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RNS Number : 3330F Hummingbird Resources PLC 24 September 2024
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining
24 September 2024
Hummingbird Resources plc
("Hummingbird", the "Group" or the "Company")
H1-2024 Interim Results
Hummingbird Resources (AIM: HUM) is pleased to announce its unaudited results
for the six months ended 30 June 2024 ("the Period" or "H1-2024").
Financial Results
· The Group recorded revenue of US$62.8 million at the Yanfolila
Gold Mine in Mali ("Yanfolila") during the Period (H1-2023: US$98.6 million),
from the sale of 30,687 ounces ("oz") of gold at an average price of US$2,048
per oz (H1-2023: 51,149 oz sold at an average price of US$1,927 per oz).
o An additional US$2.3 million (H1-2023: US$4.6 million) of revenue
generated from the sale of single mine origin ("SMO") gold.
· The Group reported an adjusted EBITDA loss of US$8.9 million for
H1-2024 (H1-2023 gain of US$33.1 million), primarily due to reduced
production from Yanfolila in the second quarter. The pre-tax loss for the
period was US$29.6 million (H1-2023 profit of: US$4.1 million).
· At the end of H1-2024, the Company held a net bank debt position
of US$153.5 million (US$150.1 million including gold inventory value).
Operating Summary
· During the period, Yanfolila produced 29,064 oz at an AISC of
US$2,015 per oz, driven by lower grade through-put and increased waste
stripping in preparation for H2-2024 operations.
· The Kouroussa Gold Mine in Guinea ("Kouroussa") produced 13,657
oz of gold in H1-2024 as ramp-up of operations faced challenges through the
period. Following the restart of mining by the mining contractor, volumes
progressively increased with the mining of high-grade fresh material mining
commencing in late Q2-2024.
· Through the year, Hummingbird has continued to advance its ESG
initiatives, focusing on community engagement and sustainability projects and
the Company published its annual Sustainability Report during H1-2024, which
is available on the Company's website
(https://www.hummingbirdresources.co.uk/investors/reports-presentations/#sustainability)
.
Post Period Corporate Updates:
· In August 2024, Hummingbird secured a refinancing package of
US$25 million with its principal lender, Coris Bank International ("Coris
Bank"). This financing covers existing obligations and is repayable over two
years with a one-year payment and interest deferral, offering the Company
financial flexibility during this crucial phase of ramp-up at the Kouroussa.
· Hummingbird's 53%-owned subsidiary, Pasofino Gold Limited
("Pasofino"), has made considerable progress in its strategic review of the
Dugbe Gold Project in Liberia. Pasofino received two non-binding expressions
of interest from third parties in late August 2024. On 16 September 2024,
Pasofino entered into an exclusivity agreement with a potential purchaser to
acquire the company for a total consideration of US$75 million.
Dan Betts, CEO of Hummingbird, commented:
"This year has been a challenging period for us and our stakeholders, with
operational and market headwinds to navigate. Despite these hurdles, we have
made significant strides in positioning the Company for a stronger future. Our
focus on advancing key projects, particularly the ramp-up at Kouroussa and the
implementation of strategic initiatives at Yanfolila, is laying the groundwork
for improved performance in the second half of the year and beyond. Securing
the US$25m refinancing with Coris was another crucial step, providing the
flexibility needed as we progress towards our goal of becoming a 200 Koz pa
producer.
Looking ahead, our priority remains on delivering profitable production and
value for our shareholders. With Kouroussa nearing commercial production and
the ongoing optimisation programme at Yanfolila, we are confident in
delivering improved production in the last quarter of the year. Additionally,
our commitment to sustainable and responsible mining practices is unwavering,
with continued progress on our ESG initiatives.
With gold prices remaining robust, we are highly optimistic about the future
and believe Hummingbird is well-positioned to capitalise on the vast
opportunities that lie ahead. We will continue to keep our stakeholders
informed and provide further updates in due course."
**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
(https://singlemineorigin.com/ (https://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 ESG policies and practices.
