Acquisition of the Kouroussa Gold Project

RNS Number : 2305P

Hummingbird Resources PLC

08 June 2020

 

Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining

Hummingbird Resources plc

("Hummingbird" or the "Company")

Acquisition of the Kouroussa Gold Project

Hummingbird Resources plc (AIM:HUM), is pleased to announce the signing of a binding heads of terms agreement for the acquisition of the Kouroussa Gold Project (the "Project") located in Guinea, from Cassidy Gold Corp ("Cassidy"), subject to standard conditions precedent including Government approval.

Project Highlights

§ Hummingbird to acquire the Kouroussa Gold Project, a near term development asset in the prolific Siguiri Basin, which has a high grade mineral resource of 1.18Moz of gold at >3g/t

§ The acquisition of the Project turns Hummingbird into a near term multi-asset producer with jurisdictional diversification in line with the Company's strategy

§ First gold production targeted within 2 years, with production of circa 100,000oz per annum and AISC of circa US$800 over an initial 5 year Life of Mine ("LoM")

§ Similar metallurgical flow sheet and process plant design to Yanfolila allows Hummingbird to leverage construction and operational expertise gained to date

§ Estimated capital development cost of circa US$90m for plant construction, mine development and all associated infrastructure

§ Illustrative pre-tax project IRR, NPV and free cash at range of gold prices¹:

Gold Price US$/oz	IRR	NPV10 US$m	Cumulative Free Cash US$m
1,350	51%	110	167
1,500	69%	162	233
1,750	98%	251	344
2,000	97%	338	454

¹ Internally generated by the Company based on information acquired from Cassidy and inclusive of the 2% royalty retained by the vendors

§ Significant exploration potential is known to exist at depth beneath the Koekoe deposit with another 6 high priority targets identified from intersections which require follow up work or surface bulk sampling results

§ Letter of Intent from the Company's West African Bankers, Coris Bank International, to provide up to US$100m for the development of Kouroussa as deemed necessary and according to the company's funding strategy, subject to due diligence and credit committee approval

§ Well established and stable mining jurisdiction with a number of world class bauxite and gold mines owned and operated by major international companies

Key terms of acquisition

§ Initial consideration of £10m satisfied through the issue of 35,248,441 Hummingbird new Ordinary Shares at 28.4p ("Initial Consideration"), currently representing 9.1% of the enlarged share capital:

§ 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

§ Deferred consideration of £10 for every ounce of gold reserve published in excess of 400,000 ounces (subject to a maximum of 1,000,000 ounces)

§ 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 maximum of 2.2m ounces of production and sales

Dan Betts, CEO of Hummingbird, commented:

"The intended acquisition of Cassidy Guinea and the Kouroussa Gold project marks a transformational step in the development of Hummingbird and the execution of our strategy to become a multi asset gold producer in the near term.

"Kouroussa is a high grade, high margin project with a number of similarities and synergies with Yanfolila which we are confident we can harness to our advantage.  Over the last few years we have looked at a vast number of projects and Kouroussa ticks every box in terms of a next mine for Hummingbird. It is of the scale, geology, process circuit design and grade that are all perfect for our team's experience to be put to immediate use, and it is in line with our strategy to focus on high margin projects.

"I am delighted to welcome the shareholders of Cassidy Gold to the Hummingbird share register and I am pleased that our West African Banking partner, Coris, have indicated their keen support for the financing of the project as may be required.  Our plan is to spend the next 6 months refining the detailed engineering and design of the project whilst initiating construction and ordering long lead items, with an aggressive timetable to try to accelerate the build and pour gold within two years of the acquisition.

"We look forward to updating the market as the development of Kouroussa progresses."

