chat with the md

I posted the following on UK based iii.com website but thought it might be of interest here. For the record I own GGG shares but not AZX as I have a UK based only trading account, though would happily own AZX. I rate both companies as a buy.


I had a phone chat with Jeff Malaihollo (GGG MD) earlier this evening, caught him as he was walking back to his car after work :)

First of all I'd like to say this is only the second time I've spoken to Jeff but also that on both occasions he came across as a very open, friendly and genuine guy. These are just my impressions and recollections of the conversation. Hopefully most posters who know me will accept I try to give a positive but balanced view with the information I have at the time.

IMO his enthusiasm for GGG and Bullabulling clearly came across and he was very passionate about getting B'lings true value proved up as soon as possible for two reasons:

1. He is conscious, as we all probably are, that a project like B'lings could be taken over before it's true value is realised which would not be in the interests of either shareholders. From this I believe as most can see, ( apart from the AZX BoD perhaps :) ) that B'lings is literally a Goldmine that needs proving up and exploiting as soon as possible.

2. The second reason to get B'lings drilled to death ASAP is dilution. Both AZX and GGG say they:
want to be in production in 2013,
which means building the mine in 2012,
which means getting the funds to build the mine in 2011/12.

Now getting these funds maybe possible through finance but also I expect there will be more shares issued as well and if we ( for example) need to raise UKP50million I would rather they issued just 50million shares by getting the SP up to a 100p rather than 100million shares because the SP is only 50p.

QUESTION. How do we get the SP up to a 100p in the next 12 month.
ANSWER. We need to drill the hell out of B'ling to increase the inferred, indicated, and measured as soon as possible!

QUESTION: How do we do this?
ANSWER: We need to go from 2 rigs to four, five or six rigs!!

This is the fundamental difference between the two company strategies as AZX actually want to go down to just one rig! Which seems crazy to me and I can't for the life of me see any logic, benefit, or even one good reason in snail pacing this literally golden opportunity for either shareholders! If anyone can, please enlighten me.

Jeff also spoke about the well known fact that B'lings is being valued at a significant $/ounce discount to its peers and should the T/O be successful then this discount gap would most likely close. I believe we are currently being valued at around $65/ounce, where as other comparable miners are valued at over $100/ounce, so there is significant upside to be had just by bringing B'lings into one controlling company.

I lamely tried to get a few juicy bits of information out of him but only got impressions rather than actual info, and my impressions were GGG launched the T/O with the expectations that it had a good chance of being successful and that they believed they were winning the argument in Aussieland for the GGG strategy with regards to B'lings going forward.

I certainly hope GGG are successful as imo there appear to be only three other alternatives, none look appealing!

1. AZX take over GGG. Can't see this happening as I don't think they have the money or the strategy to win the case, and it would have to be at such a premium for GGG PI's and ii's to accept, that AZX shareholders would be well diluted and probably would rebel.

2. The company's have a friendly merger. Possible but again it seems unlikely as they fundamentally disagree and AZX seem to be getting a little bit personal about GGG's abilities and experience which isn't very professional or even true. Also I think if a 'friendly' merger was possible we probably wouldn't be where we are now.

3. Bullabulling is spun off into a separate company, GGG and AZX both owning 50%. Again possible but this would again have both wanting to decide on forward strategy and that is where we are today!

Anyway no great inside news but thought I'd share. Hope it was of some use or interest.

Temu

PS, I would like to thank Excelsior and 264091 for their previous posts regarding likely AZX SP movement and the reasons why.