Hi!Yes, 1st post. Joined the forum some time ago mainly to...

Hi!

Yes, 1st post. Joined the forum some time ago mainly to follow up what people are talking about GGG. It's currently my only shareholding in Australia.

In an earlier investor presentation I think they estimated a start-up cost of about $1B. Later with the new plans of taking the raw ore to China for processing it was mentioned that the initial costs will be reduced (but no numbers). With 240M I just took a poke in the dark to make an example with round numbers (order of magnitude could be correct) and with current share price of 6c that would be 4B new shares and a dilution of 80%.

I've invested with the rationale that the current share price seems very low when the operation finally gets started and that's where the upside could be. But that could be spoiled with a huge dilution and I guess my question was if someone has the experience or expertise from other mining cases how this might play out.

I've had another high-risk investment where they needed a lot of cash going forward and I calculated that even with 10x (90% dilution) it should still make sense and the management was very experienced in their industry so I thought they wouldn't dilute the heck out of the shareholders. It turns out I was wrong and the management pulled through over 1000x dilution (new shares compared to existing shares). My $100k+ investment was suddendly less than $100. And this happened in less than 6 months. Industry was completely different but I learned the hard way that a bargain might turn out to be very expensive or even losing all of your money.

I think this case is different (otherwise would not have invested). With the management projections it's possible to estimate the future cash flows and earnings and make an intelligent estimate of the instrict value. But I'm finding it difficult to estimate the total number of shares in 5 years and thus the potential price / share in 5 years.

Some say here $1. I think that's forgetting the investments and capital raise needed. Analyst says 16-30c, which sounds pretty realistic or justified if things go well. But I'm thinking that perhaps the market could be right with the current price if there's a huge capital raise or Shenghen manages to grab majority of the value leaving current GGG shareholders with crumbs.

I don't know. That's why I'm asking / opening a discussion.