The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
It looks to me like the cash burn has been around $30m. The Kouroussa CAPEX was $90m and they had a $100m loan from Coris. There will of course be premining and ramp up costs, which if I remember correctly are around the $20m mark. There is a $20m overdraft and I notice they were already $5m into that. They also have the Bunker Hill shares and I am sure soon the Pasafino shares. I can't see a sale of Dugbe before the Kouroussa ramp up. As we all know the performance at Yanfolila is crucial here and I am nervously awaiting Q3 numbers. Based on their production guidance for the year, it is hard to envisage an AISC above $1500 if they are in target. That would mean around 25,000 ounces for the quarter. It would seem a huge turn around. The recoveries are good and the excavators seem to be running effectively from what we have been told. So I am hopefully there are processing higher grade ore, as per the mine plan, and we get a bumper Q3 and Q4. If they manage this then free cash should be $200 per ounce at present prices, which means $5,000,000 per quarter at $1700 gold. If they maintain that for the next 4 quarters you have an extra $20m, but G&A looks to be about $13m per annum at present (which needs to come down!). My summary, if everything goes according to plan (lmao), it is still very tight, but there is a chance of getting through without additional funding. The trouble is, if they mess anything up in the next year we will get annihilated. A raise at the current MCAP would decimate any future value we perceive. It would be great to see additional lending put in place as a much needed buffer! Fingers crossed, butt clenched.
Could well be pumping prior to attempting a raise. Almost certainly would have been better to wait.
Just took 100k and 2x 50k. I must be an idiot.
Now if I know Danny boy we'll see another RNS tomorrow stating they have run out of money.
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How depressing. I really hope this isn't going to zero and can recover at least some of the lost ground over the medium term. Bracing myself for 0.
There are plenty of miners with AISC around $1000
They still haven't drawn down the last tranche of the loan and first pour at Kouroussa moves ever closer. Will they need to raise, that is the question. We will have a much better idea after Q3 numbers. Touch wood, no horrific RNS this quarter. Hopefully, that means 25k ounces and sub $1500 AISC. One can dream. Come on HUM, please don't continue to mess it up!!
Yet when I suggest a concerted effort to get rid of the inept management, nobody is interested. Too late now, we just have to hope Kouroussa comes online before the company bites the dust, or is diluted to oblivion.
If HUM run out of money and they hold shares in Pasafino they will sell them down.
Guvvi is clearly correct here and suggesting Dugbe will be sold for anywhere near NPV is incredibly misleading or misguided. I don't suspect Bonker really believes this for a second.
Not as bad as I feared. Fingers crossed for a strong operational performance at Yanfolila and steady progress at Kouroussa.
Can anyone fill me in on the VAT situation? I saw there was a bill for a few million paid a while back. Was this due to a change in Mali's tax rate or something else? Can we expect any more of these? Also, has anyone tried to calculate what is spent by the company in addition to AISC at Yanfolila based on previous reporting? I am trying to work out how much of the cash for the Kouroussa build has been used to keep Yanfolila afloat. It already looks like at least 10 million, but if the build comes in on time and budget the overdraft would cover that. I think during the ramp up Kouroussa might also be a cash drain, but if they can turn a small profit at Yanfolila it might cover that. Basically looking like if everything goes to plan from here they might possibly, just about, not need to do a raise.
Well, I just watched the Q2 update interview. It would have been hard to have been less inspiring. They mention that there are still issues at Yanfolila, but they don't say what they are! There is a brief mention of drill and blast plus grade control. You've had a year Anthony! What could you possibly be doing now that shouldn't have already been done?! I think they might be able to get the AISC down to $1500 at best. You have to remember the company will have additional costs not included. It seems likely to me that they will run out of money before Kouroussa is properly online. I am considering delayed payments and use of the overdraft in that assumption. Dan just seems to be praying for a higher gold price. As ever the bottom line is that management here are incompetent and opaque.
I'll believe it when I see it. They have a terrible track record of meeting guidance and have already started walking back AISC expectations. We all knew they were fanciful after Q1 numbers anyway. An improvement is welcome. However, it comes from an incredibly low base and the fact remains that they are still losing money. Our money! Fingers crossed going forward.
Yes, Dugbe is worth 200 million pennies or jellybeans? Maybe they have sold up for a Jammydodger because Dan was hungry, they just didn't feel like telling anyone in an RNS. To be fair, that does sound about right.
Me too, I hope it goes to zero. Then it will be really cheap and I'll have lost all my money!
The question is, how high can they raise rates before something breaks. I don't think anyone knows, but the debt levels suggest it won't be that high.
As the share price dwindles the prospect of a raise looks even more terrifying. Are they making a profit at Yanfolila now? I really hope so... From what they have said the money runs out around the end of the year. Hopefully, they will be able to take on debt to get through to Kouroussa production. I think there will be a profitable period then, but what will the debt burden look like?! It's so hard to quantify the risk of bankruptcy here, but I am holding on and crossing my fingers we don't have to face dilution. It's an interesting punt at this price for new money. Time will tell..
And what about Q4 and Q1...