HGO 1.61% 6.3¢ hillgrove resources limited

Empire,I fully trust that your phonecall with DS was reported...

  1. 3,666 Posts.
    Empire,

    I fully trust that your phonecall with DS was reported faithfully, and I appreciate your post. I am definitely not shooting the messenger. I simply point out that MD's always spout 'the company line'. What you have reported also backs up what I have said for the last few weeks - that HGO did require extra capital and until they did so their share price would slide. As you recall, I was hoping that a resolution on capital management happened ASAP so we could move on with less risk.

    But MDs always wear a company hat when speaking with shareholders. And right at the moment, that role is to sure up extra capital, get Kanmantoo up and running and cashflow positive, with the minimum dilution. And in so doing, increase HGO's low share price.

    As for picking exactly who, when and at what price a takeover may happen is a fool's game. If I knew that, I would buy in only on the day before. I simply point out, as many other analysts have, that HGO is vulnerable due to its low price and open register, and there are cashed up companies on the acquisition trail (including the Chinese) in a variety of sectors (not just copper). But if HGO get through this rough period, and get over certain hurdles, their share price will strengthen and they will then be less vulnerable. I am not saying HGO will be taken over. I am saying they are a potential target given the large share price/value gap. If you think HGO is a bargain at current prices, so will others...

    Empire, as a longer term holder you will be aware that HGO was 'looked at' at the end of 2009 prior to turning their back on a JV - most buyers want 100% of something, not 50%. They were also being 'looked at' when they were sitting on K and a pile of cash (and a potential top-up) and HGO did that 'phantom buyback' where they announced a buyback but never actually bought shares. This was done for defensive reasons - they were being looked at.

    In general, I support what HGO is trying to do - their tighter strategic focus and financial discipline. The current approach is the right fit at the right time. My only criticisms have been:

    - HGO did not report the incident with the contractor in a timely fashion,
    - They blurted that they may need extra capital before they had secured it, which was amateurish.
    - and HGO shouldn't be pre-empting market sensitive announcements like near-future capital raisings by having private discussions with some shareholders.

    Yaq

    And as for communicating with DS - do you really think I refer to myself as 'Mr Yaq' in my correspondence? Please...

 
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