REG - Hummingbird Res. - Interim Results

Hummingbird ResourcesAnnouncement

24/09/2018 07:05

RNS Number : 6338B
Hummingbird Resources PLC
24 September 2018
 


Hummingbird Resources Plc / Ticker: HUM / Index: AIM / Sector: Mining
 
Hummingbird Resources Plc ("Hummingbird" or the "Company" or the "Group")
Interim Results
 
Hummingbird Resources Plc, announces its unaudited financial results for the six months ended 30 June 2018 ("the Period"). The Yanfolila Gold Mine ('Yanfolila'), Hummingbird's principal asset, performed solidly and in line with guidance in its first full 6 months of production pouring 51,304 ounces of gold with the Group ending the Period with US$46.2 million cash.
 
OPERATIONAL AND FINANCIAL HIGHLIGHTS
 
·     Successful on schedule transition from construction, through ramp up, to full scale operations at Yanfolila with mine and plant operating at name plate capacity by end Q1 with commercial production declared from 1 April 2018
·     51,304 ounces of gold poured at an average mill feed grade of 3.22 g/t
·     50,667 ounces of gold sold at an average price of US$1,312/oz
·     577kt of ore mined and plant recovery of 95.64%
·     US$66.6m of revenue in period with total all in sustaining costs ('AISC') of US$884/oz (includes cost from Q1 while in ramp-up to commercial production), with Q2 AISC on gold sold US$790/oz(1).
·     EBITDA(2) of US$21.9m for the Period
·     Pre-tax profit US$3.5m for the Period
 
POST PERIOD HIGHLIGHTS
 
·     Exploration drilling campaign targeting conversion of Resources to Reserves commenced at the beginning of Q3 with encouraging initial results from the Komana West and Guirin West Deposits:
Komana West
o  11.45m @ 8.69g/t from 69m depth (KWDD0604A)
o  25.75m @ 2.95g/t from 117m depth (KWDD0603)
o  8.05m @ 4.98 g/t from 72.4m depth (KWDD0603)
o  8.1m @ 5.52 g/t from 84.9m depth (KWDD0603)
Guirin West
o  16m @ 3.11g/t from 38m depth (GRWRC1109)
o  4m @ 8.12g/t from 13m depth (GRWRC1106)
o  9m @ 2.06g/t from 27m depth (GRWRC1104)
o  13m @ 1.91 g/t from 16m depth (GRWRC1116)
·     Approved construction of a second ball mill at Yanfolila Gold Mine which is due to be operational in Q3 2019 for a capex of US$13m. When complete, the ball mill is expected to:
o  When operating with 100% fresh ore, throughput capacity will increase from 1Mtpa to 1.24Mtpa
 
OUTLOOK
·     The Company maintains full year (2018) production guidance of 105,000 - 115,000 ounces gold (including Q1 ramp-up)
·     Q3 is expected to have lower production than Q2 due to it being the 'wet season' in Mali. 
 
1)   Total mine all in cash costs plus sustaining capital cost divided by oz of gold sold
2)   Earnings before interest (including foreign exchange), tax, depreciation and amortisation
 
Dan Betts, CEO of Hummingbird, commented: 
"Hummingbird's H1 interim results show a period of mature progression for the Group from developer to producer with Yanfolila delivering solid results on forecast with high grades and strong recoveries coming through the plant. Financially the Group is in a good position with strong earnings and on a corporate level our board has adapted successfully whilst attracting skills and talent appropriate for our operating status. We are coming to the end of our first full rainy season as an operator in Mali and the team have experienced one of the heaviest rains seen in the region for a decade.  This has presented new challenges which the team has worked tirelessly to overcome. Despite lower production figures anticipated in the current quarter I am happy that we remain on schedule to meet our annual production guidance. I am also pleased to report that the 2018 exploration programme is in full throttle with encouraging results coming in from the drill programme.
 
