TIDMHUM
RNS Number : 2158R
Hummingbird Resources PLC
26 June 2020
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
Hummingbird Resources plc
("Hummingbird" or the "Company")
Signing of Sale and Purchase Agreement for the Kouroussa Gold
Project & Exploration Highlights
Further to the Company's announcement on 8 June 2020,
Hummingbird Resources plc (AIM:HUM), is pleased to announce the
signing of a conditional binding Sale and Purchase Agreement ("SPA"
or the "Agreement") confirming and setting out the key terms for
the acquisition of the Kouroussa Gold Project (the "Project")
located in Guinea, from Cassidy Gold Corp ("Cassidy"), following
the completion of confirmatory due diligence by the Company on the
Project.
The Company has also completed a more in-depth review of the
Project's geological database which highlights promising drill
intersections both within and outside the current stated mineral
resource used in the mine plan. These drill intersections also
demonstrate the high grade nature of the targets proximal to the
project and within the permit area.
Kouroussa Exploration Update - Highlights
The tables below illustrate a small number of the notable drill
intersections with greater than 100 gram meter intervals and
re-confirms the Company's belief in the exciting exploration
potential to extend the resources at Kouroussa beyond the known
1.1Mozs.
All deposits remain open and further exploration work is
required to enable Hummingbird to fully evaluate the potential of
the Project.
Koekoe deposit
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC0565 Sanu Folo 30.0 48.0 18.0 70.78 1,274
-------------- ------ ------ --------- ------ -----------
KD125 Sanu Filanan 73.0 86.0 13.0 53.04 689
-------------- ------ ------ --------- ------ -----------
KRC1381 Sanu Filanan 114.0 123.0 9.0 64.06 577
-------------- ------ ------ --------- ------ -----------
KRC1378 Sanu Filanan 33.0 53.0 20.0 25.97 519
-------------- ------ ------ --------- ------ -----------
KD005 Sanu Filanan 34.8 41.1 6.3 70.72 446
-------------- ------ ------ --------- ------ -----------
KRC1570 Sanu Filanan 29.0 37.0 8.0 46.73 374
-------------- ------ ------ --------- ------ -----------
KRC1515 JJ 55.0 64.0 9.0 43.44 391
-------------- ------ ------ --------- ------ -----------
KRC0027 JJ 16.0 30.0 14.0 23.90 335
-------------- ------ ------ --------- ------ -----------
KRC1110 JJ 97.0 102.0 5.0 42.62 214
-------------- ------ ------ --------- ------ -----------
KRC1000 KD-1 77.0 95.0 18.0 13.92 251
-------------- ------ ------ --------- ------ -----------
KRC0975 KD-1 38.0 50.0 12.0 18.26 219
-------------- ------ ------ --------- ------ -----------
Kinkine deposit
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC0862 Kinkine 46.0 70.0 24.0 19.41 466
---------- ----- ----- --------- ------ -----------
KRAB0416 Kinkine 56.0 68.0 12.0 38.67 464
---------- ----- ----- --------- ------ -----------
KRC0861 Kinkine 11.0 25.0 14.0 17.70 248
---------- ----- ----- --------- ------ -----------
KRC0910 Kinkine 88.0 92.0 4.0 47.08 188
---------- ----- ----- --------- ------ -----------
KRC0828 Kinkine 42.0 77.0 35.0 3.81 133
---------- ----- ----- --------- ------ -----------
X-Vein deposit
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
XV004 X-Vein 52.5 54.5 2.0 151.81 304
---------- ------ ------ --------- ------- -----------
XVRC-004 X-Vein 188.0 198.0 10.0 17.83 178
---------- ------ ------ --------- ------- -----------
XV018 X-Vein 95.0 99.0 4.0 40.14 161
---------- ------ ------ --------- ------- -----------
XVDH-003 X-Vein 110.5 112.6 2.1 64.46 135
---------- ------ ------ --------- ------- -----------
XVDH-003 X-Vein 121.2 123.8 2.6 33.19 86
---------- ------ ------ --------- ------- -----------
Bag Farm Deposit
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC1432 Junction 61.0 97.0 36.0 5.63 203
---------- ----- ----- --------- ------ -----------
KRC0783 Junction 81.0 83.0 2.0 88.68 177
---------- ----- ----- --------- ------ -----------
KRC0752 Junction 9.0 14.0 5.0 30.21 151
