Operational and Exploration Update

Hummingbird Resources PLC

21 December 2023

 

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

21 December 2023

Hummingbird Resources plc

("Hummingbird" the "Group" or the "Company")

Operational and exploration update

Hummingbird (AIM: HUM) is pleased to provide an operational and exploration update, including recent drilling results.

Operational Update

Yanfolila Gold Mine, Mali

·      78,220 ounces of gold ("oz") were produced at Yanfolila to 30 November 2023 at an average AISC of c.US$1,340 per oz and the Company is on target to meet FY-2023 production guidance of 80,000 - 90,000 oz and AISC under US$1,500 per oz. 

·      Key areas of focus remain the development of the Komana East Underground ("KEUG") operation and the continuation of mining performance across the mine.

Kouroussa Gold Mine, Guinea

·      3,094 oz have been produced at Kouroussa to 30 November 2023. The processing plant is operating at nameplate capacity on a consistent 24 hour a day basis with ramp up of the mining fleet productivity rates improving.

·      The Company anticipates gold production from Kouroussa in H2-2023 of c.5,000 oz of gold, with lower production driven largely by the delays in accessing higher grade ore due to initial lower than contracted mining volumes.

·      Mining is progressing towards the higher-grade regions of the Koekoe deposit, with Kouroussa expected to reach full commercial production in Q1-2024.

Dugbe Gold Project, Liberia

·      The Company recently completed the conversion of the Company's 51% interest in the Dugbe Gold Project (the "Project") into a 51% interest in Pasofino Gold Limited ("Pasofino"), which simplifies the ownership structure, providing clear visibility and control to facilitate more efficient decision-making and project advancement to drive the material value the Project represents to all stakeholders.

·      Pasofino plans to optimise the 2022 Definitive Feasibility Study ("DFS") and evaluate a new drilling programme to extend the key Project deposit Tuzon, along with possible additional exploration targets previously evaluated.

Circular, Revenue Protection and Outlook Update

·      A further update on the Company's fundraise as announced on 7 December 2023 will be provided in due course. As noted previously, proceeds will be used to accelerate its growth strategy, increase exploration, and strengthen the balance sheet.

·      The Company is implementing a near term revenue protection strategy over a portion of the Company's production for the first three quarters of FY-2024 in the order of 60,000 oz, as the Company materially deleverages its balance sheet in FY-2024, with c.44,500 oz of gold now protected through forward pricing and cost collars, averaging above US$2,000 per oz.

·      As previously noted, the Company continues to focus on material balance sheet deleveraging which is set to commence in Q1-2024 with scheduled debt repayments of c.US$77 million in FY-2024, c.US$61 million in FY-2025, and the remainder c.US$15 million payable by the end of FY-2028.

·      Formal FY-2024 Group guidance will be provided in the Q4-2023 operational and trading update, expected in January 2024.

Drilling results and exploration update

·    Between May and November 2023, the Company completed c.5,900 metres ("m") of drilling at Yanfolila to identify increased mining opportunities and extend life of mine ("LOM") at the asset.

·    Drilling focussed on the Gonka and Sanioumale West deposits with notable drill results including:

o  2m @ 37.30 grams per tonne ("g/t") from 45 m (GKRC0456)

o  16m @ 8.38 g/t from 17 m (GKRC0459)

o  4m @ 10.00 g/t from 22 m (SWGCM006096)

o  4m @ 7.21 g/t from 22 m (SWGCM006960)

·      The Company believes it is essential that its exploration plans are increasingly executed to deliver results that lead to increased Resources and Reserves for the Group to extend LOM at both operating assets. A comprehensive Group exploration plan is in place for FY-2024 onwards, with further updates to be provide during FY-2024 once programmes begin.  

Investor Presentation

The Company's senior management team will be holding an investor presentation this Friday 22 December at 11:00 GMT via the Investor Meet Company platform.

The event will cover the recent fundraise and this release, and provide an opportunity for Q&A. The Company invites attendees to pre-send questions to the Company via [e-mail].