Once again we can report our continued safety record at site.  This is an integral focus for the Company as we look to not only operate a highly profitable mine but a safe one where all staff and contractors are working to best practice. Around the mine we remain committed to our local engagement initiatives and to implementing a collaborative and responsible approach to community relations with the Period seeing investment in community water supply, training, several new livelihoods projects and the completion of a new community health centre. We also raised around £75,000 from the sale of the first collection of SMO gold coins originating from Yanfolila, and other items donated to the charity auction, with the funds raised being donated The Pygmy Hippo Foundation and Tusk."
 
The interim results have also been made available on the Company's website.
 
Operating Review
 
Yanfolila delivered a solid H1 production figure of 51,304 ounces of gold poured and the processing plant performing strongly. The mine is on track to achieve its 2018 production target of 105,000 - 115,000 ounces.  A total of 50,667 ounces of gold was sold at an average price of US$1,312/oz.
 
During the period, the plant met the design criteria and capacity.  The design feed rate to the plant was achieved and sustained with excellent gold recoveries from the CIL circuit, with recoveries exceeding the design figure of 93%, consistently at over 95%. The Company has hired and trained plant operators from local villages, which is in line with one of its objectives to provide local employment. The success of this can be seen in the consistently strong performance of the plant and we will continue to ensure that community development is prioritised.
 
Focus and emphasis was placed on shovel optimisation and increased utilisation over the entire suite of equipment in order to build an optimal ore stockpile. This has allowed a greater blending capability for the processing plant in terms of the type of material and grade delivered.
 
Hummingbird's safety record continued to improve with the Group having achieved 500,000 LTI free hours in the period.
 
Exploration Review
The 2018 exploration strategy aims to bring as much of the approximately 1.5Moz of Resources, not currently in Reserves, into the Life of Mine plan.  The focus is on prioritising those areas that have the greatest impact to the mine life, as well as discovering extensional Resources within the licence area to ensure a healthy pipeline of ore Reserves. 
 
Initial results from the Group's exploration programme were encouraging with the first batch of results showing significant numbers of positive drill intersections defining in places new zones of mineralisation not currently defined as Resources and not in the current mine plan.
 
At Komana West, based on the revised model, a number of mineable widths are coming through on drill intersections outside of the current pit design and extending zones within the current pit design deeper. Once drilling has confirmed the geometry of the new zones, modelling will be carried out to confirm the tonnes and grade of these zones and the pit optimisation re-run before they can be added into the mine plan.
 
At Guirin West ('GW'), drilling has been strictly to infill and de-risk the+70koz Resources already delineated.  The drilling has confirmed the existence of shallow oxide mineralisation suitable for extraction by open pit mining. No Reserves or Resources from GW are currently in the current mine plan and any Reserves delineated will be available for immediate mining in the short term due to the shallow nature of the mineralisation, the close proximity to the processing plant and current haul road infrastructure.
 
Community
 
The Group has carried out significant community work throughout the period including the construction of a new community health centre in Bougoudale village, which comprised of construction of the main building, a pharmacy, maternity unit, borehole, water supply system and accommodation. The Group's existing water supply initiatives have continued, with new boreholes equipped with pumps and solar panels constructed in four villages and distribution networks installed to communal taps. The estimated total number of beneficiaries of these projects amounts to over 5,000 people across four villages. A major focus for the period has been the implementation of several new livelihood development projects including two irrigated market gardens targeting 200 women, as well as four poultry projects. We look forward to seeing positive economic returns from these projects in the coming months. Vocational training for 25 youths in welding was undertaken for 3 months in partnership with local NGO Nege Blon. This training included a one month work placement at companies working in Mali.  Initiatives such as these have seen Hummingbird be successfully aligned with the local communities.
 
