Fourth Quarter Operational Update

RNS Number : 0049Y

Hummingbird Resources PLC

20 January 2014

 



20 January 2014

Hummingbird Resources plc

("Hummingbird" or the "Company") (AIM: HUM)

Fourth Quarter Operational Update

Positive Updates for the Tuzon Resource

Hummingbird, the Liberian gold exploration and development company, announces an operational update for the three months ended 31 December 2013.

Highlights

Corporate Developments

·     Placing to raise £1.1m with Sprott Inc ("Sprott") at 41p per share

·     Successful award of South African DTI grant for the Detailed Feasibility Study ("DFS") which significantly reduces the cost of the study to Hummingbird

·     Appointment of Endeavour Financial ("Endeavour") to facilitate the Project Finance Debt Facility for the Company's Dugbe 1 Project

Operational Developments

·     Updated Interim Mineral Resource Estimate for Tuzon which demonstrated a robust geological and resource model showing scope for initial starter pit near surface with higher grade zones

·     Completion of 2,612m of the infill drilling campaign at Tuzon aimed to upgrade the US$1,500 pit constrained 1.5Moz Mineral Resource

·     Completion of DFS Phase 1 metallurgical work and throughput Options study

·     ESIA baseline studies are progressing in line with expectations and due for completion on time in Q3 2014

·     Completion of DFS due Q3 2014

Exploration Developments

·     An exploration plan has been developed based on the most recent airborne survey, focused on high priority targets close to the already defined deposits of the Dugbe 1 Project, with the aim of identifying drill ready targets

Dan Betts, Chief Executive of Hummingbird Resources, said:

"2014 looks set to be a step change year for Hummingbird with our DFS on schedule for delivery in Q3. Our positive infill drill results at the Tuzon deposit offer significant exploration upside. In addition, all of our technical studies remain on schedule for completion.

"We are fully funded through to the completion of the DFS and all of the work undertaken in recent months has confirmed that the Dugbe 1 Project remains commercially robust in the current gold-price environment."

DFS and Operational Update

The DFS remains on schedule for delivery in Q3 2014. Highlights of Q4 2013 include the completion of a new Interim Mineral Resource on Tuzon, the award of the South African DTI grant for the study, which will significantly reduce the cost to Hummingbird, successful completion of the Phase 1 metallurgical test work and completion of the Options study to assess various throughput scenarios.

Updated Interim Tuzon Resource

SRK, who were awarded the contract to complete the resource estimate for the DFS on the Tuzon gold deposit (one of the deposits within the Dugbe 1 Project), completed an Interim Resource estimate during Q4 2013.  The Interim Resource was based on a geological model that was developed jointly by Hummingbird and SRK, and following a data review completed by SRK the data was confirmed to be of a standard appropriate for the estimation of Indicated and Inferred Mineral Resources.  The general form of the deposit is a recumbent fold, with the fold axis dipping shallowly to the east and plunging shallowly to the south.  To undertake the variographic analysis and grade interpolation by Ordinary Kriging, SRK created the block model in GOCAD software and unfolded it and the drill holes intercepts for variography and estimation.  The table below shows the resulting Mineral Resource Statement for the Tuzon Project, with an effective date of 11 November 2013.  The statement has been classified in accordance with the 2004 Edition JORC Code, by the Competent Person, Mr Martin Pittuck (CEng, MIMMM).

Mineral Resource Statement for the Tuzon Gold Deposit

Classification	Zone	Density	Tonnage (Kt)	Au (g/t)	Au (Koz)
Indicated	A (Higher Grade)	2.78	6,650	1.57	337
	A (Lower Grade)	2.78	4,180	0.60	81
	B (Higher Grade)	2.78	1,670	1.44	77
	B (Lower Grade)	2.78	300	0.59	6
Total Indicated		2.78	12,800	1.22	501
Inferred	A (Higher Grade)	2.78	4,510	1.46	212
	A (Lower Grade)	2.78	4,760	0.63	96
	B (Higher Grade)	2.78	10,810	1.75	606
	B (Lower Grade)	2.78	1,240	0.54	21
	Hangingwall 1	2.78	1,170	0.72	27
	Hangingwall 2	2.78	600	1.06	21
	Internal	2.78	430	0.75	11
	Oxide	1.7	1,310	1.10	46
Total Inferred		2.72	24,830	1.31	1,040
Grand Total			37,630	1.27	1,541

*Reported within a US$1,500 pit shell at a cut-off grade of 0.5 g/t

By applying a lower cost pit shell (US$600), a coherent zone of higher grade material (1.63g/t Au for 0.41Moz at a 0.8g/t Au cut-off) is defined near surface (strip ratio of 1.3:1) in the northern part of the deposit.  This area is highly conducive for planning production in the early years of the project during the payback period.

