Publication of Circular and Notice of GM

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

05 December 2024

Hummingbird Resources plc

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

Publication of Circular and Notice of General Meeting

Further to the Company's 28 November 2024 announcement concerning entry into a conditional binding subscription agreement with CIG SA and Nioko Resources Corporation, pursuant to the proposed Debt-to-Equity Conversion detailed by the Company on 6 November 2024, the Company now provides an update on the publication of the associated shareholder Circular and Notice of General Meeting.

The Circular contains full details of the Debt-to-Equity Conversion to be implemented via the proposed conversion of the New CIG Loan and approval of a Rule 9 Panel Waiver by Independent Shareholders, along with a Notice of General Meeting scheduled for 10:00 GMT on 23 December 2024. The Circular outlines the shareholder approvals required to complete the Debt-to-Equity Conversion, as well as provide instructions on how to vote.

The Circular and Notice of General Meeting will be sent to shareholders today and will also be made available on the Company's website shortly.

Overview

·      Despite the Company's efforts, ongoing challenges including operational issues at Yanfolila, equipment shortages, working capital constraints, and delays in ramping up Kouroussa, have significantly strained the Company's balance sheet and its ability to meet near-term debt obligations.

·      To address these financial challenges, the Company agreed to a non-binding term sheet for a debt-to-equity conversion with Nioko and CIG and subsequently entered into the Subscription Agreement to implement the conversion. During November 2024, CIG provided a further US$10 million loan, bringing the total unsecured debt owed to CIG under the New CIG Loan to US$30 million (excluding interest).

·      Subject to certain conditions, this debt will be converted, in two stages, into new Ordinary Shares at a price of 2.6777 pence per share. This conversion would increase Nioko's voting rights from 41.81% to approximately 49.9% (Stage 1 Conversion), and further to approximately 71.8% of the Company's enlarged share capital upon completion of the Stage 2 Conversion, as further detailed in the Circular.

·      Nioko has indicated its intention to seek the cancellation of the Company's AIM listing following the completion of the Debt-to-Equity Conversion. To provide an exit opportunity for Independent Shareholders, Nioko is considering making a firm offer for the entire issued share capital of the Company it does not own at a price of 2.6777 pence per share (the "Offer"). The Debt-to-Equity Conversion is conditional on, amongst other things, Nioko announcing the Offer prior to the General Meeting. The Company expects Nioko to announce the Offer (if made) on these terms at least seven days before the General Meeting, and in the event this does not occur, the Company intends to adjourn the General Meeting for a certain period of time to allow shareholders adequate time to evaluate the Offer (if made). Shareholders are encouraged to read the Circular for further information on this dynamic.

·      Any Offer announcement remains subject to Nioko completing its due diligence to its satisfaction. While positive discussions are continuing between Nioko and the Company, there can be no certainty that any Offer will be made, even if any pre-conditions to it are satisfied or waived. Shareholders are strongly advised not to take any action until after the Offer has been made.

·      Should the Resolutions required for the Debt-to-Equity Conversion to proceed not be passed at the General Meeting, then the Debt-to-Equity Conversion will not proceed. In such circumstances, the Company will not be able to repay the New CIG Loan on its current terms and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board will need to put the Company into administration or an alternative insolvency process, as appropriate. Given the level of debt the Company has outstanding, in such a scenario, Shareholders are unlikely to receive any meaningful return on their equity investment.

·      Approximately US$68 million in debt repayments and credit support renewals are due by 31 December 2024. This includes US$30 million owed to CIG, which will be removed from the Company's balance sheet upon approval of the Resolutions, and amounts due to Coris, for which the Company is dependent on continued deferrals and provision of credit support.

·      Despite achieving commercial production at Kouroussa, the Group as a whole is not expected to generate sufficient near-term cash flows to alleviate its liquidity pressures. These issues are exacerbated by ongoing losses at Yanfolila and upcoming payments related to negotiations with the Government of Mali. CIG has indicated a willingness to discuss providing additional funding, pending due diligence, to support the Company's operations until the restructuring and Offer are completed.

