TIDMHUM
RNS Number : 8762I
Hummingbird Resources PLC
29 November 2018
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
Hummingbird Resources plc
("Hummingbird" or the "Company")
Operational Update and 2019 Guidance
Hummingbird Resources (AIM:HUM) announces a follow up to its
announcement on 25 October 2018 regarding a pit stability issue
after a significantly heavier than normal wet season. A
comprehensive analysis surrounding the required remediation work on
the western wall of the Komana East pit at the Yanfolila Gold Mine
('Yanfolila') has been completed and remediation work has now
commenced. Production from Yanfolila has continued throughout this
period and will continue during the remediation work.
Key Points
-- 2018 full year production guidance adjusted to 87,000 - 92,000 oz
-- 2019 full year production at Yanfolila to reach between
110,000 - 125,000 oz with a targeted AISC of US$800/oz
-- Remediation work on the western pit wall of Komana East has
begun and is due to be completed in January 2019
-- Increased working capital flexibility with a new US$9.5
million debt facility from Coris Bank International Group
('Coris'), its existing lender, on the same terms as its existing
borrowings, to part-finance the second ball mill
-- Barge mobilised to provide additional transport link while
Yanfolila bridge is restricted by a reduced weight limit
Impact of pit stability issues and response
To summarise the unexpected series of events which led to the
announcement on 25 October 2018, mining at the western side of the
Komana East pit was suspended immediately for safety reasons
following the observation of a crack near the pit wall at the end
of a significantly heavier than normal wet season. Remediation
works were subsequently commenced to alleviate pressure, which
impacted mining activities in the pit. Simultaneously, flood damage
to the bridge providing access to the site impeded the mobilisation
of additional equipment.
In response to this, we have reconfigured the mining plan in
consultation with African Mining Services ('AMS'), our mining
contractor, with remediation works now well progressed and expected
to be completed in January 2019. Furthermore, a barge has now been
mobilised to assist in the transfer of additional fleet to site to
boost mining volumes.
Dan Betts, Hummingbird Resources CEO commented:
"Whilst the last month has been challenging for Hummingbird, I
am pleased at the professionalism with which the team have worked
to quantify the scale and nature of the issues and to execute a
remediation plan, which is already well under way.
We have worked closely with our mining contractor, AMS, who are
committed to the remediation plan and the delivery of the 2019
production guidance following the lower than expected ore delivery
to the ROM pad due to the extended wet season. We would like to
thank Coris, our lender, for their support to ensure working
capital flexibility.
We believe we have a strong remediation plan to rectify the
issues we have faced at Yanfolila and look forward to meeting our
revised guidance.
I would like to thank everyone at Hummingbird who has worked
tirelessly through this period and to our investors and other
stakeholders who have shown patience and support as we have worked
through these complex issues."
2018/2019 Guidance
The Group has modified its 2018 production guidance at Yanfolila
to be between 87,000-92,000oz from the previously stated
105,000-115,000oz with a Q4 targeted AISC of circa US$1,800/oz
which includes remediation costs, lost production and incremental
supply chain costs associated with restricted bridge loads.
The Group expects 2019 full year production guidance for
Yanfolila to be between 110,000-125,000oz with an expected AISC of
US$800/oz.
The majority of remediation costs will be incurred in Q4 2018
with some costs expected to be incurred in Q1 2019, by which point
the Group expects to return to normalised production. While the
reduction in production volumes has impacted Yanfolila in Q4 2018,
Hummingbird is confident in returning to full production capacity
in 2019.
Increased working capital facility
The Company has continued to meet all debt and interest payments
throughout 2018. In order to provide additional working capital
flexibility, the Company has agreed to borrow an additional
CFA5.5bn (circa. US$9.5m) from Coris, its existing lender, to
partially finance the US$13m capex requirement for the second ball
mill. The loan has a 9% interest rate, with interest only being
paid over the first year and interest and the capital being fully
repaid in the second year. The second ball mill will add 24% to the
process plant's fresh ore throughput capacity and as such offers a
good return on investment. To mitigate against any unforeseen
circumstances while remediation work is completed the Company
expects to secure a CFA5.5bn (circa. US$9.5m) overdraft facility
with Coris in the next week. The overdraft facility will provide
additional working capital flexibility if required. In the event
this overdraft facility is not secured, the Company will provide a
further update. The West African CFA franc has a fixed exchange
rate to the Euro.
Yanfolila Bridge
The Yanfolila bridge, located 40km from the Yanfolila Gold Mine
on the sole access road to site, was recently impacted by floods
and, as previously reported, was issued a 10 tonne weight limit.
The Malian Government is currently building a new bridge upstream,
however, the Company has mobilised a Malian Military barge to
guarantee access to site and the passage of additional fleet in the
interim.
Business Development
Hummingbird notes the press release by Bunker Hill Mining
Corporation ('Bunker Hill') on 13 November 2018 reporting that the
lease on the Bunker Hill mine has been reinstated with a 70%
reduction in monthly payments. Additionally, Bunker Hill raised
C$300,000 and appointed a new director. Hummingbird invested in
Bunker Hill in the form of a US$2m interest bearing convertible
loan note as announced on the 19 July 2018. Whilst Bunker Hill's
project looks promising, Hummingbird has decided not to pursue the
opportunity further at this time.
Conference Call
Hummingbird Resources will be hosting an analyst and investor
call today at 10:00am GMT. Participants can dial-in with the
following details:
UK Toll Free Number: 0800 358 9473
UK Toll Number: +44 333 300 0804
International numbers:
http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
Pin: 24409445#
**ENDS**
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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