Member Info for iWantThatOne

In the last day (and today so far) we haven’t seen what I think is a persistent seller offloading 20k-30k shares at a time. I’m sure much of the downturn from 140p has been due to that.

Meanwhile, in yesterday’s RNS Ray Anderson says “The Board is confident that Tony provides continuity and stability as we continue our RAPID GROWTH” (my capitals).

As far as the interims go, we know the results more or less, which have already been flagged in the trading update. The question is whether there’ll be any statement indicating progress against the market consensus. The cautious thing would be to hold fire until then, I suppose. On the other hand, the SP is very low (EV/EBITDA of about 7x) if everything’s on track. And Larbey described it as such near the start of the year after the dramatic fall from 180p.

There’s a very good reason for doubters to hold onto shares at the mo. IF Kor hits its nameplate within a few weeks, and if a bid for Pasofino IS accepted in Q4 (and the transaction concludes), then the share price could well double very quickly.

Anyway, I’m pretty sure that a Dugbe sale would soon be followed by the acquisition of a new “Kouroussa” to replace it, a smaller mine better suited to HUM’s capital base. With the cash it will earn in ‘25 it could easily crack on at pace with barely any need for debt financing.

HUM have repeatedly said that next year they intend to get back to the work to convert more resources into reserves, with the expectation that both mines last for ten years. Plus when West African gold companies are valued around 3x EBITDA you don’t need a very lengthy LOM. Nice try Punter.

Management certainly don’t regard it as a “substantial debt pile”. They repeatedly maintain it’s low (

I was very encouraged. The reduction in Op loss in Q2 must have been after some revenue improvement as well as cost control, given the bigger loss in Q1 - the savings won’t have come through solely in Q2. If you project an annual Op loss of £200k going forward then I can see how that will easily be wiped out even by just incremental growth - £500k pa at a 40%+ margin. Then you have the bigger prizes of one or both India and Saudi coming on stream within (perhaps) 6-12m. It’s clear the regulatory environment is finally shifting, which is the main driver of business. Still a waiting game but perhaps the time for longer term investors like me to start stocking up.

Interesting that the updated corporate presentation has the majority of HUM’s peers valued at 3x EV/EBITDA. Even at a cautious 180k ozs at $600 that gives 30p per share once net debt is extinguished - which could be as early as Q1 next year if Dugbe is sold and Q3/4 are decent. I’m sure the market would want to see steady progress first, but still.

“Performance at least in line with market expectations…..”. Excellent. I’m also pleased to see the buyback here again. The share price has clearly dropped sufficiently low that this becomes the best use of capital again. Plus Royde buying again and the share cancellation - all looking very good for the remainder of the year.

Updated research from Cannacord Genuity today. Forecasts net debt down to $112m at year end, moving to a net cash position of $19m by YE25. Short term price target of 16.9p, which will increase as debt is repaid. In ‘25 that’s predicated on revenue of $454m and costs of $226m. As an example, you could get to that from 200k ozs at $2270 with AISCs of $1130.

I think the SP is ridiculously low and simply due to lack of buying pressure and news flow. Revenue was $24m in H1; so they need to do a further $29-30m in H2 to meet consensus. $16m in H1 was the payments business, which is H2 weighted (said to be 40/60, which if true would give an additional $8m). And the DVM business must be a little higher in H2 at least (unless part of H1 was one-off set up fees etc). Overall I can’t see how they will not meet revenue consensus. EBITDA - similar arguments.

From what I can see Osino was valued at just over £200m (c$260m) for a resource very similar to Dugbe in the round (Google “Twin Hills DFS”). Slightly lower resource, similar AISC and capex etc. $300m could be achievable given current POG in my view. So HUM’s share could be worth $150m less Gov share - still comfortably >$100m.

This is in line with the other recent sale Dan keeps referencing, whose name I’ve forgotten but I posted on this when he first mentioned it and calculated a HUM share worth getting on for 10pps. (The value Dan keeps stating included a lot of cash, which is not the case here so adjustment needed). Overall then, my starter for ten would be $100m-$130m to HUM.

Gold Investor:

- You think Alaska is a low cost mining environment?!

