not good enough

The AR is released, which should be THE GREAT PRE-PRODUCTION MARKETING PRESENTATION for HGO, and the share price goes DOWN to $0.26? I find this extremely disappointing. The Wilson HTM Report states that HGO should be valued at DOUBLE this figure at $0.52 (with a target price of $0.64) with only $0.02 assigned for Indonesian and other exploration. Why arent the big players buying in? What the heck is going on here?

Although we punters on HC like to think we affect the share price, in reality we do not. It is the institutional investors that control the share price. Analyst School 101: among the first things the junior analysts are instructed to look at (1) Profit from continuing operations (2) Earnings per share.

(1) 'Profit from continuing operations' (or 'loss' as it should read) is blatantly incorrect. Even at a first glance it is obvious that the oxide ore operation revenues and costs will be discontinued: they even say 'this business will be discontinued in 2011' on page 7 - it simply does not get any more black and white than that. They even wrote off the associated goodwill to emphasise the fact. All incorrectly shown as revenues, costs, impairment and profits from continuing operations, which is totally misleading.

(2) EPS is also incorrect as it does not adjust for the discount in the offer of (the small matter of TWO HUNDRED AND FIFTY MILLION) shares, which is another huge oversight given that it was nearly FIFTY PERCENT of our shareholding they diluted away (at an all-too-painful 25 cents, as if we need reminding). They even tell us this too, on page 9: 'The offer price represented a 16.7% discount...' If any analysts can even be bothered to call them on this we will be forced to endure a THIRD releasing of this report.

The institutional investors will not tolerate this stream of basic errors from an aspiring producer and nor will ASIC if they select HGO for a review. DS needs to sort this out, and quickly.

Anyway, more important than any of this is the lack of information flow from Sumba (and BH for that matter). Come on HGO, get us some good news out, God knows we need some.