HUM.GB Hummingbird Resources Plc

TIDMHUM

RNS Number : 1708P

Hummingbird Resources PLC

07 February 2023

Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining

7 February 2023

Hummingbird Resources plc

("Hummingbird" or the "Company")

Strategic Investor, Issuance of Deferred Consideration Shares & TVR announcement

Strategic Investor:

The Company is pleased to announce a strategic investment of US$15 million by CIG SA ("CIG")(1) into Hummingbird. CIG is a leading African investment company, with a ten-year track record and over US$100 million of active investments across a number of sectors including mining and construction.

This investment strengthens the Company's balance sheet and provides improved liquidity to help ensure we bring our second gold mine, Kouroussa in Guinea, into production as scheduled for first pour by the end of Q2 2023 and to help fast track exploration at the asset. Additionally, it endorses the Company's strategy for growth with a strategic partner to underpin that ambition - both in the West African region and beyond.

Deferred Consideration:

Further, the Company announces the settlement of the deferred consideration payable to Cassidy Gold Corp ("Cassidy"), as announced on 26 June 2020, for the acquisition of Kouroussa, Guinea. This deferred consideration is payable under the terms of the acquisition agreement owing to the increased size of the Company's reserve base at Kouroussa as published last year.

Dan Betts, CEO of Hummingbird, commented:

"We are delighted to welcome CIG as a key strategic investor into the Company. As we bring the development of our second mine at Kouroussa into production by the end of Q2 this year; we see this investment as the first step of a partnership with the ambition of building a multi asset international gold producer built on strong foundations in West Africa."

CIG Strategic Investment - Further Details:

The Company has entered a conditional subscription agreement for the investment of US$15 million into the Company by CIG (the "Subscription"), which is split into two tranches:

o A firm first tranche of US$3.8 million, which involves the issue of 39,360,800 new ordinary shares of GBP0.01 of the Company ("Ordinary Shares") (the "First Tranche Shares"), and;

o A conditional second tranche, subject to Shareholder approval, of US$11.2 million, which involves the issue of 117,724,008 new Ordinary Shares (the "Second Tranche Shares").

Both tranches are being issued at a subscription price of 7.79 pence, which represents a c.2% premium to the 30 day VWAP (the "Subscription Price").

In aggregate, the First Tranche Shares and Second Tranche Shares amount to 157,084,808 Ordinary Shares (the "Subscription Shares") to be issued to CIG. Following the issue of the Subscription Shares, and the Cassidy Deferred Consideration Shares (as per the details below), CIG would have a holding of 27 percent in the Company's share capital as enlarged by the issue of the Subscription Shares and the Cassidy Deferred Consideration Shares

The First Tranche Shares are expected to be admitted to trading on AIM on 10 February 2023, resulting in CIG having a holding of 8.6% in the Company. Conditional upon, inter alia, Shareholder approval being granted at the General Meeting for the issue of the Second Tranche Shares, the Second Tranche Shares will be admitted to trading on AIM as soon as practicalble following the General Meeting. The full consideration of US$15 million has been received by the Company and is being held on deposit pending the relevant share issues and/or return to CIG to the extent the necessary approvals are not granted at the General Meeting. The Company intends on publishing the required shareholder circular and notice of General Meeting shortly and a further announcement will be made as and when appropriate.

As noted above, the US$15 million proceeds of the Subscription will be used to strenghten the Company's balance sheet and provide improved liquidity to help ensure we bring our second gold mine, Kouroussa in Guinea into production as scheduled for first gold pour by the end of Q2 2023 and to help fund additional exploration. Additionally, it endorses the Company's strategy for growth with a strategic partner to underpin that ambition - both in the African region and beyond.

