REG - Hummingbird Res. - Q3-2024 Operational and Trading Update and TVR

Hummingbird ResourcesAnnouncement

06/11/2024 17:45

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RNS Number : 2413L  Hummingbird Resources PLC  06 November 2024

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

 

06 November 2024

Hummingbird Resources plc

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

Q3-2024 Operational and Trading Update and TVR

Hummingbird Resource (AIM: HUM) announces an operational and trading update
for the third quarter ending 30 September 2024 ("Q3-2024").

Operational update

Group Production

·      In Q3-2024, the Group produced a total of 26,376 ounces ("oz") of
gold, with 69,097 oz produced year-to-date.

Yanfolila Mine, Mali ("Yanfolila")

·      Q3-2024 production of 13,992 oz at an All-In Sustaining Cost
("AISC") of US$2,352 per oz, and 13,717 oz of gold sold at an average price of
US$2,216 per oz.

·      Yanfolila faced some operational challenges during the quarter,
but the delivery of several initiatives to improve fleet availability,
utilisation, and sequencing have helped stabilise production.

Kouroussa Mine, Guinea ("Kouroussa")

·      Q3-2024 production of 12,389 oz (up from 7,789 oz in Q2-2024),
with 26,041 oz produced in the nine months to the end of September 2024, as
the mine continued to progress towards commercial production. The Company
continues to focus on increasing mining volumes as well as mining higher-grade
material, both of which will drive operational improvements.

·      The mine's current focus is on increasing mining volumes in line
with forecasts, together with ongoing operational improvements aimed at
optimising the utilisation of the mining fleet. Efficient waste movement
remains critical to achieving the mine plan. Should mining volumes and fleet
utilisation increase as expected, Hummingbird aims to achieve a commercial
production rate of c.2,000-2,500 oz per week this quarter.

·      The post-quarter end period has seen continued progress, with the
mine producing 2,693 oz this past week across several pours, reinforcing
confidence in reaching commercial production this quarter.

Financial Overview:

·      The Group recorded an adjusted EBITDA loss of approximately
US$3.83 million for Q3-2024, marking an improvement from the US$16 million
loss in Q2-2024. This recovery can be attributed to higher gold sales and
price, increased production at Kouroussa and enhanced operational efficiencies
at Yanfolila.

·      At Kouroussa, year-to-date revenue totals US$55.4 million on an
average gold sale price of US$2,143 per oz. The Group will provide AISC for
Kouroussa once the mine achieves commercial production.

·      As of the end of Q3-2024, the Group reported a net debt position
of approximately US$154.2 million. At the period end:

o  Hummingbird's net bank debt stood at approximately US$135 million with
Coris, of which around US$90 million is secured against the Company's assets.
Additionally, the Company holds approximately US$20 million in unsecured debt
with CIG, which is scheduled to mature on 31 December 2024, as announced on 27
September 2024.

o  Cash position was approximately US$3.9 million drawn of the Company's
existing overdraft facility of c.US$11.6 million.

o  The value of gold inventory was approximately US$4.3 million at the end of
the quarter.

·      With the continued operational and liquidity challenges, the
Group's trade and other payables increased from the end of Q2-2024 (US$134
million) to US$152 million as at the end of the quarter.

Corporate update

·      The Group reported a Lost Time Injury Frequency Rate ("LTIFR") of
0.43 per million hours worked, a testament to Hummingbird's unwavering
commitment to safety across its operations.

·      The Company is today providing a separate update on ongoing
discussions with its primary lenders, Coris Bank International ("Coris") and
Coris Invest Group SA, and the Company's largest shareholder Nioko Resources
Corporation ("Nioko", a wholly owned subsidiary of CIG, and together with
Coris and CIG, the "Coris Parties"), in relation to its liquidity position, a
proposed debt restructuring, partial debt to equity conversion and a possible
offer for all of the shares in the Company which are not owned by Nioko.

