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Hi Playboy - for me this explanation doesn't adequately cover it and HUM still need to address it correctly. KW pit is just as close to Plant as KE (see map https://www.hummingbirdresources.co.uk/operations-projects/mali/) and post KW, the next area to mine was supposed to be GW, again in the 5km area close to plant. It is SE and SW thereafter which show huge promise from those drill results and great grades, that are further out in 15km that were next to mine after GW. If they're rejigging mine plan to move SE and SW to front, it needs to be explained more concisely and in detail with release of revised Rolling Mine Plan. This may be the intent, but at present it's just not crystal clear, unless I skimmed over it.

On stripping again this may add some cost, but as per the DFS regarding KE and now KW: "Both are amenable to open pit mining using conventional drill and blast and load and haul mining methods. No significant pre-stripping will be required to access the pits"

Sands - that's not correct, as of 2019 accounts his base salary was $473k, committee fees/ benefits $29k and bonus of $240k (i.e. bonuses like HIPPO scheme and others). That's broadly in line with other similar size companies like SHG where Eric Zurrin CEO is on very similar: $384k base, $273k bonus.

kadavul - great initiative to set up a PI group. Completely agree with Adam, one step at time. Ownership of any PI group is key. Anything less than 10% (think it's still 10%, someone can correct me) means you have no power to call an EGM for any "nuclear option" and would therefore have less "clout" when making requests/ demands of the Board.

I'm against jumping straight to pushing for a board change, which will be very difficult and in short-term any EGM will cause huge uncertainty. Any PI Group should first list its main concerns in a concise manner in writing (email) as a matter of record to the Chairman (as TBTT suggests), copying in Edward Montgomery (IR contact) and request how the HUM board will address and/ or clarify these by XX dates. Followed by Investor call to get traction. But if after XX months we believe HUM Board is still not fulfilling it's primary mandate to run company competently in shareholders' interests nor competent to run Yanfolila, it is not Dan that is the problem, but the entire Board. HUM is also in a stage in its life with Yanfolila and juggling development of Kouroussa an active COO should be sitting on the board if the CEO has no such experience (Attie Roux has COO experience, but is only a NED and not sure he's at stage in his life he's visiting the mines on regular basis, getting mines ship shape which HUM desperately need).

Chairman is of course supposed to be "independent" from rest of Board so to speak, but as we all know in any UK company it can all be very "incestuous", hence why it's so difficult for "activist" investors to implement change unless organised. The HUM Non-Exec Chairman heads up Remuneration Committee and a key issue moving forward from a sentiment point of view is of course Performance Options. However primary issue remains operations at Yanfolila (AISC, production, grades/ mine plan, revised rolling mine plan etc. etc.)

Gota - my turn to concur with Ragnar on Chrome front - I may go about it from different angle but effectively get to same result: 14% discount on chrome price to THS versus "market price". And again I use exact same methodology I used on PGMs - use numbers from accounts FYE Sept 2020 as example:

Chrome Production: 1,340,000 tn
Chrome Revenue: $161,267,000
Chrome Sale Price per tn (Revenue/ Production): $120tn
Chrome "Contract/ market price" Reported by THS: $140tn

So difference of 14%. I think with THS increasing their specialty grade chrome, this differential may decrease further.

IWantThatOne - you don't deduct Mali Gov share from EBITDA, it will be deducted from Net Income, which is years down the line as HUM have so much development capex/ investment to recover 1st and 20% of net income will be less than 20% EBITDA. Also the Government have another circa $8m to pay HUM so that will all add to Net Cash position.

On other EBITDA deductions you make very valid point. On the "Interest" side we will have no debt, so that no longer needs to be deducted. On Capex, Sustaining Exploration and Capex are both supposed to be included in AISC, so should already be factored in the EBITDA calc and should explain the high AISC. But would agree the Company need to explain this correctly and what they consider "Sustaining Exploration/ Capex" (incl in AISC and therefore EBITDA) and what is "Expansionary" (outside AISC and EBITDA). To me all Yanfolila Exploration and Capex to sustain the mine should fall into the former, but some miners (SHG an example) are pretty loose with the terms and don't include it.