Below is an extract of certain sections from the Circular thought relevant to Shareholders. Shareholders are strongly encouraged to read the Circular in full however. Capitalised terms in this announcement are as per the definitions section at the end of the announcement, unless otherwise defined.

Extract From the Circular - Letter From the Chairman (Selected Paragraphs)

Introduction

On 6 November 2024, the Company announced a proposed debt restructuring and, pursuant to Rule 2.4 of the Takeover Code, a statement regarding a possible offer by Nioko for all of the shares issued and to be issued in the Company not already owned by Nioko.

Proposed Debt-to-Equity Conversion and Possible Offer

Despite the best efforts of the Company, the continued challenges around operational performance at Yanfolila, equipment availability, working capital constraints and further delays in the ramp up of operations at Kouroussa (as detailed further in the Company's Q3 2024 Operational Update), have placed significant strain on the Company's balance sheet and its ability to meet near-term debt repayment obligations.

To address the Company's immediate financial obligations, the Company agreed a non-binding term sheet for the Debt-to-Equity Conversion with Nioko and CIG as described in the Company's announcement on 6 November 2024 and, on 27 November 2024, entered into the Subscription Agreement to implement the Debt-to-Equity Conversion. CIG has provided the outstanding US$10m loan referred to in the Company's announcements of 27 September 2024 and 1 November 2024, following which the Company now has US$30m of unsecured debt (excluding interest) due to CIG under the New CIG Loan. The Board has agreed that the principal amount of US$30m outstanding under the CIG Loan will, subject to certain conditions, be converted into Ordinary Shares in the Company pursuant to the Subscription Agreement, to be issued to CIG's wholly owned subsidiary Nioko, at a conversion price of 2.6777 pence per Ordinary Share. The conversion would increase Nioko's voting rights from 41.81 per cent. to approximately 49.9 per cent. (Stage 1 Conversion) on approval of the Rule 9 Waiver Resolution, and thereafter to approximately 71.8 per cent. of the Company's Enlarged Share Capital on the terms and conditions further described in paragraph 3 of this Part 1 (Stage 2 Conversion).

Nioko has informed the Company that, following completion of the proposed Debt-to-Equity Conversion, it intends to seek the cancellation of the admission to trading on AIM of the Company's Ordinary Shares. Accordingly, in order to provide an exit opportunity for Independent Shareholders, ahead of the proposed cancellation, Nioko stated that it would consider announcing a firm intention to make an offer for the entire issued ordinary share capital of the Company that it does not hold at a price of 2.6777 pence per Ordinary Share (the same price as the Debt-to-Equity Conversion) (the Offer). The Debt-to-Equity Conversion is conditional on, among other things, Nioko announcing the Offer prior to the General Meeting.

The Company expects Nioko to announce the Offer (if made) on these terms on the date falling not less than 7 days prior to the date of the General Meeting so that Shareholders can make a fully informed decision in relation to their vote at the General Meeting. Shareholders who consider the liquidity opportunity afforded by the Offer to be important should note that the Offer is conditional on the Rule 9 Waiver Resolution being passed and should read that announcement in full before voting at the Meeting or returning a Form of Proxy.

It is expected that the passing of the Resolutions 1, 2 and 3 will, among others, be a condition to the Offer and if the Resolutions 1, 2 and 3 are not passed, the Offer will not become unconditional and will lapse. If for any reason Nioko's announcement of the Offer has not been made by the date that is 7 days prior to the date of the General Meeting, the Company intends to adjourn the General Meeting until an appropriate time after it has been made.

The making of an announcement of any Offer remains subject to Nioko completing its due diligence to its satisfaction. While positive discussions are continuing between Nioko and the Company, there can be no certainty that any Offer will be made, even if any pre-conditions to it are satisfied or waived. Shareholders are strongly advised not to take any action until after the Offer has been made.

