Are the stars lining up for Red Hawk?
Interesting question isn’t it? Let’s discuss it. There appears to be two (or maybe three) schools of thought here.
Firstly there are those that take the current apparent direction for RH on face value. These shareholders have developed (through company past performance and history) a well deserved scepticism of what TIO’s real motives are but are able to see that RH is progressing well towards a rational and logical outcome, the road haulage operation to Port Hedland. These shareholders know that a third party (or even TIO) may thwart that outcome (by a TO offer or JV Agreement) but they are at least reasonably certain that if there is no third party interest and offer or agreement RH will ship ore in 2025 via Port Hedland. Some (like me) may have reached the conclusion that it is possible TIO wants to exit (which is absolute heresy for the second group!). Being positive about the current direction is absolute heresy to the second group also.
The second group it appears (according to emails received and other feedback) to think there is zero chance RH will get to ship our IO via a road haulage to Port Hedland and that Todd is working in the background to prise away RH’s IO. They don’t appear to know when (although I’ve heard 2025 touted) or how, but they appear certain that it will happen. This group has a habit of cherry picking information and concluding that the same old conspiracy theories are valid. The narrative that RH has hidden 2017 drilling results and have not been included in RH IO JORC resource is a great example (along with the BBI Rail Agreement although expired isn’t really cancelled apparently). Anything positive that is stated about the current Road Haulage progress and direction is quickly attacked with a negative response (not just on HC but also emails sent to me).
(Just a note about the phantom 2017 drilling results. I note that unlike previous drilling results announcements there was no table of results included in the Maturation Study announcement. Previous announcements had included a table in the appendix showing drilling results for each drill hole (and showed the new hole locations). That does not necessarily mean that the results WERE NOT included in the Maturation Study JORC resource and all following resource announcements. I believe that the results were included but it would be great if that proves to be incorrect. If the conspiracy theory is indeed proven, RH will likely have more resource than we know about. If proven that would mean more resource and therefore likely more value. So, if those that promote this theory are proven correct this may well be an unexpected bonus for shareholders and, I suspect, would land some past company officers in deep trouble.)
There is possibly a third group, those that sit somewhere in the middle and either haven’t made their minds up, taken a position, or are not that concerned either way. These may well be the smartest group, lol.
Does it really matter which group is right? Well, it could be argued probably not. It could also be argued that generally in life a positive outlook is better than the opposite. That leads us to the header, are the stars lined up for Red Hawk? I’d like to think the answer is a clear yes (although the Red Dog Highway completion and Port agreements are arguably about 12 months behind where they should ideally be).
Firstly, RH appears to have a clear direction and a viable solution via trucking to Port Hedland. The Red Dog Highway last stage is funded and will be constructed.
Secondly, RH has no binding agreements with BBI (or TIO) that restrict RH from meeting their stated goals.
Thirdly, those RH stated goals are supported by rewards (performance shares).
Fourthly, the company and Board are now free of the likes of McAdam, Warburton and Woolly.
Fifthly, and arguably most importantly, the iron ore price is very attractive and forecast to rise. This will have a massive effect on funding and profitability.
Sixth, OCJ are the king makers. That applies to any attempted TO, a JV or supply agreement between RH and TIO/BBI.
Finally, Minority shareholders have demonstrated preparedness to take action if needed (such as the TOV and 249d plus others). I’d suggest that the company knows that their every move it is scrutinised. I’d suggest Todd/TIO/BBI know they are being watched closely too.
So, there are many positives moving forward. IMO, the stars are lining up, whether the outcome be Road Haulage, TO, JV or supply agreement. Arguing which is the better outcome is futile at this time as Road Haulage is the only option on the table at this point in time.
My opinions and analysis may be wrong so do your own research. Comments, corrections, additional info etc are important and welcome.
A final note - Stay away from negative people, they find a problem for every solution!