Without fail just like the old adage an RNS on Friday is normally bad news, a delayed HUM RNS is always bad news, so I have to admit I was expecting this and had been “re-balancing” my portfolio accordingly. At start of last year HUM was my largest holding, now it’s 4th after THS, TSG and AAZ. COVID19 alone can’t be used as an excuse for poor performance, albeit I’ll admit HUM had added issue of a coup and temporary closed borders impacting supplies.

In terms of the "good" and "bad"

Good
- HUM at 28-30p had so much of this bad news already baked in. We’re now at £100m market cap – yes RNS today bad, but are we seriously not worth more than £100m?!
- HUM when including Gold Receivables, is in Net Cash position and will be debt free by end Q2 2021.
- Yanfolila (Mali): amazing drilling results at Sanioumale East, ticking all boxes in terms of open pit, grade and widths. As Punter64 stated if these were released on their own, would be great news. But they’re effectively lost in all the bad news.
- Kouroussa Gold Project (Guinea): significant positive developments – not only looking like a “carbon copy” Yanfolila in terms of process, but grades, LoM all looking even better.
- Dugbe Gold Project (Liberia) - Pasofino Gold doing a great job pushing Dugbe through to DFS milestone.
- Need to remember HUM has 5% of Bunker Hill (CAD 44.64M market cap), 12% Cora (£17m market cap), 51% Dugbe, Pasofino 49% (CAD 44.64M market cap, mainly due to Dugbe). All of this in terms of HUM portion adds up to over £26m.

Bad (all Yanfolila and all important)
- 2021 AISC. I do not understand their EBITDA calculation of $70m. Even if you take upper end 110K oz p.a. AISC $1,250, at $1,830 gold price you get $66m.
- 2021 Production guidance lower than original rolling mine plan, now at 100-110k.
- Updated 5yr Rolling Mine Plan not yet produced, so for now officially we have 4yr open pit LoM, although clear with SE drill results, this will be increased much further.
- Grades less expected at circa 2g/t rather than 3g/t to be expected from JORC resource and last 5yr mine plan. Although recoveries still very good.
- Other issues the Board need to accept failings on, demonstrate to Investors they accept failings and not just blame COVID, coup, old mine manager/ contractor, with the latter of course being overseen by Board anyway and their failing. They need to restart proper investor/ analyst calls with each Q report, start to rebuild trust and sentiment. Stop delaying RNS when there is bad news to try and fill it with “good news”, as the good news that may have delayed the overall RNS just gets lost.

Even with all the bad I state above HUM is now only valued at 2x EBITDA on Yanfolila, let alone all other HUM assets. And I will be emailing company to be more constructive with my criticism rather than to simply “b*tch” on here (although still think in correct context its constructive for people to air their grievances here too, so don’t begrudge anyon

Gota - it varies quarter to quarter, as I think working capital flows and delayed payments from refiners always "muddies the waters" so never an exact science. For SLP when looking at Q's and Annual Reports, it varied from 19-23% discount compared to their reported 4E PGM Basket (the 4E also muddies the waters, as they provide a 6E concentrate, which may partly explain the higher discount compared to THS, as the 6E products treated as by-products for financial reporting purposes).

For THS, the discount to 6E PGM basket is around 13% (think Ragnar has 15%). In terms of how I got to 13% figure, using last THS FYE Sept 2020 Accounts as example:

PGM Production: 142,100 Oz
PGM Revenue: $218,619,000
PGM Sale Price per Oz (Revenue/ Production): $1,538 oz
PGM Basket as reported by THS: $1,704 oz

So the difference between the 6E PGM basket report of $1,704 oz versus actual sale price received per Oz of $1,538 oz for me becomes the "refiner + impurity fee etc.", which is 13.4% "discount" to reported 6E PGM basket.