In the event that Nioko has not announced a firm intention to make the Offer by 31 December 2024 then CIG will need to grant an extension to, or waiver on, the repayments under the New CIG Loan so that the General Meeting can be adjourned until a later date and for the process to continue, failing which, and in the absence of an alternative financing solution being found, the Board may need to consider putting the Company into administration or an alternative insolvency process, as appropriate, and Shareholders would be unlikely to receive any return on their equity investment.

Should there be an extension to, or waiver of, the repayments under the New CIG Loan but Nioko does not announce an Offer before 31 January 2025, the General Meeting will be adjourned indefinitely, meaning the Debt-to-Equity Conversion will not take place, unless mutually agreed otherwise by the parties. In such circumstances the Company may not be able to repay the New CIG Loan on its current or amended terms, and, if CIG calls a default on the New CIG Loan it is highly likely that in the absence of an alternative financing solution being found, the Board will need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any return on their equity investment.

Both the Stage 2 Conversion and the Offer (if made) will be conditional on the receipt of the regulatory approvals relating to the consequent change of control of the ultimate beneficial ownership of the Company's assets in Mali, Guinea and Liberia (the Regulatory Condition). It should be noted that, if the Resolutions 1, 2 and 3 are passed at the General Meeting but the Regulatory Approvals are not granted, then, given the material significance of the Regulatory Approvals to Nioko and Hummingbird in the strategic context of the Debt-to-Equity Conversion and the Offer, although the Stage 1 Conversion is expected to automatically complete and the Stage 1 Conversion Shares be issued following the General Meeting, resulting in Nioko holding approximately 49.9 per cent. of the voting rights in the Company, it would be Nioko's intention to seek the Panel's consent to invoke the relevant Regulatory Condition to cause the Offer to lapse and the Stage 2 Conversion to not complete. Nioko considers that if any of the adverse circumstances contemplated in the Regulatory Approvals were to materialise, this would fundamentally undermine the rationale behind the Stage 2 Conversion and the Offer and, therefore, Nioko would not wish to implement the Stage 2 Conversion and the Offer in such circumstances. In such circumstances, the Company may not be able to repay the balance of the New CIG Loan on its current or amended terms unless CIG agree to further waivers or deferrals and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board may need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any meaningful return on their investment.

CIG has indicated its willingness to engage in good faith discussions in respect of potential additional funding for the Company, following its due diligence exercise, with a view to the Company continuing as a going concern pending full implementation of the Proposals.

Panel Waiver and PUSU Deadline

The Panel has agreed to waive the obligation on Nioko to make a general offer that would otherwise arise on account of the allotment and issue to it of any Conversion Shares, subject to the approval by the Independent Shareholders of the Rule 9 Waiver Resolution on a poll. Conditional upon the Resolutions 1, 2 and 3 being passed at the General Meeting it is expected that the Stage 1 Conversion Shares will be admitted to trading on AIM shortly after the General Meeting.

The Company has called the General Meeting in order to put to Shareholders the resolutions required to grant (i) the authority to issue and allot the Conversion Shares (ii) approve the Rule 9 Panel Waiver and (iii) take renewed share authorities should they be required.

As noted in the Company's 6 November 2024 announcement, and in accordance with Rule 2.6(a) and Rule 2.6(c) of the Code, Nioko is required, by not later than 5.00 p.m. (London time) on 3 January 2025 (the PUSU Deadline) (with such deadline having been extended from 5.00 p.m. (London time) on 4 December 2024), to either announce the Offer, subject to conditions or pre-conditions if relevant, for the Company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. If Nioko request more time to consider making an Offer, the Company anticipate requesting that the Panel extends the PUSU Deadline accordingly.

Conversion Price

The Conversion Price represents a 58.2 per cent. discount to the closing share price of 5 November 2024, being the last trading day prior to the date of the Rule 2.4 Announcement.

