Hummingbird Resources Share Discussion Threads

[qs99] 02/3/2018 13:16

visit on 19th March may provide some buying interest IMO...but main thing IMO is for management to attract a first class broker on board...

[fsawatcher] 02/3/2018 12:52

buy gold miners fast

gold goin be hot this year

jus look at hgm and cey go

hum gonna be 60p in 2018

trump hit steel but he luv gold

[casual47] 02/3/2018 11:45

A lot of miners/explorers were caught off-guard by the crash as they had been very liberal and in-efficient with spending shareholder funds and easy financing up until then, which meant a lot of them were unable to take advantage of the gold price rise when suddenly severe cost cutting and efficiencies were being demanded.

A lot of that kind of deadwood has been got rid of now, so hopefully the next gold surge should be much more rewarding for investors in mining companies.

[ukgeorge] 02/3/2018 11:14

In the last crisis gold got hit before the crisis and then sold off heavily in the flight to cash. wasn't it a peak to trough of $1021 to $682...... I would much prefer $1,300 for 5 years without massive volatility.

The way gold shares are going it looks like a crash in gold is very close.

[charles clore] 01/3/2018 17:36

Chip - despite the warnings that most of us are aware of its still probably the most interesting and exciting sector to be invested in imho

[chipperfrd] 01/3/2018 14:58

Of course another risk that is always present is the price discovery of the PMs being set on the paper futures and forwards exchanges in New York and London.

It tends to directly impact the PM miners and creates adverse sentiment against the sector.

Nothing we can do about it and certainly nothing is done by the regulators in spite of numerous proven cases of price fixing by the banks involved.

All in all, a very difficult sector to invest in and not for the unwary.
Chip

[chipperfrd] 01/3/2018 14:24

bishan,

I just try and diversify as much as possible and try not to put too many eggs in one basket so to speak.

I also treat each position opened separately and work a method which prompts me with price points (on all positions on all holdings) at which I should take profits (in shares) or where I can buy at a lower price. Thus I tend to recycle my cash constantly and always look to reduce my overall holding cost on all my investments.

But sometimes sudden external events can provide opportunities amid the usual scrambling for exits. 2008 was a great example for value hunters.

Sometimes events impact specific stocks:
CEY took a big hit when litigation was brought against them but it turned out to be a fantastic time to accumulate even if it took a couple of years to multi-bag from its sub 30p low.
Another was HGM when sanctions were brought in against Russia (Dec 2014) and created a prime opportunity to buy at wonderful prices (around 24p at the low against its recent 180p).
Perhaps ACA will turn out in a similar fashion. I am trading it but remain sanguine about it whatever the longer-term outcome. SHG is also impacted by that association.

Another 'no-no' for me is leverage. I have used CFDs and SBs in the past, in quite a big way, but no more. So I am not tied to the markets every waking minute and I certainly don't lose any sleep over my holdings whatsoever.
Chip

[bishan bedi] 01/3/2018 13:52

Chip, others, I would be interested in understanding how you mitigate the political risks of an operation such as ACA (or HUM, or anywhere in a risky jurisdiction for that matter)

I use google alerts, but always looking for other ways to get a better night's sleep...

[chipperfrd] 01/3/2018 12:52

Plasybryn - neither of those but I do hold 24 producers currently.

[chipperfrd] 01/3/2018 12:45

Bostanli - I have looked, but so far, not for me.

[plasybryn] 01/3/2018 12:43

Chip: aren't you in ARS & HZM? I also like the GFM chart. Impressive.
Perhaps JAY's chart as well.
The share price here is reflective of macro issues imo. I'm not losing sleep over HUM. but admit if I had followed the chart more carefully I would have sold and bought back when the trend resumes. Once we have Steady State production and the next wave in the gold cycle starts, I think we will start to see a more realistic valuation here.

[bostanli] 01/3/2018 12:36

Hi chip, any views or interest in Kefi Minerals

[chipperfrd] 01/3/2018 12:31

UKGeorge,

I disagree re commissioning being the most risky time!

Given that only c. 1 exploration company in a 1,000 gets to production, I would place the odds of failure for an explo outfit as far higher than one that has raised cash and is in development. Such companies tend to be rare beasts indeed!

True that all manner of teething problems may arise but if all aspects of the planning has been correct then, all other things being equal, they should have a real opportunity to reward stakeholders.

No guarantees of course. Poor management or an adverse political/national backdrop might well break the best of projects (ie look at ACA in Tanzania!). But these are risks that ought to be well understood by investors in the sector. At least reaching cash flow ought to reduce the likelihood of failure compared to the early-phase outfits that have to rely totally on equity raising to try and bring a new project up to a bankable level.

Frankly, back in 2013, I took the decision to almost totally stick to producers. Exceptions were MARL (because of the fantastic grades) and a bit later on HUM (because of their specific story). I have also added a few Condor along the way because of their explo results. But it is certainly not a sector for the faint-hearted.

