Quick Insights on Two FTSE Listed Basic Materials Stocks: Central Asia Metals & Hummingbird Resources

Summary

• Central Asia Metals produced 3,883 tonnes of copper, 5,764 tonnes of zinc and 7,159 tonnes of lead in Q3 FY2020.
• In the same period it sold 3,988 tonnes of copper, 4,873 tonnes of zinc and 6,860 tonnes of lead.
• Hummingbird Resources announced the completion of 21,509 metres of drilling at Yanfolila gold project.
• The infill drilling programme at Sanioumale East is expected to finish by the end of October 2020.

Central Asia Metals PLC (LON:CAML) and Hummingbird Resources PLC (LON:HUM) are basic materials stocks. Based on 1-year performance, shares of CAML were down by close to 13.0%, and shares of HUM were up by around 59.14%. Shares of CAML and HUM gained by nearly 3.83% and 2.28%, respectively from their last closing price (as on 9 October 2020, before the market close at 1:50 PM GMT+1).

Central Asia Metals PLC (LON:CAML) - Operations have resumed at Sasa project

Central Asia Metals PLC is a metal and mining company that produces base metals. The Company has operations in Kazakhstan where it owns and operates Kounrad mine site that produces copper. It also owns the Sasa project situated in Macedonia that produces zinc and lead.

Q3 FY2020 Operations update as reported on 8 October 2020

In Q3 FY20, Central Asia Metals produced 3,883 tonnes of copper from the Kounrad site. The nine months (9M FY20) copper production from Kounrad stood at 10,490 tonnes that were lower than 10,633 tonnes produced in 9M FY19. The Company produced 5,764 tonnes of zinc in concentrate and 7,159 tonnes of lead in concentrate in Q3 FY20. The 9M FY20 production of zinc and lead was 17,966 tonnes and 23,300 tonnes, respectively, which was better than the production in the same period last year. In Q3 FY20, 3,988 tonnes of copper was sold from the Kounrad project. The Company sold 4,873 tonnes of zinc and 6,860 tonnes of lead in Q3 FY20 from the Sasa project. It also sold 92,922 ounces of silver to Osisko Gold Royalties from the Sasa project. As on 20 September 2020, Central Asia Metals had cash of USD 55.2 million.

Update on Sasa project

On 14 September 2020, there was a short term tailing leakage of close to 8,000 m³ into the river at Sasa project. The leakage was stopped immediately, and there was no casualty. The Company appointed Knight Piesold for consulting on tailing leakage and Wardell Armstrong to suggest on the cleaning of the river channel. The project recommenced operation on 2 October 2020; however, the plant is currently operating at half capacity in the trial period that would be for one week before the production is ramped up.

Share Price Performance Analysis

1-Year Chart as on October-9-2020, before the market close (Source: EODHD/Others, Thomson Reuters)

Shares of Central Asia Metals PLC were trading at GBX 174.44 and were up by close to 3.83% against the previous closing price (as on 9 October 2020, before the market close at 1:50 PM GMT+1). CAML's 52-week High and Low were GBX 233.00 and GBX 100.20, respectively. Central Asia Metals had a market capitalization of around £295.38 million.

Business Outlook

Central Asia Metals forecasts the copper production between 13,500 tonnes and 14,000 tonnes for FY20 that is better than the previous estimates. The copper production is expected to increase due to the higher contribution from the Eastern Dumps. The processing operations at the Sasa project has resumed that was halted due to the tailings storage facility leakage in September 2020. Despite the incident at Sasa, the Company expects zinc production between 23,000 tonnes and 25,000 tonnes and lead production in the range of 30,000 tonnes and 32,000 tonnes.

Hummingbird Resources PLC (LON:HUM) - Drilling programme at Diaban target is put on hold

Hummingbird Resources PLC is a UK based company that is involved in the exploration, development and production of gold. Hummingbird Resources was founded in 2005, and it has operations and projects in Mali and Liberia. Hummingbird Resources has an interest in Yanfolila gold mine in Mali and Dugbe gold project in Liberia.

Assets of Hummingbird Resources

(Source: Company website)

Drilling programme update at Yanfolila

On 8 October 2020, the Company announced that it has drilled close to 21,509 metres based on year to date in 2020. The Company has spent around 95% of the USD 5 million amount set for drilling and exploration programmes for 2020. Hummingbird Resources’ main goal is to upgrade the resource potential and expand the Yanfolila project. After the completion of the drilling and exploration activity at the Yanfolila gold project, the Company would perform the mineral resource update. The 2020 exploration programme of Hummingbird Resources is focused on finding high-grade resources at the Komana East Underground deposit, identifying open-pit oxide resources and reserves at Sanioumale West and Sanioumale East and testing Greenfield targets near the license area of Diaban.

As on date, the Company has completed the drilling programme at Komana East Underground deposit that includes drilling of 14 holes of more than 4,535 metres. It has also completed 13,000 metres of drilling at Sanioumale West, which is situated 16 kilometres north of the processing plant. The Company is awaiting 2,000 sample assays from Sanioumale West. The infill drilling programme at Sanioumale East is expected to finish by the end of October 2020. The Company has put the drilling programme at Diaban target at hold, and it is currently focused on other sites.

Production from Yanfolila

(Source: Company website)

Financing update for Dugbe gold project as reported on 23 September 2020

Hummingbird Resources announced that its joint venture partner in Dugbe gold project, Pasofino Gold Limited completed the acquisition of ARX Resources Limited and raised funds close to CAD 10.02 million from equity issue. The proceeds from the equity issue would be used for the development of the Dugbe gold project. On fulfilling the particular criteria, Pasofino can get a 49% stake in the project.

Share Price Performance Analysis

1-Year Chart as on October-9-2020, before the market close (Source: EODHD/Others, Thomson Reuters)

Hummingbird Resources PLC's shares were trading at GBX 38.97 and were up by close to 2.28% against the previous closing price (as on 9 October 2020, before the market close at 1:50 PM GMT+1). HUM's 52-week High and Low were GBX 42.74 and GBX 18.08, respectively. Hummingbird Resources had a market capitalization of around £136.02 million.

Business Outlook

The Company stated that the business outlook from the results achieved at the Yanfolila project looks encouraging. It witnessed that Greenfield targets have produced some good drill intersections, and based on the results it is preparing strategies for 2021.