Webcast link: https://www.investormeetcompany.com/hummingbird-resources-plc/register-investor

Dan Betts, CEO and Interim Executive Chairman of Hummingbird, commented:

"In late November it became increasingly evident that the slower than expected ramp-up at Kouroussa was placing increasing strain on the Company's balance sheet. As such, the difficult decision was made to inject additional funds into the business through an equity offering. This was aimed not only to fortify our balance sheet, but also to provide capital support for the Group's operations. Moreover, it positions us to accelerate our growth strategy and exploration efforts.

The Company has faced challenges ramping-up operations at Kouroussa, mainly through lower mining productivity rates than planned. However, through working constructively with our key contractors and bringing in additional mining fleet, we continue to expect Kouroussa to reach commercial production for a full year of production in 2024. Further, as noted above, Yanfolila remains on track to deliver on our FY-2023 guidance of 80,000 - 90,000 oz at an AISC under US$1,500 per oz and we are seeing progress in the development of the KEUG operation, which is a central focus of our long-term operations at Yanfolila.

Extending the LOM at our assets is a key corporate focus area for Hummingbird, especially now that we have two operating mines in place. We plan to continue delivering targeted, cost effective drilling campaigns at known and future deposits with existing positive exploration results targeted at Yanfolila, and increasingly at Kouroussa. As we look forward, our team has developed detailed exploration plans which we will look to increasingly execute and remain confident of maintaining and extending Yanfolila's LOM and in particular extending Kouroussa's LOM to reach our target of a +1 million ounce Reserve base at that asset.

For FY-2024, the Company's key areas of focus are achieving material deleveraging of the balance sheet, a Group production profile of c.200,000 oz of gold, accelerated exploration plans, maintaining and enhancing our ESG programmes and the advancement of Dugbe."

Operational Update

Yanfolila Gold Mine, Mali

·      At the end of November 2023, a total of 78,220 oz was produced at Yanfolila at an average AISC of approximately US$1,340 per oz.

·      The production during Q4-2023 saw reduced throughput in late November due to increased maintenance on the mill, impacting processing volumes, resulting in lower recovery grades at that time.

·      KEUG development has continued with approximately 122 metres ("m") mined to date, with upgrades to the power reticulation, establishment of mine dewatering and ventilation taking place during Q4-2023.  The project remains a crucial element in the Company's long-term mine plan at Yanfolila, with the expectation of producing initial developmental ore in H1-2024 and ramping up production throughout the remainder of the year.

Kouroussa Gold Mine, Guinea

·      As noted in the Q3-2023 operational and trading update, Kouroussa has faced ramp up challenges, in particular from lower mining productivity rates than planned, leading to reduced volumes and a delay mining the high-grade material at the initial key deposit, Koekoe.

·      As of 30 November 2023, Kouroussa produced 3,094 oz, which is below the Company's anticipated productivity levels as planned at this stage of the ramp up phase.

·      However, throughout November, into December, with all the mining fleet onsite and an additional support fleet in operation, mining productivity continued to rise towards target BCM movement rates and is progressing towards the higher-grade regions of the Koekoe deposit.

·      Through December, the processing plant performance has continued to improve with the plant operating at nameplate capacity on a consistent 24 hour a day basis.

·      Mining is progressing towards the higher-grade regions of the Koekoe deposit, with Kouroussa expected to reach full commercial production in Q1-2024.

·      The Company notes that on 18 December 2023, the country's main fuel depot in Guinea's capital Conakry had a fire impacting oil supply in country. The Company is working with its fuel supplier contractor to minimise any adverse supply impacts at the mine. As a precautionary measure, the Company has temporarily suspended mining operations, while the processing plant continues to operate, until regular fuel supply is restored, which is expected in the near term.

·      With the ramp-up of Kouroussa progressing towards the higher-grade parts of the orebody at the Koekoe deposit, the Company continues to expect Kouroussa to reach full commercial production in Q1-2024.

