Hummingbird Resources Share Discussion Threads

[lowtrawler] 08/2/2021 23:08

Having done a little more research, I believe there are some valid concerns over management capability. Some of the mine modelling has been worryingly inaccurate and they seem a little incident prone. Communication failures tend to be a feature of AIM but there are plenty of exceptions. If gold had stayed under 1500, they would currently be struggling.

On the plus side, they are producing 100k/oz a year, effectively debt free and self funding a lot of promising prospects. In my view, Gold is likely to rise in price which will positively impact HUM more than most junior miners.

On balance, I am going to dip my toe in to ride what I hope will be significant Gold price improvement. I reckon 2300 Gold could double the price and as some of the prospective mines come on stream, there should be further price growth. I'm not going to go mad, I can see some valid concerns and so will maintain only a modest investment.

Thanks for the comments all.

[plat hunter] 08/2/2021 21:34

"There are uncertainties in the RNS that would be best being certainties."Not sure there is... It looks pretty simple to me.. Capex has doubled from from 5 mill to 10 million and the debt of 11 million is to be paid off in the first half too.16 million being spent right there, get passed June, the AISC falls and the cash accrual will really start motoring.

[johnhemming] 08/2/2021 21:17

>So the basic premise is that the management are not held in high regard. They have >messed up in various ways, got lucky and are pretty poor at communication.
So if we separate those things.

a) The management are not held in high regard
That may be true, but is not necessarily correct.

b) The management are poor at communication.

There are uncertainties in the RNS that would be best being certainties.

[plat hunter] 08/2/2021 21:10

Well todays gold movement added 2.5 million to the earnings.Let's see what happens tomorrow. ;-P

[lowtrawler] 08/2/2021 21:07

So the basic premise is that the management are not held in high regard. They have messed up in various ways, got lucky and are pretty poor at communication.So long as gold stays above 1700, they can fund their capital projects and emerge stronger.Due to their high AISC, they are massively geared to the gold price. A $100 movement in gold will change profitability by around 20%?Thus, if I believe gold will increase in price, they will be a great investment. Volatility will be of the scale though.

[borderterrier1] 08/2/2021 21:07

Plat Hunter Wake up. Do yourself a favor and read the recent post by Anon3 on the LSE bb entitled "What a Mutt" and then perhaps you will realize that what I have been saying on here for a long time is right? What concerns me most with this abysmal share price is exactly what he says, how can the co. get it back up?

As I have often said at one time I held 400,000 shares here, today only 120,000. Fortunately, I can afford the loss but there are many who come on here that probably can't.......and that disturbs me. Perhaps the move by others to remove DB will not be successful but I hope it is. BTW I have not had a reply to my e mail from the company. It's a poor job all round IMO.

[johnhemming] 08/2/2021 19:21

>But the mine isn't. Is it worth £100M? No it isn't because reserves are running out >and costs are through the roof.
The company has an 80% interest in this mine and also an interest in two others.

Lets ignore the other interests for now.

Reserves are always running out. Hence the question is what remains to be extracted at a reasonable cost.

>Mineable Reserves, as at 31 October 2019 Yanfolila were 7.9Mt of Reserve ore @ 2.66 >g/t for 676,000ozs gold. At 31 March 2019 Yanfolila had a total Resource base >(inclusive of Reserves) of 28Mt of Ore @ 2.23 g/t for 2,005,300ozs gold.

So lets take the worst case figure of USD300 margin on gold.

On that basis Yanfolila is worth USD200m.

I accept that things change if gold goes down to USD1200. Things change if gold goes up to USD 2.3K

The way I see it is that looking at negative scenarios that are unlikely then the business survives and does not necessarily need more capital.

In more likely negative scenarios it washes its face.

The risk is on the upside not the downside.

Still we all make our own decisions and deal with the consequences which is fair enough.

Here is a helpful chart:

[charlieeee] 08/2/2021 19:21

UK George

Are you aware that Yanfolila is a multi pit asset?

So far, they have only been mining part of K/E and K/W and the first 2 years was just the oxide.

Much of the fresh rock has not been mined and there is high grade to come from K/W.

K/E underground has not yet been started and that is 113,000 oz. grading at 3.45 g/t.

In Gonka they have a high grade resource of 293,000 oz. at an average grade of 3.96 g/t ( and 209,000 oz. of that is the pit at 3.8 g/t, with the balance being underground)

Part of Sanioumale West is already in reserves and yet to be mined and the drilling results re near surface at Sanioumale East look to be good.

The original plan was to start blending these from year 3 ie 2020, but cash flow constraints meant that they were not able to finalize the plans or fund the capex (thanks to the pit wall and the need to pay off the debt).