I'll do the same for the 1H 2021 Interims post March 2021 whenever they're released. I've also started to compare the THS 6E basket versus what I calculate from JM (http://www.platinum.matthey.com/prices/price-tables). So as example, THS reported $2,399 per oz for Q1 2021 (calendar Oct-Dec 2020), whereas I get circa $2,460 oz from JM, so a 3% differential. So in end if you're trying to forecast future earnings and cashflow using JM/BASF, it may be more prudent to apply a 15-16% discount. But I need more Qs and Interims to start doing this on regular basis. My % may be bit off on the 6E split too, as they did tweak it themselves in last few months - need to double-check.

Whilst one swallow does not make a summer, the Q4 2020 report shows a major turnaround, annualized it represents 26,200 oz p.a., but most LTHs know if ALTN execute their plan correctly, this should be tip of a very big iceberg. ALTN now need to demonstrate consistency that this can be continuously maintained + improved.

Even if you assume it does not get better and you conservatively assume an AISC of $850 oz, current production represents EBITDA of $26.2m p.a., with current market cap of only £42m. Once/If ALTN can demonstrate consistency, due to its huge Reserves and Resources it should be valued at a very high multiple due to its effective never-ending mine life. As a reminder the JORC Mineral Resources and Ore Reserves as released Oct 2019 CPRs:

1) Sekisovskoye (operating): 6.68Moz Gold & 11.12Moz Silver, of which importantly Measured is 3.51Moz Gold at 3.76g/t & 6.35Moz Silver at 6.08g/t.

2) Teren Sai (Area #2 only) (to be developed): 1.48Moz Gold at 2.91 g/t, 2.45Moz Silver at 4.81 g/t, open pittable to start (360k oz gold at 1.89g/t)

Current potential nameplate production for Sekisovskoye is 850k tpa. In terms of scenarios assuming grade (1.7g/t) or recovery (88%) doesn’t improve from here but they eventually hit nameplate:
(850,000tns x 1.7g/t x 88% recovery) / 31.1035 (troy oz conversion) = 40,883 oz p.a.

However if they achieve nameplate and start hitting the JORC grades of 3.76g/t, but assume recovery of 88% remain unchanged:
(850,000tns x 3.76g/t x 88% recovery) / 31.1035 (troy oz conversion) = 90,423 oz p.a.

The truth may lie somewhere between the two extremes: perhaps they can hit 750ktpa and avg. grade of 2.7g/t, which would yield 57k oz p.a. To all these numbers you then still have to add the open pit Teren Sai resource.

Lots of ways to “skin a cat” and try to hypothesize future production. There are geo-political risks, but whichever way you look at it, this is significantly under-valued – yes for good reason due to uncertainty, but another quarter in region of 6,500 oz, then surely we will be going back to £3 and beyond?

Hi Gbs - as Ragnar and TBTT still post on SLP assume you may be referring to me, but yes confirm I was heavily invested in SLP. I bought from 7 - 20p area, with an avg. of circa 15p. I was extremely overweight there and on top of that recommended it to my parents, who also still have a large holding. I sold out around late Feb 2020 in the 60p region.

I sold out due to COVID and kept my money in cash for few days, but started to slowly rotate into Russia gold miner TSG in late Feb (in Kamchatka in middle of nowhere which was important for me due to COVID in Feb-Mar 2020 at height of "global panic", paid a meaty dividend and significantly undervalued at the time). During the days the market collapsed in Mid-March, I even double downed on TSG and kept buying - think my broker thought I was mad - one of few times I had to call them to work an order due to the market chaos. I also bought a small portion that day back into SLP in the mid 20s at this point, but sold it bit later in the 40s (hindsight's a ***** but can't complain overall). It wasn't that I was bearish on SLP, very much the opposite, however once the market had calmed I took a look at THS in June 2020 and couldn't believe it was still stuck in the 50s. I looked at past accounts, presentations and realized it was significantly undervalued, even more so than SLP. If I was passive investing, looking back if I hadn't sold my SLP at 60p in Feb, I would have seen them now hit 1.10p. However both my TSG and THS positions have just about doubled and I've also received circa 10% dividends on the TSG portion and feel more comfortable with my portfolio these days, with more eggs in different baskets. My parents still have large holding in SLP, so do still keep close eye on the boards and all RNS', but they have taken my advice and rotated some funds into THS.