- It’s not about high grade, it’s about profit per ounce. Dugbe is a low cost project with very good margins, hence more attractive than a high-AISC mine.

- Dugbe has initial capex of $400m not $500m, and no exploration needed - though there’s plenty more gold there.

- You’ve been quoted recent purchase prices for gold in the ground - these need to be significantly uprated for the current gold price.

There are more holes in your arguments than a sieve.

In fact they’re becoming increasingly desperate - maybe you don’t get paid if the sp goes up?

What rubbish, Gold Investor. Dugbe has 2.27m ounces of gold recoverable, per the DFS. A sale price of $20m would imply just $10 per oz. Brand new gold exploration companies can get that. Wise up.

If HUM effectively owns 100k ozs at $1000 AISC at Dugbe, that’s EBITDA of say $100m pa after Gov share. At 2.5xEBITDA (say) that’s a value of $250m or 25p per share after debt to construct the mine is paid off. Given that, I agree a sale now for say $100m and reinvestment in another Kouroussa (if there is one) could be a better option. But I doubt DB would go for that.

Anyway - good news today, and look forward to seeing what value Pasofino get and therefore how HUM could value Dugbe in its accounts. This clearly will be the final nail in the coffin for Gold Investor et al, given a rapid sale is entirely possible and could easily resolve debt issues if it came to that.

Surely the main consideration at this stage is not impairments or depreciation but cash generation, which is what will repay the debt. What Gold Investor and others don’t seem to realise is that HUM is already at the point where not only debt can be covered but immediate creditors can also be paid. For instance - H2 guidance is 73-103ozs. Even at the lower limit x margin $700, say, that’s more than $50m, which will not only cover debt under the existing schedule (max $19m pq from memory) but also immediate creditors.

I also think current forecasts for the sp rather low. HUM’s peers (see corp slide deck) are on c2.5x EBITDA less debt. By end-2025 that implies more like 25p.

Excellent news today, eliminates immediate insecurities around the financing. I thought they’d reschedule the existing payments but borrowing more to pay off their existing obligations is an elegant solution. Onto the next big milestone now in five or six weeks, then 40-50k ounces in Q4. (Pity the poor naysayers today, so difficult to trot out the tired old lines when there’s good news….)

“Coris have already set up an entity to take control of this…”. Codswallop. There are many reasons Coris may have moved its HUM shares into a subsidiary. Maybe there are tax advantages, either now or on later sale. Or the size of the investment requires greater governance and oversight that it may not get as part of an investment fund. Or its size may be disproportionately affecting performance of Coris’ investments as a whole. Suddenly everyone’s a corporate restructuring expert.

Unlike some investors here I’m completely comfortable with the progressive dividend policy that the company has been following for a year now (and the “small” divi announced today is only the interim one, remember). And why should debt repayment be a priority when debt is at such a manageable level and gives a lower ROC to investors than share buybacks? Anyway, rather surprised to see such a pull back today when TIG is still at a 45% discount to its peers. A buying opportunity I think.

The gloom and doom merchants here yesterday are missing the big picture. In as little as six weeks the company could be at a run rate of 200k ozs pa, with only 40k of ounces hedged at less than spot price. For all the Board’s incompetence and reactive management, their objective is finally, tantalisingly within reach. Just fast forward to H1 - 100k ozs at $1000 margin, say, is $100m. The deleveraging is going to happen so fast (and in fact starts in Q4 if not earlier). And even if they mess up here and there, as seems inevitable, the overall picture remains one of large cash flows and debt flying off the B/S.

I can’t help think some people continue to talk down the share price for their own ends. As for a Coris low-ball bid - I absolutely don’t believe any of that conspiracy bull. Coris’ interests are best served by growing the company’s value back to that at which they invested and beyond. Is the way to do that to attempt to buy and flip it? Absolutely not - the numbers don’t work, certainly not without them running the mine for a reasonable time. Far easier to let the current management do that.

The shortfall at Yan is indeed concerning but I’d like to hear what DB says about this. It’s not a steady state situation there, just crunching an established open pit - they’re opening up new areas etc. - so things can go awry. But issues with availability of machinery should not be happening.