Hi Mallis, Thanks. I will check them out. The good thing about...

Hi Mallis,

Thanks. I will check them out.

The good thing about HIG vs. AUZ now that AUZ has re-rated materially, IMO, is that the operation is already built and operational at Ramu. There is no execution risk and capex required.

HIG has been previously priced for the issues it is experiencing at Ramu (low commodity prices) and Frieda River (huge capex). In a higher Ni-Co price environment this is a simple case of re-rating the business as the cashflow improves.

Previously I have been concerned that Ramu was very close to a runaway debt situation where the capitalized interest on the JV debt got to the point whereby it was impossible for Ramu to repay the loan under any realistic price scenario.

I believe that this got very close.

However, after a couple of Quarters of positive cash flows from Ramu, good operational performance and record production levels and an improving Ni price (coupled with solid Co prices) I think the situation is now different.

If/ When the debt gets repaid HIG enjoy an additional benefit of increasing their stake from 8.5% to 11.3% in the project for "free" ... a 33% increase.

Undoubtedly there is a lot of enthusiasm in the Ni-Co sector at present as can be seen by the price charts. Things may be a little ahead of themselves ... or not.

Cheers
John