 
 
 
Consolidated Income Statement

For the six months ended 30 June 2018

 




 


 


 


 


 




 


 
 
 


Unaudited
six months
 ended 30
June


Unaudited
six months
 ended 30
June


Audited
year ended 31 December




 


 


2018


2017


2017




 


Note


$'000


$'000


$'000




Continuing operations


 


 


 


 




Revenue


 


66,614


-


-




Cost of sales


 


(55,523)


-


-




 


 


                    


                    


                    




Gross Profit


 


11,090


-


-




 


 


 


 


 




Administrative expenses


 


(4,659)


(3,713)


(6,775)




 


 


                    


                    


                    




Operating Profit / (Loss)


 


6,431


(3,713)


(6,775)




 


 


 


 


 




Finance income


 


2,106


1,556


6,514




Finance expense


 


(4,869)


(457)


(6,877)




Share of loss of associate


 


(142)


-


(117)




Profit on disposal of subsidiaries


 


-


-


1,919




 


 


                    


                    


                    




Profit / (Loss) before tax


 


3,526


(2,614)


(5,336)




Tax


 


(915)


-


-




 


 


                    


                    


                    




Profit /(Loss) for the period/year


 


2,611


(2,614)


(5,336)




Non-controlling interest


 


(963)


-


-




 


 


                    


                    


                    




Profit /(Loss) for the period/year attributable to equity holders of the parent


 


1,648


(2,614)


(5,336)




 


 


                    


                    


                    




 


 


 


 


 




Profit / (Loss) per ordinary share


 


 


 


 




Basic (US$ cents)


3


0.48


(0.76)


(1.55)




Diluted (US$ cents)


3


0.44


(0.76)


(1.55)




 


 


                    


                    


                    




 
There was no other comprehensive income in the current or prior periods.
 
Consolidated Balance Sheet

As at 30 June 2018

 




 


 


Unaudited
30
June


Unaudited
30
June


Audited
31  December




 


 


2018


2017


2017




 


Note


$'000


$'000


$'000




Assets


 


 


 


 




Non-current assets


 


 


 


 




Intangible exploration and evaluation assets


 


63,971


60,989


63,249




Intangible assets software


 


174


171


163




Property, plant and equipment


 


136,176


75,036


129,954




Investments in associate


 


3,668


2,711


3,704




 


 


                    


                    


                    




 


 


203,989


138,907


197,070




 


 


                    


                    


                    




Current assets


 


 


 


 




Inventories


 


8,219


-


1,392




Trade and other receivables


 


13,531


24,796


15,135




Unrestricted cash and cash equivalents


 


41,918


71,006


36,210




Restricted cash and cash equivalents


 


4,302


-


4,410




 


 


                    


                    


                    




 


 


67,970


95,802


57,147




 


 


                    


                    


                    




Total assets


 


271,959


234,709


254,217




 


 


                    


                    


                    




Liabilities


 


 


 


 




Current liabilities


 


 


 


 




Trade and other payables


 


(33,084)


(11,786)


(28,422)




Other financial liabilities


 


(15,974)


(15,967)


(16,368)




Borrowings


 


(18,945)


(1,309)


(11,246)




 


 


                    


                    


                    




Total current liabilities


 


(68,003)


(29,062)


(56,036)




 


 


                    


                    


                    




Non-current liabilities


 


 


 


 




Borrowings


 


(43,265)


(58,361)


(53,404)




Provisions


 


(12,756)


-


-




 


 


                  


                    


                    




Total liabilities


 


(124,024)


(87,423)


(109,440)




 


 


                    


                    


                    




 


 


                    


                    


                    




Net assets


 


147,935


147,286


144,777




 


 


                    


                    


                    




Consolidated Balance Sheet (continued)

As at 30 June 2017

 




 
Equity


 


 


 


 




Share capital


 


5,260


5,156


5,176




Share premium


 


150,846


148,516


148,930




Other Reserves


 


-


2,000


2,000




Retained earnings


 


(13,305)


(19,235)


(15,500)




 


 


                    


                    


                    




Equity attributable to equity holders of the parent


 


142,801


136,437


140,606




 


 


                    


                    


                    




Non-controlling interest


 


5,134


10,849


4,171




 


 


                    


                    


                    




Total equity


 


