"After what was quite a positive start to 2020, how things have changed in the world! Shareholders should take comfort from the fact that Havilah's new management moved decisively to secure Havilah's position by re-capitalising the Company, paying off the Investec loan and by reducing staff and cutting corporate overheads to a more sustainable level. The process of reducing corporate overheads is ongoing.
Rest assured that Havilah's valuable mineral assets remain intact and the Directors will not be panicked to sell at the bottom of the market. With the rejuvenation of our exploration drilling capability, Havilah is currently drilling at its Kalkaroo copper-gold-cobalt project, focussing on the shallower gold resource and the rare-earth element (REE) by-product possibilities (see photo in circular newsletter above).
Shareholders will be aware that Kalkaroo is a large gold deposit in its own right, with over 3.1 million ounces of JORC Mineral Resources.
Havilah's own drilling team can continue to carry out very cost-effective exploration for a considerable period in spite of the current market situation. Every successful explorer knows that the chances of discovery success are in direct proportion to the metres drilled, so by drilling Havilah is working to stack the odds of a significant exploration discovery in its favour.
Management's focus at this time is to position Havilah so that when markets turn, as they inevitably will, Havilah will be in the best possible place to capitalise on that upturn. Mineral commodities are vital to the world's technological, social and economic progress and are particularly valued by investors when located in low sovereign risk places like South Australia. Therefore the present market volatility in retrospect may be seen as no more than a temporary dislocation of the long term world demand for high value minerals like copper, cobalt, REE and iron ore, which Havilah has in abundance.
During these extraordinary times we think of those whose livelihood and health are at risk from the COVID-19 virus, and pray for their comfort and protection and a speedy return to normality."
"A period of clearing the decks of past legacies, recapitalisation and planning for the future.
Dr Chris Giles, Havilah's Technical Director, provides some brief commentary on Havilah's most recent ASX Quarterly Report, which had the following key highlights:
• In an important vote of confidence by Shareholders $3,135,362 was subscribed at the close of the non-renounceable, non-underwritten Entitlement Offer on 11 November 2019. Subsequently $1,632,620 of Shortfall Shares were subscribed for and allotted.
• Investec loan was fully repaid. Security held by Investec over Kalkaroo and Mutooroo lapsed.
• Shareholders overwhelmingly approved the election of Messrs Victor Previn and Simon Gray as Directors at the 2019 AGM.
• Elevated levels of REE returned in re-assaying of Havilah drill samples from several Curnamona Copper Belt prospects, supported by earlier MMG Limited drilling results.
• Raises possibility of an additional revenue stream for the Kalkaroo project, if REE can be recovered as a by-product of the copper-gold processing.
As a consequence, Havilah's immediate focus remains on updating the PFS work at Kalkaroo with the aim of adding further value to the project in order to attract a suitable well-funded partner or perhaps highlight a better way forward to exploit the shallower gold mineralisation."
"Port Augusta Operations is an independently operating arm of Cu-River Mining, the iron ore magnetite company that last year unveiled a $250 million plan for a global port facility at the site capable of handling up to 15 million tonnes a year of iron ore, grain and other commodities."
There was a similar article on Port Augusta Operations, and the Havilah MOU, in yesterday's The Advertiser.
Reminder: Havilah has only signed a MOU, it has not signed on as the first customer. If you are looking for the location of Port Playford on Google maps, type in Port Paterson (South Australia). It is about 10 kms southeast of the city of Port Augusta.
Notes on Transhipment (if you are like me, I had to research it)
Transhipment simply means barges are loaded with iron concentrate at the Port and then sail into deeper water in the Spencer Gulf where the iron concentrate is transhipped to larger vessels (normally Capesize vessels).
The question is one of transhipping vs deepwater and the timing around when transhipping becomes unviable and deepwater is required.
SACOME has previously said that transhipping is cost effective up to approximately 15 Mtpa of iron concentrate volume: "Feedback from members was that a deepwater port was only needed by iron ore operators and only at export volumes of 15 million tonnes per annum (mtpa) and greater." [Source: South Australian Chamber of Mines & Energy ('SACOME') Ports, Power & Pipes: Infrastructure Requirements for South Australian Iron Ore Operators November 2018]
From the Sea Transport website link below, it says transhipment significantly de-risks projects and greatly reduces CAPEX and OPEX:
The Sea Transport webpage also has a good video on a floating harbour transhipper vessel, for those that are interested.
Cheers
These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
HAV Price at posting:
6.8¢ Sentiment: Hold Disclosure: Held
(20min delay)
