TIDMHUM
RNS Number : 0613A
Hummingbird Resources PLC
31 January 2022
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
31 January 2022
Hummingbird Resources plc
( "Hummingbird" or the "Company")
Q4 2021 Operational Update and 2022 Outlook
Hummingbird Resources plc (AIM: HUM) provides an operational
update for the fourth quarter of 2021 ("Q4 2021") and its outlook
for FY2022.
For the full release, including photos, please follow the link
here:
http://www.rns-pdf.londonstockexchange.com/rns/0613A_1-2022-1-30.pdf
Investors are welcome to join Senior Management on Thursday, 3
February 2022, at 09:30 GMT for a retail investor webinar via the
InvestorMeetCompany platform. Information and registration details
are provided below.
Q4 2021 updates:
-- 18,181 ounces ("oz") of gold poured at Yanfolila in Q4 2021
o FY2021 production of 87,558 oz, in line with the revised
guidance range of 84,000 - 89,000 oz
-- 18,489 oz of gold sold in Q4 2021 at an average realised price of US$1,782 per oz
-- 2,246 oz gold inventory at 31 December 2021, valued at c.US$4.1 million
-- All In Sustaining Costs ("AISC") of US$1,803 per oz for Q4 2021
o FY2021 AISC of US$1,536 oz, in line with revised guidance of
US$1,490 - US$1,590 per oz
-- Company Reserves were updated, increasing to 1.12 million oz
at 3.03 g/t, including: Yanfolila, Mali to 705,800 oz at 2.57 g/t
and a maiden Reserve for Kouroussa, Guinea of 408,900 oz at 4.38
g/t
-- The Company successfully received an externally audited
assurance report for the World Gold Council ("WGC") Responsible
Gold Mining Principles ("RGMPs") conformance for year two
implementation and progress towards full conformance in 2022
FY2022 Guidance:
-- FY2022 production guidance of 87,000 - 97,000 oz of gold,
with an AISC of US$1,300 - 1,450 per oz of gold
o Q1 2022 is forecast to be a lower production quarter versus
the remaining quarters of 2022, with a ramp up from Q2 2022
expected, driven primarily by an additional five excavators
becoming increasingly operational during Q1
o Further operational improvement measures at Yanfolila have
been undertaken to ensure 2022 guidance forecasts are met, as
detailed below
Operational Updates:
Yanfolila, Mali
-- Operations have underperformed since September 2021,
primarily due to our mining contractor's excavator fleet not
meeting the contracted mining rates. The reduction in material
movements have led to a lower grade profile primarily due to lower
grade sections of the orebody accessed during this period.
Mitigation measures that have been undertaken include:
o Adding five additional excavators to the current fleet, with
the expectation that all will be fully operational during Q1
2022
o Reinforcing our contract miners maintenance team to improve
overall mining fleet performance
o Implementing several other operational workstreams at site,
with the key focus to improve: production performance and
predictability; mill grade feed profile; and departmental cost
disciple
-- During the quarter c.12,800 meters ("m") of drilling assays
were analysed from the Sanioumale West ("SW") and greenfield
deposits, Kama and Diaban, highlighting significant grade and depth
at the SW deposit and the potential to establish new greenfield
resources as detailed in the 20 December 2021 release
Kouroussa, Guinea
-- December 2021 saw the increased mobilisation of equipment and
personnel on site to enable construction, which began in early
January as detailed in the 10 January 2022 release. Civil
engineering work is scheduled to commence this quarter and the
Company remains on track for first gold pour by the end of Q2
2023
-- To fund construction, in late December 2021, the Company drew
the second of three tranches available from the Company financing
facility provided by Coris Bank International ("Coris Bank")
-- In Q4 2021 and in early January 2022, the Company released
approximately 7,700 m of infill drilling results, with multiple
high-grade intercepts received, including extremely encouraging
results such as a 55 m intercept at 35.72 grams a ton ("g/t"),
strengthening the Company's knowledge base and confidence in the
Kouroussa asset which is situated in the highly prospective Siguiri
region
Dugbe, Liberia
-- Earn-in partner Pasofino Gold Ltd ("Pasofino") updated
Dugbe's Mineral Resources Estimates ("MRE") in Q4 2021, totalling 4
million oz ("Moz"), with 3.4 Moz in the Measured and Indicated
category, and remains on track to deliver a Definitively Feasibly
Study ("DFS") in Q2 2022. The Company notes the investment in
Pasofino in Q4 2021 by the ESAN group from Turkey
Dan Betts, CEO of Hummingbird, commented:
"Throughout 2021, the Company has made significant steps towards
our strategic goal of becoming a multi-asset, multi jurisdiction
gold producer. Construction at Kouroussa is ramping up and is on
schedule for first gold by the end of Q2 2023 - taking the Company
to being a +200,000 oz gold producer. The feasibility study at
Dugbe is coming together as per the schedule and we are expecting
robust and attractive economics which will provide additional
optionality for our portfolio of assets. Further, we saw our
Company Reserves increase, adding mine life at Yanfolila, including
maiden underground Reserves and importantly adding maiden Reserves
at Kouroussa. We expect that trend to continue when our updated
Company Resources and Reserves statement is released in Q2
2022.
