TIDMHUM
RNS Number : 8813P
Hummingbird Resources PLC
22 October 2021
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
22 October 2021
Hummingbird Resources plc
('Hummingbird' or the 'Company')
Q3 2021 Operational and Trading Update
Hummingbird Resources plc (AIM: HUM) announces its operational
and trading update for the third quarter of 2021 ("Q3 2021").
Q3 2021 updates:
-- Gold poured: 22,102 ounces ("oz") of gold poured in Q3 2021
(Q2 2021: 24,494 oz)
-- Gold sold: 22,255 oz of gold sold in Q3 2021 at an average
realised price of US$1,782 per oz (Q2 2021: 24,790 oz at an average
realised price of US$1,802)
-- Gold inventory: 2,769 oz gold inventory at 30 September 2021, valued at US$4.8 million
-- All in Sustaining Cost ('AISC'): US$1,520 per oz for Q3 2021
(Q2 2021: US$1,386 per oz), the increase being due to lower
production quarter on quarter ("QoQ")
-- Quarter production: Production was impacted by mining
contractor excavator equipment availability in September.
Mitigation measures are being implemented with our mining
contractor to bring mining volumes back to contracted levels
-- Investment profile and balance sheet in Q3 : Lower cash
balance in Q2 versus Q3 driven by:
o Lower gold production QoQ
o Continued investment in exploration and expansion capex
developing future deposits of US$8.0 million, split US$4.4million
at Yanfolila, Mali and US$3.6million at Kouroussa, Guinea
o VAT payments of US$5.6 million and working capital movements,
resulting in a net-debt, including gold inventory, of US$1.0
million
-- Exploration update:
o Yanfolila, Mali: 6,750 metres ('m') was drilled during the
quarter, mainly on Sainamoule East ("SE") and Sainamoule West
("SW") extensions, in addition to greenfield drilling at the Kama
and BBC deposits
o Kouroussa, Guinea: 12,800 m was drilled during the quarter,
with the f ocus of the drill programme to convert resources to
reserves
o Both regions remain on schedule to complete their 2021
drilling campaigns by year end of 44,000 m at Yanfolila and 24,000
m at Kouroussa
Outlook:
-- Yanfolila, Mali: Due to lower contracted volumes of material
being mined than was anticipated in the mine plan for Q3, our
current model for full year production is forecast to be at the
lower end of the guidance range of 100,000 - 110,000 oz, and AISC
at the upper end of the guidance range of US$1,250 - 1,350 per oz
of gold. The Company notes that, all other things being equal,
meeting this forecast is based on the mitigation measures, as
described above, being successfully implemented by our mining
contractor, bringing mining volumes back to contracted levels
-- Company reserve update: An u pdated Company reserve statement
is scheduled to be released later in the current quarter, including
a maiden reserve for Kouroussa. This will be followed by a
subsequent Company resources and reserve update, based on the 2021
drilling campaigns, to be released in Q2 2022
-- Kouroussa, Guinea: On 12 October, the Company announced
details of the financing, capex estimates and timelines for
Kouroussa . Construction of Kouroussa is scheduled to commence this
current quarter, with first gold pour scheduled for the end of Q2
2023
o Kouroussa is forecast to be a high-grade, low-cost mine that
will produce between 120,000 and 140,000 oz for the first three
years of production and average 100,000 oz over the life of mine
("LOM"), at an AISC in the range of US$900-US$1,000 per oz
-- Dugbe, Liberia: Earn-in partner, Pasofino Gold Ltd
("Pasofino"), released drilling results during the quarter which
continued to highlight the significant gold endowment scale of the
Dugbe project, with Pasofino expected to release an updated Mineral
Resource Estimate ("MRE") shortly
Dan Betts, CEO of Hummingbird, commented:
"The third quarter saw Hummingbird balance the need for
investment and further optimisation in its current production at
Yanfolila, whilst building a broader and sustainable platform for
growth through its development of the high grade/low cost Kouroussa
mine in Guinea. Beyond the challenges faced during the quarter from
underperformance by our contract miner, the Company has seen a
number of operational improvements across the board as we continue
to build our business. Of significance since the quarter end, was
the signing of a group financing facility with Coris Bank to
support our next stage of growth with the construction of the
Kouroussa gold mine. We look forward to updating the market over
the coming months with further developments as we execute on our
growth strategy."
