REG - Hummingbird Res. - Q2 2023 Operational and Trading Update

Hummingbird ResourcesAnnouncement

25/07/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230725:nRSY0131Ha&default-theme=true

RNS Number : 0131H  Hummingbird Resources PLC  25 July 2023

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

 

25 July 2023

Hummingbird Resources plc

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

Q2-2023 Operational and Trading Update

Strong quarter with H1-2023 production of >51 Koz & Kouroussa ramping
up to steady state production

 

Hummingbird (AIM: HUM) is pleased to provide a Group operational and trading
update for the second quarter of 2023, ending June 30 2023 ("Q2-2023").

Operational update

Yanfolila, Mali

·      23,885 ounces ("oz") of gold produced in Q2-2023, an increase of
c.19% on the previous year (Q2-2022: 20,013 oz), with a total of 51,147 oz
produced in the first half of 2023 ("H1-2023") up c.44% versus H1-2022
(H1-2022: 35,561 oz).

·      AISC of US$1,234 per oz in Q2-2023, a decrease of c.34% on the
previous period last year (Q2-2022: US$1,859), with an H1-2023 AISC of
US$1,170 per oz, a decrease of c.42% versus US$2,019 in H1-2022.

·      24,770 oz of gold sold at an average realised price of US$1,981
per oz and $1,927 per oz for H1-2023 (H1-2022: US$1,819). The Company held
1,831 oz of gold inventory on 30 June 2023.

Kouroussa, Guinea

·      Ramp-up of the Kouroussa operation is on track, with processing
plant availability currently at c.68%, the first gold pour recorded on 8 June
2023 and regular gold pours commencing in July.

·      Gold ounces poured at Kouroussa are scheduled to increase during
H2-2023. The operation is anticipated to reach steady state production in
Q4-2023 and expected to produce circa 30,000 oz for H2-2023.

Corporate update

·      Group adjusted EBITDA of c.US$15.5 million for Q2-2023 and
c.US$33.1 million for H1-2023 - a material positive Group turnaround compared
to the negative Group adjusted EBITDA of US$2.3 million for Q2-2022 and the
negative Group adjusted EBITDA of US$9.3 million in H1-2022.

·      Group loss time injury frequency rate ("LTIFR") of 0.69 per
million hours worked for the quarter, within the Group target rate of under
1.20 per million hours worked.

·      A strategic review of the Dugbe Project remains ongoing with the
Company's joint venture partner, Pasofino Gold Limited ("Pasofino").

Outlook

·      Following a strong H1-2023, Yanfolila is well positioned to meet
its FY-2023 production guidance of 80,000 - 90,000 oz at an AISC of under
US$1,500 per oz.

·      Updated Group FY-2023 production outlook to be given in the
Q3-2023 operating and trading update once Kouroussa is closer to steady state
production.

 

Dan Betts, CEO of Hummingbird, commented:

"This quarter has rounded off a six-month period that has seen a strong
performance by the Company as demonstrated by the more than 51 Koz of gold
produced at an H1-2023 AISC profile of US$1,170 per oz and Group adjusted
EBITDA of c.US$33 million.

 

Yanfolila is performing more in alignment with our mine plans, providing
better consistency for the Group, and our first gold pour at Kouroussa in
June, currently in the ramp up production phase, is a major milestone, making
the Company a multi-asset, multi-jurisdiction gold producer of which we are
very proud.

 

As we look forward, our key focus for the coming months and the second half of
the year is to fully ramp up production safely at Kouroussa to reach steady
state production and to continue to demonstrate stable quarterly production at
Yanfolila, generating solid free cashflows from both assets that strengthen
our balance sheet. Further, a core focus for the second half of 2023 is to
begin to implement our detailed exploration plans to extend the life of mine
at both Yanfolila and Kouroussa, coupled with a positive solution on Dugbe in
Liberia to benefit key stakeholders at that asset."

