Not looking good for GMC, page-28

Hi @img999a,

I'm very impressed that there aren't just a bunch of conspiracy theorists on here. The reason I am forced to articulate the same fundamental argument, constructed differently is hoping that I may get through to these conspiracists.

In response to you:

Yes the CPA with Acuity is certainly a source of solvency. However, this is subject to the 125m shares which would only raise $1.25m. (The absolute maximum would be 379m shares - the LR7.1 cap from Appendix 3B) such would give $3.8m to GMC. Whilst this is certainly a source of solvency, GMC's cash burn is $3.5M per quarter.

So it appears that Acuity would need to short sell the full LR7.1 capacity just to sustain GMC through to June 2018.
The obvious most important question being is $3.5M sufficient to get GMC to positive cash flow?
My thoughts are this would be very unlikely, given as far as we know the refurbishment is yet to be complete, the smelters are still in South Africa (need to be shipped) and then they still need to installed. GMC seem to remain silent on this very important point. How much capital is required before it generates any revenue (which I believe is still contingent on a permit with Indonesia).

Given BB Lee is a shareholder it wouldn't be in their interest, although by calling the notes and placing GMC into administration they could acquire it as a distressed asset (seen this happen with AZZ). Noteholders redeemed their note and basically seized control of the assets as it was placed into VA.

The way the Acuity CPA works is like this. On any good news GMC rises say to $0.015. Whilst this buying volume exists, Acuity would be selling the 125m shares they've got as collateral gaining $1.9m. They give GMC the $1.9m less fees and they get back the 125m collateral to repeat this process up to 379m share limit (beyond which shareholder approval is required). Acuity have no stake in GMC - they never will, they simply short sell the shares that they have as collateral maintaining a perfect hedge (i.e. never having any exposure). It would contravene ASK regulations if they were to manipulate the price, so they will only be acting as a seller once the CPA is triggered to the tune of up to 379m shares.

Given GMC have turned to this CPA, I believe it indicates that capital and investors are running out, remember Tanah Capital pulled out at an effective price Of $0.009.

The DSO approvals incurs no cost. It is simply to sell raw untreated manganese. GMC do not require a smelter to receive this revenue, they could sell any ore from local suppliers. But to be allowed to do so, they need to be classified as a processor of manganese. Maybe the Indonesian government themselves do not deem this project worthy of being a processing plant, hence no DSO approval.

I'm certainly not giving you financial advice but I follow Warren Buffet's principle - preservation of capital.

Since flogging GMC off on open (after being caught in it by believing their announcements of the executed and notarized deal with Pak Marthen), I have made my fair share back (all asset classes are appreciating at the moment).

I'd personally prefer the risk/reward the casino offers (eve after their cut) than the proposition on offer here...

Good luck with your investments, and try not to believe everything that GMC state is "imminent" as history would say otherwise

I will be here to continue to interpret their announcements

Cheers
Tt2000