Clearly, this progress has been overshadowed by the operational
underperformance of Yanfolila in recent months. Whilst the
operation has been beset by a number of extraneous challenges, the
overwhelming root cause for this performance has been the under
performance of the contract mining fleet at site and the timeframes
involved with bringing in extra capacity. As such, we are putting
significant focus on improving productivity and predictability at
the Yanfolila with several optimisation and mitigation workstream
in train. These plans have been actioned and are largely in place
with our forward looking 2022 guidance accommodating these
challenges.
Following the release of our maiden underground Reserves at
Yanfolila, we see significant potential in the Komana East
Underground, underpinning Yanfolila's future production profile,
with higher grade ore for many years to come. Our team is currently
finalising analysis of the optimal development route to then put
into our future mine plans . We are considering options to
accelerate the development of the underground project in order to
bring the delivery of higher-grade ore forward.
As we saw in 2021, this year we will once again further our ESG
initiatives. This includes the implementation of energy efficiency
programmes at Kouroussa and the continuing establishment of Single
Mine Origin ("SMO") as an industry platform for fully traceable
precious metals to responsibly operated mines. I believe that all
of these actions will be key to delivering material long term
shareholder value."
Anthony Köcken, COO of Hummingbird, commented:
"As we move into 2022, we are focused on critical operational
areas at both Yanfolila and Kouroussa. At Yanfolila, these include
amongst others: overall better performance of the excavator fleet,
which is in progress with additional fleet ordered and becoming
operational; optimisation of geological control and ore management;
wet weather planning and mitigation measures; finalising
underground analysis to then implement into our future mine plans;
and line management control improvements across each of the
operational departments. We are confident these measures and others
will lead to an overall improvement in production, cost management
and performance predictability at Yanfoliila.
For Kouroussa, the project has moved from the mobilisation phase
to breaking ground. We have commenced construction and key
contracts for power generation and mining are at advanced stages of
discussion and finalisation. Our key focus for Kouroussa remains to
maintain our diligent approach to timelines, capex management,
positive community engagement and an overall quality build
process."
Retail Investor Webinar Details
The Company's senior management will be holding an investor
webinar on Thursday 3(rd) February 2022 at 09:30hr GMT via the
Investor Meet Company platform.
The event will be hosted by CEO Dan Betts, CFO Tom Hill, CSO
Edward Montgomery and COO Anthony K ö cken. It is open to all
existing and potential shareholders. Investors are welcome to
submit questions prior to the event through the above link or by
emailing HUM@Buchanan.uk.com , or at any time during the event via
the "Ask a Question" function.
