The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Funny nothing here has actually changed in the last 6 months.
The full potential of this business still remains the same, can management deliver ALL full potential??
Purchasing at 5-7p it didn’t matter that much.
There’s still other gold players out there will the same valuation metrics HUM had a few ago
Ultimately I believe the real rerating will occur Q3/4 in 2024.
Having 2 operating assets and lower/No debt is the real play, at that point a 5x multiple could be applied to CF on optimised production and potentially higher spots.
Interesting going out a few years 2026, we now see Cerrado Gold offering significant more upside and a class management team.
Spread your bets!
Probably time for some real clarity and control on Dugbe, given the 51% ownership should be in the drivers seat.
Ideally it gets mothballed for 12months . Allowing optimisation of KOR and new mine plan for Yan. This would eliminate any risk in further share price negative surprises and focus attention on production assets.
Dugbe is a high development cost mine but noting post US Fed pivot and printing , the opportunity to forward hedge at much higher spots may be available to finance the debt from higher IRR.
Appears Win Win delaying Dugbe. We don’t want another near death experience, that would really be snatching defeat from the jaws of victory.
I’m not a shareholder Cora, but am of Hummingbird.
It appears Cora have taken the wrong route to production.
On face value they should prove a resource in proximity to another producer(hummingbird or otherwise) and use a tolling arrangement to generate $$ flows.
Then attempt a major mine.
Only value here is if another producer in proximity does the work on it with an elevated spot price.
2024 Q3 - Potential share buy back commences…@ $150m year! Lol
Ideally they just hold on Dugbe , and wait for gold miner sector to reflate.
Potential then for loan/streaming etc arrangements to fund Pasifino independent of Humm.
We had to double up weighting once line of sight to KOR funding was achieved. Asymmetry!
Waste of time looking short term if you bought in sub 7.5p and locked into the journey.
Full year 2024 - 200k oz at $1200 aisc @ $2000oz = $160m CF
Re rate to 4 x CF- $600m market cap
Debt free
Self fund Dugbee
Buy back 20% market cap
Free option then if gold rips $2500+ on much higher multiple.
Time to move on to next opportunity.
Question regarding KOU life of mine. Reserve at 650 k oz
Years 1-3 = 400 k oz
4-5 = 200k oz
6 = No reserves
Is that why management are rushing to commence drilling this year??? Or is there another reason . Are they trying to up the Qty in years 4-5 etc
According to forecasts issued.
Robex could theoretically dilute itself 25% and take out HUM.
Interesting you then have a 500k oz year producer… Market Cap $1.5-2 b.
It’s surprising some form of merger hasn’t been proposed yet.
Ideally the strategic stake CIG are getting, would have gone to another mid tier producer to beef up the management.
Compare to Robex Resources - Market Cap $170m us.
1. Mine in Mali - 30oz year , say $1200 aisc
2. Resource in Guinea- NPV $300m. In planing.
Trusted management team.
Hummingbird - market cap $35m usa
Mine 1 - YAN life tbc hopefully 50k oz year < $1500 aisc
Mine 2- KOU - NPV $240m
Mine 3 - DUG -
The GAP in market caps is a management discount … No one believes they can make it work. Robex is nothing special either.
Using a Tennis Analogy-
Robex in Top 50
Hummingbird not in top 100… yet !!
Management of Risk appears misguided in recent corporate communications.
Risk seems to be rear facing ie. we just crashed our car into a tree, now we will wear seatbelts. All good move on, no more RISK.
Things Managment can control or mitigate RISK- Gold Spot Prices by hedging programs.
AISC - managing your mine operations.
YAN - has issues we get that , have you hedged forward gold prices to get some control over sales/cash flow.
KOU - needs debt to build , we get that. Have you hedged forward any gold spot to get certainty over the debt payback profiles ???
Yes/No - If no , you haven’t managed your going bankrupt RISK.
Upside will come when you manage your downside RISK.
It’s wild to think it’s being considered to sell Dugbe - the crown jewel in a bear market.
Why not hold any decision until mid next year- another gold
bull market is around the corner. The asset will worth a lot $$$ in a few years.
Manage downside RISK now , upside will take care of itself.
Rear View Mirror - Management has destroyed 95% of shareholder value… who has been made accountable??
Immediate Future - KOU has a IRR of 75% at current spot prices and a 2 year payback … if we believe what we’re told?
Hedging current spot prices for the next 2 years should have this debt free or near.
Therefore it makes perfect sense to dilute shareholders for an extra $12m now ( Yes/No) when shareholders should see $120m ebita in FY 24.
Why not turn the next CIG tranche of $$ into a convertible note paid on 31st Jan 2024. negotiate the lessor of a lump sum interest payment of $10m or issue shares as per the current t&c are discretion of HUM management 31st Jan 24.
The $10 m interest payment would just equal the 24 FY diluted ebita (@$1800oz hedged gold ). Take it or leave it CIG, I’m assuming only another gold entity would be happy to play on those terms if shopped around?? Has this been already completed by management? Yes/ NO
Future Vision- All 3 mines firing with a gold spot price $2300+
250k oz per year +
Generating $250m ebita
Market Cap - 4 x ebita
The same management term that gave us the Rear View Mirror are still in place . Have they learnt anything different? It doesn’t appear likely yet, but there is always hope.