Hi Mole I was wondering IF you had any thoughts on the GBG...

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valueadd

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30/01/18

17:08

Post #: 30671020
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Originally posted by The Mole ↑

GBG owns 47.84% of KML but could reduce to 38%, refer to p5 of 2017 Annual Report.

If and when KML makes money then it may change the market's perception of GBG. I noted in a previous post that KML's debt is $US1.481billion, but I had forgotten the $US900 loans which have been rolled over (for which GBG is not liable) but is still a loan. There is also a $AUD244 million loan ( $US183m)

So total debts of KML are $US2.564billion. Interest at 4% = $US102m pa or at 7% = $180m pa.

At 4% interest that is $US12 per tonne. At 7% it is $US21 per tonne (based on 8.5m tonnes pa.

If we are pay off the loan by 2030 it will require $197m repayment pa and based on 8.5m that is $US23 per tonne.

So interest and repayments is between $US35 and $US44 per tonne (but both reducing if making these payments).

Based on cost of $US65 per tonne plus interest and repayments requires a sale price between $US100 and $US109 per tonne to break even.

If sale price is $US120 per tonne then margin between $US11 to $US20 per tonne of $US94m to $US170m.

If KML was making good money say $170m pa then GBG's portion would be $65m based on the lower percentage of 38% or 4,3c per share. Capitalise that at 12.5% and you get 34.5c for GBG shares.

So we need a sale of least $US120 per tonne to see things turn around.

But if they start paying back $197m per annum then interest costs would reduce by $US8m (4% interest) or $US14m (7% interest) pa.

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Hi Mole

I was wondering IF you had any thoughts on the GBG quarterly and what they published relating to Karara ?

cheers

VA

GBG Price at posting: 2.8¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Hi Mole I was wondering IF you had any thoughts on the GBG...

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