Hummingbird Resources Share Discussion Threads

[bo doodak] 10/2/2021 16:12

Enjoyed reading these last few days posts.

DB finally implicitly admitting that HUM would benefit from a dedicated COO is crucial to my mind, and I was looking for something from him on that. The dilemma, if the grade is to decrease for a few Q's, is it too early too top up. For me, the answer would be yes.

[johnhemming] 10/2/2021 14:49

I think one difficulty is that investors at times concentrate on short term gains. Actually running a business a task best planned for the long term. That applies here as well.

What is good for HUM, however, is that the business can now be self-financing. Finessing all the deals without capital must have been a challenge.

[polaris] 10/2/2021 13:57

It's poor planning. They must have had the drilling for KE and KW and known the higher grades are lower in the pit. With a good strategy you would have started to strip the lower grade ore from the top of KW and blended it with the higher grade ore from KE. That is prudent grade management to avoid huge spikes up and down...which we have now. A COO onsite would have been in full control of this process. Now HUM will need to go through a few Qs of maybe even sub 2 g/t ore in order to reach the higher grades. It could have been avoided!

[plat hunter] 10/2/2021 13:50

Not just your opinion Rich..Attributable ounces to HUM for all three assets is circa 260/300,000 ounces a year. Given the low level of issuance, the dividends alone will likely be a multiple of current share price

[andrewsr] 10/2/2021 13:49

Wouldn't any miner's prime objective be to get as much out of the ground as quickly as possible? Hedge to cover finance costs if prices spike, but you wouldn't expect them to put/leave aside higher grade material in the hope of higher prices in the future, i.e. trying to finesse price v grade extraction.

If they've hit low grades, it may be economical to continue for a while, but they wouldn't want to put off mining high grade ore elsewhere for too long.

We may all expect higher gold prices, but as long as it's profitable just get it out of the ground quickly and then move on to the next project and so on until the price makes it no longer profitable. Just my simplistic/non-expert take.

[richgit] 10/2/2021 13:38

Dan sounds very positive




I am looking to buy a stake in Pasofinogold and will wait patiently to try and
guess the best entry point for longer term,and possibly an undervalue of a Positive
Feasability study (albeit much higher than currently trading at.

Considering its aims- its value could multiply many fold if things develop positively

Work has commenced on a Feasibility Study to investigate the potential to produce 200,000 to 250,000 ounces of gold per year.


That is some staggering "potential" and if the right news flow-flows, more Investors will start to at least buy a base case stake in such staggering "potential"

Considering Hum`s Market Cap allows nothing for it-then the possiblities are huge.



IMHO

[polaris] 10/2/2021 12:22

I think that you need to read the post again as to what was being asked. It was a full scenario with more than one option.

Further, if you really think that pog is close to its high and it may impact your business, you hedge. That is the whole point of hedging: give forward clarity on business revenues v costs against the business plan. It is also why all reserves have a cut-off grade, beyond which the ore is uneconomical for the given assumed pog.

tongue in cheek here but i wouldn't want you to be the CEO of a mining company! ;-)

[lowtrawler] 10/2/2021 12:15

I agree in terms of long-term earnings. The question was framed as how to maximize short term gains, specifically mentioning reducing mine life to achieve it.

[polaris] 10/2/2021 12:10

@lowtrawler - well in that case you gave the incorrect answer. When prices are high you mine lower grades where possible to generate enough income to meet guidance and cost profile. Business is a marathon not a sprint.

[lasata] 10/2/2021 12:04

Someone nibbling with Hum on this dip.....

Buy when fearful.....sell when cheerful

[lowtrawler] 10/2/2021 12:00

I want recommending it Polaris, it was answering the question.

[polaris] 10/2/2021 11:46

lowtrawler - that says everything about your mindset. No sane long-term company wants that kind of variation. The more areas that are mined in parallel, the more blending becomes absolutely crucial. It's not about turning a profit in one year, it's about sustainable production and profit. If a BoD follows your recommendation then i would immediately sell out...short-termism!

[charlieeee] 10/2/2021 11:45

They should be heap leaching the lower grade.

So, as we all thought, capitulation yesterday and a decent bounce.

How is it that investors are so unable to understand value? At 100 million market cap, the bad news was already priced in for a 100 oz producer shortly to be debt free.

Well done, UK George.

[lowtrawler] 10/2/2021 11:41

Goldfinger. The correct answer to that question entirely depends on gold pricing. If you think we are at an exceptionally high gold price and it is going to fall in future years, you need to mine high grade gold as quickly as you can. If you think gold prices are not going to fall-back, maybe even increase over time, you may even want to concentrate on the low grades leaving the high grade for future improved prices.

[polaris] 10/2/2021 11:41

Always blend - use high gold prices to economically mine lower grades. It makes financial sense. Whether a company actually does that says a lot about their mindset.

