TIDMHUM
RNS Number : 7344F
Hummingbird Resources PLC
20 July 2021
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
20 July 2021
Hummingbird Resources plc
('Hummingbird' or the 'Company')
Q2 2021 Operational and Trading Update
Hummingbird Resources plc (AIM: HUM) is pleased to provide an
operational and trading update for the second quarter of 2021 ('Q2
2021').
Q2 2021 Highlights
-- Gold poured: 24,494 ounces ('oz') of gold poured in Q2 2021
(Q1 2021: 22,781 oz)
-- Gold sold: 24,790 oz of gold sold in Q2 2021 at an average realised price of US$1,802 per oz
-- Gold inventory: 1,972 oz gold inventory at 30 June 2021, valued at US$3.4 million
-- All in Sustaining Cost ('AISC'): US$1,386 per oz for Q2 2021
(Q1 2021: US$1,494 per oz)
-- Cost and productivity improvement initiatives commenced: Cost
reduction and productivity improvement programmes initiated at the
Yanfolila mine. These are focused on both short and longer term
improvements from each department and aim to deliver lower AISC and
increase overall productivity
-- Net cash (inc. gold inventory value): US$12.4 million (Q1
2021: US$4.9 million) with US$4.7 million of final debt repayments
made, taking the Company into a debt free position
-- Outlook: Maintaining 2021 production guidance of 100,000 -
110,000 oz of gold, with an AISC of US$1,250 - 1,350 per oz of
gold. Full year production is expected to be weighted towards the
second half of the year in line with Hummingbird's guidance
expectations at the start of the year
-- Yanfolila exploration update: Material progress continued
with US$3.5 million spent on Yanfolila exploration during the
quarter, with 32,500 metres ('m') of the 44,600 m forecast for the
year drilled to date (vs 21,000 m drilled in 2020). Two drilling
releases during the quarter highlighting, in particular,
significant results at the Sanioumale East ('SE') deposit:
-- Results continue to provide further confidence that the
Company will build on the 2020 SE deposit JORC compliant mineral
resource base of 204,000 ounces ('oz')
-- Multiple assays are awaiting results from the labs in Bamako
and the Company anticipates being able to release more drilling
results during Q3
-- The Company remains on track to release an updated - reserve
statement later this year. In future, the Company is looking to
release a joint resource and reserve update annually from H1
2022
-- Kouroussa, Guinea: Mining licences awarded in May 2021.
Detailed capex estimates are being finalised to then enable the
Company to complete key work streams, including agreement on a
financing strategy for construction of the mine. The Company
anticipates updating the market shortly with further details on
development plans and capital cost estimates
-- Dugbe, Liberia: Earn-in partner, Pasofino Gold Ltd
('Pasofino'), released results of an independent preliminary
economic assessment ('PEA') for Dugbe highlighting strong project
pre-tax NPV 5% economics ranging from US$825 - US$1,153 million
(dependent on gold price). Ongoing positive drilling results also
continued during the quarter at Dugbe's two key deposits Dugbe F
and Tuzon, showing upside potential to the PEA economics
-- Health and Safety: Sadly, in late June, one of Hummingbird's
subcontractors suffered an employee fatality while operating at
Yanfolila. The Company's emergency protocols were actioned, via its
onsite medical teams, and a detailed investigation has now been
completed with the local and government authorities. The fatality
was an isolated incident, however the Company stood down the
contractor pending further investigations. Support is continuing to
be given to the family and counselling has been offered to the
Company's employees as well as to people employed by the
contractor. The Company's Total Recordable Injury Frequency Rate
('TRIFR') is 1.02 (Q1 2021: 0.42)
-- ESG: Key infrastructure for two new locally supported village
market gardens was completed taking the total Company supported
market gardens to 10. Progress continued at the Company's supported
village nursery's with 10,000 trees ready to plant in the coming
months as part of the Company's rehabilitation programmes. Strict
Covid-19 protocols remain in place, and vaccinations of site
employees has begun with a limited number of Covid-19 cases
recorded during the quarter
Dan Betts, CEO of Hummingbird, commented:
"Q2 saw steady improvements in terms of gold ounces poured and
lower AISC at Yanfolila when compared to Q1 2021. Additionally, the
Company has achieved a major milestone by paying off the final debt
used to fund Yanfolila, which will now better allow the mine to
generate cash flows to fund our future growth plans. The Company
also continued to invest heavily in exploration and whilst we have
received and released some outstanding drill results, we are still
due a significant number of results back from the labs which we are
keenly anticipating, with the expectation of adding further mine
life to Yanfollila.
