HRR - Heron Resources

[alphman]

I am loooking at buying into this stock and while a fart about decidiing its gone up 30c. whats driving it? Any one got any ideas?

Thanks in advance.

Lost Greenhorn!

You and me both. I was contemplating this one when it was trading just below $1.00 a few weeks ago.

Both CVRD-Inco and BHP-B are on the top 20 shareholders list. BHP-B recently invested $17m+ in HRR at $1.15 which was at a ~10% premium to the price at the time. A few days later, CVRD-Inco followed suit with the same. Looks to me like big guns are about to play ball. With the recent placements, both companies now own approx. 15% of the company each. Last week Fat Prophets recommended HRR as a BUY at $1.12.

Heron has two significant Nickel laterite projects in WA:
- Jump Up Dam, which is 100% owned; and
- Kargoorlie Nickel Project, where CVRD-Inco is earning 60%.

Total resources for both projects is a whopping 987mt @ 0.74% Ni.

A great story is about to unfold here, IMO. Unfortunately, I'm watching on the sidelines.

 

[Miner]

Fat prophets recommended as BUY at 1.12 (high risk), Eureka report reports that it is a take over target even if CVRD and BHPB have equal stake.
Laterite Ni percentage wise is not very high however.
Currently traded at 1.25 sp. May be market speculation.
Any expert view on this share ?

REgards

 

[derty]

Jump Up Dam heap leach project has been canned for the interim, pre-feas identified significant increase in capital expenditure. Now estimated to be A$681.9 M and operating costs of A$6.39 per pound of production. The site is placed on care and maintenance.

The resource estimation process identified that the distribution of ore types was more complex than initially planned though the continuation of mining in the trial pit should iron out some of these bugs.

BHP has increased their share by 1%, the Inco JV for the Kalgoorlie Nickel Project is continuing, however you would imagine that with Jump Up Dam halted the near term outlook for the share price is not great. Possibly some good buying opportunities ahead, keeping in mind ALL Ni laterite exploration/resource plays are LONG term if you are thinking staying in the stock until production.

 

[traydor]

Hi derty, just wondering were you heard they had trouble with the rescorce estimation. i do have a fair amount invested in this stock and i try to get as much information as possible. i read it this way.. the canning of jump up dam as a reason to increase the project using atmospheric leaching as this type of operation can produce up to 60,000 t a year versus heap leach 10,000t, because they have found more nickle the Yerilla District
at Jump-up Dam South, Boyce Creek, Aubils and Pianto Road. i just wonder if they realize thats you might as well build a bigger operation if you are going to fork out a heap of money (economy of scale sort of thing )...anyway any feed back will be welcome thanks traydor

 

[traydor]

Hi all I was wondering what anyone thinks of the prospects of heron being taken over as Ian Buchohorn is the major share holder, and if it did what would it be worth ...thanks

 

[derty]

A takeover is probably a very real prospect somewhere down the line, especially given that BHPB have increased their holding from 8.7% in June 07 to 14.7% at the moment and Inco have gone from 8.5% to 13.9% over the same period. Neither is letting the other get too far ahead and if and when the time came you would imagine it would be hotly contested. I am not totally sure of the mechanics of a take over but I think you need 90% to make the takeover and with IB, BHPB and Inco all having over 11% they have blocking stakes. IB is renowned for screwing down the best deal, so he wont be letting it go cheaply considering he has built HRR from the ground up.

Some one who knows the mechanics of takeovers would be able to let us know what the implications for a takeover are with respect to the current holdings.

traydor, I was chatting with a resource geo a while ago and they mentioned that the distribution of the different ore types was more complicated than was originally envisaged. Complication can be managed as long as it is understood. It is good they have identified it now, much better than assuming a nice homogeneous ore only to find out during mining that there are large parts of it that cannot be processed.

HRR have a huge resource, though as i said before the lead time on these type of projects is long and very expensive. As far as I understand the cost of the acid is what killed the Jump Up Dam heap leach. At Murrin they have a heap going but that is only economic due to the existing infrastructure present. As you said traydor, if you are going to spend $600M to make 10kt Ni/year you may as well spend $2000M to make 60kt Ni/year.

