focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Hi TBTT, I agree with you, Endeavour certainly looks like a strong candidate.
Alternatively La Mancha could take a large equity stake in HUM (or take it over completely), injecting enough capital to further explore and develop Dugbe and get the existing HUM team build that mine, given that Liberia is not a former French colony (which seem to be Endeavour's favoured operating countries - they've made a big deal about working in former French colony West African countries with the same language and broadly similar legal frameworks).
Certainly several possibilities on this front though.
Interesting excerpt:
La Mancha’s new chief financial officer, Beirut-born Karim-Michel Nasr said: “We are interested in M&A, although we are not empire builders — our aim is to build shareholder value, any acquisition has to be value accretive.”
The company would look at potential mining targets in west and central Africa but “not southern Africa,” said Nasr.
One route to Dugbe financing or full takeover:
http://arabnews.com/node/1383951/business-economy
The concerns expressed by @KaMei seem justified. It doesn't look like anyone is knocking HUM management's previous successes but that does not give them carte blanche to go completely off piste with shareholders' cash after they had previously communicated that they were a **West African gold company**. BH is increasingly looking like a total sh*tshow. I'm still hoping that HUM can pull a rabbit from a hat here but I fear this is increasingly unlikely. The recent BH director resignations and apparent failure to pay two concurrent mining property lease payments amounting to US$400k does not bode well for our US$2m unsecured "loan".
At least the price of gold has risen strongly today. Looking forward to seeing Q3 production results as well as the new Gonka exploration drill results in the near future......
[Part 2]
HUM have intimated that they are presently working on the MDA ratification process but shareholder communication on the subject has been very limited. Instead shareholders have seen [possibly highly unreliable] press reports on the subject, with references like: 'President Weah said: “There are several omissions of dates which my Office is not authorized to correct and without such corrections, I cannot affix my signature to the bill, I refer you to pages 7, 102 and 107. We also observed that pages 14 and 15 are unsigned."' (source: Front Page Africa Online, Jul 2018). Whilst this reporting may be unreliable, if it's true it raises real concerns about the competence of HUM's legal team overseeing the MDA process. HUM's lack of communication on the subject makes it hard for investors to understand the present situation.
- Sort out the communication strategy on Bunker Hill. It makes absolutely no sense to tell investors one day that this is simply an interest bearing "loan" and imply that HUM will get its money back with no issue at the end of term, whilst also commenting separately that if HUM hadn't made the loan then BNKR would have gone bust. How exactly will BNKR repay the loan at the end of term if they were in such a dicey position at the original loan date? It's possible that other investors may fund BNKR to repay HUM but this is very unclear. Certainly BNKR's share price has not reflected much investor optimism since HUM's original loan.
Every part of HUM's communications, including website, videos and presentations have stated that HUM is a West African gold company. Here the contrast between HUM and EDV is stark. EDV have a very clearly communicated narrowly focussed strategy focussed on gold in a specific region of West Africa, whereas HUM look like they're adopting a spray and pray approach geographically and metallurgically. Despite HUM's recent comments about its skillsets, the combination of West African gold assets and this North American outlier seems very odd. It's unclear why HUM would get access to BNKR if it's such a great investment, whilst specialist streamer and royalty companies operating in the US and Canada have steered clear, who would usually be frontrunners to provide investments in these types of early stage projects. It also seems conceivable that such non-core investments might dissuade potential suitors for HUM which may further depress the share price. The BNKR "loan" may be genius or absolutely bonkers - hopefully HUM will explain soon. Meantime the selloff in the market seems to be suggesting the latter.
Firstly, I am an investor in HUM and I like their management and their story. I have a substantial investment here and plan to continue to hold through 2018.
Here's a few suggestions of things they could work on improving:
- Enhance the technical content of investor presentations. IMO HUM's latest presentations have got the balance wrong between style and substance. Compare HUM's latest investor presentation to EDV's - whilst very different animals, EDV provides much greater detail about certain exploration targets, maps/diagrams of drilling activity, recent drill hole results, planned future drilling and likely size/shape of ore bodies on their properties. I believe this is an important element of the investor communication strategy which HUM is presently not communicating optimally. I'd personally prefer fewer fancy icons and more detailed information.
- Board members to buy HUM shares, even if a token amount, especially the likes of Thomas Hill (FD) who is on a very comfortable salary and has purchased very few shares indeed (from the published information available to us). I acknowledge that DB already has a significant stake and I think it's reasonable for him to limit his personal exposure on this basis as his current holding is reflective of his strong commitment. However, DB needs to respond calmly to related investor questions on this subject which should be expected and are perfectly reasonable - his recent response to question about board members' share purchases during an investor conference call was unnecessarily aggressive towards the investor (to the investor: if you are reading this, your question was absolutely spot on and you should not have apologised to DB when he became overly defensive IMO). This raises questions about DB's preparedness for the call and temperament.
- Focus on getting the Dugbe MDA ratified ASAP. The land package, past exploration success and potential for future exploration provides huge optionality on the gold price and is a big part of the HUM investment story. The current legislative impasse is concerning for investors - this was evident when there were press reports of the MDA being rejected by the Liberian Senate in December 2016 and the share price subsequently tanked to ~12p (this was pre-Yano construction - the share price recovered as investors realised the strength of the Yano project). The scale of the Dugbe discovery, with upside exploration potential, is going to make HUM attractive to mid-tier producers like EDV and thus be a key component to support future share price gains. If gold rebounds and/or Liberia secures funding for hydro-electric power which could be used in part by HUM to reduce project AISCs, this project has great promise. Furthermore, larger gold companies may be able to re-optimise the existing project design to improve economics (as EDV has done recently to great success with its ITY project).