Dugbe Gold Project, Liberia

·      As noted above, the Company recently completed the conversion of the Company's 51% interest in the Dugbe Gold Project into a 51% interest in Pasofino, which simplifies the ownership structure, providing clear visibility and control to facilitate more efficient decision-making and project advancement to drive the material value the Project represents to all stakeholders.

The Dugbe Gold Project represents material valuation upside for the Company as represented by the pre- and post-tax NPV's of the Project in the sensitivity table below based on gold prices between US$1,700 - US$2,300 per oz.

	Gold price sensitivity on NPV
Gold Price (US$/oz)	$ 1,700	$ 1,800	$ 1,900	$ 2,000	$ 2,100	$ 2,200	$ 2,300
Pre-tax NPV5% (US$ million)	$691	$843	$996	$1,149	$1,301	$1,454	$1,607
Post-tax NPV5% (US$ million)	$530	$645	$760	$875	$990	$1,104	$1,219

Notes: the above calculations are internal forecasts based upon the June 2022 DFS economic model and are based on a 100% basis.

Further, the current Project highlights from the June 2022 DFS (at US$1,700 oz gold price) are detailed below, with plans as noted in the highlights above to optimise and improve the current DFS.

Description	Units	Value
Production Statistics
Production LOM	years	14
Production LOM	months	159
Total Ore Tonnes	million tonnes ("Mt")	66.27
Total Au Ounces Recovered	million oz	2.27
LOM Average
Throughput	Mt per annum	5.00
Au Grade	g/t	1.30
Au Recovery	%	83.01
Au Ounces Recovered	oz/a	171,594
Initial Capital Cost	US$ million	435
SIB Capital Cost	US$ million	98
Operating Cost
LOM Average	US$ million /a	147
LOM Unit Cost	US$/t	29
Financial Outcomes (Pre-Tax)
NPV	US$ million	690
IRR	%	26.35
Payback Period (undiscounted)	years	3.3
AISC	US$/oz	1,005
	US$/t	34
Financial Outcomes (Post-Tax)
NPV	US$ million	530
IRR	%	23.6
Payback Period (undiscounted)	years	3.3
AISC	US$/oz	1,005
	US$/t	34

Exploration Plans for FY-2024 and beyond  

As part of the proposed equity placement, the Company plans to use c.US$5 million of monies raised, subject to inter alia, shareholder approval, to accelerate its exploration plans.

Following exploration conducted during FY-2023, the Company has developed comprehensive exploration plans for FY-2024 onwards. These plans are designed to systematically expand the Resource bases at both the Yanfolila and Kouroussa operations, with the goal to increase the Reserve bases and extend LOM at both operating assets.

Central to Hummingbird's exploration strategy is the implementation of a structured exploration-to-mine pipeline at both Yanfolila and Kouroussa. This pipeline prioritises key workstreams that encompass initial target definition, Resource and Reserve definition, and mine plan development. By streamlining the exploration process, the Company is looking to ensure that its efforts are focused on targets with the highest potential for success, maximising the likelihood of identifying and developing new mining opportunities.

The exploration-to-mine pipeline encompasses the following stages:

·      Initial target definition:

o  Employing a range of exploration techniques, including geological mapping, geophysics, geochemical surveys and artificial intelligence and machine learning, to identify promising exploration targets.

·      Resource and Reserve definition:

o  Conducting systematic drilling programs to delineate the extent and grade of mineralisation at identified targets.

·      Mine plan development:

o  Utilising the defined Resources and Reserves to develop feasible and profitable mine plans for potential new mining operations.

The following table provides an overview of the key areas of focus for the Company's exploration team based upon a priority-based system of high probability of results leading to increased Resources to Reserves for the Group to extend LOM at both operating assets.

