TIDMHUM
RNS Number : 2568F
Hummingbird Resources PLC
26 October 2018
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
Hummingbird Resources plc
("Hummingbird" or the "Company")
Q3 2018 Report
Hummingbird Resources (AIM:HUM), the African gold producer,
announces its Q3 2018 production results for the quarter ended 30
September 2018, which represents its second full quarter of
commercial production since the end of the ramp-up period at the
Yanfolila Gold Mine ('Yanfolila') in March 2018.
Yanfolila highlights for Q3 2018
-- 22,206 ounces of gold poured at an AISC, calculated on gold
sold, of US$1,006/oz representing, as expected, a softer quarter
due to the heavy rainy season
-- Average grade processed of 2.99 g/t
-- 20,029 ounces of gold sold at an average price of US$1,217/oz
-- Highlights from the initial exploration results, released on 19(th) July, included;
o 11.45m @ 8.69g/t from 69m at Komana West
o 16m @ 3.11g/t from 38m at Guirin West
-- Approval to construct a second ball mill increasing
throughput by 24% when operating 100% fresh ore
Corporate highlights for Q3 2018
-- Cash of US$20m on 25 October 2018
-- US$4.5m of debt repaid in the quarter, with total debt of US$58m
-- US$3.5m reduction in trade payables in the quarter
-- US$5.5m increase in gold inventory to US$7.5m (gold on hand and not yet sold) in the quarter
-- Court approved the cancellation of the Company's share
premium allowing the Company the ability to pay dividends and
buy-back its shares
Dan Betts, CEO of Hummingbird, commented:
"As previously guided, the quarter was always going to be softer
in terms of mining and processing levels given the rainy season,
which has been unusually heavy. The Company produced 22,206 ounces
of gold taking total year to date production to 74,092 ounces of
gold. The 2018 exploration programme delivered early, positive
results that we expect in time to benefit the mine life by
Resources to Reserves.
"The rainy season and associated flooding has also had an impact
on the public bridge, which is over 35km away from the mine, along
the only route into site; this situation has therefore caused
supplies to be double handled and means that the mine is restricted
in its ability to mobilise heavy equipment to site which would have
the capacity to speed up any remediation work needed. We are
currently working on a number of solutions to this situation.
"As announced yesterday, pit stability issues were identified at
the Komana East pit which present a risk to the continued safe
mining directly below its western wall. The necessary
rehabilitation work on the western wall of this pit means that Q4
production will be negatively impacted and the Company will no
longer meet its 2018 production guidance. Mining from unaffected
parts of the Komana East pit and from the Komana West pit is
ongoing delivering ore to the process plant and it is expected to
continue while any remediation work takes place. The Company has an
experienced team who are working tirelessly at site and we will
give a further update once a remediation plan is developed."
Yanfolila Gold Mine
Q3 2018 Q2 2018 Q1 2018*
Gold Poured (Ounces) 22,206 33,101 18,785
------------------- ------------------- --------------------
Ore mined (Tonnes) 212,742 282,153 295,228
------------------- ------------------- --------------------
Ore processed (Tonnes) 232,518 287,605 238,628
------------------- ------------------- --------------------
Avg grade mill feed
(g/t) 2.99 3.43 2.96
------------------- ------------------- --------------------
Recovery (%) 96.42% 95.17% 96.10%
------------------- ------------------- --------------------
Gold Sales (Ounces) 20,029 38,726 11,941
------------------- ------------------- --------------------
AISC (US$/oz) 1,006 790 -
------------------- ------------------- --------------------
Average gold sale price
(US$/oz) 1,217 1,307 1,332
------------------- ------------------- --------------------
*ramp-up quarter
During Q3 the 2018 wet season was extremely heavy, which
affected both mining and processing rates at Yanfolila.
Furthermore, the public bridge on the edge of Yanfolila town (over
35km from site) suffered damage from excessive rainfall impacting
our ability to operate effectively with the double handling of
goods and inability to mobilise additional mining fleet to support
the remediation work needed.
Stability issues at the Komana East pit have presented a risk to
the continued safe mining below the western wall of the pit. The
necessary rehabilitation work on the western wall of this pit means
that Q4 production will be negatively impacted, however the Company
is still mining ore from both Komana East and West pits. Further
updates will be provided once a remediation plan has been developed
as announced yesterday.
Health, Safety and Environment
A comprehensive review of the Health, Safety and Environment
Management System is underway to ensure improved performance and
implementation of a strong safety culture across the whole Project
site. Despite the three LTIs recorded in the quarter, the overall
Project LTIFR has declined reflecting the changing risk profile as
the Project has transitioned from construction into operations.
