REG - Hummingbird Res. - Financing, Operational & Strategic Review

Hummingbird ResourcesAnnouncement

27/09/2024 07:00

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RNS Number : 9020F  Hummingbird Resources PLC  27 September 2024

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

 

27 September 2024

Hummingbird Resources plc

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

Financing, Operational & Strategic Review and Operational Update

Hummingbird Resources (AIM: HUM) announces receipt of a further US$20 million
from its largest shareholder and the launch of a comprehensive Group-wide
review ("the Review"), aimed at delivering operational improvements and
realising the Company's potential as a multi-asset, multi-jurisdictional gold
producer. Additionally, the Company today provides an update on the ramp-up of
the Kouroussa Gold Mine in Guinea ("Kouroussa").

Financial Stabilisation and Strengthened Balance Sheet

Hummingbird has secured a loan facility of US$30 million from CIG SA. This
facility consists of a new US$20 million loan, which will be provided in
tranches, and the consolidation of a previously announced US$10 million
short-term loan from CIG SA. The loan is unsecured, carries an interest rate
of 14% per annum, with an initial maturity date of December 31, 2024. However,
the Company anticipates transitioning this loan into a longer term fixed-rate,
gold-linked loan note (the "Gold Loan"), which is currently being finalised.
There are several opportunities to increase the size of the Gold Loan due to
additional interest, and further updates will be provided in due course.

As previously announced, the Company is progressing with several other
non-equity financing options to further strengthen its balance sheet as it
reaches full operational capacity over the coming quarters.

Group Review

Hummingbird has commenced a comprehensive Group-wide review to assess the
capacity of its current platform to deliver sustainable production growth and
value creation at its evolving portfolio in West Africa.

Corporate review and restructuring

·      Hummingbird is currently formalising the engagement of a leading
industry expert to conduct an independent review of the Company's management
structures and operational performance, as above. The scope of work is aimed
at restructuring the business to maximise operational performance and
efficiencies across the Group.

·      The review will also include corporate restructuring initiatives
aimed at cost efficiencies, improved governance, and enhanced accountability,
ensuring overall improved performance. A Chief Transformation Officer will be
appointed by the board and will join in an executive capacity to lead this
assessment and the implementation of the transformation plan. This process
will involve initial Board and management changes, with further adjustments
expected upon completion of the review.

Operational Review for Consistent Performance

·      As part of the operational optimisation, the Company is
finalising the appointment of  an experienced mining professional to lead
this transformative process focussed on operational delivery and ramp up at
Kouroussa and is expected to be in place shortly. As required, additional
external experienced resources may be sourced to support the near-term
optimisation plans at Kouroussa and Yanfolila.

Strategic Review for Maximising Shareholder Value

·      Hummingbird is actively engaging with key stakeholders to
optimise its strategy and maximise shareholder value. As part of this, the
Company is conducting a comprehensive evaluation of the Company's assets,
which may involve divesting non-core assets and/or exploring project
opportunities. To date the Company has also engaged in informal, non-binding
discussions with several parties regarding the sale of certain assets
including the Dugbe Gold Project in Liberia.

Leadership Transition and Board Update

·      Dan Betts will formally transition from his current role as CEO
and Interim Executive Chairman to the position of Executive Chairman. In this
role, he will focus on overseeing the strategic review and guiding the
long-term development of the Company, aligning with shareholder interests.

·      Concurrently, mining recruitment specialists, Lincoln Strategic,
have been appointed to conduct a search to identify a new CEO, responsible for
delivering on the next chapter of Hummingbird's evolution, with an initial
focus on driving operational improvements.

·      The Company also announces the planned appointment of Mr. Oumar
Toguyeni, a seasoned mining executive, and a Director of Nioko Resources
Corporation ("Nioko"), the Company's largest shareholder, to the Board as a
Non-Executive Director, subject to final regulatory and due diligence checks.

Hummingbird notes that these measures are being implemented with the support
of its primary lender, Coris Bank International ("Coris") and major
shareholders. The Company believes that this support will help capitalise on
the strong platform it has built to date, enabling it to evolve into a robust
mid-tier gold mining company.

Kouroussa Gold Mine Operational Update

While the ramp-up at Kouroussa has continued during Q3-2024,
lower-than-forecast mining volumes, delayed pit staging, and processing plant
optimisation have delayed the achievement of commercial production, which the
Company now anticipates reaching in Q4-2024.

The Company continues to work with the main mining contractor and its
operational team at Kouroussa to progress the ramp-up and deliver commercial
production. With the now completed mill relining, a more consistent ramp-up of
mining performance expected and the end of the wet season, production rates
are projected to significantly increase, with a strong performance expected
through the final quarter.

Investor Presentation

The Company's senior management team will be holding an investor presentation
on Monday 30 September 2024 at 15:00 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
(https://www.investormeetcompany.com/hummingbird-resources-plc/register-investor)
 

Dan Betts, Executive Chairman of Hummingbird, commented:

"As we continue to navigate the challenges at Kouroussa, we are committed to
taking decisive actions to strengthen Hummingbird's operational foundation and
unlock its full potential as a multi-asset, multi-jurisdictional gold
producer. The Group-wide review is an important step towards optimising our
production capabilities and enhancing shareholder value.

 

"While Kouroussa's ramp-up has been affected by various unforeseen factors, we
are focused on reaching commercial production in Q4-2024. Whilst we are
confident of commercial production in the coming quarter, it is dependent on
us and our partners delivering meeting our production plan and expectations
 Our focus remains on sustainable growth, securing additional financing, and
completing leadership transitions to ensure the successful delivery of our
ambitious growth objectives to deliver 200 Koz pa of gold.

 

"After 17 years of building Hummingbird from a grassroots exploration company
to a gold producer with an annual run rate exceeding 200,000 ounces, I believe
the time is right for a new leadership team to guide the Company through its
next phase. I am proud of what we have achieved and will continue to focus on
strategic opportunities and key relationships as Chairman of Hummingbird."

**ENDS**

Appointment of Board Member

As noted above, Hummingbird is in the process of appointing of Mr. Oumar
Toguyeni to its Board of Directors, subject to final regulatory and customary
due diligence checks.

Mr Toguyeni is a highly experienced global mining executive, with over 35
years of industry expertise. His career has included senior leadership
positions at major international mining companies such as BHP Billiton, Alcoa
Inc., and IAMGOLD. Beginning his career as an exploration geologist in Burkina
Faso, Mr Toguyeni has gained extensive experience across Africa, Europe, North
and South America, the Caribbean, and Canada. Bilingual in English and French,
he brings a wealth of international experience and insight to the Board.

Mr Toguyeni holds an MSc, an MBA, and an ICD.D qualification. His
comprehensive knowledge of operational management, business strategy, and
international markets will significantly strengthen Hummingbird's Board as the
company focuses on furthering its long-term success and delivering value to
all stakeholders.

Related Party Transaction

Nioko is classified as a Substantial Shareholder of the Company pursuant to
the AIM Rules for Companies (the "AIM Rules"). Nioko is a wholly owned
subsidiary of CIG SA. The Company entering the associated agreements
governing the US$30 million facility with CIG SA is accordingly classified as
a related party transaction pursuant to the AIM Rules. In this regard, the
directors of the Company confirm, having consulted with the Company's
nominated adviser, Strand Hanson Limited, that they consider that the terms
of such agreements to be fair and reasonable insofar as its shareholders are
concerned.

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
(http://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
(https://www.hummingbirdresources.co.uk/)  or contact:

 

 

 Daniel Betts, Chairman  Hummingbird Resources plc  Tel: +44 (0) 20 7409 6660

 Thomas Hill, FD

 Edward Montgomery, CD
 James Spinney           Strand Hanson Limited      Tel: +44 (0) 20 7409 3494

 Ritchie Balmer          Nominated Adviser
 James Asensio           Canaccord Genuity Limited  Tel: +44 (0) 20 7523 8000

 Charlie Hammond         Broker
 Bobby Morse             Buchanan                   Tel:  +44 (0) 20 7466 5000

 Oonagh Reidy            Financial PR/IR            Email: HUM@buchanan.uk.com (mailto:HUM@buchanan.uk.com)

 George Pope

 

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