TIDMHUM
RNS Number : 0881W
Hummingbird Resources PLC
21 April 2021
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
21 April 2021
Hummingbird Resources plc
("Hummingbird" or the "Company")
Q1 2021 Production Results and Operational Update
Hummingbird Resources plc (AIM: HUM) is pleased to provide an
operational and trading update for the first quarter of 2021 ('Q1
2021').
Q1 2021 Highlights
-- Gold poured: 22,781 ounces ('oz') of gold poured in Q1 2021
(Q4 2020: 22,012 oz)
-- Gold sold: 22,019 oz of gold sold in Q1 2021 at an average realised price of US$1,788 per oz
-- Gold inventory: 2,596 oz gold inventory at 31 March 2021, valued at US$4.4 million
-- All in Sustaining Cost ('AISC'): US$1,494 per oz for Q1 2021
(Q4 2020: US$1,496 per oz). Q1 AISC driven by:
-- Relatively low planned quarterly production and mill
grades
-- High strip ratio as the Company accesses the Komana West
('KW') ore body in particular
-- Sustaining capex being weighted to first half of the year,
including the tailings storage facility ('TSF') dam lift
-- Outlook: The Company re-iterates its 2021 production guidance
of 100,000 - 110,000 oz of gold, with an AISC of US$1,250 - 1,350
per oz on gold sold. Q1 2021 is expected to be the lowest
production quarter for the year, with improvements expected in Q2
2021 and for the rest of the year from Q1 levels. AISC is also
expected to improve from current levels, in line with improvements
in production expectations to meet the above AISC year end guidance
range
-- Health & Safety: The Company's impressive health and
safety track record continued during the quarter with an improving
Total Recordable Injury Frequency Rate ('TRIFR') of 0.42 (Q4 2020
at 0.82), which is industry leading (based on ICMM industry
data)
-- Net cash (inc. gold inventory value): US$4.9 million (Q4
2020: US$1.5 million) with US$8.6 million debt repaid during the
quarter. The remaining outstanding US$4.6 million of debt is
expected to be paid during this quarter, moving the Company into a
debt free position, in-line with Hummingbird's guidance
expectations
-- Management update: Appointment of Anthony Kocken as Chief
Operating Officer ('COO') during the quarter. Anthony has over 23
years operational and senior management expertise, predominately
working on African projects. Anthony's initial focus will be to
support the site in driving operational performance improvements at
Yanfolila and oversee the Kouroussa, Guinea project development
-- Yanfolila exploration update: The Company delivered an
internal Mineral Resource Estimate ('MRE') update for the Yanfolila
mine in Q1 2021, followed by significant drilling results at the
Sanioumale East ('SE') and Komana East ('KE') deposits. Both
releases highlighted upside life of mine ('LOM') potential at
Yanfolila
-- Kouroussa, Guinea: Received preliminary Front End Engineering
Design ('FEED'), infrastructure layout and capex estimates during
the quarter, which are now being reviewed and optimised before they
can be finalised whilst the Company awaits the award of the mining
licences from the Guinea Government, which are expected to be
issued shortly
-- Dugbe, Liberia: Earn-in partner, Pasofino Gold Ltd
('Pasofino'), made material progress in delivering a definitive
feasibility study ('DFS'), releasing successful exploration
drilling results for the Dugbe F deposit and completing on key
infrastructure plans
-- ESG: Strict protocols around Covid-19 remain firmly in place
and which have been successful in mitigating and capturing virus
spread. Progress in terms of water infrastructure improvements at
locally supported villages and continued progress with the
Company's health and safety metrics are key highlights for the
quarter
Dan Betts, CEO of Hummingbird, commented:
"Although Q1 was a slow quarter in terms of production, this is
in-line with forecast projections that the 2021 production profile
would be weighted to the second half of the year. We expect
production numbers to improve during Q2. Also, we expect our AISC
profile to improve from current levels, in line with improving
production levels.
"Our balance sheet continued to strengthen during the quarter.
Our net cash position improved, with the last remaining Company
debt of US$4.6 million forecast to be paid this quarter, taking the
Company into a debt free position, as we forecast over 12 months
ago, being a noteworthy achievement.
"During the quarter, we significantly strengthened our senior
management team with the important strategic hire of a COO, Anthony
Kocken. I would like to welcome Anthony to the team and look
forward to his valuable input as he utilises his extensive
operational and African expertise to help drive both operational
improvements at Yanfolila and progress at Kouroussa. Also, we
welcome Luke Main, another important hire as our Group People and
Performance Officer during the quarter.