---------- ----- ----- --------- ------ -----------
KRC0748 Junction 22.0 93.0 71.0 2.09 149
---------- ----- ----- --------- ------ -----------
KD174 Junction 35.0 48.0 13.0 7.12 93
---------- ----- ----- --------- ------ -----------
Map of major deposits with location of selected drill holes
http://www.rns-pdf.londonstockexchange.com/rns/2158R_1-2020-6-26.pdf
Key terms of the SPA Agreement
-- Initial consideration of GBP10 million satisfied through the
issue of 35,248,441 Hummingbird new Ordinary Shares at 28.4p
("Initial Consideration"), currently representing 9.0% of the then
enlarged share capital of the Company:
-- Equivalent to approximately US$10 per resource ounce
-- All significant beneficial owners of Cassidy subject to 12
month lock in and 12 month orderly market provisions
-- Deferred consideration of GBP10 for every ounce of gold
reserve published (or processed if not included in a reserve) in
excess of 400,000 ounces (subject to a maximum of 1,000,000 ounces,
or GBP6 million)
-- Additionally, Cassidy shall retain a 2% net smelter royalty
on all gold sales by or on behalf of the Company over and above the
first 200,000 ounces of its production and sales, subject to a
maximum of 2.2 million ounces of production and sales
Dan Betts, CEO of Hummingbird, commented:
"I am delighted we have been able to confirm the purchase of the
Kouroussa Gold Project and look forward to working with the
Government of Guinea as we progress the development of the Project
as quickly as possible whilst continuing to explore the remarkable
geological potential at the project.
"This marks a pivotable point in Hummingbird's story and is a
significant next step in achieving our long term ambition to create
a sustainable multi-asset gold producer. I would like to take this
opportunity to thank all stakeholders who have contributed to
getting us this far and continue to support us at this exciting
time for the Company."
Murray Paterson, VP Geology of Hummingbird, commented:
"Having the opportunity to work on a new gold system at
Kouroussa is extremely exciting. There is undoubtably further
potential to be discovered but what is most exciting is the
abundance of high grades as evidenced by the large number of gram
metre intercepts >50 gram metres but also the many occurrences
of visual gold. The old adage "Grade is King" is particularly
relevant to Kouroussa and our technical team is looking forward to
the challenge of unlocking the system's full economic potential. We
look forward to sharing the story as it unfolds."
For further information, including an updated Corporate
presentation, please visit www.hummingbirdresources.co.uk or
contact:
Daniel Betts, Hummingbird Resources plc Tel: +44 (0) 20 7409
CEO 6660
Thomas Hill,
FD
Douglas Ross,
IR
James Spinney Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
James Bellman Nominated Adviser
-------------------------- ---------------------
James Asensio Canaccord Genuity Limited Tel: +44 (0) 20 7523
Ed Montgomery Broker 8000
-------------------------- ---------------------
Tim Blythe Blytheweigh Tel: +44 (0) 20 7138
Megan Ray 320 5
Rachael Brooks Financial PR/IR
-------------------------- ---------------------
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 recently acquired
Kouroussa Gold Project in Guinea. Yanfolila produced its first gold
pour on time and budget in December 2017. At 31 October 2019
Yanfolila has a 7.9Mt of Reserve ore @ 2.66 g/t for 676,000ozs
gold. At 31 March 2019 Yanfolila had a total Resource base
(inclusive of Reserves) of 28Mt of Ore @ 2.23 g/t for 2,005,300ozs
gold. The Kouroussa Gold Project has a Resource base of 1.18Moz @
3.08 g/t, which will be fast tracked to production, adding an
additional c.100,000 oz of gold per annum to its production
profile. Hummingbird also has a controlling interest in the Dugbe
Gold Project that is being developed by ARX Resources through an
earn-in agreement. 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 43% IRR and US$337m NPV at a US$1,500 gold
price.
