GBG - Gindalbie Metals

[MR.]

GJ bought what 1-1.5 million at about these prices 4 months ago.
The OP broker sell off in April had pushed the price down to 70. When the market knew (assumed) the sell off was over with the last millions changing hands up she went trading near t/o of 12 million for 3 days from 1.5 million the day before. The buy side (before take off) was very heavy for many days and perhaps weeks.

Traded near t/o 4 million today. After a disappointing morning rally, pumped no doubt by the staked buy side up she went some. And at close, did not have any large sellers appearing. Some of the other Iron Ores had a similar and better bursts today. (which happened back in May)

Is it value? Perhaps, but I have been waiting for the mid to low 70's.
I'm just too picky and so miss out.

 

[Out Too Soon]

Seems to have found support at abt .81c which I'm thinking is a good level to get back in.
Haven't held this one for quite a while- since before it got way ahead of itself. Wasn't I kicking myself when I took a small profit only to see it double.

Hopefully when I reinvest this time I will hold on & not get 'out too soon'.

every 6 mths or so I spend over an hour looking up how to insert a chart in this. grrr there's nothing in the FAQ & try doing a search for charts in the forum.

 

[Pat]

every 6 mths or so I spend over an hour looking up how to insert a chart in this. grrr there's nothing in the FAQ & try doing a search for charts in the forum.

Hey Out too soon.

Cut n paste a chart in windows paint, draw some nice lines then save it to my docs or something (save it as a GIF file in the from the drop down menu on the save screen)

the clieck on "manage attachments" in the 'post a reply screen', the click browse, find your chart and then click ok, when you finissh post your post it'll show under your writings.

 

[Out Too Soon]

Thanks Pat, heres that chart. ( I hope)

Seems to have found support at abt .81c which I'm thinking is a good level to get back in.
I like those two little gaps down too, the one from a dollar down to .98c hasn't been covered yet either.

 

[Pat]

Thanks Pat, heres that chart. ( I hope)
View attachment 23797
Seems to have found support at abt .81c which I'm thinking is a good level to get back in.
I like those two little gaps down too, the one from a dollar down to .98c hasn't been covered yet either.

I think a thread with some screen dumps would help with charting/posting pics, or screen dumps in the FAQ. I'll do some tonight and post it in the beginners forum. Maybe a Mod can add it to the FAQ...

I like 80 cent level too, I like 55-60 cents better. Although I think iron ore is a little unloved ATM.

 

[Datsun Disguise]

Is it value? Perhaps, but I have been waiting for the mid to low 70's.
I'm just too picky and so miss out.

So MR - how are you feeling about it now that we are in the mid to low 70's. Looking back to '05, the chart seems to have broken out of the channel on the low side - perhaps just an overcorrection due to some big channel breaks on the upside.

What is it about projects that are approaching production - interest seems to dry up. Is making money that boring?

 

[oldblue]

I'm afraid that new projects don't look so appealing in these uncertain times and in GBG's case there's still a fair bit of i's to dot and t's to cross!
I'm holding but don't expect a quick SP recovery.

 

[Bosco]

GBG at 57 cents. Would someone please come and get me when it is safe to come out of the cave. Much appreciated.

 

[fairdinkum]

hi everybody!

any comments on the September quarterly report? it says:

"The Public Environmental Review process for the hematite phase of Karara has now been completed and the Joint Venture has responded to all of the public submissions. The Joint Venture has been in discussions with Western Australia’s Environmental Protection Authority (EPA) regarding approvals for the hematite phase of Karara and is awaiting the final EPA assessment, which is expected in the December Quarter.
The hematite start-up phase of Karara is made up of iron ore deposits which occur on both the Karara and nearby Mungada tenements. Last year, the WA Government handed down its Strategic Review of the Banded Iron Formation Ranges of the Mid West and Goldfields, which outlined areas where the Government favours mining development and preferred sites for conservation in the region, as well as highlighting further areas for investigation. The report highlighted the Mungada Ridge tenements, which contain part of the Company’s hematite resource inventory, as having significant biodiversity value and therefore presenting some environmental challenges. The Karara area, however, was recognised as an area on which the Government would support mining development.
After lengthy discussions and negotiations the Joint Venture has made the decision to withdraw the resources contained on the Mungada Ridge from its current project assessment until such time as it has a more comprehensive understanding of the conservation and mineralogical value of the area. Assessment is continuing on the hematite resources contained on the Karara tenements.
Even with the removal of the Mungada Ridge tenements from the current assessment Gindalbie expects to still be able to proceed with development of a Direct Shipping Ore operation in 2009 at an initial start-up rate of
1.5Mtpa, increasing to 2Mtpa, based on existing resources. In addition, the Company remains confident of being able to expand the Project’s hematite resources by continuing exploration of a number of as yet untested DSO grade outcrops across the tenement area."

how does the news affect your mid-term valuation of GBG?

it's been a steep downhill ride during the last few weeks. the market is obviously pretty rough atm.

still think the odds for GBG are not too bad long-term, once general market sentiment gets a little better (back to normal?). not the best timing for the company, though.

p.s. great forum, good to be on board now.