 

[stix1771]

Announcement out today, re-affirms (for holders) the potential resource HRR has on it's tennamants, lets not forget whilst the Heap Leach testing has been put into care and maintenance in favour of the Atmospheric option - trial mining is continuing to be stock piled confirming the company's drilling results and grades.

Off HRR topic, but also note that MLM has signed an off-take agreement with BHP and a technical relationship (similar to HRR's recent agrrement with BHP)

 

[traydor]

Announcement out today, re-affirms (for holders) the potential resource HRR has on it's tennamants, lets not forget whilst the Heap Leach testing has been put into care and maintenance in favour of the Atmospheric option - trial mining is continuing to be stock piled confirming the company's drilling results and grades.

Off HRR topic, but also note that MLM has signed an off-take agreement with BHP and a technical relationship (similar to HRR's recent agrrement with BHP)

hi sticks, i was looking at the drilling results they posted and they are well above 1% grading i was wondering why when they say the total rescorce is 80 million tonnes at .80% nickle i think they are finding more as when they were digging the costigan they had garnite which was holding 30% nickle in some parts anyway thanks for the post mate

 

[traydor]

hi all there was some good news on the leach results for heron i dont think the stopping of jump up dam was a bad idea after all....proof of a competent management team....thanks glenn

 

[stix1771]

This is an interesting website: http://www.directnickel.com/index.htm

Makes specific reference to Heron, but not sure how authentic the site is. Anyone know?

 

[traydor]

This is an interesting website: http://www.directnickel.com/index.htm

Makes specific reference to Heron, but not sure how authentic the site is. Anyone know?

hi stix that was an interesting article mate i,m just wondereing what all these major nickle producers think of this process ive never heared of them at all...if it was feasible you would think that they would be falling over there feet to get there technology thanks traydor

 

[traydor]

here you go stix what do you think of this ?IF JULIAN Malnic's latest venture lives up to his expectations he will have made an indelible impression on the mining industry not just once, but twice. His first breakthrough was with Nautilus Minerals Inc, which he set up in 1997 and is now well on the way to the commercial mining of high-grade ore from the sea bed.
Nautilus shows so much promise that Anglo American plc, Barrick Gold Corp, Teck Cominco Ltd and Russian steel billionaire Alisher Usmanov, have paid millions of dollars for ringside seats at the undersea action. Mr Malnic has stepped away from Nautilus to focus on another innovative company, Direct Nickel Pty Ltd. He set this up with Russell Debney, a long time associate and a lawyer who has also been involved with Nautilus since the early days – and is still a director. Direct Nickel has a metallurgical process that Mr Malnic says will produce nickel from laterite ore at a cost lower than nickel produced from many sulphide deposits. He says both capital and operating costs will be lower. The socalled Direct Nickel (DNi) process could solve the global nickel shortage he insists, and “will challenge all other nickel processes”.

Mr Malnic’s claim is being met with some scepticism because it’s not so long ago that similar suggestions were being made about the High Pressure Acid Leach process (HPAL) to treat Australia’s nickel laterite ores. HPAL proved extremely difficult and expensive to bring into commercial production. He says: “Sceptics are my friends. That’s why we get independent studies to verify and cut risk. You can’t just walk in and say ‘I have something new and believe me it works.’ You have to persuade and offer quality science to the people you are trying to influence.”
And Aker Kvaerner of Toronto has already completed a pre-feasibility study for the DNi process. Mr Malnic says his association with Nautilus, another highly innovative venture, helps open doors and dampen scepticism about DNi. Mr Malnic can thank one of those inevitable troughs in the industry’s economic cycle for his crack at the Nautilus opportunity.

