THE GOOD THE BAD AND THE UGLY
The Good.
Cobalt price up 120%
Nickel price up 15%
Copper price up 60%
Gold price down 7 %
HIG share price up 12% .
Volume over last few months is increasing.
HIG has initiated an efficiency program in relation to administration issues saving 1.75 Million per year,
they have done this by mainly reducing Board Members.
Cash at Bank is the same as 2015 approximately $10.5 million.
Ramu is at nameplate and above and the mine life has been extended to 2052.
CEO Share Incentive plan shelved by AGM. ( it is to early yet to initiate same)
Star Mountains tenement now being managed by Anglo American after having invested substantially to delineate a resource.
Normanby Island is about have its resources I believe extended due to Aerial LiDAR that has been completed, this method is accepted as the most efficient and cost-effective means to create accurate digital elevation, terrain and topographic surveys all in 3D. Results are due soon.
There has been no change of top 20 shareholder registry thus possibly signifying stability.
Possible sale of Freida River. NPV attributable to HIG is approximately 140 million to 180 Million.
So a sale of that magnitude would put the price of HIG through the roof per se. Maybe 16 c increase in valuation . Retained negative earnings are 247 million so a tax situation may not be forthcoming. What would be nice is to have a massive war chest of funds and give shareholders maybe a 3 c unfranked dividend per share.
The Bad
The proposed Board spill by GRAM in the last AGM causing indecision by the market thus keeping the price of the stock down.
The volatility of the PNG Elections just concluded.
The Ugly
In what is a difficult but improving market for copper, the primary challenge for HIG is the debt and equity funding of its share of the development ( approx. 900 million AUD) to retain its 20% interest. Should the PNG government elect to participate . HIG interest would reduce to 15% . HIG could elect to dilute down to a 5% equity interest at which point it must fund its interest of exit for no consideration. Given expenditure to date, it is not envisaged that HIG would be required to contribute until a further US$1.5billion has been spent by GRAM.
The next step is the Arbitration that has just been entered into by HIG & GRAM. The Arbiter ( who may be an
ex Australian Supreme Court Judge ) will have the final decision on where Freida River goes for us.
Addendum
Given all the above I have increased my holdings to One Three Hundred and Fiftieth ownership of the stock.
DYOR
I will give some interesting figures in relation to HIG in the next few days !
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