GREY:HRIVF - Post by User
Post by
topdopon Aug 28, 2008 1:03pm
450 Views
Post# 15416805
Oh dear. You are obviously all Big Boys here....
Oh dear. You are obviously all Big Boys here........but I think you're frankly all delusional.
Look at Constellation Copper Corp.
Death Spiral.
Look at Tahera Diamond Corps.
Death Spiral.
Look at TM Bioscience.
Death Spiral.
I could go on.
These all occurred in much better markets than now.
HRG will need to raise cash: Cormark published yesterday "we do think that HRG needs on the order of $100 MM in capital at a minimum to remain a going concern over the next year". Assets purchased or held by HRG have all gone down and some are pledged anyway (at higher prices) against borrowings.
Where do you think this will come from? And at what price?
Further, do you all have your heads in the clouds? Do you not read what is going on right now in European economic circles? There is unprecedented and significant European capital EXITING Russia. The Russian main bourse reflects this - it's being hammered. Listen, if British Petroleum (one of the best firms on the planet) cannot make a JV work (with TNK), then what's the point? Sentiment wrt Russia will remain negative and Investment $$ will continue to exit.
And we've not even discussed Georgia yet...
HRG's predicament is:
1. The removal of any take-over premium due to HRG's deepening alignment with Russia,
2. The West's increasingly sour sentiment on Russia,
3. The Company's constricting and increasing funding needs,
4. The very uncertain gold project economics from their 2 mines.
And AMAZINGLY with all of this uncertainty, HRG's coat tails are STILL connected to Russia: David Moshar 26 August 2008; "Both Alfa Group and High River see value in a strategic relationship and fully intend to pursue other initiatives for working together in the future."
Wow. Call it one massive case of lack of perception. These (and other) elements will conspire to crush you all if you are not very , very carefull and very, very nimble.
And by the way, talking of Management? Who exactly is it that you expect is going to be able to save your asses? Present Board & Management? I don't think so. Demonstrably incapable/unable to execute in this and all other regards.
So a question then. Who is it then that you think they might (with a helping push of Eric Sprott?) be able to attract to come in, fix the mines, sell assets, deal with the Russias and turn HRG around? An "industry Heavyweight"? Again, I don't think so. The ones I talk to wouldn't risk their career in Russia.
This is not pie in the sky. Look at Alan Hill. He was/is the VERY respected, no B.S. industry guy who was brought in (ex Barrick) to Gabriel Resources to fix that situation. That was over 3 years ago. Now he and his shareholders are stuck in the mud. Their saving grace is the reasonable cash still on hand, no major debt and importantly, the fact that they have no mines bleeding cash. That is ultimately what will cause the Death Spiral. Ultimately they should be fine. But when? 5 years? 20 years?
Be warned. But then, hey, you're all grown-ups and this is only one man's humble opinion....
topdop