Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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@miagi365: ok. Same to you. It’s not the interims that will ‘come out good’ they will just confirm my views as set out below. What will be good is Q3 trading if HUM can deliver 30k oz at $900-1000 margin an oz, with a stable working capital base. While confirming work progress at K, progress on D, drill results at Y etc. HUM will be net cash and with a solid balance sheet to make its investments into K and deliver another working mine in the next 24 months.
OtL, my methods work for me just fine - high level numbers are good enough for me - plenty of excellent companies out there that present very solid high level figures. Why do I need to do a deep dive in order to try to change a negative into a positive?!
If the interims do come out good, then that will be a first in HUM's history, so I wish you luck!
Miagi365 - not making an argument, I’m just telling you my view and I’ve told you where you can find the facts in the financial statements. Your choice as to whether you properly educate yourself on the business, or just take a high-level view of numbers, which are helpful, but don’t give you the full picture, as you have clearly demonstrated. If you look at note 21 you will answer your own questions. It is not obfuscation by HUM to label creditor payments as trade payables - but any investor worth their salt knows to understand the working capital and decide - hopefully with company guidance - what is likely to happen to those balances. My view is that further cash has been required to pay down those balances. In judging value from here, you need to know what remains so as to consider cashflow below the EBITDA line. My contention is that it’s going to look good and it may be that some of what we have seen is a combination of intra-year working capital swing and general reduction of trade creditors to a more normalised level. It would certainly be quite normal that in a quarter of slower / reduced activity that working capital balances would decrease. DYOR (as we say)
RTB, I have all of the information I need thanks and there are negatives aplenty, as well as some positives. All the best.
I really don't understand what Miagi is on about. Seems like he's just sold out before the recent rise and clutching at straws trying to find a negative. All the information you want should be in the annual report from June.
Never suggested my average was 13 p, does not mean that some bought in at these levels.
Sustainable for instance.
Seems like you are not out of pocket and I have done ok.
Could have been worse with acts of god and world pandemic.
Strong team, got my support.
OtL, you say you're not going to do the work for me, but this information is central to your argument! That is funny.
If trade payables had been reduced why is that not captured in the headline figure? Like I said, take a look at any successful company and there will be no confusion about the key figures (net debt, cash, etc) and there won't be a massive "trade payables" trying to hide what is basically debt.
That was meant to be “in a multi-asset miner” - small cap especially.
@Miagi365: I’m not going to do your work for you, but I’m a multi asset miner (where the assets are quite different) you do need to read the notes to the accounts. You are mad if you invest by looking only at the headline balance sheet. The detail is important - for instance there are a number of liabilities on HUM’s balance sheet associated only with Dugbe. They don’t affect Yanfolila’s value and to understand the quality of the ARX deal you need to appreciate them which you can only do by going through the accounts. Anyway, as I’m in a sharing mood: Note 21 2019 AR: trade payables reduced from £20.1m (2018) to £15.8m (2019).
So the drill results weren’t good in your opinion then? Also based on your comments on other boards you aren’t invested here anymore and I can see you have been in a discussion with tiger about who has the most dodgy director, so are you just trying to prove a point?
Still have reservations about DB - his arrogance in the way he treats shareholders and the Dugbe deal is clearly designed to line his and the FD's pockets. Having said that even they can't **** Hummingbird's potential at he current POG
GB, I'm assuming your average is not 13p! LOL, let's get real - most LTHs on here have their averages in the low to mid 20s.
The main positives seem to be the Kouroussa deal and the gold price! The gold price is floating all ships at the moment.
I don’t wish to bore people by stating again all the positives.
These arguments were being used and people listened last year, since then they missed( or maybe not) a 300% rise in SP.
Sure Hummingbird had a lot to deal with, didn’t do so bad did they.
I truly feel sorry for investors that jumped ship, fortunately I didn’t.
OtL - can you be specific as to which "notes and some judicious assumptions" you are referring? I do not see the trade payables having reduced, as per the figures presented.
OtL, clearly you know more about analysing accounts than I. However, I would say that I do know enough to make a solid basic assessment and it is firmly my experience that if more than that is required then it is a big red flag.
Just take a look at many of the best companies. Their high level accounts are dead easy to understand, and the figures stack up.
The interims arrived on the 23rd August last year so less than 3 weeks from now.
Momentum will build up now as people realise the significant price increase in gold happened in Q3. Gold was still sub 1700 on 8th June! It’s moved up more than 15% since that date.
We’re 10days away from being halfway through the quarter already!
Hi OdL!
Thanks for the posts - much appreciated.
I hope the interims will confirm what you are saying. That is, HUM's management are now "normalising" operations, after the extreme measures they took to cope with the pit wall disaster. (It is all water under the (washed-away) bridge now, but I do wonder how close they came to requiring an emergency equity raise back then. They certainly delayed as many payments as they could, building up this huge pile of trade payables which is (hopefully) now being paid down).
I also wonder if contractors and suppliers were not able to use the Covid-19 emergency to not only charge extra, but also to shorten their credit terms and to force the company to pay up on outstanding invoices.
I think we need to see the interims to confirm this theory, but if this is the case, then the foundations are being laid for a solidly constructed future.
@Miyagi365: good job on opening the AR - you’ll be ahead of many now. You now need to do a bit more analysis on these high-level numbers using the notes and some judicious assumptions. You’ll see trade payable reduction, stable accruals (factoring in the Taurus settlement), $20m debt paydown, but reduced cash as the cash cost of the 2018 issues was borne. The position at 2019 was all clear and needs to be factored into your valuation. My error was expecting the level of payables to be more sustainable as normalised working capital, so I could discount the balance on an NPV basis, but it looks like further paydown (c$10m?) was required. I use a 15% WACC for Yanfolila so it was worth some real value, however the much much higher gold price more than compensates. From here, with payables reduced, the balance sheet is arguably stronger and cash conversion should be higher. I’ll take another view when the interims land, but I’m confident we’ll be in a great place by end of Q3. But that’s my view and based on the detailed work I’ve done. You’ll have to do your own work and form your own view, then decided to buy back in or not. Good luck.
*piqued
OTL, you have picked my interest so I've got up the 2019 FY accounts, which compare with the 2018 FY accounts. We have:
1) Non-current liabilities: $28.7m (2019) vs $54.3m (2018). so they paid down $25.6 of debt in 2019. So far so good.
2) Current liabilities: $84.5 (2019) vs $75.2 (2018). I've stripped out the "lease" liability of $9m for 2019. Not so good - gone up by $9m
3) Current assets: $38.1 (2019) vs $48.6 (2018). Not good either - gone down by $10.5m.
The grand total is 25.6 - 9 - 10.5 = $6.1...............and that is why I don't trust what is going on with this company.
Gold continues rise to $2041 as we progress further into Q3.
We may have lost some shareholders, promise not to rub salt into wounds.
ODL, hopefully the interims will provide clarity. They certainly need to. Not convinced that Dan Betts is that bothered about providing clarity to shareholders but we will see. I will remain patient until then. Hopefully POG will keep the sp up until that time.
Punter64: what’s more likely, the money has disappeared into a fraudulent black hole or the cash has been used as I suggest below? The creditor / accrual position is very clear in the accounts - as I’ve said, I hoped that was more normalised, but it appears not. We’ll see in the interims.
$2000 gold is in Q3
yes, I might have to reconsider my position here if Betts doesn't up his game soon. I will wait for the interims for clarity but I am running out of patience. If they fail to provide clarity I will switch what I have here into CNR.