Letter from Mr Andrew Daley VIA PanAust, page-2

Yes, I also received the letter and felt the same way. The directors, old or new, will have to lift their game, big time. That's the good thing about Hot Copper, we can communicate and get educated by each other. Also, the Directors can read immediate public feedback from share holders.

Further to the calculations that have been posted by several people, I have been looking at a few ASX stocks which have significant cobalt deposits. In the following calculations I have used the cobalt price of US$55,000 per ton and haven't included the cost of mining or processing. For a start, Ramu has 126,000 tons of cobalt (given in Dec 2015 report), but HIG has a share of about 10% of that, so HIG's cobalt resource at Ramu is really about 10,000 tons, which equates to a value of $0.5 billion in cobalt. In comparison, Ardea (ARL) estimates that it has about 440,000 tons of cobalt in WA (worth US$22 billion) and CLQ estimates that it has about 110,000 tons of cobalt in NSW (worth US$5.5 billion). Neither of these two companies are in production and their cobalt estimates are not hard numbers yet. HIG, ARD and CLQ have nickel/cobalt ores with roughly similar percentage composition and the nickel content roughly doubles the value of the ore.

HIG's advantages are 1) it has a processing plant worth about $2 billion which is up and running, with net cash inflows in the last two quarters, 2) it has exploration leases at Sewa with a known nickel/cobalt deposit which has not been properly estimated yet, but we have been told that the recent survey of Sewa should be reported in May (that's this month).

If the Sewa deposit is roughly similar to the Ramu deposit, then HIG is in a great position. A report by the old CEO of HIG in 2015 said that shipping of ore to Ramu was a possiblity, meaning that there should be no need to set up a new processing plant. There should be savings in time and money. Also, the most recent report from the directors of HIG said that the Sewa exploration leases were owned 100% by HIG. But here's the catch, it also said that the recent survey work was being carried out by two Jappanese companies at their cost. This statement implies that the HIG directors may entered into an agreement already with these two companies and as a result diluted HIG's share from 100% to who-knows-what (20% is the figure they have used for Frieda and Star Mountains). If nothing else good comes from this month's annual meeting, I hope the directors announce a good result for the survey of the Sewa deposit and prove me wrong by announcing HIG has retained at least a majority share in any joint venture at Sewa.