For further information, please visit hummingbirdresources.co.uk
(https://www.hummingbirdresources.co.uk/) or contact:
Daniel Betts, CEO 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
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 30 31
June June December
2024 2023 2023
Notes $'000 $'000 $'000
Revenue 65,137 103,194 167,107
Production costs (51,451) (50,982) (93,961)
Amortisation and depreciation (17,523) (22,590) (40,845)
Royalties and taxes (4,623) (3,841) (6,235)
Cost of sales (73,597) (77,413) (141,041)
Gross (loss) / profit (8,460) 25,781 26,066
Share based payments (697) (2,027) (2,238)
Other administrative expenses (8,387) (9,176) (17,070)
Operating (loss) / profit (17,544) 14,578 6,758
Finance income 3,779 148 690
Finance expense (8,826) (11,914) (22,417)
Share of joint venture profit / (loss) - 2 (29)
Profit on disposal on joint venture 112 - -
Reversals / (impairment) of financial assets 53 (46) (223)
(Losses) / gains on financial assets and liabilities measured at fair value (7,137) 1,313 (3,433)
(Loss)/profit before tax (29,563) 4,081 (18,654)
Tax 5 882 (7,104) (7,168)
Loss for the period / year (28,681) (3,023) (25,822)
Attributable to:
Equity holders of the parent (25,670) (3,846) (24,359)
Non-controlling interests (3,011) 823 (1,463)
Loss for the period/year (28,681) (3,023) (25,822)
Loss per share (attributable to equity holders of the parent)
Basic ($ cents) 6 (3.28) (0.73) (4.30)
Diluted ($ cents) 6 (3.28) (0.73) (4.30)
Consolidated Statement of Financial Position
As at 30 June 2024
Unaudited Unaudited Audited
30 30 31
June June December
2024 2023 2023
Notes $'000 $'000 $'000
Assets
Non-current assets
Intangible exploration and evaluation assets 123,379 131,262 120,555
Intangible assets software 319 103 393
Property, plant and equipment 331,699 242,088 306,300
Right of use assets 56,411 19,769 75,235
Investments in associates and joint ventures - 136 104
Financial assets at fair value through profit or loss 1,414 2,114 993
Trade and other receivables 27,968 - 28,155
Deferred tax assets 6,801 3,453 4,315
547,991 398,925 536,050
Current assets
Inventory 13,103 20,672 16,006
Trade and other receivables 40,444 61,210 30,789
Other financial assets - - 2,030
Unrestricted cash and cash equivalents 4,858 1,683 11,212
Restricted cash and cash equivalents 3,776 4,003 4,030
62,181 87,568 64,067
Total assets 610,172 486,493 600,117
Liabilities
Non-current liabilities
Borrowings 52,125 58,841 65,632
Lease liabilities 38,917 11,654 53,505
Deferred consideration 2,790 1,886 2,549
Financial liabilities at fair value through profit or loss 9,848 25,950 7,497
Deferred tax liabilities 975 - -
Provisions 37,538 27,750 36,779
142,193 126,081 165,962
Current liabilities
Trade and other payables 134,013 88,169 114,175
Lease liabilities 30,474 11,819 34,075
Other financial liabilities 22,799 15,000 19,866
Provisions 145 830 145
Borrowings 101,739 69,754 82,650
Bank overdraft 8,227 - 7,602
297,397 185,572 258,513
Total liabilities 439,590 311,653 424,475
Net assets 170,582 174,840 175,642
Equity
Share capital 7 10,861 8,287 8,840
Share premium 59,713 33,647 39,140
Retained earnings 34,483 94,619 59,399
Equity attributable to equity holders of the parent 105,057 136,553 107,379
Non-controlling interest 65,525 38,287 68,263
Total equity 170,582 174,840 175,642
Consolidated Statement of Cash Flows
For the six months ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Operating activities
(Loss) / profit before tax (29,563) 4,081 (18,654)
Adjustments for:
Amortisation and depreciation 11,931 16,965 29,598
Amortisation and depreciation - right of use assets 5,691 5,719 11,438
Share based payments 610 2,650 2,570
Finance income (3,780) (149) (690)
Finance expense 8,826 11,914 22,417
Share of joint venture profit - (2) 29
Profit on sale of joint venture (112) - -
(Reversals)/impairment of financial assets (53) 46 223
Losses/(gains) on financial assets and liabilities measured at fair value 7,137 (1,313) 3,433
Operating cash flows before movements in working capital 687 39,911 50,364
Decrease / (increase) in inventories 2,903 (4,923) (258)
Increase in receivables (9,469) (14,796) (7,734)
Increase in payables 15,763 14,647 46,157
9,884 34,839 88,529
Taxation paid (361) (736) (1,470)
Net cash generated from operating activities 9,523 34,103 87,059
Investing activities
Asset purchase, net of cash - - 130
Purchases of exploration and evaluation assets (2,823) (1,610) (4,230)
Purchases of property, plant and equipment (26,295) (39,856) (84,978)
Sale of investment 13 - -
Interest received 15 - 31
Net cash used in investing activities (29,090) (41,466) (89,047)
Financing activities
Net proceeds from issue of shares 22,757 17,066 22,454
Lease principal payments (12,554) (5,739) (15,082)
Lease interest payments (4,038) (1,094) (9,136)