FY-2024 Outlook

·      In the face of continued operational challenges, despite ongoing
improvements at both the Yanfolila and Kouroussa mines, the Company updates
its guidance to for FY-2024 to 100,000-115,000 ounces ("oz") at an AISC of
c.US$2,100 per oz.

o  Yanfolila: Anticipated production of 55,000-65,000 ounces at an AISC below
US$2,100 per oz.

o  Kouroussa: Expected production of 45,000-50,000 ounces at an AISC, once in
commercial production of below US$1,400 per oz.

Exercise of Options

The Company announces that it has issued and allotted 1,023,601 new ordinary
shares of 0.01p each in the Company ("Ordinary Shares") pursuant to an
exercise of options under pre-existing share option schemes ("Options
Exercise").

The Ordinary Shares issued pursuant to the Options Exercise have already been
admitted to trading on AIM ("Admission") under the Company's block listing, as
most recently announced on 11 September 2024.

Total Voting Rights

The total number of Ordinary Shares in issue is therefore, 811,308,990 and the
Company holds no shares in treasury such that, the total number of Ordinary
Shares with voting rights in the Company is 811,308,990.

The above figure of 811,308,990 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, Hummingbird under
the FCA's Disclosure Guidance and Transparency Rules.

Dan Betts, Executive Chairman of Hummingbird, commented:

"While Q3-2024 has delivered some production growth with a Group output of
26,376 oz, reaching 69,097 oz year-to-date, this quarter has seen continued
operational challenges. At Yanfolila, we saw some improvements in fleet
availability, utilisation and mining sequencing, which have helped stabilise
production. At our Kouroussa operation, we're making progress, with
operational improvements and increased mining volumes bringing us closer to
commercial production."

Yanfolila, Mali: Q3-2024 operational summary

                       Unit  Q3-2023    Q4-2023    Q1-2024    Q2-2024    Q3-2024
 Gold poured           oz     18,399     14,419     16,999     12,065    13,992
 Mined BCMs            BCMs  1,775,723  1,878,181  1,549,607  1,536,256  1,257,037
 Ore mined             t      171,959    266,361    169,195    167,657   335,565
 Avg. mined grade      g/t   3.09       2.39       2.47       2.08       1.91
 Ore processed         t      339,333    312,045    344,510    331,910   293,505
 Avg. mill feed grade  g/t    1.79       1.66       1.61       1.31      1.65
 Recovery              %     92.93%     91.05%     92.41%     92.66%     92.24%
 Group Gold inventory  oz     1,834      2,908      1,652     74         376

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 maintained its safety performance, achieving a 12-month
rolling LTIFR of 0.45 per million hours, meeting the target of below 1.20.
Safety remains a core priority across all operations, demonstrating the
Company's ongoing commitment to safeguarding its workforce.

·      Gold production at the Yanfolila mine increased to 13,992 oz in
Q3-2024, up from 12,065 oz in Q2-2024. This improvement was driven by higher
ore mining volumes and the processing of higher-grade material. Although ore
grades have varied, the operation continues to optimise feed blends to
maximise gold recovery.

·      A total of 293,505 tonnes of ore were processed in Q3-2024, with
an average mill feed grade of 1.65 g/t. This marks an improvement over
Q2-2024, even with a higher proportion of low-grade and marginal material in
the blend. Recovery rates remained robust at 92.24%, highlighting the plant's
operational efficiency in maximising gold extraction.

·      Having implemented several near-term initiatives designed to
address the operational challenges encountered in Q2-2024 and benefiting from
the drier conditions, Yanfolila is positioned for an improved productive
Q4-2024. The Group expects to see increased mining volumes, a continued focus
on high-grade ore extraction, and further efficiency gains, all contributing
to higher gold production.

·      At the Komana East Underground ("KEUG") project, the Group
successfully produced its first development ore during Q3-2024, marking a
significant milestone in the project's progression. However, due to financial
constraints, the decision was made to temporarily pause further development.
The Company now expects to resume full development in early 2025, with
commercial production forecasted by Q2-2025.

Yanfolila ESG:

Through Q3-2024, the Company continued its focus on investing within the local
communities.

·      Ongoing Community Investment: In Q3-2024, Hummingbird continued
its commitment to local community development, conducting 390 stakeholder
engagements and 31 village meetings, reinforcing relationships with local
communities.

