Member Info for Dragons13

Thanks Bushy - useful intel - I’ve missed that nugget, where did management disclose that?

Look forward to seeing it reflected in the FY22 financials.

A big couple of months coming up news flow wise - should hopefully be value adding. Expectations of timings and news flow below:



Next week

- FY22 financial statements

- Notification of AGM

Within the next fortnight

- First gold pour Kouroussa? 🤞

End of June

- AGM

- Annual resource update (was end of June last year)

3rd week July

- Q2 reporting

- Full Year revised guidance including KOR

- Further details on Komana East Underground including progress, timelines and financials

- Details and planned spend for KOR H2 Exploration

End of July

- H1 Financials

Would also be good to get a substantive progress update on the following during this period:

- Dugbe strategic review,

- recoverability of Mali VAT receivables (the biggest cashflow unknown for YAN)

- appointment of Non- Exec Chairman

- appointment of new mining contractor at YAN

I have no quibble with them being rewarded handsomely for delivering value. What I object to is massively reducing the targets whilst not generating a result that actually grows net asset value and doing so without seeking shareholder approval (particularly given the previous plan required shareholder approval)

Anyone else have concerns about the recently announced changes to the Founders Equity Alignment Plan (FEAP) in the 31 March RNS?

The announcement is very short on detail re the FEAP (buried 3/4 of the way down the release) but from what can be inferred it seems the new plan is a lot more generous (54m shares to be shared by certain executives at max payout under the new plan vs 31m in the original scheme) which will increase shareholder dilution, whilst having materially lower share price targets (18.8p to achieve full payout in the new plan vs 55p in the original plan). This is despite the company being 7 years further down the track and imminently about to have two operational mines up and running with a third in play. At full payout under the new plan the market cap would still be significantly below HUM’s current NAV.

Have asked a number of questions around this to the company to confirm my understanding and also gain clarity re: governance on this topic, shareholder approvals, target setting, benchmarking, alignment with long term shareholders etc and am awaiting answers. I’d encourage others to do the same.

From the RNS back in 2021 the terms of the debt were four years with the first 18 months being interest only for each tranche of debt. The first two tranches were drawn in December 2021 so unless they have renegotiated terms then these first two tranches start to require principal repayments from June this year (c.$2.3m per month). Maybe CIG can bring their "strategic bearing" to have that date pushed out?

I'd agree if we were debt free but to my mind with c.$120m of debt, principal debt repayments commencing shortly and significant short term capex the need for dependable cash flows over the next 9-12 months trumps the opportunity for maximising profit at present.

Hope the meeting goes well today and that management provide some honest and useful information at it. One question that springs to mind given the rise in gold over the last couple of days - will they use hedging for a substantial portion of their production to lock in the current price to provide cash flow certainty given the pressing cash flow needs of the company? and if they did would that reduce the need for the equity raise?

Reluctantly voted for the motions in the upcoming General Meeting.

I feel much more could and should have been done through careful cash conservation and robust liquidity improvement initiatives to have managed the short term liquidity squeeze through HUM’s cash flows and liquidity actions rather than reverting to what seems to be an easy “get out of a pickle” equity raise that has diluted existing holders at a very low SP.

However given where we are, the benefit the cash injection will have on balance sheet resilience, the potential benefit of a having a regional investor on the shareholder register and the improved market sentiment that the equity injection will hopefully drive I’ve come to the reluctant conclusion that it’s better to vote for the motions rather than try and give management a bloody nose (which for the avoidance of doubt i believe they fully deserve) with a no vote and then suffer the impact of market sentiment turning further south as a result.

For me the sooner the new Chair is on board to hold management to account the better.

Be interested to hear from anyone able to attend the meeting as to whether management give any more details on the day (and indeed if any of the non-execs do investors the courtesy of turning up)

I believe the RNS primarily reflects Alwaha's allocation of the Cassidy deferred consideration shares that were issued in early Feb (22.7m in total - Alwaha's share c.43% of that). I expect a similar RNS for AIMS shortly. I suspect they are both institutions that will be subscribing for the subscription shares as well.

If my memory is correct both AIMS and Alwaha are the two vehicles used by the beneficial owners of Cassidy who sold KOR to HUM. So, assuming the CIG deal is voted through we will have CIG as largest minority shareholder and then the AIMS / Alwaha combination as second largest.

The recent success of an activist investor in reconstituting the entire board at Capricorn Energy shows the mechanism. The issue is that we don't have that type of investor in the shareholder mix @ HUM so practically very difficult for us and soon to be harder if CIG are there to protect the board (although whether they would or not we don't know)

Pasofino has an experienced 6 person Board and a Blue Chip Investment Bank to run and review the strategic optionality for Dugbe from their side. Who on the HUM Board will be overseeing and making decisions on the strategic review of Dugbe for HUM and it’s investors? 3 of the existing 6 board members (Interim Chair & CEO, CFO and Ernie Nutter) are conflicted through their significant personal holdings in the Pasofino vehicle (those holdings are significantly larger %’s than their personal holdings in HUM). In addition Stephen Betts is conflicted by dint of being the CEO’s father. That leaves two part time non- execs to oversee this crucial process for the Board.

How can an effective review that has strategy, finance and liquidity at its heart be managed when 2/3 of the board are personally conflicted including those directly responsible and accountable for those areas? This exact issue was flagged at the AGM last year, the CEO didn’t have a proper answer then and it clearly still has not been addressed.

Further, HUM still does not have an independent Chair in place more than 9 months after Russell King announced his intention to step down. It’s transactions like this, and the proposed equity raise with CIG where retail investors rely heavily on an independent chair. I’d wager the equity dilution and subsequent rushing of a subscription and limited open offer would not have been done in the proposed form had we had a strong, experienced and independent Chair holding the CEO and CFO to proper account in 2022.

There has been no disclosure as yet on the relationship agreement that has been entered into with CIG - understanding that is key to understanding future governance given the size of CIGs potential holding and the role of the wider CIG group as major lender to HUM and therefor the outsize influence they will have on the business. The expectation would be they would want board representation (and maybe the chair?) but there is no resolution for this in todays general meeting notice. I’d hope they would provide some detail on this in the VOX interview but not holding my breath.

Either way retail investors have no clarity on whether HUM are still even actively searching for an independent Chair.

I say all this as someone who holds c.1m shares, has done for a number of years and who fundamentally believes in the asset base but has had enough of the sub-standard governance of our company and wants to see that dramatically improved. A strong, well respected, independent Chair is a key first step in this journey with a reconstituted board required shortly thereafter. Both were indicated actions at the 2022 AGM - yet another missed target from the CEO.

I’m currently minded to vote against the resolutions unless they can show me they run out of cash without them. 4 of the 8 resolutions are special resolutions requiring 75% approval to succeed - this provides a greater chance therefore for disapproving shareholders to defeat those