about to take off

Our View
In our view, this morning’s announcement puts HGM on the map as one of the most exciting exploration stories we have seen in quite a long time.
While an exploration target is certainly no guaranteed a JORC resource will be defined, in our assessment the basis of the company’s assumptions are suitably rigorous and this Exploration Target appears defensible to us.

For context, the midpoint of the company’s Exploration Target would be a very significant 33mt @ 0.36% cobalt + 4.5% copper + 1.75% nickel
With cobalt trading at ~US$43/lb and copper trading at ~US$3/lb… cobalt is currently worth over 14x as much as copper.
But let’s assume cobalt is worth 10x as much as copper, i.e. assuming a long term cobalt price of ~US$30/lb.
Ignoring the nickel, this would equate to 33mt at 8.1% copper equivalent, or 33mt at 0.81% cobalt equivalent (including the nickel would lift these equivalent grades even higher)
If a resource of this scale and grade can be defined it would be very meaningful in a global context.

A comprehensive drilling programme is scheduled to commence at Nockelberg in Q3 CY18.


HGM is an early stage exploration story and carries higher risk and higher potential return than other mining juniors who have a defined JORC resource. (this came from a lead broker who is about to do a comprehensive cover note on HGM) Drilling starts shortly and i expect this one to move ahead nicely.)