Exploration Overview

Yanfolila Gold Mine, Mali:

The Company is focused on maintaining and extending Yanfolila's LOM, through exploration of primarily brownfield and near-mine opportunities, including both open pit and underground opportunities. Hummingbird believes that there is significant potential for the Company to operate beyond the current Reserve base LOM primarily through upgrading of the current 1,705 thousand oz ("Koz") Resource and the further development of underground potential at several deposits including Komana East (where development has already begun), Komana West, Sanioumale West, Sanioumale East and Gonka, which already have identified underground Resources.

Additionally, through our collaboration with Mira Geoscience Ltd, the Company has identified several greenfield areas for initial exploratory drilling, including Diaban Nord, and Gonka South where multiple targets have been delineated. The tables below highlight the Company's exploration priorities.

Target	Priority	Category
Yanfolila Gold Mine, Mali
Sanioumale West	1	Resource upgrade & extension
Gonka	1	Resource extension
Kama Oxide	1	Maiden MRE
Guirin West	2	Resource upgrade
Kabaya South	2	Resource upgrade
Gonka Underground	3	Resource definition
Komana East / Gonka Link	3	Greenfields
Mira Targets	3	Greenfields
Komana West	3	Resource extension

Kouroussa Gold Mine Guinea,

The Kouroussa Mine located within Guinea's gold prolific Siguiri Basin and a core focus of the Company is to extend both the Reserve profile and the LOM of the asset. The Company is confident that there remains a material upside opportunity at Kouroussa and is targeting an increase of Reserves to 1.0 Moz and a 10-plus year LOM.

The current focus for the Company is on near mine opportunities and the exploration and expansion of the Bag Farm-Junction and the high-grade X-Vein Resource base deposits.

Currently the Company is considering a programme of deep ground penetrating radar to detect and define vein and structure targets for further exploration.

Target	Priority	Category
Kouroussa Gold Mine, Guinea
Koekoe	1 & 2	Resource extension
X-Vein	1, 2 & 3	Greenfields (West) and Resource upgrade (Main)
Kinkine	2	Resource extension
Bag Farm Junction	3	Resource upgrade
Koekoe Underground	3	Resource upgrade & extension

Drilling Results Detail

Drilling conducted at the Yanfolila mine was concentrated on near-mine prospects, focusing on two deposits, Gonka ("GO") and Sanioumale West ("SW"), with the drilling campaign goals being to extend and upgrade potential Mineral Resources at both targets through reverse circulation ("RC") drilling, employing both exploration holes and limited de-risking grade control drilling.

Gonka

At GO, drilling focused on increasing the geological confidence of the potential extension of the deposit, primarily targeting a southerly extension to the GO main pit that had previously been drilled on wider spacing parameters. Received assays have revealed that the mineralisation was intersected at shallower depths than originally modelled and indicates that it remains open to the east of the deposit. The Company is currently updating its geological model and preparing an updated Mineral Resource Estimate, which will be included in the Company's FY-2024 Reserve and Resource update.

Sanioumale West

Drilling at SW involved a combination of exploration drilling to identify Mineral Resource expansion opportunities, and grade control drilling to de-risk an extension to a pushback of the current pit to incorporate additional Ore Reserves to the southwest of the deposit.

Exploration drilling, completed in November 2023, targeted both an extension at depth of the southwestern pushback and a step-out program to the northeast.

