In its final results for the year ended 31 December 2021, Hummingbird Resources (HUM ) said it is ‘well on its way’ to achieving its strategic goal of becoming a multi-asset producer and more than doubling its production profile in 2023/24.
Hummingbird Resources hailed the ‘significant progress’ made towards its goal of becoming a multi-asset, multi-jurisdiction gold producer. Despite the operational challenges faced in FY21, largely as a result COVID-related production disruptions and headwinds together with social and political volatility in both Mali and Guinea, it said “some key outcomes” were achieved.
It did acknowledge, however, that the disruption faced over the year impacted the operational performance of the Yanfolila gold mine in Mali which underperformed in the latter part of 2021.
Over FY21, Hummingbird says total sales of US$156.6m, compared to $181.7m in FY20 were generated from 87,553 ounces (“oz”) of gold sold in 2021 at an average price of US$1,788/oz.
The Company reported adjusted EBITDA of $18.6m for FY21 while net debt stood at $21.0m.
Speaking of the operational impact, Dan Betts, CEO of Hummingbird told investors: “We have taken steps to address these issues, with a significant focus on improving productivity and predictability at Yanfolila with several optimisation and mitigation workstreams in place.”
‘Though we have faced some difficult challenges in 2021, we are focusing on operational improvements and delivering future growth platforms for us to generate returns for our long-term shareholders, whose support is greatly appreciated by the Board,’ he noted.
Having financed the Kouroussa gold development project in Guinea, Hummingbird initiated construction at the site in 2021 and expanded the mine life of Yanfolila and Kouroussa, respectively, with company reserves increasing to over 1 million oz, with “further growth” anticipated at the next Company Resources and Reserves statement due in June 2022.
In FY21, reserves increased to c.1.12 million ounces, a 438,600 oz increase to the previous company reserve statement in October 2019 of 672,000 oz, while a c.68.000 metre drilling programme was undertaken at both Yanfolila, Mali and Kouroussa, Guinea, respectively.
With operational improvements being embedded at Yanfolila and with the development of Kouroussa, Hummingbird said it remains on track to achieving its long-term strategic goal.
Hummingbird also highlighted the progress made on its ESG initiatives over the year, which it said continues to be a significant focus. At Kouroussa, it is planning to embed technologies to lower its overall mining carbon footprint, such as a solar plant and heat recovery systems.
At Kouroussa, with construction rapidly advancing and major civil works now underway, the key priority for the project management team in 2022 and beyond is to deliver the project on time, on budget and safely, with zero tolerance towards unsafe behaviours and practices.
While acknowledging that the current macro-environment - in terms of inflationary pressure and political instability in West Africa - provides a challenging backdrop, Hummingbird said it will increasingly focus on operational readiness over the next year “so that the business of mining effectively and efficiently is in place when mining begins in 2023 and beyond.”
Meanwhile, at the Dugbe gold project in Liberia, Hummingbird expects its earn-in partners Pasofino Gold Limited to deliver a DFS at the projects shortly. It says it is cognisant, post the DFS, that it will have the opportunity to deliver meaningful shareholder value on Dugbe.
Hummingbird outlined that its exploration objectives in 2022 will be to finalise the analysis and delivery of its updatedCompany Resources and Reserves statement and extend the LOM of its assets whilst also looking to continue the company’sLOM extension journey by further analysing its geology base and developing additional exploration campaigns for the future.
In regard to outlook, CEO, Dan Betts, concluded: “As we look to 2022, we remain focused on delivering our vision for Hummingbird with significant initiatives across our portfolio to create value and build a Company that we and stakeholders across the business can be proud of.”
Hummingbird’s FY22 forecasts include production guidance of 87,000 - 97,000 oz of gold, with an AISC of $1,300 - $1,450 per oz of gold amid improving trends in production and AISC.
The Company is expected to release a Resources and Reserve statement in 2Q, which is expected to include positive results from the drilling campaigns at Yanfolila and Kouroussa.
Its earn-in partner, Pasofino Gold Ltd, also remains on track to release details of the Definitive Feasibility Study on the
Dugbe gold mine in Liberia in 2Q22. Once finalised, this is expected to be a significant milestone as the company completes the transition from a pure exploration asset into a proven project with economic fundamentals of strategic value to Hummingbird.
CEO, Dan Betts, recently commented on the aforementioned developments and remarked on short-term outlook: “As a Company, we remain focused on the year ahead as we look to drive operational and productivity improvements at
Yanfolila, remain diligent in terms of timeframe, cost, and quality delivery at Kouroussa towards first gold pour at the end of Q2 2023 and show a pathway to delivering shareholder value from Dugbe with a DFS to be issued soon.”
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