Measure Q3 2018 Q2 2018
3 month average LTIFR 4.29 1.65
-------- --------
Project average LTIFR 2.93 3.44
-------- --------
All safety frequency rates are reported per 1,000,000 hours
On the health side Hummingbird has continued to advance
occupational health plans in line with its strategy to protect
workers and improve worker welfare. The 2018 Malaria action plan
has seen training delivered to Project staff as well as local
health care providers, distribution of nets and insect repellent,
and improved case management. Early signs are encouraging, however
further data collection is needed to accurately track improved
malaria incidence rates.
Environmental monitoring has continued with groundwater, surface
water, air quality and noise monitoring programs. Detoxification
process, using the INCO method, has performed well resulting in
tailings discharge significantly below ICMI standards. During the
first operational wet season, sediment control has presented some
issues and work is underway to ensure better preparedness next
year.
Community
Hummingbird is pleased to report the successful completion of
construction of a new community health centre in Bouougdale
village. Designed to serve over 5,000 people from across three
communities, this project is set to make a lasting positive impact
on community health in the local area. Through the medical services
contractor Critical Care International (CCI), Hummingbird will
support an intensive training and mentoring programme to establish
the health centre. This will include first fills for drug and
equipment at the health centre, before being handed over to the
local health services. This project now forms the focus for the end
of 2018 community projects.
Livelihood restoration activities, targeted at those former
artisanal miners from local communities, continue to deliver. In
partnership with Swisscontact two new market gardens are bearing
their first produce with over 200 women benefiting. Four new
poultry projects have been established and nearly 2,000kg of
chicken has been sold to local suppliers already. Training
programmes including livestock development and product processing
have also been supported.
Plans are now underway for 2019 to continue and expand on some
of the successful initiatives already undertaken to date.
Hummingbird looks forward to working closely with all stakeholders
to develop a lasting positive impact within the areas it
operates.
Dugbe Gold Project
The Company is waiting for the final approval of its Mineral
Development Agreement ('MDA').
Dugbe is Liberia's largest gold deposit with 4.2Moz of gold in
Resources and the Company has an additional +2,000km(2) of highly
prospective ground under licence in the country.
Update on cancellation of the Company's share premium account
('Cancellation')
The Company is pleased to announce that it has now received
court approval for the cancellation of the Company's share
premium.
As previously announced, the Cancellation has the effect of
creating distributable reserves, which will enhance the ability of
the Company to pay dividends and buy back shares.
Business Development
Hummingbird notes the press release made by Bunker Hill Mining
Corp ('Bunker Hill'), on the 15th October 2018 in regard to its
default on a lease payment to Placer Mining Corporation ('Placer').
The Company has a US$2m interest bearing convertible loan note
announced on the 19(th) July 2018 with Bunker Hill. Whilst the
project looks promising Hummingbird has decided not to pursue the
opportunity further at this time.
**S**
For further information, please visit
www.hummingbirdresources.co.uk or contact:
Daniel Betts, Hummingbird Resources plc Tel: +44 (0) 20 7409
CEO 6660
Thomas Hill,
FD
Robert Monro,
IR
James Spinney Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
James Bellman Nominated Adviser
-------------------------- ----------------------
Martin Davison Canaccord Genuity Limited Tel: +44 (0) 20 7523
James Asensio Broker 8000
-------------------------- ----------------------
Gordon Poole Camarco Tel: +44 (0) 20 3 757
Owen Roberts 4980
James Crothers Financial PR/IR
-------------------------- ----------------------
About Hummingbird Resources Plc
Notes to Editors
Hummingbird Resources (AIM: HUM) is a leading gold production,
development and exploration company. The Company has two core gold
projects, the Yanfolila Gold Mine in Mali and the Dugbe Gold
Project in Liberia.
Yanfolila produced its first gold pour on time and budget in
December 2017 and is expected to produce approximately 107,000oz
gold/year on average over the Life of Mine. Yanfolila holds
pre-production Probable Reserves of 709,800oz @ 3.14g/t, total
Resources of 1.8Moz of gold and an additional 390,700oz of
non-compliant exploration potential.
The Dugbe Gold Project has Resources currently totalling 4.2Moz
of gold and a completed NI 43-101 compliant PEA on the project
showing a 29% IRR and US$186m NPV at a US$1,300 gold price.
In addition to Hummingbird's production and development assets,
the Company also has an exploration footprint of 4,000km(2) and a
34% interest in AIM listed Cora Gold, which is advancing a
portfolio of prospects in Mali and Senegal.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
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END
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