Subscription Agreement

The Subscription Agreement documents the terms of the Debt-to-Equity Conversion and details the conditions on which the US$30 million outstanding principal amount under the New CIG Loan converts into new Ordinary Shares in the Company. The Debt-to-Equity Conversion comprises (i) the Stage 1 Conversion and (ii) the conversion of the remainder of the principal amount of the New CIG Loan in the Stage 2 Conversion.

Unless otherwise agreed between the Parties in writing, completion of the subscription by Nioko of the Stage 1 Conversion Shares under the Subscription Agreement is conditional on, prior to 10 February 2025:

a)   the approval at the General Meeting of the Resolutions 1, 2 and 3;

b)   no insolvency event having occurred in relation to any member of the Group;

c)   there being (i) no cancellation, loss, expiry, expropriation or surrender of any Core Mining Licences and (ii) no act of any governmental authority resulting substantially in the cessation of operations at any of the Group's operations;

d)   Nioko announcing the Offer before 31 January 2025;

e)   certain warranties regarding, amongst other things, the Group's operations, its material contracts, litigation, title and capacity being true, accurate and not misleading at the time of Admission of the Stage 1 Conversion Shares; and

f)    Admission of the Stage 1 Conversion Shares.

Unless otherwise agreed between the Parties in writing, completion of the subscription by Nioko of the Stage 2 Conversion Shares under the Subscription Agreement is conditional on, prior to 31 March 2025 (or such later date, being no later than 30 June 2025, as Nioko may nominate):

(a)        Admission of the Stage 1 Conversion Shares;

(b)        no insolvency event having occurred in relation to any member of the Group;

(c)        there being (i) no cancellation, loss, expiry, expropriation or surrender of any Core Mining Licences or mineral rights and (ii) no act of any governmental authority resulting substantially in the cessation of operations at any of the Group's operations;

(d)        the granting of all Regulatory Approvals;

(e)        certain warranties regarding, amongst other things, the Group's operations, its material contracts, litigation, title and capacity being true, accurate and not misleading at the time of Admission of the Stage 2 Conversion Shares; and

(f)         Admission of the Stage 2 Conversion Shares.

The Panel has confirmed that, if Nioko announces a firm intention to make the Offer as contemplated above, Rule 13.5(a) of the Takeover Code will also apply to the conditions under the Subscription Agreement described in (b) and (c) above relating to the issue of the Stage 1 Subscription Shares, and to the conditions described in (b), (c) and (d) above relating to the issue of the Stage 2 Conversion Shares. Under the Takeover Code, Nioko may not invoke a condition to which Rule 13.5(a) applies so as to cause the transaction not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the conditions are of material significance to Nioko in the context of the transaction. Nioko may only invoke a condition that is subject to Rule 13.5(a) with the consent of the Panel and any condition that is subject to Rule 13.5(a) may be waived by Nioko.

As noted in paragraph 1 above, given the material significance of the Regulatory Approvals, if not obtained Nioko intends to seek the Panel's consent to invoke those conditions. Nioko also considers that the conditions in relation to the Core Mining Licences and the solvency position of the Group are of material significance, as a failure of each of such conditions equally poses a serious risk of a cancellation of the relevant mining licences. Nioko would, therefore, also seek to invoke those conditions if necessary.

If Nioko is able to invoke any of the conditions, then the Stage 1 Conversion and/or Stage 2 Conversion may not occur, the Company may not be able to repay the balance of the New CIG Loan on its current or amended terms unless CIG agree to further waivers or deferrals and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board may need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any meaningful return on their investment.

Rule 9 Panel Waiver

Nioko is currently interested in 41.81 per cent. of the Ordinary Shares in the Company. As it is interested in Ordinary Shares which in the aggregate carry not less than 30 per cent. of the voting rights of the Company, but does not hold Ordinary Shares carrying more than 50 per cent. of such voting rights, if Nioko subsequently acquires an interest in any other Ordinary Shares which increases its percentage of Ordinary Shares carrying voting rights, it must make a mandatory offer to all other Shareholders, unless a waiver from such offer is granted by the Takeover Panel pursuant to Rule 9 of the Takeover Code. The Panel has agreed to such a waiver provided that Independent Shareholders approve the issue of the Conversion Shares. Full details of the Rule 9 Panel Waiver are set out in Part 2 of this document.

