REG - Hummingbird Res. - Q1 2022 Operational and Trading Update

Hummingbird ResourcesAnnouncement

25/04/2022 07:00

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RNS Number : 1314J  Hummingbird Resources PLC  25 April 2022

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

25 April 2022

Hummingbird Resources plc

("Hummingbird" or the "Company")

Q1 2022 Operational and Trading Update

Hummingbird Resources plc (AIM: HUM) provides an operational update for the
first quarter of 2022 ("Q1 2022").

An interview with COO Anthony Köcken discussing the operational and trading
update can be viewed here
(https://www.voxmarkets.co.uk/articles/anthony-k-cken-of-hummingbird-resources-discusses-progress-at-yanfolila-kouroussa-b5a3c88)
.

Q1 2022 updates:

·      Quarter production: As forecast at the start of that year, Q1
2022 production was a lower production quarter at 15,548 ounces ("oz") of gold
(Q4 2021: 18,181oz), driven primarily by the planned essential maintenance
work on the processing plant, and the gradual improvement in mining rates as
extra excavators were added during the later end of the quarter, in
particular. With additional excavators now operating on site, daily mining
volume rates have continued to increase.

·      All-in Sustaining Cost ("AISC"): Increased AISC of US$2,235 per
oz for Q1 2022 (Q4 2021: US$1,803 per oz) primarily due to the lower
quarterly production, with a lower AISC profile forecast for the remainder of
the year, in line with forecast production improvements as detailed above

·      Gold sold: 15,179 oz of gold sold in Q1 2022 at an average
realised price of US$1,837 per oz (Q4 2021: 18,489 oz at an average
realised price of US$1,782). The Company held 2,557 oz of gold inventory
at 31 March 2022, valued at ~US$5.0 million

·      Kouroussa, Guinea: As previously announced, official
construction began at Kouroussa in January and is rapidly advancing, with
civil works now underway. The project remains on schedule for first gold pour
by the end of Q2 2023

Outlook:

·      Guidance: The Company maintains its 2022 guidance of 87,000 -
97,000 oz of gold, with an AISC of US$1,300 - US$1,450 per oz of gold with
forecast improving trends in production and AISC as detailed above

·      Company reserve update: An updated Company Resources and Reserve
statement, to include the 2021 drilling campaigns at Yanfolila and Kouroussa,
remains on schedule to be released later in Q2 2022

·      Dugbe, Liberia:  Earn-in partner, Pasofino Gold Ltd
("Pasofino"), remains on track to release details of the Definitive
Feasibility Study ("DFS") on the Dugbe gold mine in Liberia in Q2 2022. Once
finalised this will be a significant milestone for the project and will
complete its journey from being a pure exploration asset to a proven project
with economic fundamentals of strategic value to Hummingbird

Dan Betts, CEO of Hummingbird, commented:

"Significant work has been completed in Q1 to deliver more consistent and
elevated future production at Yanfolila, including integrating additional
excavators on site to improve mining volume rates, something that we are
already starting to see. As guided at the start of the year, Q1 production was
lower, with improvements expected from here.

Alongside the work at Yanfolila, we continue to make strong progress at
Kouroussa, with construction officially starting in the new year and rapidly
advancing, with major civil works now underway. At Dugbe, the DFS is being
finalised via our earn-in partner Pasofino, with details expected to be
released soon.

We continued to receive the final results from our 2021 group-wide drilling
campaign during the quarter for both Yanfolila and particularly Kouroussa
where we have continued to intersect many significant intercepts. These
results are now being incorporated into our updated Company Resources and
Reserves statement, which is expected to be released later this quarter.

As a Company, we remain focused on the year ahead as we look to drive
operational and productivity improvements at Yanfolila, remain diligent in
terms of timeframe, cost, and quality delivery at Kouroussa towards first gold
pour at the end of Q2 2023 and show a pathway to delivering shareholder value
from Dugbe with a DFS to be issued soon."

