now thats serious!, page-16

re: hig: question for acturtle Hi Rosco,

I know a little of the project, but not a lot.

I believe there are two detriments to the HIG.

1. The management team have blown $60 million in cash and dont have a lot to show for it. That is a worry. They have spent a lot of money on three separate projects and dont yet have a mine to show for it.
2. The PNG factor.

Otherwise it looks like a fantastic project, the grades are awesome. HIG should see some healthy share price gains as construction commences and production eventually occurs. The stock could perhaps double over the next 12 to 18 months.

I am looking at switching from one of my current gold stock's soon into a new one. I look for companies with no current production and a mine in construction phase. Maybe HIG will be the one I move into. It depends whether others are more attractive at the time. To be honest if there is value in a stock without the sovereign risk I will prefer to stay in safer waters.

The risk with HIG is that due to the PNG factor it will always be a cheap stock. However to offset this, OXR have shown that despite the location a good deposit will always attract the institutions. There is also a dearth of mid-cap gold stocks around so maybe HIG will not be penalised too heavily.


acturtle