Ann: Results of AGM , page-2

The voting result of the AGM both stunned and intrigued me.
Shareholders overwhelmingly rejected the company’s remuneration report and yet, strangely, to my mind, re-endorsed the tenure of incumbent directors to pursue their dream of developing the company’s mining assets over the next two decades.
Good luck to investors who have signed on for the long haul.
I respect the judgement of shareholders but, before my stock faces yet further dilution, I intend to exit Havilah in favour of more attractive investment opportunities.
The thing is that companies should stick to what they do best.
Havilah is an excellent and successful little explorer, well placed to keep finding and on-selling its considerable discoveries. It should have initiated this regimen many years ago but instead has remained anal retentive.
Realistically, there are very few companies in Australia and several only overseas capable of funding the capital now required to develop Havilah’s large portfolio of assets.
A tiny company such as Havilah has scant prospects of sequentially mining its assets over the massive time-line it has outlined unless it can be assumed that commodity prices are set to increase over the foreseeable future, that wages remain static for years to come, that mining costs remain stable, that native title difficulties, PIRSA compliances etc all resolve themselves almost immediately and that our current directors have the longevity to stay the distance for all this to take place.
An old teacher of mine, Jim Griffin, who wrote perhaps the most definitive textbook on Australian history once related to our class that the mining boom of the 1850’s actually produced fewer than 100 individuals who could retire as a result of the gold rush. Of these, only a handful were miners, the majority being persons who supplied picks, shovels and pans to those determined to prospect for the elusive gold.
My suspicion is that the same will hold true for Havilah.
Bob Johnston’s contract drilling company seems assured of reaping the lion’s share of any venture to extract Portia’s gold, copper from Kalkaroo and iron ore from whatever Havilah site which may be prioritized.
Basically, I see little joy for Havilah shareholders ensuing over many years to come, if ever at all.
I cannot understand how shareholders have so readily stood by its geological directors when, to me, their agendas are so obviously disparate.
Havilah had until recently promised to sell its Kalkaroo asset in order to provide a timely capital return to shareholders of perhaps $2 to $3 per share.
In fact Havilah's agent, Standard Chartered Bank is still attempting to achieve this outcome.
Nonetheless, at the same time, it seems that Havilah directors now intend to try to develop this asset themselves, or maybe with an equity partner, with mining to commence, subject to PIRSA approvals being in place, before the end of this decade, but with the no mention of projected returns to long suffering investors.
Perhaps the appointment of Peter Reeve as a new director of Havilah was the catalyst which, temporarily at least, saved our directors’ bacon, but I’m very wary of this appointment.
I recall, only months ago, a wonderful little company named Exco Resources.
This company had a magnificent portfolio of copper and gold assets and held a large slice of the most prospective ground in Australia, around the Cloncurry region in Queensland.
So successful was Exco that its Managing Director, Michael Anderson, (the most impressive MD I have come across in many years) decided to return to shareholders 28 cents per share as a result of Xstrata buying its major discovery for $175m.
Peter Reeve, the then CEO of Ivanhoe Australia, Exco’s major shareholder, insisted that the payout to shareholders be increased to 38 cents per share, resulting in the resignation of Michael Anderson, who saw that his company was now vulnerable.
Although Exco still held 16 cents cash per share after Peter Reeve’s edict, Peter soon sold out Ivanhoe’s equity in Exco for just 19 cents to Soul Pattinson.
This sell-out was subsequently upgraded, thanks to Exco’s other directors to 26.5 cents per share.
To my mind, Peter Reeve basically destroyed Exco and delivered it into the hands of SOL for a mere fraction of its real value.
Remember that the new Grants iron ore prospect is 25 per cent owned by the SOL/PLY partnership.
SOL has a long history of offering peanuts for great assets.
My hope is that Peter Reeve now works for Havilah and will not once again succumb to the bidding of Soul Pattinson.
Time will tell.
Unfortunately, it is time which I personally no longer have available.
I am very disappointed with the performance of my Havilah holding and will now leave it to the young guns who continue to show faith in the ability of the old guard to lead them into the distant future.
Good luck to all of you.