Hummingbird Resources Share Discussion Threads

[chipperfrd] 06/9/2017 13:51

tens machine,

I disagree. There are producers at low valuations - but they tend to be at higher risk. So you have to take some chances and diversify a bit.

Chip

[tens machine] 06/9/2017 13:48

chip

you actually prove my case when i was talking to another investor the other day .there just ain't any low valuation gold miners about

[darola] 06/9/2017 13:45

zb. UkG murdered my pension, never mind my dreams!

His figures are way off so I'm not going to lose sleep.

Tick, tock. Only a matter of time here....

[tens machine] 06/9/2017 13:45

industry average is x7.1 , however i do my sums on x5

i tend to listen to the management regards numbers , at no point have they wavered from their goal and have delivered . to suggest PFS/DFS numbers are not accurate would discredit the 5 independant companies that compiled them

but of course you know the high grade gonka open pit near surface resource was not included in the PFS

[chipperfrd] 06/9/2017 13:39

Ricky,

Based on actual PE multiples for PM producers your 5x looks very conservative!

On 38 producers that I am tracking on Sharescope, their average PE is 34.8x !!

Admittedly, stocks on the NYSE tend to be at far higher multiples than on the LSE but even so, 5x does look way too low unless they hit big problems.

On the LSE, Randgold is at 41.8x, Fresnillo at 37.6x, Serabi at 35.4x with projected at 4.5x, Blackrock is 29.5x, Hochschild is at 29.2x, Patagonia at 20x, Polymetal at 12.9x, Centamin at 11.4x, Pan African at 10.6x, Acacia at 10.2x, Goldplat at 10.1x, Anglo Asian at 10.1x, Highland at 9.9x, Orosur at 8.7x, Trans Siberian at 8.5x, Caledonia at 8.2x and Ptropavlovsk at 7.1x.

Good to be conservative but with the world's financial state in such a complete mess one would reasonably expect to find pretty decent multiples for stocks that actually produce the world's finest hard assets :-)

Chip

[rickyhatton] 06/9/2017 13:28

Darola, mine was somewhere in the middle! And plasybryn you are right I was being cautious and conservative. But I am invested! By July 18 I see it much higher.

Good luck to all.

[tens machine] 06/9/2017 13:27

george you have just calculated the divi , of course there are exploration costs that will be funded by production ,10-15% of profit DB has said
free cash flow has nothing to do with what they spend it on

the bad scenario plus random number in YOUR increased costs and a placing now aswell .

what if grades are better and they will be still sitting on $30m upon mine start up

what next a godzilla attack in downtown yanofilia?

[plasybryn] 06/9/2017 13:10

Not sure it is bullish as I have used 15 times, even 10 times, not 25.
But are these types of valuations used more in a bullish gold market?
Any Accountants care to comment?

[zeberdie] 06/9/2017 13:06

Darola,,,, £1.20 :-)

[zeberdie] 06/9/2017 13:06

Ukgeorge, you have just murdered my dreams.

[darola] 06/9/2017 13:00

So in two posts we have the bear view and the bull view! I'll take something in the middle.

[plasybryn] 06/9/2017 12:55

I think it is acceptable for small miners to calculate their valuation on free cash flow.
I would use 130,000 ozs at a margin of $650 giving $84.5m or £65m before loan repayments.
The Annual Report & Accounts (2016) says we will be trading on just 1.26 times free cash flow with an industry average of 15-25.
If we therefore multiple free cash flow of £65m by the bottom figure 15, we get a potential Market Cap. of £975m which represents a share price target of £2.84 (circa 700% upside)
It also says in the Annual Report & Accounts that they will be generating cash flow per share of 20p in their first full year of production.
On 15 times that gives you £3 or £2 on just 10 times.
So using the Co's own figures I think your numbers are too conservative ricky.
Anyone disagree?

[ukgeorge] 06/9/2017 12:55

Sadly, almost always, feasibility studies under estimate costs.

so being sceptical the $700 will likely be higher lets try $850

1300-850 x 107koz = $48M

ownership is 85% so $41M

Then there is greenfield exploration lets say $7.5M

Then there is head office costs, lets say $2.5M

Suddenly we are down $31M / 1.3 = £24M

£24/351M shares

suddenly down to 7p

P/E ratio at 35p current price is suddenly 5


Lets try a bad scenario and throw a spanner in the works, the ore body doesn't live up to the model, recovery rates are impacted by high clay content and dilution with waste, costs shoot through the roof. They run out of capital and need to raise funds. There is an additional 200M shares issued to raise funds.

The mine costs are $950
suddenly the free cash is down to £16M, but there are now 540M shares in issue... earnings per share are now 3p, suddenly 35p a share is a distant memory.


This is why the share price is not higher. When we are in commercial production for a couple of quarters we can hope for a better valuation but until then we have to many unknowns.

[rickyhatton] 06/9/2017 12:27

Sorry, The $78m should have read $64m, but the workings outcome is unchanged. Amended.

[darola] 06/9/2017 11:30

Just to add to that your currency conversion is too low. $78m is closer to £59m, let's say £55 and then use your formula. That's a PE 5x0.8 value of .625 per share, or a 50%+ premium from here.

Edit: And still missing the additional 25k ozs in year 1.

[darola] 06/9/2017 11:24

First year is stated as 132k ozs. By the time we reach the 107k from year 2 Golds bull run should see it north of $1500. I also believe that HUM are setting them selves up to outperform their targets to add to the positive news flow.

So your numbers are very conservative and still demonstrate that this is significant value. Just got to sit back and watch the story unfold. 😀

[rickyhatton] 06/9/2017 11:11

HUM target AISC $700 GP $1300 P/E ratio 5 minimum

$1300-700 = $600 x 107,000 0z pa = $64m/1.30= £49m

£49m / 351m shares = 14p

P/E ratio of 5 x 14p = 70p x 0.8 ownership = 56p minimum target price during 2018

If he achieves his stated goal of organic growth to average 150,000 oz pa then target price 79p.

[westmoreland lad] 05/9/2017 21:43

and it only gets better -- bring on the production -- not long now to wait ------>

Gold prices continued rising Tuesday, as the latest U.S. response to a North Korea nuclear test and comments from a Federal Reserve official urging caution on raising rates pushed investors toward the haven asset.

Gold for December delivery closed up 1.1% at $1,344.50 a troy ounce on the Comex division of the New York Mercantile Exchange -- its sixth day of gains in the past seven sessions. Prices recently have risen to their highest level in almost a year as tensions between the U.S. and North Korea have escalated and many investors have become skeptical that the Fed will raise rates one more time this year amid sluggish inflation.

[darola] 05/9/2017 21:23

Until we are producing the stuff it seems nobody is interested - when the penny drops, and this breaks out again it should fly.

[qs99] 05/9/2017 20:42

GP motoring again

[tens machine] 05/9/2017 16:35

nice mention on VOX

18mins in approx

[dingo75] 05/9/2017 16:30

Could well see 50p here v soon.
v good mngmt, tier 1 asset.

[catsick] 05/9/2017 15:07

No pvr , this looks like it is set up to succeed though

[darola] 05/9/2017 13:46

CS. I have a very large position. Any teething issues will be short lived - perhaps swapping out faulty plant components - but the story and forecasts here show significant upside.

Stick around and you'll be well rewarded IMHO.

[zhockey] 05/9/2017 13:39

Catsick,

As long as there are so serious teething issues you should do well.

Are you buying PVR?