Aim-listed Hummingbird Resources reports that has achieved decent production results from its Yanfolila mine, in Mali, despite Covid-19 having caused a challenging operating environment in the second quarter of the year.

The company poured 24 054 oz of gold in the quarter, compared with the 27 466 oz of gold poured in the second quarter of last year.

Hummingbird achieved a lower all-in sustaining cost (AISC) in the quarter under review of $983/oz, compared with AISC of $998/oz in the second quarter of last year.

The company sold 31 520 oz of gold at an average price of $1 663/oz in the reporting three months.

Meanwhile, an exploration programme for the year at the Yanfolila mine continues to progress, with 12 000 m of drilling done to date. Hummingbird says 75% of the latest exploration programme has been completed.

In respect of the company’s acquisition of the Kouroussa project, in Guinea, Hummingbird awaits change of control approval from the government of Guinea and is preparing to start works on site as soon as possible.

The company acquired the project from Cassidy Gold Corporation in June after Hummingbird completed an in-depth review of the project’s geological database.

Meanwhile, the company’s infrastructure plans will progress at the Dugbe project, in Liberia, once an aggressive exploration programme is completed in due course.

Hummingbird entered into a conditional earn-in agreement with Canadian oil and gas producer ARX Resources over the Dugbe gold project early in June.

The agreement requires ARX to complete a definitive feasibility study, carry out a significant exploration programme and cover all of the project’s costs over a two-year earn-in period.

In return, ARX can earn up to a 49% interest in the project.

The deal also enables Hummingbird to secure the right to acquire an exploration licence which is surrounded on all sides of its existing mineral development agreement, the central licence.

The company had $6-million in cash on hand at June 30, as well as 4 000 oz of gold inventory, which is worth about $8-million. The company expects to be at a net cash position in the second half of the year, with current bank loans to be fully repaid by the end of June next year.

Hummingbird has reduced its debt by $14-million since December 31, with bank debt at $26-million at the end of June.

The company maintains its production guidance for the year at between 110 000 oz and 125 000 oz at an AISC of $995/oz.

Hummingbird says its Yanfolila mine will likely generate in excess of $60-million in earnings in the second half of the year at current gold prices.

"The Covid-19 pandemic has presented us all with a very challenging and dynamic operating environment over the last few months, which previously caused us to advise that we anticipated cost pressure across the board whilst we moved towards a more stable operating situation. 

“While that proved to be the case in the second quarter, with logistical, mechanical and mining challenges all exacerbated by restricted movements and quarantine periods, I am pleased to say that the team has continued to perform well in these trying times and that we have established a stable footing enabling us have a robust outlook for the second half of the year,” says Hummingbird CEO Dan Betts.