The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Significant buys coming in.. good to see a sea of blue .. good times ahead I hope ..
Swatton, Yes I think a cash deal is probably the most likely reason for the delay.
Back when the deal was penned, HUM didn't have the cash and it would have meant taking a punt on pog. Given the share price now versus when the deal was penned then 10 million in cash with zero lock-in's is a better deal than 10 million in shares valued at 28p for Cassidy and no dilution for HUM and overhang for their investors. I also think cancelling a planned dilution event and paying cash, publicly demonstrates cash build, BOD reluctance to dilute and a level of maturity that is rarely seen on AIM.
I think a cash settlement would be a win win for all involved imo.
@Swatton. Thoughts. Well more like speculation thanks to management equating us to mushrooms but my guess is as follows. Whatever happened caught the HUM management by surprise. Pulling a share issue to complete a transaction is not a good look and I cannot believe they did it on their own volition. Then remains what caused them to take this action. Clearly it is either the govt or member thereof or Cassidy. In both cases somebody tried to pull as fast one at the last minute to pile pressure on the management. If this is true then HUM management called their bluff and refused to bend to the new demands and hence the stalemate we are now seeing. If I had to point the finder it would be Cassidy.
I'm hoping that come the Q2 update the management will realise they cannot stay stumm for ever and will at least give us the bare bones of what did happen alongside all the production data. If they don't at least acknowledge the non event and leave us hanging then that's a pretty good indication of how they view their shareholders and I for one will be on the warpath...
Regarding the Cassidy share issue. I am wondering if they will actually pay them in cash sometime in July? Could we get an announcement for Q2 in mid July saying that cash in hand is over £10M and then a cash deal with Cassidy? I am surprised by the delay in not updating the market so I don’t think it is administrative issue. Not sure it could be a big renegotiation as I would have expected that to have been completed by now. Could be a selling of the entire project to a third party but wouldn’t they have had to update the market on that? So a change to a cash deal does make sense to me. First update the market on a good Q2 with good cash flow and no debt. Then announce a cash deal Wu Cassidy? If that were the case it could put back by one quarter the start of the build but it wouldn’t mean a share dilution. Thoughts?
Adam, I'm also concerned about the Cassidy share issue, but only from the point of view that I was excited to see the project get up and running and thought it looked the much needed catalyst for a rerate. But, I find it hard to be concerned about the Casdidy delay from a current valuation risk point of view, as the project has not been given any value whatsoever to lose. It also has not been paid for and wont be paid for, should it fall apart. The idea of 'fall apart' is also relative. I find it hard to believe that even on a reversal (of some sort) of the deal, there won't be upside for HUM who took the risk on an unpopular mothballed project and mining licence that has to an extent already 'come good' on the POG upswing and mining licence being granted. So yes, also irritated, but happy to remain invested on the balance of possible outcomes.
Swampy I don't disagree with much of what you say particularly about the over emphasis on SC being the main cause of the share price slump. It is not.
Also I'd go easy on the so called fearmongers. Just because someone disagrees with your generally solipsistic view of the company does not mean they are not putting up a reasoned argument. If you examine what they say they may even be pointing out logical inconsistences in your own analysis.
I'll suggest but one. You states that cost pressures are " in fact moderating". Really? Show me one piece of solid evidence this is the case please. Sure we have management assurances that costs have already peaked but that's all.
If you base your investing on what management say rather than what the real data imparts then that's your lookout.
I for one will withhold judgement until Q3/Q4 operational updates come out. If costs do indeed moderate then fine my confidence in management to understand their operations will go up. Unfortunately in the last 12 months all the evidence has been pointing the other way. In my eyes management have a job to repair their reputation.
And finally, what about the curt announcement of the share placing for Cassidy being delayed. Since then nothing not from management and hardly a peep from investors. What a placid lot we are!
I think everyone is over thinking this. SC has been a significant/ the main factor on SP - They are capping the market and are limit order sellers. There is no other large II to take them out, which is a factor down to uncertainty, DB issues etc. This leads to a long basing effect which I've seen often in small caps.
My view is they at 20-30% VWAP sellers at a limit of 21p, and given their last, (and there will be no more), TR1, they wont be out until mid end of July, ex a block trade.
Dan B is unable to attract new IIs to this value trade, and yes, precious miners dont seem to be in favour despite near record GP. If he understood the market better, he would not be in this situation and would be adapting his strategy to roll up HUM with others so that he is not a small single/two mine operator - that then become more atttractive to IIs. He is either stupid, greedy or lazy. (or a mix), at its pretty obvious and other small miners are acting in that way. He simply plays around at the edges and far too slowly.
Anyway, SC is the only factor IMO and until they are out we will not have a true understanding of equilibrum market value.
Swampy I agree with all of that but your first post this morning even more so.
This is a good old fashioned earnings lag. People who can count have been shaking week part time, pin tack punters for ages. But it will only work whilst the actual isn't yet reported.
All the troll accounts as you state will disappear and we'll get new ramping accounts joining the board. They'll all be the same individuals of course though.
Sustainible Capital have certainly been a factor over the past few months, but they are very far from being the only factor. We've analysed their sales to death over the last six or eight months, with their clear out being confidently described as "imminent" for the last three or four months. The reality is that to put all the share price weakness at their door, would require selling volumes that would have seen them sell out months ago.
The far bigger factor here, is plain old fashioned doubt and uncertainty, not helped by a constant trickle of fear mongering. This miner along with many other juniors has struggled with a market that has looked for a cloud with every silver lining. We have had to listen to constant rubbish about how costs are spinning out of control, while they are in fact moderating. How the more recent coup was a disaster unfolding, when it was just some local political flexing by the man who may very well be voted in democratically in February anyway. We have seen that our secondary investments (outside of the producing mine) have been criticised to the point that they are valued at zero here, but independently valued in their own investment vehicles are worth more than a third of our entire value. The Islamic fundamentalists, numbering only a few hundred in a very remote and completely unpoliced part of the country, unrelated to our activities, have managed to be mentioned half a dozen times on this board. Every announcement made by our BOD is dissected in detail, looking for any word to be misconstrued. And so I can go on.
Luckily sentiment turns fast and trolls and 'disaster experts' dissappear quickly when the share price climbs. But we need a catalyst that is more than an end to Sustainible Capital. I think its going to take a completion (one way or the other) of the Kouroussa transaction and some proof of the moderating AISCs. While I too used to quote Sustainible Capital as the answer to all our problems, I now think they are a red herring that at best, have exaggerated pre-existing PR and communication problems, that have been addressed by the company but have not yet found traction. All of this noise made for some nice buying opportunities, but the possibility of a value trap cannot be denied. Having said all that, I think the risk is worth it and is more than compensated by an insane value proposition and I have this as my single largest position.
Have a look at the rate sustainable capital are selling...it's not long to wait now until they're out completely
Very frustrating. Although it's been across the board. The silver miners are even more frustrating, as silver hasn't quite the same dip (relative) as gold. I hate wasting a PM price dip, but couldn't force myself to buy any more shares of any sort this dip. (Although I did add a small coin to the physical stack out of principle). It's hard to see what will change the stubborn investor attitude for a lot of the miners, but at least with HUM, the contrast between share price and profits will move from expected to reported in the near future.
Frustrated with low sp with no sign of a breakout