Operational Summary
Yanfolila, Mali
Unit Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020
Gold poured oz 22,102 24,494 22,781 22,012 24,722 24,054
------ -------- -------- -------- -------- -------- --------
Ore mined t 392,005 443,490 364,114 382,289 268,726 334,094
------ -------- -------- -------- -------- -------- --------
Ore processed t 326,020 391,652 345,374 359,208 352,348 337,926
------ -------- -------- -------- -------- -------- --------
Avg. grade mill feed g/t 2.27 2.14 2.16 2.03 2.27 2.36
------ -------- -------- -------- -------- -------- --------
Recovery % 91.95% 91.88% 92.97% 93.47% 95.18% 94.78%
------ -------- -------- -------- -------- -------- --------
Gold inventory oz 2,769 1,972 2,596 1,980 4,634 4,339
------ -------- -------- -------- -------- -------- --------
-- Gold poured of 22,102 oz was down 9.8% on Q2 2020 levels,
impacted by mining contractor excavator equipment availability in
September
-- Mitigation measures are being implemented with our mining
contractor in order to bring mining volumes back to contracted
levels including:
o Additional maintenance on existing excavators in order to
bring them back to full productivity
o Maximising existing excavator fleet availability
o Reviewing regional options for additional excavator
capabilities
-- Average grade mill feed was up on Q2 levels by 6% averaging
2.27 g/t versus 2.14 g/t in Q2. As per the mine plan, the operation
is moving into some of the higher-grade parts of the ore bodies for
the year in Q4. With mitigation measures as detailed above being
implemented successfully, expectations are that mined ore tonnes
from our contract miner will return to contracted levels, where
these high-grade ore zones will be increasingly mined
-- Mill recovery rates for the quarter were flat at 92% versus
Q2 levels
-- Yanfolila optimisation strategy progress: During the quarter,
progress was made in: drill and blast; dilution control; geological
review processes; and security upgrades
Kouroussa, Guinea:
On 12 October, the Company announced details of the financing,
capex estimates and timelines for Kouroussa . Construction of
Kouroussa is scheduled to commence this current quarter, with first
gold pour scheduled for the end of Q2 2023
-- Kouroussa is forecast to be a high-grade, low-cost mine that
will produce between 120,000 and 140,000 ounces ("oz") for the
first three years of production and average 100,000 oz over the
life of mine ("LOM")
-- LOM for a minimum of seven years, forecast to produce at an
average AISC in the range of US$900-US$1,000 per oz throughout the
LOM, with material upside potential through further exploration
drilling which is currently being planned
-- Total Project capex of US$97.5 million for a one million
tonne per annum ("Mtpa") processing plant and establishment costs,
with an additional budget of US$10 million for pre-production
mining cost and US$7.5 million for contingencies
-- The Project is funded through internal cash flows and a group
financing facility from Coris Bank International ("Coris Bank")of
US$100 million at a fixed interest rate of 8.5% over four years
-- Industry leading project economics at a gold price of $1,750 per oz:
-- IRR 71%
-- NPV US$210 million
-- Cumulative free cash of US$314 million
-- Capex payback period of approximately two years post
commencement of production
Dugbe, Liberia
-- Earn-in partner, Pasofino Gold Ltd ("Pasofino"), released
several drilling results during the quarter on the key Tuzon and
Dugbe F deposits. The results continue to highlight the significant
gold endowment scale of the Dugbe project
-- The next key update on Dugbe to be released by Pasofino is an
updated Mineral Resource Estimate ("MRE") due shortly, with a
definitively feasibly study ("DFS") scheduled to be finalised by Q2
2022
Financial Summary
Unit Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020
Gold sales oz 22,255 24,790 22,019 24,285 23,794 31,520
------- -------- -------- -------- -------- -------- --------
