REG - Hummingbird Res. - Q1 2024 Operational and Trading Update

Hummingbird ResourcesAnnouncement

25/04/2024 07:00

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RNS Number : 9385L  Hummingbird Resources PLC  25 April 2024

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

 

25 April 2024

Hummingbird Resources plc

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

Q1-2024 Operational and Trading Update

Hummingbird (AIM: HUM) is pleased to announce a Group operational and trading
update for the first quarter ending 31 March 2024 ("Q1-2024").

Operational update

Group Production

·      Q1-2024 Group production totalled 22,867 ounces of gold ("oz").

Yanfolila Mine, Mali

·      Yanfolila produced 16,999 oz in Q1-2024, an increase of 18% from
Q4-2023.

·      All in Sustaining Costs ("AISC") totalled US$1,616 per oz in
Q1-2024, a decrease of 5% from Q4-2023.

·      During the quarter, 18,230 oz of gold was sold at an average
realised price of US$2,030 per oz.

Kouroussa Mine, Guinea

·      In Q1-2024, the Kouroussa site produced 5,868 oz of gold.

·      Operations at Kouroussa were temporarily disrupted in January
2024 due to a fire at Conakry's main fuel depot. Fuel deliveries resumed in
late January, allowing production to gradually increase.

·      Despite steady progress in February and the first half of March,
as previously announced, Corica Mining Services ("Corica"), the primary
contractor, halted mining on 17 March 2024. Discussions with Corica are
ongoing; simultaneously, the Company is exploring partnerships with other
operators to expedite Kouroussa's advance towards commercial production.

·      Post-quarter developments include the initiation of blasting
operations to access the high-grade ore. The mine aims to reach commercial
production as soon as possible, bolstered by an expanded agreement with West
African contractor ETASI, which has been established on site since H2-2023.

Corporate update

·      The Group reported a Lost Time Injury Frequency Rate ("LTIFR") of
0.61 per million hours across 1.6 million hours worked in Q1-2024, better than
the target of 1.20 LTIFR.

·      Group adjusted EBITDA of US$7.1 million Q1-2024, an increase of
US$6.9 million on Q4-2023.

·      Hummingbird continues to work closely with the Company's primary
lender, Coris Bank International ("Coris"), which remains fully supportive
of the business and its current strategy, including surrounding mitigation of
the financial impacts of the ongoing contractual dispute with Corica.

FY-2024 Outlook

·      Yanfolila remains unchanged with guidance of 75,000 - 85,000 oz
at AISC below US$1,500 oz.

·      With the ongoing roll-out of the operational ramp up at
Kouroussa, guidance will be updated once the operation nears commercial
production.

Investor Presentation

The Company's senior management team will be holding an investor presentation
on 25 April 2024 at 3:30pm 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, CEO of Hummingbird, commented:

"The Company faced a challenging quarter, particularly at Kouroussa, where the
fire at the main fuel depot in Guinea and an operational suspension by Corica
impacted our progress ramping up production. These events have tested our
team, but thanks to their dedication, strategic planning and our supportive
partners and suppliers, we have remained in operation as we look to accelerate
towards reaching commercial production, while mitigating the impacts of recent
events.

At Yanfolila, we are pleased with the progress at the mine producing nearly
17,000 oz of gold, at an improved AISC performance, during what was expected
to be a weaker quarter as we progress through our near term mine plan.

Looking ahead, we are committed to reaching commercial production at Kouroussa
and continuing our exploration efforts to extend the life of mine at both
Yanfolila and Kouroussa. Our strategy is clear - to become a 200koz pa gold
producer across multiple jurisdictions, decrease costs, extend the mine lives
of our assets and drive shareholder value while upholding stringent ESG
standards."

Yanfolila, Mali: Q1-2024 operational summary

                       Unit  Q1-2023    Q2-2023    Q3-2023    Q4-2023    Q1-2024
 Gold poured           oz     27,262     23,885     18,399     14,419     16,999
 Mined BCMs            BCMs  1,557,793   592,360   1,775,723  1,878,181   1,549,607
 Ore mined             t      647,869    262,911    171,959    266,361    169,195
 Ore processed         t      366,622    364,459    339,333    312,045    344,510
 Avg. mill feed grade  g/t    2.41       2.21       1.79       1.66       1.61
 Recovery              %     94.41%     94.06%     92.93%     91.05%     92.41%
 Group Gold inventory  oz     2,810      1,831      1,834      2,908      1,652

 

Note: 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.

·      At the close of Q1-2024, Yanfolila reported a consistent safety
performance with a rolling 12-month average LTIFR of 0.93 per million hours
worked, maintaining the strong safety record against the target rate of less
than 1.20 per million hours worked.

