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The CEO (responsible surely, the buck stops with him) really screwed up here, I can't believe they tried to con/bluff, IMO, shareholders by saying in the RNS they were pleased to announce and then listing failures!
To clarify what went wrong - They've simply run out of better grade gold ore until later this year - that is either bad planning, scheduling and/or operational delivery - whichever way you cut it it's unforgivable IMO. I hope if the action group get an interview, you realise what is at the root of happened here - they haven't got new work areas ready on time (it's obvious from the RNS's), find out WHY. Now they are scrambling about for the time being working lower grades - and how come they have no decent stockpile material??? Perhaps because they have been covering poor performance for some time
Mr Betts needs to go and someone with gold mining expertise brought in, nothing less will allow for the required changes because that requires an acceptance that they screwed up and the knowledge to do something about it - no sign of that acceptance or knowledge in recent interviews - does he really not know how incompetent they have been? I think so, hence the site visit RNS, which I believe was intended to show the office based staff are actually on the ball - the message was relax dear shareholders we've got it all under control now before issuing the true nature of the problem in the later update.
Having said that the SP is getting ridiculous and will retrace soon IMO, but the company have left shareholders with no bullish reasons to trade in the short term, though even these incompetents will find it hard not to make money at $1800/oz.
Rid ourselves of the incumbent leadership and IMO the company will be a real winner.
What makes this "running out of better grade ore until later this year" so unacceptable is:
-They have known about this since 2018, when the presentation showed a top up of higher grade to be blended (and as far as I know, that was planned to come from Gonka)
-The old Goldfields plan was in the most part a near surface oxide operation, covering all the pits (and involving far less capex) and they have been so dilatory in proving up the known resources.
What on earth were they thinking when they spun off the CORA assets?
It does make interesting reading looking at how CORA is approaching these assets with low capex heap leaching for low grade oxides.
Everyone is calling for management heads on a platter, but that then requires credible replacements (or the SP would crater even further) and so my question is what does everyone think of the Board and management team at CORA, how they have approached a similar proposition and whether the two companies would be a good fit?
(I could be wrong, but I doubt if Ian Stalker would be interested, for all the reasons he gives on his hard sell on Liberia: he only does big, it would seem).
Ore grades are temporary, very temporary, it's ludicrous to me that people are calling to sack the bod. Higher grades temporarily from an asset that is fully paid up and derisked and that's failure?
Crazy
Bushy - one thing you never know is what the optimum possible performance was and companies rarely get close to it, so we trust management to tell us what they expect to achieve as so-called experts in the field and buy on that basis. They have failed against their own targets and it's not a case of working through a planned lower grade area, it's a surprise. Betts the lower grade suggested it was a surprise last quarter - what do you think all the drilling is for - to ensure no surprises (de-risk). They have failed, I expect them perform on par or even outperform, never underperform. This company was not sold to investors as a laggard.
No one expects anything other from any company they invest in, don't be satisfied with crumbs. the BoD are paid handsomely.
JTD with regards lower grades the blame is being apportioned to management when actual fault lies with the resource modelling, conducted and verified by independent consultants. We are still processing ore that was previously given proven reserve confidence correct? If I am wrong on this I would like to see evidence rather than accusations thrown around about the lack of management quality. It's very easy for people to criticise results and spin the blame game without fully understanding the situation, not that I am suggesting you have. But I haven't seen enough evidence to confirm lower grades are directly down to mismanagement.
I suspect more information will be forthcoming in the next quarterly updates with regards to better managing grade qualities and a strategy outlined to maintain grades above the 2g/t level we flirted with last quarter, gradually increasing this as the year goes.
Atb
Just to clarify so my words are not taken out of context by any resident trolls, IF ore being mined and processed is from an area previously modelled to prove reserve confidence and is averaging far lower grade material than models forecast it is very likely an issue with the modelling to blame.
The points raised by Juxtapose as to why the exploration of certain resources were not more aggressive in late 2019 and through 2020 is THE issue I would focus my questions on.
