Today’s announcements are clearly very positive. The market’s...

Today’s announcements are clearly very positive. The market’s reaction is disappointing.

I think the market’s reaction clearly brings in to focus the difference between short term traders and long term investors. I suspect that most of the regular posters on this forum are long term investors. I suspect that most of the sellers today are short term traders. I personally prefer long term investing as a means to building wealth.

I think it’s useful to put the current share price in to perspective. In February 2020, I was very happy when HGO and AGL agreed to terminate the PHES agreement. From memory, HGO’s market capitalisation at that time was about $30M. At today’s price of, say, 5.8 cents per share, HGO has a market capitalisation of about $67M. That rate of growth is obviously very pleasing, particularly in circumstances where we can confidently expect further significant growth in the near future.

As set out in today’s economic assessment announcement, the net present value of the project is $166M. That equates to over 14 cents per share, assuming no further capital raisings, and assuming no further increase in the resource estimate over the next three years.

The concern which has been expressed about betting the future of the company on the MC51 is unjustified. HGO’s announcement to the ASX on 31.8.21 states that the MC51 will be used to develop the portal and the 500m underground decline. After that, everything else is being done by conventional drill and blast methods. That’s also set out in section 5.1 of today’s economic assessment.

My only concern from today’s announcements is that HGO does not allow itself to be discouraged by the lukewarm market response, but, instead, that it continues to do what it has been doing to bring this project in to production as soon as possible. Lachlan impresses me as someone who will do just that.