well written ff. I admire the enthusiasm of the HEG punters but...

well written ff. I admire the enthusiasm of the HEG punters but alas remain the bear. Mr bearish relates to my view of the future share price of HEG.

I would actually like to see HEG make some serious money, the sentiment towards narrow vein miners is still very bad due to the fiaso of BDG and Ballarat, ongoing fiasco of CTO . The market remains wary. My biggest junior stakes are in narrow vein miners, SLR and MCO. I know the game reasonably well as an investor and talk it through with engineers and airleg miners alike.

It a tough game airleg mining, there is great scepticism towards it by many mining professionals. The underground nickel mines of the WA goldfields are the home base of airleg mining .It has been abandoned by the majors as being to risky. The team assembled by SLR was probably your airleg grand final winners.

anyway...

as anyone who has observed the share price has noticed sentiment is very poor for HEG right now, esp when you look at the strong moves in other juniors recently

I had attributed this to the option issue, but I dont think this is the cause. I was actually thinking of buying back in close to expiry, but wont now. I could well be wrong.

The cause of the weakness is I believe

- the market looks at the production figures and doesn't like what it sees, decreasing grade on increasing tonnage.

-the company has not disclosed July and August production to the market so it probably isnt that exciting

-at current gold prices the company will have to raise more capital to fund expansion. Whenever the market senses this a stock go bearish.

- to fund the more ambitious expansion of the bulk mining target at Hargraves would require at least $80million. The market is very wary of this, the potential dilution and the risk attached

-the market has done the math on the current production and its ho hum:

cash costs claimed to be $500 an ounce by HEG bulls. Well I for one believe underground miners should be banned fron quoting cash cost because it omits the next biggest cost of mine development . My guess is development costs are running at a minimum of $200 an ounce

at a production rate of say 15000 ounce pa , admin and exploration are around $200 an ounce

thus we get $900 an ounce cost. Its to close to the bone. the market isn't interested

I dont buy into the " repeating high grade bonanaza pod " view of the bulls here. I require proof from production. Its not showing up. When it does the price will go up

HEG will underpeform the other juniors. Its market cap already prices in success

good luck holders thats it from me I will leave you alone, but remember the most imporatnt thing in this game is spread your bets and be very very hardnosed. Your investment capital is precious and once gone hard to get back