Operational Review

RNS Number : 0593Q

Hummingbird Resources PLC

27 August 2014

 



27 August 2014

Hummingbird Resources plc

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

Operational Review

Hummingbird Resources, the gold exploration and development company with assets in Mali and Liberia, is pleased to provide an update on its operations at the Yanfolila Project in Mali and the Dugbe 1 Project in Liberia.

Yanfolila Highlights:

·     Funded with US$75m debt facility with Taurus Funds Management

·     Mining and environmental permits granted

·     Mineral inventory of 1.8Moz gold at 2.8 g/t, over US$100m historical spend on the project

·     11,000m drill programme underway with 4 rigs drilling to increase the oxide resource

·     7,000m completed to date and expected completion early October 2014

·     SENET has made significant progress on plant and process design

·     Optimisation on target for completion by end of December 2014 to allow for construction to commence in Q1 2015

Dugbe 1 Highlights:

·     More than 2Moz Au converted to Indicated Resources; Total mineral Resources grown to 4.2Moz from 3.8Moz

·     16% increase in average gold grade

·     Estimated metallurgical recoveries up by 2% to 90%

·     Detailed study of power options completed

o  Estimated power costs down from US$0.28/kw to less than US$0.20/kw using HFO

·     Re-modelling of Dugbe F deposit and Sackor discovery shows potential to enhance mine plan economics

Dan Betts, CEO of Hummingbird Resources, said:

"We acquired the Yanfolila Project two months ago and we have already secured US$75m in debt, have four drill rigs turning on site and SENET are well under way with their optimisation and engineering studies.  With the deal came the experienced Gold Fields team and infrastructure, allowing us to make such quick progress. 

The acquisition of Yanfolila has changed the strategic direction of the Company as we are now focussed on bringing the funded Yanfolila Project into production before the end of 2015.  The advanced state of the asset and its excellent grade means it offers significant short-term cash flows.  The Dugbe 1 Project remains a 'company making' deposit with a 20 year mine life that we look forward to moving into production.  At this stage it makes sense to consider augmenting the existing mine plan with gold from the Dugbe F and Sackor deposits. 

We are monitoring the situation with regards to the current Ebola virus carefully. We have taken independent advice and have exercised all necessary procedures to ensure the safety of our in-country staff and will continue to monitor the potential impact on our optimisation timeframes.  Currently there have been no instances of Ebola in Sinoe County, a rural and sparsely populated region in south-east Liberia, where the Dugbe 1 Project is located.  The situation is dynamic and we will continue to take all the necessary precautions and keep the market updated."

Yanfolila Update                            

Detailed Plant Design and Optimisation Studies:

Hummingbird Resources acquired the Yanfolila project from Gold Fields along with its other assets in Mali in July 2014, for a consideration of US$20m payable in Hummingbird Resources ordinary shares.  Yanfolila has a current mineral inventory of 1.8Moz of gold at 2.8g/t. Hummingbird Resources proposes to create a low-cost mining operation that yields strong cash flows early in the project life at Yanfolila.  Hummingbird Resources is currently undertaking detailed plant design work and optimisation of the Gold Fields mine plan in order to focus on mining oxide material only in Phase 1.

Resources:

An infill and extension drill programme of c11,000m is currently underway using four drill rigs.  To date 7,000m have been completed and we intend to finish this programme in early October 2014.  The purpose of this programme is to both extend the total oxide resource inventory and increase the resource confidence in certain areas in order to extend the existing modelled oxide mine life to beyond six years.   Using CSA Global (UK) as resource consultants, we have been re-evaluating the existing Gold Fields resource models, targeting both oxide and transitional material.  The initial work has been very encouraging and we look forward to updating the mineral resource estimate on the Project in the near future. 

Process Design:

Work has started on the development of the flow sheets for Yanfolila, based on test work conducted by Gold Fields during previous studies.  A further metallurgical and geotechnical test work campaign is being planned to verify key parameters of the additional ore that will be processed at Yanfolila.

Plant Design:

An initial plant layout has been developed using preliminary process flow sheets.  Due consideration is being given for future expansions and efficient processing of harder transitional material, whilst not increasing the installed capital during this phase of the mine's operation. It is expected that by the end of August 2014 a ±10% accuracy capital cost estimate will be produced which will be closely followed by the commencement of detailed engineering. The ordering of long-lead capital items for the plant is expected during Q4 of 2014.

Dugbe 1 Update

Compilation of the Detailed Feasibility Study ("DFS") reports is ongoing along with a review of the scope of work and any additional optimisation that can be applied to it. The DFS has, to date, been compiled using only the Tuzon Indicated Resource with the potential to significantly improve the DFS by bringing into the model further Inferred Tuzon Resources, as well as 1.8Moz at Dugbe F and potentially Sackor resources.  The Company intends to look at all of these options with a view to compiling a detailed work programme to make these changes to the DFS resource inventory.  The acquisition, funding and rapid advancement of the Yanfolila Project in Mali presents a unique opportunity to explore the full potential of the Dugbe 1 Project. 

Future Proposed Work Programme:

The work completed in producing the DFS has uncovered areas where additional optimisation and development can be targeted to further improve the overall Project effectiveness.  We intend to implement supplementary work on the Dugbe 1 Project to enhance the resource, recovery and operating costs that have already been achieved.  This work may include:

·     Further conversion of Inferred to Indicated Resources at Tuzon through a short drilling programme;

·     Confirming extensions at depth of the most significant part of the Tuzon ore-body through a short drilling programme;

·     Carrying out further work at the highly prospective Sackor deposit, close to Tuzon, to develop an Indicated Resource on the back of a recent extensive re-logging exercise of core;

·     Review the Dugbe F Inferred Resource, (1.8Moz), and look to upgrade its classification to Indicated Resources;

·     Review mine scheduling and waste dump philosophies to improve operating economics;

·     Continue the metallurgical test-work using the Aachen oxygen shear reactor which has shown significant potential for:

o  improved recovery

o  reduced operating costs

o  improved environmental quality of tailings

·     Confirm full understanding of structural and mineralogical issues as the basis for looking for further improvements in mining and processing; and

·     Continue with the creative thinking process to generate maximum value from the Dugbe 1 Project.

It is anticipated that this work could continue for six to nine months whilst Yanfolila is being developed, utilising minimal resources and bringing substantial downstream benefit. 

The Dugbe 1 Project scoping study showed a 20 year mine life and we believe there are significant opportunities to increase the resource inventory to extend it even further.  The Directors believe that the Dugbe 1 Project remains a 'company making' project that Hummingbird Resources looks forward to producing gold from in the future.  

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 Corporate Broker
Stewart Dickson / Jeremy Stephenson / Carrie Lun	[phone]
FTI Consulting LLP
Financial PR
Ben Brewerton / Oliver Winters / Sara Powell	[phone]

Notes to Editors

About Hummingbird Resources Plc

Founded in late 2005, Hummingbird Resources is a West African gold explorer and developer (AIM:HUM), which listed on AIM in December 2010 with a maiden N143-101 compliant Resource of 0.8Moz gold in Liberia. Since IPO the Company has significantly grown its initial resource to 4.2Moz at its Dugbe 1 Project in Liberia, West Africa.  In July 2014 Hummingbird Resources acquired Gold Fields' gold assets in Mali, Hummingbird is now a multi-project, near-term producer with 6Moz of gold and 5,000 km² of exploration ground.

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

 

END

 

 

MSCLLFERTAIRFIS