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If gold price is all that matters to you as investor then avoid gold producers Jammin and buy leveraged physical metal ETFs.
If on the other hand leveraged returns of cash are more important then you need to be looking at producers who are expected to have elevated rates of ROCE whilst ignoring debt where DCF outstrips liability.
My thoughts are that you have jumped out of the frying pan and into the fire... HUM a few weeks away from a monstrous rerate with Kor resolved and gold at 2200 puts HUM at circa 50p on a DCF based valuation.
SRB on the other hand are where HUM was relative to number of projects and ambitions more 2 years ago and with a significant funding gap over current MCAP.
Personally I think anything over 40p for SRB is expensive until they fill the gap. Plenty of people have 5h1t themselves over the volatility here, you're certainly not on your own
In short I think you have held the risk here and sold out just at the point of deleveraging, just to buy the same build and capital risk at SRB.
I could be wrong of course, it's all just my humble opinion
Id like to say they won't go bust. I mean the RNS makes no mention of serious financial issues specific to this new development... However i've heard Dan speak at least 3 times in the last years and within weeks found his rosy picture isn't quite so rosy. The fact he always sounds bewildered about the markets pricing but always shoots himself in the foot is pretty ironic.
That said i bought 5k more at 5.45p this morning as surely it is in everyone's interest to get this issue sorted somehow included the debt holders. I know everyone here loves a conspiracy but i can't see how Coris want to inherit their own debt with no working miners/management. If the reply is they can sell Humm in a debt ridden state to a few people then you clearly believe Humm is worth a fortune today as well. I'd guess if push comes to shove Coris will delay some debt on different terms or something and allow Humm to do a deal with Corica.
I sold out here almost 50% ago, and I've made 75% on SRB. So it certainly seems to have been the right call so far
It's such a shame. I think we can all agree with gold over $2200 this should have been over £1 a share by now. Unfortunately, Dan has consistently messed it up. Pit wall failure because they changed the slope angle from design to be too steep, insufficient stockpiles, two security situations due to poor social governance, equipment failure due to poor award of contracts, out of control Aisc due to poor management aka Anthony, artisinal depletion, high salaries and Mayfair office, 1p share options, upgrade Yanfolila plant throughout before realising it's a smaller mine going forward, worst timed hedge (I bet this is costing them money atm). What have I missed? The list doesn't seem long enough.
Yup it's a very long and sobering list. Mining is Africa is tough, unfortunately Dan Betts isn't cut out for it. Unless they get rid of him these issues will persist
Yeah it's tough but Dan makes it sound impossible. If i was Humm i would have stated whether Yan mining is affected at all and also given shareholders a summary or view of the current financial position. We own the company and we don't know if a major issue with a major supplier at our new large mine is actually dangerous for the company and over what time frame.
Every RNS is so vague and hopeful or full of pointless legalese type prose. Just talk to us about the risks in plain english as though your mother is a shareholder and has asked how things are going !
As I've said before, Dan has contempt for shareholders and the need to keep them informed. Probably because it's always bad news
Horizonte Minerals, it just goes to show what can happen and the risk to equity holders.
If I'm not mistaken, HZM haver produced anything but borrowed and borrowed to fund drilling and pie in the sky DFS's.
Ill confess - i've topped up in this dip not a huge holder sitting on about 60K shares now - i am hopefull a stoppage for a few weeks wont impact anyhting too much but they have a hell of a lot of debt. Worth keeping in mind they own 53% of Pasifino which is currently valued at £15/20M so this is priced to fail at £25M if the gold price holds a couple of years from now they could be debt free - seems like a worthwhile punt 5p to 0p ot 5p to 40p and who the hell knows what will happen to dugbe at this price im sure it could be offloaded if it came to it
It's not 0p or 5p though. If they survived with dilution we have no idea what the potential is. Could be tops 10p if they have to raise 20 mil. Then it's 0p or 10p. You could do that at the roulette table in a fraction of the time and with no tax...
Getting harder and harder to buy.
Couldn't get a quote again so had to stick it on as a limit order.
Fair comment, if you belive this to be the case perhaps wack a short on, id love to compare notes in a few months time
Its not the size of the debt here that is an issue, under normal operations this would be paid down quickly, its the fact that the repayments begin from the end of this month. Even with an extention to the debt repayments I think there must be atleast a small raise of £2-£5m to cover costs
All back on site mining by Saturday, final blast, high grade coming out by the bucket load and gold at 2220 oz. Could happen, we can dream