Hummingbird Resources Share Discussion Threads

[sleveen] 16/6/2022 08:13

So the consensus on Dugbe is neutral at best.

IRR is not high enough given known risks :input costs, POG etc.

Dugbe on the backburner and continue with K & Y?

[laurence llewelyn binliner] 16/6/2022 07:44

#DB, no problem, it took a little work to do the numbers, but it is important to make comparisons..

Dugbe is a lower margin project, it always was a 1.4g/t ore body so it is no surprise, debt payback went out 6/8 months to 4 years from the IRR again not a surprise with input costs going up, still a valuable asset to have, and more marginal with POG having a bigger impact, but equally if POG heads north of the base case DFS 1,700 the gearing to profits is bigger in % terms from a higher cost base/tighter margin..

Mine finance has always been 8/10% so rates picking adding 0.75% is not a huge leap..

It is however a big leap for mortgage holders here at home from a low 1% base, and 1.5% mortgages rolling out onto the variable, all eyes on the MPC today, to see if they follow the FED +0.75% raid last night..

[dickbush] 16/6/2022 07:12

LLB, Many thanks for the work to remind us of HUM's DFS for Yanfolila versus the actual outcome.

I agree with your view that, on the DFS, Dugbe doesn't look a very attractive investment. Given what's happening to interest rates and, almost certainly, a very much more constrained lending environment in the short run (at least), all we have to look forward to on that front is successful drilling results or a sale.

Kouroussa, on the other hand, does look like a little beauty. So, our hopes for the share price over the next 12-18 months depend on bringing that into production on time and, meanwhile, getting Yanfolila producing 100,000 ounces plus. Not forgetting, as always, the gold price, at least, holding current levels.

The 75 b.p. rate rise by the Fed does concern me. I thought, with the mid-terms less than 5 months away, that the Fed would concentrate on avoiding a recession in the US rather than crushing inflation. I'm not so sure anymore.

[borderterrier1] 15/6/2022 14:19

Lowtrawler Heard it all before, multiple times. The stumbling block here is it inexperienced and overpaid Ceo. Until that changes, this won't.

[lowtrawler] 15/6/2022 14:10

Even though I have been critical of Dugbe, VEIN are still valued at over £23m for their 49% share of the project. My guess is ESAN may take on responsibility for the project with a cash payment and retained interest to VEIN / HUM. If the VEIN shareprice can be relied on, HUM probably have an asset worth £25m. That's around half our current market capitalisation.

The market are effectively valuing Yanny and Kouroussa at £25m. If my view of cash generation at Yanny proves accurate, that's around 1 year's cashflow from Yanny with Kouroussa thrown in for free.

The market clearly does not share my confidence on cash generation at Yanny and also expects Dugbe / Kouroussa to be worth far less. Over the next 12 - 18 months, we will find out.

[lowtrawler] 15/6/2022 13:55

UKG, as I see it, Kouroussa is fully loan funded for construction already. At the time of the loan, they likely didn't see Yanny going cash negative and they probably need around a $10m - $20m cash contribution from Yanny to take them through to cash generating. Even with the high strip ratios, I don't see that as challenging. What I really hope is that we take some cash for Dugbe and retain a carried interest. That would remove any pressure on Kouroussa.

I believe a properly run Yanny is capable of generating around $20m cash each year as a minimum. With the new excavators, well maintained mill and improved production planning, the next 12 months should comfortably generate more than $20m cash. I see this as a key test for the management team. They have finally started to focus attention on running operations at Yanny. If they are at all capable, cash generation shouid be closer to $30m between July and June.

[plat hunter] 15/6/2022 13:38

Https://www.voxmarkets.co.uk/articles/hummingbird-announces-promising-results-of-dugbe-gold-project-feasibility-study--a02183e/"The site is 76km from the Port of Greenville with a repaired and upgraded road connecting the two."Amongst other zeitgeist fallacies. DYOR peeps. HUM needs a max 50 million usd equity to raise 200 million from a bank against a book value of circa 240 million.

[borderterrier1] 15/6/2022 13:11

Lowtrawler Before I invested, I did as much research on this as possible based on the information provided at the time by the company and their broker.......who was prosecuted by the FBI. So did many others. I guess you are saying it was all lies?

[ukgeorge] 15/6/2022 10:46

Lowtrawler

Yanfolila, is very high strip ratio, so turning it around maybe proving a lot harder than you imply and if it continues to be loss making how is Kouroussa going to be funded?

Either a capital raise or some more debt is potentially coming.

[lowtrawler] 15/6/2022 09:31

BT, even the poorest poker player occasionally gets a winning hand. HUM have got lucky with Kouroussa and even a team of muppets are likely to make money from it. Turning Yanny cash positive is child's play.

It sounds to me as though you listened to the media hype from Yanfolila's inception instead of doing your own research. Never a good idea for investing in junior explorers aiming to become producers.

