27-May-2020: Quarterly Activities Report
I've got a small position in Havilah Resources (HAV), and they've performed dismally so far. They have a number of "prospective" projects, mostly in the north-east of South Australia, and those encompass Copper, Gold, Cobalt, Rare Earths and Iron Ore. They had a deal lined up last year that would have been a game changer for them (in a positive way) in that a MUCH larger company - Sanjeev Gupta's SIMEC Group, part of the Indian-based GFG Alliance - was taking a large stake in them and providing around $100m in financing plus experience and expertise to hopefully take them through to production with some of these projects, however the largest shareholder in the company, Dr Chris Giles, their current Technical Director and a co-founder of the company, having supported the transaction up until the day of the General Meeting, changed his mind on the day and voted against the proposal. GFG/SIMEC understandably walked away - a little upset. So did HAV's CEO and the entire board, except for Dr Giles. It's been all downhill since then unfortunately.
They are not burning much cash, so they can wait this situation out, and they may come good again one day. I could NOT recommend them though. Usually I would have cut my losses immediately because of what Dr. Giles did, but I'm not sure I fully understood why he did it at the time, and my position was very small (comensurate with the high risk of holding an explorer and wanna-be-developer with no revenue), so I ended up just letting it ride. I haven't topped up however. If they ever have a decent bounce, I'll probably sell into whatever strength there is at that time. They certainly have a lot of projects. I just don't know which ones, if any, they are going to be able to convert into some revenue, and how long that process might take.
That's the latest update to clients from State One Stockbroking on Havilah Resources (ASX:HAV) regarding their Kalkaroo Project PFS (pre-feasibility study).
HAV is certainly a high risk speculative "investment" (read: gamble). State One have a 21 cent price target for them and a "Speculative Buy" call. HAV closed at 13.5c yesterday, so the upside implied in State One's PT for HAV is 55%, but you need that sort of upside potential from a company that could easily go to $0.
Disclosure: I have a small HAV holding.
01-May-19: The latest addition to my Strawman.Com Scorecard, HAV, rose 45% today (from their 15c close yesterday, to close at 22.5c today) on this announcement. SIMEC have agreed to invest up to $100 million in HAV, but the downside is that they are buying shares with that money and could end up with 51% of HAV, so SIMEC could effectively control Havilah in three years time. HAV have also announced that a discounted pro-rata rights issue will be offered to existing shareholders, after shareholder approval, but prior to any placement to GFG (SIMEC).
The big news however is that OneSteel Manufacturing Pty Ltd (trading as “SIMEC Mining”) (SIMEC), a member of the GFG Alliance (GFG), will fully fund Havilah’s work programs for its iron ore assets and its copper prospects in the Mutooroo Copper-Cobalt District, including the Mutooroo deposit, and provide a clear pathway to potential commercialisation. GFG is a successful international group which owns the Whyalla Steelworks and iron ore export facilities, and which can provide access to global capital markets and extensive technical and commercial support
Disclosure: I hold HAV shares, and today's 45% rise takes them back up to the price I paid for them back on July 31st 2018, so I'm back to breakeven on HAV now. On my Strawman.Com scorecard however, my HAV is up 50%! Now, if only CLQ could have a positive move like that, I might get my scorecard back into positive territory...
Update - 30-Oct-2019: Like a lead balloon, they came back down - closed at 10c today, and they're raising money again, after the resignation of Mark Stewart and Martin Janes as independent non-executive directors earlier this month following the resolution for the approval of the proposed investment in Havilah of up to $100 million by OneSteel Manufacturing Pty Ltd (SIMEC) not being passed by shareholders at the EGM held on 12 September 2019.
It's all a bit of a mess. I'm still holding. Don't know why sometimes. They might come good - eventually... hopefully... it's a very small "investment" and I don't spend much time worrying about it... Which is probably for the best.