Going forward, there should be a good number of high grade and highly profitable years and with gold at $1800 per oz. even the lower grade is making money. Obviously blending is better going forward, as that smooths out the peaks and troughs.

I agree that they should have talked the shareholders through this at the beginning of 2020, but given the current POG, the market cap is ridiculous: it is now valued as an explorer and totally fails to value the built and paid for processing plant.

[aimsurfer] 08/2/2021 18:45

This is my thoughts on what's happening. Management and board lacking meaningful mining experience. They made plenty of good moves but unfortunately Yanfolila was their schooling on operating a mine. All first time miners face challenges and learn plenty. Yanfolila now is not a company maker due to how it's been managed, it's purpose now is to get us to fund the development of Kouroussa without any equity dilution and hopefully again with Dugbe.Unfortunately for management to be taken seriously, they need to show they learned. Open and transparent communications, detailed breakdown of AISC. until they change their attitude to transparency market will keep rating them as cowboys. If they can't be transparent about Yanfolila I don't trust them to operate Kouroussa any different. You can say AISC will be $900 or whatever but I know from experience you haven't proven you can deliver to your mine plans or ASIC. Funds will think the same IMO.Yes there were circumstances like covid and border closing but when that happens decent management know exactly what the impact is and offer full impact assessment. Not keep quiet hoping to still pull a rabbit out the hat.

[johnhemming] 08/2/2021 18:23

>Market needs a detailed rns exploration not some video with their pr company.

That indeed is true. You need to read between the lines to understand what is happening with the AISC.

A lot of the information is essentially available, but not with the clarity that would be best.

[aimsurfer] 08/2/2021 18:08

Market needs a detailed rns exploration not some video with their pr company.

[bikwik] 08/2/2021 17:53

Cinoib....its because capitulation is going on.....reason goes out of the window then.

They cannot see that gold has left the station!!


One last video on gold and silver. This guy is superb (plus daniela is superb as well what a woman!)

Try and listen to it all......then you'll know why the cup and handle may just be right!

[plat hunter] 08/2/2021 17:49

They only expect the AISC to be in the higher end for the first part of the year, coincidentally the debt is being paid off in the first half of the year. AISC will grind lower with no more capital and interest payments.

[johnhemming] 08/2/2021 17:44

What confuses me is that HUM are in possibly the strongest position they have been in since being listed.
Yet people seem really negative. They are basically cash positive and making cash. They do have some projects that need cash, but one is farmed out effectively.

Yes the AISC was high for the last quarter, but there are explanations as to capital spend and it is not unreasonable to spend some money on exploration.

Unsurprisingly I am long.

[lowtrawler] 08/2/2021 17:32

I'm considering jumping into HUM. The fundamentals look solid and assets undervalued. My concerns are around AISC rising and some vague comments about the Board not being very open and honest. Are those concerns valid?

I took a look at the recent production and outlook RNS which confirms the AISC issue but most everything else looks to be positive and on track. What other things could come out to bite me?

[jc2706] 08/2/2021 17:08

It seems to be a common malaise. A lot of juniors down across the UK market.

[cinoib] 08/2/2021 16:19

Can someone tell Hum gold is up $20 as seems to be gonig the wrong way. I thought only AAz did that.

[jc2706] 08/2/2021 16:05

BIKWIK,

I suspect that most of us think the same way if we are invested in gold companies. The stars are aligning for a lot of gold technical analysts. The contrarian in me is concerned!

[bikwik] 08/2/2021 15:56

Probably because he's not always right and likes to go on about conspiracies and he's trying to rationalise the chart TOO much with the fundamentals.

Quite a lot of the time he does get it right and given that JRB is also of the same opinion then its a very real possibility that gold does eventually go parabolic.

[bikwik] 08/2/2021 15:50

At last someone who understands. Thanks JC.

[jc2706] 08/2/2021 15:49

I seem to recall Clive Maund lost a lot of followers in the last gold bull market although I can't for the life of me remember why.

[jc2706] 08/2/2021 15:47

Plat Hunter,

True. But Jordan Roy-Byrne is pretty well respected by most. From my experience he has always been straightforward and open in his presentations.

[bikwik] 08/2/2021 15:46

Well obviously! BUT it doesn't invalidate his cup and handle view. I presume you have come across this pattern. Also, he's not the only one, and no.... because there are more than one with this view doesn't mean you take the contrarian view and go the other way.

Here's a good explanation on cup and handles:



Then you may be interested in this one:

Clive Maund is a good technician, though does talk too much about fundy stuff and conpiracy theories as at the beginning of this report:

[laptop15] 08/2/2021 15:14

I suggest you listen to the latest podcast its explained