peak hill results, page-14

mitis, the shareholders of Desert Resources got 450m shares and options in GPN for virtually worthless land. GPN paid around $9m in script at a time when gold was out of favour. They should have done a farm-in deal with Deset Resources similar to what AGU did with GPN, instead of giving up 65% of the company for unproven land. That deal was 2 1/2 years ago and the first one by the current GPN board (DM & JG)

In the meantime GPN has seen their formerly 100% held Gabinintha vanadium, titanium and iron ore project and Nowthanna uranium project (both with JORC resources) about to be reduced to about 20% through the mass dilution of YRR for yet again unproven land which they are paying a huge premium for.

For the privilege of losing 80% of the projects (actually it is more like 93% if your include the 65% dilution of GPN to Desert Resources as the first deal) GPN have issued 57.5m free options each to the directors (DM & JG) and 5m YRR options each in that time. With over 50% voting power being held by a certain group then no proposal can be voted down, regardless how detrimental it may be to the other shareholders.

GPN/YRR/AGU are all paying a high premium for land just because it is in good areas. Prospective? yes, but as we have seen with Peak Hill there is no guarantee of success. So why pay such high prices for unproven land?

Have a look at what MZM recently got at Peak Hill for much less than it cost GPN, and at a time when gold is quite hot. I have already shown comparisons on YRR recently to highlight just how much it has cost YRR and especially GPN over the last 2 1/2 years. Comparisons to their peers is a good guide to value and, when coupled with the dilutionary effect these deals have on proven resource ownership, it paints a sorry picture for long term share and option holders.

I noticed Tolli has posted how it is fortunate that GPN own such a large amount of Gabby and NT uranium. How can 20% seem like a lot when recently as 6 months ago GPN owned 70% of Gabby. Forget the NT land, that is well short of proving it is worth anything yet, and now we have to wait at least 6 more months to start drilling due to the wet season. So the drilling that was planned has been delayed, which is very convenient if you dont wish to know what is there. And after saying the full 12.2 km of Gabinintha was to be drilled, only 9.5km has been done meaning there is at least another 6 months to find out the full potential of the resource. That's also very convenient as the larger the resource is shown to be, the more obvious the loss to GPN through dilution of YRR is. In the meantime the deals just keep coming. the lower the sp of GPN/YRR/AGU at the time of the deals the less noticeable the true cost of these deals are.

Be very careful which posters you listen to mitis. Many on here have their own agenda. Tolli will be at the AGM to shake DM's hand.

Hoping to go to the AGM myself