REG - Hummingbird Res. - Q2-2024 Operational and Trading Update and TVR
09/08/2024 07:00
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RNS Number : 8802Z Hummingbird Resources PLC 09 August 2024
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining
9 August 2024
Hummingbird Resources plc
("Hummingbird", "Group" or the "Company")
Q2-2024 Operational and Trading Update and TVR
Hummingbird (AIM: HUM) announces its operational and trading update for the
second quarter ending 30 June 2024 ("Q2-2024").
Operational update
Group Production
· Q2-2024 Group production totalled 19,855 ounces of gold ("oz")
with a total of 42,722 oz produced in the first half of 2024 ("H1-2024").
Yanfolila Mine, Mali ("Yanfolila")
· Yanfolila produced 12,065 oz of gold in Q2-2024 at an All-in
Sustaining Cost ("AISC") of US$2,598 per oz. Performance was impacted by
short-term mining challenges, driven by poor availability and utilisation of
the mining fleet and the subsequent need to alter the mining sequencing,
increasing waste stripping, particularly at the commencement of mining at the
Gonka pit.
· The Company is focused on improving ounce generation in Q3-2024
and has implemented several short-term focused initiatives to maximise the
H2-2024 weighted production profile.
· During the quarter, 12,457 oz of gold was sold at an average
realised price of US$2,075 per oz.
Kouroussa Mine, Guinea ("Kouroussa")
· Kouroussa production increased through Q2-2024 to 7,789 oz of
gold, with operations progressively ramping up towards commercial production.
During the quarter, 1,281,654 BCMs were mined at an average grade of 2.64
grams per ton ("g/t") (Q1-2024: 1.88 g/t) as operations mined higher-grade
material at the Koekoe deposit.
· Post-period, operational output has continued to improve with the
mining operation reaching c.30,000 BCMs per day and the commissioning of the
fresh rock plant increasing the blending of high-grade fresh ore feed into the
plant, which continues to operate at or above design.
· Through July, Kouroussa achieved average gold pours of c.1,200 oz
per week, with approximately 4,800 oz produced during the month. Based on
current progress, the Company expects to achieve commercial production in late
Q3-2024.
Corporate update
· The Group reported a Lost Time Injury Frequency Rate ("LTIFR") of
0.99 per million hours across 2.5 million hours worked in Q2-2024, ahead of
its target of 1.20 LTIFR.
· The Company recorded a Group adjusted EBITDA loss of US$13.5
million in Q2-2024, driven by reduced production from Yanfolila in the second
quarter.
· During the quarter, the Company secured a short-term loan of
US$10 million from Nioko Resources, a wholly owned subsidiary of CIG SA, the
Company's largest shareholder.
· The Company is in the advanced stages of finalising a refinancing
package with Coris Bank International to defer near term debt repayments on a
portion of the existing facility to H2-2025. Further information will be
provided in the coming days once finalised.
· In addition to the refinancing package, the Company is
progressing with several non-equity financing options to further strengthen
its balance sheet as it reaches full operational capacity over the coming
quarters.
FY-2024 Outlook
With progress at Kouroussa and performance at Yanfolila, the Company has
updated its FY-2024 Group guidance to 115,000 - 145,000 oz at an AISC below
US$1,500:
· Yanfolila: Updated guidance to 65,000 - 75,000 oz at an AISC
below US$1,600 per oz following a weaker H1-2024, focus on delivering on the
H2-2024 weighted mine plan and operational initiatives currently being
implemented.
· Kouroussa: Reinstated guidance to 50,000 - 70,000 oz at an AISC
below US$1,400 per oz, with refined guidance to be provided once operations
reach commercial production.
Investor Presentation
The Company's senior management team will be holding an investor presentation
today at 13:30 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:
"Despite the significant challenges faced by the Company this quarter, much of
the difficulty has stemmed from delays in ramping up operations at Kouroussa,
compounded by nearly two months of lost production. These setbacks have had a
considerable impact on both production and mine plans. However, it's crucial
to understand that these issues are now behind us. We are currently working
closely and effectively with Corica to achieve commercial production later
this quarter. Since Corica's return in May, they have consistently improved
fleet availability and utilisation, enabling the mine to shift the necessary
volume of BCM to sustain operations. Consequently, we have begun accessing the
fresh rock ore body, which contains the high-grade, undepleted gold essential
for Kouroussa's ramp-up. The fresh rock crushing circuit is fully
commissioned, and as more fresh material is processed; we are witnessing a
steady increase in gold production.