Table of the June 2023 - November 2023 Yanfolila drilling results

Hole ID	Depth From (m)	Depth To (m)	Intercept Description (g/t Au)
GKRC0456	45	47	2m @ 37.30 g/t
GKRC0463	74	75	1m @ 16.99 g/t
GKRC0459	17	33	16m @ 8.38 g/t
GKRC0472	126	127	1m @ 6.94 g/t
GKRC0474	87	97	10m @ 5.21 g/t
GKRC0461	59	66	7m @ 3.26 g/t
GKRC0472	114	116	2m @ 3.26 g/t
GKRC0461	93	95	2m @ 3.13 g/t
GKRC0463	118	119	1m @ 3.00 g/t
GKRC0466	49	51	2m @ 2.83 g/t
GKRC0454	7	8	1m @ 2.39 g/t
GKRC0471	77	84	7m @ 2.29 g/t
GKRC0467	112	113	1m @ 1.96 g/t
GKRC0453	36	40	4m @ 1.93 g/t
GKRC0464	38	39	1m @ 1.92 g/t
GKRC0463	122	129	7m @ 1.90 g/t
GKRC0461	101	110	9m @ 1.85 g/t
GKRC0453	2	3	1m @ 1.85 g/t
GKRC0467	106	107	1m @ 1.72 g/t
GKRC0459	7	11	4m @ 1.62 g/t
GKRC0453	32	33	1m @ 1.56 g/t
GKRC0468	22	23	1m @ 1.50 g/t
GKRC0465	118	122	4m @ 1.50 g/t
GKRC0468	128	130	2m @ 1.48 g/t
GKRC0467	101	102	1m @ 1.45 g/t
GKRC0457	47	48	1m @ 1.44 g/t
GKRC0471	92	96	4m @ 1.43 g/t
GKRC0464	19	25	6m @ 1.40 g/t
GKRC0462	19	21	2m @ 1.34 g/t
GKRC0461	80	84	4m @ 1.29 g/t
GKRC0467	89	93	4m @ 1.23 g/t
GKRC0471	124	134	10m @ 1.22 g/t
GKRC0464	49	64	15m @ 1.18 g/t
GKRC0456	16	17	1m @ 1.16 g/t
GKRC0461	69	72	3m @ 1.14 g/t
GKRC0468	134	136	2m @ 1.12 g/t
GKRC0465	136	138	2m @ 1.06 g/t
GKRC0466	54	66	12m @ 1.05 g/t
GKRC0462	27	28	1m @ 1.05 g/t
GKRC0463	91	101	10m @ 1.00 g/t
GKRC0457	129	130	1m @ 0.93 g/t
GKRC0457	62	63	1m @ 0.92 g/t
GKRC0465	128	129	1m @ 0.91 g/t
GKRC0457	53	54	1m @ 0.88 g/t
GKRC0458	90	91	1m @ 0.84 g/t
GKRC0472	120	121	1m @ 0.81 g/t
GKRC0463	86	88	2m @ 0.75 g/t
GKRC0471	112	113	1m @ 0.68 g/t
GKRC0458	95	96	1m @ 0.66 g/t
GKRC0459	91	93	2m @ 0.60 g/t
GKRC0461	87	88	1m @ 0.58 g/t
GKRC0461	132	133	1m @ 0.57 g/t
GKRC0467	95	96	1m @ 0.55 g/t
GKRC0456	19	20	1m @ 0.53 g/t
GKRC0456	59	60	1m @ 0.53 g/t
GKRC0461	40	41	1m @ 0.50 g/t
SNWRC0520	99	109	10m @ 1.52 g/t
SNWRC0526	119	120	1m @ 0.86 g/t
SNWRC0526	141	142	1m @ 0.61 g/t
SNWRC0526	158	160	2m @ 0.82 g/t
SNWRC0527	52	56	4m @ 1.11 g/t
SNWRC0529	47	48	1m @ 0.68 g/t
SNWRC0529	52	53	1m @ 0.64 g/t
SNWRC0530	18	19	1m @ 0.59 g/t
SNWRC0530	49	50	1m @ 1.78 g/t
SNWRC0533	85	86	1m @ 3.09 g/t
SWGCM006951	10	17	7m @ 5.80 g/t
SWGCM006096	22	26	4m @ 10.00 g/t
SWGCM006093	10	22	12m @ 3.30 g/t
SWGCM006060	8	18	10m @ 3.81 g/t
SWGCM006098	15	20	5m @ 7.09 g/t
SWGCM006959	17	26	9m @ 3.50 g/t
SWGCM006960	22	26	4m @ 7.21 g/t
SWGCM006055	13	18	5m @ 5.39 g/t
SWGCM006088	15	21	6m @ 3.78 g/t
SWGCM006091	21	26	5m @ 4.06 g/t
SWGCM006958	9	16	7m @ 2.86 g/t
SWGCM006974	6	11	5m @ 3.33 g/t
SWGCM006095	5	14	9m @ 1.78 g/t
SWGCM006094	1	8	7m @ 2.03 g/t
SWGCM006965	5	13	8m @ 1.67 g/t
SWGCM006967	20	26	6m @ 2.08 g/t
SWGCM006061	4	7	3m @ 3.86 g/t
SWGCM006952	22	26	4m @ 2.87 g/t
SWGCM006059	20	24	4m @ 2.77 g/t
SWGCM006054	18	23	5m @ 2.21 g/t
SWGCM006950	7	14	7m @ 1.49 g/t
SWGCM006099	6	12	6m @ 1.47 g/t
SWGCM006957	4	9	5m @ 1.73 g/t
SWGCM006102	20	26	6m @ 1.36 g/t
SWGCM006100	11	19	8m @ 1.00 g/t
SWGCM006089	1	8	7m @ 1.03 g/t
SWGCM006090	7	12	5m @ 1.32 g/t
SWGCM006982	8	13	5m @ 1.23 g/t
SWGCM006101	23	26	3m @ 1.54 g/t
SWGCM006056	3	7	4m @ 1.09 g/t
SWGCM006057	22	24	2m @ 2.12 g/t
SNWRC0534	51	52	1m @ 2.62 g/t
SNWRC0535	50	54	4m @ 2.71 g/t
SNWRC0536	62	65	3m @ 1.93 g/t
SNWRC0537	44	53	9m @ 1.10 g/t
SNWRC0538	51	57	6m @ 7.50 g/t
SNWRC0538	78	79	1m @ 0.80 g/t
SNWRC0544	58	60	2m @ 0.77 g/t
SNWRC0545	31	32	1m @ 0.92 g/t
SNWRC0546	21	22	1m @ 1.86 g/t
SNWRC0546	43	44	1m @ 0.50 g/t
SNWRC0547	0	1	1m @ 2.27 g/t
SNWRC0554	8	9	1m @ 0.84 g/t

