Q1 Update

RNS Number : 5017K

Hummingbird Resources PLC

17 April 2015

 

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

 17 April 2015

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

Q1 2015 Update

Hummingbird Resources, the multi-project gold company, is pleased to announce a Q1 2015 update with regards to its West African mining portfolio which includes the Yanfolila Gold Project in Mali ("Yanfolila") where mine construction is due to commence imminently ahead of its first gold pour targeted in H1 2016, and the on-going development of its 4.2 million ounce ("Moz") resource Dugbe 1 Gold Project in Liberia ("Dugbe 1"). 

Q1 2015 Highlights

·    Optimisation study released for Yanfolila - highlighted increased size, extended life of mine ("LOM") and robust economics

o NPV₈ US$72.4m & IRR of 35.1% at US$1,250/oz Au

o 100,000oz year 1 full production & 79,000 oz p.a. over 6.5 year LOM

o 2.64 g/t grade over initial LOM

o US$641/oz C1 cash operating costs & all-in sustaining costs US$733/oz

o US$71.6m capex for a larger & longer life 1Mtpa project

·    Yanfolila grade control and infill drilling commenced at Komana East, Komana West and Gonka deposits

o 5,100m completed of a 10,000m drill programme

o Initial Results include (full results in appendix):

§ 11 m @ 8.22 g/t gold in hole KEGRC0006

§ 38 m @ 2.54 g/t gold in hole KMWRC1051

§ 21 m @ 5.37 g/t gold in hole KMWRC1054

§ 12 m @ 10.68 g/t gold in hole KMWRC1058

o Gonka infill drilling targeting additional ore for mining schedule

Post-period Highlights

·    Successful completion of a US$9.5m placing and open offer

o Combination of US$4.5m from new and existing shareholders and a binding agreement with BCM International Ltd ("BCM"), a well-established mining and civil earthworks contractor, to subscribe for up to US$5m of shares in lieu of payment for services during the construction phase

·    Yanfolila mine construction to commence imminently

o Long lead items ordered ahead of production including ball mill, mineral sizer, tower crane and carbon-in-leach tanks

o Letter of Intent signed with Société de Forage et de Travaux Publics ("SFTP") to commence plant earthworks

o Mobilisation commenced on 15 April 2015 and earthworks due to start before the end of April

o Appointment of Project Construction Manager, Johann du Preez, who has extensive experience in Africa and worldwide, including two Malian gold projects (Loulou and Tabakoto)

o Funded by the US$75m agreement with Taurus Funds Management Mining Finance Fund and funds from the recent US$9.5m fundraise

·    On-going development of the 4.2Moz Dugbe 1 Project 

o Hydro-electric power pre-feasibility study Collaboration Agreement signed with the IFC InfraVentures and Aldwych International

o Knight Piesold to commence fieldwork in May 2015 and study expected to be completed in April 2016

Dan Betts, CEO of Hummingbird Resources, said, "During Q1 the Company has been highly active at Yanfolila in preparation for imminent mine construction.  The robust economics demonstrate a profitable mining operation across numerous price points and there are multiple options to further improve the project economics.  We are confident we have a clear path to low-cost gold production of an initial 100,000oz for the first year and generating first revenues for the Company. 

"Whilst we are currently focused on the significant near-term production potential at Yanfolila, we also remain committed to the longer-term "company-making" upside of our 4.2Moz Dugbe 1 Gold Project in Liberia.  With this in mind at the start of Q2 2015 we entered into a hydro-electric Collaboration Agreement to develop a sustainable source of low-cost power for the Project and the region.  The Dugbe 1 Project is compelling and we are in the process of optimising the DFS in order to unlock further value of this large-scale development opportunity. 

"In the meantime, with plant earthworks commencing imminently at Yanfolila in Mali, a highly experienced construction manager appointed and long lead items ordered, we are already making fantastic headway and I look forward to providing regular updates on the progress of construction as we transition from the development stage to a leading African gold producer."

Further Information

Yanfolila Optimisation Study

The initial Yanfolila mine plan was expanded in the recent Optimisation Study ("the Study") of the Project which highlighted robust economics for a 1Mtpa low-cost / high grade gold project and the defined path to production.  The Study reconfirmed that the mine is capable of turning a profit in a varying gold price environment.  At a US$1,250 gold price the Optimisation Study results outlined a NPV₈ of US$72.4 million, IRR of 35.1% and low all in sustaining costs of US$733 per ounce of gold (cash costs US$641 per ounce) for a 6.5 year LOM production at 79,000 ounces per annum gold production.  Additionally, the Study finalised detailed plant engineering and process design work, enhanced geotechnical, hydrological and hydrogeological studies, as well as a robust mine plan allowing the mine construction to commence.

Yanfolila Mine Construction

Long Lead Items

The following long lead equipment has been ordered:

1.   Ball mill; source: RSA; Outotec. 4.3m diameter by 6.0m long. 1450 kW motor

2.  Mineral sizer; source: RSA; MMD Mineral Sizing (Africa) Pty Ltd.; 800 tonnes per hour

3.  Tower crane; source: Spain; (to be used for tank erection during construction and operational plant maintenance); Linden Comansa 6 Ton with 45 meter jib; Tower Crane Services

4. Carbon-in-Leach (CIL) tanks; source: RSA; Tryline Steel Engineering; Six tanks at 31.15 tonnes each

Earthworks

Hummingbird is embarking immediately on early site earthworks using a local West African contractor, SFTP.  This will facilitate seamless advancement to civil construction with site earthworks expected to be completed in six to eight weeks.  A full update on earthworks will follow once they have commenced.

