Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Maybe I’m being stupid but how can the jury decide against CAP-XX partly on the grounds of the inventor(s) not being identified if the patents have been signed off by the Patents Office and their validity was not being assessed by the court?
Setting that aside, can we say:
- appeal v likely
- patents still valid, just not infringed (though question mark over whether patents are watertight for above reason: but can probably be rectified)
- no monies repayable in respect of sales from licensees
- no effect on licensees selling CAP-XX products but there would be for those licensing the underlying technology in their own products. Who are these companies and are they paying meaningful fees?
Some huge transactions today, looking more like buys than sells - maybe someone looking forward to a good year-end update and stonking 2024 forecasts. Some upward momentum at last!
You’ve got to laugh. It was two years ago this month that HUM started to announce the results of 24,000m of infill drilling at Kor - on top of all the many, many metres of drilling done over the years before that date. And yet “experts” here quickly come to the conclusion that the gold isn’t there, or that the plant is over-sized, as though HUM just built a plant on a whim, without a detailed resource model. Some people just don’t have the patience…..
This is pure nonsense about CiG taking control and ultimate ownership. Why would the HUM board propose the placement in this way if it will inevitably lead to this outcome? A Rule 9 waiver may be being applied for simply as a temporary measure to get the placement away quickly before CIG’s excess over 30% is later transferred to other institutional investors at leisure. They might be doing it like this simply for speed, which may or may not be driven by a need for cash at Kor or Yan.
Instead of the perennial concern here about management not doing the right thing by the (retail) shareholders, perhaps what we’re seeing here is CIG giving the Board a good kicking and saying “look, you need to start delivering shareholder value and this is what we want you to do”. Grow reserves quickly; get Dugbe ready for its next step instead of constantly kicking the can down the road; and yes, strengthen the balance sheet. Perhaps the days of DB half-heartedly trying to get the SP up are coming to and end and he’s finally feeling some heat. And if all this raises the possibility that HUM is eventually sold, so be it. This is all self-interest by CIG of course but all shareholders would benefit. And maybe that’s why Dan looked and sounded like a hostage in his video. Another indication would be the appointment of a strong chair person soon.
HUM need to produce 155k ozs at $500 margin to cover $77m debt in 2024. Alternatively, 140k ozs at $550 margin. Those do not seem overly stretching to me.
I don’t think it was all lies. I’m prepared to bet DB is as frustrated as everyone else. For whatever reason, Kor is not delivering the goods yet and causing all sorts of problems. You *could* say the company has done well to develop the relationship with CIG, because otherwise it’d struggle to find the funds to get Kor up and running, especially at short notice. The debt pile has probably topped out. I just wish they’d been honest in the RNS though, saying “look we’re having some issues at Kor, we’ll get there but we need some more cash and this time it’ll have to be equity”. The more I think about the BS of creating c50m shares to do exploration and Dugbe, the more my blood boils.
A bitter pill to swallow, this. Some random thoughts:
- There is no justification for raising $7m equity to accelerate exploration and Dugbe by just several months - these could have been financed from cash flow later in 2024.
- However the fact that they’re doing the above does lead me to think this really is just a misguided attempt to accelerate and nothing more, possibly driven by CIG. DB looked like he was in a hostage video.
- I struggle to believe that any issues with Kor or Yan are anything other than minor and temporary. DB has reiterated *again* that they’ll produce c200k ozs next year. At this late stage, if that is downgraded significantly then it’s over for him.
- I have no issue with improving the Dugbe NPV (and indeed advocate further exploration) but stop quoting it based on 5% - that bears no relation to project risks or cost of capital.
- The hedging on just 30% of expected production is prudent given the debt repayment schedule and will be welcomed by institutions.
What's brilliant about the video? How about the fact that AFC's ammonia cracker uses 5% of the electricity that an equivalently-sized electrolyser would? The cost of ammonia needs to be added in but it seems quite likely to me that it is far cheaper to produce hydrogen the AFC way. The electrolyser companies should be quite concerned about this......