Further Information
It is the Company's intention to spend the next six months
optimising the project with the objective of commencing
construction at the start of 2021. Whilst the final design is
dependent on work to be conducted during the next six months, it is
anticipated that the project will be of a similar scope and flow
sheet to the Company's Yanfolila project. First gold pour is
targeted within two years.
During the initial six month period the Company will analyse the
optimal funding structure for the project, consistent with the
letter of intent received from our west African banking partners,
Coris Bank. The financing is expected to support the project with
up to $100 million and will take into account the fact that the
Company expects to be generating significant cash flows from its
Yanfolila mine, which is due to become debt free in Q2 2021.
Kouroussa Exploration Update
Over the past three weeks, following the initial due diligence
into the Kouroussa project, a more in depth data review by
Hummingbird's technical team has highlighted the high grade nature
of the Kouroussa gold system (includes Koekoe, Kinkine, X-Vein and
Bag Farm - Junction) and the further upside potential for open pit
and underground resources outside of the current stated mineral
resource of 1.1Mozs.
The extent of the Kouroussa gold system is defined on surface by
its Gold-In-Soil anomaly (greater than 20ppb Au) approximately 3.0
km long by 2.0 km wide, orientated in a north westerly direction,
parallel to the interpreted regional Kiniero - Kouroussa fault
zone. The four main deposits of the Kouroussa gold system are
hosted within predominantly mafic intrusives or volcanics. The gold
grades at the deposits correspond to the size, and composition of
the quartz - sulphide veins that are controlled by localised
structures within the host rocks.
As a result of the in depth data review, and a sign of the
potential world class nature of the Kouroussa gold system which
will only become apparent through further focused exploration, is
the presence of gram metre intervals greater than 100 gram
metres.
At the Koekoe deposit, made up of four principal mineralised
zones, Sanu Filanan, Sanu Folo, KD-1 & JJ, the following are
indicative of the high grade nature of the deposit, they only
represent a small number of the intervals greater than 100 gram
metres.
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC0565 Sanu Folo 30.0 48.0 18.0 70.78 1,274
-------------- ------ ------ --------- ------ -----------
KD125 Sanu Filanan 73.0 86.0 13.0 53.04 689
-------------- ------ ------ --------- ------ -----------
KRC1381 Sanu Filanan 114.0 123.0 9.0 64.06 577
-------------- ------ ------ --------- ------ -----------
KRC1378 Sanu Filanan 33.0 53.0 20.0 25.97 519
-------------- ------ ------ --------- ------ -----------
KD005 Sanu Filanan 34.8 41.1 6.3 70.72 446
-------------- ------ ------ --------- ------ -----------
KRC1570 Sanu Filanan 29.0 37.0 8.0 46.73 374
-------------- ------ ------ --------- ------ -----------
KRC1515 JJ 55.0 64.0 9.0 43.44 391
-------------- ------ ------ --------- ------ -----------
KRC0027 JJ 16.0 30.0 14.0 23.90 335
-------------- ------ ------ --------- ------ -----------
KRC1110 JJ 97.0 102.0 5.0 42.62 214
-------------- ------ ------ --------- ------ -----------
KRC1000 KD-1 77.0 95.0 18.0 13.92 251
-------------- ------ ------ --------- ------ -----------
KRC0975 KD-1 38.0 50.0 12.0 18.26 219
-------------- ------ ------ --------- ------ -----------
Throughout the Koekoe deposit, holes are predominantly drilled
to the North East, perpendicular to the localised structural trends
at a dip of minus 50-55 degrees, this has been to ensure that the
mineralisation is intersected as true width as possible. The Koekoe
deposit remains open to the south, west and to the north west.
Exploration drilling is being planned to fully close off the
deposit and test for all near surface extents of mineralisation
before drilling any potential underground extensions.
