Sunday, December 03, 2006 3:00:19 AM
IMHO, JV creates for GBDX two things: Direct control w/ % ownership of actual product they sell, increasing net margins.
Availibility of that product in an industry that is monopolized. If you were selling apples, and now you are part owner of the orchard you get the apples from, larger revenue capability and larger control of supply required.
Now,w/using Alrosa supply; that's why in the JV conditions, GBDX demanded that "if" Olympus could not supply adequate product to meet demand, GBDX has option to use outside sources to fill the gap. Best of both worlds.
We'll see!
Best Regards
Not a buy or sell recommendition. My opinion only.
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