Hummingbird Resources plc / Ticker:
HUM / Index: AIM / Sector: Mining
31 January
2024
Hummingbird Resources
plc
("Hummingbird", "Group" or the
"Company")
Q4-2023 Operational and Trading Update &
FY-2024 Outlook
FY-2023 Guidance met, and strong FY-2024
outlook positions the Company for significant deleveraging and
growth.
Hummingbird (AIM: HUM) is pleased to announce a
Group operational and trading update for the fourth quarter ending
31 December 2023 ("Q4-2023") and provide operation and AISC
guidance for FY-2024.
Operational update
Yanfolila
Mine, Mali
· Yanfolila
produced 14,419 ounces of gold ("oz") in Q4-2023, with a total of
83,965 oz produced in FY-2023, meeting the Company's FY-2023
production guidance of 80,000 - 90,000 oz.
· AISC on gold
produced at Yanfolila totalled US$1,701 per oz in Q4-2023, leading
to a FY-2023 AISC of US$1,361 per oz
(FY-2022: US$1,782 per
oz), meeting FY-2023 AISC guidance of under
US$1,500/oz.
· During the
quarter, 12,952 oz of gold were sold at an average realised price
of US$1,946 per oz. At the end of FY-2023, 2,908 oz were held in
inventory valued at c.US$6.0 million.
Kouroussa
Mine, Guinea
· Kouroussa
produced a total of 6,068 oz through H2-2023 following first gold
production in June 2023.
· As previously
announced, the ramp-up of Kouroussa encountered challenges,
primarily due to slower-than-expected mining fleet mobilisation and
commissioning, as well as delays in the recruitment and training of
local and national of mining personnel.
· During Q4-2023,
mining productivity increased and advanced towards the higher-grade
regions of the Koekoe deposit. The processing plant continued to
perform well and consistently operated at nameplate capacity,
running on a 24-hour basis through the quarter.
· As announced on
21 December 2023, the ramp-up of production at Kouroussa was
impacted by a fire at Guinea's main fuel depot, leading to the
suspension of mining operations. As announced on 25 January 2024,
following delivery of fuel to the Kouroussa Gold Mine, mining
operations restarted and are expected to ramp up to full capacity
levels over the coming weeks. The Company remains on target to
achieve commercial production within Q1-2024.
Corporate update
· FY-2023 Lost Time
Injury Frequency Rate ("LTIFR ") for the group was 0.60 per million
hours worked, below the 1.20 LTIFR target.
· Group adjusted
EBITDA of c.US$0.2 million for Q4-2023, resulting in a cumulative
adjusted EBITDA for FY-2023 of c.US$34.5 million.
· The Company's
near-term revenue protection scheme has been finalised with 60,000
oz protected across the first three quarters of FY-2024 through
forward pricing and cost collars, with an average floor price
of US$2,000 per oz and upside of up to
US$2,150.
· In Q4-2023 the
Company announced a placement and open offer, raising gross
proceeds of US$28.1 million, of which US$5.5 million was received
by the Company pre year end, to strengthen the balance sheet and
advance growth initiatives. All resolutions were duly passed at the
General Meeting on 10 January 2024.
FY-2024 Outlook
· Group production
guidance for FY-2024 of 165,000 - 200,000 oz at an AISC below
US$1,500, which is weighted towards H2-2024 and is split as
follows.
o Yanfolila:
75,000 - 85,000 oz at AISC below US$1,500 oz.
o Kouroussa:
90,000 - 115,000 oz at AISC below US$1,500 per oz.
· The Company
remains focused on material balance sheet deleveraging, which will
commence in Q1-2024 with scheduled debt 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.
· In line with the
exploration strategy outlined in Q4-2023, the Company expects to
spend c.US$5 million on exploration across both Yanfolila and
Kouroussa, targeting near mine resource and LOM growth.
Investor Presentation
The Company's senior management team
will be holding an investor presentation on 2 February 2024
at 14:30 GMT 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
Dan Betts, CEO of Hummingbird,
commented:
"FY-2023 posed
significant challenges for Hummingbird as it evolved into a
multi-asset, multi-jurisdictional gold company, welcoming Kouroussa
into our portfolio and maintained our dedication to responsible
mining practices and community engagement. Yanfolila demonstrated
its resilience by producing nearly 84 koz of gold at an AISC
of US$1,361/oz, meeting our FY-2023 guidance. Additionally, FY-2023
saw the commencement of the Komana East underground mine
development. This project is crucial in the future of Yanfolila,
and we are focused on delivering commercial production later this
year for a full year of production from FY-2025.