Investors can register to Investor Meet Company for free via:
https://www.investormeetcompany.com/hummingbird-resources-plc/register-investor
Operational Update
Unit YTD 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Gold poured oz 87,558 18,181 22,102 24,494 22,781
------ ---------- ---------- ---------- ---------- ----------
Mined BCMs bcms 9,554,326 1,920,311 2,095,935 2,672,788 2,865,292
------ ---------- ---------- ---------- ---------- ----------
Ore mined t 1,645,417 445,808 392,005 443,490 364,114
------ ---------- ---------- ---------- ---------- ----------
Ore processed t 1,404,982 341,936 326,020 391,652 345,374
------ ---------- ---------- ---------- ---------- ----------
Avg. grade mill
feed g/t 2.09 1.79 2.27 2.14 2.16
------ ---------- ---------- ---------- ---------- ----------
Recovery % 92.26% 92.38% 91.95% 91.88% 92.97%
------ ---------- ---------- ---------- ---------- ----------
Gold inventory oz 2,246 2,246 2,769 1,972 2,596
------ ---------- ---------- ---------- ---------- ----------
* Ore mined includes high grade, low grade, and marginal
material. Ore processed is a blend based on preferential feed of
high-grade and low grade, with marginal ore added as an incremental
feed source
-- As detailed on 15 December, Q4 2021 production was impacted
due to disruptions caused by local unrest leading to the plant
being offline for approximately six days and the subsequent impacts
of returning the mine back into operation; and our mining
contractor's excavator fleet failing to perform consistently to the
scheduled mining volume rates
o Full year 2021 production of 87,558 oz, in line with the
revised guidance range of 84,000 - 89,000 oz
-- Grade mill feed for Q4 2021 averaged 1.79 g/t and totalled 2.09 g/t for the full year
o Q4 2021's lower grade profile was primarily due to lower grade
sections of the orebody accessed during this period caused by
reduced material movement from an underperforming excavator
fleet
o Mined bank cubic meters ("BCMs") declined in Q4 2021 versus Q3
2021 being 1,920,311 and 2,095,935 million mined BCMs
respectfully
-- Mill throughput and processing rates for Q4 2021 were broadly
in line with previous quarters (taking into account the impact of
the wet season on Q3 2021), with recoveries improving versus Q3
2021 levels to 92.38%, to give a full year recovery rate of
92.26%
Post period updates for Yanfolila, Mali
Since September 2021, the operation of Yanfolila has
underperformed primarily due to our mining contractor excavator
fleet not meeting contracted mining rates. The Company has worked
with the contractor to set in place mitigation, including the
following:
-- The Company has secured five excavators to be added to the
current fleet, with the first excavator delivered and operating.
Two further excavators are now on site and being assembled to be
operational as soon as practical and the final two are expected to
be delivered and operational by the end of Q1 2022. The current
ECOWAS sanctions are not currently expected to impact this
timeline
-- Reinforcing our contract miners maintenance team, with the
goal to improve overall mining fleet performance
-- Implementing several other operational workstreams at site
with the key focus to improve: production performance and
predictability; mill grade feed profile; and departmental cost
disciple, which includes:
o Drill and blast improvements to minimise metal loss and
dilution via increased technical controls and optimised
fragmentation
o Cost and efficiency drive, including optimisation of mill
grinding media, review on all discretionary spending and regular
departmental cost reviews
o Planning and tactical improvements: Full review of mine
planning and geological control and ore management programmes at a
technical and execution level
o Processing and sampling improvements: Independent reviews
completed and improvement programmes in progress
o Mining contractor review: Additional equipment maintenance
capacity on site as noted above in Q1 2022
o Security upgrades: In progress at Yanfolila and Kouroussa
o Increased community engagement and investment in long term
sustainable initiatives in line with the WGC RGMPs
Furthermore, during Q1 2022 a longer than normal plant
maintenance programme has been planned, primarily to replace mill
bearings, during which other plant maintenance is being scheduled
with the objective of reducing downtime later in the year.
Given the above build-up of excavator availability and plant
shut down, we anticipate that quarterly production for Q1 2022 to
be lower versus the remaining quarters of 2022, with a ramp up in
Q2 2022 and subsequent quarters driven primarily by the five
additional excavators becoming increasingly operational, coupled
with operational improvement strategies as detailed above gaining
traction.
Lastly, in relation to the underground mining potential at
Yanfolila, we are currently finalising our analysis of the optimal
development route to then put into our future mine plans. We are
increasingly encouraged about the viability of a low capex, low
AISC (sub US$1,000 oz), long life, baseload production profile
underground mine at Yanfolila. We will provide more updates once
our analysis is completed.
