HIO (ASX) Interview

Originally posted by Johnyb888: ↑

This project will be on hold for some time. How long is hard to say. But HIO has no debt and doesn't require some big cash raise to survive for a year or two.

The rubbish here being spouted about management is just ridiculous. As is the nonsense about this project now being dead.

The current conditions have caused CAPEX cost to blow up considerably. There is however two things to note here:
1 Some of these costs are highly likely to normalize bringing down CAPEX to more manageable levels.
2 All mining projects will have to deal with this! Not just HIO.

So when the tens of billions of green steel infrastructure get up and running and they realize they don't have any feed product, its not like they can call HIO's competition who then can cheaply build a mine. One way or the other, mines producing high grade IO will have to be build in the not to distant future or the big steel makers risk wasting tens of billions on useless green steel mills/factories. This by the way is a situation mimicked in several commodities of which the prices have fallen and projects are on hold, but a very clear squeeze is coming like copper and uranium...Few people, including many experts and annalist argue the current production levels are sufficient, yet the current uncertainty/fear and higher costs are now preventing any progress even though it seems obvious these resources will be desperately needed! In my opinion high grade IO is now joining that list. You can bet your bottom dollar that any other undeveloped high grade IO projects will show a similar increase in CAPEX. This is NOT a HIO problem!
The question we should ask is which project(s) will be first in line to get going again when the shortage of high-grade IO becomes an issue.

I am sure that Brian is entirely correct that the demand for the product is there. There is just no appetite for big investment right now. That, as always in commodities, will lead to a shortage and (much) higher prices.

This is the commodity cycle at work. Despite growing demand, economic uncertainty prevents investment, followed by a shortage, followed by big price increases for the commodity, followed by massive investment in mines and big run up is share prices.

And I think this down cycle could be quite short ( assuming the recession doesn't turn into a global depression, which is possible) since there is already a shortage of high grade IO and green steel production is already happening and rapidly increasing.

With a few things going better around the globe this project could be back on in as little as 6 months.

But those talking about this project now being dead simply don't understand the cyclicity if mining stocks. Hawsons is still the best high grade IO project out there and well advanced, It will be first in line to get developed.

Unless you believe the demand for high grade IO is falling away, or you think it will just magically appear, projects will have to and actually will be developed.

Expand

That is absolutely correct.

If Hawsons project is worth $80mil then all other undeveloped iron ore projects would be worthless and all iron ore exploration companies must close shop for good because there is no point to search for iron ore and to spend more than $200mil to bring it to BFS stage, Southdown project with $180mil spent so far and where the world can get high grade ores for their new DRI mills and so what will happen to iron ore prices, especially >Fe68% grade?

So, let's the fighting between traders finish and common sense will prevail.

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(20min delay)
Last 1.9¢		Change 0.000(0.00%)		Mkt cap ! $19.31M

Open	High	Low	Value	Volume
1.9¢	1.9¢	1.9¢	$380	20K

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