For all the reasons I've mentioned on the THS board, from purely value perspective I do heavily favor THS over SLP. There's also a few I haven't mentioned - Terry moving on as MD in Feb-2020 and selling his entire holding was always a concern for me. It was nothing untoward, he had well deserved retirement to look forward to, but a big loss for company, he was good guy. I've also become more concerned by the Samancor connection of late, although my concerns could end up being nothing. I also became extremely frustrated by the SLP dividend and dividend policy (or lack thereof), Liberum House Broker continual errors on dividends forecasts (happened constantly - did SLP ever talk to their house broker to set expectations?!) and lack of organic growth. However I hope SLP now surprise me and I advised my parents for time being not to reduce their SLP holding further - maybe they will all surprise us and pay a mammoth special dividend - the LTHs deserve it. If there's no growth opportunities for now fair enough, but then pay cash out to shareholders! Ridiculous sitting on $67m. It was ridiculous when the cash pile was $25-30m

Edit: that should be "10 shaft" not "10 shift"

Impala assets range from 15-30yrs, so not dissimilar to THS LoM. But yes I would agree with you Impala is in same boat and appears to be on a 2.6x free cashflow to market cap if numbers in their FYE Jun 2020 slidepack can be believed.

Problem is investing in Impala when my broker only allows "Impala Platinum Holdings (IMPUY) ADR" in $ which I don't fancy. It's primary listing is only in SA, predominantly underground mining (40% production comes from SA Impala 10-shift UG mine and their other main assets, such as Zim JVs also mainly UG mining) and a high all-in cost at $1,500 oz, so more prone to any PGM retracement (using their lower FY June 2021 guidance threshold of 2.8m oz, as with social distancing and covid impacts, even without lockdowns it could impact UG mines).

Hi Ragnar, thanks for clarification. Yep understood now and on the Income Statement in the Accounts at the bottom it splits Income into "Owners of the Company" (THS) and "Non-controlling interest" (BEE ). This is further clarified on pg.120:

"Non-controlling interests: Non-controlling interests comprise amounts attributable to Black Economic Empowerment shareholders in South Africa for their respective shareholding in the ordinary shares of Tharisa Minerals Proprietary Limited together with associated foreign exchange translations. The noncontrolling interest share of total comprehensive income amounts to US$3.4 million (2019: US$7.4 million loss)." Looking through accounts elsewhere believe the BEE is Tharisa Community Trust / Rocasize Proprietary Limited.

However I'm also not sure how the Total Revenue of THS as a whole of $406million, is then calculated by Group Composition for Tharisa Minerals Proprietary Limited only in Note 17 (74% THS, 26% BEE) to $298m. I'm sure there is some complex accounting and mechanisms, but just proves your point you've made number of times that I didn't quite understand until now, that a sizeable proportion of THS revenues fall outside of Tharisa Minerals Proprietary Limited and are therefore 100% attributable to THS. So in the end the "income" attributable to "non-controlling" interest in FYE Sept 2020 was 11% of the total ($3.4m of total $30.8m).

THS is £333m market cap ($456m), free cashflow of $200m+ p.a (at these PGM prices, going up to $270m+ next FY after Vulcan completion), so on a 2.2x free cashflow to market cap. 12-13yrs Open Pit LoM followed by 40yrs+ underground. However comparing SLP, another SA producer close to our hearts, it has market cap of £289m ($396m), Net Cash $67m, free cashflow of c$100m (all at current PGM prices), 8yrs LoM (give or take dependent on Samancor Ops). Normalising for SLP's cash position, they're on a 3.3x ratio, higher than THS, even though THS is larger company with double production and > x2 production life. THS also has far more scope to expand with Vulcan Fine Chrome, PGM recovery + grade improvements & Zim Assets. Hence why I think THS should be at least on a 4.4x ratio (i.e £2.40 +) of free cashflow to market cap, which would still be very steep discount to its peers and LoM. Should actually be 6x minimum, which would be 50% of its open pit LoM, let alone 40yrs UG – a still very steep discount.

