sentiment

A couple of weeks ago the sentiment surrounding HGO was superb. It seemed that almost nothing could go wrong and that it was all upside from here. The SP was steadily climbing upward and its rise to the 70c (previous high) level seemed near. I *had* a good percentage of my portfolio tied up in HGO shares and I was perfectly comfortable with that.

Since HGO have announced the placement however I have been a lot less comfortable with my position. I do realise that it is probably best for the long term interest of the company but there are obviously risks involved with going it alone with a development such as Kanmantoo. So while you can say that Hillgrove want to experience all of the upside for this mine, unfortunately they also expose themselves to all of the downside. The old 'risk versus reward' concept just follows us around all of our lives.

Last week I reluctantly reduced my holdings in HGO. I did this for 2 reasons. First, I am in the belief that I will be able to get a small portion back in the SPP or below the 40c threshold and second, the world markets are definitely due for a correction and I think we have seen the beginnings of this last week. The market shows no mercy, especially to small/mid caps. Even the seemingly positive announcements don't seem to get rewarded when a bearish market takes hold.

So the quality and potential of a company takes a back seat and sentiment takes over when the market is bearish.

This is all quite bad timing for Hillgrove, as it has jeopardised their SPP and it could put on hold on share price for a while....I do not believe that this is any fault of their own, purely a timing issue.

I am still a firm believer in HGO and still have my hand in the pie. I believe in a strong future for both gold and copper and it seems that the market supports copper even when everything else is out of favour. In London, copper rallied 1.65% in the last session while all other metals slipped. This to me is significant.

So us HGO holders are stuck between a rock and a hard place. We want to hang around to see all of the potential unfold...Indo gold results, Kanmantoo development/production, Wheal Ellen, Kanmantoo expansion etc etc BUT we expose ourselves to the sentiment of the general market. What to do????

No point complaining though, if the sentiment turns into another irrational market it is the perfect time to either take a break and sit on the sidelines for a while OR turn the situation into a positive and accummulate shares that fall below fair value. Another week like the last for HGO's share price and I will be ready to pounce.