Positive Preliminary Assessment of HEP in Liberia

RNS Number : 1232Z

Hummingbird Resources PLC

16 September 2015

 

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

16 September 2015

Hummingbird Resources plc ("Hummingbird Resources" or "the Company")

Receives Positive Preliminary Assessment of

Hydro-Electric Power Plant in Liberia

Hummingbird Resources, the multi-project gold company, is pleased to announce a positive preliminary report from Knight Piesold Consulting ("KP") for the proposed hydro-electric power ("HEP") plant in south-east Liberia, ±10km from Hummingbird's 4.2Moz Dugbe Gold Project. 

This significant development follows the signature of a Collaboration Agreement for the funding and development of the HEP signed in April 2015 with IFC InfraVentures, the IFC Global Infrastructure Project Development Fund, and Aldwych International, a leading energy company active in the growing economies of Africa. 

Highlights

·    Report demonstrates a range of hydropower options that would be highly beneficial in the development of a sustainable and low-cost source of power for the Dugbe Gold Project, as well as the south-east Liberian region

·    Assessed four run-of-river hydropower options ranging from 15MW to 30MW with varying intakes

·    A hydropower development on the Dugbe River represents a legacy asset that will benefit the region by providing low cost renewable energy long after mine closure to the communities in the region

·    Pre-Feasibility Assessment will be finalised on completion of additional hydrological studies and topographic mapping (satellite survey) - targeting final  report in Q2 2016

·    Pre-Feasibility Study funded (circa US$265,000) by IFC InfraVentures as part of the Collaboration Agreement

Dan Betts, CEO of Hummingbird Resources, said: "We are highly encouraged by the preliminary study for the development of a HEP plant in south-eastern Liberia which, if developed, will enable a sustainable and low-cost source of power for our Dugbe Gold Project and secure a source of domestic power supply for the local region.  With the Pre-Feasibility study being fully funded by IFC InfraVentures, Hummingbird is ideally positioned to capitalise on the HEP development whilst mitigating risk and capital exposure.  We also believe the HEP scheme will create a catalyst for growth in the region and provide a significant potential operating cost saving for the development of the Dugbe Gold Project."

Further Information

The Company is considering the development of a run-of-river (ROR) hydroelectric facility to support the development and operation of its Dugbe mining operation in the south-west region of Liberia.  Hummingbird has instructed KP to conduct a Pre-Feasibility assessment of the potential hydropower development on the Dugbe River and its major tributaries.  The Pre-Feasibility report has been issued in draft form, as a preliminary assessment of the project's viability and it will be updated in final form once additional hydrological studies and topographic mapping (satellite survey) have been completed.

The previous desktop HEP scoping study considered an operational mine power demand of 30 MW.  However, the updated average power demand for the Dugbe Gold Project is forecast at 16 MW but with additional capacity for the local region to address the expected peak demands of 20 to 30 MW.  KP has therefore assessed a range of hydropower project alternatives, including:

·    Alternative 1 - 30 MW project with 3 intakes, on Dugbe River, Botou River and Geebo Creek

·    Alternative 2 - 25 MW project with 2 intakes on Dugbe River and Botou River

·    Alternative 3 - 20 MW project with 1 intake on Dugbe River

·    Alternative 4 - 15 MW project with 1 intake on Dugbe River

The draft Pre-Feasibility hydropower study has been based on a mixture of regional rainfall data and topographical information ranging from 1m LiDAR data near the proposed powerhouse site, up to the 10m national topographic data.  The study has so far included the following tasks: a site visit carried out in May 2015; stream gauging; a review of rainfall data; developing project concepts for the four alternative options; preparation of energy generation; capital cost estimation; and a review of licencing requirements and permitting.

The following table outlines the preliminary economics of the four alternative options.

DESCRIPTION	UNIT	ALTERNATIVE 1	ALTERNATIVE 2	ALTERNATIVE 3	ALTERNATIVE 4
Gross Head	m	41	41	41	41
Design Flow	m3/s	92	72	59	45
Installed Capacity	MW	30	25	20	15
Intakes & Canals	No.	3 Dugbe, Botou & Geebo	2 Dugbe & Botou	1 Dugbe	1 Dugbe
Capacity Factor	%	0.40	0.38	0.37	0.45
Mean Annual Energy	GWhr	106.3	82.5	64.7	59.5
Capital Cost Estimate (with Concrete Canal)	US$M	169.5	141.2	108.8	90.0

In addition to economic considerations, a hydropower development on the Dugbe River represents a legacy asset that will benefit the region by providing low cost renewable energy long after mine closure.