·      In Q1-2024, Yanfolila's gold production saw an increase, reaching
16,999 oz compared to 14,419 oz in Q4-2023. This increase is primarily
attributed to the increased ore mined and phased development at the Sanioumale
East ("SE") open pit deposit.

·      Mining volumes in Q1-2024 were slightly reduced to 1,549,607
BCMs. Through the quarter, mining operations focused on the stripping of waste
material reflecting a strategic adjustment in mining operations aligned with
the H2-2024 weighted operational profile.

·      Ore processed during Q1-2024 totalled 344,510 tonnes, an
improvement over the 319,845 tonnes achieved in Q4-2023, with the blending of
SE and Komana West ("KW") ore with existing stockpiles.

·      The average mill feed grade slightly decreased to 1.61 grammes
per tonnes ("g/t") from 1.66 g/t in the previous quarter, continuing the trend
anticipated by the mine plan for lower grade ore for the duration of 2024.
However, the processing plant recovery showed an improvement to 92.41%,
reflecting a partial recovery from the lows experienced in Q4-2023 of 91.05%.
This improvement in recovery rates during Q1-2024 has helped to mitigate the
impact of lower grades.

·      Significant progress was made in the development of the
high-grade Komana East Underground ("KEUG") Mine, with 614 meters of
development now completed, far exceeding the advancements made by the end of
FY-2023 of 164.5 meters, with the development rates having increased further
in recent weeks.

Yanfolila ESG:

·      Through Q1-2024, the Company continued its focus on investing
within the local communities.

o  Healthcare Infrastructure Enhancement: Progressed the Soloba Community
Heath Centre, signalling near-readiness to provide enhanced healthcare
services to the local region. The strategic closure and refurbishing of the
Makandina maternity hospital also demonstrate Hummingbird's core focus on
upgrading health facilities for long-term community benefits.

o  Economic Development Initiatives: Initiated the construction of a soap
manufacturing facility at Kona, reflecting the strategic investment in
sustainable economic development and support for local entrepreneurship.

o  Infrastructure Improvements: Commenced the rehabilitation of the Kobale
bridge. The involvement of local authorities and community leaders in the
planning and oversight illustrates its crucial importance to local
infrastructure development.

Kouroussa, Guinea: Q1-2024 operational summary

·      In 2023, the Kouroussa site maintained an exemplary safety
record, achieving a rolling 12-month LTIFR of 0.44 which significantly
surpassed the safety target of an LTIFR of 1.20, with zero LTIs recorded
across Q1-2024.

·      The quarter was marked by several unprecedented challenges,
initially caused by the fire-induced shutdown at the main fuel depot in
Conakry in mid-December 2023 forcing the temporary suspension of operations.
Following restart of operations in late January 2024, Corica halted mining
operations on 17 March 2024, due to contractual disputes, as announced on
March 18, 2024. As a result, only 5,868 oz of gold were produced, accounting
for only 1% of the current Reserve at the Koekoe deposit. With production not
yet at commercial run rates, operational costs continue to be capitalised with
an AISC to be provided once in commercial operation.

·      The Company has maintained ongoing negotiations with Corica aimed
at resolving these disputes and encouraging a timely return to mining
activities at Kouroussa under the existing contract.

·      Alongside these discussions, efforts are underway to resume and
enhance mining operations with the help of other existing and additional
contractors, targeting commercial production at the earliest opportunity, as
detailed in the 16 April 2024 announcement.

·      In parallel with this, the Company is progressing with the ramp
up of mining activities at Kouroussa, aiming to achieve commercial production
as soon as possible. To accomplish this, several significant steps have been
taken:

o  Due to the ongoing suspension, a formal Step-In Notice was issued by the
Company, allowing the Company to take contractual control of operations at
Kouroussa and issue direct instructions to Corica and its third-party
contractors and, if necessary, appoint alternative operators or contractors.

o  The Company has entered a short-term contract with the West African
contractor, Etablissement Adama Sidibé ("ETASI"), to enhance their already
active support fleet and accelerate mining activity at Kouroussa as operations
commence the near-term mining of high-grade ore.

o  The Company progressed discussions with various additional operators,
contractors, and equipment suppliers in a bid to maximise the full scope of
mining activities required to expedite Kouroussa to full commercial production
as soon as possible.

·      Post quarter end operations began to access high-grade ore via
the commencement of blasting at initial the pit Koekoe Open Pit. The Company
has achieved higher weekly gold pours occurring versus Q1-2024 levels.

·      In Q1-2024, Kouroussa average ore grade mined improved to 1.97g/t
in March 2024, with a run of mine stockpile balance of c.23,000 tonnes.

·      With blasting underway to access the high-grade ore post
quarter-end, the Company expects the Kouroussa average grade profile to
further improve going forward.

