Financing, Operational & Strategic Review

Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining

27 September 2024

Hummingbird Resources plc

("Hummingbird", the "Group" or the "Company")

Financing, Operational & Strategic Review and Operational Update

Hummingbird Resources (AIM: HUM) announces receipt of a further US$20 million from its largest shareholder and the launch of a comprehensive Group-wide review ("the Review"), aimed at delivering operational improvements and realising the Company's potential as a multi-asset, multi-jurisdictional gold producer. Additionally, the Company today provides an update on the ramp-up of the Kouroussa Gold Mine in Guinea ("Kouroussa").

Financial Stabilisation and Strengthened Balance Sheet

Hummingbird has secured a loan facility of US$30 million from CIG SA. This facility consists of a new US$20 million loan, which will be provided in tranches, and the consolidation of a previously announced US$10 million short-term loan from CIG SA. The loan is unsecured, carries an interest rate of 14% per annum, with an initial maturity date of December 31, 2024. However, the Company anticipates transitioning this loan into a longer term fixed-rate, gold-linked loan note (the "Gold Loan"), which is currently being finalised. There are several opportunities to increase the size of the Gold Loan due to additional interest, and further updates will be provided in due course.

As previously announced, the Company is progressing with several other non-equity financing options to further strengthen its balance sheet as it reaches full operational capacity over the coming quarters.

Group Review

Hummingbird has commenced a comprehensive Group-wide review to assess the capacity of its current platform to deliver sustainable production growth and value creation at its evolving portfolio in West Africa.

Corporate review and restructuring

·      Hummingbird is currently formalising the engagement of a leading industry expert to conduct an independent review of the Company's management structures and operational performance, as above. The scope of work is aimed at restructuring the business to maximise operational performance and efficiencies across the Group.

·      The review will also include corporate restructuring initiatives aimed at cost efficiencies, improved governance, and enhanced accountability, ensuring overall improved performance. A Chief Transformation Officer will be appointed by the board and will join in an executive capacity to lead this assessment and the implementation of the transformation plan. This process will involve initial Board and management changes, with further adjustments expected upon completion of the review.

Operational Review for Consistent Performance

·      As part of the operational optimisation, the Company is finalising the appointment of  an experienced mining professional to lead this transformative process focussed on operational delivery and ramp up at Kouroussa and is expected to be in place shortly. As required, additional external experienced resources may be sourced to support the near-term optimisation plans at Kouroussa and Yanfolila.

Strategic Review for Maximising Shareholder Value

·      Hummingbird is actively engaging with key stakeholders to optimise its strategy and maximise shareholder value. As part of this, the Company is conducting a comprehensive evaluation of the Company's assets, which may involve divesting non-core assets and/or exploring project opportunities. To date the Company has also engaged in informal, non-binding discussions with several parties regarding the sale of certain assets including the Dugbe Gold Project in Liberia.

Leadership Transition and Board Update

·      Dan Betts will formally transition from his current role as CEO and Interim Executive Chairman to the position of Executive Chairman. In this role, he will focus on overseeing the strategic review and guiding the long-term development of the Company, aligning with shareholder interests.

·      Concurrently, mining recruitment specialists, Lincoln Strategic, have been appointed to conduct a search to identify a new CEO, responsible for delivering on the next chapter of Hummingbird's evolution, with an initial focus on driving operational improvements.

·      The Company also announces the planned appointment of Mr. Oumar Toguyeni, a seasoned mining executive, and a Director of Nioko Resources Corporation ("Nioko"), the Company's largest shareholder, to the Board as a Non-Executive Director, subject to final regulatory and due diligence checks.

Hummingbird notes that these measures are being implemented with the support of its primary lender, Coris Bank International ("Coris") and major shareholders. The Company believes that this support will help capitalise on the strong platform it has built to date, enabling it to evolve into a robust mid-tier gold mining company.

Kouroussa Gold Mine Operational Update

While the ramp-up at Kouroussa has continued during Q3-2024, lower-than-forecast mining volumes, delayed pit staging, and processing plant optimisation have delayed the achievement of commercial production, which the Company now anticipates reaching in Q4-2024.

