Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi BillyBoy - yeah my take on the VAT is that it wasn't resolved and my impression was that the amount outstanding was pretty close to what it was at last years AGM. I also got the impression that the team didn't think it would be resolved either.
What is cracking off with the trades today. Seems like a load of automatic trades gone through all at 500 volume within a short space of time. Anyone any idea what is happening?
It was a good set of results. The only thing I am slightly disappointed by is that they didn't say very much about the Exxon Mobile deal. Just one sentence and that they were confident. They have lost the timescales from the last update. Not sure if that was a mistake but does seem less positive than the last update.
The wording "Looking ahead at the likely completion timetable for the ongoing proposed acquisition" still seems to be positive towards the deal going through. I wonder if agreeing to these governance changes were part of a deal....? Dunno just thinking out loud.
Evraz - yeah I do agree. FWIW my targets are.... 140kOz this year. 90kOz Yan, 50kOz Karoussa. ASIC of circa $1400 and maybe average gold of $1900 across the year. This maybe a bit pessimistic but I prefer it that way with HUM! So EBIDTA of $70M this year. Assume a multiplier of 4 which I think is fair compared to other miners then you get an enterprise market Cap of $280M. By the end of the year I think we will have circa $90M of debt maybe. So maybe a fair market cap by then will be $190M or £150M. Given that there are circa 600M shares then a target price of 25p by the end of the year. In 2 years this raises to circa 60p when in full flow and debt paid off. And that is assuming that they can extend the life of mine of Yan and Karoussa to around 10 years. If the life of mine is shorter then a multiplier of 4 is not valid in my opinion.
Evraz - it isn't going to be 250kOz per year! You are aware that HUM will be assuming Yan contributes circa 80kOz per year from next year right? So it will be just a bit over 200kOz per year. Maybe 220, but it isn't going up to 250 with the current mines.
Yes please that would be great. My username is @stewartswatton
Where are you hearing all this from SeaTank? Would very much like to read this if you can post links?
Well on VAT I have noted down that there is a total of $25M outstanding on VAT. I also noted that since the last AGM this figure has not got smaller! They also said that they were able to offset this against other taxes like profit but first they have to make a profit! I am not holding out any hope of them ever recovering the VAT and I didn't get the impression from the directors that they were too.
Think it was a grace period of 18 months from when they agreed the loan to coincide with the opening of the mine. So payments will be starting this summer I think.
Dugbe is a long way off providing any income for the company. Any sale is greater than 12 months in my opinion. Was at the GM today and the finance director indicated that it could be 6-12 months before Passifino aquires the project due to various approvals required. So can't see any sale happening for some time. Directors mentioned that they are happy to wait to get a good price for the project as they don't need the cash right now.
These were my questions I sent to HUM
Can the company confirm that the Kouroussa mine is still on track for first gold pour by the end of Q2?
One of the reasons for the placement was to expedite a drilling campaign at the Kouroussa mine. But given that the company has already a life of mine of greater than 4 years why the urgency and why can’t the company wait a few months for cashflow to improve following the opening of the mine?
The conditional second trance of the placing to CIG is dependent upon Shareholder approval at the AGM. Given that the AGM is planned for late June after the planned opening of the Kouroussa mine and cashflow should improve then can the company explain what cashflow issues this investment will de-risk?
Can the company confirm that it has not already used the investment from CIG associated with the conditional second trance and that it will not use the money ahead of Shareholder approval?
Can the company provide details of how much VAT is left to reclaim from the government of Mali associated with the Yanfolila mine.
Can the company comment on the current mining activities at Yanfolila? Are there any issues that are affecting the current mining? Has the mine been operating throughout January and February at the same rate as it was reported for the Q4 quarterly results?