quarterly , page-5

G'day Guys

Yeap, it is all good and I agree with you, Hardmano, that a JV partner is almost a sure thing. With $114 million cash in hand, if HGO were to go it alone, $100 million for the mill and $10 million for further digging in Indonesia, all that cash would be gone and then HGO will have a tough time explaining why it gave away a big amount in the 2 cents divident and then having to borrow and go into debt later. Makes no sense.

When the divident was first ann., I did post that HGO could have just called it a once off capital return but instead called it a divident. This could only mean that we all can see more divident next year. It will look excellent for HGO which can give fully franked decent divident while still a non producing company. Can't recall which other non producing company ever did that. My personal opinion only, a JV will then leave a very big chunk of the cash in hand for next year's better than 2 cents divident sweetener.

Cash in the bank is always an excellent idea but when to have a big stash of cash for the rainny day is even better. Just like having plenty of money to spend every day without worries is good but to have a big pile ready when one is jobless or when others are bleeding is even better. In the real business world, greed is good and the guy who is bleeding to death is usually being kicked more when he is down. Very cruel but it is the survival of the fittest.

3bornot3b commented that he/she din't realise that hoarding is good when I posted that China has been hoarding plenty of metals. I din't quite explain what I meant then. Well China has already made a huge profit from all those tonnes of hoarded metals with the cost of these metals going up and up weekly. But more importantly, and that was what I was trying to say then was that China was buying all those extra tonnes when the prices were depressed and the producers were still producing and had to sell into the down market. With China buying up all those excess tonnes, though the prices will be prevented from total collapse, then there WILL NOT be huge left over in the market when the market turns upwards like what is happening now.

If China didn't buy up those excess tonnes, the large producers will just stockpile them up instead while the smaller ones go belly up. When the market improves, then all those stockpiles will come into the market and all of China's competitors will then be enjoying the cheap metals on offer. This way with China buying up all those extra, there is now NO surplus available. Next year, all industries will be paying inflated price. China will also be forced to pay the same price but it has a mighty stockpile to slowly release into her own end users and thus reduce cost. What better way of spending your extra money.

Next year is just around the corner and imho, we can look forward to a better one for HGO as well as ESG. We got a mill for cheap because we have the cash at the right time, in fact I think a once in the lifetime opportunity and for that I still will bet my right shrivelled nut for HGO and the left one for ESG.

Here is for a better week for all of us

Cheers. Ted