frieda update, page-8

Folks take a chill pill.

IMHO this is a forum for opinions - my opinion is mine and it's based upon practical considerations rather than assays.

My opinion is moulded by folks that have a very direct interest in the logistics and construction of this project. My own interest is tangential, but it doesn't mean it's not well informed.

Great assays are only part of the story here - consider the following:-

1. Frieda should have been mobilising significant workforce by now - but this keeps getting delayed. They have a small workforce on site only. Why? Ask the right questions. A great resource is only worthwhile if it's financially viable to get it out of the ground - that is what's being asessed right now.
2. The construction workforce required is HUGE - yes, PNG has a wealth of untapped manpower, but, the qualified folks from the highlands which you speak of are mostly operations people - NOT construction people - and the numbers are small. With PNG LNG in full swing, and several other mega projects in the region (Gladstone, Wheatstone etc etc) ramping up, the costs of getting the specialised engineering and construction expertise required for this very technical project will be astronomical - and I have some significant doubts that there would be the resource in PNG - would probably need to import labor from Phillipines if this is to really kick in the next 5 years - politically palatable?
3. There are NO ROADS and NO INFRASTRUCTURE in the Frieda area. Everything will have to come in by barge... which leads to..
4. There are no large ports nearby - the closest thing remotely worthwhile is Madang - for those of you that have been there, it's not large. IE large investment required there. Moresby will be out of the question for the next 5 years with PNG LNG.
5. The political epicentre of PNG appears to be shifting from the sepik - don't underestimate the impact Somare had upon 'driving' this project.
6. 250 million is really a drop in the ocean for Xstrata and I'd suggest they'd want the questions above answered in more detail before they threw more on the table - I haven't read the agreement with HIG but I'd bet that there are provisions in there for withdrawal if the project is found to be technically, politically or economically unfeasible at the present time.
7. I'll become very bullish on the stock if I see more discussion about these issues - until that time I'd see investment in HIG as potentially a very long and disappointing wait -

My two cents, my opinion only. No apologies issued or expected! It's just an opinion - could be wrong, could be right - but my counsel is dig deep before getting carried away.

Goosfraba Folks -

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