Lease deposits - - (1,158)
Net proceeds from minority interests 286 - -
Loan interest paid (2,695) (6,279) (12,918)
Commissions and other fees paid (388) (2,188) (3,962)
Loans repaid (22,648) (809) (37,031)
Loan drawdown 31,345 9,682 64,412
Net cash generated from financing activities 12,065 10,639 7,579
Net (decrease)/increase in cash and cash equivalents (7,502) 3,276 5,591
Effect of foreign exchange rate changes 269 259 (102)
Cash and cash equivalents at beginning of period/year 7,640 2,151 2,151
Cash and cash equivalents at end of period/year 407 5,686 7,640
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2024
Share Share Retained Total equity attributable to the parent Non-controlling interest Total
capital premium earnings $'000 $'000 $'000
$'000 $'000 $'000
As at 1 January 2023 5,828 97,177 120,430 37,464 157,894
17,425
(Loss)/profit for the period - - (3,846) (3,846) 823 (3,023)
Total comprehensive (loss)/profit for the period - - (3,846) (3,846) 823 (3,023)
Transactions with owners in their capacity as owners:
Shares issued 2,459 16,222 - 18,681 - 18,681
Total transactions with owners in their capacity as owners 2,459 16,222 - 18,681 - 18,681
Share based payments - - 1,288 1,288 - 1,288
As at 30 June 2023 (Unaudited) 8,287 94,619 136,553 38,287 174,840
33,647
As at 1 January 2023 5,828 17,425 97,177 120,430 37,464 157,894
Loss for the year - - (24,359) (24,359) (1,463) (25,822)
Total comprehensive loss for the year - - (24,359) (24,359) (1,463) (25,822)
Transactions with owners in their capacity as owners:
Issue of shares 3,012 21,940 - 24,952 - 24,952
Issue of shares - fees - (225) - (225) - (225)
Movements in non-controlling interest - - (15,809) (15,809) 32,262 16,453
Share based payments - - 2,390 2,390 - 2,390
As at 31 December 2023 8,840 39,140 59,399 107,379 68,263 175,642
As at 1 January 2024 8,840 39,140 59,399 107,379 68,263 175,642
Comprehensive (loss)/income for the period:
Loss for the period - - (25,670) (25,670) (3,011) (28,681)
Total comprehensive loss for the period - - (25,670) (25,670) (3,011) (28,681)
Transactions with owners in their capacity as owners:
Shares issued 2,021 20,573 - 22,594 - 22,594
Movement in minority interest - - 13 13 273 286
Total transactions with owners in their capacity as owners 2,021 20,573 13 22,607 273 22,880
Share based payments - - 741 741 - 741
As at 30 June 2024 (Unaudited) 10,861 59,713 34,483 105,057 65,525 170,582
1. General information
Hummingbird Resources PLC is a public limited company with securities traded
on the AIM market of the London Stock Exchange. It is incorporated and
domiciled in the United Kingdom and has a registered office at 49-63 Spencer
Street, Hockley, Birmingham, West Midlands, B18 6DE.
The nature of the Group's operations and its principal activities are the
exploration, evaluation, development, and operating of mineral projects,
principally gold, focused currently in West Africa.
2. Adoption of new and revised standards
The interim financial statements have been drawn up based on accounting
policies consistent with those applied in the financial statements for the
year ended 31 December 2023. There were several accounting standards updates
effective 1 January 2024, which did not have any material impact on the
financial statements of the Group.
IFRS 16 effective 1 January 2024 Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 Leases
IAS 1 effective 1 January 2024 Classification of liabilities as Current or Non-Current and Non-current
Liabilities with Covenants - Amendments to IAS 1 Presentation of Financial
Statements
IAS 7 effective 1 January 2024 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures - Supplier Finance Arrangements
3. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards. The principal accounting policies adopted
are set out below. The functional currency of all companies in the Group is
United States Dollar ("$"). The financial statements are presented in
thousands of United States dollars ("$'000").
The consolidated interim financial information for the period 1 January 2024
to 30 June 2024 is unaudited, does not include all the information required
for full financial statements and should be read in conjunction with the
Group's consolidated financial statements for the year ended 31 December
2023. In the opinion of the Directors the consolidated interim financial
information for the period represents fairly the financial position, results
from operation and cash flows for the period in conformity with generally
accepted accounting principles consistently applied. The consolidated interim
financial information incorporates comparative figures for the interim period
1 January 2023 to 30 June 2023 and the audited financial year to 31 December
2023. As permitted, the Group has chosen not to adopt IAS34 'Interim
Financial Reporting'.