One thing we can agree on is how bad management come off looking, regardless of where the fault actually lies.
What we had in one of the recent (post RNS) interviews is DB asserting that the mining has validated the resource model over all (albeit with individual variations).
What we also have is grades that are not in line with overall project.
Looking back, there were changes to the grades from tinkering with the pit design. Have these been reversed?
There is a note to say that local miners had affected grade, but that can only be true of the surface oxides: they have not been down in the fresh rock.
The final straw is the December RNS which claimed they were already in the better grade ore: the explanation is not credible as they should have been doing grade control.
Large sell after hours at 17.15 yesterday - 1.6m shares.
SC still selling?
Tiger - That's no problem, all those that want out need to go or they'll only be a drag on the way back up, and it will eventually retrace.
the_shareminator:
Your comment - "If I am wrong on this I would like to see evidence rather than accusations thrown around about the lack of management quality. It's very easy for people to criticise results and spin the blame game without fully understanding the situation, not that I am suggesting you have. But I haven't seen enough evidence to confirm lower grades are directly down to mismanagement."
The evidence is available, you just need the recognise it, my interpretation of the RNS's was verified in the Betts interview and even more so in the interview with the new guy yesterday - contrary to what you may think I'm trying to be tactful here and not completely rubbish the company in spelling out the problem. I stand by all I've said, and I believe you are wrong in some aspects of your understanding, resource modelling is not the underlying problem. If you are looking for a direct statement of what went wrong, you'll be waiting for ever.
IMO Poor management control led to poor planning and scheduling and/or operational failings - they've stated it themselves- what more do you need? Of course the same loose management controls may have also led to some poor resource mapping as Juxt suggests.
Which ever way you cut it, management has been lapse.
lot of speculation here, all I can see is that people are confusing share price degradation with a general consolidation in the gold market. The SP would be down regardless of positive results, because the gold price is being tested; I see this as bottoming here, and progressing slowly with bigger moves in the 2nd half of the year...I feel that management ought to provide more frequent RNS; I suggest anyone with QS to email investor relations and ask for clarity in the RNS feed. It's very often luck of the draw but the more transparent and frequent a company updates the market, generally the more positively the share performs.
Well the Bett's interview spelled out a number of issues with the resource and specifically the resource modelling, which has been largely overlooked and still ignored. I know a fair bit about the relationship mining costs have with grades and was in fact pointing this out to people on here after the last update, before Betts provided his interview. So no I'm not looking for anything to be spelled out.
The information available points to more than simple management failings. I'm not sure why shareholders are so quick to ignore the glaringly obvious, that the ore being mined falls FAR short of previous modelling. The 'bad planning' as you say was based around an independent resource evaluation and factors with the company's internal model and strategy. These are not independent of one another.
Let's be clear grades fell below 2g/t in the initial part of last quarter.
Production in the first 9 weeks of Q4 dipped to just 14koz according to the update Dec 2 with mention of lower grades. As pointed out earlier this culminated in the site visit. Also mentioned was that they were now mining higher grade. This looks to be a true statement, it stands to reason they were producing slightly higher grade material in December given the slight uptick in production to approx 8k in the final 4 week.
As for the evidence presented by Betts in the video call, it does not go into these specifics so you'll have to take my word for it. What that call did detail was the multiple reasons why grades fell far below the modelling in Q4. The resource modelling of grades at this deposit averaged 2.8 g/t initially, although this earlier model was revised down I think to 2.6g/t.
How management chose to deal with these issues is related and not an entirely separate issue of course. I'm not going to waste energy defending Betts current tenure but would rather encourage objective debate about the state of affairs.
For the righteous falls seven times and rises again, but the wicked stumble in times of calamity.
Anyone know who sold yesterday, this is list of major holdings, few big players give confidence:
Ruffer LLP 8,97%
Hargreaves Lansdown AssetMgt 8.97%
Sustainable Capital Africa Alpha Fund 4.98%
Interactive Investor 4.69%
M&G Investments 3.78%
Jupiter Asset Mgt 3.53%
Halifax Share Dealing 3.46%
HI FindersKeepers!