 

[Lachlan6]

I have been watching GBG for a while yet it has not given any sign that an entry is forthcoming. The stock looks to be in the larger corrective wave (C). Within this, I have placed the stock in the wave 4 of the larger wave (5). This would suggest we should have some more consolidation before the stock makes new lows into the wave 5. From there, the big question is can it impulse higher or will it chop and grind its way higher. This will be important as it will tell us if the stock is ready to start a major trend higher or not.

 

[oldblue]

Hi fairdinkum

I think the company has previously signalled some environmental doubt over the Mungada ridge so withdrawal of this relatively minor area shouldn't be a surprise nor have a major impact.
The big issue is still the demand for and price of iron ore and how China's growth stands up. We might have to accept some delay here but eventually the investment made in GBG by the Chinese will result in action.
I'm holding but won't be buying more until current trends ( Price of Iron Ore and SP ) reverse.

 

[fairdinkum]

I think the company has previously signalled some environmental doubt over the Mungada ridge so withdrawal of this relatively minor area shouldn't be a surprise nor have a major impact.

agreed. (just needed a peg on which to hang on my post; wanted to bring the thread and the company back to everybody's attention)

still wondering if the Chines backing (Ansteel, CDB) is a huge competitive advantage. on the one hand founding is easier, even more so in these troubled times.

on the other the dependence on Ansteel actually requiring (and buying) the ore seems as a kind of disadvantage to me.
how do you estimate the ratio between Karara and the non-jv projects?

furthermore there's not so much fantasy involved when it comes to market consolidation / take-over bids, cf. what happened in the past to Midwest, Murchinson.
Lest we forget the SDL episode!!

 

[oldblue]

agreed. (just needed a peg on which to hang on my post; wanted to bring the thread and the company back to everybody's attention)

still wondering if the Chines backing (Ansteel, CDB) is a huge competitive advantage. on the one hand founding is easier, even more so in these troubled times.

on the other the dependence on Ansteel actually requiring (and buying) the ore seems as a kind of disadvantage to me.
how do you estimate the ratio between Karara and the non-jv projects?

furthermore there's not so much fantasy involved when it comes to market consolidation / take-over bids, cf. what happened in the past to Midwest, Murchinson.
Lest we forget the SDL episode!!

I would say "assurance" on funding is not only important but essential the way the markets for commodities are shaping up. I don't expect any quick miracles - GBG will be delayed along with everyone else but when things pick up they should be one of the first to get underway. I suspect a lot of the other "emerging " producers without strong shareholders/customers will just be quietly forgotten about for some time.
As for ratio of the value of JV to non-JV projects, I wouldn't know where to start to estimate this. I don't think it's very important just now - any action is bound to be JV in the next year or so.
Similarly, I think we are well placed not to be a takeover target at this time. Any bids are going to be at bargain prices and not attractive to shareholders.

 

[mayk]

I think Ansteel is sneaking and launching a takeover war with this lucrative financial offer in these perilous times.

What do people think of this offer from Ansteel?

SECURITIES EXCHANGE ANNOUNCEMENT & MEDIA RELEASE

3 November 2008

GINDALBIE RECEIVES ALTERNATIVE FUNDING
PROPOSAL FROM ANSTEEL

ENGINEERING, DESIGN AND DEVELOPMENT WORK TO CONTINUE ON SCHEDULE


Gindalbie Metals Limited (ASX: GBG – “Gindalbie”) advises that it has received an alternative funding proposal in
connection with its final equity contribution to the Karara Iron Ore Project from its joint venture partner, Anshan Iron &
Steel Group Corporation (AnSteel).

Under the previously announced agreed payment schedule for equity payments, Ansteel has made three payments to
date totaling A$228.4 million and Gindalbie has made one payment of A$18.38 million. The final equity payment, of
A$143.68 million each, was due to be made in October.

Gindalbie had previously exercised its right, under the terms of the Karara Joint Venture Development Agreement
(JVDA), to request AnSteel to arrange finance for Gindalbie’s share of the final equity contributions to the Project.
Under the terms of the agreements, AnSteel is required to arrange this finance as debt on acceptable terms.