147,935


147,286


144,777




 


 


                    


                    


                    




 


 


                    


                    


                    




 
Consolidated Statement of Cash Flows

For the six months ended 30 June 2018

 




 


 


Unaudited six months ended 30 June


Unaudited six months ended
30 June


Audited
year ended 31   December




 


 


2018


2017


2017




 


 


$'000


$'000


$'000




Operating activities


 


 


 


 




Profit / (Loss) before tax


 


3,526


(2,614)


(5,336)




Adjustments for:


 


 


 


 




Finance income


 


(2,106)


(1,556)


(6,514)




Finance expense


 


4,869


457


6,877




Depreciation of property, plant and equipment


 


14,713


6


10




Share of associate loss


 


(142)


-


117




Profit on disposal of subsidiaries


 


150


-


(1,919)




Share based payments


 


420


210


424




 


 


                    


                    


                    




Operating cash flows before movements in working capital


 


21,430


(3,497)


(6,341)




Increase in inventories


 


(3,327)


-


(1,392)




Decrease (increase)in receivables


 


1,365


(974)


5,294




Increase / (decrease) in payables


 


15,289


(565)


1,790




 


 


                    


                    


                    




Net cash inflow / (outflow) from operating activities


 


34,757


(5,036)


(649)




 


 


                    


                    


                    




Investing activities


 


 


 


 




Purchases of intangible exploration and evaluation assets


 


(720)


(350)


(1,233)




Purchases of intangible software assets


 


(25)


(176)


(185)




Purchases of Property, Plant and Equipment


 


(22,430)


(21,855)


(56,368)




Purchases of shares in associates


 


-


(242)


(741)




Purchase of shares in other companies


 


(105)


-


-




Interest received


 


102


196


320




 


 


                    


                    


                    




Net cash used in investing activities


 


(23,178)


(22,427)


(58,207)




 


 


                    


                    


                    




Financing activities


 


 


 


 




Exercise of warrants


 


-


-


434




Loan interest paid


 


(3,650)


(934)


(3,955)




Loans repaid


 


(1,341)


(15,000)


(15,000)




Financial liabilities issued net of issue costs


 


-


59,257


57,980




 


 


                    


                    


                    




Net cash (used in) / from financing activities


 


(4,991)


43,323


39,459




 


 


                    


                    


                    




Net Increase / (decrease) in cash and cash equivalents


 


6,588


15,860


(19,397)




Effect of foreign exchange rate changes


 


(988)


1,307


6,178




Cash and cash equivalents at beginning of period/year


 


40,620


53,839


53,839




 


 


                    


                    


                    




Cash and cash equivalents at end of period/year


 


46,220


71,006


40,620




 


 


                    


                    


                    




 
 
Consolidated Statement of Changes in Equity

For the six months ended 30 June 2018

 




 


 
Share
capital
$'000


 
Share
premium
$'000


 
Shares to be issued
$'000


Retained
earnings
$'000


Total equity attributable to the parent
$'000


Non-controlling
interest
$'000


Total equity
$'000




For the six months ended 30 June 2017


 


 


 


 


 


 


 




As at 1 January 2017


5,156


148,516


-


(17,262)


136,410


-


136,410




Shares to be issued in parent company


-


-


2,000


-


2,000


-


2,000




Shares to be issued in subsidiary


-


-


-


-


-


10,849


10,849




Share based payments


-


-


-


641


641


-


641




Total comprehensive loss for the year


-


-


-


(2,614)


(2,614)


-


(2,614)




 


                  


                  


                  


                    


                   


                  


                   




As at 30 June 2017


5,156


148,516


2,000


(19,235)


136,437


10,849


147,286




 


                  


                  


                  


                    


                    


                  


                    




 


 


 


 


 


 


 


 




For the year ended 31 December 2017


 


 


 


 


 


 


 




As at 1 January 2017


5,156


148,516


-


(17,262)


136,410


-


136,410




Acquisition of minority interest


-


-


2,000


(1,000)