In the event that the Stage 2 Conversion completes Nioko will hold 71.8 per cent. of the voting rights in the Company's Enlarged Share Capital (approximately 70 per cent. on a fully diluted basis) and will not be required to make a mandatory offer to all other Shareholders in the event that it increases its percentage of Ordinary Shares carrying voting rights by acquiring Conversion Shares.

General Meeting

The Notice of General Meeting is set out in Part 6 of this document.

Resolutions

The Resolutions which are required in order to enable the Company to allot and issue the Conversion Shares are summarised below.

Resolution 1

Resolution 1, if passed will grant to the Directors a general authority to allot the Conversion Shares and will be proposed as an ordinary resolution. To be passed an ordinary resolution requires a simple majority of the votes cast at the General Meeting (by Shareholders present in person or by proxy) to be cast in its favour.

This authority, if granted by Shareholders, will expire on the date falling 6 calendar months from the date of the passing of the Resolution and will be in addition to the 2024 Authorities.

Resolution 1 is conditional on the Rule 9 Waiver Resolution being passed at the General Meeting

Resolution 2

Resolution 2, if passed will grant to the Directors the authority to allot the Conversion Shares on a non pre-emptive basis and will be proposed as a special resolution. To be passed a special resolution requires at least three quarters of the votes cast at the General Meeting (by Shareholders present in person or by proxy) to be cast in favour of it.

This authority, if granted by Shareholders, will expire on the date falling 6 calendar months from the date of the passing of the Resolution and will be in addition to the 2024 Authorities.

Resolution 2 is conditional on Resolution 1 and the Rule 9 Waiver Resolution being passed at the General Meeting

Resolution 3

Resolution 3 is the Rule 9 Waiver Resolution and will be proposed as an ordinary resolution for Independent Shareholders to approve the Rule 9 Panel Waiver and shall be voted on a poll. If passed it will approve the Rule 9 Panel Waiver and (subject to the passing of the other Resolutions 1 and 2) will allow the issue of the Conversion Shares to Nioko without Nioko being required to make a mandatory offer under Rule 9.

In the event that any of Resolutions 1, 2 or 3 are not passed at the General Meeting the Debt-to-Equity Conversion will not complete. In such circumstances the Company will not be able to repay the New CIG Loan on its current terms and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board will need to put the Company into administration or an alternative insolvency process, as appropriate. Given the level of debt the Company has outstanding, in such a scenario, Shareholders are unlikely to receive any return on their equity investment.

Resolutions 4 to 7

The Company is also proposing updated shareholder authorities as further resolutions 4 to 7. Resolution 4 will replace the Company's general authority to allot Ordinary Shares, providing the Directors with the authority to allot new Ordinary Shares up to one third of the Enlarged Share Capital (or two thirds in relation to a pre-emptive rights issue), resolutions 5 and 6 will replace the Company's authority to disapply pre-emption rights on the allotment of new Ordinary Shares up to 10 per cent. of the Enlarged Share Capital (and an additional 10 per cent. on a financing of an acquisition or specified capital investment), and resolution 7 will replace the Company's authority to make market purchases of Ordinary Shares up to 10 per cent. of the Enlarged Share Capital

Irrevocable Undertakings and Recommendation

The Independent Directors recognise that the Conversion Price may not fully recognise the potential shareholder value which may, or may not, be generated in the longer term. However, the Independent Directors also recognise that absent the CIG Parties' continued financial support for the Company, or a new party offering to finance the Company, the Company will not be in a position to meet its near-term debt obligations and the risk of administration or insolvency will significantly increase.