There's no way of knowing who sold big at the close of play yesterday.
My guess (note, guess!) would be that Sustainable Capital are selling down to zero - they've already dumped a huge number of shares all the way down from 40p, so why stop now?
Some of those big players you quote are aggregated PI holdings, aren't they, rather than proper institutions? E.g. HL, II and Halifax.
My monies on Sustainable Capital, they've been selling down for a while, they could well be under 4% by now too, maybe a TR1 in the offing soon.
Bushy - well said, I don't know what it means, forgive me, but it sounds powerful.
Join the dots - The evil and weak can be finished off with just one disaster, where as the strong dust themselves off and rise back up.
HUM suffered two black swan events in 2020, unlike the majority of the markets single event... And had to make sacrifices on the grade and are now moving out of those crisis restrictions and forward with better grade.
How you dust yourself down and move forward from a problem, is of greater importance than the problem itself.
Hi BushyTailed!
Let me introduce you to Unlucky Mine Syndrome, or UMS.
UMS happens when a mining company suffers a series of seemingly unconnected disasters one after another. Let's say a few artisan miners get shot by the army, rains wash out a bridge and cause a steep pit wall to crack, the CEO inexplicably falls for a pump and dump scam and blows $2m of company money on it, more rainy season problems, logistical problems as a result of a coup, actual grades don't match with the mineral resource estimate, the mine manager has to be fired, costs spiral out of control, and so on.
Yes, so many problems affecting one poor miner, it seems so unfair!
But the truth of UMS is that it doesn't strike by chance. Rather, that strong management would have avoided most of these problems, or at least mitigated them. And Hummingbird's management team, led by the low-powered rich kid English graduate and former stockbroker Dan Betts really isn't up to the job.
There are almost no institutional investors left now, so there's nobody powerful to put pressure on the Chairman to replace the woefully inadequate CEO. And the board is stacked with Dan Betts's family and allies, so the chances of action from them is also low. And so Hummingbird goes on, a rich kid's mismanaged plaything, not helped by a falling gold price, and sliding slowly downwards.
What's stopping you selling then tiger?
It must have hurt being this unhappy at 36p in January only to watch it fall the way down without doing anything about it, are we suffering from regretful hindsight?
TBTT - great explanation - 100% captures the situation at HUM.
Still kicking myself for not fully exiting, now were back to too cheap to sell the stub. We're back in the hope land for a white knight to make an offer at a low valuation, even for shares......get rid of DB and his crony Board, and ride valuation. But then again, it was cheap before and DB likely not been open with investors about the truth thats discovered in any propert DD. Horrible - but then again not much can change.
Sustainable have reported inline their TR1 announcements. The next one would be when it drops below 4%, and then that perhaps only one more when it falls below 3%. If they dont report in next 24 hrs, then it aint them.
"If they dont report in next 24 hrs, then it aint them."
Sorry but that's b*ll*cks
TR1 report on threshold being crossed should be filed within 2 days of event. Sustainable have been filing. Last time they filed = end of Jan. 1% is circa 3m shares. Ergo if they had sold down and are the main seller recently they would be filing and within 24 hours / 1 day. Personally i dont think they are selling as they would have reported already since end of Jan, the volume is big enough to have done so.
What I think is *******s is your call that Sustainable have been the sellers - the numbers simply dont support it - without a TR1 within the next 24 hrs. Your welcome.
I noted the presentation which was useful but more importantly what will halt the plunge in the SP and what price will cheap be cheap enough to tempt buyers once more given HUM seems to be serially "unlucky" and gold has gone soft?
To be clear I exited to pickup some AAZ and have since freed up some other funds to buy back in here, but sorry reading what has gone on I'm not (yet) tempted as I'm not seeing what has been done to resolve the management failures and restore confidence.
Am I missing something?
Do HUM still hold 10% of Bunker Hill shares?
ATB APR