TIDMHUM
RNS Number : 3129R
Hummingbird Resources PLC
26 October 2023
Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector:
Mining
26 October 2023
Hummingbird Resources pl c
("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
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. W e'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 s ummary
Year to
Unit Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 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
incl SMO oz 2,187 2,057 2,810 1,831 1,834 1,834
====== =============== =============== =============== ============== =============== ==============
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 s ummary
-- 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, u pdated 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
Year to
Unit Q3-2022 Q4-2022 Q1-2023 Q2-2023 Q3-2023 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.
**S**
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 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 or contact:
Daniel Betts, Hummingbird Resources Tel: +44 (0) 20 7409
CEO plc 6660
Thomas Hill, IR@hummingbirdresources.co.uk
FD
Edward Montgomery,
CD
James Spinney Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer Nominated Adviser 3494
-------------------------- -------------------------------
James Asensio Canaccord Genuity Limited Tel: +44 (0) 20 7523
Gordon Hamilton Broker 8000
-------------------------- -------------------------------
Bobby Morse Buchanan Tel: +44 (0) 20 7466
Oonagh Reidy Financial PR/IR 5000
George Pope Email: HUM@buchanan.uk.com
-------------------------- -------------------------------
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