·      Through the quarter, the processing plant operated at or above
performance expectations with gold recoveries reaching over c.90% despite the
processing of marginal material due to the operational challenges. The Company
expects that as the mining operation enter the high-grade material, the strong
performance of the processing plant will continue.

Kouroussa ESG:

·      Through the quarter, the operation has remained focused on
delivering value to local stakeholders:

o  Community and Safety Education: Launched initiatives to educate local
populations on electrical safety, conflict management, and the dangers of
traditional gold mining. Successfully hosted 22 pupils for an educational
geological study tour, emphasising safety and sustainability in mining
practices.

o  Community Development and Support: Monitored and reported significant
progress in social projects, including the completion of a water borehole for
the local hospital and the distribution of prayer mats for mosques. Continued
construction of sanitation facilities, showcasing our commitment to improving
local infrastructure and living conditions.

Dugbe, Liberia

·      In Q1-2024 Pasofino Gold Limited ("Pasofino") mobilised drilling
equipment and crew to Bukon Jedeh, completed extensive infrastructure
improvements. Drilling operations at Bukon Jedeh commenced earlier this week.

·      The Company continues to work with Pasofino to advance efforts to
optimise the 2022 Definitive Feasibility Study ("DFS") focusing on power and
recovery efficiencies, alongside continuous collaboration with stakeholders to
maximise project value.

Exploration Summary

·      During Q1-2024, exploration focused on Yanfolila with several
initiatives taking place:

o  Commenced reverse circulation drilling at Sanioumale West, with 31 holes
drilled totalling 2,108 metres; notable for intersecting visible
mineralisation, which indicates potential resource expansion and could be used
to augment the Company's FY-2024 and FY-2025 mine plans.

o  Finalising the Komana exploration plan, alongside ongoing geologist
training, aligning with the Company's goals to extend the Life of Mine ("LOM")
at Yanfolila and Kouroussa operations through the leverage of improved
software usage.

Q1-2024 Financial update

                                                  Unit  Q1-2023   Q2-2023   Q3-2023   Q4-2023   Q1-2024
 Yanfolila Gold Mine, Mali
 Gold sales                                       oz     26,380    24,770    18,550    12,952   18,230
 Avg. gold sale price                             $/oz   $1,878    $1,981    $1,918    $1,946   $2,030
 Operating cash costs                             $m     $20.0     $30.0     $30.5     $22.0    $27.1
 AISC on gold sold                                $/oz   $1,109    $1,234    $1,651    $1,701   $1,616
 Group Financial Performance
 Group Adjusted EBITDA                            $m    $17.6     $15.5     $$1.2     $0.2      $7.1
 Net bank (debt) / cash                           $m    ($110.8)  ($122.8)  ($123.0)  ($140.4)  ($138.8)
 Net bank (debt) / cash inc gold inventory value  $m    ($105.2)  ($119.3)  ($119.5)  ($134.4)  ($135.1)

·      At Yanfolila Q1-2024 AISC on gold sold totalled US$1,616 per oz.

·      During the quarter, a total of 18,230 oz of gold was sold at an
average realised price of US$2,030 per oz from Yanfolila, post Q1-2024 hedge
allotment.

·      As part of its near-term revenue protection scheme over a portion
of production for the first three quarters of FY-2024, the Company fulfilled
its Q1-2024 hedging obligation. Additionally, the Company looked to further
leverage the current gold price environment to increase its revenue protection
including.

o  Implemented a 15,000 oz hedge for Q4-2024 to capitalise on prevailing gold
price upswings.

o  Restructured hedge commitments and postponed portions involving
commitments from Q2-2024, Q3-2024, plus the additional volume in Q4-2024, now
earmarked for Q1-2025. This adjustment is designed to leverage the gold
pricing environment while ensuring future revenue protection.

·      Group adjusted EBITDA of US$7.1 million Q1-2024, an increase of
US$6.9 million on Q4-2023.

·      During the quarter, the Company completed a fundraising totalling
US$28.1 million, with the remaining conditional placement of c.US$22.2 million
approved by shareholders at the General Meeting and received by the Company.

·      As of the end of Q1-2024, the Company held a net bank debt
position of c.US$138.8 million (c.US$135.1 million including gold inventory
value). For the year end:

o  Gross bank debt of c.US$144.2 million

o  Cash at bank of c.US$5.4 million

o  Gold inventory value of c.US$3.7 million

·      During Q1-2024, the Company repaid US$9 million of debt excluding
interest. The Company also drew down US$6.3 million of existing debt
facilities during the quarter. Hummingbird is working closely with Coris
surrounding the mitigation of the financial impacts of the ongoing
disruptions.

**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
(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, 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

 Ana Ercegovic           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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