"At Kouroussa, our development project in Guinea, we have made
good progress on the FEED, project layout and capex studies and are
currently reviewing and finalising these details while we await the
awarding of the mining licences from the Government. In relation to
security in the region we are mindful of recent unrest and are
closely monitoring the situation; we remain in close contact with
the government and do not believe the environment currently poses
any material risk to our project timelines and development
plans.
"Also, at the Dugbe Gold Project in Liberia, our earn-in
partners, Pasofino, made significant progress towards delivering a
DFS and we look forward to their continued progress.
"Finally, we saw our ESG initiatives progressing, in particular
around important water infrastructure improvements at several
locally supported villages. Further, our impressive health and
safety track record continued which are achievements we are proud
of."
Investor Q&A
Hummingbird will be publishing a Q&A for investors, with Dan
Betts, CEO, and Anthony Kocken, COO, on Vox Markets. Please submit
any questions to Kat Perez at kperez@voxmarkets.co.uk before 17:00
BST on 22 April 2021.
Operational Summary
Unit Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Gold poured oz 22,781 22,012 24,722 24,054 30,282
------ ------------- ------------- ------------- ------------- -------------
Ore mined kt 364,114 382,289 268,726 334,094 446,183
------ ------------- ------------- ------------- ------------- -------------
Ore processed kt 345,374 359,208 352,348 337,926 339,159
------ ------------- ------------- ------------- ------------- -------------
Avg. grade mill
feed g/t 2.16 2.03 2.27 2.36 2.98
------ ------------- ------------- ------------- ------------- -------------
Recovery % 92.97% 93.47% 95.18% 94.78% 93.19%
------ ------------- ------------- ------------- ------------- -------------
Gold inventory oz 2,596 1,980 4,634 4,339 11,000*
------ ------------- ------------- ------------- ------------- -------------
* Q1 2020 gold inventory was high due to COVID-19 impacting gold
shipments during that quarter
-- As indicated at the start of the year, Hummingbird expects
that the 2021 production profile to be weighted to the second half
of the year. Q1 2021 production of 22,781 oz is expected to be
Hummingbird's lowest production quarter for the year, with
improvements anticipated from Q2 2021 and the rest of the year from
Q1 levels
-- Average grade mill feed was 2.16 g/t of gold for the quarter,
seeing an improvement from Q4 2020 levels. The Company expect
incremental grade profile improvements from Q2 2021 onwards as it
access's deeper parts of the ore body which have incrementally
higher gold grades, particularly at the Komana West ('KW')
deposit
-- During the quarter the Company made an important strategic
hire of a COO, Anthony Kocken, who has over 23 years' experience in
the mining industry. Anthony has spent 18 years in various
managerial positions, including, COO for African Mining Services
(one of the largest mining contractors in Africa), COO and General
Manager at the Bisha Share Mining Company, owner of the world class
Bisha mine in Eritrea (gold, copper, silver and zinc mine), and as
COO and Operations Director at Mirabela Mineração do Brasil, owner
of the Santa Rita Mine (one of the largest open pit nickel sulphide
mines globally). Anthony has also held various senior operational
positions for Xstrata Zinc (Now Glencore) as General Manager of
Mining for all open pits and underground with a major part of
Anthony's last 15 years focused on site operation improvements
-- Anthony's initial focus will be to support the site in
driving operational performance improvements at Yanfolila and
oversee the Kouroussa, Guinea project development
-- As highlighted in the Company's Q4 production and 2021
outlook, Hummingbird expected to appoint a new contract mining
company, Junction Contract Mining ("Junction"), at Yanfolila on
similar terms to the previous contractor in place. This occurred
during the quarter with Junction taking over the mining fleet and
circa 90% of the existing employees of the previous mining
contractor allowing a seamless hand over process to occur with
improvements in mining volumes from Junction versus the previous
contractor already being seen
Financial Summary
Unit Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Gold sales oz 22,019 24,285 23,794 31,520 24,575
------ -------- -------- -------- -------- --------
Avg. gold sale price $/oz $1,788 $1,862 $1,919 $1,663 $1,568
------ -------- -------- -------- -------- --------
AISC on gold sold $/oz $1,494 $1,496 $1,283 $983 $875
------ -------- -------- -------- -------- --------
Net (debt) / cash $'m $0.5 ($2.1) ($9.7) ($20.3) ($25.1)
------ -------- -------- -------- -------- --------
Net (debt) / cash inc.
