Maintaining 2021 production and AISC guidance
Hummingbird Resources (AIM: HUM), is pleased to announce its unaudited results for the six months ended 30 June 2021 (“the Period”).
OPERATIONAL AND FINANCIAL HIGHLIGHTS DURING THE PERIOD
· 46,809 ounces (‘oz) of gold sold at an average price of US$1,794/oz
· Revenue of US$87 million (H1 2020: US$92 million) with an all in sustaining cost (‘AISC’) of US$1,437/oz (improving in Q2 to US$1,386/oz)
· Adjusted EBITDA of US$16.2 million (H1 2020: $39.0 million) and pre-tax loss of US$3.3 million for the Period (H1 2020 profit of: US$23.8 million). I n line with Hummingbird’s guidance expectations with full year production to be weighted towards the second half of the year
· Net cash of US$12.4 million (inc. gold inventory value of ~US$3.4 million), with ~US$4.7 million of final debt repayments made during Q2 2021, taking the Company into a debt free position (H1 2020: net debt of US$20 million)
· Maintaining 2021 production guidance of 100,000 – 110,000 oz of gold, with an AISC of US$1,250 – 1,350 per oz of gold sold
DEVELOPMENT AND EXPLORATION
· Yanfolila Mali: Material progress and success with the Company’s 2021 Yanfolila exploration and drilling programme during H1 2021. ~32,500 metres (‘m’) of the 44,600 m forecast for the year drilled in H1 2021 (vs ~21,000 m drilled in the whole of 2020) with significant drill hole intercepts reported. The majority of assays from the H1 drilling campaign are awaiting results from the labs in Bamako and the Company anticipates being able to release these results during H2 2021 along with final drilling programmes
· The Company released a detailed Yanfolila mineral resource estimate update of 1.929 million ounces (indicated and inferred). The Company remains on track to release an updated reserve statement later this year, to include Kouroussa in Guinea, and in the future is looking to release a joint Company resource and reserve update annually from H1 2022
· Kouroussa, Guinea: Mining licences awarded in May 2021. Detailed capex estimates are being finalised to then enable the Company to complete key work streams, including financing for construction of the mine. As previously stated, the Company will update the market shortly with further details on development plans and capital cost estimates
· Dugbe, Liberia: Earn-in partner, Pasofino Gold Ltd (‘Pasofino’), released the results of an independent Preliminary Economic Assessment (‘PEA’) for Dugbe highlighting strong project pre-tax NPV 5% economics ranging from US$825 – US$1,153 million (dependent on gold price). Ongoing positive drilling results also continued during H1 at Dugbe’s two key deposits, Dugbe F and Tuzon, showing upside potential to the PEA economics. Pasofino is working towards a delivery of a Definitive Feasibility Study (‘DFS’)
ENVIRONMENTAL, SOCIAL & GOVERNANCE (‘ESG’) HIGHLIGHTS
· Covid-19 : The Company’s ongoing strict on-site testing, quarantine procedures and overall hygiene protocols performed well in mitigating virus spread during H1 2021. In Q2 2021 limited cases were reported with on-site employee vaccinations beginning
· Hummingbird Tree Initiative : The Company’s locally supported village nursery programmes continued to progress during H1 2021, now with over 10,000 trees ready to be used in the coming months for the Company’s annual 20-hectare rehabilitation programme
· Market gardens : Hummingbird successfully completed key infrastructure for its local market garden programme, a market centre for trading fruit, vegetables and poultry from locally supported village market gardens completed in Q2 2021. This takes the total Company supported market gardens to 10. The markets now provide employment for over 800 mainly women from the local communities. Water infrastructure improvements were also carried out during H1 2021
· Sanioumale East (‘SE’) resettlement: Progress continued during the Period with workshops, technical services and risk assessments taking place
· World Gold Council (‘WGC’) Responsible Gold Mining Principles (‘RGMPs’) : Company GAP analysis was completed towards the end of Q2 2021. This is now being evaluated internally and with external ESG consultants to prioritise and address areas where gaps have been identified in the Company’s policies and procedures
· Single Mine Origin (‘SMO’): As a founding member of SMO, good progress was made during the Period with this industry wide initiative of traceable gold to responsibly operated mines. A number of other gold mines joined as SMO members, increased marketing took place in key publications advancing SMO brand awareness, several new leading jewellery brands signed up to use only SMO gold in their products, with future business plans and new revenue streams developed
POST PERIOD
· In July, Hummingbird announced drill results from the SE deposit at Yanfolila where 14 new holes continued to showcase a high grade open pit potential, with one hole demonstrating 5.33 grammes per tonne (“g/t”) gold at surface for ~40 m
· In August, the Company provided an update on the exploration programme at Yanfolila, releasing 18 new diamond drill hole results from the Komana East deposit. Each hole intersected mineralisation over the +300 m long strike length tested, to a depth of ~200 m below surface with grades of +3 g/t gold. The mineralisation continues north showing future underground mining growth potential and life of mine extension
· Pasofino released results for a further six drill holes at the Tuzon deposit ( please see link here ), in August. The results included 36.3 m grading 2.06 g/t gold and 15 m grading 2.01 g/t. These results are expected to have a positive impact on the updated Mineral Resource Estimate due in September 2021
Dan Betts, CEO of Hummingbird, commented:
“We have yet again had another busy first half to the year. Our key focus centred around productivity and predictability improvements at Yanfolila in Mali, which was reflected in our Q2 2021 operational results, with gold ounces poured and AISC improvements from Q1 2021 levels. Our new COO started in Q1 and has settled into the role, having been to site and implementing a number of processes and protocols aimed at cost reduction and productivity improvements across the business.
“In H1 2021 we completed the repayment of all the debt raised to build our Yanfolila operations, a key milestone of which we are extremely proud.
“Further, the drilling success we achieved in 2020 continued during the period. A material number of metres were drilled at various deposits in H1 2021, and some stellar holes released with many more awaiting assays which we are excited to receive in order to continue to show the potential for extending the mine life at Yanfolila.
“Our growth project, Kouroussa in Guinea, advanced in H1 2021, and with the granting of the mining licences in May, our dedicated project management team are now finalising capex estimates, to then allow completion of financing and then begin construction. We are nearing the finalisation of our capex estimates and anticipate offering a more detailed update on the Kouroussa economics soon.
“Our other development project, Dugbe in Liberia, continued to advance via our joint venture partner Pasofino. Material drilling has taken place at the two key deposits, Dugbe F and Tuzon, and improvements in infrastructure in and around the asset have been carried out. Additionally, a P EA was released showcasing the robust economics of the project.
“With improving operational protocols and efficiencies gaining traction at Yanfolila, Kouroussa moving towards beginning construction, and Dugbe advancing well towards a DFS, we are excited about the future prospects for the Company and look forward to keeping the market updated on our progress for the remainder of the year.”