Operational Summary

                            Unit  Q1 2022    Q4 2021    Q3 2021    Q2 2021    Q1 2021
 Gold poured                oz    15,548     18,181     22,102     24,494     22,781
 Mined BCMs                 bcms  2,164,253  1,920,311  2,095,935  2,672,788  2,865,292
 Ore mined                  t     502,800    445,808    392,005    443,490    364,114
 Ore processed              t     298,925    341,936    326,020    391,652    345,374
 Avg. grade mill feed       g/t   1.71       1.79       2.27       2.14       2.16
 Recovery                   %     95.39%     92.38%     91.95%     91.88%     92.97%
 Gold inventory - incl SMO  oz    2,557      2,246      2,769      1,972      2,596

* 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

·      Q1 2022 production of 15,548 oz was a low production quarter,
however, as detailed in the Company's Q4 2021 operational update and 2022
outlook release, the quarter was forecast to be a lower production quarter
versus the remaining quarters of 2022 due to the completion of planned
essential maintenance on the processing plant and the gradual implementation
of extra excavator fleet to improve daily mining volume rates

·      Additional excavators are now on site and operating, which has
led to increased daily mining volume rates. Further, we note additional
maintenance programmes were undertaken during the quarter to improve the
overall fleet performance of our contract miner, with some positive
productivity improvements starting to be seen on the existing fleet

·      Grade mill feed for Q1 2022 averaged 1.71 g/t versus 1.79 g/t
averages in Q4 2021

o  The Q1 2022 grade profile was again relatively low primarily due to lower
grade sections of the orebody accessed during the period and a run of mine
("ROM") pad not fully optimised to allow for more consistent better grade ore
feed into the mill, resulting in lower grades being processed for the quarter

o  With improved mining rates and practices taking place, the quantity and
quality of ore on our ROM pad is scheduled to improve, with expectations to
then allow for better mill grade feed to be processed

o  Further, we are also looking to increase throughput at the mill in Q2
before the wet season, in particular utilising increasing oxide stockpiles
from mining at the Sanioumale West ("SW") deposit, which is now taking place

o  Mined bank cubic meters ("BCMs") totalled 2,164,253 in Q1 2022 versus Q4
2021 in 1,920,311 being a c.12% improvement as the additional excavator fleet
became operational, especially in the later end of the quarter

·      Processing plan recovery rates for Q1 2022 improved versus
previous quarters, at 95.39%

·      The Company continues to finalise the analysis of the optimal
Yanfolila underground development route to then put into the future mine plans
and will provide more updates once our analysis is completed

·      During the quarter, the Company received and analysed a further
c.12,000 m of assays from the Sanioumale East ("SE") deposit showing
continuing high-grade intercepts being received, and c.3,179 m of assays from
the first round of drill testing done at greenfield deposit BBC, which showed
the potential to establish new resources at this deposit

Kouroussa, Guinea

During the quarter, significant progress was made on constructing the
Company's second producing gold mine, Kouroussa, with the scheduled timeline
remaining on track to achieve the first gold pour by the end of Q2 2023. Key
updates included:

·      The commencement of civil works on-site and near completion of
the processing plant and camp site accommodation earth works

·      The construction of several key components of the processing
plant, including the fabrication of the CIL tanks and the finalisation of
their foundation works

·      The ordering of several long lead items, including apron feeders,
jaw crusher, SAG mill, cyclone cluster, and agitators

·      Excavation of the Tailing Storage Facility ("TSF") pond area
commenced

·      The temporary construction camp was completed and operational.
The main site operations camp was cleared, and base layers were installed
ahead of foundation works

·      The arrival of key equipment, tooling, machinery, personnel, and
consumables to the site continued during the quarter, with operational
readiness planning and preparations underway

·      The power and mining contractor contracts negotiations are
nearing finalisation and expected to be awarded soon

·      In Q1 2022, the Company released a further c.8,767m of infill
drilling results at Kouroussa's key deposit Koekoe, with multiple high-grade
intercepts received, further strengthening the Company's knowledge base and
confidence in the Kouroussa asset

·      Future exploration review studies are underway on near-mine
targets, with the expectation that further exploration drilling campaigns to
be initiated in the future with the focus to increase Kouroussa's overall
Resources and Reserves base

·      Community engagement remains a key feature of all workstreams

Dugbe, Liberia

The Company's earn-in partner at Dugbe, Pasofino, provided a positive progress
update on the DFS, which is scheduled to be released in Q2 2022.

