Greenstone Resources GRE.T or GRERF OTC Message Board

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Gold/Mining/Energy : Greenstone Resources GRE.T or GRERF OTC

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To: Joe Gun who wrote (948)	8/13/1999 3:44:00 PM
From: richard badauskas	Read Replies (1) of 1005

Called GRERF this morning, was told they are confident that a deal with secured parties can be worked out.I guess this means massive dilution. The market is indicating around C$0.17 cents or C$14M value for the shares. Guess this means shareholders C$14M secured holders C$120M or a division of the company 1 share to shareholders 9 shares to the bondholders if we split on the basis of valuation at current values. I guess this means 80m shares current shareholders/720 million shares bondholders for a total of 800m shares. On current valuations of 40cents for the bonds and stock at 17 cents we get a total valuation of around C$65M divided by 800m we get around 8 cents per new adjusted share (Market seems to be indicating a value much higher than this or around C$130M to maintain informed buying of shares at 17 cents current price). Assuming markets are well informed and the public, as always is mostly in the dark, we may only be looking at dilution of around a total of 400m shares to satisfy bondholders. At this lower number GRERF can certainly carry a small re-financed short term debt of around C$30m. With these lower numbers the bondholders get a good shot at capital appreciation going forward and the business doesn't dissolve into chaos and shut-down. The current valuation seems to be indicating that the June qtr. results will be a very positive number. I am not in total dispair at this stage, was involved in a similar situation in Australia where the Charters Towers Mine came out of receivership with a dilution factor of 100% only to the common shareholders going from 125m shares to 250m shares. Much of this depends on the confidence of the secured parties in current management and their ability going forward to better production numbers.

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