Morning TBTT, was just about to post didn't take long for Rh to reclaim $20k. More importantly now looking back on Jan 2021, we can see the average Rh price was $19,750 oz, Pd $2,400 oz, Pt $1,100 oz, with Iridium, Gold and Ruthenium also very strong. If Chrome Ore has reclaimed the $150-160tn area, we are on to a record breaking quarter by a country mile.

I still remain perplexed as to how undervalued we are, on whatever metric you want to consider: peer comparison, P/E, free cashflow etc. Even if the PGM basket was much lower, we would still be significantly undervalued. But just like with all solid value plays, have to be patient.

As THS is just so undervalued on its SA PGM + Chrome production alone, I doubt any of us really invested in THS on the Zimbabwe assets , however if these prices continue, I am getting quite excited at what THS could do in terms of self-financing initial open pit operations for the huge Zimbabwe Karo Resources asset in Great Dyke. 96 Moz 4E resource (platinum, palladium, rhodium and gold) grading at 3.2g/t declared by Zimplats who were forced to release asset by government in 2018 to allow new entrants in to Zimbabwe. THS had already completed circa 32.4 km of drilling to average shallow depths of between 50 and 150 m, to identify open pittable resources, so I am looking forward to what any Pre-feasibility study might say and hope we get this in 2021 at some point. But should again emphasize this is merely another cherry on a huge cake and not why I invested. But with SA assets being correctly valued and then progress on Zimbabwe, one day in future could we be celebrating a £1bn market cap company?

For FYE Sept 2021 at current prices EBITDA could be in region of $326m (PGMs $256m, Chrome $67m and Arxo $3m). We have FYE Sept 2021 Capex of $100m ($50m SIB Capex + $50m Vulcan Fine Chrome Project), Interest on Loans $7m, Tax paid of $4-8m (Tax in Accounts may be $30-40m, but THS have circa $100m of unredeemed capex to offset taxes), so "free cashflow" of $211m.

After everything has been deducted post-tax, does anyone know how the 26% BEE portion is calculated? Is it truly 26% of post-tax profit, or are there still historical development costs to be deducted before any split? Can't find anything in the Accounts or accompanying Results overview.

Thanks for silver overview Ragnar - did you decide to dip your toe in POLY again? As I mentioned on the THS thread, I did get in to POLY last week, buying tranches at 15.90 and 15.80. Subject always to keeping my eye on any material changes to either POLY or gold/ silver markets, i'm now in POLY for long-term as looking for capital growth + dividend plays, of which POLY ticks both boxes, like our favourite THS... Rhodium back over $20k ; )

The RNS we had all been waiting for. Milling has caught up with mining and grades are improving too. This is game changing news for ALTN and should see us eventually get back to over £3 which we hit last year (hit over 3p before the 100-1 consolidation).

THS is also by far my largest position of all too, but like you can't simply stick it all in here. Now debating whether to jump in to POLY with "cash on the sidelines" now it's declined to under £16...

I was underwhelmed by the RMM RNS and used the increased liquidity of RNS day to sell down 90% of my holding. The crazy ramping on that board also put me off.

Bangrak - was it company itself that informed you Q4 results won't be out until Feb?

I would concur with TBTT's tip - it's great news and I bought in heavily to AAZ after the end of the war, for reasons I posted on AAZ site around 14-Jan (existing mine plans were formally extended from 3yr to 8yr mine life, end of war opening up new contract areas + de-risking geo-politics, cash position $38m + dividends etc.). I lived in Azerbaijan for over 5yrs so it's close to my heart, only left last March.

