Hummingbird Resources, [LON:HUM], the AIM-listed, London-based gold miner operating in Mali and Guinea with interests in Liberia, published an operational update earlier this week.
The update concerned Hummingbird Resources Kouroussa Gold Mine in Guinea and its plans to bring the mine into production. Kouroussa is in the Siguiri Basin and has a resource base of 1.2 million ounces (moz) at a grade of 3.02 grammes per tonne with reserves of 647,000 ounces (oz) at 4.15g/t and has been in Hummingbird’s ownership since 2020.
Hummingbird’s pathway to commercial production hit a roadblock last month, as the company’s principal contract miner, Corica Mining Services walked off the job, citing contractual issues. Hummingbird believed that the walk-out was a breach of the mining contract and said that mining equipment mobilisation, commissioning, and overall operating performance was not satisfactory. For the last month Hummingbird and Corica have been in discussions to get Corica’s workforce back on site and to restart and ramp-up mining activities at the Guinean gold mine.
Hummingbird Resources taking operational control
To mitigate, Hummingbird Resources has taken more direct control of Kouroussa’s operations, stepping-in and taking contractual control and directly managing Corica’s own subcontractors on-site. Hummingbird has the option of appointing an alternative apex contractor, and in the interim, while discussions with Corica are ongoing, has temporarily engaged Etablissement Adama Sidibé, a West African contractor to help accelerate the development.
Hummingbird is very focussed on getting Kouroussa into production given the high price of gold on world markets at the moment and drilling and blasting has resumed to allow mining of the higher-grade regions of the tenement and despite the issues with Corica, Hummingbird has completed several small gold pours at Kouroussa, averaging 700oz per week.
The company also updated the market on its flagship Yanfolila Mine in Mali, which is continuing to operate in line with expectations and on target to meet market expectations for FY24 of 75,000oz to 85,000oz of gold at an all-in-sustaining-cost of less than USD1,500/oz.
Discussions with principal lender
The slowdown at Kouroussa has put some financial stress on Hummingbird, but the miner has been in discussions with its principal lender, Coris Bank International, which has said that it will standby and remain supportive of Hummingbird.
Dan Betts, chief executive of Hummingbird Resources said in a statement to the market: “Kouroussa has demonstrated its strategic significance and potential, especially in the current gold pricing environment, through the weekly gold pours despite the significantly reduced mining fleet and the clear visibility of high-grade material that is well within reach. I am also encouraged by the continued performance of the team at our Yanfolila mine, which stands as a testament to the team’s hard work over the past 18 months. As we move forward, our adaptability and the strong support from our partners, reinforces my confidence in our ability to achieve our strategic corporate objectives to become a 200,000 oz pa gold producer.”
Hummingbird Resources opened trading on Tuesday (16th April) at 6.97p and on publication of the update, rallied to 7.955p. Over one-year Hummingbird Resources share price fell 41% and year-to-date is down 32%. Five years ago Hummingbird shares were trading at 16.125p. The company’s shares have ranged between 4.06p and 20.5p over a 52-week period, and the company has a market cap of GBP54.4m.