The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Worth watching the presentation and Q&A
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I do tend to assume the worst and am not aware of the issues that the contractor has encountered,Dan was careful not to comment on why they have not kept to the mine plan despite Hummingbird management having overseen mining activities for 12 months or more
Jwhitw - who else is responsible for the mining then? What are these posts where people just mention something then suggest nothing then assume the worst.
As Dan said you'd have to ask Corica why they are not sticking to the mining plan, moving the dirt and getting us to where we hoped to be under the contract which they signed.
The graphic showing our actual position against planned mining in yesterday's presentation was quite alarming. It appears we have barely scratched the surface against what was planned. Are we to assume this is solely down to corica and this is indeed a $1000 aisc project.
Fill in the typos yourself
Chris... There is no one quite as odd as someone who posts the amount of absolute garbage as what you do and can't even read I'll use a calculator to establish the output using grade profile
You've literally been told by the company that the processing plan is operating at 110% capacity and no yesterday they have confirmed to you that the grade they're no processing is 2 grams Per tonne.
Yes they will. I had a period where we were into the bank for quite a bit and had to keep extending and re-financing things to make ends meet. We were waiting for business to pick up etc which we were sure would come. Every time our overdraft got extended or we organised payment holidays or whatever they charged us for the ' new ' facility. This is how banks make their money - they're a bank.
They never once suggested taking over our capital intensive business that they don't understand, can't run and wouldn't want to sell in a hurry to the lowest bidder which would take ages and result in huge problems.
Id guess that Coris will be flexible if the base case is still very strong and progress is being made. 77m dollars is due in 2024 and 9m has been paid already. What if they get 50m back this year and roll the remainder into next year? Sounds perfectly reasonable to me and risk-free for both parties ( as long as progress is made going forward now ).
Sounds far more reasonable than ' Coris will take the business they already own and wipe out shareholders ' or ' another equity raise at 5p is coming '. Why on earth would the bank want a huge controlling stake in a multi jurisdictional mining company!?
This is all dependant on Hummingbird continuing to deliver more at Yan and little by little at Kouroussa too. I agree if their production goes backwards now they could be in big trouble. Regarding CIG stake i'd say its more likely half of it gets sold at a profit to whoever wants to help fund Dugbe later in the year or 2025.
'Are you really saying that after last week you was defending 2 billion valuation for SRB based on guidance for a production profile that isn't even funded and not even guided for until atleast 2026?🤡🤡🤡🤡'
No, you've got the wrong person, that was someone else. I have a £1 target for SRB.
'The amount he cried last week because I said SRB would test 55p was unreal.'
You're an odd one. (i) I didn't get wound up because you just came on the SRB board spamming with no interest in debating and (ii) I was right that it wouldn't pull back that far.
Anyway I won't reply to you again however abusive and slanderous your posts as it's tedious for the rest.
Are you really saying that after last week you was defending 2 billion valuation for SRB based on guidance for a production profile that isn't even funded and not even guided for until atleast 2026?🤡🤡🤡🤡
Reading through your post again essentially what you're doing is assuming a fairly optimistic base case that involves POG remaining this high and Coris being supportive regarding the debt maturity that's looming as with your figures they still aren't going to meet the short term liabilities they have this year. Certainly could work out but the risk is much bigger than you want to believe.
HUM keep repeating that Coris is supportive but they are a bank not a charity, they will want their pound of flesh in return for this support.
love that!! people who consistently use the phrase let's assume, big headidly telling people how little they know. how little you have learnt. you can't assume anything with hummingbird and use your assumptions as a basis for *** packet calculations. when have you ever been able to rely on hummingbird or assume anything. surely you must have twigged by now the only assumption you can make is they can't achieve and things are bound to go wrong.
Regarding DB never doing anything right, they did meet guidance for last year 2023, guidance for high grade in q1 and q2 2023, contractor replacement for yan resulted in sucessfully meeting 2023 guidance.
Hard for DB or any ceo to stop fire at fuel depot or underperformance of a contractor. Step-In Notice gives them control now, with third party contractors who maybe did not want to stop work. Anyone know how much more of that $6.3 million they can draw down? The last debt restructuring refinanced 55 million to longer term and added $20 million more debt available so is that the $20 m that is being drawn down?
If Coris bank really wanted 100% of hum, they could have just refused to restructure the debt the last time. Banks do not have the manpower and knowhow to run mines.
The_shareminator that's a really detailed post thank you. A great starting point although from almost line 1 you got something wrong (Yanfolila guidance has been lowered to 75k-85k hence my 75k remark). Still, I'll start from the basis that the rest of the post is more or less accurate as a jumping off point for my own research. Thanks again.
5m deep sounds small but over 1km long and hundred m wide of pit is a lot of tons to remove. Digging a small 5m by 5m does not give the volume.
The last financing said it was used for Dugbe, underground yan, exploration drilling of both yan and kou, so not all was used for kou.
playboy
you’re like a broken record, ffs
you’ve told us many times it’s not for
yet you!
yet you are desperate to come on here to constantly
**** the company off.
very strange behaviour, maybe stick to shares that you are interested in?
i’ve never gone into other boards gloating
how knowledgeable i am about the company if not invested, i wouldn’t waste hours of my time doing so?