The Company continues to work with the main mining contractor and its operational team at Kouroussa to progress the ramp-up and deliver commercial production. With the now completed mill relining, a more consistent ramp-up of mining performance expected and the end of the wet season, production rates are projected to significantly increase, with a strong performance expected through the final quarter.

Investor Presentation

The Company's senior management team will be holding an investor presentation on Monday 30 September 2024 at 15:00 BST via the Investor Meet Company platform.

The event will cover the release and provide an opportunity for Q&A. The Company invites attendees to pre-send questions to the Company via [email protected] or via the Investor Meet Company platform.

Webcast link: https://www.investormeetcompany.com/hummingbird-resources-plc/register-investor   

Dan Betts, Executive Chairman of Hummingbird, commented:

"As we continue to navigate the challenges at Kouroussa, we are committed to taking decisive actions to strengthen Hummingbird's operational foundation and unlock its full potential as a multi-asset, multi-jurisdictional gold producer. The Group-wide review is an important step towards optimising our production capabilities and enhancing shareholder value.

"While Kouroussa's ramp-up has been affected by various unforeseen factors, we are focused on reaching commercial production in Q4-2024. Whilst we are confident of commercial production in the coming quarter, it is dependent on us and our partners delivering meeting our production plan and expectations   Our focus remains on sustainable growth, securing additional financing, and completing leadership transitions to ensure the successful delivery of our ambitious growth objectives to deliver 200 Koz pa of gold.

"After 17 years of building Hummingbird from a grassroots exploration company to a gold producer with an annual run rate exceeding 200,000 ounces, I believe the time is right for a new leadership team to guide the Company through its next phase. I am proud of what we have achieved and will continue to focus on strategic opportunities and key relationships as Chairman of Hummingbird."

**ENDS**

Appointment of Board Member

As noted above, Hummingbird is in the process of appointing of Mr. Oumar Toguyeni to its Board of Directors, subject to final regulatory and customary due diligence checks.

Mr Toguyeni is a highly experienced global mining executive, with over 35 years of industry expertise. His career has included senior leadership positions at major international mining companies such as BHP Billiton, Alcoa Inc., and IAMGOLD. Beginning his career as an exploration geologist in Burkina Faso, Mr Toguyeni has gained extensive experience across Africa, Europe, North and South America, the Caribbean, and Canada. Bilingual in English and French, he brings a wealth of international experience and insight to the Board.

Mr Toguyeni holds an MSc, an MBA, and an ICD.D qualification. His comprehensive knowledge of operational management, business strategy, and international markets will significantly strengthen Hummingbird's Board as the company focuses on furthering its long-term success and delivering value to all stakeholders.

Related Party Transaction

Nioko is classified as a Substantial Shareholder of the Company pursuant to the AIM Rules for Companies (the "AIM Rules"). Nioko is a wholly owned subsidiary of CIG SA. The Company entering the associated agreements governing the US$30 million facility with CIG SA is accordingly classified as a related party transaction pursuant to the AIM Rules. In this regard, the directors of the Company confirm, having consulted with the Company's nominated adviser, Strand Hanson Limited, that they consider that the terms of such agreements to be fair and reasonable insofar as its shareholders are concerned.

Notes to Editors:

Hummingbird Resources plc (AIM: HUM) is a leading multi-asset, multi-jurisdiction gold producing Company, member of the World Gold Council and founding member of Single Mine Origin (www.singlemineorigin.com). The Company currently has two core gold projects, the operational Yanfolila Gold Mine in Mali, and the Kouroussa Gold Mine in Guinea, which will more than double current gold production once at commercial production. Further, the Company has a controlling interest in the Dugbe Gold Project in Liberia that is being developed by joint venture partners, Pasofino Gold Limited. The final feasibility results on Dugbe showcase 2.76Moz in Reserves and strong economics such as a 3.5-year capex payback period once in production, and a 14-year life of mine at a low AISC profile. Our vision is to continue to grow our asset base, producing profitable ounces, while central to all we do being our Environmental, Social & Governance ("ESG") policies and practices.

For further information, please visit hummingbirdresources.co.uk or contact: