interesting post on yahoogroups

Hi Ian se what you think

Subject: interesting speculations




I will stick my neck out and categorically say that this capital
raising is not for JP5 ( or not primary reason ). My conclusion is
based on 2 points:

1. The JP5 project is too small for such an expensive capital
raising in terms of dilution! Also, this capital raising sounded like
for immediate needs.

2. Patterson is guaranteeing the shareholder placement to the
tune of (3.2m?) Now, that is heavy money by any broker
institution standards. You don't guarantee that sort of things for
pitiful returns or if it eventuate!

Now, read this paragraph under automotive review in the
investor presentation.

"A typical engine plant with a capacity 400k units pa and with
royalties achieved in marine sector US40-$50 per unit represent
US $16-$20 m pa in royalties."

When I first read this, I was confused by the reference to marine
in an automotive review and the royalties numbers. Firstly, my
understanding is that the royalties for auto is often quoted as
$US20-$US40. Than it dawn on me that Cook is just using the
marine segment as the kind of royalties that can be achieved for
the auto segment. But than that is not totally true!!! unless of
course Cook is referring specifically to the high end of auto
royalties( V6 and V8 !!!). Now this line of analysis become even
more teasing when "a typical engine plant,,,,," is also included in
the same paragraph! I did a quick calculation of the melbourne
Fisherman high feature plant capacity and it came out to be app.
324,000 units pa. (400K!!!) I keep asking myself why would Cook
use an engine plant capacity to illustrate the potential of the auto
sector unless he has the Fisherman plant in mind when he
penned the document. Now, why would he suddenly depart from
the usual "10% of the market will result in $150m royalties" type
of statement?

Finally, while the use of the word '"bid" might conjure up
government contracts it could just as easily be referring to auto
contracts. ( plural !) The word major was also used in describing
these contracts. As I said, i wouldn't consider the JP5 as a major
contract nor would Patterson guarantee a multimillion fund
raising exercise on a JP5 contract alone. The only other scenario
is multiple Indian scooter contracts!!!