Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Would not expect HUM to get involved with developing Dugbe.
As gold rises the economics of Dugbe will improve significantly.
There should then be a number of mid-caps (or Chinese) willing to open their cheque books. There cannot be many +4 moz gold projects with a mining licence and large exploration upsides available.
Patience can be very rewarding.
It is a reasonably thoughtful article, but some aspects are not properly understood.
The company was quite clear about what happened to the cash:
"In addition, the Company has continued to strengthen its balance sheet including reducing trade and other payables."
It has already been discussed here, but trade payables were exceptionally high and creditors have been remarkably patient over an extended period of time. In the light of that, the company's explanation is credible.
Dugbe is more difficult to "justify" since it depends on a very personal point of view. I believe that funds are better concentrated on Yanfolila and getting return on the capital expended on the already built plant, but I can see why others feel that HUM should hang onto the additional 4 million oz. and take the quantum leap (with all associated risk) into the next league of gold producers. Of course, like everyone else, I do want a good deal for Dugbe and it is frustrating to have some but not all details revealed. What has been shared so far, looks like a new, special purpose vehicle, to lay off the risk (and $15 million of liability on our balance sheet) whilst retaining some of the upside.
I think the concerns are overblown. Looking forward to the update due over the next few days.
" There are several red flags in the operational update and the questions I sent the company are still unanswered. Summarized, the red flags include
- large ore stockpiles at unknown grade
- increase in net debt
- obscure partner for the Dugbe project in Liberia
-confusion regarding the calculation of gold inventory on hand. " GP/Seeking Alpha.
It would be so easy for Dan to dispel all these doubts by proper communication - if there is no OTHER reason...
Quite surprised GP bailed before this weeks RNS.
Dan previously was asked questions on the board and in an email about who they sell gold to and he answered it in a transparent way in the next RNS.
Looking forward to this weeks RNS.
A posting on SeekingAlpha with some concerns about the clarity of communications to shareholders.
Stockpiling of lower grade ores to blend with forthcoming higher grade ore ( Gonka) is not unusual.
My view is that the cash flow in the next 2 years should resolve any financial concerns on the balance sheet.
https://seekingalpha.com/article/4319324-hummingbird-delivers-in-q4-2019-out?dr=1&utm_medium=email&utm_source=seeking_alpha
For Dugbe, I think this is a tremendous asset to own in the current period of rising demand for gold.
4.2 moz in Resources and a further + 2,000 sq/km of highly prospective licence to explore.
In Europe with 2% Inflation and minus 0.5% interest you are losing 2.5% of your deposits pa in real terms. This is one of the reasons for the revived interest in gold.
The takeaway from Davos was that Central Bankers agreed that Quantitative Easing was no longer effective . Governments needed to support their economies with fiscal measures ie public spending on infrastructure projects. That invariably has led to higher inflation and fuelled a strong bull market in gold.
I also have concerns of a sale to to an unknown BVI company.
I was talking a few days ago to a successful private equity principal. He stressed that business fraud is running rampant at the moment as it is seen as a unpunished crime. You have to be very careful.
Resource companies who have spent a large some of money developing an asset can pass control to an organisation for follow on investing. The new owners have control . They can sell assets, run it into bankruptcy and the previous owner cannot recover it as they are not a creditor, just minority shareholder.
We need to know why we have to now sell this asset now when rising gold should passively and risk free raise its potential value.