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I assume we are in agreement, on the outlook for Q4 (" Q4 results should be a lot better than Q3 results "), RichTheNewbie. ;0)
BW
You don't need to tell me the final quarter SHOULD be better.....my observations were purely about the SP trend and reaction to the Q3 news. ;)
Yeah, I took another tranche on Tuesday (s/p@36.3p), RichTheNewbie,.....Q4 results should be a lot better than Q3 results, if I understood the interview correctly,.....was not expecting s/p to pull-back quite so far, been tempted to pick another tranche up down here, but resisted so far, you never know s/p could pull-back a bit more yet.
BW
Imagine if HUM had put out an RNS that said just "AISC will be higher than the average for the year to date due to wet weather etc. ...". The share price would have tanked. No, I think it was definitely right to talk about it only in the context of the Q3 performance in its totality.
Hi Jammer, you're welcome. I'm not entirely sure that the Company should spell it out every quarter. To an extent, it is up to us as investors to understand what AISC means and invest accordingly. That's why it was created as a measure in the first place - to provide a consistent comparable measure. However, when sales and production are out of kilter as they were in the first two quarters it would have possibly helped to have been given a little more insight.
I think I'm right in saying that in one or both of the recent interviews that Dan has given, he does state that the increase in AISC reflected the lower level of sales, but he does not explain exactly why and not everyone will have listened to the interviews, but all should have read the RNS update where clarification would be better when required.
Cheers, Ash
Thanks M20ASH for a very good explanation of the change in the AISC from quarter to quarter. It should have been given by the company though.
Hi Juxtapose, everything I have read this morning to confirm my understanding, points to AISC as a measure of gold sold - WGC, etc. HUM actually produced more gold in Q3 than Q2 at a lower overall cost, but the variance in sales - 23,794 oz in Q3 vs 31,520 oz in Q2 has resulted in a 30% jump in AISC whereas the reality in terms of production cost per oz is a drop.
The big jump was actually in Q2, but masked by the higher sales relative to Q1 and if you think about it, that makes sense given the incidence of COVID and inventory stocking followed by the commencement of drilling. This is then followed by the coup issues and wet season resulting in production costs remaining high and you are quite right to state that certain costs remain relatively fixed irrespective of the amount produced. A drop in Q4 AISC will depend on higher sales, which will require higher production and this should be achievable.
Somewhat misleading/confusing and I think a lot of investors have sold on the basis of the reported jump in AISC without understanding the underlying figures. Having read up, I am happy with my understanding and the progress being made and have added 200k shares today at 34p and under. Seems like an opportunity to me.
Cheers, Ash
I agree, i stand corrected. my glass is more than half full. GL all
My understanding is that AISC is on production (the matching concept) and I am struggling to see how it could be on sales, which could be quite"lumpy". Overall, it should make no difference as gold produced should all be sold!
This Q's AISC was disappointing, but had to be expected with that level of production, as a large component of cost is fixed costs and so these have to be spread over less units. If Q4 production increases, it automatically reduces AISC per unit.
From recollection, we were warned that the mine plan was being resequenced (for the various reasons given which may have impacted more on mining than processing, hence using up low grade stock piled ore).
Looking forward to Q4 and a return to the success of last year and Q1 of this year.
TBTT / Ash
I was merely highlighting the increase but I completely agree the share is well under price. In fact I had added few more to my holdings to bring my average cost down.
It should break out 40p after next quarter. DYOR! Good luck all!!
Morning all, I don't post much these days, but have a bit of time on my hands so...to the best of my knowledge AISC is a measure of the cost of gold sold and not gold produced. Whilst the jump from $983 to $1283 is a 30% increase the absolute costs for Q1, Q2 and Q3 are $21.5m, $31m and $30.5m so if Q4 comes in at around 30k oz at an AISC of c. $1k per oz, you're looking at around $113m for 110k oz, which is an overall AISC of $1,027 - not far off guidance.
If you factor in everything that I believe is included in AISC, including sustaining exploration costs c. $5m, costs of COVID, closure of the borders as a result of the coup and the exceptionally wet Q3, which prevented accessing higher grade ore at the base of the pit, I don't think that's a bad result at all given the higher sales price being achieved.
Feel free to shoot me down, if I've got it wrong!
Cheers, Ash
I cant argue, could have been communicated better, that has always been the case with hum. Under the present circumstances i feel the results are anything but awful. Yes an increase of 30% in costs but fortunately an increase of 18% in gold price sales .
i guess its whether your glass is half empty or full, should we take assumptions on 3 months of data or consider progress made over a period of time and opportunities moving forward.
HUM did have to deal with a military coup and closed borders, a pandemic, and a very damp rainy season.
And all these were publicly available information.
So an increase in AISC should not really have come as such a shock to the market.
Anyway, the shares are really good value at this price (as long as the price of gold isn't going to take a big tumble). So I'm a buyer.
All in Sustaining Cash Cost ("AISC"): US$1,283 per oz for Q3 2020 (US$983 per oz AISC for Q2 2020).
An increase of 30.5% from previous quarter without any prior warning to the market!
1047 YTD Hardly awful
@Rich agreed ... the market has beaten HUM with their own awful quarterly reported AISC. Still on the plus side the likelihood of much better results next quarter have risen significantly!
@Rich I have it at 28-Oct-20 open @35.5p below daily open/close and close @34.51p below interday low trend line from 17/18-Mar-20. Take your pick it broke both in one day and close below the lower one.
Semantics really, it's broken support and unhappy
AIMHO APR
Unfortunately it was just a perfect storm (in the wrong way), with HUM releasing unexpectedly bad AISC for the quarter, it being at the bottom of the upward trend channel when they did, and then gold heading sub 1900 compounding the issue. In a market where investors take a lot of persuading to hold anything, and hardly any persuading to head to cash, this was sadly always the most likely outcome on the news.
aprogerson - HUM broke the uptrend at the start of the week rather than at 34.5p...https://www.tradingview.com/x/RpBu5Oj8/
Any other support now is speculative and could be here (at 34p, or 32p, or 30p).
Unfortunately HUM Price broke down below uptrend support @34.5p yesterday & has headed lower today. Next support is 32.75p or just below 30p if the sell-off continues.