The Independent Directors, who have been so advised by Stifel and Strand Hanson as to the financial terms of the transaction, consider the Debt-for-Equity Conversion and concurrent Offer, should it be forthcoming, to be fair and reasonable and in the best interests of the Company and Independent Shareholders as a whole, as the Offer represents an opportunity for Independent Shareholders to realise some cash sum for their holding now, which may not otherwise be available. In reaching this conclusion, the Independent Directors have considered the CIG Parties' intentions in respect of the ongoing strategy and operation of the Company, including the potential proposed changes to employment and locations of registered and trading office locations that may be necessary to make.

Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Resolutions, including the Rule 9 Waiver Resolution (which is to be proposed as Resolution 3).

It is noted that Oumar Toguyeni is Nioko's representative on the Hummingbird board (as well as being a director of Nioko) and Geoff Eyre was appointed to the Hummingbird board at the request of Nioko, and therefore neither are providing a recommendation on the Resolutions.

Stephen Betts, Dan Betts, Tom Hill and Ernie Nutter (being the only Directors holding Ordinary Shares as at the Last Practicable Date) holding, in aggregate, between them approximately 1.90 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to vote in favour of the Resolutions in respect of their respective holdings of Ordinary Shares in the Company, subject to Nioko announcing a firm intention to make the Offer.

For the avoidance of doubt, Nioko is not able to vote in respect of Resolution 3.

The Debt-to-Equity Conversion is conditional on the passing of Resolutions 1, 2 and 3. If the Debt-to-Equity Conversion does not complete, the Company will not be able to repay the New CIG Loan on its current terms and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board will need to put the Company into administration or an insolvency process and Shareholders are unlikely to receive any meaningful return on their investment.

Extract From The Circular- Part 2 - The Takeover Code

Rule 9 Waiver Resolution

Nioko is currently interested in 41.81 per cent. of the Ordinary Shares in the Company. As it is interested in Ordinary Shares which in the aggregate carry not less than 30 per cent. of the voting rights of the Company, but does not hold Ordinary Shares carrying more than 50 per cent. of such voting rights, if Nioko subsequently acquires an interest in any other Ordinary Shares which increases its percentage of Ordinary Shares carrying voting rights, it must make a mandatory offer to all other Shareholders.

The Takeover Panel has agreed, however, to waive the obligation on Nioko to make an offer that would otherwise arise upon the issue of the Stage 1 Conversion Shares following the passing of the Resolutions 1, 2 and 3 which will increase Nioko's holding to 49.9 per cent. of the voting rights of the Company, and on the issue of the Stage 2 Conversion Shares following receipt of all Regulatory Approvals for the change in control of the Company when the balance of the New CIG Loan will be converted into Conversion Shares representing a maximum of in aggregate 71.8 per cent. of the voting rights of the Company's Enlarged Share Capital, in each case subject to the approval, on a poll, of the Independent Shareholders. Accordingly, the Rule 9 Waiver Resolution is being proposed at the General Meeting in respect of the issuance of the Conversion Shares. Nioko will not vote on the Rule 9 Waiver Resolution.

Risks Associated With The Rule 9 Waiver Resolution

In considering your voting decisions in relation to the Rule 9 Waiver Resolution, you are referred to the risks set out below, as well to the text contained in the paragraph Current Trading, Future Prospects and Ratings in Part 3 of this document. Only those risks relating to the Rule 9 Waiver Resolution which are material and currently known to the Company are set out below: 

·      The Independent Shareholders should note that, if the Resolutions 1, 2 and 3 are approved and the Stage 1 Conversion becomes unconditional, Nioko's aggregate shareholding in the Company will automatically increase to 49.9 per cent. following the General Meeting, and Nioko will be able to exercise greater control over the conduct of the Company than is currently already the case. Following receipt of the Regulatory Approvals and the Debt-to-Equity Conversion becoming unconditional, Nioko's aggregate shareholding in the Company will increase to over 70 per cent. of the Enlarged Share Capital effectively giving Nioko control over the Company, including the ability to delist the Company and take it private. Nioko will be able to increase its holdings in the Company further without incurring an obligation under Rule 9 to make a mandatory offer to the other Shareholders.