 

Operational update

                       Unit  Q2-2022    Q3-2022    Q4-2022    Q1-2023    Q2-2023  H1-2023
 Gold poured           oz    20,013     16,827     28,264     27,262     23,885   51,147
 Mined BCMs            BCMs  2,726,205  1,539,947  1,303,770  1,557,793  592,360  2,150,153
 Ore mined             t     511,449    361,755    529,496    647,869    262,911  910,781
 Ore processed         t     357,837    290,756    382,683    366,622    364,459  731,081
 Avg. grade mill feed  g/t   1.87       1.90       2.45       2.41       2.21     2.31
 Recovery              %     94.8%      92.8%      94.3%      94.4%      94.1%    94.2%
 Gold inventory        oz    2,418      2,187      2,057      2,810      1,831    1,831

 incl SMO

 

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.

Yanfolila, Mali: Q2-2023 operational summary

·      As of the end of Q2-2023, the Yanfolila operation recorded a
rolling 12 month average LTIFR of 0.87 per million hours worked, within the
Company's LTIFR target of less than 1.20 per million hours worked.

·      Gold produced totalled 23,885 oz in Q2-2023 and 51,147 oz in
H1-2023. As noted above, Yanfolila is well positioned to meet its FY-2023
production guidance of 80,000 - 90,000 at AISC of less than US$1,500 per oz,
with the Company expecting a solid H2-2023 production profile from Yanfolila.

·      Mined BCMs reduced from Q1-2023 levels to 592,360 tonnes ("t"),
driven by mining the bottom of the Komana East ("KE") open pit. However, ore
processed totalled 364,459 t, another good consecutive quarter, with the
Company utilising stockpile ore to blend with the ore mined tonnes.

·      Q2-2023 saw another good quarter of average grade mill feed at
2.21 grammes a tonne ("g/t") and processing plant recovery of 94.1%.

·      Mining at the KE open pit deposit was finalised in recent weeks,
with the last open pit blast taking place and the processing of this ore to
now occur in the current Q3-2023 quarter. The finalisation of the KE open pit
has allowed increased advancement of the Komana East underground mine
("KEUG"), and progress is expected to accelerate further in H2-2023.

·      Mining at the Sanioumale East ("SE") open pit deposit commenced
during Q2-2023, ahead of schedule, to allow increased ore to the mill from the
SE deposit to be processed in H2-2023, alongside ore feed mix from other
deposits including Sanioumale West ("SW") and Komana West ("KW").

Yanfolila Resource extension drilling re-commenced during Q2-2023:

·      During Q2-2023, drilling on brownfield deposits in the Yanfolila
license restarted, including SW and Gonka South ("GS"). The SW drilling will
test for further mineralisation along the north-east and south-west strike
zones to extend the SW Resources. The GS Resource upgrade drilling is complete
and awaiting assay results ahead of further analysis.

·      The Company expects H2-2023 exploration drilling at Yanfolila to
accelerate at near pit opportunities as well as some of the historical
Resources, with a key focus on increasing Yanfolila Resources at known
deposits and ultimately adding to the Yanfolila Reserves base.

Yanfolila ESG:

·      SE village resettlement began in Q1-2023 and has been completed
ahead of schedule, allowing mining at the SE deposit to begin during Q2-2023
as noted above. The SE resettlement has resulted in the housing of over 40
families, all completed under the guidance of West African specialist
consultants Environmental and Social Development Company ("ESDCO").

·      Company supplied water infrastructure implementation and support
remain a key focus, with two deep water boreholes drilled during the quarter,
with water supply systems currently being installed, to be completed in
Q3-2023.

Kouroussa, Guinea: Q2-2023 operational summary

·      As of the end of Q2-2023, the Kouroussa operation recorded a
rolling 12 month LTIFR of 0.40 per million hours worked, within the Company's
LTIFR target rate of less than 1.20 million hours worked.

·      Following the commencement of mining in early Q1-2023 and the hot
commissioning of the processing plant in Q2-2023, Kouroussa achieved its first
gold pour on 8 June 2023, ahead of the end of the Q2-2023 schedule, and on
budget. With regular gold pours commencing in July, the ramp up of the
Kouroussa operations is on track towards steady state production, expected to
occur in Q4-2023.

