Morning guys, Just really a courtesy post to say that I have...

Morning guys,

Just really a courtesy post to say that I have completed my sell down of HIG.

The reason being that the price rise I had anticipated in Ni has not eventuated (yet). Despite the continued rise in Co prices and the throughput of the Ramu plant, I think that at Ni prices of US$4.60 the JV will be very close to break even at an operational level at present.

The issue for HIG and Ramu is that the JV has a huge debt burden that incurs a c. 5% pa interest rate. Despite this favourable interest rate provided by the Chinese JV partner, the Ramu operation is, IMO, very close to the inflection point where the debt burden runs away from them due to the capitalised interest and, unless Ni and Co prices were to moonshot, Ramu will struggle to generate enough cashflow to pay the interest component of the debt let alone pay the debt off.

This was compounded today, IMO, by the news that in an independent expert's opinion the BFS for Frieda River is robust. This leads to the risk that this project moves ahead and HIG are required to contribute capital to maintain their share of the project without the means (from Ramu cash flows) to do so.

Thus, HIG may be reduced to a NSR basis for Frieda River. In addition, the drill results from Star Mountains have been less than inspiring to-date, again IMO.

Really just for courtesy to other HC'ers as I have talked positively about HIG previously.

Cheers
John