REG - Hummingbird Res. - Q3-2023 Operational and Trading Update

Hummingbird ResourcesAnnouncement

26/10/2023 07:00

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RNS Number : 3129R  Hummingbird Resources PLC  26 October 2023

 

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

 

26 October 2023

Hummingbird Resources plc

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

Q3-2023 Operational and Trading Update

Yanfolila well positioned to meet FY-2023 guidance & Kouroussa ramping up
for a full year of commercial production from FY-2024.

 

Hummingbird (AIM: HUM) is pleased to provide a Group operational and trading
update for the third quarter ending 30 September 2023 ("Q3-2023").

Operational update

Yanfolila Mine, Mali

·      Yanfolila produced 18,399 ounces ("oz") of gold in Q3-2023, an
increase of c.9% on the previous year (Q3-2022: 16,827 oz), with a total of
69,546 oz produced as of the end of September 2023.

·      AISC on gold produced at Yanfolila totalled US$1,651 per oz in
Q3-2023, a decrease of c.24% on Q3-2022 (US$2,161 per oz), with an average
AISC of US$1,298 per oz to the end of September 2023.

·      18,550 oz of gold sold at an average realised price of US$1,918
per oz (Q3-2022: 16,917 oz sold at US$ 1,713 per oz). As of the end of
September 2023, the Company held 1,834 oz of gold inventory.

Kouroussa Mine, Guinea

·      In Q3-2023, Kouroussa produced 1,047 oz of gold, and another 614
oz shortly after. The Company's updated production expectations for H2-2023 is
c.10,000 oz, and on track for a full year of commercial production from
FY-2024.

·      Through Q3-2023, the processing plant's overall performance
continued to improve, with availability reaching c.82%. The plant is on track
to operate on a consistent 24-hour basis during Q4-2023.

·      Mining volumes at Kouroussa have encountered challenges during
ramp-up, primarily stemming from seasonal weather, equipment commissioning,
and the recruitment and training of local and national Guinean personnel. The
Company is actively resolving these issues, with improvements being seen and
expected to accelerate during Q4-2023.

Corporate update

·      In Q3-2023, the Group achieved a Loss Time Injury Frequency Rate
("LTIFR ") of 0.80 per million hours worked, and Kouroussa surpassed 1 million
operational hours Loss Time Injury ("LTI") free since the start of plant
commissioning.

·      In Q3-2023, the Group achieved an adjusted EBITDA of c.US$1.2
million, vs a loss of US$8.9 million in Q3-2022, resulting in a cumulative
adjusted EBITDA of c.US$34.3 million as of the end September 2023.

·      Per the Interim Results, a Group refinancing and funding package
was agreed to provide additional cash liquidity and capital support. With both
mines on track for full commercial production and increased cash flow
generation from FY-2024, material balance sheet deleveraging is set to
commence next year with scheduled repayments of c.US$77 million in FY-2024,
c.US$61 million in FY-2025, and the remainder c.US$15 million payable by the
end of FY-2028.

Outlook

·      With 69,546 oz produced as at the end of September 2023 at
Yanfolila, the Company is well on track to meet its FY-2023 production
guidance of 80,000 - 90,000 oz, with AISC remaining under US$1,500 per oz.

·      The Company remains focused on being a c.200,000 oz per annum
gold producer and will provide formal FY-2024 Group production and AISC
guidance at the Q4-2023 operational and trading update, expected at the end of
January 2024.

Investor Presentation

The Company's senior management team will be holding an investor presentation
today at 15:30 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.

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:

"Being the wet season, Q3 is traditionally the most challenging period to
operate in as we have learned over the years. However, during the quarter
Yanfolila performed in line with our expectations and with over 69 Koz of gold
produced through to the end of September, we are well positioned to
comfortably meet our FY-2023 Production and AISC guidance.

At Kouroussa, we have focussed on ramping up the operation across all
disciplines and are proud to have achieved over 1 million LTI free hours since
commissioning the plant in Q2-2023. We expected challenges during the
six-month ramp up period; however, our plant has exceeded expectations,
regularly meeting nameplate capacity in Q3-2023. During the quarter we
encountered hurdles in increasing mining volumes and ramping up the
recruitment and training of local and national Guineans. We're actively
addressing these challenges, targeting increased operational performance in
Q4-2023, setting the mine up for full commercial production from FY-2024 and
are committed to building and operating a mine the people of Guinea can be
proud of.

