43c. Ann re completion of deal on July 1, 2009. For reference, the high/low of the month prior to the deal was 68.5-32.5c). Based on the day before, the multiple was up to 2.2x. 2.2x 27c is 60c. Planned debt/equity was 30/70. And GBG had a much higher equity value than AXO has (~500M share *40c = $200M prior to Ansteel deal, vs AXO $52M now).
I suppose the question AXO holders need to ask is does AXO have the similarly strong link/relationship with a sound company as GBG has?
Also, have you taken into account the different equity values to start with re GBG and AXO? Have you considered the planned debt/equity ratio GBG worked on? If we just work on a 30/70 split, AXO needs ~$300M in equity, or $250M more. Even at 75c (a price I consider fanciful, but it is merely my opinion), that is 330M more shares, so 1.5x current base. At 60c (calculated number from above), it becomes >400M shares. Again, the numbers can be altered a bit, but the result could potentially become ugly.

Bottom line for me is that equity holders currently run the risk of substantial dilution if this project is to proceed. That could be more than offset by a market jubilant that the project is to get off the ground, thus increasing the shareprice. The market will decide that one.
I hold AXOG only.