Avg. gold sale price $/oz 1,782 1,802 1,788 1,862 1,919 1,663
------- -------- -------- -------- -------- -------- --------
Operating cash costs $'000 33,472 33,986 31,588 35,634 30,045 30,652
------- -------- -------- -------- -------- -------- --------
AISC on gold sold $/oz 1,520 1,386 1,494 1,496 1,283 983
------- -------- -------- -------- -------- -------- --------
Net (debt) / cash $'m (5.9) 9.0 0.5 (2.1) (9.7) (20.3)
------- -------- -------- -------- -------- -------- --------
Net (debt) / cash inc gold inventory value $'m (1.0) 12.4 4.9 1.5 (0.9) (12.5)
------- -------- -------- -------- -------- -------- --------
Debt repayments $'m - 4.7 8.6 6.6 8.3 8.4
------- -------- -------- -------- -------- -------- --------
Debt repayments (movement in loan) $'m - 4.6 8.7 5.7 6.9 7.6
------- -------- -------- -------- -------- -------- --------
-- Q3 ASIC of US$1,520 per oz was higher than Q2 levels of
US$1,386 per oz, primarily driven by lower gold ounces poured
during the quarter
-- With Q4 production forecast to rise per our mine plan, AISC
costs are expected to fall in this current quarter in line with the
higher end of our full year guidance expectations as detailed in
the above highlights
-- A lower cash balance in Q2 versus Q3 as detailed in the above
highlights. The net-debt position is funded via a long standing
overdraft facility in place with Coris Bank
Environmental, Social and Governance ("ESG") quarterly key
updates
-- World Gold Council ("WGC") and responsible gold mining
principles ("RGMPs"): Key focus of the corporate and onsite ESG
teams for the quarter has been to finalise the WGC RGMP's year two
independent limited assurance audit, which is in the final stages
of being completed. A material amount of work is now being done
with our ESG teams and independent ESG consultant identifying work
streams required to close identified gaps in order to receive our
September 2022 WGC RGMP assurance audit certification
-- Kourousa environmental and social impact assessment ("ESIA"):
An updated ESIA study was completed to ensure Kouroussa delivers on
leading ESG industry standards and the WGC RGMPs
-- Covid-19: Our ongoing mitigation strategies continued to be
implemented at Yanfolila and Kouroussa, with a small number of
Covid-19 cases being reported and contained during the quarter.
Ongoing employee vaccination programmes continued
-- Hummingbird Tree Initiative: Planting of 10,000 trees from
the Company's locally supported village nursey programmes was 95%
completed during the quarter at Yanfolila and scheduled to be
finalised this month, as part of the Company's yearly 20-hectare
rehabilitation programme
**ENDS**
For further information please visit
www.hummingbirdresources.co.uk or contact:
Daniel Betts, Hummingbird Resources Tel: +44 (0) 20 7409
CEO plc 6660
Thomas Hill,
FD
Anthony Kocken,
COO
Edward Montgomery,
CSO & ESG
James Spinney Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer Nominated Adviser 3494
-------------------------- ---------------------
James Asensio Canaccord Genuity Limited Tel: +44 (0) 20 7523
Thomas Diehl Broker 8000
-------------------------- ---------------------
Bobby Morse Buchanan Tel: +44 (0) 20 7466
Augustine Chipungu Financial PR/IR 5000
James Husband
-------------------------- ---------------------
Notes to Editors:
Hummingbird Resources (AIM: HUM) is a leading multi-asset,
multi-jurisdiction gold production, development and exploration
Company and member of the World Gold Council ('WGC'). Our vision is
to continue to grow our asset base, producing profitable ounces,
while central to all we do being our Environmental, Social &
Governance ('ESG') policies and practices. The Company currently
has two core gold projects, the Yanfolila Gold Mine in Mali and the
recently acquired Kouroussa Gold Project in Guinea. Further, the
Company has a controlling interest in the Dugbe Gold Project in
Liberia that is being developed by Pasofino Gold Limited through an
earn-in agreement.
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