A geologist by training, he had turned to resource journalism to earn a living. In March 1993, while editor of The Miner, an Australian monthly, he interviewed Ray Binns, a geologist who had been trying, unsuccessfully, to persuade the Australian government to let him expand his work exploring the sea bed. Dr Binns was employed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO), searching for Black Smokers. These are chimney-like structures formed when mineral-rich, magma-heated fluid shoots up through the earth’s crust and is then quickly cooled by sea water. The first rocks Dr Binns recovered from an extinct smoker 1,600 m deep off the southern tip of Papua New Guinea, contained 20% copper, several percent zinc and 10 parts per million of gold.

Dr Binns thought a way could surely be found to mine such high-grade material. But Australian officials were interested in his work only as a way of providing a guide for finding landbased mineral deposits. Mr Malnic listened to Dr Binns’ story and made a note of the location of the smoker. After lengthy research into law and technology – which convinced him that mineral rich deposits formed mainly in deep water – in 1995 he posted exploration licence claims to the Papua New Guinea government – which in Decenber 1997 awarded him its first-ever underwater exploration claims. These very areas contain the Solwara projects in PNG’s Bismarck Sea which Nautilus hopes to start mining in 2010. But Mr Malnic met as much resistance to the idea of undersea mining as Dr Binns before him. It was pointed out that in the 1970s about US$700 million had been spent in an attempt to mine manganese from deep below the sea’s surface – but these ultra-deep deposits didn’t offer high enough metal grades to be commercial.

In response, Mr Malnic argued that technology had raced ahead since the 1970s – the oil industry, for example, now had remotely-operated vehicles able to view, dig and drill material at depths down to 3,000 m below surface.

New Partners
Mr Malnic owned 100% of Nautilus until 1997 when he was able to convince two seasoned industry people to join the board – Mr Debney and Geoff Loudon, who, among other things, was founder and chairman of Niugini Mining, discoverer of the Lihir gold deposit in PNG. Mr Loudon is still Nautilus’ chairman.

Mr Malnic recalls that, because there was limited money available: “I did research, I worked with other researchers, sailed on the ships with the researchers and staked new areas in PNG, Fiji and Tonga.” In 2002, Mr Malnic brought in David Heydon, another geologist-turnedentrepreneur, to be Nautilus’ chief executive. Mr Malnic says of Mr Heydon: “He has achieved what I hoped he would achieve [with Nautilus].” Having brought together the key people to take Nautilus forward, Mr Malnic left the company in April last year when it listed in Toronto. He has sold some of his original stake – partly to help set up Direct Nickel, but also because his family home in Sydney was burnt to the ground in January this year, “a harrowing experience,” he says. But he still owns about 3% of Nautilus, shares currently worth about C$14.5 million. Mr Malnic, now aged 51, was born in Sydney. After graduating, he deliberately steered clear of starting a long-term career with one of the major mining groups – “I have always been unimpressed by the attitude of big companies.” He preferred “to survive drilling escapades in wild country,” drilling mainly for gold in Fiji as well as the Torres Straits and the Great Dividing Range in Australia. For a time, he ran his own consultancy and in the mid-1980s staked a big magnetite deposit near Munduberra which he sold “not for a fortune but enough to buy me a house”. The deal also “established in my mind that enterprise was the place for me”.

Reform in the spotlight
In 1996, he gained attention in his home town by drafting a paper suggesting how the Australian Institute of Mining and Metallurgy should be reformed. “So many people had been complaining about the Institute that I decided to do something about it.” He first showed his work to The Australian newspaper instead of the Institute. The headline said ‘Institute Gets Dinosaur Warning’ and consequently “that made me the most unpopular man on Earth”. He says that at that time there was a demand among Australia’s mining professionals for more debate about cultural and current affairs but the archaic AusIMM outlook and constitution could not cope with this. So Mr Malnic set up the Sydney Mining Club where industry people could meet every month to hear speakers on a wide range of issues.

He says: “We have a unique ‘come once and be a member for life’ philosophy, recognising that mining industry people belong together no matter what.” Following the success in Sydney, where Mr Malnic is chairman, he assisted in the creation of the present Melbourne and Brisbane Mining Clubs. And two years after he wrote his ‘Blueprint for Reform of the AusIMM’, the Institute made the first changes to its constitution in 102 years. Mr Malnic’s involvement with Direct Nickel started when a metallurgist contact put him in touch with an industrial chemist in the US who had been working on the technology for some time – the DNi Process has been 15 years in development to the present pilot plant stage. It is claimed that DNi is an environmentally friendly, hydrometallurgical process for treating nickel bearing laterite ores at a moderate temperature and atmospheric pressure.