"Operational performance is central to our objectives this year,
and under the leadership of our new COO, we are implementing a
number of processes and protocols aimed at cost reduction and
productivity improvements across the business.
"Advancement at Kouroussa continued at pace. During the quarter
we were awarded the mining licence for the project which is a major
step forward. Our Chief Strategy & ESG officer and I visited
Guinea during the quarter where we met government officials and
other stakeholders, following the visit, we remain encouraged by
the local and federal governments' support and commitment to the
project.
"We are nearing a finalised capex number for Kouroussa, with our
dedicated project team progressing workstreams with construction
and engineering companies. Once capex numbers are complete, we can
then finalise financing requirements, complete other key work
streams and begin construction. Importantly the project economics
of Kouroussa remain robust and in line with our expectations when
we acquired the project after months of rigorous de-risking. Most
excitingly of all though, and a key reason for the addition of
Kouroussa to our portfolio, is the significant exploration upside
potential which we are already engaged in unlocking through
developing comprehensive exploration plans. We will provide more
details once finalised capex estimate numbers are complete.
"At Dugbe, our joint venture partners Pasofino, released a
detailed PEA showcasing material project economics with the
Pasofino team progressing an ongoing drilling campaign which will
feed into the delivery of a DFS. We will update the market on key
updates on Dugbe's progress to deliver value for our shareholders
on one of the largest undeveloped gold projects in West Africa.
"Lastly, on a sombre note, I am truly saddened to report that
one of our subcontractors reported an employee fatality at
Yanfolila in late June. Our emergency procedures were actioned
swiftly, the subcontractor was stood down and a detailed
investigation completed with our senior site management team and
government officials. The safety of our employees, contractors and
local stakeholders remains our number one priority."
Operational Summary
Unit Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Gold
poured oz 24,494 22,781 22,012 24,722 24,054 30,282
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Ore mined t 443,490 364,114 382,289 268,726 334,094 446,183
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Ore
processed t 391,652 345,374 359,208 352,348 337,926 339,159
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Avg. grade
mill feed g/t 2.14 2.16 2.03 2.27 2.36 2.98
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Recovery % 91.88% 92.97% 93.47% 95.18% 94.78% 93.19%
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Gold
inventory
* oz 1,972 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
-- Gold poured of 24,494 oz is an improvement on Q1 2020 levels
and, encouragingly, the Company saw a month-on-month incremental
improvement in gold ounces poured
-- Wet weather protocols, procedures and mitigation strategies
are in place given Hummingbird's experience last year of the
extreme weather events that occurred in Q3 2020
-- Mill through put and processing rates for the quarter
improved from Q1 levels, with a good recovery rate of 92%
-- Average grade mill feed was flat, with expectations of
incremental improvements in the second half of 2021
Financial Summary
Unit Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Gold sales oz 24,790 22,019 24,285 23,794 31,520 24,575
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Avg. gold
sale price $/oz $1,802 $1,788 $1,862 $1,919 $1,663 $1,568
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
AISC on
gold sold $/oz $1,386 $1,494 $1,496 $1,283 $983 $875
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Net cash /
(debt) $'m $9.0 $0.5 ($2.1) ($9.7) ($20.3) ($25.1)
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Net cash /
(debt) inc
gold
inventory
value $'m $12.4 $4.9 $1.5 ($0.9) ($12.5) ($7.3)
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
Debt
repayments $'m $4.7 $8.6 $6.6 $8.3 $8.4 $6.0
------ ----------------- ----------------- ----------------- ----------------- ----------------- ------------------
-- Q2 ASIC of US$1,386 per oz improved from Q1 levels of
US$1,494 per oz driven a large part by improvements in ounces of
gold ounces poured
-- Improvements in Yanfolila's production predictability and
ASIC profile remain a key focus, with a cost efficiency and
productivity improvement campaign initiated across the key
divisions at site
-- An important milestone for the Company was achieved during
the quarter, with the final payment of debt made of US$4.7 million
to fund Yanfolila, taking the Company into a debt free position.