Minimum Interval 1 m Trigger 0.5 g/t (Max 2 m Internal Waste)

GKRC Gonka RC exploration drilling, SNWRC = Sanioumale West RC exploration drilling, SWGCM = Sanioumale West Grade Control Drilling

Competent Person Review:

David Muir, has reviewed and approved the technical information contained within this announcement in his capacity as a Competent Person, as required under the AIM Rules for Companies. David is the Group Database and Exploration Manager for Hummingbird, and is a "Competent Person", according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("JORC Code, 2012 Edition") and is a member of good standing with the Australian Institute of Geoscientists (AIG).

**ENDS**

Notes to Editors:

Hummingbird Resources plc (AIM: HUM) is a leading multi-asset, multi-jurisdiction gold producing Company, member of the World Gold Council and founding member of Single Mine Origin (www.singlemineorigin.com). The Company currently has two core gold projects, the operational Yanfolila Gold Mine in Mali, and the Kouroussa Gold Mine in Guinea, which will more than double current gold production once at commercial production. Further, the Company has a controlling interest in the Dugbe Gold Project in Liberia that is being developed by joint venture partners, Pasofino Gold Limited. The final feasibility results on Dugbe showcase 2.76Moz in Reserves and strong economics such as a 3.5-year capex payback period once in production, and a 14-year life of mine at a low AISC profile. Our vision is to continue to grow our asset base, producing profitable ounces, while central to all we do being our Environmental, Social & Governance ("ESG") policies and practices.

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

Daniel Betts, CEO Thomas Hill, FD Edward Montgomery, CD	Hummingbird Resources plc	Tel: [phone]
James Spinney Ritchie Balmer	Strand Hanson Limited Nominated Adviser	Tel: [phone]
James Asensio	Canaccord Genuity Limited Broker	Tel: [phone]
Bobby Morse Oonagh Reidy George Pope	Buchanan Financial PR/IR	Tel:  [phone] Email: [e-mail]

 

END