Chip

[bubloo] 01/3/2018 10:59

anyone here have any opinion on GFM where I have again taken a small holding during recent crash

[bubloo] 01/3/2018 10:58

Lurker
Your comments much appreciated. further to your posting i have researched a bit further into HUM AS I HAVE A SMALL HOLDING BOUGHT AT 33 PENCE recently. I do not think much value has been attributed to dugbe and cora. I see that anglopacific have a royalty stream on dugbe and it appears that they may have lent 15 million about three years ago. the guys at anglopacific appear to know their business well.
so based on my research I am happy with my purchase and see a further upside of atleast 75% to 100 % based on projected EPS and cash flows. their aisc is around 693 for the life of mine and I am sure the will improve their resource to reserves and Cora holding may come as a surprise

[chipperfrd] 01/3/2018 09:09

lurker,

Your comments appear to be primarily concerning brokers, presumably because of their target setting. Personally, I take little notice of targets set by anyone, especially the sell side of the market.

I have generated cash flow models for dozens of companies in the resource sector but NONE of the underlying data used was sourced from brokers.

Ideally I obtain Full Technical Feasibility Reports written by 3rd party independent competent bodies, or otherwise settle for summarised bankable studies issued by the companies themselves.

In many cases this work has resulted in NOT becoming invested for one reason or another. But for the rest, the original models have provided a substantive baseline for monitoring and adjustment as projects turn into cash generation (or not as the case may be). Clearly, my own models have also allowed me to test NPV/IRR statements made by the companies involved, hence my earlier comment about "sanity checking".

We all have to do our own DD. Mine was very positive for HUM, yours clearly was not. So be it!

Chip

[napoleon 14th] 01/3/2018 01:28

lurker - and you live up to your name apparently, not being invested!
Interesting article, but it's for peeps who have all day to read and write them...
The CEO's interview was more pertinent IMO, and the chart says a lot.
I'll hold out for 50p at least, then check.

[return_of_the_apeman] 28/2/2018 22:41

Lurker5,

Thanks for taking the time to reply, was just interested to know the source as I could not find it.

I was not commenting on the credibility of brokers, however my opinion fwiw is that they are part of the finance industry, which in the main part is to move wealth from the outsiders to the insiders.

What do you think of the counter arguments for NPV being 48p?

I personally found your post useful

[lurker5] 28/2/2018 22:12

1) Apeman The newsletter mentioned 'Mining Opportunities Guide' has never been available on-line. It was circulated via the Institutional subscription platforms like Factset to thousands of international institutions. It had a much better track record and was considered more thorough, objective, and accurate than most broker notes - which if you've been involved in institutional research as the author has over 40 yrs, you will know are always biassed.
2) Chip You misunderstand what I've written. NPV used by brokers is that in the relevant feasibility study ie is after capex and nothing to do with the owning company's share structure. What I am saying is that broker 'targets' are almost always stated as that NPV 'per the owners' shares in issue when he writes his note', which is almost always before the capex is raised (or part raised)- after which the extra shares will dilute his 'target'. Practically all brokers do it. A few, more honest, will make a stab at shares to be issued and therefore at dilution.
3) UKG - yes , your English must be pretty bad.
4) bublo the cash flows are taken from HUM's updated presentation mid 2017 which (as far as I can see) takes no account of the Coris loan. The full 2016 6 monthly feasibility study figures back that up. Having said that, many miners don't let investors see the full figures (or they don't read them very thoroughly)
5) Chip I don't know where you get your facts but practically all the hundreds of consultants' feasibility studies that I have examined over the last 12 years will use anything between 5 - 12% - but in developing countries for commodity mining will use. the higher end. My statement re never finding a co that met its NPV target was based on examining over 70 companies in the 2011 boom and noting that most didn't met their share price targets even at a 12% discount rate.

Having said that, I don't mind anyone having a different opinion - provided backed up with obvious knowledge about NPVs and some maths. My own opinion is based on following HUM closely (and all BB posts and opinions) since early 2015 - although have never invested in it.

[darola] 28/2/2018 15:28

No mention of upside from inferred (being proven) resources or Cora.

[chipperfrd] 28/2/2018 13:26

bubloo,

re the cash flow: the loan is already baked into the NPV as a -ve cash flow in year -1. The posted diatribe effectively counts it twice.

[bubloo] 28/2/2018 12:51

clear miscalculation in that article. after highlighting all the other miscalculations of broker and analyst forecasts, the source of article has got cash flows wrong
he says $ 260 million net cash generated by 2025. pay of the coris loan of $ 60 leaves $200. 80% of which is $160 and not $115 as the article says.
so as per his own calculations it equates to 48 p per share
the above assumption I have made is based on gold at $1300. if gold goes higher and Hum brings the 1 million indicated resources outside present mine plan then we can imagine the numbers. so I am sceptical about the above article and its intention.

[sleveen] 28/2/2018 11:32

As we head into March, I would expect an announcement of breakeven/commerciallity soon.