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JTS, not sure why clearly they have invested a max of 1m in ARX, the point is we don’t have a clue what they paid for their 19% of the asset that they as directors have invested 70m Of HUMs money into. Indeed if they have invested that much why did they not invest that into HUM? We should also be cogniscent that when we end up with 51% of ARX, we will end up consolidating 51% of whatever debt they have on their balance sheet. So we will end up paying for 51% of whatever they do in terms of borrowing to pay for their earn in.
@aw2414: what gives rise to the debt comment? There’s no way that ARX will be able to fund their work through debt, for a start, ARX will hold a minority stake in the project and therefore nothing on which to secure the debt for which any lender could take control. This is an equity funded development play until such time as it is construction ready. I don’t think this should be a concern.
Plenty of views this morning on the fundamentals of the ARX deal. I never considered Liberia as being investable, and with the Anglo Pac royalty it was always going to be a hard sell.
BUT......my biggest concern is that this is another super spivy deal which has a low % chance of being successful. ARX have to raise funds, show funding, has related party elements etc.
I would say chances of this deal happening and getting to feasibility at 25%, yes I'm a pessimist.
If this deal fails, then it will be 3 from 3 for Dan and his useless exec/BoD. His entire reputation will be gone and HUM SP will suffer until he is ejected. If the deal succeeds then the upside is tiny, as the project will still need to be funded and will be heavily discounted. To me this deal shows little upside and opens up reputational downside if it falls over.
I hope I'm wrong, but Dan really is hopeless as a deal maker - and presenting this deal to the market half baked shows his naivety.
@Aw2414: If I'm prepared to accept that mgt paid 1mill, but you want to suggest they paid more. Then I'm happy to accommodate that. Clearly 1 mill is considerably more pessimistic
@Dropinmonkey: If the deal fails, HUM lose nothing. They won't even have the bill to pay. If the deal works, then there's upside. Just less of the upside than a lot of people were hoping for... So don't quite get your point
Got to love the SP here. 2 years ago we had a mud field and another project we couldn't fund in Dugbe. Now we have a solid producing mine with not one but two mills. We have gold in the ground all around as indicated in drill results. We have shares in CORA with finds that will support a stand alone profitable mine. We have a JV to move Dugbe forward and we are worth a lot less today. Go figure.
DB is doing this for his own personal interest (he is very selfish - think of the 1p otions) and he is anticipating make big personal profits from this deal!! If there are big profits to be made why can't we keep them within HUM?
Dugbe has not been mentioned on this board for bloody years. It's been forgotten about yet it's suddenly a crappy deal where we lose all the upside?
Dugbe moves to the next stage without our shares getting diluted. Check.
We can now concentrate on how HUM is going to spend the $35million it is about to have in the bank/ assets by the end of this month.
To those looking at zero downside from a deal falling through. HUM benefits from II taking positions and moving the stock higher through valuation expansion. If Dugbe deal falls through, as is more likely than not, then II investors will be (even) less likely to support crooked Dan. This will have a meaningful impact of the prospects of realising the true value of Mali.
And I havent even address the related party issues here.
I dont understand when 95% of other gold miners are doing fairly straight forward deals/mergers/partnerships, Hum and Dan cant get anything done. The old adage a simple deal is a good deal applies in this environment ($1700/ox GP).
There is downside to HUM reputation and valuation if (and when) this deal blows up - its too complicated and ARX is an unvetted counterparty. It looks and smells just like Bunker Hill
Junior minors are the last to hit a big rise in gold bull run but they also make bigger rises. HUM's time will come and it starts once we announce we are net debt positive and it's explained what we will be doing with the money.
If we announced today that we were spending this money ourselves I can assure you I would be looking to sell. Dugbe has been a back of the queue project for years, now it's a low risk project moving forward.
We're not spending money on Dugbe, so what are we spending it on? Cora/ M&A? Divi or buyback? Surely any of these options are better than Dugbe and will move our SP in the short term once announced?
