Hummingbird Resources Share Discussion Threads

[redtrend] 23/8/2019 10:19

Oh dear the usual suspects show up who don't have a clue about accounts or simply intentionally making misleading and false statements. Perhaps ignorance is a defence. As Andrew states liabilities like "lease liabilities" are covered by AISC - it's simply new reporting requirements required by "IFRS 16", on how the books are presented. For HUM it's effectively an upfront snapshot of working capital/ trade payables.


Bookworm you honestly have no shame. When Goldibucks recently sold out of JLP (appears to be the only accountant who posted on that thread), you turned on your usual melodrama about losing respect for him and why he was still posting. Low and behold, here you are.

Most don't need geography lessons here, but Mali is an incredibly large country. The north is dangerous, central area has regional problems, but is full of UN troops and some inter-regional fighting has given way to cease fires and tentative peace treaties. The south where Bamako and Yanfolila are safe in comparison with no such fighting or security issues.

If some were a bit more nuanced with potential negatives, you could raise the issue of potential changes in VAT law in Mali. Such law if enacted though will take time, be fought by the bigger miners and in a gold bull, if HUM get their house in order meeting guidance, it doesn't change the fact HUM is significantly undervalued.

[andrewsr] 23/8/2019 10:14

Thanks for the clarification.

[casual47] 23/8/2019 09:44

Don't see a need for placing as gold production in the next 12 months plus the overdraft facility should be enough.

A refinancing would be normal and seems a strong possibility especially when they get the new LOM update.

[andrewsr] 23/8/2019 09:08

Sleveen,

There's no mention of additional finance required, so DB's statement 'forecasted positive net cash position during 2020' is false according to you, which seems a bit unlikely.

Some clarification is needed. Probably some of the current liabilities are included in the AISC (?).

[bookwormrobert] 23/8/2019 09:06

Hi Sleveen!
I make it that you're right. Not as bad as Avesoro, but still a pretty ugly situation. Hopeless mismanagement from exceedingly greedy and clueless public schoolboys.
Best way out would be for the company to put itself up for sale.
Mali security situation also steadily worsening.
As I'm definitely NOT shorting any gold stocks, even a turkey like this one, given gold is now in a bull market, it's not worth spending any more time on this particular miner. Lots of better ones around.

[charlieeee] 23/8/2019 08:55

Leasing $19 million, partly to finance ball mill.

I had thought Coris had offered a loan for the ball mill and that there was also an additional facility of $9 million which was undrawn. Am I right to assume that this $19 million is the alternative finance and that effectively, the overdraft facility has been drawn (contrary to explanations)?

[andrewsr] 23/8/2019 08:46

Most of the current liabilities will be included in the AISC.

So, clearly, no placing or re-financing required.

[sleveen] 23/8/2019 08:43

net current liabilities of $92m v net current assets $30m = $60m current liabilities +$10m G&A/interest. so $70m to find but cash generation from ops only $36m (@ 65k oz * $550 and that's generous)

The clue is in the word CURRENT, those need to be paid in the next 12 months of which most will be within 6 months.

net debt is a useful metric but also includes longer term debt (ie more than 12 months)and it should be used with other metrics to gain an overall picture of the financials.

So refinancing and a placing alongside needed.

[sleveen] 23/8/2019 08:39

andrew


net current liabilities of $92m v net current assets $30m = $60m current liabilities +$10m G&A/interest. so $70m to find but cash generation from ops only $36m (@ 65k oz * $550 and that's generous)

The clue is in the word CURRENT, those need to be paid in the next 12 months of which most will be within 6 months.

net debt is a useful metric but also includes longer term debt (ie more than 12 months)and it should be used with other metrics to gain an overall picture of the financials.

GL

[andrewsr] 23/8/2019 08:29

'Cash of US$8m and net debt of US$43m at end of Period, keeping the Company on track for forecasted positive net cash position during 2020'.
'3,500ozs of gold inventory worth approx. US$5m at end of Period
Undrawn US$10m overdraft facility in place'

Clearly, no placing or refinancing required.

[avsome1968] 23/8/2019 08:22

Totally agree with you sleveen, market not too impressed either, Hum also working through the rainy season this Q hope its not as 2018.

[sleveen] 23/8/2019 08:02

Negative current liabilities of $60m., + $10m in G&A and interest.

Cash generated by 60k oz @ 500 op profit in H2 = $30m.

Going to need a refinancing and a placing alongside that.

[avsome1968] 23/8/2019 07:52

H1-2019 financials out...

51,273 Ounces produced
H1 AISC 1135 (Q1-1297/Q2-998)
POG 1304
H1 margin 169/Oz
USD 8M net debt 43M
Cash USD 8M
Target net cash positive in 2020

Solid progress and our Q3 Ounces will be closer to 30,000 Ounces, the AISC nearer 900/Oz and the margin nearer 600/Oz 3.5 times EBITDA over Q2 and we will swing into profit at last in this quarter..