The terms of the Subscription are set out in an investment agreement entered into between CIG and the Company and include:

o An undertaking by CIG that it will not (save in limited circumstances) dispose of the Subscription Shares for a period of 12 months from the date of admission of the First Tranche Shares (in the case of the First Tranche Shares) or 12 months from the date of admission of the Second Tranche Shares (in the case of the Second Tranche Shares)

o In addition the Company has granted CIG a pre-emption right in relation to further equity issues by the Company while it holds 20% or more of the Ordinary Shares

o The agreement also contains customary warranties from each party

Further, CIG has also entered into a relationship agreement with the Company and the Company's nominated adviser, Strand Hanson Limited, which imposes certain obligations on CIG in its position as a substantial shareholder (as defined under the AIM Rules) in the Company to ensure that the Company will at all times be capable of carrying on its business independently of CIG and the members of its group. The relationship agreement remains in force for so long as CIG's holding does not drop to below 10%.

Issuance of Deferred Consideration Shares to Cassidy - Further Details:

As noted in the Company's 26 June 2020 announcement regarding the signing of the share purchase agreement ("SPA") for the acquisition of Kouroussa, deferred consideration of GBP10 for every ounce of gold reserve published by (or on behalf of the Company) in excess of 400,000 gold ounces (subject to a maximum of 1,000,000 ounces, and 100,000 ounce thresholds) (the "excess ounces") becomes payable to Cassidy Gold Corp ("Cassidy"), in cash or new Ordinary Shares, at the Company's discretion following the end of the relevant financial year.

Accordingly, following the publication of the reserve of 647,000 ounces (at 4.15g/t) at Kouroussa on 30 June 2022, deferred consideration in respect of 200,000 excess ounces is now payable to Cassidy.

The initial deferred consideration due of GBP2,000,000 is reduced by GBP532,032 due to the settlement of liabilities by the Company on behalf of Cassidy, and therefore results in the issue of 22,688,844 new Ordinary Shares to the underlying shareholders of Cassidy (the "Cassidy Deferred Consideration Shares"), when a VWAP of 6.47 pence is applied (being the 5 business day trailing VWAP to 31 December 2022).

Admission and Total Voting Rights

Application has been made to the LSE for the admission of the 39,360,800 First Tranche Shares and the 22,688,844 Cassidy Deferred Consideration Shares to trading on AIM, which is expected to take effect on or around 10 February 2023 ("Admission").

Following Admission, the Company's issued share capital will consist of 455,773,694 Ordinary Shares, all with voting rights. The Company currently does not hold shares in treasury. The total number of voting rights in the Company following Admission is therefore 455,773,694 , which may be used which may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure Guidance and Transparency Rules.

(1) CIG is controlled by the same principal as the Company's primary lending bank.

**S**

Notes to Editors:

Hummingbird Resources plc (AIM: HUM) is a leading multi-asset, multi-jurisdiction gold production, development and exploration Company, member of the World Gold Council and founding member of Single Mine Origin (www.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 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. The final feasibility results on Dugbe showcase 2.76Moz in Reserves and strong economics such as a 3.5-year capex payback period once in production, and a 14-year life of mine at a low AISC profile. 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.

   For further information, please visit   hummingbirdresources.co.uk   or contact: 
 
 Daniel Betts,         Hummingbird Resources       Tel: +44 (0) 20 
  CEO                   plc                         7409 6660 
  Thomas Hill, 
  FD 
  Edward Montgomery, 
  CSO & ESG 
 James Spinney         Strand Hanson Limited       Tel: +44 (0) 20 
  Ritchie Balmer        Nominated Adviser           7409 3494 
                      --------------------------  ---------------------------- 
 James Asensio         Canaccord Genuity Limited   Tel: +44 (0) 20 
  Thomas Diehl          Broker                      7523 8000 
                      --------------------------  ---------------------------- 
 Bobby Morse           Buchanan                    Tel: +44 (0) 20 
  O onagh Reidy         Financial PR/IR             7466 5000 
  George Cleary                                     Email: HUM@buchanan.uk.com 
                      --------------------------  ---------------------------- 
 

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February 07, 2023 04:49 ET (09:49 GMT)