As noted, the draft Pre-Feasibility assessment has reduced conceptual HEP project design uncertainties, although there are still improvements needed before selecting the final layout and confirming the HEP feasibility.  For the final Pre-Feasibility report a more detailed assessment of the hydrologic and topographic information will be needed over the coming months.  Stream gauging will provide site specific hydrology data to prove the available water resource.  Additionally, satellite topographic data offers the opportunity to improve capital cost certainty by refining canal and penstock alignments, and structure siting.  This satellite survey information should be available in Q4 2015 and the completed Pre-Feasibility Report is expected to be finalised in Q2 2016.

About Knight Piésold

Knight Piésold has been in the hydropower business for over 80 years with extensive experience in large and small hydroelectric projects throughout the world. Their experience includes water storage projects, run-of-river projects and pumped storage projects. Knight Piésold provides a "one-stop-shop" for hydropower development, from resource identification and evaluation, financial services, environmental impact assessments and permitting, through to project management, site investigations, detailed engineering design, site supervision, O&M staffing and training, commissioning, and asset management. The improvement of existing units and facilities through power facility additions at existing dams, replacement of aging or low efficient equipment, and equipment upgrades or improvements, are also key elements of Knight Piesold's hydropower practice. Past projects include the 235MW East Toba and Montrose Projects and 150MW Kwalsa and Upper Stave Hydroelectric Projects in Canada, the 1,333MW Ingula Pumped Storage Scheme in South Africa, the 247MW Kalungwishi Hydroelectric Project in Zambia, and the 150MW Casecnan Multi-Purpose Hydroelectric Project.

Dugbe - Liberia

The Dugbe Gold Project is located within the Birimian Basin, the world's second largest gold producing region, characterised by exceptionally large, homogenous grade deposits which offer vast exploration and development scope.  With a current Resource of 4.2 million ounces of gold at an average gold grade of 1.4 g/t, Dugbe offers a large-scale development opportunity for Hummingbird.  The Company completed a Preliminary Economic Assessment ("PEA") in April 2013 which demonstrated the viable economics of developing a 20 year gold mining project with initial gold production of 125,000 ounces, an NPV of US$186 million, IRR of 29% using a US$1,300 gold price.  Hummingbird is continuing to advance Dugbe and is progressing Definitive Feasibility Study optimisation work evaluating the large 4.2Moz gold resource, mining, processing and power capabilities with a view to future production viability.

**ENDS**

For further information please visit www.hummingbirdresources.co.uk or contact: 

Daniel Betts Thomas Hill Robert Monro	Hummingbird Resources plc	Tel: [phone]
Stewart Dickson  Jeremy Stephenson Phil Davies	Cantor Fitzgerald Europe Nominated Adviser and Joint Broker	Tel: [phone]
Jon Belliss	Beaufort Securities Limited Joint Broker	Tel: [phone]
Lottie Brocklehurst Felicity Winkles Hugo de Salis	St Brides Partners Ltd Financial PR/IR	Tel: [phone]

Notes to Editors

Hummingbird Resources (AIM: HUM) is building a leading gold production, development and exploration company.  The Company has two core gold projects, the near-term production Yanfolila Gold Project in Mali and the Dugbe development project in Liberia.  Its current focus is on bringing Yanfolila, which has a 1.8Moz gold inventory, to production in 2016.  The high grade gold project has the potential to turn a profit in a varying gold price environment and will allow for quick returns with low operating costs.  A US$75 million debt facility has been agreed with Taurus Mining and mine construction is now underway with the aim of commencing production in 2016.

The 4.2Moz Dugbe Gold Project in Liberia provides Hummingbird with excellent development upside.  An optimisation of the DFS is on-going whilst Yanfolila is brought to production in the near-term.  Additionally, the Company has 5,000km² highly prospective exploration ground in Mali and Liberia and is constantly evaluating new quality assets.

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

 

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