The really big difference between IRN(Tampakan) & HIG(Frieda) is that IRN have to arrange their own financing for their share of the Tampakan CapEx - they clearly know that no one will lend them the money so they're trying to sell their stake - one of the problems for potential buyers is that there are no guarantees from Xstrata that the project will be developed and unfortunately IRN will run out of money in six months time but you would think a Chinese buyer would step forward. However HIG have an agreement with Xstrata whereby Xstrata have to arrange or guarantee HIG's share of Frieda CapEx. HIG is still liable for their share of financing but don't have to arrange it. Both projects are expected to cost a total of $5 billion each to develop. Expect a large increase in reserves announcement from Xstrata shortly(within two months) on Frieda together with a projected increase in throughput/production rates.
HIG Price at posting:
19.0¢ Sentiment: LT Buy Disclosure: Held