·      Significant Infrastructure Developments: The Company made
progress on key projects, including the completion of the Mankaniana maternity
extension and fencing of the Soloba CSCOM, while advancing the construction of
the Barila health centre and a women's soap store in Kona.

·      Extensive Training and Health Programmes: Hummingbird prioritised
health and safety, training 280 employees in first aid, conducting safety
leadership and Mpox awareness campaigns, and inspecting key operational areas
such as the gold room and camp kitchen. The company also supported local
health initiatives through donations and awareness campaigns.

Kouroussa, Guinea: Q3-2024 operational summary

                       Unit  Q1-2024                        Q2-2024                        Q3-2024
 Gold poured           oz     5,868                          7,789                         12,384
 Mined BCMs            BCMs   1,119,449                      1,281,654                     1,590,928
 Ore mined             t           125,972                        213,926                  206,989
 Average Mined Grade   g/t   1.88                           2.64                           3.54
 Ore processed         t           182,505                        234,706                  190,227
 Avg. mill feed grade  g/t                1.08                           1.17                           2.07
 Recovery              %     91.96%                         93.76%                         94.18%

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.

·      Kouroussa made improvements in its safety protocols following a
tragic incident during the quarter. The Group remains focused on safety,
achieving a 12-month rolling LTIFR of 0.40 per million hours, meeting the
target of below 1.20.

·      Kouroussa's gold production increased in Q3-2024, with 12,384
ounces poured versus 7,789 ounces in Q2-2024. This increase in output is
primarily attributed to higher mill feed grades and improved recovery rates,
signalling ongoing ramp-up progress.

·      Mining volumes continued to increase, with 1,590,928 BCMs mined
in Q3-2024, up from 1,281,654 BCMs in Q2-2024. A total of 206,989 tonnes of
ore were mined, reflecting a steady operational focus on extracting high-grade
material as the mine ramped up towards commercial production.

·      The processing plant continued to operate efficiently, handling
190,227 tonnes of ore in Q3-2024 at an average feed grade of 2.07 g/t, a
notable increase from 1.17 g/t in Q2-2024. This higher feed grade, combined
with a further improvement in recovery rates to 94.18%, contributed to the
increase in gold production.

·      While the ramp-up at Kouroussa was delayed earlier in the quarter
due to operational challenges and equipment availability issues, these were
exacerbated by the impacts of the wet season. However, with improved equipment
availability and operational conditions stabilising, the Group has seen an
increase in output, which it expects to continue into Q4-2024.

·      In late Q3-2024, the relining of the mill was completed,
positioning the processing plant to fully capitalise on the enhanced ore
grades and operational output.

Kouroussa ESG:

Through the quarter, operations have continued to provide value to local
communities and enhance overall well-being:

·      Ongoing Community Investment: In Q3 2024, Hummingbird completed
key projects in Kouroussa, including the construction of 12 latrines at the
local market and 6 latrines at Kouroussa Hospital. Several other community
initiatives, such as market gardening projects and sanitation efforts, are
ongoing, with notable progress made.

·      Extensive Training and Health Programmes: The Company trained
over 120 workers in first aid and conducted health campaigns on Mpox, sexually
transmitted illnesses, and malaria prevention. In addition, 949 medical
consultations were provided, focusing on malaria, chronic diseases, and health
education.

·      Engagement with Authorities: Kouroussa hosted four national
government missions regarding environmental and mining compliance, all of
which were successfully received and supported by the Company. The Company
also welcomed British Ambassador to Guinea, John Marshall to visit the
operation and meet with local stakeholders as the Company delivered essential
infrastructure and resource donations to the local community.

Dugbe, Liberia

·      Pasofino Gold Limited entered into an exclusivity agreement with
a potential third-party purchaser in Q3-2024 for a US$75 million acquisition.
A definitive acquisition agreement is expected in Q4-2024.

·      Initial diamond core drilling results at Bukon Jedeh in the Dugbe
Gold Project showed intersections including 21.3m at 0.9 g/t Au. Additional
exploration is planned near the Tuzon deposit.

·      Work continues on the 2022 Feasibility Study update, focusing on
power usage and metallurgical recovery rates, with completion expected in
2024.

