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Hi Tiger
I can see your logic regarding institutions if bought sp was less than takeover price.
This would not apply to Institutions have bought at higher prices and seeing the gold cash being generated.
Hi GoldenBull!
Of course a low share price is bad for the company. I can't imagine how this situation could be advantageous to Hummingbird in the long run - the most likely consequence of a low SP is a swift takeover and no long run at all.
FWIW, I know lots of people who work in major financial institutions (from my day job), and I can promise you that after this long slow decline in the SP they would be delighted with an opportunity to cash out at a reasonable premium and to achieve their bonus targets for the year. There'll be no loyalty to management when money is put on the table, believe me.
I do agree with you that it would be wonderful if Hummingbird could flog Dugbe and pay a special divi. Not sure how many buyers there will be for it in current environment, though. (And, honestly, why buy Dugbe for $60m when less than $200m gets you the entire company?)
With unknown future investment requirements at CORA, possibly Dugbe (to get a JV away) and even new high-return investments, it’s too early for divis or buy-backs - IMHO. Give it six months. An announcement that they are seeking the disposal of Dugbe, with proceeds returned to shareholders as a special divi, might be an alternative approach.
For the long term development of Hummingbird is it advantageous to keep the share price down?
Private share holders are temporarily down, long term ones will eventually come good. Institutions are buying in cheap and if and when Dan decides to buyback, they get more shares cheap. I personally still believe in the company and would not welcome a takeover. A share buyback is promised by Dan should it be required, I do not think the existing shareholders would entertain a low priced takeover. The company delivered the gold on time, on budget and a rerate will come.
Hi 1234567!
I agree that a buyback would help the share price, but I don't think it would need to be as much as $8-$10m. IMO, even $3m would put a bid under the share price and change things dramatically.
What I do think is absolutely crucial is that the BOD makes it clear that they understand that the company belongs to us, the shareholders. So proper communication, proper support for the share price (either via dividends or via buybacks or other means), proper investment and development of Yanfolila, and no distractions.
I do hope that those who are going to the presentation tonight don't let Burt get a false impression that all is hunky dory here. The share price is grinding along at an almost unbelievable low (given the free cash flow HUM are generating), and share trading volume has collapsed. At the very least, the BOD should care about this if they want to keep their jobs - HUM are a very appealing takeover target at this price. And I think the vast majority of shareholders (institutions and PIs alike) would welcome such an offer with open arms.
People want to the dividend or income, should not buy metal & mining or E&P business, because of capital intensive and cyclical nature of the business. having said all that, we are trading way below replacement value of yanfolilia mine, one time 8-10m$ buyback would really help accelerate the re-rate, look at our low trading volume, it will take many many months or even up a year to buy back 8m$ of shares.
Yes, AAZ shows how well the market can react to a maiden dividend. IMO, it also shows how well the market responds to a well-planned publicity campaign - there was an article in the Mail on Sunday, then two exploration RNSs to prepare the ground, and finally a surprise increase in the value of the previously trailed maiden dividend. The result? A share price up by over 30% in only a few days.
So, congratulations to AAZ. They are a good company with an impressive cash flow, and they deserve to be rated higher.
That said, IMO HUM are a superior proposition to AAZ. And the SP here is still ridiculously low compared to HUM's free cash flow. So perhaps the BOD should review its publicity strategy (like, actually have one) and announce a dividend as well!
When you consider Anglo Asian who have announced a maiden dividend today and are producing less gold, although lower operating costs, the market reaction today for HUM shouts out for a clear steer on introducing dividends , albeit modestly to begin with as quarterly production is proven into the year.......
http://www.proactiveinvestors.co.uk/companies/news/205205/anglo-asian-mining-surges-as-it-declares-maiden-dividend-in-half-year-results-205205.html
Come on Dan, even with spend on drilling, new mill, and your N American adventure, free cash flow will support something back for shareholders....
Lets be greedy and have a dividend, a share buy back scheme, gold back up to $1,350 AND a move away from AIM!!
Sands you are spot on......personally i am glad we don't have the "herd" mentality here and the sell on news brigade! I don't doubt for a minute though that it could and probably will happen over the next few months and so on. What we have here with HUM is an investment that keeps reducing the risk whilst all the time increasing its value, this value over time will gradually be realised. The downtrend of the last 6 months, in some respects, makes this a screaming buy today as the risk at 27.5p is extremely low indeed!
HUM have now firmly set their sights on being a very very attractive long term hold. The 2 statements made by Dan and Murray are the icing on today's well baked RNS cake......
Dan Betts, CEO of Hummingbird, commented:
"Approving the second ball mill, in place of the tertiary crusher, at the same time as releasing our initial results from the 2018 exploration programme shows the confidence we have in increasing our Reserves at Yanfolila. The second mill will give us greater flexibility and 24% more throughput when operating on 100% fresh ore. I am delighted with the initial drill results and look forward to receiving more over the coming months.
I am very pleased to continue our working relationship with SENET who have been appointed the EPCM contractor for the second ball mill and look forward to carrying out another successful construction project with them."
Murray Paterson, Chief Geologist for Hummingbird, commented:
"We are delighted to have commenced exploration works at Yanfolila, with a new team, new eyes, new ideas and a lot of enthusiasm to be successful. As stated previously our focus is on targeting Reserve growth by drilling out known Inferred and / or de-risking the Indicated Resources at the 4 deposits within the mining permit but not yet in the Reserve mine plan. The results at KW show that the previous drilling didn't delineate and close off the mineralisation at this deposit. Drilling at Gonka is very exciting and we look forward to receiving and publishing the results when available."
If you want to invest in a growth story that is likely to continue to unfold over the coming weeks, months and years then HUM has to be up there with the very best.....it is in fact knocking on the door to being one of the best investments out there on this broken and corrupt market.
Throw dividends and share buy backs and POG increasing back to around $1350 and beyond and the value that can be extracted as a shareholder in HUM is stunningly attractive!
A while back someone mentioned the "AIM shoal" and attracting that shoal but I am not sure that is what is needed for long term share growth. So many of these "great" rises you see are preceded (maybe by 6 months or so) by a big drop. Hopefully HUM won't be one of those that experience large increases but also large decreases as that, to me, is the day traders market. Getting away from AIM would be a big plus for me as whilst there will be ups and downs along the way it'd be good to see the company judged on its performance.
I have been critical over PR myself, and have not seen a level of increase that should have taken place with new positions for that purpose in the company. Having said that, everything that is happening with regards to production is still taking place and the fact they have approved a second ball mill is proof things are going better than expected. Therefore you would have to conclude the smart money is already here, and the rest of the investment community will inevitably catch on. IMO Q3 results will help, but Q4 will be the traction point.
Just doesn't seem to be on enough potential investors radar, this is probably where the PR could/should have been better to help get the message out there.
Not exactly rushing to buy...perhaps Q3 results needed...