Lachlan called me back so a little bit of welcome left. I think...

Lachlan called me back so a little bit of welcome left. I think I have clarified the main issues

1. PHES agreement

Original negotiation did not include mining in the pit as a likely option so no provisions for it.

Kavanagh UG was a subsequent idea.HGO can mine at the moment but equally AGL can buy the contract out and stop any activity if they wish.

For this reason Lachlan has resolved that any further mining will only be done with the say so of AGL.

AGL are still progressing their plans. Until they have their plans together and HGO has our plans, it’s not possible to determine if both projects can co-exist in a meaningful way

2, Kavanagh drilling

This has been completed for now. We have enough info to pitch a sound economic plan to AGL. There may be more drilling on West Kavanagh if AGL are agreeable - just to finalise size of the ore body.

Boys our coin is at risk here if AGL says no but Lachlan said they had to spend the money else no chance of a Kavanagh UG at all. He said the investment was worth the risk as the expenditure was relatively modest and responsible


3, Kavanagh permitting

Eight months after applying to the govt for a permit to mine there is still no approval - wheels turning slowly in the Govt

4. Ore in the pit

The pit wall remains very dangerous. The only chance of recovering this ore is if a UG proceeds at Kavanagh. Recovery is possible using an unmanned machine which they will probably have on site for the UG

It is not economic to get such a machine in just for the remaining ore.

For this reasons it is written off for now.


5. Plant

Given the reduced content of the stockpile it is now unavoidable that the plant will go onto care and maintenance. AGL are proceeding too
slowly to get the UG up in the reduced time frame

6. South Hub

Kavanagh UG is easier to get permitted than south Hub. South Hub will require longer and more expensive studies to permit. It could not have been done in time to keep the plant going.
As yet this work has not commenced. Hence the decision to try for the Kavanagh UG which was the only chance of keeping a stream of ore up to the plant

7. Dividend

would not comment accept to repeat that they are still considering and no decision on it or the timing and quantum gave been made.