Hi all, I'm a long time holder from back in the Rene Rivkin Report days, have always been an interested reader of the posts on HIG but never compelled to write anything. Like builder2, I have averaged down over the years and now find myself with a significant holding, always having faith that the stock was undervalued and that some day there would be a turnaround which seemed evident with the recent cobalt rally and nickel story relative to the EV revolution. It's Friday night and i need to vent, would be close to 15 years I've been waiting for a takeover offer and I'm disgusted.
OK let's be honest, Craig Lennon has been totally outplayed by Anthony Milewski, his pants are around his ankles!
Firstly, he agrees to issue 142.5 million shares to Cobalt 27 through a privateplacement, making them our biggest shareholder with 13%. He did this in good faith on the pretense that the streaming deal would be a game changer for HIG, as it would have been. He also gets Milewski on the board and Milewski puts him on the Cobalt 27 advisory board or something to that effect, butters him up a bit... Milewski is now inside and has exposure and a chance to go right over the HIG business, secretly doing due diligence no doubt, an then the penny drops, he realizes that it would be more cost effective to buy Highlands outright and forget about the streaming deal. Go figure, I'm sure this is what all of us have been thinking for some time, cheap, cheap. ie. Why not pay 115m or there about's for a stake in a Nickel/Cobalt mine worth 2 Billion+ with the metals on the up + the other interests. This may have been his strategy the whole time, knowing that a deal with MCC wouldn't be a walk in the park as Craig Lennon had us believe. "They have expressed in-principle support for the transaction", what a joke.
So it's now December, Milewski is now in a commanding position and ready to take advantage of the declining share price due to the nervousness of the market around this deal getting done. He could of easily agreed to the extension but realizes he's got Lennon cornered. So he now says, we're going to walk away from the deal and you'll have egg on your face or what about this, how about we pay 10.5 per share, the same as we did in May mind you, and we'll buy all of your company, a premium to your VWA share price blah blah, you know the rest.
And disgracefully, Lennon throws up the white flag and recommends we sell out, is this a bad dream, knowing full well that the reason for the share price decline is because of this deal not getting signed off, what a joke. In my opinion, if the deal was made the share price would have easily recovered above 10.5C anyway, especially after a few quarterly reports and investors seeing the free cash flow starting to come in, it was a given. Milewski knew this, why not have a go at all the pie, Lennon works for me now anyway, he'll agree...Disappointed with Chairman Ron Douglas, thrown in the towel also, and Ernie Gangloff, well Ive sneezed longer than he's been on the board, opinion doesn't matter, hasn't done any hard yards.
Milewski also forces us to sellout on Frieda for peanuts after all this time, he has no interest and uses this as leverage for them to sell into the scheme, guaranteeing their large shareholding % to his cause in return for the whole 20% they don't own, another joke.
Q's
Would we have issued 13% of our company to C27 if the streaming down wasn't going to happen? Imagine the effect on our share price if they had to be bought on market like any other predator/bidder...
How can Craig Lennon be an Independent Director and be taken seriously if he's on the advisory board of C27?
Do we know if the winning bidder is entitled to purchase up to 20% of Ramu at fair market value? This is an important question, if the answer is yes then it gives the Chinese incentive to bid on Highlands to protect their stake and simplify their model. They need to pay 115m + a bit to sure up the remaining 20% they don't own, sell off the other interests. Sorry forgot about MRDC, not sure of their position in this.
Or, on the contrary, do MCC consider C27 as a better partner going forward to assist with funding of Ramu expansion? if that was the case then it makes sense that they could have colluded with C27, plausible?
Note, C27 make a 66 million share cross transaction as the market opens after the announcement to get their stake near the maximum 20%, once again outplayed Craig Lennon. What is it about 10-nil.
In summary, I don't know if we have any hope except for MCC, look forward to seeing what the independent report has to say.
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