[plat hunter] 10/2/2021 11:36

For me it's the latter and use the gold price to extend LOM. Who knows what you might find, drilling nearby with those few extra years.

[g0ldfinger] 10/2/2021 11:32

Polaris, thanks for the info in post 4026.

Do you think it’s better to go for maximum earnings over the next year or two by operating at a higher cut-off grade,
With the consequence of reducing the life of mine by a couple of years.

Or;

Use the gold price strength to blend low grade ore into the mix to increase mine life at the cost of a reduced margin?

[cj2021] 10/2/2021 11:30

Some interesting notes here and on the LSE bb.

Rogue trader - think on every metric, i.e. short/medium and long term its a bargain when you consider the market cap is c£87m.

It looks poised for a strong rise from a TA perspective with wave 3 of the downward trend now completed. Heavily oversold and I understand with news due on Karoussa and being fundamentally undervalued - a healthy gain should be in order from here.
Can't even by 20k shares on the market at the moment without going in to NT. I suspect mm's will have to release the brakes at some point.

[plat hunter] 10/2/2021 11:28

And we're off, that's a channel break on the hourly.Https://www.tradingview.com/x/TtI1lPn1

[roguetreader] 10/2/2021 11:22

Polaris I agree with post above, I now think a COO is key to good management of the operation at Yanfolila. I do not think DB has put enough detail in to the explanations of the grade / costs figures for 2021 i.e. as to whether they are blip due to the swings as part of the mining process or whether they are potentially a longer term trend. I suspect that this may be because without a COO focusing purely on 'Yanfolila' this has not had the focus it needs and at this point DB simply doesn't know with sufficient confidence to say. Just my surmising, still think medium / long-term the Company is a bargain.

[plat hunter] 10/2/2021 11:15

More like 150

[johnhemming] 10/2/2021 11:12

polaris - the immediate cash position is indeed all about the grade. Noting this:
"Production profile weighted towards the second half of the year, with part of the KE pit to be mined out this period and focus to move to Komana West ("KW") pit where higher grades are lower in the orebody which are not expected to be accessed until the latter part of 2021 onwards."

I think it is sensible to mine out part of KE. Balancing out some higher grade processing and lower grade has merits, but there is no sense in the long term simply discarding the lower grade.

[bishan bedi] 10/2/2021 11:10

An excellent post, thank you for distilling the issue polaris

[polaris] 10/2/2021 10:54

Here's some information from the last few years on production stats.

2018
AISC $1087
gold sold 91546 oz
Ave received $1271
grade 2.77 g/t
recovery 95.48 %
margin per oz $184

2019
AISC $986
gold sold 112686 oz
Ave received $1377
grade 2.88 g/t
recovery 93.67 %
margin per oz $391

2020
AISC $1147
gold sold 104174 oz
Ave received $1745
grade 2.41 g/t
recovery 94.08 %
margin per oz $598

Projections for 2021 based on the guidance:

2021A
AISC $1350
gold sold 100000 oz
Ave received $1825 (insert as you like)
grade ?? g/t
recovery 94-95 %
margin per oz $475

2021B
AISC $1250
gold sold 110000 oz
Ave received $1825 (insert as you like)
grade ?? g/t
recovery 94-95 %
margin per oz $575

Throughput in the plant is fine from 2019 to 2020 at 1.39 v 1.25 Mt. The major issue is the feed grade, which over the last 4 Qs has progressed as:
2.98, 2.36, 2.27 and 2.03....not good! Gives the average of 2.41 g/t for the year.

As i said yesterday: It is all about grade!

Let's say HUM process the same through plant as last year at 1.39 Mt.

To meet the 100 k oz for the year the grade needs to be 2.38 g/t after accounting for the recovery. For 110 k oz it needs to be 2.62 g/t after accounting for the recovery.

We need to keep an eye on the tonnage through the plant and the grade in the next Qly results. Example - with 2019 average grade and recovery the production would be almost 121 k oz. With Q4 grades it would only be 85.3 k oz. That is a huge spread. If production fell as low as 85 k oz then AISCs would be closer to $1500 and the profit margin much closer to that in 2018.

Yes, HUM have some nice other prospects but they need to get the existing mine under tighter control wrt mining practices, grade control and drilling up further reserves. HUM need a COO onsite to deal with this grade issue and to forward plan. DB is not that man.

HUM will clear the debt in 2021. It's just a matter of what cash-flow they manage as a result of the grades...

[bikwik] 10/2/2021 10:53

I wonder if Tones77777 and Kadul over on the LSE board bought any shares today. Probably not I would hazard a guess......far too busy wasting their time trying to organise a WI meeting among fellow PI's. In effect trying to blame Dan for their mistake in buying HUM's shares higher up. We should all be responsible for our own mistakes. Hmm.... the phrase caveat emptor springs to mind.

Meantime....it looks like the 64c moment was yesterday at 24.10p. Don't you just love Eddie Murphy!