Yanfolila also experienced a challenging quarter. However, our FY-2024 mine
plan was always heavily weighted toward the second half of the year, and that
remains unchanged. In view of the challenges faced at Yanfolila in the second
quarter, we are implementing strategic initiatives to optimise production and
expect to see significant improvements in the coming months.
The delays have undoubtedly placed significant pressure on our balance sheet
and liquidity, and I am deeply grateful for the continued support of our
partners. We are in advanced stages of finalising the refinancing of a portion
of our debt with Coris to provide us additional financial flexibility. We have
also explored several non-equity financing options to strengthen the balance
sheet without diluting shareholder value, ensuring additional resilience if
needed. With gold prices high and production increasing at Kouroussa,
Hummingbird is positioned to rapidly deleverage the balance sheet in the
coming quarters. Our primary focus remains on delivering value to our
shareholders through enhanced production and operational efficiency."
Yanfolila, Mali: Q2-2024 operational summary
Unit Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024
Gold poured oz 23,885 18,399 14,419 16,999 12,065
Mined BCMs BCMs 592,360 1,775,723 1,878,181 1,549,607 1,536,256
Ore mined t 262,911 171,959 266,361 169,195 167,657
Avg. mined grade g/t 2.72 3.09 2.39 2.47 2.08
Ore processed t 364,459 339,333 312,045 344,510 331,910
Avg. mill feed grade g/t 2.21 1.79 1.66 1.61 1.31
Recovery % 94.06% 92.93% 91.05% 92.41% 92.66%
Group Gold inventory oz 1,831 1,834 2,908 1,652 74
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.
· In Q2-2024, Yanfolila achieved a rolling 12-month LTIFR of 0.68,
meeting its safety target of below 1.20.
· Yanfolila produced 12,065 ounces of gold in Q2-2024, marking a
decrease from Q1-2024. This reduction is primarily due to a shift in mine
sequencing as part of the long-term mine plan. During this period, lower
tonnages of higher-grade ore were mined, resulting in increased reliance on
lower-grade stockpile material to meet processing throughput requirements.
This temporary adjustment was necessary to increase waste stripping and
prepare access to higher-grade ore zones in future quarters.
· Total BCMs slightly decreased to 1,536,256 BCMs in Q2-2024 from
1,549,607 BCMs in Q1-2024. The volume of ore mined also saw a slight
reduction, with 167,657 tonnes mined at an average grade of 2.08 g/t in
Q2-2024 compared to 169,195 tonnes at 2.47 g/t in Q1-2024. Despite the grades
being within expected ranges, ore volumes were notably impacted by excavator
efficiency at the Sanioumale East ("SE") pit driven by availability and
spatial constraints. Looking ahead to H2-2024, the Company anticipates
increased ore volumes as access improves at SE and mining operations at Gonka,
which commenced ore extraction in August following waste stripping through the
quarter.
· In Q2-2024, 331,910 tonnes of ore were processed with an average
mill feed grade of 1.31 g/t. Plant recovery rates remained stable at 92.66%.
To maintain processing throughput, the ore mined in Q2-2024 was blended with a
higher proportion of low-grade and marginal waste material, resulting in a
reduced mill feed grade. As ore mining volumes increase in H2-2024, the
Company expects a significant improvement in throughput grades and,
consequently, ounce production.
· The Company has implemented several short-term initiatives to
improve gold production efficiency. Strategic initiatives to address and
mitigate operational challenges and maximise production include:
o Mine Plan Optimisation: Implemented mine design optimisation and
scheduling strategies to maximise ore extraction from the resource models,
targeting high-grade ore.
o Excavator Fleet Enhancement: Utilising additional excavators with further
equipment from Bamako being evaluated.
o Mill Optimisation: Reviewed and optimised mill set points following recent
refurbishment, targeting an operational throughput of over 180 tph.
