Hummingbird Resources (AIM: HUM) said it is in “a strong position” to deliver its goals for the second half of 2020 after it swung to a profit for the six months ended 30 June 2020.
The African gold producer reported a pre-tax profit of $23.7m for the period compared to a loss of $5.8m in 2019’s first half despite the difficulties faced by the COVID-19 pandemic.
In its half-year results, Hummingbird described the period as “busy and productive” and reported revenue up for the period at $92m from$67.1m in the comparative 2019 period.
The group highlighted that production has continued at the Yanfolila gold mine despite the combined difficulties faced by both the COVID-19 crisis and recent political unrest in Mali.
Hummingbird said it has adapted its procedures to operate within COVID-19 restrictions and has, as a result, sold 56,095 ounces of gold at an average price of US$1,621 per ounce.
Commenting on the difficulties faced, CEO, Dan Betts, said, “The recent political unrest in Mali, while a concern, has not impacted our current operations, which are some 280kms from the capital, however, we are closely monitoring any potential impact it may have on logistics.”
Shares in Hummingbird have risen from lows of 18.15p in late March and were trading 1.47% higher this morning at 34.5 following the company’s half-year results.
Nonetheless, Hummingbird has continued its planned 2020 exploration programme at Yanfolila which it says is now 75% complete with over 12,000 metres of drilling completed, adding that ‘significant results are being returned’, increasing its confidence in the project.
The group described its acquisition of the Kouroussa Gold Project in Guinea as “a significant step forward” in its growth strategy to be a multi-asset producer and said it offers potential to develop another asset into production, “which has significant exploration upside.”
Hummingbird added that its earn in agreement with ARX Resources to advance the Dugbe Gold Project in Liberia will enable it to both realise value and focus on its core business.
Cash stands at $6m while the group told investors that it has significantly reduced its bank debt - having paid down debt and interest of around US$16 million during the period - and that it is on track to pay off all currently held debt by the end of the first half of 2021.
Looking ahead, Hummingbird has maintained its 2020 guidance of 110,000 - 125,000 oz at an all-in-sustaining cost of up to US$995 per oz.
Betts said the company is in “a strong position” to deliver its goals for the second half of 2020.
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