HDN 1.90% $1.29 homeco daily needs reit

Haddington resources

  1. 2,218 Posts.
    HDN seems to have drifted a bit of late. However, we should get the results of to two programs next week.

    One is to expand the resource and hence mine life of Bald Hill, the other is test the extent of mineralisation at the new Payne's Find property (South Murchinson region), where HDN have reported that old trenching work gave results up to 20m at 560ppm Ta2O5 and 20m at 760ppm Ta2O5 on two sample traverses 400m apart.

    In my view Payne's find is likely to be HDNs second tantalum operation if things go well (Catlin Creek turned out to be too small). From memory, HDN put the Bald Hill operation together for less than $5million with some technical assistance from SGW (who take all HDNs Bald Hill concentrate at fixed price).

    The other bit of news is the installing of a new main screen that will effectively allow the doubling of the capacity of the plant to approx 400,000 tpa, lifting potential production to contained 280,000-300,000 lbs of Ta2O5 in centrate. I doubt that they would go straight to maximum production just yet, but I guess they might progressively ramp up over the next six months. My back of the envelope calculations suggest a free cashflow at this rate of maybe $7 million pa (mkt cap at about $9 million). Bald Hill mine life at this rate would be about four years, hence the drilling, although neighbouring HDN tennements would seem to have a good probability for further economic resources.

    I understand HDN also plan to pay a divie this September.


    I hold HDN

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