I have decided to return from my self-imposed exile from the HGO thread, because I feel that there needs to be debate about what is going on.
It is time for HGO to make a decision on Kanmantoo. Mine it, or sell it. But the uncertainty that has surrounded this company for the last 6-12 months has got to stop. In fact, the uncertainty around K has gone back many many years.
I have never seen a company do with Kanmantoo what HGO have done. I have never seen a company spend so much money, and do so much in terms of mine development, without making a FID.
They have:
- bought a mill, but delayed its dismantling and relocation - Hired a GM and staff - built a new road, to avoid noise and impact on local communities - confirmed a deal on water - bought swaptions - got final regulatory approvals - turned their back on a JV... - raised capital, supposedly to go it alone on K - then said they are going to spend some of that money buying BACK some of the the shares they had issued (who would ever participate in a HGO cap raising ever again?)
All without making an FID. Who does that?
- Who turns their back on a JV, without committing to a Plan B?
- Who pays dividends, issues more shares, then buys them back, then DOESN'T buy them back (just SAYS they are going to)? A money roundabout. It doesn't send a consistent message of a definite strategy, and consistent capital management approach.
- Who has over $100m in the bank, thinks they have extra copper at K, and yet delays drilling for 9 months? For the sake of a few hundred thousand dollars, which could potential add millions in shareholder value, and drilling is delayed by 9 months.
- Who claims ESG to be worth over $2.50, and then sells it for $1.00 on the hope of a top-up?
- Who waters down HGO's ESG stake to just below 20%? They had a powerful blocking stake in ESG, and dilute it down to 19.99%.
- Who goes out and invests in smaller resource companies, when their core purpose should be getting K into profit operation? As I have said before, it reeks of a company behaving like a 'mid-tier mining house' before they are one.
Well, time is up. As Hardmano said, it is decision time. They either decide to mine Kanmantoo, confirm finance, and make an FID, or, they decide to divest it. Not more dicking around spending money, and yet leaving the market in uncertainty about their purpose and the share prices bleeds away.
Were they stalling for the top-up which is running out of time? Where they playing a game of brinkmanship with K and really wanting to sell it?
We just don't know.
In many ways, HGO's inaction has caused more damage than the proposed RSPT. The RSPT's problem is it caused so much uncertainty. This is exactly what HGO have done. No one outside of the company has the foggiest of what they plan to do, when they plan to do it.
And as I said once before, when shareholders and strong supporters like me start losing patience, then you have a problem. I can be a company's best friend, or their worst enemy.
So, time for some decisions Hillgrove. MINE or SELL. And time to be upfront, open and clear with the market about what you intend to do. AND SOON Because the current situation is untenable, and will not be accepted by shareholders.
Yaqona
And as for my sentiment - HC don't have a button for, "I have no idea what is going on, so how do I make an informed investment decision. Yes, HGO is ridiculously cheap. But how can we invest in them when we don't know what is going on, and they themselves are no willing to buyback their own shares?
HGO Price at posting:
26.5¢ Sentiment: None Disclosure: Held
