Member Info for pjh1

Sorry RA, I have just checked and stand corrected, you are correct. This most likely partly explains where the Q2 cash went despite reporting reasonable AISC numbers.

Per World Gold Council:
The initial development of a new open pit or underground mine, including related infrastructure should be considered non-sustaining. If a second pit or a second underground mine is developed at the same operation, the initial stripping or surface underground development should also be characterised as non-sustaining if it meets the materiality thresholds for a ‘major project at an existing operation’.

So, on the basis of the guidance above, the stripping and development costs for both open pits probably were excluded from the AISC numbers entirely.

On the ball mill, the World Gold Council's guidance states:
“Non-sustaining costs are primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ where these projects will materially benefit the operation. A material benefit to an existing operation is considered to be at least a 10% increase in annual or life of mine production, net present value, or reserves compared to the remaining life of mine of the operation. Companies should publicly disclose the ‘new operations’ and ‘major projects at existing operations’ that are considered non-sustaining. ” The determination of classification as sustaining or non-sustaining requires judgment by a company’s management.

I think HUM have guided a material increase in LoM production from the ball mill, so again, you're probably correct in assuming the ball mill will be excluded from the AISCs.

As shareminator mentions below, AISCs include capitalised mining costs, which are released over the life of mine. These costs have already been paid for as part of the mine build, so there is no associated cash spend in the year of gold production.

Using RA's "back of a fag-packet" approach to calculate free cash flow below, you'd need to add back an estimate for these capitalised costs, which he's conveniently forgotten to do in arriving at his figures.

HUM have had a nightmare in Q3 but I don't see the outlook is as bleak as claimed by some posters.....

RA - AISC does include a % of corporate G&A costs as well as sustaining exploration costs and sustaining capital expenditures, so it's not quite as grim as you imply. However, agreed that AISC does not reflect all-in-costs and the difference can be very variable (especially with cash burning events like BH).

Sentiment would improve if the Liberia MDA was finally signed. This would give confidence that HUM have full legal title to two separate commercially mineable gold assets. This recent article mentions that HUM have submitted the requested modifications to the MDA to President Weah but he has still not signed:

https://frontpageafricaonline.com/politics/fpa-weighs-in-on-performance-of-chief-executive-cabinet-ministers-for-the-year-2018/

RNS last Thursday stated:

"[HUM] expects to secure a CFA5.5bn (circa. US$9.5m) overdraft facility with Coris in THE NEXT WEEK. The overdraft facility will provide additional working capital flexibility if required. In the event this overdraft facility is not secured, the Company will provide a further update."

Since a full week will have passed tomorrow, as a minimum I'd imagine HUM should RNS the overdraft position as it's clearly material to the going concern of the company.

sands - they're my thoughts too. Better news could be issued later this week confirming that both the Coris overdraft facility has been agreed as well as positive drilling results.

If drilling results were not good, I think they'd have got a brief mention in last week's RNS.

shareminator - not true. Listen to the conference call ON NOW and you'll hear they've confirmed it's two facilities, although they're not planning to use the overdraft facility according to HUM.

*Coris , not Chris

Charliee - as I read it they’ve agreed a loan for $9.5m for the ball mill. It reads as if HUM have also asked for a separate additional $9.5m overdraft facility for general working capital purposes which has not yet been finalised by Chris but is expected to be next week. Happy to be proved wrong here but HUM do seem to struggle to issue clear concise RNS’s.

Looks like Sawiris is still keen on acquiring and consolidating medium sized gold mines in Africa. This article talks about Barrick but HUM's resources could equally fit the bill: https://www.ft.com/content/af2c8ff8-f246-11e8-ae55-df4bf40f9d0d

On a positive note, sentiment seems to have bottomed pretty heavily here amongst PIs. Maybe this is a bit of wishful thinking, but if HUM can do a one-two punch RNS saying they've resolved the issues in the East pit as well as releasing good drilling results from Gonka, the current price could form a nice base for a rise. ....

I agree - some BOD remuneration levels are too high given the current market cap of the company.

The only way to know whether the mine is cash flow positive or negative is to understand the cash cost per ounce which is information that HUM have not provided in any recent releases. Conflating cash costs and total costs will not give remotely accurate cash flow numbers. Recent operational updates do not include sufficient detail to understand cash movements which would be required to estimate cash costs.

RA - FSJ is making a perfectly reasonable point in that we have no idea about the scale or scope of the "stability issues". HUM have not released this information and their IR department are not presently providing any clarification on this matter when asked.

There may be a range of options available to HUM to remediate the pit wall issue(s). Unless you know someone providing non-public information on the precise issue in question, or you have found other information detailing HUM's problems, I'd suggest you are simply guessing at this stage. Given the very limited information available to investors, there's no way to know for certain that the only option available to HUM is to "dig a bigger hole". For example, HUM may be able to artificially support the area(s) of the wall they are concerned about.

For those interested earning a little more about pit wall problems, this PDF is a useful summary of pit wall issues, monitoring techniques and remediation approaches: https://www.cdc.gov/niosh/mining/userfiles/works/pdfs/aamop.pdf

HUM IR told me they would release a drilling update in November, so hopefully that's on the cards as a minimum.

I guess a release about their concerns about the Komana East pit will depend on when they are confident they've got a fix. I've asked twice and they've been very non-committal on both occasions.

That's odd - TigerByTheTail's (tbtt) post of 8:24am this morning that I replied to has disappeared. Is it possible to post spurious information on this board then delete it at will when you're called on it? Bit of a crappy system if that's the case. Here's tbtt's post repeated in it's entirety for reference so the previous two posts below make sense:

ORIGINALLY POSTED BY TBTT 8:24am 20 November 2018:
"Just checking back in here, as tigers are cats and curious by nature. No updates from the company, I note.
I thought the Bloomberg article on Bunker Hill posted by Coldcut was superbly researched journalism. However, it makes you weep for Hummingbird. I can't decide if Dan Betts is stupid or crooked, but it's one or the other, and neither is good.
Also, is nobody going to mention Dugbe? The licences expire in a few weeks' time, and the Mineral Development Agreement seems dead in the water. It looks like Hummingbird are going to lose their concession in Liberia (and the $60m or so they spent on exploration there). Does anybody care about this?"

tbtt, where are you sourcing your information that the Dugbe licences expire in a few weeks' time? Given your curious nature, did you ask HUM IR about this? I'm guessing not, because I did and HUM stated in writing that 'there is no time limit on the exploration permits', and 'we [HUM] have an agreement that they [exploration permits] remain in good standing until they [Liberia gov't] grant us the MDA'. If you have evidence to the contrary, please post it.

I've had the good fortune to travel around several African countries over the years and this delay seems pretty typical of "Africa time" to me. A great deal of patience can be required to get business done.