·      In the event that the Resolutions 1, 2 and 3 are not passed by the Independent Shareholders, then the Debt-to-Equity Conversion will not proceed. In this case, the Company will not be able to repay the New CIG Loan on its current terms and, if CIG calls a default on the New CIG Loan, it is highly likely, in the absence of alternative funding arrangements, that the Board will need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any meaningful return on their investment. In addition, as completion of the Debt-to-Equity Conversion is a condition to the Offer, the Offer will not become unconditional and will lapse.

·      In the event that the Resolutions 1, 2 and 3 are passed at the General Meeting but the Regulatory Approvals are not granted, then, given the material significance of the Regulatory Conditions to Nioko and Hummingbird in the strategic context of the Debt-to-Equity Conversion and the Offer, although the Stage 1 Conversion is expected to automatically complete and the Stage 1 Conversion Shares (as noted above) be issued, resulting in Nioko holding approximately 49.9 per cent. of the voting rights in the Company, it would be Nioko's intention to seek the Panel's consent to invoke the relevant Regulatory Condition to cause the Offer to lapse and the Stage 2 Conversion to not complete.  Nioko considers that if any of the circumstances contemplated in the Regulatory Conditions were to materialise, this would fundamentally undermine the rationale behind the Stage 2 Conversion and the Offer and, therefore, Nioko would not wish to implement the Stage 2 Conversion and the Offer in such circumstances. In such circumstances the Company may not be able to repay the balance of the New CIG Loan on its current or amended terms unless CIG agree to further waivers or deferrals and, if CIG calls a default on the New CIG Loan, it is highly likely that, in the absence of an alternative financing solution being found, the Board may need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any meaningful return on their investment.

·      In the event that Nioko has not announced a firm intention to make the Offer by 31 December 2024 then CIG will need to grant an extension to, or waiver on, the repayments under the New CIG Loan so that the General Meeting can be adjourned until a later date and for the process to continue, failing which, and in the absence of an alternative financing solution being found, the Board may need to consider putting the Company into administration or an alternative insolvency process, as appropriate, and Shareholders would be unlikely to receive any return on their equity investment.

·      Should there be an extension to, or waiver on, the repayments under the New CIG Loan but Nioko does not announce an Offer before 31 January 2025, the General Meeting will be adjourned indefinitely, meaning the Debt-to-Equity Conversion will not take place, unless mutually agreed otherwise by the parties. In such circumstances the Company may not be able to repay the New CIG Loan on its current or amended terms, and, if CIG calls a default on the New CIG Loan it is highly likely that in the absence of an alternative financing solution being found, the Board will need to put the Company into administration or an alternative insolvency process, as appropriate, and Shareholders are unlikely to receive any return on their equity investment. In addition, certain repayments are due by 31 December 2024 in respect of the Company's existing loans with Coris Bank, as set out in Part 5.

Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, may also have an adverse effect on the Company.

Extract From The Circular- Part 3 - Additional Information On The Company

Current Trading, Future Prospects And Ratings

The Company currently operates two gold mines: the Yanfolila Gold Mine in Mali and the Kouroussa Gold Mine in Guinea. During Q3-2024, Hummingbird produced a total of 26,376 ounces ("oz") of gold from both of these mines, bringing year-to-date production to 69,097 oz. At the Yanfolila Mine in Mali, production in Q3-2024 amounted to 13,992 oz, with an All-In Sustaining Cost (AISC) of US$2,352 per oz. The Kouroussa Mine in Guinea advanced towards commercial production during the year, officially declared by the Company on 25 November 2024. Kouroussa produced 12,389 oz during Q3-2024, an increase from 7,789 oz in Q2-2024, resulting in a year-to-date production of 26,041 oz.