Mr Malnic claims the economics are “far superior” to those of HPAL, the Caron Process and ferro-nickel smelting. A 5,000 t/y DNi plant, using readily available equipment, would cost US$150-170 million, and US$350-400 million for a 20,000 t/y lant. Mr Malnic says: “I can hardly believe I have an opportunity of this magnitude following an opportunity as big as Nautilus.”

Julian Malnic / Direct Nickel - original Mining Journal article (pdf)

 

[traydor]

just wondering what anyone thinks of the latest hrr release ......i think the atmospheric option was definatly worth the wait and its seems alot easier on the equipmet as well less heat and pressure anyway thanks

 

[traydor]

just wondering what anyone thinks of the latest hrr release ......i think the atmospheric option was definatly worth the wait and its seems alot easier on the equipmet as well less heat and pressure anyway thanks

 

[Garpal Gumnut]

just wondering what anyone thinks of the latest hrr release ......i think the atmospheric option was definatly worth the wait and its seems alot easier on the equipmet as well less heat and pressure anyway thanks

I am a chartist, so know nothing about releases etc.

It has a nice bottoming pattern. If it recovers to go up over 45c, it may be worth a punt.

gg

 

[traydor]

I am a chartist, so know nothing about releases etc.

It has a nice bottoming pattern. If it recovers to go up over 45c, it may be worth a punt.

gg

hi garpul thanks for the reply, i brought some more at 35c and yep it does seem to be holding its the best price i have paid in 2 years i could have waited until now but anyway live and learn thanks for the chart

 

[stix1771]

January and Vale's decison on Stage 3 is all that is keeping me interested..........................

 

[ricee007]

Howdi Everyone, first time poster.... 3 week lurker...

Anyone able to offer some foresight into HRR?

The latest reporte kept pushing how if Vale declined to continue, then HRR would seek another partner.... it almost made it seem like they expected Vale to decline to continue... which scares me.

BUT, *IF* Vale continues....
HRR has one of the best deposits in the world, with one of the lowest costs of production in the world...

IIRC, Break-Even is around US$8.20 per pound... with variable costs of around $4.50, (but then fixed costs, etc). Am I imagining things, is this old news, or?

Nickel is about $5/pound..... but, can only really go up.

Anyone have an opinion on HRR?
Or if Vale will continue the project?
Are there still rumours of BHP putting up a take-over bid?
Anyone else think $10 is still achievable in 3 years time?
Anyone accumulating?
Anyone got thoughts on short, medium, long term prospects?
Anyone think there is a risk of administartion?
Or the effect on shareprice if Vale continues / doesn't continue?
Anything?

To me, this is a fairly high risk, lowly research, fairly illiquid stock...

Does this mean that the market hasn't necessarily fairly priced it (due to it being high risk, int his environment...... *AND* because there isn't as many analysts researching it)... and because of the liquidity preference theory?

I've held since they were last at $0.57 (or thereabouts) (and on the way down), so I clearly bought in at the wrong time. But, I did buy in expecting to hold for 3 years (1-2 years ago).... the GFC has just seemingly set back that 3 years by a year or so....

Cheers,
Rhys

 

[ricee007]

Well well well..

Nickel price / pound has jumped from around US$4 to over $6!

The variable costs are around $4.42 for HRR's main mine...

Look at the graphs available at
http://www.metalprices.com/FreeSite/metals/nickelalloy/nickelalloy.asp

Especially the one year nickel price graph...


I envision a jump in SP following, due to the increase in nickel price.

 

[ricee007]

Oh how wrong I was...

HRR announced a very bad announcment today.

i can't bare to look at Commsec, but last I saw was -17%.

Vale withdrew from the PFS.