GMC - FA, TA, page-145

I always enjoy reading your posts on GMC, @The Mole. I know you've been around since the Kupang Resources days (who I believe were further advanced than GMC before going into administration) and have a better grasp on this project that most.

I'm curious though why you assume it would be a blast furnace? They've been getting phased out for the past 40+ years, so it would seem strange for a project (hopefully) starting up in 2018 to be using that system.



Also the project metrics used in April's investor presentation stated that 1 tonne of MCFeMn Alloy (medium carbon ferromanganese) requires:

0.212 tonne of Iron Ore
0.944 tonne of Coal
0.502 tonne of Limestone
0.341 tonne of Ferro Silicon
0.480 tonne of Burnt Lime

I'm only reading from a slide in a presentation, and haven't properly researched the smelter process yet, but it seems much more in line with your figure of 1.5 tonne of coal for an electric arc furnace.

Taken at face value, the Kupang Smelter Project metrics are very impressive, but I also have a few concerns. Starting with the fact that GMC don't have enough money to make it to production. Even if all the 0.5c options were exercised they would still be a few million $$ short, and I can't see them being converted while the SP remains at these levels.

I also recall Hamish saying that there would not be another CR, so he must be either relying on debt funding, or expecting a permit to export untreated manganese. The last I checked, GMC had ticked most of the boxes for applying for this permit - which they need anyway to stockpile & process the ore - so hopefully we'll be seeing this announcement soon. Between that and receiving the other A$4m from SI's (not holding my breath), I don't see what other news they could use to pump the SP. Perhaps arrival of the smelters - which may also be another prerequisite for the export permit.

Another major concern, as The Mole pointed out, is where are GMC sourcing this ore from? GMC directors & staff are due another $510k in bonuses (thanks to generous shareholders) after they sign an MoU with manganese suppliers. I would have thought this to be the easiest of all the vesting conditions - an MoU is a non-binding agreement, probably not even worth the paper it's written on, as they don't even honour binding agreements in Indonesia. The fact that this condition hasn't already been achieved is a worrying sign, in my opinion.

Last point for now, as this post is already too long - I don't believe there is enough available power to run all 8 smelters. Not as big a concern, as there should be enough power to supply 2 smelters, and if GMC manage to get that far then all shareholders should be very happy.

For the record, I didn't sell any shares when GMC relisted. I might live to regret it, but I still believe it's worth the punt. I wouldn't expect there is any rush to get in between now and September, and would encourage everyone to do their own homework first.