David Crichton-Watt, Chairman of Cassidy Gold, said:

"As long term gold investors, we were attracted to the Kouroussa project by its exceptional grade and exploration potential.  Having taken the project to the point where it is ripe for development into a significant mine, we are delighted to become significant shareholders in Hummingbird whose track record together with the proximity and uncanny project similarities with Yanfolila means they are the ideal partners to develop the project and unlock the potential of Kouroussa rapidly for all stakeholders.  I am personally delighted to have the opportunity to participate in this journey with Hummingbird as a highly supportive long term shareholder."

**ENDS**

For further information, included an updated Corporate presentation, please visit www.hummingbirdresources.co.uk or contact:

Daniel Betts, CEO Thomas Hill, FD Douglas Ross, IR	Hummingbird Resources plc	Tel: [phone]
James Spinney Ritchie Balmer James Bellman	Strand Hanson Limited Nominated Adviser	Tel: [phone]
James Asensio Ed Montgomery	Canaccord Genuity Limited Broker	Tel: [phone]
Tim Blythe Megan Ray Rachael Brooks	Blytheweigh Financial PR/IR	Tel:  [phone]

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.  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 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.

Strategy and acquisition rationale

Hummingbird's strategy is to become a multi mine company focusing on margin and cash returns to create long term shareholder value, through a three pronged approach:  

1.  Extending mine life at Yanfolila, Mali

Extending the mine life at Yanfolila remains a high priority and the drill results announced last week; both exploration holes close to the plant and holes targeting underground developments at Komana East are encouraging in this regard.

2.  Diversification of cashflows and returns with high margin projects

Geographic diversification of producing assets should provide excellent risk mitigation against single mine and jurisdictional operations.  The acquisition of Kouroussa as a high grade, high margin, additional mine, which leverages Hummingbird's operational and construction experience is a significant step in developing this second strand of our strategy.

3.  Capital allocation

It is critical to maintain discipline in the allocation of capital with the objective of prioritising extending mine life and value accretive diversification.  As part of this it is incumbent on us to maximise the value from non core assets which are not a natural fit for the Company at the current time and may be a significant drain on the Company's resources and/or represent a risk to the wider group.  An example of this is the recently announced farm in agreement in Liberia for the Dugbe project which represents a significant investment from a third party in order to unlock value at a project which is strategically seen as too large for Hummingbird to develop on its own. This investment means that the project's development and carrying cost for the next 2 years has been minimised to Hummingbird who retain control of the project for the long term.

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 any outstanding shareholder loans owed by Cassidy Guinea, subject to the satisfaction of various matters including confirmatory due diligence and the exchange of a definitive sale and purchase agreement ("Sale Agreement"). 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 £10,000,000 (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 this announcement.  The Initial Consideration shall be subject to customary adjustments payable in cash for working capital and net debt.  The Initial Consideration shall only be payable on satisfaction of various conditions including completion and the issue of the mining permit in relation to certain areas currently subject to exploration permits.

2.  Deferred consideration of £10 for every ounce of gold reserve published by or on behalf of the Company in excess of 400,000 ounces (subject to a maximum of 1,000,000 ounces or £6,000,000) (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 2.2m ounces (the "Royalty").

The Initial Consideration currently represents approximately 9.1% 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 will be 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 2 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 5 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.

Principal Conditions

Hummingbird has been granted exclusivity in relation to the proposed acquisition until the end of June 2020, or for such additional time as Hummingbird funds the operations of Cassidy Guinea US$150,000 per month, which it has agreed to do from the date of the heads of terms until completion.

The principal conditions to be fulfilled before completion include:

(a)  Completion of confirmatory due diligence;

(b)  Exchange of a mutually agreed SPA containing customary protections and warranties; and

(c)  Approval from the Government of Guinea for the change of control of Cassidy Guinea.

The Kouroussa Project

Background & location

The Project is situated near the town of Kouroussa in the Kouroussa Prefecture in eastern Republic of Guinea. Located 570km east of the capital of Guinea, Conakry, with an approximate travel from Conakry of 10 hours. As per the attached map the project is in close proximity to Hummingbirds Yanfolila mine, 170km to the West, and an approximate 5 hours travel time by paved roads from Mali's capital, Bamako.