·      The processing plant's availability has reached c.68%, with the
plant able to run as per design. A key focus area for the plant team over the
coming months will be to increase the running of the plant at full
availability on a 24-hour basis.

·      Mining operations commenced in early Q1-2023 and accelerated
during Q2-2023, with ROM stockpiles at the end of Q2-2023 of approximately
120,000 tonnes of initial low grade material from the mining of the top layer
at the key KoeKoe open pit. The Company expects the mill feed grade profile to
incrementally improve during H2-2023 as mining of the top layer at Koekoe is
completed, allowing access to deeper, higher-grade ore for mining and
processing.

·      Other key areas of focus for the Kouroussa operations team to
safely reach steady state production during H2-2023 include:

o  The management and monitoring of mining and other on-site contractors to
maximise the operational performance for the Group.

o  The implementation of wet weather procedures to protect access to
higher-grade ore for processing during H2-2023.

o  Finalisation and efficient implementation of HR operational plans.

o  Efficient operation of the newly constructed mine camp, allowing the
company to end offsite residential requirements.

o  Ongoing monitoring and following of safety protocols and procedures.

Kouroussa exploration programme:

·      The Company is finalising exploration plans for H2-2023 and
FY-2024, with several targets identified within the current mining license
area for further drilling and analysis with the focus on increasing
Kouroussa's existing Reserves base of 647,000 oz at 4.15 g/t.

Kouroussa ESG:

·      Progress on community livelihood initiatives and projects
continued to advance. As part of Kouroussa's reforestation strategy, 650
seedlings were planted during the quarter around the mining camp area.

·      Additionally, the medical team conducted a malaria awareness
campaign during the quarter on site and in surrounding villages to the mine.

Dugbe, Liberia

·      As noted above, the strategic review of options to best realise
the maximum value of Dugbe for all stakeholders remains ongoing with our joint
venture partner Pasofino.

Financial update

                                             Unit   Q2-2022  Q3-2022  Q4-2022  Q1-2023  Q2-2023  H1-2023
 Gold sales                                  oz     20,490   16,917   27,860   26,380   24,770   51,149
 Avg. gold sale price                        $/oz   1,851    1,713    1,726    1,878    1,981    1,927
 Operating cash costs                        $'000  38,253   36,179   34,581   28,996   29,996   58,992
 AISC on gold sold                           $/oz   $,859    2,161    $1,248    1,109   1,234    1,170
 Group Adjusted EBITDA                        $m    (2.3)    (8.9)    11.2     17.6     15.5     33.1
 Net (debt) / cash                           $'m    (64.4)   (84.7)   (128.7)  (110.8)  (122.8)  (122.8)
 Net (debt) / cash inc gold inventory value  $'m    (60.1)   (81.0)   (125.0)  (105.2)  (119.3)  (119.3)

 

·      Q2-2023 AISC on gold sold from Yanfolila operations totalled
US$1,234 per oz, an 11% increase on Q1-2023, leading to an average H1-2023
AISC of US$1,170 per oz. The Company expects H2-2023 AISC to be higher than
H1-2023 levels at Yanfolila, as more open pits are mined, however FY-2023 AISC
is to remain within guidance of under US$1,500 per ounce.

·      Capital expenditure ("capex") of approximately c.US$16 million in
the quarter (c.US$12 million for the project completion at Kouroussa and
c.US$4 million for expansion capex in Mali). Expectations for H2-2023 Group
capex to be materially lower versus H1-2023 levels with the Kouroussa plant
build complete.

·      Net debt position of c.US$122.8 million at the end of Q2-2023
(c.US$119.3 million including gold inventory value) with deleveraging
expected to commence in H2-2023.  For the quarter end:

·      Gross debt of c.US$128.6 million.

·      Cash at bank of c.US$5.8 million.

·      Gold inventory value of c.US$3.5 million.

 

**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 51% 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 demonstrate 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. The Company's vision is to continue to grow our asset
base, producing profitable ounces, while adhering to the highest international
standards of 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

 Gordon Hamilton         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

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFLFLRDTISFIV