Hummingbird Resources plc / Ticker:
HUM / Index: AIM / Sector: Mining
25 April
2024
Hummingbird Resources
plc
("Hummingbird", "Group" or the
"Company")
Q1-2024 Operational and Trading
Update
Hummingbird (AIM: HUM) is pleased to announce a
Group operational and trading update for the first quarter ending
31 March 2024 ("Q1-2024").
Operational update
Group
Production
· Q1-2024 Group
production totalled 22,867 ounces of gold ("oz").
Yanfolila
Mine, Mali
· Yanfolila
produced 16,999 oz in Q1-2024, an increase of 18% from
Q4-2023.
· All in Sustaining
Costs ("AISC") totalled US$1,616 per oz in Q1-2024, a decrease of
5% from Q4-2023.
· During the
quarter, 18,230 oz of gold was sold at an average realised price of
US$2,030 per oz.
Kouroussa
Mine, Guinea
· In Q1-2024, the
Kouroussa site produced 5,868 oz of gold.
· Operations at
Kouroussa were temporarily disrupted in January 2024 due to a fire
at Conakry's main fuel depot. Fuel deliveries resumed in late
January, allowing production to gradually increase.
· Despite steady
progress in February and the first half of March, as previously
announced, Corica Mining Services ("Corica"), the primary
contractor, halted mining on 17 March 2024. Discussions with Corica
are ongoing; simultaneously, the Company is exploring partnerships
with other operators to expedite Kouroussa's advance towards
commercial production.
· Post-quarter
developments include the initiation of blasting operations to
access the high-grade ore. The mine aims to reach commercial
production as soon as possible, bolstered by an expanded agreement
with West African contractor ETASI, which has been established on
site since H2-2023.
Corporate update
· The Group
reported a Lost Time Injury Frequency Rate ("LTIFR") of 0.61 per
million hours across 1.6 million hours worked in Q1-2024, better
than the target of 1.20 LTIFR.
· Group adjusted
EBITDA of US$7.1 million Q1-2024, an increase of US$6.9 million on
Q4-2023.
· Hummingbird
continues to work closely with the Company's primary
lender, Coris Bank International ("Coris"), which remains
fully supportive of the business and its current strategy,
including surrounding mitigation of the financial impacts of the
ongoing contractual dispute with Corica.
FY-2024 Outlook
· Yanfolila remains
unchanged with guidance of 75,000 - 85,000 oz at AISC below
US$1,500 oz.
· With the ongoing
roll-out of the operational ramp up at Kouroussa, guidance will be
updated once the operation nears commercial production.
Investor Presentation
The Company's senior management team
will be holding an investor presentation on 25 April 2024
at 3:30pm BST via the Investor Meet
Company platform.
The event will cover the release and
provide an opportunity for Q&A. The Company invites attendees
to pre-send questions to the Company
via IR@hummingbirdresources.co.uk
or via the Investor Meet
Company platform.
Webcast link: https://www.investormeetcompany.com/hummingbird-resources-plc/register-investor
Dan Betts, CEO of Hummingbird,
commented:
"The Company faced a challenging quarter,
particularly at Kouroussa, where the fire at the main fuel depot in
Guinea and an operational suspension by Corica impacted our
progress ramping up production. These events have tested our team,
but thanks to their dedication, strategic planning and our
supportive partners and suppliers, we have remained in operation as
we look to accelerate towards reaching commercial production, while
mitigating the impacts of recent events.
At Yanfolila,
we are pleased with the progress at the mine producing nearly
17,000 oz of gold, at an improved AISC performance, during what was
expected to be a weaker quarter as we progress through our near
term mine plan.
Looking ahead, we are committed to reaching
commercial production at Kouroussa and continuing our exploration
efforts to extend the life of mine at both Yanfolila and Kouroussa.
Our strategy is clear - to become a 200koz pa gold producer across
multiple jurisdictions, decrease costs, extend the mine lives of
our assets and drive shareholder value while upholding stringent
ESG standards."
Yanfolila, Mali: Q1-2024
operational summary
|
Unit
|
Q1-2023
|
Q2-2023
|
Q3-2023
|
Q4-2023
|
Q1-2024
|
Gold poured
|
oz
|
27,262
|
23,885
|
18,399
|
14,419
|
16,999
|
Mined BCMs
|
BCMs
|
1,557,793
|
592,360
|
1,775,723
|
1,878,181
|
1,549,607
|
Ore mined
|
t
|
647,869
|
262,911
|
171,959
|
266,361
|
169,195
|
Ore
processed
|
t
|
366,622
|
364,459
|
339,333
|
312,045
|
344,510
|
Avg. mill feed
grade
|
g/t
|
2.41
|
2.21
|
1.79
|
1.66
|
1.61
|
Recovery
|
%
|
94.41%
|
94.06%
|
92.93%
|
91.05%
|
92.41%
|
Group Gold
inventory
|
oz
|
2,810
|
1,831
|
1,834
|
2,908
|
1,652
|
Note: Ore mined includes high grade,
low grade, and marginal material. Ore processed is a blend based
on preferential feed of high grade and low grade, with
marginal ore added as an incremental feed source.
· At the close of
Q1-2024, Yanfolila reported a consistent safety performance with a
rolling 12-month average LTIFR of 0.93 per million hours worked,
maintaining the strong safety record against the target rate of
less than 1.20 per million hours worked.
· In Q1-2024,
Yanfolila's gold production saw an increase, reaching 16,999 oz
compared to 14,419 oz in Q4-2023. This increase is primarily
attributed to the increased ore mined and phased development at the
Sanioumale East ("SE") open pit deposit.
· Mining volumes in
Q1-2024 were slightly reduced to 1,549,607 BCMs. Through the
quarter, mining operations focused on the stripping of waste
material reflecting a strategic adjustment in mining operations
aligned with the H2-2024 weighted operational profile.
· Ore processed
during Q1-2024 totalled 344,510 tonnes, an improvement over the
319,845 tonnes achieved in Q4-2023, with the blending of SE and
Komana West ("KW") ore with existing stockpiles.
· The average mill
feed grade slightly decreased to 1.61 grammes per tonnes ("g/t")
from 1.66 g/t in the previous quarter, continuing the trend
anticipated by the mine plan for lower grade ore for the duration
of 2024. However, the processing plant recovery showed an
improvement to 92.41%, reflecting a partial recovery from the lows
experienced in Q4-2023 of 91.05%. This improvement in recovery
rates during Q1-2024 has helped to mitigate the impact of lower
grades.
· Significant
progress was made in the development of the high-grade Komana East
Underground ("KEUG") Mine, with 614 meters of development now
completed, far exceeding the advancements made by the end of
FY-2023 of 164.5 meters, with the development rates having
increased further in recent weeks.
Yanfolila
ESG:
· Through Q1-2024,
the Company continued its focus on investing within the local
communities.
o Healthcare Infrastructure
Enhancement: Progressed the Soloba Community
Heath Centre, signalling near-readiness to provide enhanced
healthcare services to the local region. The strategic closure and
refurbishing of the Makandina maternity hospital also demonstrate
Hummingbird's core focus on upgrading health facilities for
long-term community benefits.
o Economic Development
Initiatives: Initiated the construction of a
soap manufacturing facility at Kona, reflecting the strategic
investment in sustainable economic development and support for
local entrepreneurship.
o Infrastructure
Improvements: Commenced the rehabilitation of
the Kobale bridge. The involvement of local authorities and
community leaders in the planning and oversight illustrates its
crucial importance to local infrastructure development.
Kouroussa, Guinea: Q1-2024
operational summary
· In 2023, the
Kouroussa site maintained an exemplary safety record, achieving a
rolling 12-month LTIFR of 0.44 which significantly surpassed the
safety target of an LTIFR of 1.20, with zero LTIs recorded across
Q1-2024.