Well this is huge. I get the concerns about potentially changing track to also be a hydrogen producer (though I don’t think that’s the main aim), but what a spin-off this could be. The question is, how does the cost of AFC’s cracker+electricity+ammonia compare to electrolysers+electricity to produce 1kg of hydrogen?
It’s not running out of cash, numpty. Have you even read the RNS or watched the prezzer?
Agree on Dugbe - DB has talked of it being a $1bn deposit so he’ll be loathe to let it go without further exploration to boost the resources. More exploration for 18m, sell and invest in a third mine the size of Yan/Kor.
Eh, where did you get this from? The company will grow as soon as more NHS trusts start offering contracts again - too many are currently sitting on their hands whilst they prioritise other areas of spend. Meanwhile waiting lists get longer, which can’t go on.
I’m looking at it this way. EV is c$240m currently of which c$150m is debt. In one year’s time c$75m of debt will be repaid and - if EV doesn’t change - that will see the equity value increase by about 10p, and a bit less again the following year. So 12p goes to 22p then 30p+. But that assumes the current EV is at the right level. If EBITDA is $120m (200k ozs x $600), to make the maths easy, then EV/EBITDA is only 2. That’s very low. Arguably that should be 50-100% higher. That leads to a price of 45-60p in two years time if execution is good and the POG doesn’t change materially.
So, on the positive front they were EBITDA positive and expect to be cash positive in H2. They have additional savings that will feed through in H2. The loss before tax is due to non- cash items. Those claiming a cash call is imminent are talking rubbish. And H2 is normally a bit better than H1. If they can achieve more or less break-even in current conditions then that’s pretty creditable. Doctors and nurses pay settlements being reached and a stabilised workforce should lead to more contracts being offered out over time. So this seems to me a perfect recovery stock right now. Let’s see what Wendy has to say on Thursday.
Bonker, yeah I get the disappointment when AiM companies promise the earth and fail to deliver. But HUM is a mining company. It’s not building a nuclear reactor, or developing innovative technology. It’s digging metal out of the ground - which it’s done before. There’s a limited number of things that can go wrong - especially now that Kor has been largely de-risked. Some people are acting as though it might still fail completely - which is crazy.
The presentation this afternoon made things very clear. Some people here just want certainty (and now!) but don’t realise the practicalities of developing a new mine. Betts admitted Kor has gone a little slower than expected but actually the timelines have been pretty normal for any new mine. Overburden stripping takes time. Dealing with local communities takes time and tact. The plant is fully working. Even were full production of 10k ozs/month to be hit only in January or February rather than year-end (and I’m not saying this will be the case) - so what? Er hello, big picture, people! It’ll still be a 120k ozs mine pa soon enough. From where I’m sitting, HUM has a number of things to work through, all pretty straightforward, with no real barriers to reaching full production at Kor. And those who are wetting the bed, you carry on. I’ll have your shares when you offload them thanks very much.
Don’t understand the grumbling today…..on track for top end of guidance at Yan, and on track for full production at Kor by the year end. 200k ozs next year. What were people expecting? Some genuine issues at Kor have clearly had to be handled, even ignoring the weather. The future looks extremely bright.
Harsh, Guvvi. This year HUM has had to develop a brand new mine plus develop a new underground operation after its open pit has been mined out. Hardly business as usual!
I’m expecting a mostly positive report tomorrow, some slight disappointments (time taken longer than we’d ideally like at both Kor and KEUG) but will be all OK by year-end and Yan Q3 production to be c20k. No issues with cash.
A commitment of sorts to $80m - positive.
The term sheet being with a single investor - positive.
The fact that the $80m would be part debt - positive.
The fact that the investor involved in the bridging loan (? unclear) has loaned a little bit immediately - positive.
But dear God AVO, get it done. These discussions are not new, they’ve been going on for many many months.
And it’s clear other radiotherapy companies are still in discussions only to pick clean the carcass if it goes into administration.