TIDMHUM
RNS Number : 1241D
Hummingbird Resources PLC
26 October 2020
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
26th October 2020
Hummingbird Resources plc
("Hummingbird" or the "Company")
Q3 2020 Corporate and Operational Update
Hummingbird Resources plc (AIM: HUM) is pleased to provide the
following operational and trading update for the third quarter of
2020 ("Q3 2020").
Corporate Highlights
-- Balance Sheet & Deleveraging: Cash of US$9 million at 30
September 2020 (US$6 million Q2 2020). Total bank debt of US$19
million, having been reduced by US$7 million during the quarter,
bringing net-debt down to US$10 million. During the quarter US$5
million was spent on other items including: exploration programmes,
expansionary capex ; and preliminary pre-development costs at the
Kouroussa Gold Project in Guinea ("Kouroussa")
-- Gold Inventory: 4,600 ounces ("oz") gold inventory on hand at
30 September 2020 valued at US$9 million which if included in the
net-debt calculation as per above, reduces net debt to US$1
million
-- Exploration and drilling: As outlined in the exploration and
drilling release on 8(th) October, see here , Hummingbird is seeing
further positive results, giving the Company confidence of the
overall resource and life of mine potential at Yanfolila. These
results can be seen in more detail below but include drill hole 16m
@ 9.64 g/t from 47m depth from our Sanioumale East ("SE")
deposit
-- Continued development of Kouroussa: In line with the
Company's stated strategy to be a multi asset and multi
jurisdiction producer, work continues at pace with pre-development
work plans at Kouroussa progressing well. Hummingbird is awaiting
the award of the mining license to then begin development works
which are expected early 2021
-- Progress at Dugbe Gold Project ( " Dugbe Project"): Joint
venture partner Pasofino Gold Limited ("Pasofino") (TSX: VEIN)
gained funding during the quarter and have now begun works to carry
out and fund a definitive feasibility study ("DFS") and exploration
works to earn-in its 49% stake in the project once these agreed
milestones have been met. Pasofino is targeting two new exploration
targets which is very encouraging. Recent progress updates from
Pasofino can be found here . At the time of this release Pasofino's
market capitalisation on the TSX was C$25.3 million.
Production Highlights
-- Production: 24,722 oz of gold poured in Q3 2020 (24,054 oz in
Q2 2020)
-- All in Sustaining Cash Cost ("AISC"): US$1,283 per oz for Q3
2020 (US$983 per oz AISC for Q2 2020)
-- Gold Sales: 23,794 oz of gold sold in Q3 2020 at an average
realised price of US$1,919 per oz
-- TRIFR: Total Recordable Injury Frequency Rate ("TRIFR") at
0.91, meeting the Company's target of having a TRIFR lower than
2.5
-- Management changes: The Company made several managerial
changes during the quarter to improve group operational
performance, reporting lines and efficiencies. Edrich Welthagen was
promoted to General Manager ("GM") at the Yanfolila Mine from Mine
Manager. Additionally, Shaun Bunn SVP of Projects Delivery and John
Meneghini, SVP Operations are reporting directly to the Executive
Committee on an interim basis
Post Period Highlights and Outlook
-- Production: 2020 production guidance maintained at 110,000 -
125,000 oz. Now into the dry season, expectations are for a better
quarter with realistic expectations for the full year to be at the
lower end of guidance
-- AISC: Extreme rainfall, the ongoing Covid pandemic and the
temporary closure of the Mali border (now reopened) due to the coup
caused logistical issues which had a negative impact on costs.
Although some of these issues have been resolved, there will be an
impact on full year cost guidance of US$995 oz
-- Deleveraging : Debt reduction continues as planned and the
Company remains on track for current bank loans to be fully repaid
by 1H 2021
-- Exploration & Drilling success continues : Post quarter
exploration and drilling results continue to be encouraging. N ew
results from Sanioumale West ("SW" in reserves) and the initial
results from SE (not in reserves) are very positive like the SW 15m
@ 3.72 g/t from 47m depth hole and the SE 16m @ 9.64 g/t from 47m
depth hole. See more details below
-- Kouroussa: Hummingbird's pre-development plans are
continuing. A key piece of work amongst other things being looked
at is the Front-End Engineering Design analysis ("FEED") which is
expected to be nearing completion by year end. The Company will
give a more detailed update in early 2021
-- 2021 budgeting analysis: Hummingbird's 2021 corporate budget
plans are being developed which it is excited about, this includes
plans on: exploration & drilling for both Yanfolila and
Kouroussa, Mine plans; Kouroussa development plans and operational
efficiency improvements
Dan Betts, CEO of Hummingbird, commented:
"Despite a more difficult quarter impacted by some of the
heaviest rains on record hitting site, compounding the already
difficult logistical challenges imposed upon us through a
combination of managing COVID-19 issues and the temporary closure
of borders due to the military coup in Mali, we are now in the dry
season, borders are back open and we are looking to have a strong
finish to the year in terms of production. Importantly we continue
to rapidly deleverage the Company's balance sheet with net debt
(including gold on hand) approaching zero at the time of writing.