Further, Hummingbird's net cash (including gold inventories)
position improved to US12.4 million versus US$4.9 million in Q1
-- Lastly, US$2.5 million was realised from the sale of the
Company's remaining holding in AIM quoted, Cora Gold Limited. Funds
will be primarily used for Hummingbird's continued exploration
programmes to extend mine life
Exploration Summary
-- Drilling at SE highlighted ongoing significant drill results
for the deposit, with final drilling expected to take place during
Q3 to finalise the year's planned 15,000 m drilling at SE. Some key
holes from the two releases during the quarter included:
o 40 m at 5.33 g/t near surface (SNERC0425)
o 38 m at 5.39 g/t gold from 58 m depth (SNERCO421)
-- Drilling also continued at the Sanioumale West, Diaban, Kama
and Bolobi Coura ('BBC') deposits
-- Final drilling at Komana East Underground ('KEUG') took place
with economic analysis, portal hole access, and mine scheduling
taking place as part of the Pre-Feasibility Study ('PFS') being
undertaken to evaluate KEUG into the Company's future mine
plans
-- Hummingbird is awaiting multiple assays results with a
backlog at the Bamako labs impacting the Company's ability to
report ongoing drilling results. However, further results are
expected to be received and announced in Q3 2021
Development Summary
Kouroussa, Guinea
-- As per the highlights, the Company anticipates updating the
market shortly with further details on development plans and
capital cost estimates
Dugbe, Liberia
-- Pasofino released during the quarter an independent PEA on
Dugbe which highlighted the strong economics of the project
including:
-- Pre-tax NPV(5%) of US$825 million (US$627 million post-tax),
34% IRR (31% post-tax) at a gold price of US$1,600/oz
-- Pre-tax NPV(5%) of US$1,153 million (US$874 million
post-tax), at a gold price of US$1,800/oz
-- Fast capital payback of c.2.9 years from start of
production
-- LOM Cash flow of US$627 million
-- LOM AISC of US$893/oz and US$821/oz cash cost
ESG Summary
-- Covid-19: Limited cases were reported during the quarter.
Employee vaccinations begun, with the Company's ongoing strict
on-site testing, quarantine procedures and overall hygiene
protocols performing well in mitigating and capturing virus
spread
-- Hummingbird Tree Initiative: The Company's locally supported
village nursey programmes continued to progress, with the Yanfolila
forestry department assisting Hummingbird's local market gardens in
terms of training in tree procurement, with over 10,000 trees ready
to be used in the coming months for the Company's annual 20-hectare
rehabilitation programme
-- Market gardens: Key infrastructure for two locally supported
village market gardens was completed taking the total Company
supported market gardens to 10
-- SE resettlement: Progress continued during the quarter with
workshops, technical services and risk assessments taking place
-- World Gold Council ('WGC') Responsible Gold Mining Principles
('RGMPs'): Company GAP analysis was completed. This is now being
evaluated internally and with external ESG consultants to
prioritise and address areas where gaps have been identified in the
Company's policies and procedures
**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 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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