Just to add in Q1 Hummingbird repaid $9 million debt due in 2024 and have drawn down a $6 million which almost certainly isn't due for repayment until 2025 at the earliest. I'd assume interest accrued at $4-5 million this quarter and Korroussa being loss-making contributed to a debt position unchanged. Welcome to correct if I've misremembered anything there
I missed the presentation, but I've just looked at the slide deck. I might remember this incorrectly, but didn't Dan say the high grade was 5m away ages ago?! What they have achieved vs the plan is actually laughable. I hope for the holders that they find a way through to commercial production and manage to renegotiate with Coris and be lucky enough that regional instability or rainy season doesn't derail things. It would seem to me that even if everything went perfectly that they are still at the mercy of Coris to defer. Even then I expect a raise would be required. But when has anything ever gone to plan for HUM. It's not for me!
He doesn't understand much... Just go and look at his posting elsewhere, clueless beyond parody.
The amount he cried last week because I said SRB would test 55p was unreal.
HarChris - okay I'll break it down for you as you are still not understanding the current outlook..
Yanfolila guidance is 80-90koz this year of which they poured 17koz in Q1. Let's assume a middle of the road outcome of 85koz weighted towards the second half of the year with 20koz in Q2 and 48koz in H2.
Average group sales price including sizeable number of hedged ounces of $2,030/oz vs Yanfolila AISC of $1,616/oz provides margin of $414/oz. For the remainder of the year Hummingbird are due to benefit from increased margins as a result of a forecasted fall in AISC to around $1,470/oz (for a FY average of $1,500/oz at the mine) while benefitting from
1) the recent surge in the gold price and
2) the agreement to improve the hedging arrangements.
The average gold price received is set to be higher in Q2 and will likely remain high in the second half given expectation will be, a conservative figure closer to $2,100 /oz this quarter and approaching $2,200/oz in the second half if the price of gold remains around the 60 day average ($2,230/oz).
The above figures suggest quarterly earnings are set to rise significantly:
Q1: 17koz at $2,030/oz with AISC of $1,616 (margin $414/oz) = $7m
* Q2: 20koz at $2,100/oz with AISC of $1,520 (margin $580/oz) = $11.5m
* Q3: 23koz at $2,200/oz with AISC of $1,450 (margin $750/oz) = $17.2m
* Q4: 25koz at $2,200/oz with AISC of $1,430 (margin $770/oz) = $19.2m
First three months $7 million earnings vs next 9 months roughly $48 million. There is scope for improved performance and meeting top end of guidance which would improve AISC forecasts and the unknown price effects. Most of us are here because we believe in the intrinsic value gold offers and see the price going higher as global growth wains, rates ease into 2025 and geo-political tensions remain heightened.
It is too early to draw conclusions on Kouroussa but even 50koz in 2024 would I suspect be enough to cover the vast majority of the $77m originally earmarked for repayment with the remainder deferred with the approval of Coris bank. The lender appears to be accommodating wouldn't you say? They have funded Hummingbird's operations for years, helping the company through a number of difficult periods in it's history.
45koz production over the next 9 months would still generate approximately $25 million in earnings and that is assuming weaker margins owing to reduced output and increased third party contractor expenses.
Management have already successfully renegotiated the hedging arrangements with our buyer during the quarter and arranged for other contractors to stand in for Corica. These are steps towards rectifying the current predicament, do you not think the bank will be accommodating? It appears you are discounting any possibility of Coris bank agreeing to deferring a portion of the 2024 debt repayments. I don't see why Coris would not want to alleviate the situation and provide an adequate financing solution.
If you think falling short of production target by possibly as much as 40% is going to have no knock on effects for an indebted miner such as HUM then fine. You might be right but once you're running the risk of failing to meet debt obligations things turn sour pretty quickly.
Will continue to watch with interest and hope for your sake Dan Betts starts to follow through on his ambitious plans for once and HUM holders get some respite.
Please expand on why there would have to be huge
Placing?
More mining fleets required?
Building more plant?
Exploration works?
For 125k oz the debt is still being paid
Also at 200k the POG wasn’t factored until now
There could be a difference of $400 to $ 500
Per oz
Which easily covers the debt.
I love these armchair experts in mining
It’s hilarious stuff
No so let me at least expand on that earlier comment.
December placing at 11.25p. The placing rns included this: 'The Company is on track to produce c.200,000 oz in FY-2024' which (from a later update) we know would be ~80k Yanfolila and 120k Kou. There's also plenty of talk of deleveraging the balance sheet as a priority hence my focus on that metric earlier.
Now we know that first quarter production was 22867 oz. Let's assume Yanfolila hits 75k target what do you expect from Kou this year? We don't know obviously but is 100k possible now? No, 60k? Perhaps. Conservatively let's say 50k - that would mean HUM produces 75k oz less than they set out to just a few short months ago so let's assume expectation were for gold to average $2100 this year back then - that's over $150m lost revenue vs prior expectations. Gold price would need to go way, way higher to counteract the lost revenue from this mess with Corica.
So is this a steal vs the 11.26p placing price in December? No i don't think so, not when the plan was to pay off $77m debt this year which looks impossible now given the situation and tight cash constraints.
Will HUM become a 200k oz producer at some point in the future? Sure they obviously still can but at what price in the meantime? How many more shares will there be in issue at that point and what will the debt be? You might even find that it happens at the end of the gold bull market and all the cash generated simply goes to slowly paying down the debt for years to come.
No one likes to hear it but unless the situation is sorted very quickly at Kou the next lot of financing is going to be a lot uglier than the last.
You are reassured by anything DB tells you? You must be slow learners . When have is deeds ever lived up to his words? It's just another round of words. If he was ever going to match is words with actual profit making achievements he would have done so by now. What's stopping him?
In the presentation they stated the asset value of Dugbe to HUM at $1800 gold is $650 million. That's without additional resources being proved up and is 30% below current gold price. So the company's MCAP is more than backed up by assets.
I'm quietly optimistic for a very good Q2.