Link to Figure 1: Location map highlighting the geology of the of Siguiri Basin with Major Gold Deposits  
http://www.rns-pdf.londonstockexchange.com/rns/2305P_1-2020-6-8.pdf

Geology   

The Kouroussa Gold Project is situated in the South West corner of the Siguiri basin within a complex stress field, which developed through the deposition and evolution of the Birimian Greenstone belt.  The Birimian Greenstone formations of West Africa are host to some of the largest gold deposits in the world, including Sadiola, Yatela, Morila and Syama in Mali, Obuasi, Bogosu, Prestea, Ahafo and Achem in Ghana, and Siguiri in Guinea, the latter also lying within the Siguiri Basin.

Birimian-style mineralised deposits are generally associated with regionally metamorphosed terrains that have undergone considerable deformation and polyphase intrusive events. They are invariably strongly structurally controlled, but are commonly associated with rheological contrasts within and between different lithologies. The mineralisation within the Kouroussa deposits are typically late-orogenic, high-grade gold lodes, which exhibit some of the characteristics common to Birimian-style mineralisation. These lodes are structurally controlled and have a silica-sericite-carbonate-pyrite-arsenopyrite alteration assemblage. The mineralisation is often located within quartz veins or in quartz-veined fracture zones (grading to breccias) in the surrounding wall rocks.  Within the project area there are a number of recognised intrusive lithologies which have been interpreted as the underlying drivers for the gold mineralising fluids. Well-recognised and significant exploration opportunities exist at Kouroussa for orogenic shoot style mineralisation. Kouroussa is an under explored system at depth, and deeper drilling in the future is likely to reshape the gold field.

Exploration in the area commenced in earnest in the 1940's with the identification of auriferous veins. Modern exploration techniques including regional mapping, geophysics, geochemistry and drilling commenced in the mid-1980's with exploration activities resulting in a number of Mineral Resource Estimates being conducted on the Project since 2008. The latest Mineral Resource Estimate was completed in early 2020 by Mining Plus Pty Ltd for Guinea Gold Ltd.  Over 308,900m (from 5,769 holes) of resource definition drilling has been carried out since 2003 and used in the mineral resource modelling of the deposits.  The Project is almost entirely covered by in-situ lateritic plateaux on topographic highs. The area is deeply weathered with reworked lateritic gravels of variable depth on the slopes and alluvial deposits in the topographic lows.

Three main mineralised areas have been defined to date by drilling: the Koekoe Area which consists of the JJ, KD, Sanu Filanan and Sanu Folo mineralised zones, the Kinkine area and Bag Farm which comprises the Junction, Bag Farm and X-Vein deposits.

The mineralisation at Koekoe is interpreted to be structurally controlled, with the four main mineralised zones thought to be caused by the same structural regime. The four mineralised zones include the northwest striking Sanu Filanan, JJ and KD zones and the east-west oriented Sanu Folo zone, which appears to be associated with a linking structure between Sanu Filanan and JJ.  The majority of these structures contain numerous high-grade shoots, many of which have not been adequately tested at depth. Mineralisation is associated with quartz veins or zones of intense silica-sericite-carbonate-pyrite-arsenopyrite alteration, these often grade into breccias due to the intensity of fracturing. 

A distinguishing characteristic of the Koekoe deposit is the frequency at which visible gold is observed in drill core and gold grades in excess of 300g/t have been assayed.

Mineralisation within the Kinkine deposit is interpreted to be related to an intrusive gabbro with the gold hosted within both the intrusive lithology and the overlying sediments. The mineralisation occurs as a series of stacked shallow dipping zones, which are oriented sub-parallel to the intrusive contact.  The majority of the mineralisation defined to date is relatively shallow (within 100m of the surface), although some deep drilling has identified the potential for deeper mineralisation as it is open to the South West with mineralisation plunging below the shallow near surface drill holes.

