Hummingbird Resources Share Discussion Threads

[charlieeee] 18/11/2016 10:28

Perhaps news on the financing front?

This is such a professional outfit: outsourcing the build to experts is far smarter than inflicting a management learning curve on shareholders: far less likely to faill either on technical grounds or budget over run.

[hutch_pod] 18/11/2016 09:18

Unusual strength this morning, with gold being tested again..

[substp] 17/11/2016 10:29

Maybe with Vender Financing they figure they can put off the senior debt for a while longer.... Pay off Taurus with what's in the kitty already.

[sleveen] 17/11/2016 08:53

If a placing is required to obtain full project finance, management better get it done soon or the share price will be lower still, causing unnecessary dilution to current shareholders.

[au24] 16/11/2016 21:27

Too many unknowns,potential problems,future POG, weighs on people minds with still a year to go.
The Daily Mail pushed it twice-result down.
Wait and see until nearer the time is the prudent path many think,due to past companies falling before the finishing post.

[bsharman3] 16/11/2016 20:09

Isn't it ironic that the HUM share price doesn't rise when the gold price rises but falls when the gold price falls..

[charles clore] 14/11/2016 08:52

You would hardly think so with the share price tanking. Someone is dumping thats for sure.

[rileyma] 14/11/2016 08:45

I assume this is a holding increase?

[chipperfrd] 11/11/2016 14:05

And what will happen to the Taurus 1% royalty if their loan is repaid?
Was it linked to their funding commitment to HUM - I just don't know how it was arranged.

But I imagine it should be a nice little earner for them if they are able to hang on to it. I make it around US$1.1m pa at current PoG.

They certainly appear to have good reason to support HUM.

[chipperfrd] 11/11/2016 13:39

Taurus would appear to be so indecisive that they completely missed the boat and never followed through with their 'apparently' original plan to fund HUM through to production. So who cares what they may or may not do!

HUM will have to find a more reliable medium term funder. Just like they had to find supporters for their outstanding equity raise thanks to Taurus failing to stump up the cash. The sooner Taurus gets dropped the better IMO!

[substp] 11/11/2016 13:37

I'd be more concerned with monies being in place to finish the construction of the mine.

[divmad] 11/11/2016 13:31

I agree with you, chipperfrd, but the fact remains that Hum has been singularly unsuccessful thus far in extinguishing or replacing the Taurus loan. They have been in deep discussions with Taurus for two years now, and still that outfit chooses to vacillate. Why? Surely with production coming on stream within 15 months from now, and the irr projected by Hum, it has to be a no-brainer for Taurus to offer a juicy term loan for its HNWI investor base.

[chipperfrd] 11/11/2016 13:24

Divmad

It would be a rare startup that had zero debt. So I imagine either Taurus will keep their loan or restructure it, or an institutional loan will be entered into.

Forward earnings predictions ought to make the risk pretty marginal on such a small loan requirement. Although I suppose that the temptation to bolster it upwards a bit to help with satellite exploration and Dugbe development work might push it up to US$25-30m or so.

It would make little sense to cover the bridge through equity. But if it were to happen that way then so be it.

[substp] 11/11/2016 13:14

A placing isn't needed to pay off Taurus but do they need to be fully funded to start the main construction? Maybe they aren't pushed for time on the later?

[divmad] 11/11/2016 13:05

Meanwhile, the share price here goes lower. Anticipating a placing to cover the bridging loan?

[chipperfrd] 11/11/2016 12:46

zhockey

It's all a matter of opinion!

I made AAZ PER 26.5x based on their 1H financials and their current trailing PER at 47 on an annualised basis.

Yanfolila Reserves are currently similar on an AuEq basis but M.I. Resources are some 3 times bigger for HUM if Dugbe are included.

Chip

[zhockey] 11/11/2016 12:33

Thanks Chip, not sure about your PeR at 15x though for a junior producer. AAZ are trading at 2.5 and arguably have about the same production, reserves, cost and risk.

On that basis they (hum) seem pretty fairly valued right now.

[chipperfrd] 11/11/2016 10:28

zhockey,

I have rerun my NPV model at US$1254 PoG and zero change through 2018.

That returns an estimated 119p at the end of that year.

Other lower values of PoG and resulting estimated share price targets are as follows:

$1200 ~ 106p
$1150 ~ 92p
$1100 ~ 79p
$1050 ~ 66p
$1000 ~ 53p

But obviously, these are based on my model, which in turn, is based on forward metrics provided by HUM, so subject to substantial revisions if targets are not met.

Certainly no advice intended by me. Just sharing my own forward estimates that may change in the light of actual production and financial figures becoming available over the course of time.
Chip

[sleveen] 11/11/2016 09:00

Support broken from a charting perspective.

[chipperfrd] 10/11/2016 09:10

zhockey,

Currently away from home so don't know the exact level of PoG I was using for 2018, but I think it was c. US$1,600/oz. I based that on long term average monetary inflation in real terms.

I use a PER of 15x for profitable gold producers which is at the low end of most of the established producers that I monitor.

I will run the HUM model for a PoG at c. US$1,300 in 2018 when I am back home again. That will give you a decent comparison.
Chip

[zhockey] 09/11/2016 16:32

Chip, what POG and PER are you using?

Cheers

[divmad] 09/11/2016 13:43

That's all well and good when we know how they will replace the Taurus bridging loan.

Another equity placing or project based debt?

[chipperfrd] 09/11/2016 12:53

My NPV model puts them at an estimated 218p for FY2018. But that has to include assumptions on US$/GBP, PoG and market PER so lots can change.
Chip

[zhockey] 09/11/2016 12:43

Anyone have a view on what fair value is here? Could they be worth as much as 50p if the mine goes to plan?