The Capex was higher earlier as they were acquiring own equipment to replace contractor suppliers. The process of doing all that is probably moving to just sustainable capex as that process gets fully completed.
457 close USA side. ( pound drops in value) USD gains a little against mx peso.
453.5p taking 1.27 for USA/pound pairing.
Https://www.banxico.org.mx/publications-and-press/announcements-of-monetary-policy-decisions/%7B37E09D62-344B-CB2E-178A-3DFD89B45FAB%7D.pdf
Little impact on currency pairing thus far.
Fresnillo will be selling into a gold market that has given 6.1% higher prices over the mean from 2023. For silver they are rapidly catching up to the average over 2023 and around 0.7% down 23.378 2024 futures average against 23.535 for all of last year. There is a 2024 profit recovery on going with Fresnillo. The average share price since 1 August up until today is 533p. At the current silver prices we should be heading towards that share price.
When Fres prices move up it is usually in blocks of 50p.
There is a deeper problem. This contractor works for Barrick, Endeavour and other note worthy miners and appears to work okay, but none are in Guinea.
Hummingbird are new to Guinea and so is their contractor. Guinea has a long history of issues with mining companies. The productivity of mining companies in Guinea is far worse than other African countries and was identified in an IMF report. The world bank has poured in funds to try and help the Guinea mining sector on ESG. So why are things not working out?
In the past, Guinea mining companies were outplayed by China and other importing countries through commodity price rigging in conjunction with large mining companies in the global market. It led to a lot of people in Guinea losing mining jobs and left environmental mess where mines were operating as they financially collapsed in debt.
A number of mining companies damaged Guinea agriculture and certainly contaminated water supplies that led to riots in some parts of the country. There is huge distrust of the mining sector by rural communities. Local people are often promised some compensation for a local mine and then got nothing. Worse still there was a history of corruption where mining companies acquired land and previous owners received no compensation. There is plenty of evidence that working in the mining sector is not the first choice of Guinea people who have seen precious little benefit. This adds hugely to recruitment difficulties and retaining workforces in mining in Guinea. I suspect both the contractor and hummingbird are not dealing with some real problems. To set targets and they fail because the contractor is having real problems in Guinea, whether it is getting equipment through the port to the mine or keeping a work force and having good community relations is proving difficult to do.
Overall both sides are pointing fingers at each other and this is demonstrating that someone or something like the country of Guinea is breaking their relationship. Hopefully they will solve things, but Betts has a habit of taking short cuts and they always come back to bite him and his investors. The problem with Guinea is that you can not do short cuts. A senior manager has to be out there most of the time and communicated effectively. Tony
USA FED are tolerating more inflation for higher growth. Hence silver and gold move higher. Peso has gone back to where it was on Tuesday with USD. Mexico central bank needs to cut rates tomorrow. USA growth is now projected to be 1% higher in 2025 than current forecast for Mexico economy.
Https://uk.finance.yahoo.com/news/corica-mining-services-corica-suspension-090400206.html
Non-payment of completed work the company asked and presumably directed them to do. The Hummingbird RNS now appears misleading. This problem was going on for months. I expect the 42% holder is rubbing their hands with glee as they are probably not a white knight. The bank will have company governance issues to look into. Publican you were smart to get out this morning.
I would be happy to see a one month extension.
The peso USD exchange has bottomed out. The overbought conditions on the pairing is highly extreme with everyone sitting on one side of the trade. Usually such positions can not last that long. The damage of a high peso to USD is now hitting into the Mexican economy. GDP annual rates are falling 60%. Companies that re-shored from Asia to Mexico are now wandering why they bothered and are probably making losses. We await to see what the Mexican central bank does on Thursday. The real interest rates in Mexico are just way to high.
Current shareholders as of December 2023
https://finance.yahoo.com/quote/FRES.L/holders/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&guce_referrer_sig=AQAAAIDOzo34MsqLO7P_RIKzx0Pq1R1wFInl97K1otRhtma00k_W7v5mgk3V6R_f_9-2yKXMbS29HVdiZN-3nznTwhp3nPjXe5gGCYS7k-SwycCEsNitfZSpn0fkgUIP1Et7c1Ss9pvC8GbABMaFk1IMAMvqfBb7Lc2kmKm8FqeRMHo4
20 April 2009 it hit 416.8p.
I note at the next annual meeting in May, one of the requests to be voted on is for the company to be able to buy back up to 73M of its own shares at a 5% premium to average market prices.
Last time it was at the current prices was back in 2009 when ounces mined was less than 40M a year and half the current gold output and the company had to deal with miner strikes. We are certainly well under the Covid-19 low and 2015 bear market lows.
I do not use candlesticks patterns myself, but Fresnillo has delivered its first ever monthly inverted sell hammer.
DarkKnight
I have study a Fresnillo a lot. I agree with the analysts that revenue forecasts are going to be a lot higher than in 2023. The company exploration drilling is up 110% on last year that is likely to replace substantive amounts of mined out reserves with a possibility of maintaing levels of resources. The forecast in the annual report RNS has a good chance of 3% in production ounces in silver conversion. Probably around 107-108M ounces. I have added today but can not understand how everything is backward looking. USD gain 0.2 peso today and the share price retreated. 21 March is the next central Mexican bank meeting. With silver futures above $25, I would have expected Fresnillo above 500p. Hopefully Q1 results will be good.
The 8.5p appears to be pricing in a $25M hit on the balance sheet.
Each quarter with a debt carry and very up lift in Kouroussa production is creating this level of damage. The kitchen sink was thrown in last year as total shares moved up from 455M to 799M. One shareholder holds 41.2% of the company. In fairness to Betts, Guinea is a difficult country to deliver a profitable mining operation and for some reason productivity is not that good in the Guinea mining sector. The falling out between the mining team and the company may be more than a financial issue. If other sectors are recruiting staff away from the mine contractor as they prefer other types of work or whatever they have all kinds of delivery issues then impacting on them. If that was the case Betts has a deeper problem to resolve and needs to fix it in Q2. Otherwise the 42% holder will get the lot in a private buyout deal and they may apply the answers that the Hummingbird management team did not see.
Well Publican
It is a complete gamble. Anybody buying into this on the hope it gets resolved tomorrow is exactly that, based on hope and a prayer.
I did warn Publican not to go into Hummingbird resources. He has a shed load on that stock.
Publican,
You were warned.
Tony