Member Info for RichTheNewbie

I've listened to the interview but it doesn't really explain any of the raised cost versus plan to me.

It's, generally speaking, saying we always expected to be approaching these higher cost areas, and within 2% of their model etc, but this just being a bad quarter that didn't fit the model generally.
You could accept Q4 running into a low quality area and taking more cost.....however they're not planning on it being a one off clearly with the forward guidance on costs.

The only way I can square things away is if the original costs projections were basically complete rubbish and essentially the overall AISC for the mine is miles higher than they originally said (accounting for peaks and troughs in costs when mining) to the degree of around 2 or 3 hundred dollars an ounce.

Dan's demeanour was somewhat amusing. Looks exactly like a schoolboy version of a mate of mine being forced to apologise for something.

tones - fair enough.

Personally I've just been burnt too many times on AIM with projects or assets that seem great (or even are great) but the management (whether through incompetence, or worse) never realised any/enough value from them, overhyped them, or painted a rosier picture than the reality, and the potential never made its way into the profit/share-price.

So the dilemma, for me, is that, historically, selling out when I start to have doubt in the BoD's competence or transparency, has much more often than not been the right decision. Which makes this a tough one for me. I'm probably not going to hold as big a stake as before - for this reason. Haven't decided if I'll retain a stake and of what size.

The other factor is, like you, I'd like to think gold will rise, however for me it's SHOULD rather than WILL, and I would also not be the least bit surprised to see it end up falling - as countries recover from the virus (despite the fact the yank money printing alone probably means it should rise). I was comfortable with that risk before, with the nice big AISC cushion between an AISC of $850 and gold of 1850, however without it, and an AISC of $1350, that risk becomes more of a consideration, on top of the usual risk of an operational issue, or a political issue.

Other thing is, it might be a while to see more positive production news, as they say for 2021 "Production profile weighted towards the second half of the year".

Enough dwelling on this now :)

What concerns me in all of that tones is, if you've spoken to management, that you really only heard:
- "We're going to under promise and over-deliver, this time, honest guv"
- "We're going to do more interviews"

Neither of those things fix the skyrocketing AISC. Setting the expectations to a poor level is not solving the problem. In fact it's not even saying what the problem is! Let alone having a plan to resolve it!

It's all very well increasing the reserves.....but if they continually waste those reserves by generating a fraction of the profit they should do when mining them....it's a bit pointless!

That's what irritates me the most. Everything else is irrelevant (reserves/LOM upgrades/drilling success) if you don't get the sense management are playing with a straight bat. It makes it impossible to have confidence in them or their forecasts (unless simply using some blind hope).

Trust is easily lost and hard to win back. Forget any promotion...they need to address this AISC elephant in the room. In detail. Setting out why it's not the $695 originally forecast, explaining every element that's making it so high now compared to the original plan, and which of these they think can be resolved and which (if any) cannot.

It all boils down to this should have been operating at about $850/oz AISC next year (let's be generous and ignore the $695 AISC from the mine plan).

The fact their guidance (that they rarely hit) is up to $1350 now (and recent quarter considerably higher even than that) means that the expectations are basically that this will likely produce $50M less profit next year than it should have (1350-850 * 100koz).

This is all assuming the gold price doesn't pull back!

If you multiply the AISC/oz by the ounces for each of the quarters in 2020 you get:
$32,929,952 and $31,718,326 for Q4 and Q3
but you get $23,645,082 and $26,496,750 for Q2 and Q1.

So costs would appear to have gone up by a rather large amount for Q3 and Q4 (and are forecast to remain pretty high too).

The costs for Q4 appear to be almost $10m more than Q2.

It's this which needs addressing and glossing over it just makes it look like they're hiding problems.

Exactly TBT.
I can accept a blip in costs above $1000 due to a problem that needs to be overcome/rectified, but then get back to the kind of AISC most people will have invested for, like $800/$900 or below.
A low AISC means a good profit and margin of safety for the gold price and makes this appealing despite the country risk.
Unfortunately HUM barely seem interested.
The 2020 guidance was "US$850-895/oz AISC" and now they're talking about near $1500 for the last quarter and hoping for US$1,250 - 1,350/oz.
Costs going up that much with barely a mention is extremely poor.

This update is all about the AISC.
Most of the update is OK or positive, but at the end of the day current production trumps everything, and their costs keep going up, production down, and they didn't explain why. It's a very poor RNS.
I often defend the company when they're getting stick unjustly but the recent handling of the single most important thing in the business (the AISC) appears like it's just a minor thing they mention flippantly before talking about other stuff. It's not good enough.

twogoals - I jinxed it didn't I ;)
Market has been getting their own back and smashing the reddit market manipulators back into the dust today. Unfortunately, in these crazy markets, this means silver tanking appears to have had a small knock-on to gold, nudging it back to the bottom of the range it's been swinging up and down in lately (1830 - 1870). Bouncing back a touch at the mo tho at least.

sands1971 - It's a bit of a judgement call for them. I think it would be fair to assume HUM don't think it warrants its own RNS and would be included as part of the imminent update.
If it had been big gold zones found during the course of a drill though - then yeah - it would probably warrant an RNS of its own. Not surprised they didn't RNS that on its own it as it's just a baby step (could you imagine Barrick doing that - people would laugh at them :p).
Pasofino, with not a lot else to talk about, it's more understandable ;)

I never understood why the gold/silver ratio is/was a thing.

