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what is your take of Dugbe DFS ? surely at this point should have been submitted to Pasofino by their consultant a few weeks ago ? Is it being held back ?
Update should be in now
They'll already have it for sure - just a matter of when the money guys want to drop it.
Maybe HUM asked them to save it so they can release it after terrible Q2 numbers.
HUM don't make those calls - the money guys/NOMAD do - it's up to them how they play it but they'll drop it and the monster reserves upgrade before the Q2 numbers for sure, those Q2 numbers may surprise to the upside of course but that's a way off yet.
#Playboy
That would suggest that BOD is motivated to support the share price and the evidence thus far is that they don't care what the market thinks.
However that's a strength for a deep value investors, when it comes to high growth opportunities with a clear road map.
Back in Feb 2022, Cannacord took a look at Dugbe and Hum:
https://www.sharecast.com/amp/news/broker-recommendations/canaccord-genuity-takes-another-look-at-hummingbird-resources-ahead-of-feasibility-study--9178458.html
They point out Hum is in a tight (now tighter) cash position and so a sale of the resulting interest in Pasofino is likely. They point out Hum’s NPV interest in Dugbe is 50p per share on an unfunded basis.
Dan always said there’s value in Dugbe not reflected in the share price. He also said he did not have a plan during the Q&A I think, but would await events. What is your preference as a shareholder as the DFS draws near? Some possible options:
Cash out - sell stake in Pasofino and distribute as dividend
Cash out - sell Pasofino and take on a new project in existing geographies
Cash out - take over Bunker Hill (speculative!)
Cash out - buy Cora permits close to Yan or similar (or Cora)
Hold - see through to Dug first pour and beyond, likely requiring an equity raise from Hum holders
Hold - but stall development until Kouroussa is up and running and Hum net cash
Buy out Pasofino - it’s possible the project is not that attractive (big up front costs) and the option to buy the project back from Pasofino emerges
Personally, if we could hang in there and get Dugbe built that would be cool. I think the license has potential for several mines (at least that’s what Dan said I think). However I am not sure I’d have the stomach for investing more in any equity raise. Time for Dan to earn those big bucks
Cheerful,
Either way, the subtext of your post is that there are options in order to ensure continued operation and cash moving forwards. I agree with nearly everthing you say. I dont think there would be any further raises required assuming Yan and Kor are both cash generative. Corus have been incredibly supportive of both assets to date and with a hopeful success of Kor i would imagine they would also be supportive of funding Dugbe.
Dugbe will be years away anyway, Kor will be net cash positive by the time any construction starts at Dugbe in my view. It would be too much risk to develop 2 mine sites concurrently.
Ballio.
I say if Coris are game then build it.. If we presume build costs of 300m then the equity requirement would be 60 million. Easy for HUM even with KOR debt outstanding. Even if we funded 100% of dugbe build then the equity burden on 300 mill would only be 120 mill roughly book value of Yanfolila and vaulted gold. Add Kor to the mix then the build capex becomes an asset. Literally 12 months from now and HUM would be in position to releverage 120 million and it would still be roughly 50% of total book value, with a doubling of FCF to boot.
Peeps need to realise how much of a success Yanfolia has been with regards to asset accretion and corporate credibility. One thing is for certain, HUM unlike most aim companies, is not reliant on mcap and dilution to raise capex.
Cora, essentially an undeveloped spin off from yanfolila is valued by the market at 40% of the entire value of HUM. Make of that what you will.
Actually got that the wrong way round...
Equity to loan ratio of 20% over 300 mill is just 60 million to fund the lot with bank debt or half of current book value.
For 51% of the cost it would be a mere 30 mill equity requirement.