RE: Re results28 May 2019 13:21
Lurker - I would agree and I too only look at liquid assets versus liabilities. After all once the mine is depleted, the assets are useless, bar perhaps some residual value for some heavy machinery etc., although this merely would offset the reclamation costs. However at any one-time such liquid assets need to be put in the correct context. HUM have spent huge amounts of Capex on the Fixed Assets ($141m in the books), ball mill ($13m), exploration for LoM extension ($9m) and remedial works.
Going forward they will not have these large costs, even for LoM extensions. The Plant is future-proofed and whilst there may be some non-sustaining development drilling and capex extensions it will be minimal.
I don't know where Colonel Drake is getting his LoM from, definitely not the actual Mine Plan itself. Seems to be same source as UKGeorge.... coincidentally. The original LoM is 7yrs. With Gonka + extensions, likely 12yrs. As the production to date due to the problems encountered has meant lower production, you're likely looking at 10.5yrs LoM left by end of this calendar year. And that's not taking into account new sources over and above Gonka and further drilling. The plan was always to hit a steady state over 12yrs of 120k Oz. So if the 2nd ball mill and tonnages allow 140K Oz (As a note increasing capacity to increase production is not "high grading" as TBTT suggested. Such drivel to be expected unfortunately), then 2023+ will reduce (even with Gonka incorporated) to circa 105K Oz p.a. (80K Oz p.a. without Gonka based on existing LoM plan), by very fact you're bringing production forward.
Of course if you keep incorporating new sites into the Mine Plan, you could expect HUM to hit a 120K Oz steady state 2023+ and sure that's the plan. You have Yanfofila site itself primed for extensions, Cora prospects and the Kobada Gold Project 2.2m Oz (AGG - who now only have market cap of circa $5.5m and doubt could function as a stand-alone entity (although still making out they can), so HUM can likely take this asset when needed for a song).
There's clearly enough feed for 10yrs + and the 2nd ball mill will allow maximum production.
In short-term, inventories of varying states is just shy of USD 14m (compared to USD 8.2m in June 18 Interims just before last wet season), so even if we get hit with another once in a decade horrendous wet season, you would hope HUM with both increased inventories, remedial work completed, new stable bridge, experience of last year under its belt, could "weather" the storms better this time.
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