RE: Price30 Jan 2022 12:25
Well anything is "possible" but in the bigger scheme of things it doesn't matter to me - lower averages are always nice but this has always been about Q2 onwards - the reason I like this so much, and like it even more the lower it goes, is that it's so readable going forward.
We're now substantially under $20 per oz of c3.5m oz Gold with much/most of it having been measured/costed etc, certainly by Q2, not just "in the ground" resources with the many tens of millions of Pounds it requires to convert resources into reserves still to be paid - it's all been done. A mere $200 profit per oz of profit clearly suggests this company could throw off at least $500m of FCF over the next decade.
Kouroussa is mostly funded by the Coris Bank loan and Pasofino are paying for the Dugbe DFS.
Kouroussa's first three years of production are truly stellar and there's still so much upside to come there as we saw with that recent truly-worldy monster drill hit. We have to pay Cassidy just $10 per oz of newly discovered Gold there which is incredible value (capped at 1.4m oz IIRC??).
Dugbe is/will be enormous - there's some hefty up-front production bills to pay for that of course but that money won't be required anytime soon - I don't see why Coris/A.N. Other bank wouldn't fund that too - or it gets taken out by a major, it's certainly big enough and 51% of that is worth more than the entire mcap of HUM, as is Kouroussa.
c300k oz pa of gold production makes HUM a genuine mid-tier producer with risk mitigation across three projects in three different jurisdictions.
As I said some time ago, find me a better value/readable prospect in the Gold space and I'll buy it next week - nobody has come back with anything - probably because they can't/don't exist and the value proposition keeps coming back.
I like a return to $2k for Gold in Q3 but when the value proposition to my eye is as it is above, quite frankly I'm not sure it makes much of a difference in the bigger/longer term scheme of things whether Gold moves up this year or not - the NPVs for Dugbe and Kouroussa were both predicated on a $1,800 / $1,775 Gold price which is where we are now - I doubt we'll see much downside for Gold this year, or ever.
Many people will point to interest raises pressuring Gold down but it really doesn't work like that as evidenced by the 1970s inflationary period when Gold 20x bagged to 1980 tracking the 10-year yield all the way up to *10%*. The head room for raising rates, however, has never been lower with the US running a c140% Debt:GDP ratio.
Discretionary spend is collapsing, GDP "growth" (LOL) is stalling, even when using the BS 6-7% CPI number (it's three times that in the real world as we all know), corporate earnings are going to collapse in H2. Only wage growth counters that but that also increases inflation just as new goods costed at 2021's +20% PPI number come to market = more inflation ...
Sign In
Follow the stocks
