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I am not aware HIG have disclosed they have been trying to sell...

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brightpower

877 Posts.

43

29/04/17

07:37

Post #: 24350184
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Originally posted by prawn_man ↑

Bright Power, have you also considered a float of the Frieda River assets? Basically, HIG shareholders would be given first option to purchase discounted shares, then retail investors could be invited to buy the reamining shares. The aim would be to raise enough funds for the 20% share of development costs at Frieda.

My reason for suggesting this direction is based on the terrible dispute between AusPacific and HIG over the cost and speed of development of Frieda. As it stands, HIG directors write to us saying that they are "acting in the best interests of HIG hareholders", but offer no solution to the lack of funds for Frieda. Similarly, PanAust has asked for a new set of directors, but they have not explained how this change will find the funds for Frieda. So all we have is a bitter dispute that must be resolved. Whatever the result at the May meeting in 2 weeks, the lack of funds will remain and the dispute will probably bubble away and kill the share price thereafter.

HIG have disclosed that they have been trying to sell Frieda. I am distressed by that, but I understand that a smalll cap miner/explorer with plenty of assets in JVs but minimal cash, has to find development funds from somewhere. There are no buyers stepping forward to buy the 20% share of Frieda. Also, JID and Dogon in previous posts said that banks are not going to lend the funds to HIG. Also, if HIG doesn't make the necessary contributions to the JV, then their share will dilute to the point where it has to give up its share altogether. The talk in the Morgan's report that it can get a smelter royaty is rubbish. I have been informed that there is no such agreement. HIG will lose its share at the 5% dilution point, and in the process relinquish the bundle of shareholder funds that have been invested prior to that pont. So a breakup that releases the 20% share of Frieda to shareholders seems to be the only pathway to working with the JV on getting the project underway and sharing in the rewards. Let's remember the fact that Frieda will be deveoped by Gram and it is a huge asset. The latest information from HIG states the following:

"The Frieda River district endowment totals some 2.8 billion tonnes of mineral resource containing approximately 13 Mt of copper and 21 Moz of gold."

As a shareholder of HIG I would be enthusiastic in taking up options to buy shaes in a new company with a focus on the Frieda development and receiving the 20% of cash inflow that will come. That breakup of HIG would settle the dispute and leave HIG to develop Sewa and Star Mountains with the cash inflow it receives from Ramu. But I'm not enthusiastic about giving the directors at HIG any funds (whoever is elected in 2 weeks).

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I am not aware HIG have disclosed they have been trying to sell Frieda.That aside,I would be comfortable with the proposal to take up shares in a new company to develop Frieda via HIG's 20%.I don't think however AusPacific would want to be diluted in this new structure which would not be a bad thing,given GRAM would be the developer.HIG could then work on developing the other valuable projects it has on its books .

HIG Price at posting: 6.8¢ Sentiment: Hold Disclosure: Held
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