chat with jeff malaihallo

I managed to speak to Jeff just after midday for a amicable and unhurried chat. I haven't found out anything that wasnt already know or published but the conversation has clarified my personal understanding of where we are and how we got here. All my comments are as best as I can remember and my own interpretation of what was said. In no particular order:

Q. What has been BS's part in all of this?
A. Jeff said that the message from them is that both sides need to get together to get Bling into one entity.
Comment: He wouldnt be drawn but I think rumours of BS playing with a crooked bat in misleading GGG may have some substance.

Q. I asked about the Jorc and whether or not the statements, about 'most' of the likely inferred is going to be moved up into the M & I category in the upcoming report, still stand?
A. Jeff said that he still expects most of the resource to be moved to M & I but the current drilling program hasnt drilled all of the known resource and so the answer is not in this Jorc report.
Comment: As the 'current programme focuses on approximately 2.3km of the 6km portion known as the Bullabulling Trend' the coming Jorc isnt focusing on the whole resource, maybe 25% of it, so IMO we should expect at best, M & I of 4 to 500k ounces, although probably a higher resource number. This would still be a great result as its booked reserves and only covers a small amount of Bling. The rest will come when we have drilled the required spacing to prove the rest of asset, and it is also why we need to increase the number of rigs if possible.

Q. I asked are we still on track for a Jorc in June?
A. Jeff wouldnt commit to a date but the fact he is talking to me suggests it wont be this week. I personally am now thinking 20th onwards, just my opinion though.

Q. After this Jorc what time frame is it likely that the next Jorc will be ready?
A. It depends on a few factors such as the number of rigs available but around the end of the year would be possible.
Comment: I think this is the Jorc that is likely to move most of the inferred in to the M & I category.

Q. Did the two companies meet when JL was in London?
A. Yes they did meet.
Comment: Looking at some of the AZX statements and in particular their last Bling update when AZX left out any reference to a JV partner, imo prior to the meeting the relationship was probably at a low point. Since then both sides have been quiet and I got the impression that the working relationship has moved forward. I asked if it had affected the operational side of things and he said no. IMO, I guess part of the problem is JL and GP started AZX and probably feel it is their little baby, GGG launching a TO was probably considered a personal attack on them, which might explain some of their questionable (re)actions.

Q. Without breaking any rules, how is the TO or merger going, is there an end in sight?
A. He mentioned that both sides agree that Bling needs to be under one corporate entity and that AZX spinning off their other assets would help in this matter.
Comment: I believe a consolidation is still possible if both sides can agree, but GGG always has the option of the TO. As has been speculated on this BB AZX are not cash rich and with 3 rigs running they are getting through $$$'s quite quickly. Together with the constraints that the TO has on AZX ability to raise funds, then the TO leaves GGG in a position of relative strength. Time it appears, is not on AZX's side in this matter. On a slight tangent, I did suggest that the current set up is useful in that Bling is a harder TO target for a gold major. Jeff did not disagree with this statement and I got the impression that currently with the SP being quite low, it was in fact a useful situation.

Q. Would it be possible for both companies to issue a statement to the effect that you both are working towards a negotiated solution?
A. Jeff said he couldnt comment on that question

Overall nothing new but my gut feeling is things are progressing ok but a long way still to go. GGG are the guys with time on their side though, and money in the bank. I also feel that GGG have less egos about the company structure of whatever takes ownership of Bling, but if they and AZX fail to get a negotiated merger then GGG will keep pressing ahead with the TO.

AZX will also come under considerable financial pressure in the not too distant future unless they dilute their shareholders, but therein lies another problem. JL has said he will get more than 71c/share. Not sure how that is going to happen with their current SP unless the Jorc adds 30% and he offers iis no discount. At the end of the day Jeff says this will get sorted one way or another and it will. The SP may drift up, down, sideways, but ultimately in a month or three there will be a solution, and the good thing is the operational side is still progressing with at least 3 rigs and not one. So the TO bid has achieved one of its primary aims.

Temu

PS My impression of Jeff is that he would be a good man to go into business with and i think wanted a friendly merger but that AZX couldn't/wouldn't do what was right with BB. To that end, together with AZX hindering the Aussie listing he had little choice but to launch a TO. On the plus side, I think he's done what had to be done and has had sucess in getting 3 rigs instead of 1. 1 rig would have done the SP no favours at all. AZX, in a way, may have only themselves to blame for where they find themselves.