Well Done GBG !!, page-36

GBG a 2015 Hypothetical:
Ansteel takes 100% control of GBG?

1:0 Ansteel gobble up all the GBG shares they do not already own – can you see that happening – Australian PM and Chinese Premier witness signing of the GBG and Ansteel agreement at the beginning and Oz investors end up gifting China a processing plant and 30 years ore body, plus the Chinese have shifter all pollutants to get to 68% Fe to Australia?? Squeal time?

1:1 so they purchase the remaining shares in KML which are held by GBG

1:2 Each KML share is priced at $4.31 (by pre-agreed formula?)

1:3 KML has a total of 321,987,284 shares.

1:4 As of March 2014, Ansteel owned 52.16% of KML shares being = 167,948,567

1:5 As of March 2014, GBG owned 47.84 % of KML shares = 154,038,717 - however Angang Group Hong Kong (Holdings) Ltd has also put in an additional US$230 million to bolster Karara's working capital which will further dilute the Gindalbie stake to 38 per cent.

1:6 As of March 2015, GBG owns 38 % of all KML shares = 122,355,167

1:7 as per the pre-agreed formula (GBG 2014 year end records) each KML share is valued at $4.31, hence in March 2015 with GBG holding 122,355,167 KML shares x $4.31 per share that equals a total value of: $527,350,773.74

1:8 March 2015 GBG has 1,500,000,000 shares on issue (rounding up), ASSUMING OUR WONDER-FILLED GBG DIRECTORS DON’T ISSUE MORE TO KEEP THEIR LIFE SUPPORT GOING!)

1:9 in March 2015 Ansteel still holds 535,492,521 GBG shares (35.81%) again assuming they don’t get more on market of have a special issue by the board of GBG

1:10 so in March 2015 Ansteel purchase the remaining KML shares held by GBG at a 30% premium to show good faith: 122,355,167 KML shares x $4.31 per share x 1.3 = $685,556,000.71

1:11 As Ansteel already own 964, GBG shares the sum Ansteel would pay to own Karara outright is $685,556,000.86 which obviously must to be divided by 100% then multiplied by 64.19% = $440,058,400.16

1:12 GBG shareholders have a disbursement of $440,058,400.16 divided by 964,507.479 (shares on issue apart from those held by Ansteel), which equals a sum of $0.45625 per share.

1:13 Ansteel has full ownership of Karara Mining Ltd;

1:13:1 an ore body of 30 million tonnes per year for 30 years
1:13:2 no air pollution in China as processing into 68% Fe (silica is dirty) is carried out in Australia – That will be a big issue in 2035.
1:13:3 assume an average profit margin over the 30 years production of 30 million tonnes per year of 68% Fe say US$10.00 per tonne (would be a great deal more than that but let’s say US$10.00 per tonne) x an average exchange rate of US$1.00 to AU$1.05 . Excluding the benefits China gain by the transfer of processing into 68% Fe with the pollutants then belonging to Australia, the ultra-conservative numbers stated equate to a value of 30,000,000 tonnes x 30 years = 900,000,000 tonnes of 68% Fe concentrate x US$10 profit per tonne x the average exchange rate of 1.05 into AU$ = $U$ 9,450,000,000.00 Profit

The added advantage to China is that the Karara Mining Ltd cost of mining and production of 68% concentrate is far less than the average cost of mining and production of 68% Fe mined and processed in China. We all are aware that at present it is US$120.00 per tonne, we also hear about Fe mines and processing plants shutting down in China. Now let’s see what happens to the Karara Mining Ltd profit margin numbers when we use the Chinse costs of US$120.00 per tonnes to mine and process 68% Fe concentrate:

2:1 using US$120.00 per tonne the profit margin for Karara Mining Ltd product would be an average per tonne over the 30 years of US$28.50 per tonne
2:2 multiply that margin per tonne by the conservative 900,000,000 tonnes
2:3 then multiply that by an averaged US$ to AU$ exchange rate over the 30 years of 1 to 1.05
2:4 US$28.50 x 900,000,000 x 1.05 = AU$ 26,932,500,000.00.
2:5 that is very close to AU$27 Billion over the 30 years and a per year average profit of AU$897,750,000.00

I am the first to admit that I know nothing, absolutely nothing BUT on my reckoning let’s have a quick look at what AU$897,750,000.00 may end up as dividends;
3:1 - at 30% tax AU$897,750,000.00 is AU$628,425,000.00
3:2 - at 45% dividend payout rate after 30% tax paid that is AU$282,791,250.00
3:3 -1,500,000,000 total GBG shares remaining
3:4 that equates to a Fully Franked Dividend of $0.1885 cents per year for 30 years plus capital gains on share price
3:5 a fully Franked Dividend of $0.1885 cents per year for 30 years equals $5.655, so ask yourself why would any GBG shareholder want to sell their shares in March 2015 for $0.45625 per share?

PATIENCE, THE ONLY QUESTION NOW IS WHEN? Then if worse comes to worse why don’t we buy out all the non Ansteel held GBG shares when the B of D's finally give up altogether and run for their lives?