The Kinkine deposit is located approximately 4.0 kms north east
of Koekoe. Kinkine currently contains Inferred material of 2.3Mt
for 160kozs and is made up of a series of stacked lenses within a
dome like mafic unit. The mineralisation is located towards the
margin of the intrusive and older sedimentary units (carbonaceous
mudstones, siltstones and greywacke).
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC0862 Kinkine 46.0 70.0 24.0 19.41 466
---------- ----- ----- --------- ------ -----------
KRAB0416 Kinkine 56.0 68.0 12.0 38.67 464
---------- ----- ----- --------- ------ -----------
KRC0861 Kinkine 11.0 25.0 14.0 17.70 248
---------- ----- ----- --------- ------ -----------
KRC0910 Kinkine 88.0 92.0 4.0 47.08 188
---------- ----- ----- --------- ------ -----------
KRC0828 Kinkine 42.0 77.0 35.0 3.81 133
---------- ----- ----- --------- ------ -----------
Drilling has been relatively shallow at Kinkine with
mineralisation open to the South West plunging below the base of
the current drilling.
The X-Vein deposit, located 2.5 km in a Northerly direction from
Koekoe, was discovered in 1948 by the French government
organisation, BUMIFOM, which sank an exploration shaft with some
limited underground development taking place. This previous work
highlights the recognised high grade and amenability to underground
mining. The mineralisation is hosted within mafic volcanics (pillow
basalts) and dips steeply to the West. The deposit is made up of a
single smokey quartz vein with a current strike length of 400 m. A
representation of the gram metre intervals intersected at X-Vein
are below,
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
XV004 X-Vein 52.5 54.5 2.0 151.81 304
---------- ------ ------ --------- ------- -----------
XVRC-004 X-Vein 188.0 198.0 10.0 17.83 178
---------- ------ ------ --------- ------- -----------
XV018 X-Vein 95.0 99.0 4.0 40.14 161
---------- ------ ------ --------- ------- -----------
XVDH-003 X-Vein 110.5 112.6 2.1 64.46 135
---------- ------ ------ --------- ------- -----------
XVDH-003 X-Vein 121.2 123.8 2.6 33.19 86
---------- ------ ------ --------- ------- -----------
X-Vein deposit has a high weathering profile making it suitable
to establishing an underground operation from surface, which
Cassidy Gold Ltd, had started a portal box cut in preparation of
going underground, the box cut was nearly completed but never
became operational.The deposit remains open to the North and down
dip with shallow drilling having taken place to date to define the
resources of 350 kt at 7.3 g/t. Multiple repetitions of similar
quartz veins that make up the X-Vein deposit has been mapped and
sampled within a 500 m radius West of X-Vein. In 2015, a 20 tonne
bulk sample was collected, averaging over 8 g/t from one of the
veins comprising the X-Vein West area. This area has never been
drilled.
The Bag farm - Junction ("BFJ") Deposit, is semi contiguous to
the X-Vein area and is located approximately 2.0 kms North West of
Koekoe. BFJ lies along a strong North/Easterly trending structure
with the near surface high grades clearly evident at the Junction
or northern end of BFJ closest to X-Vein, with Cassidy's initial
plans to link from X-Vein via an underground drive to Junction.
HOLEID PROSPECT FROM TO Interval Au Gram/Metre
KRC1432 Junction 61.0 97.0 36.0 5.63 203
---------- ----- ----- --------- ------ -----------
KRC0783 Junction 81.0 83.0 2.0 88.68 177
---------- ----- ----- --------- ------ -----------
KRC0752 Junction 9.0 14.0 5.0 30.21 151
---------- ----- ----- --------- ------ -----------
KRC0748 Junction 22.0 93.0 71.0 2.09 149
---------- ----- ----- --------- ------ -----------
KD174 Junction 35.0 48.0 13.0 7.12 93
---------- ----- ----- --------- ------ -----------
BFJ is surrounded by an extensive clay alteration halo
interpreted to be related to a deeper intrusive body at the South
West end of the zone, where a distinct 500 m x 500 m soil anomaly
(> 500ppb) is located. Shallow drilling defines the current
resource of 1.7Mt at 1.6 g/t due to being of a lower grade the
deposit hasn't been subjected to systematic or deeper evaluation.
