Ann: Appendix 4E & 2018 Annual Report, page-6

HI Alee

Executing the mine plan for the giant pit has certainly been a disaster. Those who provided the seed capital based on the DFS have lost heavily. Others like myself who came in at, and after,  the bottom stand an excellent chance of doing pretty well. A scenario often played out in mining companies in my experience.

Is management to blame? They certainly are to some extent. Current management got us through the near death experience exceptionally well but let us down rather badly by not having a clue as to the cost to complete mining when they advised VAA on its 2017 valuation.

Are they the right team to carry us forward beyond the giant pit ? Thats a good question but I'm sure they will be leading the charge for the near future.

Can we expect any major developments with HGO?

The board and major shareholders are seeking to have the lions share of the cash from the Giant Pit and the sale of the PHES returned to shareholders with the stash of franking credits.

Small scale mining close to the plant with minimum capital cost is set to continue while Plan B hatches out.

Reading between the lines it seems that Plan B is for management to extract as much value as possible for the current shareholders from the property ,resources ,exploring licences .plant and equipment as possible. The processing plant would have to be worth $60 or $70m as a going concern. With Garry Weiss and Ariadne as the major shareholder and the MD of Greshams as a shareholder who is sitting on the board, watch this space.

I'm predicting that the existing shareholders will be able to back out some how using the proceeds from some form of new capital injection. Which is of course  only a supposition based on the script and the players.

Even without plan B,the SP at 8.1 c  seems like a "get more than your money back quickly proposition."

 Based on the current forecast for 2019  and the date for completion of processing the stockpiles, its possible to calculate the forecast cash flow from the open cut mine plan. It looks to me, that if they limit capex to $5m and achieve the forecasts, and don't have to close shop and pay a heap of redundancies then, the surplus cash on my calculation is close to the current market cap.

ON top of that we should get a decision in a matter of weeks on the PHES.   It seems the negotiations in that regard are seeking to get some payment in time to pay a franked dividend before 30th of June.

Cash from pit after cap ex + proceeds from PHES + franking credits has to be a very healthy margin > Current SP 

with Plan B as a bonus.