Member Info for iWantThatOne

I’d be perfectly content with 35k in Q1, tbf, given what will be a relatively low January and at least part of Feb at Kor.

20k from Yan and 15k from Kor.

35/45/45/50 in each quarter, say, allowing for a bit of rain, adds up to 175k, which would be fine.

I’ve been out of XTR for a while now so out of touch. What’s the thinking on BR? A sale for even a fairly nominal amount could represent a decent return here. (As opposed to yet more copper exploration, aka “Colin’s viagra”).

The frustrating thing is that the funding requirement didn’t pop out of nowhere, it would have been pretty well understood well before reaching 230MeV. Running costs were c£20m pa - so that’s £40m over two years - plus the cost of the building for first treatment, plus some manufacturing costs probably. I think they were just very slow at trying to raise the cash.

It’s not AIM that’s shafted us, Vanilla, it’s the incompetent BoD. When the 230MeV milestone was met the share price was 24p and things looked great. Odey invested another £6m. Six months later the SP had steadily declined to 2.5p and a strategic review was underway. A major reason for this, imo, was the company blurting out some time after 240MeV that it needed another £70m or so over the next two years with no apparent plan of how to raise this amount. The BoD were asleep at the wheel and complacent.

Interesting slide near the end showing estimated EV/EBITDA at end-25. The figure is just 0.05, which took me back a bit. I hadn’t quite clocked that by that time but only will the debt mostly have been paid back but there will also be a lot of cash on the balance sheet (eg EBITDA $120m in ‘25 less $66m debt repaid, plus a little from ‘24). So the EV would be c$90m at todays sp plus $16m remaining debt less cash of, say, $80m gives just $26m (other estimates are available). So that cash will give an extra boost to the sp.

You keep saying the share price sinks lower, yet if anything it has strengthened a tad in the last two days. Are you sure you’re holding the graph the right way up, TwoGood?

Tbf, the accounts won’t be updated until funding is received from the investor. I expect the order will be: interim funding received -> accounts updated -> recap plan presented and approved -> funds received -> shares relisted. Though as I’ve said, I don’t think the investor is serious.

More than a “can do” attitude, the company needs to roughly double sales from here at current 35% gross margin if it’s to close that $1m Adjusted EBITDA loss, never mind cover other items. Things are going in the right direction but I’m not sure this is going to happen in the next 6-12m.

This supposed “investor” is just trolling the company. “Unexpected delay?”. Oh sure, right, that’d be the *planned delay* until AVO finally throws in the towel and the investor buys it out of administration. Nine months now, this search for new funds has been going on. Doesn’t the company’s spidey senses tell it something doesn’t feel quite right?

Yes but those miners are not gold miners, Curiousinvestor, so they’re not directly comparable. According to Cannacord Genuity research contained in HUM’s corporate presentation, the average EV/EBITDA multiple for junior gold miners in ‘23 was 2.8x. So a factor of 3 seems about right. They have a price target for HUM of 22p, which I expect is based on achieving that multiple at end-‘24 after replacing the repaid debt with equity value.

Thanks pensioner, yes I agree, and there will be more of this in ‘24 than previously - work being done and costs incurred before revenue recognition, which in turn may be before cash is received. Example - I know in Dec ‘23 that a new DVM contract had reached revenue recognition point but it wasn’t put into the accounts because a signature was needed and the individual was absent on holiday. Again, costs incurred, revenue not included, cash not received.

Doesn’t buying back shares at a low ish price gave a greater effect on capital appreciation, though? Increases EPS which in turns drives share price.

Also HUM’s currently closer to a 2x EV/EBITDA multiple:

- net debt at 31/12 of $140.4m (I’m excluding inventory)

- additional cash injection in Jan of $22.6m

- mcap of c£70m=c$88m

- EV=140.4-22.6+88=c$205m

- EBITDA=c180k ozs (say) x $500 = $90m

- EV/EBITDA=c2.27

Commoditytrader, worth noting that HUM considers itself bigger than a junior miner now (once Kor is up and running) and has a different peer group. It has two operational mines, it’s geographically diverse, has a supportive major shareholder and a third undeveloped mine worth - something. I’m not familiar with the miners you mention but there must be good reasons why they’re on such low multiples.

Plenty of cash still available as at 31/12 - $7.9m plus $6.0m gold inventory, with a further $22.6m from the raise received later in Jan. $36.5m in total. If they hadn’t had the raise then they’d only have had $2.4m plus inventory at 31/12.

Looks fine to me. Onward and upward!

Share price a bit bonkers now. If 180p was the “right” level in the run up to results with an expectation of $12m EBITDA then it should be well north of 180p at some point later this year when they hit more than $16m. Some people moving money out temporarily, I imagine, but this seem a bargain to me, for those prepared to wait a little while.

Who cares about Q4? Everything’s moved on, now it’s just about delivering enough ounces at the right margin to pay down the debt this year. All that’s relevant about Q4 is how much cash was left over at 31-Dec, if any, that can help tide the company over until Kor is fully operational.

Stifel are forecasting EBITDA of $16.6m from revenue of $53.1m in ‘24, compared to $5.2-6.2 from $46.1m in ‘23. If the additional revenue falls mostly (90%) to the bottom line that would explain $5-6m of the $10-11m EBITDA increase. The remainder might be explained by synergy savings, though BGO have said this will be reinvested back into the DVM business - perhaps not all of it will be? So EBITDA is increasing nicely but cash is not. I don’t believe it’s due to repayment of the NHN loan other than just a couple of $m in H2 (per the CFO). So what’s going on? If operational costs were increasing they’d be included in EBITDA. Is the cash being used for exceptional outgo? Or paying for work that is being capitalised rather than go through the income statement? Or is some revenue being booked without cash being received?

Also I presume that as net debt reduces by c$55m pa, according to Zeus, the equity component of the EV will rise to compensate for the debt part reducing, so a modest natural share price increase from that alone.