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One further thought. Corica contracted to HUM local service / op company, which will likely have no assets, hence the comment on deed of guarantee. So if, and I don't believe this, Corica have a $27m claim, they have no way of enforcing payment against the mining asset or HUM plc. The best that Corica can do is issue nasty PR (done) and remove their kit. The litigation to get unsecured funds, is lengthy and unlikely to yield anything. Ergo, either they talk to get some reasonable resolution or they will leave. But there is zero chance that HUM pays out 27m and also zero chance a mining contractor would give 27m of unsecured credit to junior miner. As stated, the PR release is BS and just a scare tactic.
And for the second time in 4 yrs I'm thinking of buying, maybe I need a lie down
Been trading this name for 10yrs
Been involved in multiple mining litigations in Africa, takes on average 4-5 yrs to resolve. Excuse like deed of guarantee a classic irrelevant clause used to divert from the principle issue, especially if work started. A claim letter takes 3-4weeks to put together, this PR release took 2 days with a number. Things in Africa just don't work this quickly so it's complete BS. This is a classic call to PR from Corica CEO, with "get something out there now". It's massively unprofessional and knee-jerk from Corica. They are worried about their performance reputation in industry. Dan is still an idiot for letting this get to this stage. But 100% this is BS response.
To all those who think there is a genuine claim of $27m from Corica, clearly don't know what you're talking about. Any claim would go through arbitration first, then litigation. The $27m is a classic scare tactic, if they had a strong hand they wouldn't put out such a notice, they would just act. The deed of guarantee is also nonsense, if that were an issue they would never have started work in the first place. It's an excuse and a weak one legally.
I'm no fan of Dan, he's an idiot, but this PR is classic African bs. To me the likely scenario is Corica screwed up, they didn't like the RNS from HUM, and their non financial PR firm put this scare tactic PR out without much thought. He doth protest too much me Lord...confirms HUM is right Corica is wrong.
Its binary, and the market cap is simply representative of the option value of the assets. There is no fundamental value in the market cap either at this price of at 50% lower.
The company either goes to 0 in the coming years or goes to $200m+ equity value, if it can pay down debt in 2024, at say min 80% of the current schedule, then it might start to looking interesting, hence my question on 2024 production.
All those going on about current liabilities vs current assets - its doesnt really matter. Its about forward FCF generation and liquidity. Plenty of net +ve equity businesses have gone bust very quickly - its about cash generation.
I'm still amazed that Dan Betts and his clown executive and board are still running the ship. The management ability of a rusty teaspoon.
Havent post here for a while - thankfully exited sometime ago.
Does anyone have a view on what a realistic gold production could be for 2024 from K and Y ??
To hit the $77m repayment in 2024 they need to be at around a 200k oz production level.
Super leverage play on gold - works both ways, so a possible tradable share long/short on basis of GP.
Re HUM and SHG - would it not make sense to put these 2 together in a paper merger deal and remove circa $7m+ a year from the SGA, optomise the B/S, portfolio from both etc.
On HUM they already start to build debt back due to Koura build, as well as -ve CF from Q4. There in is the risk, as the equity / cash support gone from Yanf.
Different for SHG, but not marketedly.
As stated here, a $100 fall in GP and its curtains for both. Awful management of risks.
I think on Yanf the reality is that the strip + costs, + required drilling are now CF negative. Thats what market is pricing.
Ergo - best to squeeze working cap out of easy tons at Yanf, stop drilling, plan out the most effective route to Koura production. This means a smaller company - but difficult to cut SGA when you have a weak BoD as per HUM. I have been and remain all in favour of a take out for paper or cash (or both) as Dan is done.
Its literally 100km on ok-ish roads from Yanf to Koura. I done see why one can move primary equipment like crushing circuit, the 2 mills, possibly other items. Even it saved 20 or 25m in cost, in todays money that > 50% of market cap.....which is silly but true. Seen it happen many times. I'm assuming of course that the geology and grind are similar.....which I dont know. Its a thought, as HUM is now firmly a distressed company valuation
Also for Koura, why not consider moving the spare mill and other equipment from Yanfo to the new mine? Yanf could be total uneconomic now, so stop production and move ops to Koura. Would likely save $20m or so in capex costs and would accelerate development. Hum would then be back to a developer and requiste valuation
Cora is now worth >50% of the mrk cap of HUM, and as an explorer there is a certain option value embedded.