Infill drilling

During the resource classification process it became clear that with a minimal amount of additional drilling most of the currently quoted Inferred Mineral Resource had the potential to be upgraded to Indicated.  Hummingbird, in consultation with SRK, designed a diamond core programme totalling approximately 2,500m that comprised of 17 new holes and 4 hole extensions.  Drilling commenced in December 2013 and by the end of December 1,713.8m had been completed.  This entire drill campaign was completed on 15^th January 2014 for 2,612m.

Gold assay results for 4 holes and 3 extensions had been received by 31 December 2013.  All results achieved to date have met expectation and this provides strong support for the reclassification of the Inferred Resources into Indicated.  Current expectation is that a final resource estimate including the results of this infill drilling programme will be completed in early Q1 of 2014.

Calculated at 0.5 g/t Au lower cut-off and 7.0 g/t Au upper cut-off
Hole ID	From (m)	To (m)	Interval (m)	Grade (g/t Au)
TDC016ext	228	251	23	1.90
	256	260	4	1.56
TDC082ext	335	403	68	1.44
	407	409	2	0.91
TDC084ext	311	320	9	1.26
	324	361	37	2.45
TDC141	1.2	5.5	4.3	0.60
	12	14	2	2
TDC142	24	27	3	0.82
	34	67	33	1.22
TDC143	3	22	19	1.28
	36	40	4	1.33
	44	46	2	1.24
	49	62	13	1.69
	66	82	16	1.65
	86	88	2	0.68
TDC144	6.5	13	6.5	1.64
	26	73	47	1.25

Please click on the following link for the maps of the latest Tuzon Drill Result Plan and Tuzon Drill Cross Sections.

http://www.rns-pdf.londonstockexchange.com/rns/0049Y_1-2014-1-19.pdf

http://www.rns-pdf.londonstockexchange.com/rns/0049Y_-2014-1-19.pdf

From 1^st January 2013, we have completed 20,137m of drilling in total at the Dugbe 1 Project.

Metallurgy

The completion of the Phase 1 metallurgical test work resulted in the selection of a straight Carbon in Leach ("CIL") flow sheet, as pre-concentration by flotation or gravity concentration offered no material benefits to Run of Mine treatment by CIL. The Phase 2 metallurgical test work programme has the following two primary objectives:

·          Determining the grind size, where the cost of milling (opex) vs. gold recovery (revenue) is optimised; and

·          Metallurgical mapping, to better understand the variability across the deposit.

Options Study

The initial assessment of the economic implications, including both capex and opex, of different potential throughputs has been completed and is under review. A decision on the throughput of the project will be made this quarter which will allow MDM to proceed with detailed design and costing of the plant.

Geotechnical

Phase 1 of the geotechnical investigation is complete, awaiting final report, and now the potential major infrastructure locations have been identified.  Phase 2 of the investigation is currently underway and on schedule. Phase 2 involves the collection of core samples and excavation of trial pits on the major infrastructure locations which is being overseen by engineers from Coffey Mining.

Infrastructure

Several meetings have been held with all interested parties to assess the technical, financial, social and biodiversity impacts of the locations of major infrastructure such as the tailings management facility, plant site, camps, roads and waste dumps. In each case several options were assessed and their various merits and constraints evaluated. The proposed infrastructure layout seeks to provide the most robust technical and economic solution while taking due cognisance of both social and bio-diversity issues.

ESIA

All ESIA baseline studies, carried out by AMEC, are underway and on target for completion in Q3 2014.  The studies include: soil baseline, biodiversity, water quality and socio-economic studies.  In addition, we are completing a second round of stakeholder engagement meetings with the local communities, a central pillar to our stakeholder engagement strategy.

Exploration Upside

In the Q3 operational update announced in October 2013, Hummingbird published the results of the interpretation of the airborne magnetics and radiometrics data collected earlier that year.  The interpretation conducted by Southern Geoscience in Australia, resulted in a large number of targets to be followed up with systematic exploration.  A further, more detailed review of the interpreted anomalies and historic Hummingbird data has enabled the Company to define a plan for future exploration programmes, prioritising targets and activities based on:

·          identifying new resources as quickly as possible near to the existing Dugbe 1 Project with work starting proximal to the current deposits and progressing outwards; and

·          the discovery of a new deposit field.

The over-riding focus in the exploration programme is to undertake comprehensive geological mapping, and collect, process and analyse good soil geochemical data so that the higher cost elements of the programme (trenching, drilling and magnetics surveys) are only undertaken when justified.  The aim is to have new gold-in-soil discoveries ready for drilling by the end of 2014.