· Through Q2-2024, development of the Komana East Underground
("KEUG") Mine continued, with 170 meters ('m') completed in Q2-2024, leading
to a total of 780 m of development now completed.
Yanfolila ESG:
· Through Q2-2024, the Company continued its focus on investing
within the local communities.
o Ongoing Community Investment: In Q2 2024, the Company maintained its
strong commitment to local community investment and successfully conducted 370
stakeholder engagements and 24 group meetings, reinforcing community
relations.
o Significant Infrastructure Developments: Made notable progress on key
community projects, including health centre construction, maternity
extensions, and road rehabilitation.
o Extensive Training and Health Programmes: Executed comprehensive training
initiatives with 270 inductions and 172 first aid trainings, and effectively
carried out community health campaigns and medical support.
Kouroussa, Guinea: Q2-2024 operational summary
Unit Q1-2024 Q2-2024
Gold poured oz 5,868 7,789
Mined BCMs BCMs 1,119,449 1,281,654
Ore mined t 125,972 213,926
Average Mined Grade g/t 1.88 2.64
Ore processed t 182,505 234,706
Avg. mill feed grade g/t 1.08 1.17
Recovery % 91.96% 93.76%
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.
· Through Q2-2024, Kouroussa maintained its strong safety record,
achieving a rolling 12-month LTIFR of 0.00, meeting its safety target of below
1.20. Unfortunately, post-quarter, a serious accident occurred at Kouroussa,
where one employee lost their life. The Company and relevant authorities are
conducting a thorough investigation into the event, ensuring all necessary
measures are taken to prevent future incidents.
· Kouroussa production increased to 7,789 oz of gold in Q2-2024.
Production ramped-up following the remobilisation of Corica's fleets and
improved operational performance.
· 1,281,654 BCMs were mined at an average grade of 2.64 g/t in
Q2-2024, up from 1.88 g/t in Q1-2024. The operations were impacted by the
previously announced delay in ramp-up operations through to mid-May when
Corica operations recommenced. With Corica's on-site mining performance
significantly improved in line to the new operational plan as the operation
progressed through the transitional ore into the high-grade material.
· Throughout Q2-2024, the processing plant continued to operate at
its designed capacity, processing 234,706 tonnes at a grade of 1.17 g/t with
recoveries of c.93.76% achieved. The lower grade processed vs mined was due to
the significant blending of low grade and marginalised waste material to
compensate for impact of the Corica suspension and ramp-up of mining on ore
volumes. The Company expects an improvement in milled grade through Q3-2024.
· Since the restart of operations, Corica have continually met
expectations under the agreed operational plan with movement reaching c.30,000
BCMs per day. Post-period, despite the onset of the rainy season, mining
operations have continued to ramp up and output has continued to improve.
Through July, Kouroussa mined 683,066 BCMs at an average grade of 2.70 g/t,
resulting in the production of c.4,800 oz during the month at an average of
c.1,200 oz per week.
· Based on the current rate of progress, the Company expects to
achieve commercial production in late Q3-2024.
Kouroussa ESG:
· Through the quarter, operations have continued to provide value
to local communities and enhancing overall well-being:
o Community and Environmental Education: Launched radio communication
initiatives to educate local populations on environmental protection.
Conducted awareness sessions to highlight the value of environmental
conservation to the communities of Kouroussa.
o Healthcare Support: Successfully commissioned a borehole at the Kouroussa
hospital, ensuring a reliable water supply and delivered essential medical
equipment for emergency, maternity, and paediatric care in collaboration with
local authorities.
o Sanitation Improvement: Continued the construction of twelve latrines at
the Kouroussa market in collaboration with local authorities. This project
aims to improve community health and support income-generating activities for
the municipality of Kouroussa.
Dugbe, Liberia
· In Q2-2024 Pasofino Gold Limited ("Pasofino") completed its
diamond core drilling programme at the Bukon Jedeh 'gold camp' within the
Dugbe Gold Project, Liberia.
· Work is progressing on optimising the 2022 Feasibility Study,
focusing on power usage and metallurgical recovery rates and is expected to be
completed later this year.
