REG - Hummingbird Res. - Operational and Financial Position Update

Hummingbird ResourcesAnnouncement

23/12/2024 07:00

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RNS Number : 0895R  Hummingbird Resources PLC  23 December 2024

 

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

 

23 December 2024

Hummingbird Resources plc

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

Operational and Financial Position Update

Hummingbird Resources plc (AIM: HUM) provides an update regarding its
operations and financial position.

Kouroussa Gold Mine ("Kouroussa")

Since the announcement on 25 November 2024 that Kouroussa had achieved
commercial production, the operation has continued to struggle to achieve
production forecasts.

The table below summarises the key performance metrics that were forecast for
December at Kouroussa compared to what is estimated will be achieved given the
current operating performance:

                  Unit           Forecast (1))  Current Estimate  % Variance
                  December 2024                 December 2024
 Total BCM Mined  BCM            950,910        583,695           (39%)
 Mill Uptime      %              93%            76.20%            (18%)
 Mill Tonnes      t              76,209         96,896            27%
 Mill Feed Grade  g/t            4.31           1.92              (56%)
 Recovery         %              95%            94.8%             0%
 Gold Poured      oz             10,049         5,662             (44%)

(1)) Monthly forecast underpinning the production guidance provided in Q3-2024
Operational and Trading Update on 6 November 2024

As a result of the underperformance Kouroussa will generate c.$11.2 million
less revenue than planned on gold sold in December. As a result, the mine is
not at the stage to generate enough cash to fund the much-needed capex to
complete the finalisation of the mine build as was envisaged in the original
design, procure critical spares and make necessary sustaining capital
investments.

Yanfolila Gold Mine ("Yanfolila")

Yanfolila continued to generate losses in December. The table below summarises
the key performance metrics that were planned for December at Yanfolila
compared to what is estimated will be achieved given the current operating
performance:

                  Unit           Forecast (1))  Current Estimate  % Variance
                  December 2024                 December 2024
 Total BCM Mined  BCM            441,750        128,824           (71%)
 Mill Uptime      %              96.2%          95.5%             (1%)
 Mill Tonnes      T              122,952        120,233           (2%)
 Mill Feed Grade  g/t            1.66           0.88              (47%)
 Recovery         %              92%            92.4%             0%
 Gold Poured      oz             6,021          3,149             (48%)

(1)) Monthly forecast underpinning the production guidance provided in Q3-2024
Operational and Trading Update on 6 November 2024

 

Yanfolila will struggle to break even for the foreseeable future, even before
taking into consideration the substantial investment required to replace its
end of life mining fleet, conducting drilling essential to extending mine life
and addressing overdue creditor payments, which in many cases are
significantly more than 90 days overdue. The Company and its Malian
subsidiary, Société des Mines De Komana SA ("SMK"), have been engaged in
constructive discussions with the Government of Mali Commission to address
outstanding audit findings and clarify the application of the 2023 Mining Code
to the Yanfolila Gold Mine. The Company expects to finalise an agreement with
the Government of Mali shortly, thereby crystallising additional near-term
payment obligations.

Reduced Production Guidance

In light of these ongoing challenges, the Company will not achieve the bottom
end of most recently updated production guidance of 100,000 oz - 115,000 oz at
an AISC of $2,100 per ounce that was announced in the Q3-2024 Operational and
Trading Update on 6 November 2024. The Company now estimates it will produce
95,000 - 100,000 oz for the 2024 year, at an AISC of c.$2,200/oz as compared
to the original guidance provided at the start of the year of 165,000 -
200,000 oz.

Financial Position Update

As a result of the operating performance noted above, and as communicated to
the market over the last number of weeks, the Company is in severe financial
distress and, despite the provision of approximately $30m of overdue debt
repayment waivers by Coris Bank, Hummingbird will be unable to continue
trading as a going concern without further external funding being provided,
with such further funding if provided by CIG SA being contingent on
shareholders voting in favour of the proposed resolutions at the General
Meeting to take place at 10:00 GMT on Monday 23 December 2024.

 

                             Unit  Q2 2024       Q3 2024       30 November 2024 (Unaudited)

                                   (Unaudited)   (Unaudited)
 Bank and CIG Debt           US$m  153.9         154.6         160.5
 Cash Position               US$m  0.4           (3.9)         1.8
 Trade and Other Payables    US$m  134.0         152.0         155.8
 Gold Inventory Value        US$m  3.4           4.3           3.9
 Net Bank debt and Payables  US$m  (284.1)       (306.2)       (310.6)
 Quarterly Gold Production   Oz    19,854        26,376        20,259 (2))

(2)) As at 30 November 2024, for the full quarter production is now forecast
to be 29,070 oz.

Since November, the Group's financial position has continued to decline, and
without additional inflows, the Company is expected to breach its liquidity
headroom by year-end. As a result, of the current challenges, Hummingbird
estimates that it requires very material additional financing to address
significant operational issues across both mines, alleviate material creditor
obligations, improve operational performance and maintain business continuity.

Without the Resolutions being passed at the upcoming General Meeting, and
immediate substantial financial support being received thereafter, the Board
will likely be forced to place the Company into administration or pursue
alternative insolvency processes. In such circumstances, shareholders are
unlikely to receive any meaningful return on their investment, and secured
creditors may exercise their security rights over the Company's assets.

Geoff Eyre, Interim CEO of Hummingbird Resources, commented:

"Recent independent assessments have highlighted significant operational
challenges at both the Kouroussa and Yanfolila sites, which continue to
perform very poorly. Kouroussa requires fundamental improvements in mining,
processing and site infrastructure which will take a significant amount of
time and money to deliver. Yanfolila's future viability depends on substantial
exploration investment and successful extension of its mine life.

The Company faces immediate financial pressures that require urgent
recapitalisation. Whilst the Board has explored multiple options, the
transaction presented to shareholders represents the only viable path forward.
 If not for the forbearance of lenders and other creditors, the Company would
have run out of financial runway many months ago.

The Board recommend that all shareholders vote in favour of the resolutions at
the forthcoming shareholder meeting to provide the Company with the
opportunity to repay creditors in full in due course and provide some value
return to shareholders."

**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. Furthermore, 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:

 

 

 Geoff Eyre, Interim 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

 George Pope

 

 

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