Australian (ASX) Stock Market Forum

HIG - Highlands Pacific

Jump to new
J

junmonkey

Joined
14 November 2006
Posts
17
Reactions
0
Some quick information to start off the thread if anyone's interested.

HIG is a Papua New Guinea (PNG) based miner focused on its 95% owned Kainantu Gold Project, 400km NW of Port Moresby. Annual production of 110koz of gold in concentrate is planned over nine years. Upside is from conversion of some of the 2.0Moz resource to reserves, exploration and potential expansion. HIG has substantial option value from minority interests in the Ramu nickel laterite and the Frieda River copper gold projects in PNG.

Market Cap: 129 million (23/04/07)
Current price at $0.21
 
Seems to be heading south at a pretty dramatic rate. No real obvious reason for it that i can see. They assured ASX nothing was abnormal this afternoon causing a huge vol spike. Anyone know more?
 
a little late to reply, but yeah, it could be the crappy cash flow, or the fact that aspect huntly downgraded their rating from a spec buy to a "under review"
 
Very interesting really. They have a couple of decent looking joint ventures in PNG, one with Xstrata. Their gold production is well down on expectations (its running at a loss), and they do still carry some financing debt of US $22 million. Cash at hand is somewhere near US $24.5 million. But that only came about after a placement of $20 million in March.

But the placement to Resource Capital Fund was at 29 cents. Thats just 2 months back.

Trading now at 14.5 cents, as far as i can tell, almost an all time low.

If they can get their gold production back up (which is unclear at this point), or if the joint ventures show some promising results, share could jump back up fairly quickly. That is, if there isnt something they havent been telling us!

One to watch. I dont hold....yet.;)
 
$70m EBIT loss I read somewhere due to poor hedging,

Whenever I hear those words I run, loss due to poor hedging (Giants Reef, Croseus, BMA Gold, Sons Gwalia)
 
YOUNG_TRADER said:
$70m EBIT loss I read somewhere due to poor hedging,

Whenever I hear those words I run, loss due to poor hedging (Giants Reef, Croseus, BMA Gold, Sons Gwalia)
Click to expand...

HIG's loss due to hedging was a result of production problems, producing at its Kainantu Mine only 21,000 ounces of gold from Jan 2006 to Feb 2007.

It had a forward sales contract at Dec 2006 comprising of 250,000 ozs to be fully settled by December 2008. The contract has since been restructured and rescheduled to 2010.

Under the accounting standards, operating loss was 27.5 million usd and the foward contract loss that was brought forward amounted to 36.2mil USD.

I don't own the shares of this company yet, but am extremely interested in view of the 2.0 million ounces of gold at Kainantu and the recent huge price drop, which has since recovered a little after the new MD was appointed. Market cap is 114 million currently. Considering the asset that HIG currently holds, I think there is potential once production shows indication of a turnaround.
 
What is the actual market cap on this one,my uncle is a staunch supporter :mad: of this from it's highs and tipped it to me.
I would consider buying if the fundamentals stack up on 2 mill oz, if only to rile him up and say I finally bought his recommendation........:)
 
HIG (HNG)

Anyone holding. I have been for several years. Currently on 6% dividend yield. Not really as exciting as the yellow cake but the earnings are transparent and easy to understand. Kevin Ealy is doing a great job as director and discloses more than most. Net profit up 150% yesterday but mainly due to sale of MMC contrarian ownership. Excluding this significant item core profit was up 15% for the half year but this was mainly due to interest earned on securities owned by HNG. Net profit from Import business actually fell by about $800,000 which is the earnings which are the most reliable given that income from listed securities will fluctuate as the market does. However receipts from customers was up about 5 million and the fall in net profit probably due to the increase in expense in raw materials. This is promising, while operating efficiency has declined perhaps with the acquisition of two new businesses, economies of scale maybe achieved with clever management.

The pro's of this company include large return of income to shareholders, steady capital growth a very solid return on equity and management that disclose more than required on their financial statements as well as give candid opinions of the companies earnings (no pie in the sky forecasts)

Cons include a heavy reliance on listed securities to make up earnings. Lack of interest in this stock, average turnover less than 20,000 shares per day therefore low liquidity.


Disclaimer this is not financial advice DYOR.
 
This stock is at 0.225 now, with quite a bit of volume. Is there something going on that we don't know?
 
Some nice movement recently for HIG. Garampeiro has covered them several times this year, most recently with their Nong river announcement. Two advanced projects with deep pocketed partners and some good exploration ground to boot...

http://www.theage.com.au/business/nong-river-no-joke-for-highlands-pacific-20091025-henz.html

Nong River no joke for Highlands PacificBARRY FITZGERALD
October 26, 2009
The Macquarie Dictionary tells us that ''nong'' is a shortened form of ''ning-nong'', an Australian way of saying someone is a bit of fool.

But there is nothing foolish about Highlands Pacific's (ASX:HIG) Nong River copper/gold porphyry prospect up in Papua New Guinea's rugged West Sepik province .

The talk in Port Moresby recently has it that after more than seven years of holding the prospect, Highlands is finally in a position to punch some holes in the ground to confirm the promise demonstrated by the US group Kennecott (now part of Rio Tinto) way back in 1972.

Kennecott is also the mob that earlier had confirmed the nearby Ok Tedi deposit as a big find (1969-1971), only to walk in 1975 when it could not reach agreement to develop the project. BHP, as it was then, picked up the running in 1976 and stayed around until 2002.