Further, the refinancing and funding package agreed with our long-term finance
partners Coris Bank provides increased financial flexibility for Hummingbird,
with material deleveraging projected to begin in FY-2024. Importantly, we
remain on track to deliver c.200,000oz per year, establishing ourselves as a
mid-tier, multi-asset, multi-jurisdiction gold producer."

 

Operational update

Yanfolila, Mali: Q3-2023 operational summary

                       Unit  Q3 2022                    Q4 2022                    Q1 2023                    Q2 2023                  Q3 2023                    Year to

Q3-2023
 Gold poured           oz           16,827                     28,264                     27,262                    23,885             18,399                     69,546
 Mined BCMs            BCMs    1,539,947                  1,303,770                  1,557,793                    592,360                1,775,723                  3,925,876
 Ore mined             t          361,755                    529,496                    647,869                   262,911                   171,959                 1,082,740
 Ore processed         t          290,756                    382,683                    366,622                   364,459                   339,333                 1,070,414
 Avg. grade mill feed  g/t              1.90                       2.45                       2.41                      2.21                      1.79                      2.15
 Recovery              %     92.84%                     94.28%                     94.41%                     94.06%                   92.93%                     93.79%
 Gold inventory        oz    2,187                               2,057                     2,810                      1,831                     1,834                     1,834

 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.

 

·      As of the end of Q3-2023, the Yanfolila operation recorded a
rolling 12-month average LTIFR of 0.9 per million hours worked, which is well
below the Company's target rate of less than 1.20 per million hours worked.

·      During Q3-2023, gold production totalled 18,399 oz. With a total
of 69,546 oz produced for the first nine months of FY-2023, Yanfolila is well
positioned to meet FY-2023 production guidance.

·      Mined BCMs increased on previous levels at 1,775,723 tonnes
following the commencement of mining at the Sanioumale East ("SE") open pit
deposit.

·      Ore processed totalled 339,333 tonnes, with additional ore feed
alongside SE provided by other deposits including Sanioumale West ("SW") and
Komana West ("KW").

·      Q3-2023 saw a reduction in average grade mill feed at 1.79
grammes a tonne ("g/t") and processing plant recovery of 92.9%. The change in
grade and recovery rate was driven by the shift in mining to SE and other open
pits, and the blending of marginal Run of Mine ("ROM") stockpiles with higher
grade mined material.

·      The development of the Komana East Underground ("KEUG") Mine has
continued with the Company targeting production from FY-2024 onwards.

Yanfolila ESG:

·      During the quarter, Hummingbird held an official handover and
opening ceremony for the new SE village. This village has been built with the
guidance of West African specialist consultants, Environmental and Social
Development Company ("ESDCO") and provides housing and infrastructure for over
40 families.

·      Throughout the quarter, the Company continued its commitment to
collaborating with local communities in the Yanfolila region, actively seeking
opportunities to engage in and support local community initiatives. These
initiatives include projects focused on enhancing and restoring local school
infrastructure, as well as the advancement of livelihood projects within the
community (including market gardens, bee keeping store and equipment, and a
poultry house).

Kouroussa, Guinea: Q3-2023 operational summary

·      At the end of Q3-2023, the Kouroussa operation achieved a rolling
12-month LTIFR of 0.5 per million hours worked. Additionally, Kouroussa
surpassed the significant milestone of 1 million operational hours LTI free
following the commissioning of the plant.

·      During the quarter, Kouroussa poured 1,047 oz of gold and
completed its first gold shipment, with a further 614 oz poured shortly after
the end of period.

·      The processing plant has continued to improve during its ramp up
with the plant availability through Q3-2023 at c.82%. Furthermore, during the
quarter, the plant performed to the 1 million tonnes per annum ("Mtpa")
nameplate design and ran on a 24-hour basis across several days. The plant
remains on-track to operate on a consistent 24-hour basis during Q4-2023.

·      Mining volumes at Kouroussa have been impeded by challenges
associated with the ramping up of operations during the regional wet season,
commissioning of mining equipment, and the ramp up of recruitment and training
of local and national Guinean personnel. The Company is actively resolving
these issues, with improvements being seen and expected to accelerate during
Q4-2023.

·      During the quarter, the mining activities centred on overburden
removal, resulting in lower-grade material on the ROM pad being fed to the
mill. However, as mentioned above, with anticipated improvements in mining
productivity during Q4-2023, the Company expects higher-grade sections of the
ore body to be accessed, leading to increased gold production rates through
the quarter towards full commercial production from FY-2024.