In the face of challenging conditions at
Kouroussa, with delays in the mobilisation and commissioning of the
mining fleet and the suspension of mining operations due to a fire
at Guinea's main fuel depot, we successfully completed construction
on schedule and within budget and produced 6,068 ounces in H2 2023.
During the mining shutdown, our team has used this time diligently
to further optimise the ramp-up process and with fuel deliveries
now occurring, all equipment onsite and operations restarting, our
focus remains on reaching commercial production in
Q1-2024.
Looking to FY-2024, our primary focus is on
delivery, and we have set our guidance in the range of 165,000 to
200,000 ounces, targeting Group AISCs at below US$1,500. This broad
range reflects the ramping up of Kouroussa, and we anticipate
refining this guidance later in the year once we have reached
consistent commercial production levels. In the upcoming fiscal
year, our strategic objectives include achieving the substantial
increase in our Group production profile, significantly reducing
our net debt position, executing on exploration programs to further
extend LOM at both producing assets, and delivering substantial
value to our stakeholders through responsible mining practices and
strategic growth initiatives."
Yanfolila, Mali: Q4-2023
operational summary
|
Unit
|
Q4-2022
|
Q1-2023
|
Q2-2023
|
Q3-2023
|
Q4-2023
|
FY-2023
|
Gold poured
|
oz
|
28,264
|
27,262
|
23,885
|
18,399
|
14,419
|
83,965
|
Mined BCMs
|
BCMs
|
1,303,770
|
1,557,793
|
592,360
|
1,775,723
|
1,878,181
|
5,804,057
|
Ore mined
|
t
|
529,496
|
647,869
|
262,911
|
171,959
|
266,361
|
1,349,101
|
Ore
processed
|
t
|
382,683
|
366,622
|
364,459
|
339,333
|
312,045
|
1,382,459
|
Avg. mill feed
grade
|
g/t
|
2.45
|
2.41
|
2.21
|
1.79
|
1.66
|
2.03
|
Recovery
|
%
|
94.28%
|
94.41%
|
94.06%
|
92.93%
|
91.05%
|
93.10%
|
Total Gold
inventory
|
oz
|
2,057
|
2,810
|
1,831
|
1,834
|
2,908
|
2,908
|
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
Q4-2023, Yanfolila maintained a rolling 12-month average LTIFR of
0.70 per million hours worked against our target rate of less than
1.20 per million hours worked.
· In Q4-2023,
Yanfolila's gold production reached 14,419 ounces, contributing to
a total of 83,965 ounces for FY-2023, successfully meeting guidance
for FY-2023 gold production. Mining volumes rose to 1,878,181 BCMs,
mainly driven by the mining at the Sanioumale East ("SE") open pit
deposit.
· Ore processed in
Q4-2023 totalled 319,845 tonnes, experiencing a slight decline from
Q3-2023 due to increased maintenance on the mill in late November,
affecting processing volumes.
· Q4-2023 saw a
reduction in average mill feed grade on Q3-2023 at 1.66 grammes a
tonne ("g/t") and processing plant recovery of 91.05%. The
reductions over the quarter were driven by the shift in mining to
SE and the blending of marginal Run of Mine ("ROM") stockpiles with
higher grade material, whilst grades returned to Q3-2023 levels in
December.
· The ongoing
development of the high grade Komana East Underground ("KEUG") Mine
progressed well, with approximately 164.5 meters of advance by the
end of FY-2023. The Company, which is developing the project
internally, anticipates initial developmental ore in H1-2024 and
reaching commercial production later in the year.