·      Pasofino raised US$2.4 million through a non-brokered private
placement for the Dugbe Project and working capital. Brett Richards was
appointed as Non-Executive Director.

Q3-2024 Financial update

                                                  Unit  Q3-2023   Q4-2023   Q1-2024   Q2-2024   Q3-2024
 Yanfolila Gold Mine, Mali
 Gold sales                                       oz     18,550    12,952   18,230    12,457            13,717
 Avg. gold sale price                             $/oz   $1,918    $1,946   $2,030    $2,075            $2,216
 Operating cash costs                             $m     $30.5     $19.5    $31.7     $31.2     $32.1
 AISC on gold sold                                $/oz   $1,651   $1,508    $1,753    $2,598    $2,352
 Group Financial Performance
 Group Adjusted EBITDA                            $m    $1.2      $2.7      $4.6      ($16.0)   ($3.83)
 Net bank (debt) / cash                           $m    ($123.0)  ($140.4)  ($138.8)  ($153.5)  ($158.5)
 Net bank (debt) / cash inc gold inventory value  $m    ($119.5)  ($134.4)  ($135.1)  ($150.1)  ($154.2)

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:

·      For Q3-2024, AISC for gold sold was US$2,352 per ounce,
reflecting an improvement from US$2,598 per ounce in Q2-2024. This reduction
in AISC is primarily attributed to the increased production volumes at
Yanfolila.

·      The Group recorded an adjusted EBITDA loss of approximately
US$3.83 million for Q3-2024, marking an improvement from the US$16 million
loss in Q2-2024. This recovery can be attributed to higher gold sales and
enhanced operational efficiencies at Yanfolila.

·      At Kouroussa, year-to-date revenue totals US$55.4 million on an
average gold sale price of US$2,143 per ounce. To date revenues generated from
production have been capitalised. The Group will provide AISC for Kouroussa
once the mine achieves commercial production.

·      As of the end of Q3-2024, the Group reported a net bank debt
position of approximately US$154.2 million. At the period end:

o  Hummingbird's net bank debt stands at approximately US$135 million with
Coris, of which around US$90 million is secured against the Company's assets.
Additionally, the Company holds approximately US$20 million in unsecured debt
with CIG, which is scheduled to mature on 31 December 2024, as announced on 27
September 2024.

o  Cash position was approximately US$3.9 million drawn of the Company's
existing overdraft facility of c.US$11.6 million.

o  The value of gold inventory was approximately US$4.3 million at the end of
the quarter.

·      Additionally, with the continued operational and liquidity
challenges, the Group's trade and other payables increased from the end of
Q2-2024 (US$134 million) to US$152 million as at the end of the quarter.

**ENDS**

Notes to Editors:

Hummingbird (AIM: HUM) is a leading multi-asset, multi-jurisdictional 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 output once in commercial production. Further, the Company
has a controlling interest in the Dugbe Gold Project in Liberia that is being
developed by its joint venture partner, 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. The Company's vision is to continue to grow its
asset base, producing profitable ounces with, Environmental, Social &
Governance ("ESG") policies and practices central to all its activities.

 

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

 

 

Notices related to financial advisers and broker

Strand Hanson Limited ("Strand Hanson"), which is authorised and regulated by
the Financial Conduct Authority in the United Kingdom, is acting exclusively
for Hummingbird and for no one else and will not be responsible to anyone
other than Hummingbird for providing the protections afforded to its clients
or for providing advice in relation to the matters referred to in this
announcement. Neither Strand Hanson, nor any of its affiliates, owes or
accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Strand Hanson in connection with this
announcement, any statement contained herein or otherwise.

Canaccord Genuity Limited ("Canaccord"), which is authorised and regulated by
the Financial Conduct Authority in the United Kingdom, is acting exclusively
for Hummingbird and for no one else and will not be responsible to anyone
other than Hummingbird for providing the protections afforded to its clients
or for providing advice in relation to the matters referred to in this
announcement. Neither Canaccord, nor any of its affiliates, owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Canaccord in connection with this announcement, any statement
contained herein or otherwise.

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