Short Term Trading Week Starting: 4 Dec

Originally posted by GoodEnuff ↑

STTCOMP HEG FA LONG

MC $25mil
Cash $3.9mil
SOI 140mil
Current Share Price 21.5c

HEG were originally a gold exploration company and still have decent projects in the gold-rich region of Hill End – Hargraves in central New South Wales with existing gold resources totalling 572,000 ounces. However, hype is starting to build about their High Purity Alumina (HPA) Project in Ballarat, Victoria. As I mentioned in my earlier post above, the market for HPA is in electronics, such as LED lighting and lithium batteries and is forecast to expand at 15-20% compound annual growth rate over the next six years. HPA sells for about $30,000/tonne and HEG have already proven they can produce HPA of 99.99% purity. “HEG’s HPA Project is anticipated to produce a significant proportion of global HPA supply at low unit costs.”

The HPA Project was sold by to HEG by Syrah Resources founders Tolga Kumova and Tom Eadie who together run a private company called Pure Alumina Limited. The two of them have continued their involvement with the project and have remained major shareholders. Something I find very interesting, is that today HEG announced a restructure of their board, which involves the resignation of their long standing Managing Director/Chairman Philip Bruce. The role of Chairman will be filled by Graham Reveleigh, however, the announcement states and I quote “an announcement on a replacement Managing Director will be made shortly”. As I said, I find this interesting and believe it will have a very positive effect on the company which is desperately in need of new blood. I’m sure a lot of long-term HEG holders will be excited to read today’s announcement, there is actually an investor on the HEG threads who has been holding since 2008 when HEG’s share price was $12.00!

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From the last Appendix 3b:

SOI - 105,890,933 Ordinary Shares

Listed Options - 42,200,000 @ $0.075 (exp 30/07/20)

Unlisted Options - 3,200,000 @ $0.075 (exp 30/07/20)

From the coming Extraordinary General Meeting:

Tranche One - 15,000,000 Ordinary Shares

Tranche Two - 22,500,000 Ordinary Shares

Placement Options - 18,750,000 @ $0.20 (exp 30/07/20)

Broker Options - 5,000,000 @ $0.0001 (exercise price $0.20, exp 30/07/20)

Consulting Share Payment - 800,000 Ordinary Shares

Shares in lieu of Fees - 2,500,000 Ordinary Shares

So for the sake of completeness you have a structure as follows:

SOI - 146,690,933 Ordinary Shares

Options - 45,400,000 @ $0.075 (exp 30/07/20 with cash value of $3.405m on conversion)

Options - 23,750,000 @ $0.20 (exp 30/07/20 with cash value of $4.750m on conversion)

Total - 215,840,933

So note at this point all options are in the money and fully diluted market cap @ $0.215 is $45.406m.

As a result I would really like to see HEG drop some announcements (JORC etc.) to support the current market cap as I see it.

Just on FYI - whilst ATC and HEG have grabbed the attention of the market, FYI has been quietly going about its business and has been ticking boxes. You'd have to think that anyone who has got set early (or even getting set now) will do very well indeed. It is grossly undervalued on any peer comparison.