Disclaimer: This is not cross promoting. I have only mentioned...

Disclaimer: This is not cross promoting. I have only mentioned HIO in order to give some context to what I think is an excellent decision by PEK's BoD, and no, I do not hold shares in this company (though I did seriously consider it at one stage).

I was watching a very interesting interview with the MD of Hawsons Iron (ASX:HIO), Mr. Brian Granzian.

Here is a short summary on the problem: HIO was slated to release a BFS before December this year which, rumours have it was in the region of billions of NPV (Post-Tax) - one of the largest high grade iron ore projects in the world. Their JORC resource is 3.95 BILLION tons of ore.
HIO came out with an announcement a couple of days ago that essentially caused their share price to plummet from around 37 cps to close at 9.7 cps after two days of trading.

Brian goes on to state (I have summarised his statements below):
"What's changed is the economic climate, at a pace that investors haven't fully grasped or understood. Geo-politically, that continues to ramp up, which is adding to cost escalations. For starters, Steel has gone up from xxx to yyy in the past 12 months. The Aussie dollar has sunk to great depths compared to a year ago. The cost of energy - I don't think I need remind anyone of that, unless you've been living under a rock for the past year or so. The central banks are chipping in by raising cash rates to counter record inflation, which in turn has resulted in inverted yield curves and entire reserve equities being wiped out - point in case, our own RBA has lost 37 billion in equity.Supply chains are more costly - they themselves being affected by the above points.Lead times have blown out, further compounding holding and construction costs.This is a perfect storm for all intents and purposes, with all these economic factors coming in at the same time.Raising capital under these conditions is extremely difficult."

If we draw a parallel to PEK, we can see that a significant reduction of CAPEX is exactly what the doctor ordered in today's macro-economic $hit-storm and by design or not, has turned out to be a blessing in disguise.

And before any one else storms off in the wrong direction, I need to ask a question - would you prefer a very low chance of project finance if our CAPEX had remained in the ~USD 400 million (this was in 2017, it would be closer to USD 600 million now), versus very high chance of finance for a very low CAPEX, which in turn, allows us to build a mine and produce concentrate, and when the economic climate improves, take a shot at financing our rare earth separation plant.