This is a major milestone and a significant achievement for the
Company. Our 2020 exploration programme has led to some stellar
drill intersections particular at the Sanioumale West and East
deposits and we are excited to model these and see the potential
impact on the life of mine at Yanfolila. We continue to make solid
progress at Kouroussa ahead of commencing construction of our
second mine, which, when built, will see the Company as a circa
220,000 oz producer. Additionally, our important environmental and
social governance initiatives continue to provide significant
benefits for our local stakeholders."
Yanfolila Operational Highlights
To view the RNS with illustrative graphics please use this link:
http://www.rns-pdf.londonstockexchange.com/rns/1241D_1-2020-10-25.pdf
. Also, to view the Company's updated Q3 2020 Corporation
presentation please visit the website at
www.hummingbirdresources.co.uk/investors/reports-presentations/
Environmental, Social & Governance ("ESG") Highlights
-- No environmental incidents reported
-- TRIFR for the period was 0.91 against a benchmark of 2.5
-- World Gold Council ("WGC"), Responsible Gold Mining
Principles ("RGMP") internal committee was set up last quarter and
is making solid progress with the ongoing GAP analysis on current
work practices and policies in order to meet the WGC RGMP
requirements for membership
-- Hummingbird continues to manage its COVID 19 risks. Cases so
far and new cases reported have showed mild or A-symptomatic
symptoms and all previous case individuals have now fully
recovered
-- Tailing Storage Facility ("TSF") capital work improvements
costing US$2 million for 2021 have been approved. Works to begin
early Q1 2021 for completion before next year's wet season
-- The Company have on order and is awaiting the delivery of a
new medical COVID-19 testing machine, expected soon. This will
allow the Company to rapidly test employees to assist in the
overall management of the virus on-site and the surrounding
areas
-- Community projects update :
-- Reforestation - The 2020 goal of reforesting 20 hectares of
land on and around the mine site is 100% completed. Hummingbird is
committed to building on this commitment to further its
reforestation programmes for 2021 and beyond
-- Schools - The sponsorship of 11 teacher salaries continues at
eight local schools in the neighbouring communities
(Yallankro-Soloba and Sere Moussa ani Samou). Recent highlights
include Teachers and Pupil sanitisation and hand washing kits for
COVID-19
-- Soap Manufacturing - The sponsorship of local soap
manufacturing continues to be successful. In particular increased
soap usage from the Yanfolila mine being used to compact COIVD-19
spread
-- Market Gardens - Hummingbird now sponsors 10 garden markets,
with 675 local workers with produce sold at local markets and the
Yanfolila mine site
-- Poultry Farms - The Company sponsors four local poultry farms
which now have 40 full time employees. During the quarter the
Soloba farm had record production of 541Kg. Plans for the future
include developing two poultry farms at the Tiemba and Donsosso
villages
-- Honey Initiative - The Company currently sponsor Beehive
manufacturing education with the aim to divert local artisanal
miners towards sustainable employment. During the quarter
Hummingbird conducted the training of 15 people and currently have
75 bee hives operating
-- Water - During the quarter the Company r ehabilitated five
manual pumps, increased capacity of a water tower and constructed
14 latrines in the surrounding local communities
-- Malaria spraying - The ongoing malaria spraying programme
continues in conjunction with a number of the Company's key
contractors supporting these initiatives
Other Items
-- Post the quarter end, Hummingbird reached an agreement with
Bunker Hill Mining Corporation ("Bunker Hill") to settle it's
US$2.1 million outstanding convertible loan to the Company by
converting the entire loan into common shares of Bunker Hill
-- The Company is extending certain share options that would
normally expire on the 26 October 2020 due to close period
restrictions in order that the holders have an opportunity to
exercise them at the first available opportunity. This relates to
1,660,000 share options exercisable at 22p
Exploration & Drilling Post Quarter Details
Sanioumale West "SW" Deposit
-- 15m @ 3.72 g/t from 47m depth (SNWRC0450)
-- 12m @ 2.54 g/t from 10m depth (SNWRC0451)
-- 15m @ 3.45 g/t from 9m depth (SNWRC0461)
-- 2m @ 44.39 g/t from 24m depth (SNWRC0469)
Sanioumale East "SE" Deposit
-- 16m @ 9.64 g/t from 47m depth (SNERC0317)
-- 7m @ 3.72 g/t from 45m depth (SNERC0308)
-- 9m @ 1.90 g/t from 36m depth (SNERC0315)
-- 4m @ 4.09 g/t from 65m depth (SNERC0317)
-- 5m @ 3.85 g/t from 101m depth (SNERC0329)
Photos below are from Sanioumale East RC drilling.
Yanfolila Mineral Resources Map
**ENDS**
For further information, including an updated Corporate
presentation, please visit www.hummingbirdresources.co.uk or
contact :
Daniel Betts, Hummingbird Resources Tel: +44 (0) 20 7409
CEO plc 6660
Thomas Hill, FD
Edward Montgomery,
CSO & ESG
James Spinney Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Nominated Adviser
-------------------------- ---------------------
James Asensio Canaccord Genuity Limited Tel: +44 (0) 20 7523
8000
Broker
-------------------------- ---------------------
Tim Blythe Blytheweigh Tel: +44 (0) 20 7138
Megan Ray 3205
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 expected to be developed by Pasofino Gold
Limited (previously ARX Resources Limited) 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.
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