new ann out, page-17

Well like nearly all situations there's both positive and negatives with HEG. You only need to look at SLR underground drilling results or BDG drilling results as examples to know that these 'low grade' but wide intersects can turn into quite good results on mining - thats the nature of nuggety gold.

At Hill End they've only gone down under 300m and they've already encountered significant gold in and around the old workings - so I do think there's an economic resource down there. If there is it could repeat downwards for hundreds more metres as it has in other locations.

From the management perspective - look I think they've got integrity, and in spite of the waffly nature of their reports, they do still communicate fairly regularly to the market and they've certainly moved things forward and shown quite a lot in the way of innovation so they are all positives. But in my opinion, if they really are going to make a commercial go of this its time for a far more tightly run, efficient operation - clearly planned and executed. It takes a certain type of personality to move things along very quickly and very efficiently - you only have to look at SLR or NGF to see how much of a role good management plays in operational success.

I'm hoping that the 'planned expansion' next year is approached in this tightly planned and well executed manner. If it is I see no reason why HEG can't start to produce good operating results from ore bodies like this central zone. And yes - strong positive operating cashflows is what they need to acheive.

Once they get cashflow then they should be able to get aggressive with exploration - deeper down and along strike at Hill End - but particularly with Hargraves.

Hargraves to me is a truly exciting prospect. The drill results last year to me were spectacular for the type of system it is - and they were consistent over huge widths and over a long strike length.

In my view, what HEG needs to do is get enough cashflow going out of Hill End and have it running smoothly and then direct that cashflow to developing the elephant that Hargraves could be.

In relation to their current plant - for what its current capacity is, a lot of money has gone into it thats for sure - i.e. it probably hasn't been the most efficient way of ramping up production - but regardless they do have one and its now capable of putting through pretty good quantities of ore. What their plans are in relation to it I don't know - I'm hoping that after the time and money spent on it that its now performing well and is suitable for ongoing use (if not then I'd question why so much time and money has been ploughed into it rather than just kick off with an alternative processing option earlier in the piece).

I'd really like to hear more about what they're plans are and what they think they have in terms of economically mineable resources at the moment after the work thats gone on.

HEG is a bit frustrating because it feels like they have the goods there, but the progress often seems slower and more haphazard than it should be - this does have the effect of dampening enthusiasm.

Some positive production results would help to revive them a bit.