But I wont wax lyrical about AAZ on HUM board - for me the geo-political risk is much less in Azerbaijan, but then HUM is so undervalued, my largest gold miner position remains HUM. In terms of order of my main positions, HUM is 2nd: THS (PGMs + Chrome), HUM, TSG (Gold - Russia), AAZ (Gold + Copper - Azerbaijan), ALTN (Gold - Kazakhstan), SRB (Gold - Brazil) and RMM (Copper - Canada).

I'm bit apprehensive of the next HUM Q4 2020 report, we know it's going to be bad on production front, but 2021 should finally be the year it comes good with huge news for us on all fronts. If they perhaps include revised Mine Plan to ensure rolling 5yr plan stays in place as part of the Q4 2020 update and 2021 guidance, it should counter the Q4 2020 production numbers.

The market has not yet cottoned on to just how much free cash THS are throwing off – in calendar Q4 2020 it was $26m – that will seem tiny compared to next quarters if PGMs and Chrome keep these gains, at a time they’re funding $50m for Vulcan Fine Chrome Project.

Also unlike JLP, on top of their Net Cash position THS have a huge trade surplus of $55m (Trade Receivables & Contract Assets – Trade Payables & Contract Liabilities). JLP trade surplus is negligible some $7m, nothing compared to THS and SLP, even though they’re supposed to have same business model.

1) Production: JLP is not even close to THS in "recovery capability". THS produced well over double in 1Q (PGMs 39.3k oz and Chrome 372.3k tns) what JLP did in 6 months (PGM 28.2k and Chrome 319.8k). And that's comparing THS Net production to JLP's "gross". Even when JLP’s "Inyoni Chrome" is up and running, it won't come close to THS chrome production, particularly with THS expansion to 2MT chrome by Sept 2021. Once you take into account JV splits, JLP's net production is significantly less than it's headline total, but as ever their reporting is opaque.

2) Free Cashflow & Profit: JLP's "Earnings" bear absolutely no relation to either their "free cashflow" (clue: they have none yet) nor their Profit. Despite JLP posting £28m "Earnings" in 2H 2020 (includes no G&A costs whatsoever nor other hidden costs that show up in Accounts), they still issue shares like it's confetti. There is always an excuse, but to cut through the noise, they still cannot fund expansion organically nor through normal financing. They couldn't even cover $5m in June to front the new Zambia Copper JV Project Elephant, they had to raise equity. The now recent “blue chip” smoke and mirrors equity raise/ conversion of CLNs (when CLNs are not even a current liability arising in next 12 months according to Accounts) at significant detriment to existing PIs is disgraceful, but Ragnar has commented on this already anyway. There is still some 10% dilution out there for remaining CLNs and Warrants. That’s not even including XX% of dilutive options.

3) Dividends: THS pay consistent dividends, have clear policy and still fund Capex organically and through industry standard debt facilities with normal interest rates. JLP struggle raising debt on standard terms, hence the ACAM punitive CLNs, interest on them and now partially converted to detriment of PIs.

4) Reporting: Net Cash/ Debt, Capex etc. THS report per quarter and now include net cash/ debt metrics, on top of their usual interims and accounts – they have clear annual guidance and Capex forecasts. JLP moved to bi-annual reporting (who knows why, excuse was they would be more “concise”) and yet still cannot produce metrics most PIs rely on: no Net Cash/ Debt metrics, AISC, All-in, Capex requirements etc.

When you take into account all JLP’s warrants and CLNs, JLP is pretty much priced the same as THS. This is crazy. They have much less than half the production, still Net Debt most likely whereas THS now Net Cash, THS ex-div late Feb to be paid 10-March. JLP’s whole market cap seems to hinge on execution of copper on time and budget (whatever Capex budget that may be!). However all PIs keep taking the “gross” amount that may come to fruition, whereas the JV terms JLP is due only 60% and as we all know from JLP timelines, it never quite works out how CB and Leon spin it.