Project Construction Manager

Johann Du Preez has been appointed as Project Construction Manager for the Yanfolila Gold Project.  Johann comes with over 30 years' experience and has been involved in the construction of many mines in Africa and globally over a long career.  Johann has worked for Lycopodium in Burkina Faso and was the Construction Manager for MDM Ferroman in Mali on the construction of the Loulo gold mine for Randgold Resources and the Tabakoto gold mine for Nevsun Resources.

Competent Persons Statement

The information in this document that relates to Drilling Results is based on information reviewed by Mr Mark Fleming who is a Fellow of the Australian Institute of Geoscientists. Mr Fleming is a consultant to the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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'. Mr Fleming consents to the inclusion in this document of the matters based on his information in the form and context in which it appears.

**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	Cantor Fitzgerald Europe Nominated Adviser and 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 Project in Mali and the Dugbe 1 Project in Liberia. Its current focus is on bringing Yanfolila, which has a 1.8Moz gold inventory, to production in H1 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 mandate setting out the key terms of a proposed US$75 million debt facility has been agreed with Taurus Mining and initial mine construction is due to commence imminently.

The 4.2Moz Dugbe 1 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

Appendix:

Drill data received to date on 2015 Grade Control and Infill Drill Programme:

Calculated at 0.5 g/t Au lower cut-off and Uncut high grade					Drill collar information
Hole ID	From (m)	To (m)	Interval (m)	Grade (g/t Au)	EUTM Survey	NUTM Survey	RL Survey	DIP	AZ	EOH (m)
GONKA
GKARC1062	9	11	2	3.31	564376	1238300	392	-55	90	40
GKARC1063	72	73	1	5.68	564348	1238280	393	-55	90	84
GKARC1064	4	5	1	2.52	564387	1238280	391	-55	90	35
GKARD1065	55	57	2	2.99	564429	1238280	390	-55	90	146.5
KOMANA EAST
KEGRC0002	12	20	8	11.29	566000	1243715	367	-55	270	20
KEGRC0003	19	24	5	9.08	566010	1243715	367	-55	270	35
	27	28	1	3.48
KEGRC0004	12	13	1	0.59	566015	1243715	367	-55	270	40
	25	32	7	7.68
KEGRC0005	13	18	5	5.78	566000	1243720	367	-55	270	20
KEGRC0006	18	29	11	8.22	566010	566010	367	-55	270	35
KEGRC0007	0	1	1	0.89	566000	1243725	367	-55	270	21
	14	15	1	1.55
KEGRC0008	13	25	12	3.99	566005	1243725	367	-55	270	27
KEGRC0009	19	30	11	6.71	566010	1243725	367	-55	270	35
	32	33	1	0.52
KEGRC0010	14	19	5	2.71	566000	1243730	367	-55	270	20
KEGRC0011	13	14	1	0.89	566010	1243730	367	-55	270	35
	19	26	7	8.52
KEGRC0012	15	16	1	0.56	566000	1243735	367	-55	270	26
KEGRC0013	13	20	7	11.64	566005	1243735	367	-55	270	30
KEGRC0014	0	1	1	0.65	566010	1243735	367	-55	270	36
	12	13	1	0.79
	20	31	11	4.07
KEGRC0015	12	13	1	0.85	565995	1243740	367	-55	270	24
KEGRC0016	15	17	2	8.27	566000	1243740	367	-55	270	24
KEGRC0017	14	15	1	0.89	566010	1243740	367	-55	270	36
	19	32	13	6.49
KEGRC0018	0	2	2	0.58	565995	1243745	367	-55	270	23
KOMANA WEST
KMWRC1051	1	5	4	1.75	558280	1242490	408	-55	270	120
	16	17	1	1.78
	72	110	38	2.54
	112	113	1	0.57
	114	120	6	3.50
KMWRC1053	27	28	1	3	558352	1241884	395	-55	270	100
	70	71	1	6.81
	80	84	4	1.92
KMWRC1054	40	47	7	6.49	558337	1241810	385	-55	270	100
	53	56	3	0.8
	59	60	1	0.52
	67	70	3	19.37
	73	94	21	5.37
KMWRC1055	64	67	3	3.67	558267	1242580	358	-55	90	114
	78	84	6	1.13
	96	98	2	13.38
KMWRC1056	0	1	1	0.56	558283	1242450	401	-55	270	130
	37	38	1	1.92
	76	113	37	2.72
	117	125	8	2.86
KMWRC1057	7	8	1	0.54	558319	1242370	411	-55	270	150
	80	82	2	0.74
	92	95	3	4.97
KMWRC1058	0	2	2	1.39	558244	1242267	404	-55	270	120
	42	45	3	0.69
	73	85	12	10.68
	93	107	14	4.99
	110	113	3	2.8
KMWRC1059	1	2	1	1.8	558259	1242329	415	-55	270	132
	41	42	1	0.5
	45	46	1	0.86
	67	68	1	2.04
	71	72	1	0.54
	74	87	13	6.72
	88	89	1	0.57
	94	96	2	2.54
	97	98	1	0.78
	104	106	2	1.1
	119	131	12	0.89
KMWRC1060	55	57	2	0.6	558299	1242332	423	-55	270	150
	88	93	5	3.56
KMWRC1061	28	36	8	3.67	558207	1242244	379	-55	270	102
	40	41	1	2.03
	50	51	1	3.13
	70	72	2	1.71
	91	93	2	0.7

 

END

 

 

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