HUM - Todays IC report on-line (speculative BUY)26 Aug 2020 20:17
By Mark Robinson
Politics and pestilence had a limited impact on half-year figures for Hummingbird Resources, with the African gold miner swinging to a $22.9m (£17.3m) operating profit from a loss of $3.39m at HY2019.
Today change
4.41% Price (GBP)
35.50
The recent coup in Mali has yet to affect the miner’s operations, which are centred 280kms from the capital. But the group is mindful that one of the new military junta’s initial priorities will be to secure access to the struggling nation’s finances, so it is conceivable that the miner could be subject to increased royalty demands, even if expropriation is not part of the agenda.
The Economic Community of West African States (Ecowas) has already implemented border closures in response to the coup, which could have negative logistical implications for Hummingbird, although it can always fall back on 4,000 ounces (oz) in inventory to see it through any near-term disruptions.
Matters were largely positive from an operational perspective, with 56,095 oz (HY2019: 51,034oz) sold at an average price of $1,621/oz, with an all-in sustaining cost (AISC) of $936/oz.
The 2020 exploration programme is well on its way to completion, and management anticipates that all existing bank loans will be paid off by midway through 2021.
Consensus gives adjusted EPS of 6.48?, rising to 8.39? in 2021.
HUMMINGBIRD RESOURCES (HUM)
ORD PRICE: 35p MARKET VALUE: £ 124m
TOUCH: 34-35p 12-MONTH HIGH: 43p LOW: 18p
DIVIDEND YIELD: NIL PE RATIO: 6
NET ASSET VALUE: 43?* NET DEBT: 24%
Half-year to 30 June Turnover ($m) Pre-tax profit ($m) Earnings per share (?) Dividend per share (?)
2019 67.1 -5.88 -1.48 nil
2020 92.0 23.8 5.13 nil
% change +37 - - -
Ex-div: -
Payment: -
£1 = $1.32. *Includes intangible assets of $75m, or 21? a share
IC View
Prospects for gold prices remain favourable, and full-year guidance has been maintained, with production of 110,000 - 125,000 oz at an ASIC of up to $995/oz. Hummingbird also had to contend with the Covid-19 outbreak, though disruption was minimal. While the security situation could deteriorate rapidly, geopolitical risk comes with the turf, so we maintain our speculative buy call.
Last IC view: Buy, 26p, 08 Jun 2020
Sign In
Follow the stocks