Kouroussa, Guinea
Post the update on 10 January 2022 detailing the commencement of
construction at Kouroussa, the Company has further progressed the
development with key updates including:
-- Key contracts for power generation and mining are at advanced
stages of discussion and nearing finalisation
-- Groundwork clearing progress is continuing and we remain on
schedule to commence civil works this quarter
-- The scheduled timeline remains on track to achieve first gold pour by the end of Q2 2023.
Dugbe, Liberia
In Q4 2021, the Company's earn-in partner, Pasofino Gold,
released an updated MRE for the Dugbe Gold Mine in Liberia in Q4
2021, totalling 4.0 Moz, including 3.4 Moz of Measured and
Indicated Resources. Further, during the quarter, Pasofino
announced the completion of a non-brokered private placement of up
to US$5.5 million to finalise the DFS, including the investment by
the ESAN group in Turkey. The DFS remains on track to be completed
in Q2 2022.
Drilling and Exploration
In Q4 2021, Company Reserves were updated for Yanfolila, Mali
(705,800 oz at 2.57 grams per tonne ("g/t") and included a maiden
Reserve for Kouroussa, Guinea (408,900 oz at 4.38 g/t), with total
Company Reserves increasing to 1.12 million oz at 3.03 g/t.
End of the quarter, the Company completed is extensive drilling
campaign of c.68,000 m at Yanfolila, Mali and Kouroussa, Guinea, as
did our earn in partners Pasofino at Dugbe, Liberia.
The 2021 c.68,000 m drilling campaigns assays once all received
and analysed, will feed into the Company's updated 2022 Resources
and Reserves statement scheduled for release in Q2 2022. Forecast
exploration spend for 2022 is detailed below.
Financial Summary:
Unit YTD 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Gold sales oz 87,553 18,489 22,255 24,790 22,019
------- --------- -------- -------- -------- --------
Avg. gold sale
price $/oz $1,788 $1,782 $1,782 $1,802 $1,788
------- --------- -------- -------- -------- --------
Operating cash
costs $'000 $131,532 $32,486 $33,472 $33,986 $31,588
------- --------- -------- -------- -------- --------
AISC on gold sold $/oz $1,536 $1,803 $1,520 $1,386 $1,494
------- --------- -------- -------- -------- --------
Net (debt) / cash $'m ($25.0) ($25.0) ($5.9) $9.0 $0.5
------- --------- -------- -------- -------- --------
Net (debt) / cash
inc gold inventory
value $'m ($21.0) ($21.0) ($1.0) $12.4 $4.9
------- --------- -------- -------- -------- --------
Debt repayments $'m $13.3 - - $4.7 $8.6
------- --------- -------- -------- -------- --------
Q4 AISC of US$1,803 per oz was high driven primarily by lower
ounces of gold ounces poured during the quarter, with a full-year
2021 AISC of US$1,536 oz, in line with revised guidance of US$1,490
- US$1,590 oz
-- Net debt position c.US$25 million as at the end of Q4 2021
(c.US$21 million including gold inventory value)
o c.US$66 million (CFA38.5bn) loan now drawn from the Company
financing facility provided by Coris Bank, with c.US$20 million
(CFA11.2bn) overdraft facility remaining available
o c.US$10 million of capital and exploration expenditure outside
of AISC during Q4 2021, including: c.US$7 million at Kouroussa;
c.US$2 million on exploration finalising our 2021 drilling
campaigns; and c.US$1 million of expansion capex relating to Gonka
and Sanioumale West pit and haul road preparations at Yanfolila,
Mali.
o Additionally, the Company reduced working capital by
approximately US$10 million in the quarter largely through earlier
payments to suppliers
2022 Guidance
Forecasting 2022 production guidance of 87,000 - 97,000 oz of
gold, with an AISC range of US$1,300 - 1,450 per oz of gold, noting
the following:
-- The 2022 mine plan has been developed with a lowered average
daily mining volume rate than previous years to reduce the pressure
on our mining contractor who faced challenges meeting the 2021
contracted mining volume rates
-- As detailed above, Q1 2022 is forecast to be a lower
production quarter versus the remaining quarters of 2022, with a
ramp up from Q2 2022 expected, driven primarily by an additional
five excavators becoming increasingly operational during Q1.
