News: HGO Hillgrove Resources Updates To Rock Fall Which Occurred On 19 Dec 2018, page-19

Hi Costello,

Well done at 7.7c. In under 10c is a pretty comfortable place to be.

The pros and cons of mining the resources around the pit or burying them with the PHES option are bewildering. A bit like comparing apples with cherries.

UG mining the resources around the pit that would be quarantined by the PHES will involve capital cost with a forecast income stream for a few years which will have a low PE ratio.

PHES will involve an upfront payment and a more  certain and reliable income stream which will go on to infinity. With I suspect a very high PE ratio.

I think if the PHES wasn't a goer we would have learnt that in November at the end of the expression of interest campaign. There has been a lot of talk and presentations about resources further away from the pit since.

The big downside with the PHES is that we aren't permitted and ready to start mining elsewhere in time to deliver ore to the processing plant before the open pit ore runs out. This is very disruptive to the business and the SP.

The game changer comes with this turning a lemon into lemonade statement.
"Work has commenced to evaluate alternative underground mining methods to recover this lost copper ore." 

MY thinking is that the proposed UG mining will be covered by the current permit or an easy amendment. I am hoping  the programme will extend beyond the 2 KT lost. There is plenty of time  to carry on mining while the major works for the PHES are being carried out which will give us  plenty of copper to keep the plant busy until feed from other resources is available.

Dreaming maybe, but with plenty at stake, I'm sure management will see the light.