gold inventory value $'m $4.9 $1.5 ($0.9) ($12.5) ($7.3)
------ -------- -------- -------- -------- --------
Debt repayments $'m $8.6 $6.6 $8.3 $8.4 $6.0
------ -------- -------- -------- -------- --------
-- Q1 2021 AISC of US$1,494 per oz, although a slight
improvement on Q4 2020, remains relatively high. However, this is
in-line with the Company's internal mine plans, and Hummingbird
forecast AISC to improve from current levels, in Q2 and for the
rest of the year in line with overall production improvements
-- Q1 AISC driven by:
-- Relatively low planned quarterly production and mill
grades
-- High strip ratio as the Company accesses the KW ore body in
particular
-- Sustaining capex being weighted to first half of the year,
including the TSF dam lift
-- US$8.6 million of debt was paid during the quarter, with the
last remaining current debt of S$4.6 million forecast to be paid
this quarter taking the Company to a debt free position
-- Importantly, the Company's net-cash position (including the
value of gold inventories) improved to total US$4.9 million at the
end of the quarter
Exploration Summary
-- On 30 March 2021, the Company released a detailed internal
update to the MRE for Yanfolila which confirmed that Yanfolila
mineral resources (Indicated and Inferred), as at 31 December 2020,
totalled 1,929,000 oz of gold, with the 2020 exploration drilling
campaign adding 255,600 oz of gold across three key deposits
-- US$2 million was spent during the quarter on exploration,
with significant drilling results released during the quarter at
the SE and KE deposits
-- The Company's 2021 drilling programme continues to progress
and the Company will update the market soon with more assays once
received and reviewed
Development Summary
Kouroussa, Guinea
-- Q1 2021 was an important quarter for the Kouroussa project as
key preliminary work programmes were received, such as the FEED,
infrastructure layout and capex estimates, which are now being
reviewed and optimised before being finalised
-- Further highlights included:
-- ESIA studies progressed
-- Metallurgical holes planned to supply samples for
metallurgical testing to improve confidence in the flowsheet and
equipment selection
-- Geohydrology studies are underway to feed into the pit
design
-- Sterilisation drilling has been conducted to assist in
positioning of site infrastructure
-- Geotech studies have been conducted for the proposed plant
site and the main pit areas
-- Key team members are being evaluation for recruitment to take
the project from a pre-development phase to the development
phase
-- A detailed security evaluation for the project is in
progress. Recently the township of Kouroussa suffered civil unrest
directed at government authorities. The Company remain in close
contact with the government and do not believe the environment
currently poses any material risk to the project timelines and
development plans. The Company is in constant contact with the
government who have reiterated their support for the Projects
success and the security in the region
Dugbe, Liberia
-- During the quarter, Hummingbird's earn-in partner, Pasofino,
released the first drill holes of the planned 5,500 metre drill
programme at the Dugbe F deposit, and subsequently released updated
drilling results at the same deposit
-- Pasofino expects the full programme at Dugbe F, which is
intended to support an upgrade to a large part of the current
Inferred Mineral Resource Estimate to Indicated, to be completed by
the end of April 2021
-- Additionally, Pasofino completed important key infrastructure
developments during the quarter with the construction of 48 kms of
road, including 24 bridges, and finalised the refurbishment of the
exploration camp
ESG Summary
-- Covid-19: Hummingbird's ongoing strict on-site testing,
quarantine procedures and overall hygiene protocols are performing
well in mitigating and capturing virus spread
-- Water rehabilitation: Ongoing water rehabilitation at the
locally supported villages remains a key focus in general this year
and for the quarter. The Company rehabilitated five water pumps at
the Donsosso, Tekendougou and Guelekoro local villages and added a
new borehole at the Kabaya village during the quarter
-- Tree rehabilitation progress: Plans progressed in terms of
Hummingbird's vision to have a local village operating a nursery to
help be a source of trees for the ongoing tree rehabilitation
programmes
-- Market gardens: Works began on rehabilitating the market
garden of Tiemba, via water improvements and fencing. Hummingbird
continue to expect to add another two market gardens it supports in
2021, taking the number from eight to 10
-- Beehives : 90% of beehives have been colonised this quarter
with July expected to the month the honey is collected for
commercial sale
**ENDS**
For further information 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 Nominated Adviser 3494
-------------------------- ---------------------
James Asensio Canaccord Genuity Limited Tel: +44 (0) 20 7523
Thomas Diehl Broker 8000
-------------------------- ---------------------
Tim Blythe Blytheweigh Tel: +44 (0) 20 7138
Megan Ray Financial PR/IR 3205
Rachael Brooks
-------------------------- ---------------------
Notes to Editors:
Hummingbird Resources (AIM: HUM) is a leading multi-asset,
multi-jurisdiction gold production, development and exploration
company and member of the World Gold Council ('WGC'). Hummingbird's
vision is to continue to grow its asset base, producing highly
profitable ounces, while continuing to focus on its Environmental,
Social & Governance ('ESG') policies and practices. The Company
currently has two core gold projects, the producing Yanfolila Gold
Mine in Mali, and the Kouroussa gold development project in Guinea.
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.
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