Member Info for iWantThatOne

Wrong. The SP was 11p or so before an excessive reaction from a small number of retail investors, on top of macro movements. We now have more information than we did at the time of the RNS and the situation appears more favourable than indicated. “The market” has not yet factored this in and values the company on outdated data - as it always does, since it tends to look backwards rather than forward.

The bridging finance people will have full sight of AVO’s accounts, such as they are, and will be well aware of the financial position. The discussions would hardly be at an advanced stage otherwise. They will also be fully aware of the recapitalisation plan’s status, which would provide reassurance as to the viability of the company going forward - we hope.

Who knows, Bushy, but two months after saying more or less the same thing - “more gold pours and shipments from July onwards” - they wouldn’t now repeat it if there were residual major problems.

“The Company plans to increase the size and regularity of its gold pours and shipments through Q4-2023 as the operation progresses towards steady state production and a full year of commercial production for FY-2024.”

Couldn’t be clearer. May be slower than expected but by December Kor will be producing at full capacity.

It’s not been added on the LSE site yet but I get news alerts from the Stock Exchange. Perhaps it’s on the company website by now.

Ooh, news. Still working on Recap Plan incl bridging finance, more news to come early October. There’s life in the old dog yet!

Q3 was always a risky time. Any delay at Kor would put pressure on HUM’s ability to service debt, given that we knew only 15-20k ozs was likely to be produced at Yan (with corresponding high AISCs). And that’s exactly what’s happened. They key information we now need, and quickly, is where we are with Kor and why it’s taking as long as it is. If just regular commissioning issues to work through, then no long-term problem. A disappointing slug of extra debt but nothing worse. So come on Dan, more comms please. (And, btw, it’s good to have such a supportive lender).

So basically an extra $20m debt to bring KOR and KEUG to fruition, not all of which may be required, and a bit extra cost for servicing this and the refinanced €35m - an extra $3.8m pa cost in total. It seems sensible to me to delay repayment costs if things are a bit tight. Otherwise it’s just a slight delay in hitting commercial production - that’s all. Good to hear Yan remains on target for FY, and there’s no reason to believe Kor won’t be ready for 2024. Repayment of $77m debt in 2024 isn’t difficult if 200k ozs are produced at $600 margin. Not sure what people were thinking - rapid debt repayment was always the stated priority. Looking forward to Dugbe news soon - a sale would remove all concern here.

Meldrew, that rogue transaction was only for 200k shares wasn’t it? £3500. Unless I’m missing something.

On the Recap Plan, I do hope it still is being progressed in the background as surely this is the way to put pressure on a potential buyer/strategic investor. They can’t low-ball the shareholders if there is an alternative route to survival.

Oh Ade, you’re having a ‘mare at the moment. Time to take a break, maybe, or quietly go away for the sake of your own health and (cough) credibility?

Curious, I agree “something” is certainly going on, as they ran out of money at the end of May. The poor staff and creditors must be pulling their hair out. The Recap Plan is some seven weeks into its gestation now, which I guess is just about plausible, but normally it’d be a lot quicker. Therefore I’m thinking it’s more likely to be a sale. Must be any day now.

Meldrew, I feel you may be premature! It’s quite possible that sale negotiations are still going on - certainly, these must have come a long way if they’re ongoing, but nothing’s certain until the deal is signed. And the recapitalisation plan may be having the i’s dotted as we speak. Both may still come to naught, but the length of time since we heard anything gives me hope that going into administration is now the least likely outcome.

There’s been no cash available since end-May yet here we are - still clinging on. Staff’s loyalties will have been tested as they can’t have been paid for several months, so I can understand if there have been resignations, but hopefully most are still on board.

I do think the recapitalisation plan will have focused the minds of potential purchasers, who will realise they can’t put in a lowball offer (this assumes they believe the money can be raised per the plan).

Pensioner, thx for that info, i wasn’t aware Singer hadn’t updated their 2024 forecasts. Still, a full year of DOCOMO costs rather than just four months’ worth would add quite a bit to the cost base, but then there’ll be significant integration savings. We’ll just have to wait for the updated forecasts.

No it’s really not, Really. Debt has not been taken on to buy back shares. These are being bought from cash generated. Clearly you don’t like debt, and repayment of that would be your priority. Fine, but there’s nothing wrong with debt provided it is at a comfortable level. Returns to shareholders overall are enhanced more by buyback than debt repayment, which is the priority for me.

Net debt only rose because of the amount of cash used for the “non-recurring deferred contingent consideration”, so it’s not really a case of buying shares via debt, and one wouldn’t expect this to be the case in H2.

Yes I’m sure you’re right, Meldrew. Otherwise the plan would risk falling apart at one stage or another at the EGM.

Much of the increases in revenue and cost base were due to the integration of DOCOMO, though. It’s impossible to split out the components of organic vs inorganic growth, but we do know the cost base pre-DOCOMO was always considered “flat-ish” - I’d expect that to continue from the new, rebased level. And current 2024 forecasts for revenue are only $57.5m vs almost $50m this year.

Hum might sell Dugbe later this year for £50m+, based on these figures and the fact that Dan has announced a positive decision will made during this period. Anyone not in when that is announced will be kicking themselves. This alone would be 8+p per share. And perhaps some of that cash would be used to pay off debt - the “aggressive deleveraging” Dan also referred to.

I see the consolidation, sub-division and issue of new shares all being part of the “single matter” (ie recapitalisation) to be agreed at the EGM. They are separate steps, each to be voted on I think but forming a coherent whole. I’m not sure it matters what order they come in, does it, as long as each step follows on consistently (ie using the right number of shares, nominal value and issue price) from the values determined in the previous step?

Three weeks on Monday since we were told of the plan. The cash ran out end-May, so I can only assume that salaries and bills haven’t been paid for June & July, awaiting bridging finance. So that’s £3-4m just to cover that period, and the same again through to end-September (ie EGM and implementation). I assume the potential lender there wants security that the company will be able to repay, so they’ll want to see either an offer for AVO or a well-developed book-build for the equity raise. So could be a little while yet.

I imagine AVO will only want to call one EGM on one matter - either the Recapitalisation Plan or an offer to buy them. So it’s possible that the Recapitalisation Plan is in reasonable order but potential buyers are still working things through. Just speculating whilst we wait……