The annual financial statements of Hummingbird Resources plc are prepared in
accordance with UK adopted International Accounting Standards. The Group's
consolidated annual financial statements for the year ended 31 December 2023,
have been filed with the Registrar of Companies and are available on the
Company's website www.hummingbirdresources.co.uk. The auditor's report on
those financial statements though unqualified contained a material uncertainty
paragraph in respect of risks surrounding the going concern assumption of the
Company at that date.
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowings are set out in the Consolidated Statement of Financial Position and
Consolidated Statements of Cash Flows above. At 30 June 2024, the Group had
net cash and cash equivalents of $0.4 million, net debt of $153.5 million, and
total borrowings of $153.9 million.
The Group has prepared cash flow forecasts based on estimates of key variables
including production, gold price, operating costs, scheduled debt repayments
in line with the Group's debt arrangements and capital expenditure through to
December 2025. These cash flows showed that due to delays in meeting
commercial production at Kouroussa, plus the temporary stoppage by the mining
contractor on 17 March 2024, and the impact this had on accessing the
high-grade ore, the Group will need to reschedule its debt repayment and/or
will require additional funding to meet its financial obligations over that
period.
To mitigate the impact of the stoppage and delays in meeting commercial
production, the Group's majority shareholder, Nioko Resources provided the
Group with a short-term loan of $10 million. Further, the Group's majority
lender, Coris Bank International ("Coris") has provided a $25 million
refinancing package, with further discussions ongoing surrounding the
mitigation of the financial impacts of the suspension in operation. These
discussions include reviews on current debt repayments profile together with
options for further funding.
Management have therefore presented cashflows that supports the conclusion of
the Directors that, subject to those discussions with Coris concluding
positively on the loan repayment profile and the continued support of the
majority shareholder, Nioko Resources, there is sufficient funding available
to meet the Group's anticipated cash flow requirements to 31 December 2025.
These cashflow forecasts are subject to a number of risks and uncertainties,
in particular the estimated time it will take the mining contractor to access
high grade ore at Kouroussa, the ability of the Group to achieve the planned
levels of production and the recent higher gold prices being sustained. The
Committee reviewed and challenged the key assumptions used by management in
its going concern assessment, as well as the scenarios applied and risks
considered, including the risks around production at Kouroussa.
The biggest material uncertainties and risks remains conclusion of the
discussions with Coris, the ramp up at Kouroussa, ounces produced and whether
the current mine plans can be achieved and mining contractor equipment
performances at both Yanfolila and Kouroussa. Where additional funding may be
required, the Group believes it has several options available to it, including
but not limited to, use of the overdraft facility, cost reduction strategies,
selling of non-core assets and raising additional funds.
The Board also considered sensitivities to those cash flow scenarios
(including where production is lower than forecast and gold prices lower than
current levels) which would require additional funding. Should this situation
arise, the Committee believe that they have several options available to them,
as referenced above, which would allow the Group to meet its cash flow
requirements through this period, however, there remains a risk that the Group
may not be able to achieve these in the necessary timeframe.
Based on its review and subject to successful negotiations with Coris, the
Board has a reasonable expectation that the Group has adequate resources to
continue operating for the foreseeable future and hence the Board considers
that the application of the going concern basis for the preparation of the
Financial Statements is appropriate. However, the risk of unsuccessful
discussions with Coris, further delays in ramp up at Kouroussa,
lower-than-expected production levels, timing of VAT offsets and receipts, and
the ability to secure any potential required funding at date of signing of
these financial statements, indicates the existence of a material uncertainty
which may cast significant doubt on the Group's ability to continue as a going
concern.
Should the Group be unable to achieve the required levels of production and
associated cashflows, defer expenditures, and obtain additional funding and/or
renegotiate the current financing arrangements, such that the going concern
basis of preparation was no longer appropriate, adjustment would be required
including the reduction of balance sheet asset values to their recoverable
amounts and to provide for future liabilities should they arise.
4. EBITDA and adjusted EBITDA
Earnings before interest, taxes, depreciation and amortisation ("EBITDA") is a
factor of volumes, prices and cost of production. This is a measure of the
underlying profitability of the Group, widely used in the mining sector.
