AMN - MALI: Hummingbird extends $15 million bridge facility

Hummingbird Resources, the West African-focused gold development company, has extended its $15 million bridge facility with Taurus Mining Finance Fund for six months. This allows both parties to work together towards a fully funded finance package for the Yanfolila gold project without the timing of the bridge impacting on discussions.

Additionally consulting engineers Senet has agreed to defer $1.7 million of fees which previously fell due for payment in April 2016, for an additional period of up to 12 months. Senet completed the process design and engineering study as part of the Definitive Feasibility Study.  

Earlier this year, Hummingbird unveiled what was considered to be very good results from a Definitive Feasibility Study on Yanfolila.

At a gold price of $1100/oz, IRR was a very attractive 37% (NPV8% is $88 million); at $1250/oz, IRR became 55% (NPV 8% is $142 million). The Definitive Feasibility Study did not include the Gonka deposit, and a subsequent desktop study suggested that incorporation of this deposit could increase NPV 8% to $101 million (from US$88 million, assuming the $1100/oz gold price).

The Gonka study adds further resources and value to Yanfolila and adds 92,000 oz at 2.3 grams/tonne gold for a four-year open pit + 77,000 oz at 4.5 grams/tonne for the underground.

“Ore can be trucked and processed at the Yanfolila process plant 5 km away when built. Average cash costs start at $766/oz with open pit capex of $3 million and underground of $10 million. Processing cost was estimated at $15.8 million, with transport to processing plant of $1.0/tonnes.

Adding Gonka to the Yanfolila Definitive Feasibility Study increases the NPV to $166 million from $142 million at a $1250/oz gold price and to $101 million from $88 million at a US$1100/oz gold price. IRRs go from 55% to 56% and stay at 37% on the same assumptions.

In February Hummingbird announced an improved Ore Reserve Statement (compiled in accordance with JORC, 2012 Edition) and updated economic sensitivities based on the new Reserve and mine schedule for the Yanfolila gold project.

Highlights at $1,100 gold price:

• 24% increase in NPV to $109 million

• IRR increase from 37% to 42%

• AISC reduces by $34/oz to $686/oz

• Reserve increased by 44,200 oz

Updated Reserve: 7.04 million tonnes at 3.14 grams/tonne gold

At $1250 gold price:

• NPV of $162 million

• IRR of 60%

• AISC of $695/oz

Hummingbird Resources CEO Dan Betts says: “When we published our Definitive Feasibility Study in January we said at the time that we were in the process of optimising the mine schedule based on the maiden Reserves from December 2015. I am very pleased to be able to announce these results which bore out the improvements we anticipated.

“An AISC of under $700/oz and a 42% IRR at a $1,100 gold price clearly marks Yanfolila as one of the highest margin, undeveloped gold projects in Africa. At $1250 gold price the IRR jumps to 60% and the NPV to $162 million, with first full year unleveraged cash flow of $74 million.

“These much improved project economics have left the company in a better position to negotiate the final funding package for the development of Yanfolila to production and the recently secured six month bridge extension has given us the time to do this.”

www.hummingbirdresources.co.uk

News courtesy of International Mining