Hummingbird Resources Share Discussion Threads

[casual47] 28/6/2020 23:23

New, who knows. The point is that there will likely be lots of debt for years to come, e.g. Dugbe also.

A sensible dividend policy does not require a company to be debt free as pre-requisite. As long as debt can be serviced and the debt/EV ratio is within sane limits then there is nothing stopping a dividend. In fact, this is how most companies operate and have done so throughout the years.

[new_buyer] 28/6/2020 22:25

casual47 there’s nothing to say they will use the entire $100m of debt available, if they do what will they do with the cash being thrown of by Yanf? They can’t pay the loan of early without penalty so surely they aren’t going to let it just build up with no plans on using it?

[ukgeorge] 28/6/2020 21:20

I think just the announcement of the start of a share buy back would really help improve sentiment and hopefully get the share price moving.

But for arguments sake they could spend £11M to buy 10% of the company today. In 3 years we produce 180koz and have a margin of $700 that's $126M. So for £11M we would gain $12.6M of extra profit. There aren't many investments that could offer a better return........Maybe Cora but for whatever reason they didn't take part in the last rights issue.

The new project though does obviously lower the likelihood of either a dividend or share buy back.

Perhaps we could be lining up a bid for Bunker Hill.

[laurence llewelyn binliner] 28/6/2020 20:27

Q2 closing on Tuesday, then reporting early August.., and this is the 1 we've been waiting for a very long time, with net cash positive anticipated ... :o)

Q4 2019 Cash and Gold in hand USD14M, bank debt 40M, trade payables 39M
Q1 2020 Cash and Gold in hand USD25M, bank debt 34M
Q2 2020 Cash and Gold in hand USD37M, bank debt 28M (est) trade payables tbc

[moljen] 28/6/2020 20:18

You can of course buy back shares and hold them in Treasury rather than cancelling them - nice little war chest could be accumulated at this price and the shares down the line be used for a paper acquisition when hopefully the share price is somewhat higher.

[temujiin] 28/6/2020 18:23

My tuppence worth is that the HUM should NOT use any money to buy back shares while it has debt, but once debt is cleared and IF they have no particular need for any excess cash, then they should have a policy of using say 10% of free cash for buying back shares 'IF' they feel the share price is particularly undervalued, and combine this with a divi but still retain a healthy cash balance at all times.

[casual47] 28/6/2020 16:22

Nobody is suggesting to use debt for anything.

The question is what to do with free cash, so after paying all the bills, including debt repayment/interest.

It either goes back in the business, goes to shareholders as a (special/one-off) dividend or it goes toward buybacks.

All the options have pros and cons.

My preference is for the money to go back in the business until they can start a long term dividend policy.

But I can see scenarios where both a one-off dividend and a buyback may be good business sense also.

[casual47] 28/6/2020 15:32

There is a good way to do share buybacks:

If BOD are aware of a large shareholder who wants to exit but can't do so easily because of liquidity. Rather than see the shareprice be sunk by continuous drip-drip sales they could buy that seller out and then keep e.g. the shares in treasury to be used for future employee incentives.

[laurence llewelyn binliner] 28/6/2020 15:15

Share buybacks just lead to artificially inflating the EPS/DPS on the same amount of profits to flatter the BOD, and can typically lead into the next equity raise to fund the next project diluting shareholders back again and achieves nothing apart from a possible short term hike in share price and rise in the dividend which is not relevant here yet, so overall a pointless exercise..

Furthermore, how many more examples do we need to see of this share buyback practice in large corporate, who are all now on their knees now with the begging bowl out, because they have wasted company cash and profits on futile share buybacks, now in troubled times they can not raise at anything like a sensible VWAP, having to offer huge discounts get the offering sold massively diluting existing shareholders, but for the most part they can not raise at all and are having to ask for bailouts, or fall into administration..

Strong companies have strong balance sheets and can ride out a storm, weak ones make poor decisions, waste their cash and then fold so there is no point having a better short term share price to look at in a weakened business to make you feel better about your investment..

[simonbroughton] 28/6/2020 12:16

Share buybacks don't always lead to a rise in the share price. Sometimes the opposite happens. IMHO a share buyback does not inspire confidence whereas a dividend or increased investment does.

[temujiin] 27/6/2020 14:30

UKGeorge26
Temujiin, you've had months to get a decent position!!!!
================

And I have. I now have 160k at an average of 25p. But I'd like to round that up to approx 250k but can't atm as money is tied up elsewhere, where I think there is more short term upside. If those go as I think and hope they will, then I'll average up here for the medium to long term.

[glennborthwick] 27/6/2020 10:11

Grow up Ricky. It's a well known saying and if you think management at him give two hoots about it you're mistaken As long as they pay off the debt and they get the new plant rolling in a two year time frame this Shane Elric will double or treble.

[rickyhatton] 27/6/2020 09:26

BT1

You post all day every day negative and defamatory posts about HUM/DB, now naming DB as a "liar"


"borderterrier126 Jun '20 - 14:59 - 9086 of 9086
"Unfortunately, if we're talking about "old adages", here's another one:- "a goldmine is a hole in the ground with a liar at the top."
That is libel.

Suggest you delete your libel about DB with immediate effect, and offer an apology, unless you have deep pockets

[borderterrier1] 26/6/2020 14:59

Fabulous news!

[ukgeorge] 26/6/2020 12:27

A couple of nice new slides

[wassapper] 26/6/2020 11:07

Very high grades. Like it.

[rickyhatton] 26/6/2020 11:00

Note the HIGH GRADE data. For example:
KRC0565 Sanu Folo 18.0 metres at Au 70.78

"The Company has also completed a more in-depth review of the Project's geological database which highlights promising drill intersections both within and outside the current stated mineral resource used in the mine plan. These drill intersections also demonstrate the high grade nature of the targets proximal to the project and within the permit area

There is undoubtably further potential to be discovered but what is most exciting is the abundance of high grades as evidenced by the large number of gram metre intercepts >50 gram metres but also the many occurrences of visual gold. The old adage "Grade is King" is particularly relevant to Kouroussa and our technical team is looking forward to the challenge of unlocking the system's full economic potential. We look forward to sharing the story as it unfolds."

[marketanalyst1] 26/6/2020 10:51

Private investors would be wise to note the following:

• The Kouroussa Gold Project (KGP) boasts a high grade mineral resource of 1million ounces of gold!

• First gold production is projected at under 20 months at a staggering 100,000 ounces of gold per annum!

• Projected capital outlay of KGP currently stands at US$90m.

• Coris Bank International has signed-up to provide up to US$100m for the development of KGP, so no further stock dilutions ahead.


So, considering that HUM is currently on track to; produce 110,000-125,000 ounces of gold this year; to move from net debt to net cash position prior to the end of 2020, the addition of KGP is materially transformational for the business.

Put simply, and sporting a NAV of £111m ($138m) at the backend of 2019, when gold was changing hands at 1,500/oz, and translating that into today’s gold price of 1,750/oz, throws up a projected NAV of £128m. Add to this valuation today’s staggering acquisition and the NPV jumps to £247m at current gold prices!

Thus, at 30pence per share, the stock is materially mispriced. So take cue from the shrewd buys going through at sub 50pence ahead of the re-rate.

In the meantime, the stage is set for a $2000-plus gold price…







ATB and stay LONG.

[techandy] 26/6/2020 10:49

Mr market clearly didn't think much to the news.