Member Info for Sjb777

Https://apanews.net/oil-tanker-docks-in-conakry-amid-shortage/

Key statement for me was

The resumption of diesel supplies to the country through our own facilities is a real breath of fresh air” he added.

That is what I was thinking. Certainly seemed to imply it.

The information, the July presentation is on the UFO website.

For clarity net assets (173.71- 91.52)/ 394 =0.21

Arps,

The site have removed the intangible assets to arrive at 0.21

The short term share price performance will be in my opinion be determined by the markets perception of the companies ability to earn or borrow the funds to complete the KOUROUSSA mine without equity dilution. Hence why I think the quarter 3 update is key, but as you say not long now.

I am hoping that the next quarter update in about 3 weeks time is the turning point. Yes the markets and macro environment is unstable, but that should help the gold price. If they stick to the forecast gold output they should do circa 25000 ounces. The average gold price for the quarter being $1700. If there asic is say $1500 dollars, should be $5 million cash flow.

I would hope this would provide a turning point for the share price.

Bonkers, I agree and it is a stressful situation with the share price constantly declining but at you have previously stated if you look a few years out the situation will be much different.

If we can get the second mine built then the company risk profile reduces considerably, the company have to perform and we just need to hope the gold price holds up

By the way congratulations on securing a holding in single figures.

They company to date have been in my opinion been good at not diluting shareholders. Why would they start now?

I can only assume the reason being the excavator issues. Answering my own question

But why ?

Why the company have been using the low grades for so long is almost beyond reason. They have put themselves under pressure and impacted shareholder value, causing a much weakened balance sheet. The next few months are going to be difficult with sentiment so low.

The management have to get their act together, they have used up all shareholder goodwill.

To achieve the production targets they have to achieve approx 52k ounces in the next two quarters. They have an average grade at yanfolila of 2.85g/t if we assume 2.5 g/t on the next then would increase production from 20013 to 2.5/1.87 x 20013 = 26755. If the cost at quarter 2 is the same at $38254m then asic would be $1428. At $1800 for the price of gold the Cashflow per quarter would be (1800-1428) x 26755 = $9.95m. So over the next 4 quarters nearly $40m. Thus in my opinion the next quarter results are key.

So why do I think it leans towards rewards:-

As previously stated they do not overcome their operational issue, we know they have brought in new excavators, whilst management appear to have taken a hands off approach to the operations by subcontracting their reputation is being tarnished they can no longer do that. Plus they have obtained equipment before the sanctions have been brought in.

The political environment is my number one risk and is totally unpredictable and they can totally change the investment landscape but we do know Hummingbird have an airplane and Guinea are not imposing sanctions. Yanfolia in my opinion can get resources via this route.

The gold price is always unpredictable and Yanfolia AISC is much higher that I like it to be but in a higher inflation environment my thought is that the gold price will be high enough in the next 12 months to make Yanfolia ebida positive.

Investments are a balance of risks and rewards, unfortunately we can not always gets it right as there are factors outside of our control which will influence the final outcome. In the case of hummingbird resources the risks are

1. They do not overcome their operation defects
2. The political environment adversely affects the business
3. The gold price declines and effectively makes them uneconomical

The rewards being EBITA and hopefully eventually dividends.

1. They sort their operational issues at Yanfolia and make $40m
2. They operate their second mine at Kouroussa make $70m
3. They manage to get Dugbe operational and make $60

So this is every much a balancing investment decision risk v reward. We know the price is close to a 5 year low as a large investor sells and smaller investors sell. So what do I think as investments are a personal choice that can be driven by logic or emotion. In the case of hummingbird and with inflation being high the case in my opinion leans towards rewards but will probably take 12 to 18 months to have a multiplying effect upon your investment. But as previously stated there will be external factors which will be beyond your control which could change the outcome.

https://sahris.sahra.org.za/cases/proposed-mining-application-whale-head-minerals-portion-remainder-farm-1-port-nolloth

https://sahris.sahra.org.za/node/575589

Interesting read on the heavy mineral sands. Looks like they had to change plans to go below the high water mark.

Dodge-Meister, that’s for the link to the articles. The first one from Indiantvnews found interesting, firstly it is from today and seems to me to imply that constructive discussions are ongoing and may be am reading to much into it and other articles read. But seems to me like Indian government will offer assets in india to settle the debt. Any views on this ?

Mullins58 thanks for the link. Interesting that the first production is going to be 20 thousand tonnes and not 17.5.

https://resourcegovernance.org/analysis-tools/publications/mexico-updated-assessment-coronavirus-extractive.

Interesting paragraph applicable to Bacanora