The Bag Farm - Junction Area is located to the northwest of Koekoe with the mineralisation identified to date being significantly lower-grade than at Koekoe.  The domains for both Bag Farm and Junction strike northeast and are generally relatively steeply dipping. There remains significant upside potential on the northern side of the currently drilled zones with duplicate veins identified that have not yet been followed up by drilling.

The X-Vein area comprises the originally explored X-Vein and X-Vein West deposits.  Both of these deposits are considered to be structurally controlled, with X-Vein previously considered as an underground operation.  Being open to the North, there still exists significant exploration upside potential and bulk sampling (20 tonne) results from X-Vein West returning gold grades of over 8g/t.

Link to Figure 1: Location map highlighting the geology of the of Siguiri Basin with Major Gold Deposits

http://www.rns-pdf.londonstockexchange.com/rns/2305P_1-2020-6-8.pdf  

Mineral Resources

Within the Project, Mineral Resources have been defined at four deposits, Koekoe, Kinkine, Bag Farm- Junction and X-Vein.  In 2008, Coffey Mining Pty Ltd reported in accordance with Canadian  National Instrument 43-101, a code compliant resource of 1.043Mozs.  In 2012, SRK Consulting (UK) Ltd using largely the same data set, grade domains and grade estimation technique reported as part of NI 43-101 PEA study of 966kozs. 

Cassidy Gold Ltd recently retained Mining Plus Pty Ltd to remodel the mineral resources at the Project (excluding Kinkine).  Since December 2018 to date, three mineral resource estimates have been completed by Mining Plus Pty Ltd, mostly focusing on the Koekoe deposit, except in 2018, where the Mineral Resource Estimate ("MRE") study, included a complete re-interpretation and re-estimation of the Mineral Resources for the Koekoe, Bag Farm - Junction and X-Vein deposits.  In October 2019, the MRE study, only the Koekoe deposit was updated and the same for May 2020.  With the latest May 2020 MRE report for the Project (including the SRK 2012 NI 43-101 compliant resources for Kinkine) reported 1.18Mozs at 3.08g/t. With the increase in resources coming from an additional 40,000m of resource definition drilling primarily focused at the Koekoe deposit. 

Link to Figure 2: Map of the Project's mineral deposit locations
http://www.rns-pdf.londonstockexchange.com/rns/2305P_1-2020-6-8.pdf

The tabulation of the May 2020 MRE results by Mining Plus Pty Ltd and the February 2012 MRE results by SRK Consulting (UK) Ltd  for the Project are provided in the tables below.

The Mineral Resource Estimate for Koekoe is tabulated below:

Mineral Resource Estimate for the Kouroussa Project - May 2020
Resource Classification	Type	Cut-Off Grade	Tonnes	Au g/t	Ounces
Koekoe Deposit
Indicated	Open Pit	0.5	3,816,000	3.96	486,000
	Underground	3.5	3,000	5.19	1,000
Total Indicated		Variable	3,819,000	3.96	487,000
Inferred	Open Pit	0.5	3,523,000	2.99	338,000
	Underground	3.5	94,000	6.86	21,000
Total Inferred		Variable	3,617,000	3.09	359,000
Total Koekoe		Variable	7,436,000	3.54	846,000
All tonnages reported as dry metric tonnes.  Minor discrepancies may occur due to rounding to significant figures

All tonnages reported as dry metric tonnes.  Minor discrepancies may occur due to rounding to significant figures. The MRE in the table above relates to the Estimation and Reporting of Mineral Resources compiled by Mr. Richard Hingston BSc (Geology).  Mr. Hingston is an employee of Mining Plus Pty Ltd and has acted as an independent consultant on the Koekoe Deposit Mineral Resource estimation.  Mr. Hingston is a Chartered Professional and a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation and deposit type under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code).  Mr. Hingston consents to the inclusion in this report of the contained technical information relating the Mineral Resource Estimation in the form and context in which it appears. The above resources have been constrained by a $1,750 pit shell and are reported in accordance with the JORC Code (2012), the classification has been completed in accordance with the "Australasian Code for Reporting of Mineral Resources and Ore Reserves" (the JORC Code as prepared by the Joint Ore Reserve Committee of the AusIMM, AIG and MCA and updated in December 2012, (JORC., 2012)). The major classifications and terminologies have been adhered to.