Yanfolila
ESG:
· Across FY-2023,
the Company placed a large focus on investing within the local
communities, with several initiatives completed
including.
o SE village
resettlement: In Q2-2023, the Company
successfully completed the SE village resettlement, on budget and
ahead of schedule. This completion enabled the Company to initiate
operations on the SE deposit earlier than originally planned. The
resettlement effort saw over forty families relocated successfully
and was completed under the guidance of West African specialist
consultants Environmental and Social Development
Company ("ESDCO").
o Educational infrastructure
enhancement: Under its educational program, the
Company undertook the construction and rehabilitation of school
infrastructure. This encompassed the construction of three
classrooms and the refurbishment of teachers' housing and
classrooms, contributing to the improvement of educational
facilities.
o Water infrastructure
construction: The Company continued to invest
in the construction of water infrastructure, aiming to enhance
water access for approximately 1,000 people in the local
region.
o Economic development training
initiatives: The Company implemented training
initiatives focused on economic development, covering diverse areas
such as market gardens, poultry and fish farming, and the
establishment of workshops for honey and Shea butter production.
These initiatives are designed to empower the local community
economically and foster sustainable development.
o Community health
initiatives: Hummingbird actively
combated malaria through education, training, intra-domiciliary
spraying, and the distribution of mosquito nets, emphasising a
comprehensive approach to disease prevention.
Kouroussa, Guinea: Q4-2023
operational summary
· In 2023,
Kouroussa achieved a LTIFR of 0.40 across 2,449,755 hours worked,
well below the targeted objective of 1.20, and surpassed several
safety milestones.
· At the end of
FY-2023, Kouroussa had produced a total of 6,068 oz, above updated
expectations of c.5,000 oz. This was achieved through processing
existing low-grade stockpiles and additional selective mining
activity in late December 2023.
· As previously
noted, Kouroussa encountered challenges during the ramp-up of
production, particularly experiencing lower-than-planned mining
productivity rates due, delays in mining equipment mobilisation and
commissioning, the slower-than-expected recruitment and training of
local and national personnel and impacts of seasonal weather
conditions. This resulted in reduced volumes and a delay in mining
the high-grade material at the initial key deposit,
Koekoe.
·
During November and into December, mining
productivity saw an upward trend, approaching the targeted BCM
movement rates and progressing towards the
higher-grade regions of the Koekoe deposit.
· As previously
announced, a fire at the primary fuel depot in Conakry, Guinea, led
to the temporary suspension of mining operations at Kouroussa, with
the processing plant remaining in operation, processing existing
stockpiles and limited material mined. As announced on 25 January
2024, fuel had been successfully delivered to the Kouroussa Gold
Mine in recent days, leading to the resumption of mining operations
on-site. The company plans to gradually increase production to
reach full capacity levels in the coming weeks.
· Throughout the
suspension of mining operations, the company has undertaken several
initiatives to enhance ramp-up performance. These initiatives
include grade control drilling and dewatering of the operation.
Additionally, extra training has been conducted for employees at
the Kouroussa Mine. The Company maintains its focus on achieving
full commercial production within Q1-2024.
Kouroussa ESG:
· Throughout
FY-2023, the Company successfully implemented social responsibility
initiatives as well as engaging in various local initiatives,
underscoring efforts the Company's commitment to strong community
engagement and development. These included:
o Investment in Local
Communities: The Company committed resources to
support local communities, encompassing the maintenance of local
religious buildings and investment in the regional educational
system. Notably, 500 school kits were distributed to local schools,
and first aid training was provided to both regional students and
local youth.
o Sustainability and Healthcare
Focus: Demonstrating a commitment to
sustainability and healthcare, the Company continued its investment
in local water infrastructure. This involved drilling six boreholes
to supply fresh water to six local communities. Additionally,
ongoing training and certification in health impact assessment were
provided to contribute to community well-being.
o Environmental Responsibility at
Kouroussa Mine: The Company remains steadfast
in its commitment to environmentally responsible operations. The
in-house environmental team conducted comprehensive monitoring of
air, noise, dust, vibration, and water quality. Furthermore,
efforts towards the ongoing reforestation of the urban forest of
Kouroussa align with the Company's participation in the
conservation of the regional ecosystem.
o Community Engagement
Programs: The Company sustained its engagement
with local communities through diverse programs. Initiatives
included the establishment of women's market gardens across the
region, fostering economic empowerment. Furthermore, a vocational
three-year training program was initiated to equip local youths
with skills relevant to mining-related trades, contributing to
their long-term development.
Dugbe, Liberia
· The recent
conversion of the Company's 51% interest in the Dugbe Gold Project
into a 51% interest in Pasofino simplifies the ownership structure,
enabling efficient decision-making and project
advancement.
· In January 2024,
Pasofino announced a non-brokered private placement totalling
approximately US$2.33 million, inclusive of a US$2 million
investment by Hummingbird. This investment increases Hummingbird's
shareholding in Pasofino to 53%.