This shows the serious lack of trust in HUM etc.
The key now, is what is the HUM SGA burn as a % of market cap. I think its now running at 12-15% pa, which is ludicrous.
Dan is finished - the BoD need to see this and seek a solution which I think must be a merger or sale of biz to a partner company - in this way you woud remove £5-7m a year in SGA straight away from the overal cash costs.
I dont think there are "questions" for Dan any more, its questions for the Board, its clearly over for him and any refusal of that would be an impact on the reputation of the board itself
I think the will roll up any of those costs into the AISC. With SGA I'm referring to only the costs of the administration of the top co, HUM Ltd. I cant see how they can persist with this.
Just on valuation, the company is now priced at less than 2x CORA gold market cap, and actually the same as where CORA was 4 months ago. HUM spent more on the Yanfollia plant in capex, even without the new mill than the current market cap. SGA expense is now over 10% of market cap. All of these metrics are ridiculous - and DB should immediately reduce costs by getting rid of his expensive office, cut staff by 50% and get the SGA down to 5% max of market cap.
I've been highly critical of Dan Betts for almost 4 yrs , and whilst I've sold out of 80% of my position it still pains me to see what this buffoon has done to this company and opportunity.
To get rid of him, PIs, who have little power and are often ignored, should write or communicate not with DB but with the Chairman of the Board, Russell King. There are no IIs that care anymore, nor are there any that see this as a viable opportunity - this has risk for Russell King - as he is a non-exec for other companies and he will be more concerned at this stage about his own reputation. Whilst there is little one can do about DB, I would start to bring Russell King into the discussion, as its now a very big issue for him personally.
BTW I also have very low respect for Russell King - he's a career non-exec with a pretty bland background as a mining exec and banker - hes a long way from a steady hand, but he's all the company has at this time to counter the DB horror show.
It can get a lot dirtier than this, a lot. Yes he has the "talent" to enrich himself and those around him, but that requires the underlying asset to eventually deliver. So one needs "real talent" to play the game. I'm afraid DB has neither of the "talents" and is just simply incompetent at either making money for SH or himself, other than printing a silly salary.
Been mentioned here this AM, this is the ultimate get out of jail card for Dan and his cronies. Its part of mining in that part of the world to manage such things, DB is too busy drinking expensive wine at Alfred's to work on such things.
HUM is now valued at circa 2x Cora, assuming zero net debt at HUM, but with a proper reserve of >1m oz, in other words is a better propsector than Cora. Yet market is discounting all that and the production units......That how misleading DB is to the market. No one trusts him. been saying it for a while, but now is embarrassing but HUM should look to merge with another small or mid sized producer on a paper deal. This is all too much for DB, he has no talent in this game and should leave.
Clearly others in the market have looked at HUM but have passed, or DB has been a barrier to getting a good deal for SH done. Whatever the position the market understand the headline fundamentals, but aint buying.
So ongoing liquidation of HUM post qrt end does not look good for the short term SP - On an enterprise value basis, HUM is worth $67m (on H1 results), vs CORA worth $40m (latest results). $27m valuation difference where one is producing vs the other which is not even at a PFS stage. Both share same geo risk etc., so its apples to apples comp.
Cant help but think either i) there is a massive negative news item coming, ie fraud, massive negative cost hit, resource downgrade etc., or ii) the DB team is so massively impared that IIs are walking away and this thing would be better off in a take over at low premium or iii) there is a massive equity issuance coming to fund Koura.
SG&A costs are now close to 10% of HUM's EV, which is scandle - with that and any of the options above, must clearly now be curtains for DB as CEO. I cant see how he can stay on at next AGM or the BoD needs to take action.
If HUM prints say another $5m next cash to the b/s in Q3, then it makes these issues an even bigger problem for management.
BT, ex the mud slinging, wrong on 100% of your assumptions.....hahaha. seriously not a CFD punter, do not use any leverage, dont even use CFDs......no point for AIM stocks. etc. etc. etc. Hysterical. I wont offer my opinion of you in return, I dont know you, nor do i have any interest in doing so.
Anyway I'll let you get back to the vodka and crack pipe, your comments and analysis are irrelevant.