Hi ConcerndCitizen, frankly I've only started looking at GMC so I've got a lot of research to do before I'm prepared to take a stake. I've learned from previous experience that its not all smooth sailing to get a project like this up and running.
OMH sprouted the same sort drivel in a investor presentation 6 years ago when they wanted shareholder funds to start OM Sarawak, do you know how much it eventually cost to set up their ferro alloy plant? More than $600 million, although its now one of the worlds largest ferro alloy production plants producing ferro silicon, silico manganese and ferro manganese. OMH also owns a 1 million ton pa manganese mine in the Northern Territory. Even with the lowest cost power ie under US$0.04c/KWh OMH have been struggling to turn a profit. Although I'm hoping that the next financial report in August will see them in the black rather than in the red.
Unfortunately, I find the GMC April 2017 presentation as a glossy presentation not showing the correct situation. One should ask why is the Gulf Manganese projected production costs will be lower by 20% than the industry average? How can this be correct when the power cost is already twice that of OM Sarawak and even more expensive than China? Theres also no clarification as to why their cost of purchasing manganese ore will be less than 1/2 of the current market pricing. If GMC doesn't own a manganese mine how do they expect to buy Mn ore so cheaply?
Whilst purchasing second hand refurbished smelters from South Africa might be cheap, but are these second hand smelters capable of producing as much as a more modern smelter and at what power usage.
I don't wish to be negative but I find the presentation lacking in factual detail.
The other question is how many more shares will be needed to get the project finalized. OMH went the other way by borrowing rather than diluting existing holders, which has seen the share price trashed because of the debt.