1,000


-


1,000




Disposal of minority interest


-


-


-


6,678


6,678


4,171


10,849




Exercise of warrants


20


414


-


-


434


-


434




Share based payments


-


-


-


1,420


1,420


-


1,420




Total comprehensive loss for the year


-


-


-


(5,336)


(5,336)


-


(5,336)




 


                  


                  


                  


                    


                   


                  


                   




As at 31 December 2017


5,176


148,930


2,000


(15,500)


140,606


4,171


144,777




 


                  


                  


                  


                    


                    


                  


                    




 


 


 


 


 


 


 


 




For the six months ended 30 June 2018


 


 


 


 


 


 


 




As at 1 January 2018


5,176


148,930


2,000


(15,500)


140,606


4,171


144,777




Total comprehensive Profit for the period


-


-


-


1,648


1,648


963


2,611




Owners acquisition of minority interest


84


1,916


(2,000)


-


-


-


-




Share based payments


-


-


-


547


547


-


547




 


                  


                  


                  


                    


                   


                  


                   




As at 30 June 2018


5,260


150,846


-


(13,305)


142,801


5,134


147,935




 


                  


                  


                  


                    


                    


                  


                    




 
Notes to the interim results

For the six months ended 30 June 2018

 
1          General information
Hummingbird Resources plc (the 'Company'), was incorporated in England and Wales under the Companies Act. The address of the registered office is 49-63 Spencer Street, Hockley, Birmingham, West Midlands, B18 6DE.
 
The nature of the Group's operations and its principal activities is the exploration, evaluation, development and production of mineral projects.
 
2          Basis of preparation
The consolidated interim financial information has been prepared using policies based on International Financial Reporting Standards issued by the International Accounting Standards Board ("IASB") as adopted by the European Union, which are expected to be applied in the Group's financial statements for the period ended 31 December 2018.
 
The consolidated interim financial information for the period 1 January 2018 to 30 June 2018 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 2017.  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 2017 to 30 June 2017 and the audited financial year to 31 December 2017.  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 International Financial Reporting Standards ('IFRSs') as issued by the International Accounting Standards Board ('IASB') and as adopted by the European Union.  The Group's consolidated annual financial statements for the year ended 31 December 2017, 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 was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
 
3          Profit / Loss per ordinary share
Basic Profit or loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period/year.
 
The calculation of the basic and diluted profit per share is based on the following data:
 




 


Unaudited
six months
 ended 30
June
2018
$'000


Unaudited
six months
 ended 30
June
2017
$'000


Audited
year ended 31  December
2017
$'000




Profits / (Losses)
Profit or Loss for the purposes of basic loss per share being net profit or loss attributable to equity holders of the parent


 
 
 
1,648


 
 
 
(2,614)


 
 
 
(5,336)




 


                    


                    


                    




 
Number of shares


 
Number


 
Number


 
Number




Weighted average number of ordinary shares for the purposes of basic loss per share


346,841,464


343,241,250


343,566,800




 


                    


                    


                    




 


 
US$ cents


 
US$ cents


 
US$ cents




Profit / (Loss) per ordinary share


 


 


 




Basic (US$ cents)


0.48


(0.76)


(1,55)




Diluted (US$ cents)


0.44


(0.76)


(1,55)




 


                    


                    


                    




 
4          Share capital
4.1         Issued equity share capital




 


 


 




 


 


Unaudited
30 June
2018
Number


Unaudited
30 June
2017
Number


Audited
31 Dec
2017
Number




Issued and fully paid


 


 


 


 




Ordinary shares of £0.01 each


 


350,938,603


343,241,250


344,741,250




 


 


                    


                    


                    




 


Unaudited
30 June
2018
$'000


Unaudited
30 June
2017
$'000


Audited
31 Dec
2017
$'000




Issued and fully paid
Ordinary shares of £0.01 each


 
5,260


 
5,156


 
5,176




 


                    


                    


                    




                                                                                                                                   
 
 




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