Ann: Activity Report Quarter Ended Dec 18 & Guidance Update, page-17

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mwilson25

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03/02/19

21:19

Post #: 37315850
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Originally posted by VYR: ↑

One could be despondent that we ended the quarter with $2,5 m in the bank instead of the $46m that the experts valuation indicated.

On a very broad brush analysis we produced 5.5 Kt of copper less than the valuation forecast. At current hedging that is worth $48.7 m.

We are told we are running at an expected recovery of 97% of the valuations projections for metal recovery (a loss of circa $11m). Hopefully they will come up with an underground option the delivers the 2 Kt shortfall lost to the wall failure plus the 1.4kt grade shortfall.

Re lump sum payment for the PHES verses a royalty stream, If Steve is reading the mood of the board correctly I think the negotiations might be about maximising the upfront payement.

If you read the dispatches in detail the initial exploration target for Nugent is 0.8 to 2 MT at a cu equivalent grade of 2.5% to 3.5%

Thats 20kt to 70 Kt of equivalent cu. Which at current prices is $177m to $620M revenue.

You will notice in the crossections of the pit and proposals for UG mining that the Nugent load extends way deeper than the proposed mine plan and drilling.

Now that the Nugent lodes are still an option I think that the other near plant resources should be put on the back burner and all efforts put into proving up the deep resources at Nugent. If it can produce a feed grade anywhere close to 2% copper and keep the plant running at full capacity it will be an unbelievable result.

Re capital raising:-

I imagine prior to paying the dividend they will be building the case for a bright future and will set up a DRIP for those who want to reinvest in what looks like it could be promising future, particularly if its underpinned by a royalty stream stretching 100years + ..

Expand

Yes we are badly off forecast. While some of the ore related to the higher cash balance is still to be mined, the delays have blown out our costs. Its depressing I know but we are talking HGO. They are pretty good at frittering way the money after delivering the "good news" of an over optimistic forecast with no fat to allow for things to go wrong.

Still it looks to me like the divvy is still on the way.....hopefully this time it will be a successful failure and not just a failure.

Not too bad...

HGO Price at posting: 7.3¢ Sentiment: Hold Disclosure: Held
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Ann: Activity Report Quarter Ended Dec 18 & Guidance Update, page-17

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HotCopper Highlights: Your most watched stocks for Week 47, 2024

Week 47 Wrap: HotCopper users' most watched; Brent lifts on Putin's scary letter; RFK dents CSL

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