Gralia, I liked the comment in your 13 January 2019 post...

Gralia,

I liked the comment in your 13 January 2019 post “...Yes, they (Stewart and Richards) may well call themselves experienced mining people but they are shocking business men that need to find another job far away from HAV. If only we could erase the last two years and start again.”

What changed your mind?

You say give Mr Stewart 6 months. I agree with Billmac that HAV does not have 6 months. Mr Stewart has been on the Board now for over a year and with the other Directors and Management has placed HAV potentially at the mercy of its lenders. What is he going to do any different in the next 6 months, than the last 13?

Mr Stewart was the key legal person on the Portia/North Portia deal and it appears that there is no safety net included to protect HAV from delays in the project. As a result of not having safety net provisions, all money owed to HAV for Portia/North Portia is delayed. HAV had to get both an overdraft facility of $0.5 million and the Investec $6.0 million loan facility both of which has demonstrated the limited negotiation capabilities of the Board and Management, as significant interest rates are being paid for these facilities.

Mr Stewart said at the 2017 AGM he brings two key things to the table: deal-making and marketing the Company. IMO he has demonstrated he has limited skills in both since then. The share price being the ultimate scorecard.

At least we agree that Mr Richards should go immediately.

At the 2018 AGM Mr Richards and Mr Radford agreed that between March and June 2019 will be when North Portia mine plans and permits are expected to be completed. Will the Board and Management be able to manage the Company till June 2019 without more drawdowns?

What if there are further delays by CMC or it decides to shelve the project altogether? What is the Board’s strategy? More debt, capital raising or give away the iron ore assets for a pittance because well it needs money?

I agree, if there is a capital raising it has to be via a Rights Issue, not a placement to ‘mates’.

As Dr Johnson pointed out in his Reset Letter to Shareholders, HAV has significant credit risk exposure to CMC with a receivable of $12.5 million. Regardless of Dr Giles’ assurances in his 14 January 2019 EGM Letter to Shareholders, that receivable worries me most of all.


DYOR