Berenberg raises target price on Hummingbird Resources

Berenberg said 2020 was set to be "a pivotal year" for Hummingbird, as rapid deleveraging continued and its transition to a net cash position was expected to take shape.

"We forecast the company to be in a net cash position of $19m by the end of 2020 versus net debt of $31m at the end of 2019," said the analysts, who stood by their 'buy' rating on the stock.

While the German bank acknowledged that Hummingbird's updated mine plan was lower than expected in the longer-term, there was little change to the group's free-cashflow potential in the near-term as production was sustained at around 120,000-125,000 ounces.

Although Berenberg did note that the five-year plan was on a rolling basis, with Hummingbird recommencing its exploration activities for 2020, targeting both open-pit and underground resources and reserves, the analysts said the move "should continue to improve the plan".

"In our view, operational consistency is the key and will be, along with deleveraging, the driver of positive share price performance for this year," concluded Berenberg.