Aim-listed West African gold exploration and development company Hummingbird Resources announced last month that it had raised about £3.5- million, before expenses, through the placing of 10.6-million new ordinary shares at 33p a share. The funds raised will be used primarily to advance Hummingbird’s Yanfolila gold project, in Mali, to near-term production and for working capital purposes. Newly appointed joint broker, UK-based stockbroker Beaufort Securities, acted as lead broker on the fundraising.
Hummingbird CEO Dan Betts says: “Following the recent appointment of Beaufort Securities as joint broker, we received strong demand particularly from the retail community and, as such, we are delighted to have raised £3.5-million. Having bolstered our cash balance, increased our retail following and potential liquidity, we are now in an even stronger position to deliver our first gold pour at Yanfolila in 2016, where plant earthworks are already under way.”
The company also announced in June that its 1.8-million-ounce Yanfolila gold project is advancing to near-term gold production.
Technical studies completed indicate significant potential for improved economics by developing Yanfolila into an openpit mining operation. Improved pit designs and mine scheduling show the potential for significant growth in recovered gold from the Komana East and West pits.
Improved pit slopes of the Komana East and Komana West deposits have also been completed since the optimisation study, as have the gold grade control orientation drilling grids.
Plant earthworks at Yanfolila are progressing well, with 75% completion of the contract by local West African contractor SFTP against a planned 55% completion.
Owing to the success of geotechnical and resource work since the optimisation study, which was completed in March this year, Hummingbird is now focused on an initial two-pit mine plan at Komana East and West pits to simplify the mining process in the early years of debt repayment, with a further three pits – Sanioumale East and West, and Guiren West – to be brought into the mine plan, giving further upside, an extended life-of-mine (LoM) and increased production and ounces.
Betts says: “The company has been highly active over the last two months at Yanfolila with a programme of technical derisking studies and commencement of plant earthworks, which are ahead of schedule at this time. The technical derisking studies show the significant potential for material economic improvement of the openpit mining operation. We are extremely pleased with the results of these programmes to date and look forward to updating the Yanfolila financial model in the coming weeks and seeing further significant economic improvements from within it as we look to develop and build a leading West African gold mining operation.”
Project Overview and Initial Plant Earthworks
Yanfolila has a current 1.8-million-ounce gold inventory based on multiple high-grade pits, averaging 2.8 g/t of gold. The project, which is fully permitted, is located in the prospective Sikasso region, 40 km to the west of the town of Yanfolila, and benefits from established infrastructure.
Hummingbird’s completed optimisation study highlighted the robust economics for the project, underpinning its potential as a low cost, high-grade openpit gold project processing one-million tons of ore a year. A net present value of $72.4-million, an internal rate of return of 35.1% and low all-in cash costs of $733/oz of gold for a 6.5-year LoM production and average annual production of 79 000 oz were demonstrated in the optimisation study.
Since the completion of the optimisation study, Hummingbird had commenced initial earthworks consisting of the excavation, placement and compaction of fill materials of over 80 000 m3. This work consists of constructing the process plant terrace; plant infrastructure terrace, including reagent storage and handling; change house and security facility areas; power plant terrace; in-plant roads; and storm event pond.
The objective of this work, which is targeted to take eight weeks, is to complete the preparation of level compacted areas at the Yanfolila plant site for use by the civil contractor, to place structural concrete equipment foundations and slabs and to allow the overall construction schedule to be maintained.