AMN - MALI: Mining contractor appointed for Yanfolila

Hummingbird Resources has appointed African Mining Services (AMS) as mining contractor at the company’s Yanfolila Gold Project in Mali, where mine construction is under way ahead of its first gold pour, expected to occur this year.

Hummingbird Resources CEO Dan Betts says: “Appointing AMS as our mining contractor is another major milestone for Hummingbird and represents the single largest contract the company will award. AMS has an excellent reputation for high quality work with an exemplary health and safety record.

Hummingbird has appointed AMS for an initial three year period with an option for the company to extend the contract by a further year of mining at Yanfolila. The total value of the contract is expected to be approximately $112 million over three years. The pricing represents a circa 5% improvement for the company as well as increased flexibility and transparency when compared to Hummingbird’s Definitive Feasibility Study, released by the company in February 2016. As the largest contract the company will enter into for the development of the Yanfolila Gold Project, these changes represent significant benefits to the company.

AMS anticipates incurring capital expenditure of approximately $38 million for the acquisition of new equipment and that it will employ approximately 450 personnel (the majority of which will be local) for this contract.

Mining operations at Yanfolila will be carried out using conventional drill and blast, and load and haul mining methods from two deposits initially. Mining is due to start in the third quarter of 2017 with first gold pour due by the end of fourth quarter 2017.

Yanfolila is the company’s most advanced asset, which boasts impressive economics and production fundamentals, including 132,000 oz gold targeted for its first full year of production, which would deliver around $70 million of free cash flow at a $1250/oz gold price. On its initial eight-year mine life, Yanfolila has an IRR of 60% and an NPV of $162 million at $1,250 gold price, making it one of the highest margin undeveloped gold projects in Africa. All in sustaining cash costs of $695/oz places it in the lowest quartile of African producers, and well placed to operate profitably in a lower gold price environment. Yanfolila is fully funded to production and commitments to date represent nearly 30% of the project capex and it remains on budget and schedule.

www.hummingbirdresources.co.uk

News courtesy of International Mining