Financial Summary:

                                              Unit   Q1 2022  Q4 2021  Q3 2021  Q2 2021  Q1 2021
 Gold sales                                   oz     15,179   18,489   22,255   24,790   22,019
 Avg. gold sale price                         $/oz   $1,871   $1,782   $1,782   $1,802   $1,788
 Operating cash costs                         $'000  $32,177  $32,486  $33,472  $33,986  $31,588
 AISC on gold sold                            $/oz   $2,235   $1,803   $1,520   $1,386   $1,494
 Net (debt) / cash                            $'m    ($47.4)  ($25.0)  ($5.9)   $9.0     $0.5
 Net (debt) / cash incl gold inventory value  $'m    ($42.4)  ($21.0)  ($1.0)   $12.4    $4.9
 Debt repayments                              $'m    -        -        -        $4.7     $8.6

·      Q1 AISC of US$2,231 per oz was high, driven by lower ounces of
gold poured during the quarter, and as noted in the key updates above, a lower
ASIC profile is forecast for the remainder of the year, in line with
production improvements

·      Cost inflation is being felt in general, particularly in fuel and
consumables. The Company has instigated a programme to analyse ways to deliver
cost efficiency improvements at the Yanfolila operations to mitigate these
pressures. However, the key focus is on improving Yanfolila's production
profile, to then deliver an improved AISC profile

·      For Kouroussa, although similar cost pressures are being felt,
the bulk of the construction contract is at a fixed price, with our forecast
capex as detailed on 12 October 2021 remaining on budget

·      Net debt position c.US$47.4 million end of Q1 2022 (c.US$42.4
million including gold inventory value), with the final c.US$30 million loan
available from Coris Bank International ("Coris Bank") expected to be drawn in
Q2 2022 to help facilitate the Kouroussa construction build

ESG Q1 2022 updates include:

·      COVID-19: Mitigation measures remained in place at our
operations, and importantly the rise in cases as seen in Q4 2021 has reduced
materially during the quarter

·      Kouroussa community engagement: Increased overall community
engagement took place during the quarter as construction advanced, with more
detailed longer term community project planning now taking place as the
Company rapidly moves towards the production phase in 2023

·      Energy Efficiency: The Company is in the final stages of
negotiations of our power contract at Kouroussa, to then deliver on low carbon
emission initiatives including a +7 megawatt ("Mw") solar power plant and
energy saving waste heat recovery systems to be imbedded into the overall
build process

·      Dugbe, Liberia: During Q1 saw the advancement of the
Environmental and Social Impact Assessment ("ESIA") study, which is expected
to be finalised post the DFS

Notes to Editors:

Hummingbird Resources (AIM: HUM) is a multi-asset, multi-jurisdiction gold
production, development and exploration Company, a member of the World Gold
Council and a founding member of Single Mine Origin (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
when in production, scheduled for first gold pour end of Q2 2023. Further, the
Company has a controlling interest in the Dugbe Gold
Project in Liberia that is being developed by Pasofino Gold Limited through
an earn-in agreement. Our vision is to continue to grow our asset base,
producing profitable ounces while placing our Environmental, Social &
Governance ('ESG') policies and practices at the heart of all we do.

For further information, please visit hummingbirdresources.co.uk
(https://www.hummingbirdresources.co.uk/)  or subscribe to our investor
releases via investor email alerts
(https://www.hummingbirdresources.co.uk/investors/regulatory-news-alerts/#subscribe)
 

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

 Thomas Hill, FD

 Anthony Köcken, COO

 Edward Montgomery, CSO & ESG
 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

 Thomas Diehl                       Broker
 Bobby Morse                        Buchanan                   Tel:  +44 (0) 20 7466 5000

 Ariadna Peretz                     Financial PR/IR            Email: HUM@buchanan.uk.com (mailto:HUM@buchanan.uk.com)

 James Husband

 

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