TK Journal 2021-02-10

Hi every­one,

I want­ed to respond in more detail to the ques­tion at last night’s zoom call regard­ing what action to take with Hawthorn Resources (HAW) giv­en the res­ig­na­tion of a Direc­tor.

Chris Cor­ri­g­an holds 30% of the com­pa­ny but has resigned as of yes­ter­day. I thought I should lay out the facts:

- The com­pa­ny has pro­vid­ed no more infor­ma­tion regard­ing the rea­sons behind Corrigan’s res­ig­na­tion.

- As yet, he has not sold his shares.

- The com­pa­ny is thin­ly trad­ed.

- The share price is above it’s Sell point, but the share price dropped 11% yes­ter­day.

- I have found no news about the res­ig­na­tion on the inter­net. Pend­ing any fur­ther news today about the rea­son for Mr. Corrigan’s res­g­na­tion, I will not be sell­ing HAW from the Dum­my port­fo­lio.

My spec­u­la­tion is that if Mr Cor­ri­g­an sells his shares it prob­a­bly would have to be in a block trade. Ie, in a large par­cel to an insti­tu­tion. It is pos­si­ble, that the com­pa­ny may opt to buy back shares, but this is unlike­ly. The fact that there is no con­text around his res­ig­na­tion or announce­ments around board direc­tion or renew­al from the com­pa­ny sug­gests that this announce­ment was unplanned. But, in the absence of fur­ther infor­ma­tion and giv­en that the shares are close to the sell line I am will­ing to wait for devel­op­ments today before mak­ing a call. One thing I want­ed to high­light is that sell­ing may force the shares down quick­ly in this thin­ly trad­ed stock. That is why I rein­force that pur­chas­es in a com­pa­ny like this should only amount to 25–33% of the Aver­age Dai­ly Trad­ed amount.

Regards, Tony