Originally posted by eshmun
Hi Harrindimill,
No doubt people working near the coal face will know more than the average person reading company announcements from behind a screen but just being on the ground doesn’t mean you can understand the financial model that underpins the mine and it’s potential profitability or its ability to generate cash flow.
There was a classic HC poster in 2013 going by the name of Red Dirt Dan who claimed to work and know all about Gindalbie’s Karara magentite mine at the time of its commissioning. He did have some facts and was a bit of a laugh but ultimately his “on ground” experience wasn’t broad enough to actually encompass what was happening and if he wan’t a stooge he will have lost money on behalf of himself and others he sucked in with his so called inside knowledge.
Here is one of his early posts.
https://hotcopper.com.au/threads/i-...rstand.2005702/?post_id=11822726#.XBrrWxo_WhA
The GBG shares lost over 90% after this time and his $500,000 investment (if it was ever real... I doubt it) would have been decimated if he had have hung on.
The bloke should have stuck to his claimed decent “high viz” contract salary on the mine and kept quite IMO. He could have been a trade assistant for all people on HC knew, hardly a position qualified to be able to get one’s head around such a complex thing as a magnetite concentrator.
As mentioned there is no getting around the high strip ratios in the first two years and the need for high rate shows of material movmemt and if grades are down by 30% on the planned grades and stay down over the first two years, the mine needs to be revalued, as has effectively happened.
It might be that at the current price the mine represents good value even at a reduced grade but it’s impossibe to know that IMO. That’s why it’s more sensible to wait on more information, rather than some hearsay from people on the ground. The new mine plan is due for release soon according to the chairperson and the December quarterly will give more clarity to the actual production from the mine. Esh