We have relinquished the Juazohn Shear Zone licences, totalling 2,100km² which returned poor early stage exploration results offering negligible near term exploration upside. 

Financing

In November, Hummingbird placed 2,758,393 new Ordinary Shares (approximately 4.6% of the issued share capital in the Company) at a price of 41 pence per share to raise approximately £1.1 million with Exploration Capital Partners 2012 Limited Partnership ("Exploration Capital"). Exploration Capital is a private investment fund managed by Resource Capital Investment Corp., part of the Sprott Group of Companies.  

Endeavour Financial ("Endeavour") was appointed in November 2013 to assist in arranging the Project Finance and to review and secure alternative additional funding options to enable Hummingbird to commence mine construction following completion of the DFS in Q3 2014.  

Corporate Social Responsibility

During Q4 2013, Hummingbird has installed eight new water pumps and rehabilitated two water pumps and three community halls within Dugbe 1's local communities. Additionally, Hummingbird has hosted health workshops in the local area to promote hygiene, sanitation and environmental health amongst the local stakeholders.   

Hummingbird is delighted to be sponsoring Sinoe County's World Aids Day and Sinoe County Football Team who are currently competing in the Liberian County Championships.  Sinoe County Football Team have successfully progressed through the group stages and will now be competing in the knock out stages of the Championship. 

Note: David Pelham has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules.  David Pelham is a Director of the Company and is a member of the Institute of Materials, Minerals and Mining.

ENDS

Enquiries:

Hummingbird Resources plc

Daniel Betts, Chief Executive Officer
Thomas Hill, Finance Director
Robert Monro, Head of Business Development	[phone]
Cantor Fitzgerald Europe
Nominated Adviser and Broker
Stewart Dickson / Tom Sheldon / Jeremy Stephenson	[phone]
FTI Consulting LLP
Financial PR
Ben Brewerton / Oliver Winters	[phone]

Notes to Editors

About Hummingbird Resources Plc

Hummingbird Resources plc is an AIM quoted mineral exploration company incorporated in England and Wales and headquartered in London. Since its establishment in November 2005, the Company and its subsidiaries (the "Group") has been active in Liberia, West Africa, and is currently the holder of the largest area of mineral exploration ground in the highly prospective Birimian geological region of eastern Liberia. The Group has published a PEA on its project showing on a 3.5Mtpa tank leach operations an NPV of US$337m on a Capex of US$212m for an IRR of 43.4%. This gives a payback period of 3 years and is based on a 10% discount rate and US$1,500 gold price (three year average gold price at time of release).

The Group has recently published a Mineral Resource estimate for the Tuzon deposit constrained within a US$1,500 pit shell and using a 0.5 g/t cut off grade comprising of 37.6 Mt at an average grade of 1.27 g/t for 1.54 Moz of gold under the 2004 Edition JORC code.  The Group has also published a NI43-101 compliant Inferred Resource on its Dugbe F deposit of 43.01 million tonnes at 1.28 g/t Au to give 1,764,000 ounces of gold using a lower cut-off grade of 0.5 g/t Au and no upper cut-off grade.

In Q3 2014, the Group is due to release a Detailed Feasibility Study and FEED.  The Group's licence areas constitute a significant proportion of eastern Liberia's Birimian sequence.

For more information, please visit www.hummingbirdresources.co.uk

Appendix:

Calculated at 0.5 g/t Au lower cut-off and 7.0 g/t Au upper cut-off							Drill collar information
Hole ID	From (m)	To (m)	Interval (m)	Grade (g/t Au)		EUTM Survey	NUTM Survey	RL Survey	DIP	AZ	EOH
TDC016ext	228	251	23	1.90		555357	563129	111	-58	303	291.4
	256	260	4	1.56
TDC082 ext	335	403	68	1.44		555240	562908	118	-60	295	420.4
	407	409	2	0.91
TDC084ext	311	320	9	1.26		555319	562872	117	-61	299	369.4
	324	361	37	2.45
TDC141	1.2	5.5	4.3	0.60		555436	563527	108	-66	110	60.8
	12	14	2	2
TDC142	24	27	3	0.82		555364	563569	98	-65	114	81.8
	34	67	33	1.22
TDC143	3	22	19	1.28		555377	563476	113	-64	120	115
	36	40	4	1.33
	44	46	2	1.24
	49	62	13	1.69
	66	82	16	1.65
	86	88	2	0.68
TDC144	6.5	13	6.5	1.64		555388	563372	112	55	111	93.4
	26	73	47	1.25

 

END

 

 

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