Hummingbird Resources Share Discussion Threads

[polaris] 20/7/2021 17:32

HUM is probably the most undervalued gold producer on AIM right now, given actual production, costs and exploration at the producing mine AND the other projects. Just because the market values it at £70 M EV today doesn't mean otherwise.

AAZ was once valued by the market at near 4 p (so around £5 M), due to a forced seller over a long period. Now look at it. SC have depressed the SP, pure and simple. That is what a continued seller does to a small cap company.

HUM 'should' have a valuation in the region of £200 M, given the production profile, costs, LoM, exploration and prospects. If VEIN deliver on the DFS in Q1 2022 then it can be a whole different ball-game again. If HUM was listed solely in the US then i'd expect at least that forward multiple, possibly higher.

[laurence llewelyn binliner] 20/7/2021 17:21

HUM have spent USD70M on getting the Dugbe resource, exploration costs and servicing the licence(s) for X years, VEIN are getting their half of those start up costs for the price of the DFS and covering all the costs of the project for 2 years while they do it..

51/49% on the JV vehicle which was ARX, but I understand will be called HUM Liberia..

So VEIN will be raising their 49% of whatever CAPEX it takes after meeting the earn in criteria..

[plat hunter] 20/7/2021 17:18

If I'm wrong then the investment case is even more compelling no?Lets have wager chipper?

[sleveen] 20/7/2021 16:59

PH

I will add to the count that think you are mistaken.

[polaris] 20/7/2021 16:44

PH - are you being deliberately obtuse?

VEIN earn 'up to a 49 % economic interest' in the project at the stage it will be at...but that is prior to accounting for the 10 % free carry of the Liberian government. Once that is taken into account then VEIN will actually hold 39 % of the equity in the JV directly + 5.1 % of the current equity held by HUM in the JV, totaling 44.1 %. The JV vehicle is called Hummingbird Liberia.

The costs to build the mine will be up to Hummingbird Liberia to arrange, although Stalker stated that VEIN will be taking the lead with that. VEIN will likely fund their direct part of the construction project through a mix of equity and debt. It remains to be seen how HUM will contribute their fraction to the JV vehicle.#

VEIN are not getting 49 % of the completed mine with no contribution to construction costs. If you believe that so be it.

I find that when many independent people state that your point of view is incorrect, then it pays to take a good hard look at how you arrived at your point of view. The most likely outcome is that your original point of view / interpretation is wrong.*

* and if you are right then it is prudent/convivial to explain why. BBs are not (just) a popularity and posing forum.

#The GoL fraction is free carry. They do not contribute to construction costs. Until then, it is best to describe Hummingbird Liberia as a 51:49 JV of HUM with VEIN...cost accordingly.

[charlieeee] 20/7/2021 16:26

PH

The big spend was by Hum.

For an indication of how much Pasofino have spent, take a look at how much they have raised in the last 12 months or so: exploration funding is out of cash raised.

Total spend will be quite a lot more than $70 million when the Hum/Pasofino spend is aggregated.

[chipperfrd] 20/7/2021 16:16

I give up. Believe what you want.

[plat hunter] 20/7/2021 16:15

VEIN are upto circa 70 million total spend so far

[borderterrier1] 20/7/2021 16:14

Whitegold1 I know, I'm deliriously (look that up) excited about this. Never had so much fun since the last time I had toothache. Onward and upward! 15p before the end of the year, you'll see! Happy days!

[chipperfrd] 20/7/2021 16:12

I really have to give up on this one!!

Since when has a DFS cost anything like US$90m ??

[plat hunter] 20/7/2021 16:10

Chipper the dfs and 10 million exploration is circa 100 million..Surely you can manage 2+1 or does the DFS delivery just fall out of the sky for the price of a mars bar?

[bishan bedi] 20/7/2021 16:08

Should be fun watching PH try and turn this discussion in to him being right!

[chipperfrd] 20/7/2021 16:05

PH,

I have no idea how you come up with your numbers?

VEIN's share of the US$391m would obviously be 0.49 x 391 = US$191.6m.

[plat hunter] 20/7/2021 16:02

Sorry chipper I like your page and your valuable input however you're wrong on this one .If nothing else, expecting PAS to find 300 million and contribute a total of 60% of total project costs for a 49% earn-in is ludicrous. It doesn't stack up and it's not what's happening. VEIN are delivering the DFS plus 10 million in exploration. No more and no less.

[chipperfrd] 20/7/2021 15:58

JH,

I have all my own data after working out DCF's for all projects. You are welcome to any bits of that if you let me know what you want.

I also have forecasts from SharePad if you would prefer those.

[whitegold1] 20/7/2021 15:54

Bordergerret mkt lookz quite appy for now. relax man eat sum beanz.

[chipperfrd] 20/7/2021 15:53

PH,

They only earn their share (49%) by meeting those conditions. After that they are obligated to pay their share of build costs.

HUM have already poured US$70m into Dugbe to get the resource etc. They did not proceed further because of the size of Capex required to get it into production. This JV resolves that problem assuming VEIN meets all the conditions.

Clearly, once VEIN owns 49% of the project they have to take 49% of the financial risk in getting it into production.

[johnhemming] 20/7/2021 15:51

On a completely separate issue I have been trying to find forecast P&L figures for HummingBird. Stockopedia have some but they come from a provider who won't break down the figures and they look wrong.

Does anyone know of any predictions for FY 21 and FY 22?

[plat hunter] 20/7/2021 15:28

How is the capex split 51/49% chipper, when the terms of the earn in are on delivery of a DFS and 10million usd in additional exploration?Where exactly is the capex share?

[chipperfrd] 20/7/2021 15:09

The Capex is split 51:49 but do bear in mind that the Liberian Government have a free-carried 10% (with an option to pay for an increased holding) so in terms of attributable earnings HUM's potential share drops to c. 46% as things currently stand.

Vein are working on possible reduced pre-production Capex (currently US$391m according to their recent scoping study) so the total build costs may well change by the time we get the DFS.

[plat hunter] 20/7/2021 14:54

Thick as porridge

[borderterrier1] 20/7/2021 14:48

Fabulous RNS. Well done Dan and the Hum team!!! I confidently predict this will be 22p by 2026. Fill yer boots!

[tigerbythetail] 20/7/2021 14:41

So, as things are, post DFS, HUM would have to find 51% of the costs of building Dugbe, (in return for their 51% share), and Pasofino would have to find 49% of the capital for their 49% share.
(But, of course, there will be corporate developments before we ever get to this point. Hopefully, a larger miner will buy the project out, or at least buy out Hummingbird's share.)

[dickbush] 20/7/2021 14:00

I've just wasted half an hour trying to find any information on how the capital cost of developing the mine is divided (or not). I can find loads of info on the requirements for Pasofino to obtain its 49%, but absolutely nothing beyond that.