JTS, I’m not suggesting they paid more, for all I know they each paid 10k for their 19% of Dugbe, that’s the point. Why was this 39% shareholding not retained by HUM? Clearly DB et al think there’s a big personal profit here on the back of HUMs development of the project.
IMO it would have been better for the company and management to have simply sodl Dugbe outright to a validated third party even for a low $M figure and to have move on to focus on Mali. This is KEY - this deal is not finalised, has multiple CPs and IMO unlikely to complete as laid out in the RNS. THIS IS NOT A DONE DEAL. When this deal trips and fails - questions will be asked again about Dan and what the hell he is upto. Thats the point - it makes HUM look inept, and IIs will not invest in such companies.
I find it hard to believe that they will fund this through current equity. So my assumption, perhaps incorrect, is that they will borrow to fund. But I would suspect that DB eat al have not stumped up 39% of 10 to 12m. But these are all questions that the directors should answer.
Couldn’t agree more, and perhaps more importantly brings into question DB’s fiduciary commitment to HUM.
AW....I agree that there is a fiduciary responsibility here and whilst RPT is noted, it begs the question that is HUM being leveraged by DB to feather his personal non avian nest.
That said, the market may have reacted in terms of SP, but frankly the volumes are all low. I can see this as PI’s being disgruntled, but there re hardly any big sellers out there today.
This has created a buying opportunity.
DB really needs to announce a dividend strategy going forward. Forget buy backs, he’s got to show long term commitment to returning shareholder value IMO.
Just out of curiosity dropinmonkey, do you have shares in Hummingbird?
Am I missing something or has Betts just taken 49% of Dugbe into private ownership. My gut feel suggest that Betts is deliberately keeping the LOM low and hence the SP low to maybe allow ARX [a BVI private company founded by the infamous Dattels] to do a full takeover of HUM into private hands.
Probably more out of hope than anything else, but I wondered if this deal was an indication that Hummingbird might be taken over in the near future. I think DB must know that most investors would accept a 40p takeover price. That kind of takeover price doesnt really value Dugbe and the efforts DB and others made many years ago. So maybe the thinking is that if Hummingbird is taken over soon, he at least gets to realise some rewards from Dugbe down the line.
Will ii's not see a net debt positive gold mine going into a gold bull run that 'might' focus on dividends rather than a highly risky exploration play in an untested country?
I sold out of Solg to heavily invest here because I will hopefully see short-term upside to this gold bull run and not a high costing mine in Liberia that might be economical and up and running in 3 years time. I'm here for the gold now and that involves Mali.
But nobody will buy Dugbe in its current state, Dropinmonkey. It needs an updated DFS at least, either by HUM themselves or via another route such as this one. HUM can sell Dugbe in two years' time, post-DFS and hopefully for a lot more than it can today. That potential reward is worth any reputational risk arising from the process itself.
Olddrongo, what makes you think Betts is behind ARX and who are the Dattels? Just passing as saw the drop, so apologies if I missed something obvious. On a side note, the drill results don't look great to me. Deep and short intersections, that said, it depends where they sit in the bigger picture.
The RNS tells you about ARX. Betts et al have 39% of the private BVI company. Dattels is a wheeler dealer that gets involved in many dubious transactions - POL - GCM etc. I just don't trust Dan now. I will probably look to exit HUM when / if the SP recovers a little.
@goldbull - yes I have shares in HUM
@goldbull - are you a SH?
DIM
i am and also cora , sml and barrick gold. Having a cracking day :(
Pretty interesting... So we just had a 10%+ drop in MC because of an RNS about an asset that had no bearing on the MC to begin with. Jealous of whoever is buying in right now as personally see it as a great op'
I think this is more that stochastics & MACD had started to turn negative over this past week with the cooling off in gold price. Combined with some people viewing this as an opportunity to sell and things spiralled a bit beyond
Recon that we'll see a bit of consolidation action happening in the next day or so, and then subject to gold, resume the attack on 30p... Shame as just the slightest of well timed positive news could of taken this over and we'd of been able to start clawing back those prices from early 2018!