· The quarter was
marked by several unprecedented challenges, initially caused by the
fire-induced shutdown at the main fuel depot in Conakry in
mid-December 2023 forcing the temporary suspension of operations.
Following restart of operations in late January 2024, Corica halted
mining operations on 17 March 2024, due to contractual disputes, as
announced on March 18, 2024. As a result, only 5,868 oz of gold
were produced, accounting for only 1% of the current Reserve at the
Koekoe deposit. With production not yet at commercial run rates,
operational costs continue to be capitalised with an AISC to be
provided once in commercial operation.
· The Company has
maintained ongoing negotiations with Corica aimed at resolving
these disputes and encouraging a timely return to mining activities
at Kouroussa under the existing contract.
· Alongside these
discussions, efforts are underway to resume and enhance mining
operations with the help of other existing and additional
contractors, targeting commercial production at the earliest
opportunity, as detailed in the 16 April 2024
announcement.
· In parallel with
this, the Company is progressing with the ramp up of mining
activities at Kouroussa, aiming to achieve commercial production as
soon as possible. To accomplish this, several significant steps
have been taken:
o Due to the
ongoing suspension, a formal Step-In Notice was issued by the
Company, allowing the Company to take contractual control of
operations at Kouroussa and issue direct instructions to Corica and
its third-party contractors and, if necessary, appoint alternative
operators or contractors.
o The Company has
entered a short-term contract with the West African contractor,
Etablissement Adama Sidibé ("ETASI"), to enhance their already
active support fleet and accelerate mining activity at Kouroussa as
operations commence the near-term mining of high-grade
ore.
o The Company
progressed discussions with various additional operators,
contractors, and equipment suppliers in a bid to maximise the full
scope of mining activities required to expedite Kouroussa to full
commercial production as soon as possible.
· Post quarter end
operations began to access high-grade ore via the commencement of
blasting at initial the pit Koekoe Open Pit. The Company has
achieved higher weekly gold pours occurring versus Q1-2024
levels.
· In Q1-2024,
Kouroussa average ore grade mined improved to 1.97g/t in March
2024, with a run of mine stockpile balance of c.23,000
tonnes.
· With blasting
underway to access the high-grade ore post quarter-end, the Company
expects the Kouroussa average grade profile to further improve
going forward.
· Through the
quarter, the processing plant operated at or above performance
expectations with gold recoveries reaching over c.90% despite the
processing of marginal material due to the operational challenges.
The Company expects that as the mining operation enter the
high-grade material, the strong performance of the processing plant
will continue.
Kouroussa
ESG:
· Through the
quarter, the operation has remained focused on delivering value to
local stakeholders:
o Community and Safety
Education: Launched initiatives to educate
local populations on electrical safety, conflict management, and
the dangers of traditional gold mining. Successfully hosted 22
pupils for an educational geological study tour, emphasising safety
and sustainability in mining practices.
o Community Development and
Support: Monitored and reported significant
progress in social projects, including the completion of a water
borehole for the local hospital and the distribution of prayer mats
for mosques. Continued construction of sanitation facilities,
showcasing our commitment to improving local infrastructure and
living conditions.
Dugbe, Liberia
· In Q1-2024
Pasofino Gold Limited ("Pasofino") mobilised drilling equipment and
crew to Bukon Jedeh, completed extensive infrastructure
improvements. Drilling operations at Bukon Jedeh commenced earlier
this week.
· The Company
continues to work with Pasofino to advance efforts to optimise the
2022 Definitive Feasibility Study ("DFS") focusing on power and
recovery efficiencies, alongside continuous collaboration with
stakeholders to maximise project value.
