Ann: Notice of Annual General Meeting, page-23

I understand and share all the concerns which have been expressed about the increase in the share placement capacity which is proposed in Resolution 4 at the forthcoming AGM.

I have a different perspective.

As much as capital raisings never seem to take place at convenient times, I prefer to be supportive of a company I like, which is in an industry I like, and which is run by people I like. HGO ticks each of those three boxes for me.

HGO will effectively have a new board as from 25 April 2020 comprising Derek Carter (whose appointment takes effect on that day), Murray Boyte (whose appointment took effect in May last year), and Lachlan. It is likely that HGO will need to raise additional capital at some point. Mining and production activities have ceased. There is no money coming in. There is money going out to meet ongoing expenses.

Recent changes to ASX listing rules enable companies to issue up to 25% additional capital until 31 July 2020, on certain conditions. Resolution 4 will enable HGO to issue up to 25% over a longer period (12 months from the AGM), without any conditions.

The fundamental question for us as existing shareholders is whether we trust the board to place a significant number of new shares on terms which are fair to us, and which does not effectively constitute a transfer of wealth from us to new shareholders.

I have no objection to the board having the power to raise additional capital. I do object to the board raising additional capital in a manner that dilutes existing shareholders who are prepared to subscribe for additional capital in the company. I am in that category.

Any placement to a new shareholder which is accompanied by a capital raising involving existing shareholders who wish to participate, and which gives existing shareholders the opportunity to remain undiluted, would be a good outcome in my opinion. It would auger well not only as to the ability of the new board but also for the future prospects of the company as a whole.

HGO would not exist but for the support of its existing shareholders. I think it is critical that the new board take the existing shareholders with them on the journey towards a flourishing future for the company. I will be voting my shares in favour of Resolution 4 in the hope and expectation that the new board shares these sentiments.