RE: Gold Price energy side of the equation6 Mar 2022 19:41
It really will :)
Ultimately, and as always, there are ifs/buts and maybes and, yes, I'm purposely being pessimistic re Yanfolila just to prove the point that when you get into "number goes up" territory, i.e. in a hyperinflationary environment, then there are some basics that you need to recognise - costs and sale prices both increasing by the same relative/percentage amount actually nets you even more absolute profit on the assumption that your costs are/were lower than the sale price. This stuff isn't that intuitive for many people :)
You could take the view that much of what we need to happen is already happening and we're another year closer to the Kouroussa cash cow delivering or you could take the view that, overall, everything cancels everything else out and that we're broadly in the same position as a year ago.
I have sympathy with both sides of that argument I suppose but there's something else at play that shifts the needle towards the bull case here, if you look at things over the longer-term.
We are indeed a year closer to Kouroussa and we are indeed seeing Gold looking very strong just recently but if you smooth away all the shorter-term shenanigans then, ultimately, we're able to buy in here at 13s, at something like a 30% discount to where the share price was this time last year at/around 20p when the funding for Kouroussa wasn't even agreed on or banked, as it is now, and Gold was flopping around $1,700 rather than the $1,970 it closed at on Friday night.
In all likelihood, IMO, we'll be able to use hindsight in six months or so and say/see that everything under that 20p mark was a gift and there's only more upside to come as HUM transforms from a 80/100k per oz pa producer to a 200k then 300k oz pa genuine mid-tier, multi-project Gold producer at who-the-hell-knows what Gold price by then.
I welcome the debt BTW of course - there's no better play than taking on cheap debt (8.5% is half the real-world inflation as we know) to put into a project that yields on an inverse basis with inflation and the sooner we do/did it, the cheaper that debt becomes. I hope/expect we'll take an enormous amount of debt on for Dugbe in 6-12 months time and that's just fine for me for the same reasoning.
FYI - when I bought my Gold Britannias three months ago I deployed the same model - I bought them on a credit card then transferred that debt to another card for 12 months interest free at a cost of a 2.9% transfer fee. They're now worth 10% more than I paid for them but by the time that interest free period runs out I hope to be 50% up :)
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