For the Mineral Resource Estimates completed in 2018 for the Bag Farm - Junction and X-Vein deposits by Mining Plus Pty Ltd, these have been reported inside optimised pit shells ($1,750/oz) using the updated modifying factors applied to the Koekoe deposit in May 2020.

These Mineral Resources are reported as per the table below:

Mineral Resource Estimate for the Kouroussa Project - May 2020
Resource Classification	Type	Cut-Off Grade	Tonnes	Au g/t	Ounces
Bag Farm - Junction Deposit
Inferred	Open Pit	0.5	1,743,000	1.59	89,000
Total Bag Farm - Junction		0.5	1,743,000	1.59	89,000
X-Vein Deposit
Inferred	Open Pit	0.5	354,000	7.33	83,000
Total X-Vein		0.5	354,000	7.33	83,000
All tonnages reported as dry metric tonnes.  Minor discrepancies may occur due to rounding to significant figures. The MRE in the table above relates to the Estimation and Reporting of Mineral Resources compiled by Mr. Richard Hingston BSc (Geology) in December 2018.  Mr. Hingston is an employee of Mining Plus Pty Ltd and has acted as an independent consultant on the Bag Farm - Junction and X-Vein Deposits Mineral Resource estimation.  Mr. Hingston is a Chartered Professional and a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation and deposit type under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code). N.B. The block models have not been reported in accordance with the JORC Code (2012), however the classification has been completed in accordance with the "Australasian Code for Reporting of Mineral Resources and Ore Reserves" (the JORC Code as prepared by the Joint Ore Reserve Committee of the AusIMM, AIG and MCA and updated in December 2012, (JORC., 2012)).  The major classifications and terminologies have been adhered to.  The resource classification has been applied to the MRE based on the data spacing, grade and geological continuity, and quality of the estimation. These resources have been prepared under the guidelines JORC (2012 ).

The 2012 Mineral Resource Estimate as completed by SRK Consulting (UK) Ltd as part of the NI 43-101 Preliminary Economic Assessment work is provided below:

Mineral Resource Estimate for the Kouroussa Project - February 2012. SRK
Resource Classification	Type	Cut-Off Grade	Tonnes	Au g/t	Ounces
Kinkine Deposit
Indicated	Open Pit	0.43	1,883,900	2.20	133,300
	Underground	1.25	96,500	1.70	5,300
Total Indicated		Variable	1,980,400	2.18	138,600
Inferred	Open Pit	0.43	63,200	1.60	3,300
	Underground	1.25	324,400	1.76	18,400
Total Inferred		Variable	387,600	1.74	21,700
Total Kinkine		Variable	2,368,000	2.11	160,300

1.  All tonnages reported as dry metric tonnes.  Minor discrepancies may occur due to rounding to significant figures.

2.  The MRE block model quantities and grade estimates have been classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by Ben Parsons, MSc, MAusIMM(CP), Membership Number 222568), an appropriate independent qualified person for the purpose of National Instrument 43-101.  Mr. Parsons is an employee of SRK Consulting Ltd and acted as an independent consultant on the Koekoe Deposit Mineral Resource estimation.  Mr. Parsons is a Chartered Professional and a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation and deposit type under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code).

3.  Mineral resources are reported in relation to a conceptual pit shell. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. All composites have been capped where appropriate.

