In response to Bernards comments, some thoughts on current HEG...

In response to Bernards comments, some thoughts on current HEG situation.

HEG imo is possibly suffering from the 'boy who cried wolf' syndrome. For example for quite a long time mgt stated a 50tpd target for the mill but it actually took a long time to achieve. There have also often been announcements of abundant visible gold or high grade face samples - which have resulted in great but sporadic production results here and there - often punctuated by negative impacts like mill problems or some other problem (e.g. recent problems with the alimak last quarter).

The announcement from the other day contains some exciting new information on the exploration/development front but there was no information about how current production is going. I'm assuming they have been mining and milling gold this quarter but are leaving the updates on that front until the quarterly report.

If they haven't been then that would be dissappointing because they've been conveying the impression that they are now on continuous production so the market is pretty much expecting at least circa 1000 tonnes per month of ore going through the mill.

If the quarterly shows that they have been producing fairly consistently, then all we need is for the new areas that have opened up to deliver on the promise - particularly of course the mica stoping as it gets closer to the cross course and indicator fault.

The company is going well - its producing gold - and improving understanding and confidence in the resource. I also think they did a great job in the last quarterly in relation to detailed diagrams showing the areas they are targeting for development, stoping and exploration.

But they also have a history of making announcements that create expectations that are then not met for one reason or another (as much to their annoyance as ours I'm sure).

The news is all promising but until we can quantify it (with grades, production results, face sampling grades for Frenchmans, Mica etc.) then its hard to put a true value on what these results mean.

That being said - we've seen the share price move up in recent days just prior to the last announcement through an area of historical recent consolidation and it did that fairly easily on no news. There also wasn't a big volume of selling into the 'fact' after the announcement came out - possibly because people are also still awaiting the quarterly or it could be because there is more good news to come.

The quarterly as usual will give us some good insight into how to value HEG at the current time. Its possible that recent price action is simply anticipation prior to the quarterly - or it could be an indication that those in the know a bit closer to the ground can see something good coming up ahead.

Either way this company certainly incites curiousity because there is just so much potential for bonanza pockets that would make other mining companies drool and could potentially result in production levels in the space of a few weeks producing what others do in a year or more.