Adjusted EBITDA removes the effect of impairment charges, foreign currency
translation gains/losses and other non-recurring expense adjustments but
including IFRS 16 lease payments.
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Unaudited Unaudited Audited year ended 31 December
six months ended 30 six months 2023
June 2024 ended 30
June 2023
$'000 $'000 $'000
(Loss)/profit before tax (29,563) 4,081 (18,654)
Less: Finance income (3,779) (149) (690)
Add: Finance costs 8,826 11,914 22,417
Add: Depreciation and amortisation 17,623 22,683 41,035
EBITDA (6,893) 38,529 44,108
IFRS 16 lease interest and principal payments (9,623) (6,833) (13,742)
Share based payments 610 2,650 2,570
Share of joint venture gain - (2) 29
Profit on sale of joint venture (112) - -
(Reversal) / impairment of financial assets (53) 46 223
Losses / (gains) on financial assets and liabilities measured at fair value 7,137 (1,313) 3,433
Adjusted EBITDA (8,934) 33,077 36,621
5. Tax
The tax (income)/charge for the period/year is summarised as follows:
Audited year ended 31 December 2023
Unaudited six months ended 30 June 2024 Unaudited six months ended 30 June 2023 $'000
$'000 $'000
Minimum tax pursuant to Malian law 630 986 1,912
Deferred tax (income)/expense (1,512) 6,118 5,256
Tax (income)/expense for the period / year (882) 7,104 7,168
The taxation (income)/charge for the period/year can be reconciled to the loss
per the statement of comprehensive income as follows:
Audited year ended 31 December 2022
Unaudited six months ended 30 June 2024 Unaudited six months ended 30 June 2023 $'000
$'000 $'000
(Loss)/profit before tax for the period / year (29,563) 4,081 (18,654)
Tax (income)/expense at the rate of tax 30.00% (8,869) 1,224 (5,596)
Tax effect of non-deductible items - - 52
Origination and reversal of temporary differences 3,296 5,058 11,260
Deferred tax asset not recognised/(recognised) 5,573 (6,282) (5,716)
Recognised net deferred tax assets (1,512) 6,118 5,256
Minimum tax pursuant to Malian and Guinean law 630 986 1,912
Tax (income)/expense for the period / year (882) 7,104 7,168
The Group's primary tax rate is 30%. The taxation of the Group's operations in
Mali are aligned to the Mining Code of Mali 1999 under which tax is charged at
an amount not less than 1% of turnover and not more than 30% of taxable
profits. For the Guinean operations the taxation is aligned to local statutes
under which tax is charged at an amount of the greater 2% of turnover and 30%
of taxable profits.
6. Loss per ordinary share
Basic loss per ordinary share is calculated by dividing the net loss for the
period/year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the period/year.
The calculation of the basic and diluted loss per share is based on the
following data:
Audited year ended 31 December 2023
Unaudited six months ended 30 June 2024 Unaudited six months ended 30 June 2023 $'000
$'000 $'000
Loss
Loss for the purposes of basic loss per share being loss attributable to (3,846) (24,359)
equity holders of the parent
(25,670)
Number of shares
30 June 2024 30 June 2023 31 December 2023
Number Number Number
Weighted average number of ordinary shares for the purposes of basic loss per 783,988,352 529,047,722 566,893,814
share
Adjustments for share options and warrants 5,710,613 24,444,473 1,967,146
Weighted average number of ordinary shares for the purposes of diluted loss 789,698,965 553,492,195 568,860,960
per share
Loss per ordinary share 30 June 30 June 31 December 2023
2024 2023 $ cents
$ cents $ cents
Basic (3.28) (0.73) (4.30)
Diluted (3.28) (0.73) (4.30)
For the period ended 30 June 2024, because there is a reduction in diluted
loss per share due to the loss-making position, therefore there is no
difference between basic and diluted loss per share.
7. Share capital
Authorised share capital
As permitted by the Companies Act 2006, the Company does not have an
authorised share capital.
Audited year ended 31 December 2023
Unaudited six months ended 30 June 2024 Unaudited six months ended 30 June 2023 Number
Number Number
Issued and fully paid 799,374,658
Ordinary shares of £0.01 each 601,918,700 640,495,505
Total Ordinary shares after issue - shares of £0.01 each 799,374,658 601,918,700 640,495,505
31 December 2023
Issued and fully paid $'000
30 June 2024 30 June 2023
$'000 $'000
Issued and fully paid
Ordinary shares of £0.01 each 10,861 8,287 8,840
Ordinary shares after issue of £0.01 each 10,861 8,287 8,840
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