Furthermore, the Company continues to implement several operational
improvement programmes in 2022, with the overall goal to provide
improved production performance and predictability; mill grade feed
profile; and departmental cost disciple at Yanfolila in order to
meet our 2022 guidance forecasts
-- AISC guidance has been set at US$1,300 - 1,450 per oz of
gold, with the prime driver to achieve a lower AISC profile being
improved production at Yanfolila, and improved departmental cost
disciple, which is a key focus area for the onsite teams
-- Exploration spend for 2022 is guided to be lower than spent
in 2021 at c.US$2 million. The key focus for the geology team 1H
2022 is to analyse and incorporate the extensive drilling completed
in 2021 into our updated Company Resources and Reserves statement
due in Q2 2022, whilst assessing potential targets and future
exploration programmes. In H2 2022 we will review our exploration
spend in the light of operational and financial performance
COVID-19
The Company notes that the local region around Yanfolila is
currently experiencing a higher-than-normal rate of COVID-19
infections. The new Omicron variant has impacted our staff and
employees however the medical teams at both Yanfolila and
Kouroussa, supported by our international recognised medical
provider (CCI), have limited any adverse health impacts and minimal
disruptions have been caused to operations.
ESG 2022 summary plans
Key focus of the ESG team for 2022 is to achieve the year three
WGC RGMPs limited assurance audit report, expected to be completed
in Q4 2022. Further details of some key ESG initiatives for 2022
are detailed below.
-- Covid-19: Maintain our diligence and protocols in order to
minimise health risks to our employees, contractors and local
communities and impacts from covid-19 on our operations in
general
-- Hummingbird Tree Initiative: Planting of 10,000 trees from
the Company's locally supported village nursery programmes was
completed at Yanfolila as part of the Company's yearly 20-hectare
rehabilitation programme and to be maintained into 2022. This
programme is also being considered for implementation at
Kouroussa
-- Finalise the Sanioumale East village resettlement plan at Yanfolila
-- Community programmes: Maintain and continue to improve our
community programmes at Yanfolila and embed similar programmes into
Kouroussa such as: garden markets; poultry farm support; water
infrastructure improvements; honey manufacturing business
education; local school education support amongst others
-- Energy Efficiency: Deliver on low carbon emission initiatives
including a +7 megawatt ("Mw") solar power plant and energy saving
waste heat recovery systems at Kouroussa
-- Dugbe, Liberia: The DFS to include an internationally
recognised and independent high standard Environmental and Social
Impact Assessment ("ESIA") study
Restricted share units and deferred shares
Further to the Company's announcement on 27 May 2021, the 2021
restricted share units awarded to employees and Non-executive
Director Deferred Share Awards have now been issued as previously
disclosed, with the exception of the restricted share units being
issued to other employees being a lower figure of 4,533,582 rather
than the original 4,871,094.
Additionally, 1,565,000 share options issued in 2010, with
exercise price of GBP0.22 lapsed during 2021, which include
1,125,000 for Daniel Betts and 67,500 for Thomas Hill.
Notes to Editors:
Hummingbird Resources (AIM: HUM) is a multi-asset,
multi-jurisdiction gold production, development and exploration
Company, a member of the World Gold Council and a founding member
of Single Mine Origin ( singlemineorigin.com ). The Company
currently has two core gold projects, the operational Yanfolila
Gold Mine in Mali, and the Kouroussa Gold Mine in Guinea, which
will more than double current gold production when in production,
scheduled for first gold pour end of Q2 2023. 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. Our vision is to continue to grow our asset base,
producing profitable ounces while placing our Environmental, Social
& Governance ('ESG') policies and practices at the heart of all
we do.
For further information, please visit hummingbirdresources.co.uk
or subscribe to our investor releases via investor email alerts
Daniel Betts, Hummingbird Resources Tel: +44 (0) 20 7409
CEO plc 6660
Thomas Hill,
FD
Anthony Köcken
, 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
Ariadna Peretz Financial PR/IR 5000
James Husband Email: HUM@buchanan.uk.com
-------------------------- ----------------------------
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