[laurence llewelyn binliner] 23/8/2019 07:49

H1-2019 financials out...

51,273 Ounces produced
H1 AISC 1135 (Q1-1297/Q2-998)
POG 1304
H1 margin 169/Oz
Net debt 43M
Cash USD 8M
USD 2M a month debt reduction
Target net cash positive in 2020

Q3 production will be closer to 30,000 Ounces
Q3 AISC nearer 900/Oz - Q4 nearer 850
Margin nearer c600/Oz
H2 EBITDA should be 3-4 times H1 and we will swing into profit this Q..

Solid progress at last..

[le0nard] 23/8/2019 07:21

Wakey wakey humburgers???

Are these what you expected?

[borderterrier1] 22/8/2019 13:18

I suspect Bert will be far more interested in his Chicken Chow Mein than bothering to address these legitimate questions from you guys. Don't forget over the last few years since "mine completion on time and on budget" they have all been raised before to no avail. Don't forget also that a gold mine is a hole in the ground with a liar at the top. Now perhaps you get my drift? Or rather, in this case, perhaps you don't.

[bo doodak] 22/8/2019 09:36

Here's a question, fsj, if you feel comfortable asking it, or a version of it

Would the company, should the exercising criteria not be met this year, and noting investors disquiet at the granting of 1p options, consider an increased exercise price if the options are carried forward yet again?

[jbravo2] 22/8/2019 08:41

Yes, by and large fair points.
Redtrends nuanced points are more reflective of my position. I just wasn't sure they'd be taken up so didn't want to write that much. However, who knows I might need to find a home for a large sum sometime soon. So here goes...



I don't mind 1p options if they're for a large OVER delivery. Not delivery of guidance. Your salary is for guidance. I do mind though if it's too large a % of the company.
All in all I think the options were far too generous on their terms, size and price. That is more the point, and yes as has been pointed out (and I agree ironically by someone invested in another company that has done exactly the same) trust is the most important measure that is destroyed by overly generous rewards.
If I feel management wins despite shareholders losing I won't invest and that is what was portrayed by those options.

[fsjamescampbell] 22/8/2019 08:21

Fair points and noted :)

[redtrend] 22/8/2019 05:46

Having said all that HUM need to listen to its shareholders and potential investors on how the Options were presented and constructed. It goes back to an earlier point I had:

"A separate discussion is whether the Qty of shares offered is too generous and/ or the performance criteria too loose (i.e. is it based on meeting guidance or is it based on exceeding targets which should be basis of any performance bonus)."

I raised this previously direct with HUM and so I feel FSJ and others should also raise it when they meet Bert.

[redtrend] 22/8/2019 05:35

Biggles - it's a rather strange position to take when Ariana did the exact same thing but worse few years back. It was the main reason I sold out of Ariana, as they gifted themselves abundant overly generous options at a time they were diluting shareholders to high heaven!

Betts himself nearly has circa 1.5% of HUM in equity irrespective of any options, so his interests are certainly aligned with shareholders.

The performance options are a bonus, instead of a monetary cash bonus - they are not just for the directors, but staff. The performance criteria were set at the higher thresholds of guidance and AISC. They missed the target last year as is well known so no options, will miss the AISC of $800 this year and struggle to meet the guidance of 120,000 Oz. If they somehow managed to hit the performance options guidance which means they need to produce 68,727 Oz for 2H 2019 (34,364 Oz per Quarter), it would be an amazing result for shareholders and the HUM team would certainly deserve the release of 1/3 of the options.

When HUM are more flush with cash, they can perform share buybacks and keep some shares in Treasury for Options, thereby avoiding any dilution. At $1,500 gold, if HUM continues to be this undervalued share buybacks is far more potent and powerful than dividends.

The most balanced post I've seen on the Options is from Casual on the HUM moderated board in response to one of my posts (posts 731 and 734).

[borderterrier1] 21/8/2019 21:55

But unfortunately, after being here for over 2 1/2 years it is obvious now that the priority for the Ceo and Bod is the Ceo and Bod. Luckily I don't need the money I have invested here and I will hang on indefinitely until this makes or breaks. Other investors, Golden Bull for example, are not so fortunate.

[bigglesbingham] 21/8/2019 21:15

Don't get me wrong I do think this has legs and if I was in I'd stay in but at some point there will be a point where the directors have a deal which favours them more than paying shareholders. I do feel this company has potential but because of options issue I won't invest.

[borderterrier1] 21/8/2019 20:34

bigglesbingham My sentiments entirely. Look at the 10 year chart here, it's an absolute disaster. I wish I had never invested.