Silver isn't the world's reserve currency so I don't really get the point of focussing on it being 1:50 with gold or 1:500.

Ultimately I think it's a rather weird thing to measure, that has no relevance to anything, bar lazy valuation, imo. It'd be like saying Bitcoin is worth $32000 therefore Dogecoin should be worth $32000 or quoting a ratio between the two. (of course they're both just ponzi schemes really :p)

twogoals - that's actually pretty positive for gold (rather than being annoying). Means there's been strength in gold, as it's held up despite the dollar rise, and increases the chances of gold breaking back upwards when the dollar starts falling.

Those CEOs that spend most of their time promoting their companies are often doing so because they're either garbage companies, or loss making companies trying to pump up the share price - because they're soon going to raise money from PI's to pay for things ;) Couple of placings on ORPH last year wasn't it? 254m shares in issue December 2019 and now up to 668m.

As for HUM, there's plenty they could spend their cash on in future, whether Kouroussa, Dugbe, or something else. Once they finish paying off all the debt, and start to build up some cash. Seems like rather desperate clutching at straws to find a negative again - criticising them for not having yet allocated every bit of future cash flow!

PS - I wouldn't rely on being in a fund saving you from a storm coming (if anything - chances are they'll be holding a lot of stocks at extremely high P/E's that have been propped up / inflated by money-printing) ;)

Unfortunately all the information is wrong ;)

Be very careful with sites like simplywall.st they're basically a load of dung and just use automated methods to scrape information and get it wrong most of the time. They're extremely misleading.

(typo)
PI respective = "respective"

anon3 - if you're an impatient PI then you're rarely alone on AIM :p and understanding it doesn't make it right ;)

Money has piled money into anything COVID related (especially by PIs) and the fact Open Orphan has done well is of little relevance. Every COVID related stock has shot up and has its PI respective PI following continually promoting it. Currently worth about £160m.....yet the first half of the year its revenue was still only £7m and it's EBITDA was MINUS 6.5 million. When the COVID dust settles its got a lot of work to do to justify that valuation.

I do wonder though, if you don't see this ever moving much, why are you here, wasting your time, instead of bringing your sweetness and light to all the stocks you think are much better!?

OK - let's ignore the definition of fatalistic, which can have two almost opposing meanings, judging by a Google for it (not a very helpful word!).

I think you simply have entirely unrealistic expectations of the BoD to be able to give you definitive updates on a mining licence in a third world country. Even in many more developed countries, the licencing process can often be opaque at best, corrupt at worst, and completely unreliable and unpredictable time wise.

Putting timescales on things like that would be simply setting themselves up for a fall or criticism. Which they're ironically getting anyway now from you :p I do feel this board are very often damned if they do and damned if they don't by many impatient PIs.

You've completely lost me now. I don't know who you're saying has a fatalistic attitude? As far as I can see you're the nearest person to that description!

You seem to be suggesting that a company should set out timelines/milestones for a mine they don't even have a licence for yet! What would be the point!?

They told you in December: "Pre-development plans are continuing. The Company is awaiting the award of the mining license by the government to then move into the development stage of this exciting gold project once pre-development plans are complete"

So they're doing the work they can now, and when they get the licence they can move on to the next stage, and kick things off!

This seems fairly nonsensical criticism of them to me.

If you mean Kouroussa - what are they supposed to do? They're not the government. They can't approve their own mining licence. Seems very unfair to call it BS or excuses when it's the same sort of waiting game that every mining company in the world has to face to varying degrees depending on the country.

100k/oz should have been just 100k oz obviously in post below.

PS - the trading has just got a bit of a wriggle on, as the Aussies would say, and perhaps our short-term seller is done (or done for now).

bangrak - indeed.
I only talk about the gold price more as a curiosity and amusement than anything else. Plus because this does seem to follow it quite closely, despite the actual reason I invested (in this rather than gold).
The reason being, that even if the gold price falls significantly, this is still very profitable, and even at $1700 gold, could comfortably generate 100k/oz, at $1k AISC (easily lower), and therefore make $70M in a year, or nearly half the MCAP in free cash flow. That's also ignoring any value for all of their other assets entirely too and ignoring any exploration success, reserves upgrades, LOM extensions, etc.
I suppose my random waffle about other things is because I'd bore myself of repeating all of the above, over and over, to you folk, who I'm sure are mostly of a similar point of view ;)