Quarterly Review

RNS Number : 8390T

Hummingbird Resources PLC

11 January 2017

 

Ticker: HUM / Index: AIM / Sector: Mining

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

Quarterly Review

Hummingbird Resources (AIM: HUM), is pleased to announce a review of activities during Q4 2016 which saw construction commencing at its Yanfolila Gold Project in Mali ("Yanfolila") ahead of expected first gold production at the end of 2017.

Highlights

·    Commencement of construction at Yanfolila in October 2016:

o IMAGRI-SARL, a leading specialist of building, mining and industrial infrastructure in Mali, commenced civil works

o First concrete poured on 20 October 2016

·    Long lead items ordered in October 2016, including the crushing circuit equipment from Metso, agitators from Afromix, screens and carbon regeneration kiln from Kemix

·    Mill shell, pinions and gears all ordered and construction on schedule

·    US$45 million Senior Secured Term Facility and US$10 million Cost Overrun Facility signed with Taurus Funds Management Pty Limited ("Taurus" or "Taurus Funds Management") ensuring Yanfolila is fully funded through to positive cash flow

·    African Mining Services, a subsidiary of ASX listed Ausdrill Limited, appointed as mining contractor at Yanfolila

Please click on the following link to see recent pictures and videos of construction.  This will continue to be updated regularly.  http://hummingbirdresources.co.uk/gallery/ 

Review

The on-going transformation of Hummingbird into a production company started in Q4 2016 and a huge amount of activity has taken place.

The defining moment of Q4 2016 was the commencement of full scale construction at Yanfolila, our 2.2 million ounces ("Moz") gold project in Mali, in October 2016.  Yanfolila boasts impressive economics demonstrated by the US$162 million NPV₈ and 60% IRR at a US$1,250/oz gold price.  The plant will have capacity to process 1.24 million tonnes / year ("Mt/year"), producing 132,000oz of gold in its first full year of production and a life of mine average of 107,000oz/year with 3.1 grams/tonne ("g/t") reserves.  Yanfolila provides rapid payback on initial capital invested with over US$70 million free cash flow expected to be generated in its first full year of production.  Our all in sustaining cash cost ("AISC") is in the bottom quartile of producers at circa US$700/oz and importantly, at a US$1,100/oz gold price the project, with a 42% IRR, is extremely robust.  There is also considerable upside at Yanfolila, with over 1Moz of gold outside of the mine plan but within the permit as well as the Gonka deposit (5km south of the Yanfolila plant), which based on the desktop study undertaken by DRA Projects (as announced on 2 February 2016) can add a further US$24 million to the NPV alone.

Having secured the necessary equity to build Yanfolila in the summer of 2016, Hummingbird finalised the arrangements for a US$45 million debt facility with an additional $10m cost-over run facility with Taurus Funds Management in Q4.  Taurus confirmed completion of technical due-diligence on the project and provided the additional flexibility for Hummingbird to further extend its Bridge Facility by a further US$10 million to US$25 million whilst facility documentation is completed; underlying its commitment to Yanfolila.  The Taurus debt facility was the final funding stage necessary to ensure full funding for Yanfolila into positive cash-flows.

Yanfolila is now a hive of activity with good progress being made on the ground.  A few short months ago, only earthworks had been completed and now, with civil works underway we are on track for steel work to begin in the coming weeks.  The Company is hosting a site visit of mining analysts later this month and the Company is confident that strong progress made over recent weeks and months will be recognised by that group.

In December, the executive team visited the factories in Europe which are presently constructing the ball mill and gearing, and we are pleased to report that excellent progress is being made across all areas of this critical aspect of the plant development.  The professionalism and quality of the work at the facilities was impressive to see.

The Company looks forward to providing further regular updates over the coming months as activity ramps up and Yanfolila evolves in to what is expected to be a high margin gold mining operation in the near term.

**ENDS**

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

Daniel Betts Thomas Hill Robert Monro	Hummingbird Resources plc	Tel: [phone]
James Spinney Ritchie Balmer James Bellman	Strand Hanson Limited Nominated & Financial Adviser	Tel: [phone]
Jon Belliss	Beaufort Securities Limited Broker	Tel: [phone]
Lottie Brocklehurst Susie Geliher	St Brides Partners Ltd Financial PR/IR	Tel: [phone]

About Hummingbird Resources Plc

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 Gold Project in Liberia.  It is currently building Yanfolila targeting first production by end of 2017, which has a Probable Reserve of 709,800oz @ 3.14g/t and total Resources of 1.8Moz of gold and an additional 390,700oz of non-compliant exploration potential.  The high-grade gold project has low operating costs of US$695/oz AISC with 132,000oz of first full year's production. 

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 4,000km² highly prospective exploration ground in Mali and Liberia and is constantly evaluating new quality assets.

 

END

 

 

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