Q2-2024 Financial update
Unit Q2-2023 Q3-2023 Q4-2023 Q1-2024 Q2-2024
Yanfolila Gold Mine, Mali
Gold sales oz 24,770 18,550 12,952 18,230 12,457
Avg. gold sale price $/oz $1,981 $1,918 $1,946 $2,030 $2,075
Operating cash costs $m $30.0 $30.5 $19.5 $31.7 $31.2
AISC on gold sold $/oz $1,234 $1,651 $1,508 $1,753 $2,598
Group Financial Performance
Group Adjusted EBITDA $m $15.5 $1.2 $2.7 $4.6 ($13.5)
Net bank (debt) / cash $m ($122.8) ($123.0) ($140.4) ($138.8) ($153.5)
Net bank (debt) / cash inc gold inventory value $m ($119.3) ($119.5) ($134.4) ($135.1) ($150.1)
Note: The Company notes a number of small non-material accounting adjustments
have been made across the previous two quarters which does not impact year to
date performance.
Financial Overview:
· Q2-2024 AISC on gold sold totalled $2,598 per oz, driven by the
low ounce production at Yanfolila. Kouroussa and Group AISC figures will be
provided once Kouroussa reaches commercial production.
· The Group recorded an adjusted EBITDA loss for Q2-2024 of $13.5
million, driven by low production.
· As of the end of Q2-2024, the Company held a net bank debt
position of approximately $153.5 million (approximately $150.1 million
including cash and gold inventory value). For the period-end:
o Gross bank debt of approximately $153.9 million.
o Cash at bank of approximately $0.4 million.
o Gold inventory value of approximately $3.4 million.
· The Company is in the advanced stages of finalising a
comprehensive refinancing package with Coris Bank International. This
arrangement is centred around deferring near-term debt repayments on a portion
of the existing facility, extending the repayment period to the second half of
2025. Further details will be provided in the coming days once the agreement
has been finalised.
· Additionally, the Company is actively exploring and progressing
with several non-equity financing options. These initiatives are aimed at
further strengthening the Company's balance sheet and are designed to provide
the necessary capital to support the Company's operational optimisation. The
focus on non-equity financing underscores the Company's commitment to
minimising shareholder value dilution.
Issuance of new Ordinary Shares to WACOM Group:
· Further to the Company's announcement on 16 December 2021, as
part of the incentive package worth up to US$2.6 million, Hummingbird is in
the process of issuing 6,342,857 new ordinary shares of 1 penny each in the
Company ("Ordinary Shares") to WACOM Group (the "Incentive Shares"). This
issuance is in recognition of WACOM's delivery of the civil and structural
design, fabrication, and construction of the processing plant at the Kouroussa
Gold Mine, which was completed on schedule and within budget.
· The Incentive Shares issued to WACOM are valued at US$1.85
million, based on an agreed price of £0.22 per share. This incentive was
aimed to align WACOM's interests with those of Hummingbird, promoting the
successful completion of the Kouroussa Gold Mine and enhancing shareholder
value.
Nioko Resources Share Subscription:
· In accordance with pre-emption rights under its shareholder
agreement, Nioko, a wholly owned subsidiary of CIG SA, has subscribed for
4,567,874 new Ordinary Shares in Hummingbird at a negotiated subscription
price of £0.085 per share for a total cash subscription of c.US$0.5 million
(the "Subscription Shares"). Following the issuance of the Subscription
Shares, Nioko's shareholding will be 339,233,148 Ordinary Shares, which
maintains its holding at 41.87% of the Company's total voting rights following
the issuance of the new Ordinary Shares to WACOM Group and Nioko.
Admission and Total Voting Rights
Application has been made to the London Stock Exchange for the admission of
the 6,342,857 Incentive Shares and 4,567,874 Subscription Shares to trading on
AIM ("Admission"), which is expected to take effect on or around 13 August
2024.
The Incentive Shares and Subscription Shares will be issued fully paid and
will rank pari passu in all respects with the Company's existing Ordinary
Shares.
Following Admission, the Company's issued share capital will consist of
810,285,389 Ordinary Shares, all with voting rights. The Company currently
does not hold shares in treasury. The total number of voting rights in the
Company following Admission is therefore 810,285,389, which may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change to
their interest in the Company under the FCA's Disclosure Guidance and
Transparency Rules.
**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
Charlie Hammond 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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