4.  Open pit mineral resources are reported at a cut-off grade of 0.43 g/t for laterite and saprolite material, 0.48g/t for transitional material and 0.53 g/t for fresh material. Cut-off grades are based on a price of US$1,400 per ounce of gold, without considering revenues from other metals within a limiting pit shell.

5.  Underground mineral resources are reported at a cut-off grade of 1.25 g/t for laterite and saprolite material, 1.28 g/t for transitional material and 1.37 g/t for fresh material, and below the material considered potentially mineable via open pit methods. Cut-off grades are based on a price of US$1400 per ounce of gold, without considering revenues from other metals.

Previously due to insufficient funds available to Cassidy Gold Ltd for exploration, numerous near surface targets and deeper extensions (>300m below surface) have not been drilled tested, which internal modelling and studying carried out by Hummingbirds' technical team, as part of the due diligence process, shows significant potential to increase the resource base with further targeted drilling.

Technical Services

Hummingbird will establish a dedicated Project team to provide management and technical services. This will be comprised of key members of staff who previously developed the Yanfolila Project supplemented by additional skills as necessary. The Company will engage an experienced EPCM contractor to provide engineering services in support of the process plant and associated infrastructure. Specialist consultants will provide detailed engineering in support of other key disciplines including Mine Planning, Geotech and Geohydrology, Tailings Storage Facility and site wide water management. 

Future Development Strategy by Hummingbird

§ Based on the technical due diligence undertaken to date, Hummingbird envisages:

o  Open pit mining from the KoeKoe deposit of 5.66Mt of ore at 3.01g/t with a strip ratio of 12:1 (waste to ore) to be undertaken by a contract mining company

o  A 1Mtpa conventional CIL processing plant (similar flowsheet to Yanfolila Phase 1), processing 4.1Mt with an average feed grade of 3.86g/t and metallurgical recoveries in excess of 93.7% over an initial 4.25 year Life of Mine (LoM).

o  Processing of marginal ore from stockpiles can extend the LoM beyond 5 years 

o  Supporting infrastructure including a Tailings Storage Facility, site wide water supply, workshops and stores, administration offices and accommodation camp.

o  A capital development cost of circa US$90m

§ Additionally there are known Indicated Resources within the permit areas which are not included in this base case scenario, and the Company believes there is opportunity to expand LoM from both these resources and future exploration potential within and around the permit areas.

§ Hummingbird intends to leverage from existing process plant design at Yanfolila to fast track engineering with a selected EPCM Contractor and the experienced Project team. Yanfolila provides a robust operating and costs basis for initial assessment of Kouroussa, and the Company believes there are significant synergies and opportunities for optimisation between the two.

§ The Project benefits from good infrastructure with paved roads to site from both Conakry and Bamako, sufficient water resources, and a skilled workforce in the local area owing to existing mining operations in Eastern Guinea (e.g. Siguiri, Lefa andTri-K).

§ The Kouroussa Project requires further technical development prior to committing to the mine and process plant development.  A six month "pre-development phase" is envisaged to address the following areas:

o  Geology - completing structural geology and de-risking resource estimate

o  Complete mine design and ore schedule

o  Tender the Mining Contract

o  Complete process design and final metallurgical testwork

o  Select and award an EPCM contract

o  Commence Front End Engineering Design of the process plant

o  Order items of equipment with long lead times

o  Finalise Permitting, including updates to ESIA & Operating permit

o  Complete design and costing of the TSF and Site Wide Water supply

o  Establish construction camp and admin buildings, including clinic

o  Identify fuel and power suppliers

o  Complete security risk assessment and establish airstrip

§ This will allow the project to be optimised and de-risked ahead of final funding and will ensure the Project can be developed economically and expediently.

§ Following a 3 month award and mobilisation phase of key contractors, the Company envisages a 12 month construction period.

§ There will be 3 months of pre-production mining ahead of commissioning and ramp-up to commercial production.

 

END

 

 

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