Hummingbird Resources (HUM ) has reported production levels during the 1Q21 as in-line with forecast projections while the Group says it now expects 2021 production to pick up next quarter.
The African gold ore mining company poured 22,781 ounces ('oz') of gold in 1Q21 (4Q20: 22,012 oz) and sold 22,019 oz of gold 1Q21 at an average realised price of $1,788 per oz.
As at 31 March 2021, the Company’s gold inventory was 2,596 oz valued at around US$4.4m while All in Sustaining Costs over the 1Q21 came to $1,494 per oz (4Q20: US$1,496 per oz).
The costs were driven by relatively low planned quarterly production and mill grades, a high strip ratio as it accesses the Komana West ore body in particular, and sustaining capex being weighted to first half of the year, including the tailings storage facility ('TSF') dam lift.
Although Q1 was recorded as a slow quarter in terms of production, the firm said this is in-line with forecast projections that the 2021 production profile would be weighted to 2H21.
The Group said it expects production numbers to improve during Q2. In addition, it expects its AISC profile to improve from current levels, in line with improving production levels.
Looking forward, the Company has reiterated its 2021 production guidance of 100,000 - 110,000 oz of gold, with an AISC of $1,250 - 1,350 per oz on gold sold.
During 1Q21, the Group delivered an internal Mineral Resource Estimate ('MRE') update for the Yanfolila mine which was followed by significant drilling results at the Sanioumale East and Komana East deposits, which highlighted the upside life of mine potential at Yanfolila.
At Kouroussa, its development project in Guinea, the Group said it has made ‘good progress’ on the Front End Engineering Design, project layout and capex studies which are now being reviewed while it awaits the awarding of the mining licences from the Government.
At the Dugbe Gold Project in Liberia, the Group highlighted that its earn-in partners, Pasofino, made “significant progress” towards delivering a DFS releasing successful exploration drilling results for the Dugbe F deposit and completing key infrastructure plans.
The Company said its balance sheet continued to strengthen during the quarter. “Our net cash position improved, with the last remaining Company debt of ~US$4.6m forecast to be paid this quarter, taking the Company into a debt free position, as we forecast over 12 months ago, being a noteworthy achievement,” said Dan Betts, CEO of Hummingbird.
Once the ~US$4.6m of debt is paid by Hummingbird during this quarter, this will move the Company into a debt free position, in-line with the Group’s guidance expectations.
Over the period, the Group also strengthened its senior management team with the appointment of Anthony Kocken as Chief Operating Officer ('COO') during the quarter while it also appointed Luke Main as its Group People and Performance Officer during the quarter.
"Finally, we saw our ESG initiatives progressing, in particular around important water infrastructure improvements at several locally supported villages. Further, our impressive health and safety track record continued which are achievements we are proud of,” said Betts.
Despite 1Q21 being a ‘slow quarter’ the Group has told investors that the result is in-line with its forecast projections that the 2021 production profile would be weighted to 2H21.
Looking ahead, the Group said it expects production numbers to improve during Q2 as well as its AISC profile to improve from current levels, in line with improving production levels.
Shares in Hummingbird Resources have ticked up by over 3% since the start of 2021. The stock was trading 2.45% higher this morning at 20.49p following the announcement.
Reasons to HUM
Strong underlying geological indications at Yanfolila, Kouroussa and Dugbe with more drilled expected to drive resources and production higher.
Hummingbird has put a strong management team in place since 2015 with expertise in mining commodity markets and in-region experience of West Africa who have a track record of delivering projects on time and on budget.
Significant growth potential of this multi-asset and multi jurisdiction mining company with appetite to expand the number of projects going.
Lots of positive news events expected in FY21.
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