Exploration Summary
· During Q1-2024,
exploration focused on Yanfolila with several initiatives taking
place:
o Commenced
reverse circulation drilling at Sanioumale West, with 31 holes
drilled totalling 2,108 metres; notable for intersecting visible
mineralisation, which indicates potential resource expansion and
could be used to augment the Company's FY-2024 and FY-2025 mine
plans.
o Finalising the
Komana exploration plan, alongside ongoing geologist training,
aligning with the Company's goals to extend the Life of Mine
("LOM") at Yanfolila and Kouroussa operations through the leverage
of improved software usage.
Q1-2024 Financial
update
|
Unit
|
Q1-2023
|
Q2-2023
|
Q3-2023
|
Q4-2023
|
Q1-2024
|
Yanfolila Gold Mine,
Mali
|
Gold sales
|
oz
|
26,380
|
24,770
|
18,550
|
12,952
|
18,230
|
Avg. gold sale price
|
$/oz
|
$1,878
|
$1,981
|
$1,918
|
$1,946
|
$2,030
|
Operating cash costs
|
$m
|
$20.0
|
$30.0
|
$30.5
|
$22.0
|
$27.1
|
AISC on gold sold
|
$/oz
|
$1,109
|
$1,234
|
$1,651
|
$1,701
|
$1,616
|
Group Financial
Performance
|
Group Adjusted EBITDA
|
$m
|
$17.6
|
$15.5
|
$$1.2
|
$0.2
|
$7.1
|
Net bank (debt) / cash
|
$m
|
($110.8)
|
($122.8)
|
($123.0)
|
($140.4)
|
($138.8)
|
Net bank (debt) / cash inc gold
inventory value
|
$m
|
($105.2)
|
($119.3)
|
($119.5)
|
($134.4)
|
($135.1)
|
· At Yanfolila
Q1-2024 AISC on gold sold totalled US$1,616 per oz.
· During the
quarter, a total of 18,230 oz of gold was sold at an average
realised price of US$2,030 per oz from Yanfolila, post Q1-2024
hedge allotment.
· As part of its
near-term revenue protection scheme over a portion of production
for the first three quarters of FY-2024, the Company fulfilled its
Q1-2024 hedging obligation. Additionally, the Company looked to
further leverage the current gold price environment to increase its
revenue protection including.
o Implemented a
15,000 oz hedge for Q4-2024 to capitalise on prevailing gold price
upswings.
o Restructured
hedge commitments and postponed portions involving commitments from
Q2-2024, Q3-2024, plus the additional volume in Q4-2024, now
earmarked for Q1-2025. This adjustment is designed to leverage the
gold pricing environment while ensuring future revenue
protection.
· Group adjusted
EBITDA of US$7.1 million Q1-2024, an increase of US$6.9 million on
Q4-2023.
· During the
quarter, the Company completed a fundraising totalling US$28.1
million, with the remaining conditional placement of c.US$22.2
million approved by shareholders at the General
Meeting and received by the Company.
· As of the end of
Q1-2024, the Company held a net bank debt position of c.US$138.8
million (c.US$135.1 million including gold inventory value). For
the year end:
o Gross bank debt
of c.US$144.2 million
o Cash at bank of
c.US$5.4 million
o Gold inventory
value of c.US$3.7 million
· During Q1-2024,
the Company repaid US$9 million of debt excluding interest. The
Company also drew down US$6.3 million of existing debt facilities
during the quarter. Hummingbird is working closely with Coris
surrounding the mitigation of the financial impacts of the ongoing
disruptions.
**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: +44 (0) 20 7409
6660
|
James
Spinney
Ritchie
Balmer
|
Strand Hanson
Limited
Nominated
Adviser
|
Tel: +44
(0) 20 7409 3494
|
James
Asensio
Ana
Ercegovic
|
Canaccord Genuity
Limited
Broker
|
Tel: +44 (0) 20 7523
8000
|
Bobby Morse
Oonagh
Reidy
George Pope
|
Buchanan
Financial
PR/IR
|
Tel: +44 (0) 20
7466 5000
Email: HUM@buchanan.uk.com
|