· Working closely
with the Pasofino team, Hummingbird is outlining the next steps for
the Dugbe Gold Project and will provide updates in due
course.
Exploration Summary
· As previously
announced, following exploration conducted during FY-2023, the
Company has developed comprehensive exploration plans for FY-2024
onwards. These plans are designed to systematically expand the
Resource bases at both the Yanfolila and Kouroussa operations, with
the goal to increase the Reserve bases and extend LOM at both
operating assets.
· Further details on the Company exploration plans can be found
-
polaris.brighterir.com/public/hummingbird/news/rns/story/r7ln1vx
Financial
update
|
Unit
|
Q4-2022
|
Q1-2023
|
Q2-2023
|
Q3-2023
|
Q4-2023
|
FY-2023
|
|
Yanfolila Gold
Mine, Mali
|
Gold sales
|
oz
|
27,860
|
26,380
|
24,770
|
18,550
|
12,952
|
82,652
|
|
Avg. gold sale
price
|
$/oz
|
$1,726
|
$1,878
|
$1,981
|
$1,918
|
1,946
|
1,928
|
|
Operating cash
costs
|
$m
|
$34.6
|
$29.0
|
$29.0
|
$30.5
|
$22.0
|
$111.6
|
|
AISC on gold
sold
|
$/oz
|
$1,248
|
$1,109
|
$1,234
|
$1,651
|
$1,701
|
$1,361
|
|
Group Financial
Performance
|
Adjusted
EBITDA
|
$m
|
$11.2
|
$17.6
|
$15.5
|
$1.2
|
$0.2
|
$34.5
|
|
Net bank (debt) /
cash
|
$m
|
($128.7)
|
($110.8)
|
($122.8)
|
($123.0)
|
($140.4)
|
($140.4)
|
|
Net bank (debt) / cash inc
gold inventory value
|
$m
|
($125.0)
|
($105.2)
|
($119.3)
|
($119.5)
|
($134.3)
|
($134.3)
|
|
·
Q4-2023 AISC on gold sold at Yanfolila totalled
US$1,701 per oz, leading to a FY-2024 AISC of US$1,361. The
decrease in AISC during Q4-2023 was in line with the progression of
the mining at the SE deposit.
· During the
quarter, a total of 12,952 oz of gold was sold at an average
realised price of US$1,946 per oz.
· The Company has
fully implemented its near-term revenue protection strategy over a
portion of the Company's production for the first three quarters of
FY-2024 in the order of 60,000 oz, with forward pricing and cost
collars, with an average floor price of US$2,000 per oz
and upside of up to US$2,150.
· Group adjusted
EBITDA of c.US$0.2 million for Q4-2023 due to reduced gold sales,
resulting in total adjusted EBITDA for FY-2023 of c.US$34.5
million.
· During the
quarter, the Company announced a conditional placement, accompanied
by an open offer, which closed raising a total of US$28.1 million,
with US$5.5m received by the Company, and the balance following the
subsequent approved at a General Meeting held on the 10 January
2024. The Company will use the net proceeds to strengthen the
balance sheet of the business and advance multiple growth
initiatives as part of the Company's growth strategy.
· As of the end of
FY-2023, the Company held a net bank debt position of c.US$140.4
million (c.US$134.3 million including gold inventory value). For
the year end:
o Gross bank debt
of c.US$148.3
million.
o Cash at bank of
c.US$7.9 million (inclusive of the abovementioned
US$5.5m).
o Gold inventory
value of c.US$6.0 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).
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 or
contact:
Daniel Betts,
CEO
Thomas Hill,
FD
Edward Montgomery,
CD
|
Hummingbird Resources
plc
|
Tel: +44 (0) 20 7409
6660
|
James
Spinney
Ritchie
Balmer
|
Strand Hanson
Limited
Nominated
Adviser
|
Tel: +44
(0) 20 7409 3494
|
James
Asensio
Ana
Ercegovic
|
Canaccord Genuity
Limited
Broker
|
Tel: +44 (0) 20 7523
8000
|
Bobby Morse
Oonagh
Reidy
George Pope
|
Buchanan
Financial
PR/IR
|
Tel: +44 (0) 20
7466 5000
Email: HUM@buchanan.uk.com
|