The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
What ASIC are you using? The royalty is in the ASIC, as is an substantial apportionment of SG&A. The 20% for GOM May be quite conservative too, given HUM are to be repaid for the shareholder loans first before the 80/20 split - I doubt this has been fully repaid yet.
Dropinmonkey - What apportionment of S&GA have you included from AiSC which absorbs a material portion of central cost? What discount rate have you used? Thanks
Positive message re production, ASIC etc. Good to see progress on drilling / exploration even if the grammar is poor (split infinitives and “centred around” - I mean really!?!). Slightly strange that no mention is made of the underground potential at Gonka. I thought this was to be a big source of additional reserve this year? Anyone got any insight?
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HUM/14407133.html
@dropinmonkey: disagree entirely. They have always said their strategy is to give shareholders the uncapped upside. I would have been annoyed had they sold calls - though to be fair I am not expecting $1,700+ anytime soon. However, ensuring minimum pricing in light of the fast degearing is very prudent. Assuming stable production, they are guaranteed to hit the cash required to fully repay their debt. That’s got to be positive.
That’s not correct. Given outlook for gold, I suspect the pits were relatively inexpensive and still provide HUM with plenty of upside above the $1,350 hedge price. Moreover the hedge covers only a proportion of likely output, so either way considerable upside on the other proportion of output. They appear to me have taken a sensible risk approach recognising the breakeven point they need to be to ensure they can meet the debt amortisation profile.
@ricky: agree that it could be clearer, but equally these are “preliminary” production results so we can expect another announcement in due course, with their full year results to come with a lot more detail. The inventory numbers do not seem to add up on basic maths. One other important element, which I see as very positive is the stockpiling of ore. Over the last 6m, they have stockpiled c.400k tonnes of ore, based on ore mined vs ore processed. That’s a whole quarters buffer on ore for processing. There is of course a cost to that, but that’s a huge amount of buffer for any future production issues.
The Trade and Other Payables number was £39.787m on the balance sheet as at 31/12/18 - look at the annual accounts. I assume that will have come down significantly during the year particularly in the last quarter. Also don’t forget that HUM don’t own 100% of the mine and more gold was produced than sold. We should see all of that in the final year accounts for 2019, but not in the net debt number. Given the reiterated guidance on 2020 pay down, the price floor on gold price from the put option and the de-risking of Dugbe (showing they’re not about to spank all the cash in Liberia - have to agree with TBTT there), then I see this as a good trading update. If POG remains above $1,500 this year, it should be a very good one for HUM.
Cash flow not quite what I expected, but given year started at £36m of trade and other payables, I suspect £10m or so of cash has been used to reduce this liability. Gives a much stronger balance sheet even if not felt in the net debt number. Guidance for net cash in 2020 suggests this dynamic will improve a lot of the next 6 months, particularly if the gold price holds above $1,500. The Dighe deal is interesting. Does anyone have any background on the partner?
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HUM/14382571.html
Gold at $1,581 helps...
@Goldenbull: I am do not consider the previous share price to be the best benchmark - the market got over excited pre production. However agree that the direction is positive and Q4 production numbers and POG should deliver a solid amount of cash generation. For me the re-rating will only come - if it does - when mine life has been extended properly, or the rolling life extension shows a level of continuity. We may have another 12 months to wait...
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HUM/14351170.html
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HZM/14269162.html
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CORA/14260695.html
Up 11.7% YTD.
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HUM/14112380.html Not a game changer, but positive nonetheless. Now where’s the LOM extension?!
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/HUM/14042019.html
HUM did not participate - only Bert did.
Raised £1.35m in a placing at 3.85p Interesting to see if HUM participated.