Thanks
@CowBell for the compliment.
There are a few points i like to mention here:
1. This project if going to construction, it won't be ready until H2 2024. By that time, inflation should have been down significantly and interest rates should be in reverse course in other words going down to stimulate economies around the world. China should be out of Covid lockdown in Q1 2023 and supply chain disruption which has caused most of CAPEX blow-out should be way behind us by H2 2024. So, the CAPEX figures should not be as high as in current macro economic situation. It could well be back to normal range.
2. This project will not and cannot go into production by HIO alone. It will need a JV partner. This is a massive project and there is no way HIO can single-handly bring it to production by itself.
3. The coming CR does not necessarily go through the normal typical way of raising. It can be allocated to a few "stragetic investors" typically at 30% premium price to the 15-day VWAP or 30-day VWAP. Who are these potential "stragetic investors"? They could very well be off-take partners or JV partner(s).
4. The Exploration Target Resource is a mind-boggling number with the back-up of 26 historical drillholes OUTSIDE OF THE CURRENT RESOURCE AREA intercepting very significant iron ore, with assay results registered with the NSW Mining Department, my calculation shows it AVERAGING more than 2bil tons of final concentrate. This is very very big potential resource.
5. This potential resource of AVERAGE of more than 2 bil tons is about 4-5 times bigger than the current defined resource of 481mil tons. This makes it a very attractive assets of high grade iron ore to the big players (BHP, RIO, FMG, POSCO, BAOWU STEEL, TATA STEELS,...).
6. I particularly like draw people's attention to the role of Citi Group as financial adviser. It is not engaged by HIO for nothing. Citi Group by the record has been involved in many major deals of acquisitions and JV.
7. I also like to draw people's attention to the phrase "stragetic review of all options" and what it means. It is not just a technical review of how many mtpa production. It means more than that.
8. At the AGM next week, Dave Woodall chairman is about to be officially awarded 5 mil options to be excercised at average of $1 per option to convert to ordinary shares.
New executive director Tony McGrady is about to be awarded 5 mil options at average excercise price of 85c to convert to ordinary shares.
If these guys dont expect sp to go to at least $1.50 -$1.80 i dont see any other explanation that can rationalize their expectation of making any money out of their options.
9. The way i see it is this is an extremely great deposit with world's highest Fe grade product and highest selling price and it is too good for major iron ore players to ignore.
10. If a take-over comes, then at what price?
I believe common sense will come to give this stock an appropriate sp it deserves with new updates regarding the metallurgical result - final product grade - extremely low energy consumption (75% energy consumption savings compared to other hardrock iron ore deposits), then release of the list of LOIs of intended purchase of 50mil-60mil tons with some very interesting customers's names in the list, then 1st off-take announcment,...to take sp to significant high before a take-over offer comes forward at 100% sp premium. There could be stragetic moves to lock in 20% of the shares happening before the take-over offer to deny potential 4th and 5th party counter-offer. This 20% share accumulation is very stragetic for the take-over party.
The take-over offer price MUST have some relevance to those 5mil options for Dave Woodall and those 5mil options for Tony. Otherwise board of directors won't recommend shareholders to approve the deal. In other words, it must be an offer price that is satisfactory to Dave Woodall's and Tony McGrady's options.
11. After all, with potential Exploration Target Resource at average of more than 2bil tons, no matter how you look at it, no matter how you cut and trim it, this deposit is simply too good to be ignored by the big iron ore players who have all regconized the need for high grade iron ore to position themselves in the coming decarbonization revolution.
Take a look at this historical development and pay attention to the role of Citi Group and what "stragetic review of all options" means and also the average grade of 55% Fe and the price tag of $554mil and draw a conclusion for yourself. For me it simply highlights Hawsons project must be a least multiples of that price tag if a take-over comes. And it would satisfy Dave Woodall and Tony McGrady's expectation with regards to their options.
All in my opinion and not financial advice.
Then 3 months later, look at what happend:
