GCIHummingbird Resources secures $100m facility to fund Kouroussa Gold Mine
(HUM ) has secured a $100m group level financing package from Coris Bank International enabling it to fully fund the development of the Kouroussa Gold Mine.
The recently acquired Kouroussa Gold Mine in Guinea is forecast to be a high-grade, low-cost mine expected to produce an average of between 120,000 and 140,000 ounces (“oz”) for the first three years of production and average 100,000 oz over the life of mine (“LOM”).
The LOM has increased to a minimum of seven years from the original five year estimate at purchase of the Project based on the optimised mine plan, and is forecast to produce at an average All In Sustaining Cost (“AISC”) in the range of US$900-US$1,000 per oz during the
LOM, with material upside potential through further exploration drilling which is being planned.
Dan Betts, CEO of Hummingbird Resources, commented: “The completion of the financing and the imminent commencement of building Kouroussa marks the next phase of Hummingbird’s strategy to become a multi-mine, multi-jurisdiction gold producer.”
He explained to investors: “With one of the highest IRRs for a gold project in West Africa, and material upside to extend LOM through further exploration within our licences area yet to be fully explored, Kouroussa provides a strong platform for our next phase of growth.”
Hummingbird said the recent political events in Conakry have not impacted the progress of the development of Kouroussa, and that it has taken measures to ensure that our key priority of maintaining the safety of its employees, contractors and operations remain intact.
The mine is forecasted to be “a key contributor” in Guinea’s journey to becoming a leading gold producer in West Africa, following ongoing gold discoveries in the Siguiri Basin while at today’s gold price, the Project also demonstrates ‘robust economics’, he told investors.
The construction of Kouroussa is expected to begin this quarter, 4Q21, with first gold pour scheduled for the end of 3Q23 and the project is now fully funded through internal cash flows and the $100m facility from Coris Bank at a fixed interest rate of 8.5% over four years.
The total project capex is reported at US$97.5 million for a one million tonne per annum (“Mtpa”) processing plant and establishment costs, with an additional budget of US$10 million for pre-production mining cost and US$7.5 million for contingencies, Hummingbird noted.
16,000m of a 24,000m 2021 infill drilling programme at Kouroussa has been completed, with the remaining meters to be finalised this year. Its current mineral resources stand at 1.18 million ounces at >3 grams per tonne (625,600 oz indicated, and 552,700 oz inferred).
The focus of the infill drill programme is to convert resources to reserves. A maiden Kouroussa reserve on one of the key deposits, Koekoe (‘KK’), will be included in Hummingbird’s updated reserve statement to be released this quarter followed by a subsequent resource and reserve update based on 2021 drilling due in 1H22.
In its recent half-year results for the six months to 30 June 2021, Hummingbird Resources said it had fulfilled its milestone of repaying all debt raised to build its Yanfolila operations.
By period-end, the company reported net cash of US$12.4m, including gold inventory value of around $3.4m. During 2Q21, the Group made around $4.7m of final debt repayments thereby moving it into a debt free position compared to 1H20 in which it held $20m in debt.
The Group said it has seen ‘material progress and success’ at its Yanfolila exploration and drilling programme to date. In 1H21, around 32,500m of the 44,600 m forecast for the year was drilled (vs ~21,000 m drilled in 2020) with ‘significant drill hole intercepts’ reported.
The Company explained to investors that the majority of assays from the H1 Yanfolila drilling campaign are awaiting results from the labs in Bamako and that the Company anticipates being able to release these results during H2 2021 along with final drilling programmes.
Following a mineral resource estimate update of 1.929 million ounces, the Group now intends to release an updated reserve statement later this year, to include Kouroussa in Guinea.
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