That little history lesson on Ok Tedi - minus all of the controversy about landslides, riverine tailings disposal and class actions - is to demonstrate why Nong River has been overlooked despite its promise.

But now Ok Tedi is coming to the end of its life, with 2013 looming as its end date unless a feasibility study next year demonstrates an extension is viable. Either way, Ok Tedi is on its last legs. That's good news for Highlands and its Nong River project which lies all of 20 kilometres from Ok Tedi and what will become its under-utilised infrastructure base.

Highlands has been itching to follow up the copper and gold hits that Kennecott returned from Nong River from the only four holes drilled on the prospect. Results included close to 90 metres grading 0.6 per cent copper and 0.4 grams a tonne gold. In comparison, Ok Tedi's production is coming from mineralisation grading 0.8 per cent copper and 1.1 grams of gold a tonne.

While it is silly to rely on the results from the Kennecott holes at Nong River as guide to what might eventually be proved up at the prospect, it is worth noting that the copper grade is just about bang on where all of the next generation of big copper projects sit, with the gold grade a little higher.

Highlands would have been on the ground earlier but for the strife in the early 2000s with its since-sold Kainantu gold project in PNG. Now it is a debt-free, cashed up ($27 million) and asset-rich PNG play.

What is not known with Nong River is whether Highlands will be sole-funding the exploration or whether the joint venture partner, Xstrata, will be contributing. Either way, the market will like the fact there is going to be some action at the prospect.

Confirmation it is adding an exploration leg to its story won't hurt Highlands' market rating, which has been on the march since Garimpeiro looked at the stock in May when it was trading at 9.4c a share. It has since motored to 28c a share, giving it a market capitalisation (less cash) of about $150 million. If Nong River was all it had, you'd be worried. But there is a lot more in the cupboard now that the unprecedented growth in metals demand that BHP and others have forecast looks increasingly real.

First there is Highland's 8.56 per cent free carried interest in the $US1.4 billion ($1.5 billion) Ramu nickel project in PNG. It is not far off starting production and its forecast cash costs of production are about half the current nickel price.

Then there is the group's 16.9 per cent-owned Frieda River copper/gold deposit in PNG, where managing partner Xstrata is funding work until completion of a feasibility study into what is shaping up as a world-class project.

All up, Highlands' equity-portioned share of the metal inside those two projects is some 2 million tonnes of copper, 2.5 million ounces of gold, 125,000 tonnes of nickel and 12,250 tonnes of cobalt. Based on recent copper deals, Highlands' copper ''share'' alone is worth twice its current market capitalisation.

In a research note in October, Cathy Moises from Evans & Partners valued Highlands at 32c a share. Including a net present valuation on Highlands' share of Frieda River and Ramu, the upside valuation was put at $1.20 a share.
Click to expand...
 
HIG looks ok at the moment. At some point, may want to test the double bottom breakout possibility, which is at 34c. Can put on 10% reasonably easily but won't get there in one move.
 
been very quiet around here.
My scans detected the possibility of some accumulation in recent weeks; could be worth hopping on board. Which I've started doing. Once the recent High is broken, it's probably away.

HIG pm 20-02-12.gif
 
Highlands Pacific Limited breaking out this morning after announcing that it has entered into binding agreements relating to a streaming arrangement, private placement and strategic relationship with Canadian battery metals company, Cobalt 27 Capital Corp.

HIG is currently up 50.54% to 14c, and has convincingly broken through its previous 12 month high of 12c.
 
HIG - Highlands Pacific has issued a voluntary suspension order due to a potential change in control. There are a number of parties that would be interested in taking Highlands Pacific out of play with the sum of the parts being worth significantly more than the whole. Two significant stock holders are Cobalt27 and PanAust. Cobalt will be interested in the Ramu project. They recently paid more than the total current market capitalisation for a streaming deal that only represents a portion of the total. Also, there is now a proposal to ramp Ramu up further and possibly extend the mine life. So this will make it even more attractive. The other, PanAust, would obviously be interested in the 20% of the massive Frieda River project that they don't own. PanAust must guarantee the project financing for Highlands, so cheaper just to buy them out. Then there is the Star Mountains project and this could attract the owners of Ok Tedi that are looking for new feed into their current infrastructure that is running out of resources to feed. Then we have the Sewa Bay project. Sojitz could be interested in what Ramu has on offer so could also be a potential.

So will Highlands Pacific have a similar destiny that its former namesake Highlands had!

Watch this space in the coming days as it should get interesting.
 
Highlands Pacific is to be taken over by its largest shareholder Cobalt 27 Capital Corp. Current holders will receive 10.5c cash per share, increasing to 11.5c if the closing spot price of nickel exceeds US$13,220 per tonne over a period of 5 consecutive trading days prior to 31 December 2019.

According to this morning's announcement, HIG's largest shareholders, representing 30.1% of Highland's shares, have stated their intention to vote in favour of the scheme in the absence of a superior proposal. The company's independent Directors have also stated that they intend to unanimously recommend that all Highlands shareholders vote in favour of the acquisition.

In my opinion, 10.5c seems pretty cheap for HIG, and I wouldn't be surprised if many holders vote against this. Many current holders would have bought in at a much higher price, as HIG was trading above 10c for much of 2018. Given that the deal has the support of the company's Directors and major shareholders, I would imagine that it is pretty much a done deal at this point.
 
On May 20th, 2019, Highlands Pacific Limited (HIG) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement whereby all of HIG's shares were acquired by Cobalt 27 Capital Corp.
 
Top