Kouroussa ESG:

·      During the quarter, the Company has been working with local
communities in the surrounding regions to the mine to ensure the operation
meets the rigorous local employment requirements and expectations. Community
engagement remains an ongoing key focus for the Company, including the
prioritising of employment opportunities at the mine for Guinean locals and
nationals.

·      Through FY-2023 the Company has completed several social
responsibility projects in the Kouroussa region including: the construction of
sanitation infrastructure; implementation of community livelihood projects
(including poultry farms, soap making and market gardens initiatives);
development of local water infrastructure; and provision of educational
equipment for local schools.

·      Additionally, during the quarter the Company conducted an onsite
worker awareness campaign against malaria led by the Kouroussa medical team.

Dugbe, Liberia

·      The strategic review of options to best realise the maximum value
of Dugbe for all stakeholders remains ongoing with our joint venture partner
Pasofino Gold Limited ("Pasofino"), with no material updates in Q3-2023.

·      Post the quarter, the Company notes the recent exploration
release from Pasofino, which highlights further zones of mineralization at the
Dugbe Tuzon deposit.

Exploration Summary

·      During the quarter, updated 2023 Company Reserves and Resources
statements were released, noting Group Reserves of 4.03 million ounces ("Moz")
and Group Resources of 6.95 Moz.

·      The Company is currently finalising exploration plans for
FY-2024. Details on the Group's exploration plans, including updates on the
completed extension drilling, is anticipated before year end.

Financial update

                                             Unit   Q3-2022              Q4-2022              Q1-2023              Q2-2023            Q3-2023              Year to

Q3-2023
 Yanfolila Gold Mine, Mali
 Gold sales                                  oz            16,917               27,860               26,380              24,770              18,550               69,700
 Avg. gold sale price                        $/oz          $1,713               $1,726               $1,878              $1,981              $1,918               $1,925
 Operating cash costs                        $'000       $36,179              $34,581              $28,998             $29,996             $30,543              $89,537
 AISC on gold sold                           $/oz          $2,161               $1,248               $1,109              $1,234              $1,651               $1,298
 Group Financial Performance
 Adjusted EBITDA                              $m    ($8,885)                  $11,152              $17,575              $15,503              $1,189             $34,266
 Net (debt) / cash                           $'m    ($84.6)              ($128.7)             ($110.8)             ($122.8)           ($123.0)             ($123.0)
 Net (debt) / cash inc gold inventory value  $'m    ($81.0)              ($125.0)             ($105.2)             ($119.3)           ($119.5)             ($119.5)

 

·      Q3-2023 AISC on gold produced at Yanfolila totalled US$1,651 per
oz, a decrease of c.24% on the previous year (Q3-2022: US$2,161 per oz) and an
increase of 34% on the previous quarter (Q2-2023: US$1,234 per oz). The
increase in AISC was primarily driven by the reduction of gold production
during the regional Q3-2023 wet season and increased mining activity of more
open pits, including SE.

·      During the quarter, a total of 18,550 oz of gold was sold at an
average realised price of US$1,918 per oz (Q3-2022: 16,917 oz sold at an
average realised price of US$1,713 per oz) with the Company's gold sales
currently remaining unhedged and fully exposed to the stronger current gold
price.

·      Group adjusted EBITDA of c.US$1.12 million for Q3-2023, vs a
loss of US$8.89 million in Q3-2022, resulting in total adjusted EBITDA as of
the end of September 2023 of c.US$34.3 million.

·      During the quarter, the Company agreed a Group refinancing and
funding package with Coris Bank International ("Coris Bank") for c.US$55
million including:

o  Refinancing c.US$35 million of existing loans with Coris Bank, to
provide additional cash liquidity as Kouroussa ramps up towards a full year of
commercial production from FY-2024; and

o  An additional c.US$20 million to provide increased capital support for
the Group, including the continual development of underground mining
operations at the Yanfolila Mine in Mali.

o  The Company's revised deleveraging schedule to begin in FY-2024, versus
Q3-2023, with c.US$77 million due in FY-2024, c.US$61 million scheduled for
FY-2025, with the remainder c.US$15 million payable up to the end of FY-2028.

·      As of the end of the quarter, the Company held a net debt
position of c.US$123.0 million at the end of Q3-2023 (c.US$119.5
million including gold inventory value). For the quarter end:

·      Gross debt of c.US$138.0 million.

·      Cash at bank of c.US$15.1 million.

·      Gold inventory value of c.US$3.4 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                                    IR@hummingbirdresources.co.uk

 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

 

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