Further work is required to understand its true relationship to
X-Vein and the similar X-Vein West dilational veins to the
immediate north of BFJ.
In addition to the four deposits within the mining licenses, the
Benegban exploration license lies 7.5 kms directly to the north of
Koekoe, demonstrates similar potential based on soil geochemistry
and artisanal workings existing within the license. First pass air
core or RAB drilling is being planned to test the near surface
potential contained at Benegban.
Details of the Acquisition
Hummingbird has agreed to acquire all of the share capital in
Cassidy Gold Guinée S.A. ("Cassidy Guinea"), as well as the benefit
of outstanding shareholder loans owed by Cassidy Guinea. Cassidy
Guinea is being acquired from Cassidy Gold Corp (incorporated in
Canada), which is wholly owned by Guinea Gold Limited. Guinea Gold
Limited is incorporated in Labuan, and is 77.7% owned by Asian
Investment Management Services Limited together with Halfmoon Bay
Capital Limited (the "Majority Sellers").
The consideration is payable by:
1. Initial consideration of GBP10,000,000 (the "Initial
Consideration"), to be satisfied by the allotment and issue of
35,248,441 new ordinary shares in Hummingbird, based on a 30 day
VWAP prior to the Company's announcement on 8 June 2020. The
Initial Consideration shall be subject to customary adjustments
payable in cash for working capital and net debt, but which is
estimated to be immaterial. The Initial Consideration shall only be
payable on satisfaction of various conditions, including approval
from the Government of Guinea for the change of control of Cassidy
Guinea and completion and the issue of the mining permit in
relation to certain areas currently subject to exploration permits.
Further updates will be made as and when appropriate, including
with respect to the admission to trading on AIM of the Initial
Consideration shares.
2. Deferred consideration of GBP10 for every ounce of gold
reserve published by or on behalf of the Company (or processed if
not included in a reserve) in excess of 400,000 ounces (subject to
a maximum of 1,000,000 ounces or GBP6,000,000) (the "Deferred
Consideration") payable in cash or shares at the Company's
discretion; and
3. Additionally, Cassidy shall retain a 2% net smelter royalty
on all gold sales by or on behalf of the Company over and above the
first 200,000 ounces of its production and sales up to a cap of 2.2
million ounces (the "Royalty").
The Initial Consideration currently represents approximately
9.0% of the share capital of the Company as enlarged by the issue
of shares to satisfy the Initial Consideration.
The new ordinary shares allotted to the Majority Sellers to
satisfy the Initial Consideration and, if applicable, the Deferred
Consideration are subject to separate lock-in and standstill
agreements whereby the legal and beneficial owners of such shares
shall agree not to dispose or deal with them (except in customary
limited circumstances) for a period of 12 months without
Hummingbird's consent, and also agree without such consent not to
(i) acquire any additional interests in Hummingbird shares for a
period of two years; or (ii) vote any such shares other than in
line with any recommendation of Hummingbird's board of directors
for a period of 12 months. Additionally, the Majority Sellers will
be subject a further 12 month orderly market provision.
The Deferred Consideration shall be payable (if due) in cash
within five business days of the end of Hummingbird's financial
year (or at Hummingbird's option in Hummingbird shares using the
VWAP of such shares over the 30 trading days prior to the end of
the financial year) in relation to each 100,000 ounces over 400,000
ounces that has been published, with any balance being carried
forward to the next financial year.
Qualified Person sign off
Murray Paterson has reviewed the technical information contained
within this announcement in his capacity as a Qualified Person, as
required under the AIM Rules for Companies. Murray Paterson is the
VP Geology for the Company and is a member of good standing with
the Australasian Institute of Mining and Metallurgy (MAusIMM), with
25 years' experience.
**ENDS**
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END
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