AnSteel has now proposed an alternative funding arrangement to Gindalbie, which is being considered and assessed
by the Board of Gindalbie. The alternative proposal would involve Gindalbie issuing shares to Ansteel at a substantial
premium to the current share price for a total fund raising of A$162.06 million, which would cover the final equity
contribution plus the earlier contribution already made by Gindalbie out of its existing cash reserves. Any placement
would require the approvals of Gindalbie shareholders, Foreign Investment Review Board,and Chinese regulatory
approvals and would require an independent expert’s report.

In light of these developments the final equity payments by AnSteel and Gindalbie have been deferred until a final
resolution has been reached on the equity funding arrangements. AnSteel has advised Gindalbie that it has the funds
available in Australia to make its final equity payment and has also reaffirmed its full support for the rapid development
of Karara and the continued feasibility of expansion opportunities.

The joint venture company, Karara Mining Limited (KML), currently has almost A$200 million in cash reserves from
earlier equity payments and the decision has no impact on the ongoing engineering, design and development work for
the Project. In addition, discussions are advancing well with China Development Bank to provide project finance to
KML in the order of A$1.4 billion at competitive rates. All other rights and obligations associated with the Joint Venture
Development Agreement are preserved such as Ansteel taking 100% offtake from Karara at benchmark prices and in
particular for concentrate, at benchmark plus a premium.

“These equity funding discussions confirm AnSteel’s commitment to the project and highlight the strength of the long-
term relationship Gindalbie has with its joint venture partner. In the current market this is a very positive alternative as
it would leave Gindalbie itself debt-free,” said Gindalbie’s Chairman, Mr George Jones.

“We expect to conclude a suitable arrangement with Ansteel for Gindalbie’s share of the final equity contribution to
meet the final contribution as soon as reasonably practicable.”

2

While the Board of Gindalbie is assessing the proposal it has requested its securities remain subject to a trading halt.


- ENDS -

Released by: On behalf of:
Nicholas Read
Read Corporate Mr Garret Dixon/Mr David Southam/Mr Michael Weir
Managing Director/Chief Financial Officer/Investor
Relations Manager
Telephone: (+61-8) 9388-1474 Telephone: (+61-8) 9480-8700
Mobile: (+61-8) 419 929 046 www.gindalbie.com.au

 

[oldblue]

I doubt whether it's a prelude to takeover but more a case of AnSteel taking advantage of the situation to secure a shareholding - to supplement its position as a party to the joint venture. Bear in mind that AnSteel are obliged to facilitate a loan to GBG to enable the latter to pay its share of the JV. The terms of such loan may be such that GBG would prefer instead to have AnSteel as a shareholder but it seems to me that GBG could insist on the original arrangement if it takes a mind to do so.

A lot will depend on the price at which AnSteel is to/would buy in. If it's high enough the " comfort" of securing the project will outweigh the dilution of existing shareholders.

 

[Frankhalo]

“These equity funding discussions confirm AnSteel’s commitment to the project and highlight the strength of the long-
term relationship Gindalbie has with its joint venture partner. In the current market this is a very positive alternative as
it would leave Gindalbie itself debt-free,” said Gindalbie’s Chairman, Mr George Jones.

This speaks volumes, GBG is debt free bloody brilliant, all earnings down the track in the lap of share holders and JV partner.

 

[oldblue]

Let's wait and see to what degree this arrangement will dilute existing shareholders. There will be a point at which debt facilitated by AnSteel - " on acceptable terms" I think the agreement stipulates - will be more favourable than selling down too large a chunk of the "farm".

 

[onebytwo]

Gindalbie and Ansteel agree on new share issue to fund GBG's portion of equity contributions. Ansteel receives 190m shares at 85c a piece. Proposal still awaits shareholder and regulatory approvals. See announcement at asx.com.au

 

[MR.]

Gindalbie and Ansteel agree on new share issue to fund GBG's portion of equity contributions. Ansteel receives 190m shares at 85c a piece. Proposal still awaits shareholder and regulatory approvals. See announcement at asx.com.au

Not a bad outcome.

105% permium to current share price. Thought it may have taken longer for the outcome news.
---------------------
http://www.asx.com.au/asxpdf/20081107/pdf/31dgzm5hvpm060.pdf

● Proposed share placement to AnSteel comprising 190.7 million shares at A$0.85 per share.
● Issue price represents a 105% premium to the closing price of Gindalbie shares on 31 October 2008.
● AnSteel poised to make final equity contribution of A$143.68 million to Karara.
● Reduces funding risk and leaves Gindalbie debt-free in the current credit market environment.

 

[oldblue]

Yes, a good outcome for GBG shareholders in the circumstances of the iron ore and share markets.
Not too drastic a dilution and should ensure that the Karara project proceeds as scheduled.