The biggest danger at the moment is HUM wanting to proceed with Dugbe. As I said on the other thread, if they go down that route, I'm out.

[borderterrier1] 14/6/2022 21:46

Lowtrawler You sound very much like Golden Bull on the LSE bb several years ago. "I'm looking forward to the 1 pound party at Christmas." That was in 2019 I think.. "Not getting MY shares!" etc etc. He promoted this constantly until eventually his posts started to have a more negative flavour, quote:- "Only this idiot and his team of muppets would buy a second ball mill". Correct. Eventually, GB bailed out, but not before he lost his LIFE SAVINGS with this. Be warned. As me and many others keep telling you, this guy, (and his team of muppets) are incompetent.

[borderterrier1] 14/6/2022 20:01

Lowtrawler You just don't get it. Your suggestion that basic research would have caused me not to invest is complete and utter, unadulterated B/S. Research at that time suggested the exact OPPOSITE for me and many others because of the skillfully manipulated media. And in any case, "predictions" mean (especially with this) absolutely NOTHING. According to most, these guys are painfully incompetent but idiots like you (AND me) are sucked in all the time. Fear and greed, remember? Please look at the current SHARE PRICE, then kiss your money good-bye.

[lowtrawler] 14/6/2022 19:27

BT, you really have to stop comparing Yanny to Kouroussa. Looking back at the prospects for Yanny, it was patently obvious the financial projections were optimistic and so basic research would cause you not to invest. Kouroussa projections are more realistic and likely to meet expectations.

[plat hunter] 14/6/2022 17:53

I have never witnessed a gold producer, to produce gold for less than the estimate in the dfs or cheaper than the quoted aisc's.LLB's post about the pea is a good example of the cost curve over time.

[plat hunter] 14/6/2022 17:50

LT aisc's and pog are coupled by inflation.As a rule of thumb, gold increases in value over time and so do costs.

[plat hunter] 14/6/2022 17:45

The Yanfolia we had to build an airstrip for? ;-P

[laurence llewelyn binliner] 14/6/2022 17:36

Comparing the Dugbe economics to Kouroussa makes for interesting reading..

Kouroussa has a high grade mineral resource of 1.18Moz of gold at over three grams per tonne, a lucrative pre-tax NPV10 of $110 million and an IRR of 51.2% (at $1,350/oz gold price).

IRR 97% at 1,750 POG.., we should build it.. :o)

[lowtrawler] 14/6/2022 17:35

PH, you know the answer to your question on pog sensitivity having read the Pasofino sensitivities.... A 10% improvement in pog adds 6.7% IRR pre-tax, so a $120 increase would add around 4.5%. Deducting Tax, the post-tax IRR would increase by around 3.8%. It's still getting nowhere near to the level required for the project.

If pog increases over 2200, Dugbe will become viable. Nobody will invest requiring that to happen.

[borderterrier1] 14/6/2022 17:26

Lowtrawler If you doubt what I say, read PH two recent posts. ??????? If he had another brain he would have one.

[lowtrawler] 14/6/2022 17:25

PH, Dugbe has never been a significant part of HUM's share price. It was always a potential upside and may yet provide cash if ESAN remain interested. What is clear to me is that HUM should not invest in Dugbe and instead try to monetise the asset in the best way they can.

I believe Kouroussa could turn out to be a gem and I believe Yanfolila could yet be turned into a cash cow. I also believe gold is going far higher which will expand the value of K and Y.

Although higher gold prices will make Dugbe economically viable, it is a decision for the future as spending $400m today on existing gold producers would undoubtedly provide a better return as gold prices rise than would investing in Dugbe.

Had Dugbe maintained the PEA IRR of 31%, I think it would have stood a chance but for Liberia, it really needs to be over 30%.

[plat hunter] 14/6/2022 17:21

Disgusted by a 10% free carry, have you even seen Centamin?

[plat hunter] 14/6/2022 17:18

LT, same sentence as "at least 20%" is at "current spot"1700 is 120 dollars less than the average 365 days Like i said whats the IRR at 1820 pog?

[borderterrier1] 14/6/2022 17:17

Lowtrawler Please read some of the circulating news items about this where once again the "management" are touting the "on time and on budget" scenario for Kouroussa just as they did with Yanfofailure. All of it is designed to trap once again idiot investors (me included) that believe it. You only need to skim back and read through the posts over the years on here from Plat, LLB, knocker, you etc. to realize that they are ALL hopelessly wrong......... but still it continues. This is a hopeless case, a useless company that (as many others have said) is being run by incompetent clowns. I can't make it any plainer. What don't you understand?

[plat hunter] 14/6/2022 17:14

With all respect LT, if you feel the last 18 months have been a waste of time then why don't you just sell instead?Surely no one buys junior explorer's because they expect the long term value of the commodity to fall?Personally, i think you're cherry picking and your repetitive claims that liberia has a worst route to market than Mali or Guinea is just plain laughable. It's as vacuous as tbtt's claims that there's better gold companies without even saying who?