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Bailing out as a result of some bad media coverage is just a sure way of locking in losses. At circa 10% divi if you were a long term holder you would not really be too concerned about short term SP anyway?

POG forecast to remain relatively unchanged in the short term.
Low cost producer, sub $1000/oz so should not be excessively levered by POG in any case
Increasing revenue/profit from central shaft
Forward P/E of 4
Divi 5%
Politically stable in Zim (by historic standards)

What's not to like?

Interesting article on BBC news website published in March this year - https://www.bbc.co.uk/news/business-51852637

In OPG's 2020 final results they state that in calculating depreciation of assets they use a lifespan of 40 years for power stations.

So if you believe the article, Chennai has only 10 year economic lifespan remaining. Perhaps current share price is not as bonkers as it looks?

Thinking of topping up at this level to average down.

I can see why the increase in coal price has affected current SP as these costs will have to be absorbed under their current fixed term tariffs. However, moving forward, most of India's power is generated by coal plants. Gas prices have also increased, and the % generated by other sources such as HEP, nuclear and renewables is low.

So OPG is not alone, and moving forward surely all electricity tariffs in India will rise to reflect the increased coal/gas costs, at least in the mid term until a significantly higher % is produced by renewables, which is likely to be 5 to 10 years away?

So my thoughts are that this drop in SP should be short term, and within the next 6 to 12 months, or whenever tariffs are renegotiated, and the effects of covid diminish, the company should return to its previous levels of pre coal price increase profitability?

Or is there more to it than I've considered.

Thoughts please?

I think Modi family wealth is looking a lot healthier now..

35% @ 16p previously vs 65% @ 32p now!

Hi Troy

According to Simply Wall St -

14.4% Institutional
37.6% Individual insiders
48.1% General public

Top 3 shareholders -

Yogendra Modi 37.57%
M & G Investment Management 13.95%
Silvercrest Asset Management 0.41%

Not sure if it's 100% up to date, but if no3 (Silvercrest) only holds 0.41% then only Modi or M & G could rock the boat with large sales?

Thanks very much for this link Troy

Do you think this analysts very bullish report the main reason for the recent SP increase or are there other reasons?

I'm delighted that the shares I bought a few months ago at 15p have practically doubled

However, recently traded volumes are miniscule. I remember that even my modest trades (I did about 3 at between 25K to 50K shares) caused SP increase while I was buying.

What's going to happen to SP now if someone wants to dispose of 1,000,000 shares over the coming days/weeks?

I was unpleasantly surprised to see it was the worst performer in my portfolio today.

I even checked the ex div date to see if that was the reason!

I can only assume that people just don't believe the >11% divi is sustainable.

Shouldn't complain I guess, the divi would pay half my mortgage if it wasn't in a SIPP to avoid withholding tax. Just need to accept I've lost all the SP growth I achieved with DEC last year.

Cannot top up any more, already overweight and now beginning to lose confidence myself!

So in raising $225M by issuing new shares they have increased their dividend payout by circa $22m

Not only has SP dropped to meet the new sale level but shares have been diluted.

Surely they could have raised that capital at a MUCH lower cost by borrowing, and reducing the dividend to pay the increased debt. This would have been the sensible approach?

With a more sensible dividend (ball park 6%) and less debt I think they would look more credible and SP would benefit.

I'm annoyed by this. I have topped up, but on paper I'm down £4K today. I think the company should have considered the effect of this on their existing shareholders.

I don't think I'm being too bold in stating that a reduced divi of say 6%, leaving something in the pot to invest or pay off debt would be met with approval by most shareholders?

Well actually taken the plunge more like, disposed of 25 Amazon shares and bought in at average 23.6p

Busy market today. No online quotes for substantial purchases and only able to buy by placing orders. Happy I've done it. Looking forward to a positive outcome.

Thanks all for your input, you've given me some confidence in my initial conclusion that at current SP this is a worthy investment opportunity.

I think I will do it now (well Monday). Strengthening gold price should have a greater (positive) impact on SP for producers like Hummingbird who's current AISC is on the higher side, than those on the lower side, like CMCL who can remain profitable (almost) regardless of the POG.

A lot of movement can occur in 3 weeks. A great deal of bad news has already priced into the SP so I think probably more scope for upside than downside, even in the very short term.

I agree, and it would appear to me that the market is looking no further than the recent increased AISC at Yanfolila and has ignored everything that's positive about the company and its prospects.

The question for me is not whether to invest, but how much, and whether to wait for 2020 earnings release in 3 weeks, which if below expectations might further dent the SP in the short term?

Thanks, I see it was $1087 in 2018, $986 in 2019. It increased last year, obviously they have had covid to deal with.

I currently hold CMCL which has an AISC of around $800 so likely to remain profitable for the foreseeable.

I'm very tempted by what looks like an absurdly low valuation of Hummingbird at current SP.

However their AISC remains high. I've looked for a longer term forecast of what it's expected to be but found no data.

Can anyone please tell me if they have they provided any forecasts for AISC beyond 2021?

I was going to explain the reason for wanting to buy these shares at this level, then realised it was a bad idea.

Don't buy them....they're rubbish, sell as many as possible, at whatever price the broker offers....and do it fast! LOL

Thanks threeput

Looks very interesting at this price. I'm going to create a small position on this.