Across the group, the Company remains focused on enhancing performance, including increasing mining volumes and targeting improved grade material to drive cash flow. The Company anticipates meeting the lower end of its revised FY-2024 Group production guidance of 100,000-115,000 oz at an AISC of approximately US$2,100 per oz. Yanfolila is expected to achieve the lower end of its production range of 55,000-65,000 oz at an AISC below US$2,100 per oz. Meanwhile, Kouroussa is projected to produce approximately 45,000 oz of gold for the year. Following the declaration of commercial production, Kouroussa's AISC is expected to remain below US$1,500 per oz for the remainder of the year.

Additionally, the Company owns a 50.8% stake in Pasofino Gold Limited (TSXV: VEIN), a Canadian-listed entity developing the Dugbe Gold Project in Liberia. A completed feasibility study for Dugbe outlines reserves of 2.76 million oz and attractive economic metrics at a gold price of US$1,750 per ounce. These include a 3.5-year capital payback period once in production and a 14-year mine life with a low AISC profile. Pasofino has reported significant progress in its strategic review, as detailed in press releases dated 26 August 2024 and 14 November 2024, which may result in the sale of all or part of the company to a third party. Pasofino is currently in active discussions with several interested parties, with two having submitted non-binding expressions of interest to acquire the company.

In 2022, the Malian Government initiated an audit of the country's mining sector, focusing on existing mining conventions. A new Mining Code (the "2023 Mining Code") was introduced in August 2023, followed by the issuance of the Implementation Decree in July 2024, which defined key economic parameters, and the establishment of a commission comprised of Malian Government advisors and representatives (the "Commission") to negotiate certain aspects of existing mining conventions and clarifying the application of the 2023 Mining Code to both existing and new mining projects. Since late 2023 , Hummingbird and its Malian subsidiary, Société des Mines De Komana SA ("SMK"), has been engaged in constructive discussions with the  Commission to address outstanding audit findings and clarify the application of the 2023 Mining Code to the Yanfolila Gold Mine. The Company expects to finalise an agreement with the Government of Mali by the end of the year, hereby incurring near-term payment obligations.

Approximately US$68 million of debt repayments and renewal of credit support is due on 31 December 2024. This includes US$30 million of principal due to CIG, and which is the subject of the Debt-to-Equity Conversion, and as such, as long as the Resolutions are approved, this liability to CIG is expected to be removed from the balance sheet. The remainder of the amount concerns amounts due to Coris, which the Company does not expect to have the cash resources available to repay and is therefore dependent upon Coris continuing to assist the Company with its liquidity challenges through continued payment deferrals and provision of credit support.

Moreover, and as previously announced, despite achieving commercial production at Kouroussa, the Group as a whole is not projected to generate sufficient near-term cash flows to alleviate its ongoing liquidity pressures. These challenges are compounded by the current loss-making operations at Yanfolila, and upcoming payments related to ongoing negotiations with the Government of Mali.

To address these financial pressures outlined above, the Group is in discussions with CIG and Nioko regarding the provision of additional financial support necessary to enable the Company to continue trading as a going concern.

Nioko has informed the Company that, following completion of the proposed Debt-to-Equity Conversion, it will seek to procure the cancellation of the admission to trading of the Company's Ordinary Shares on AIM ("Cancellation") as it believes that the Company's financial and operational situation could be stabilised more easily as a private company. Upon acquiring control of the Company, it would also intend to make certain additional changes to its board and management and explore the Company's options to secure additional debt and equity funding to put it on a more sustainable long-term footing. 

Save as disclosed in this document, or as announced by the Company since 24 September 2024 when it announced its six-month results to 30 June 2024, there has been no significant change in the financial or trading position of the Group since 30 June 2024, being the date to which the unaudited interim financial information for the Group was prepared.  There are no current public ratings or outlooks accorded to the Company by ratings agencies.

Extract From The Circular - Definitions, Expected Timetable of Principal Events and Statistics of the Debt-to-Equity Conversion

Definitions

The following definitions apply throughout this document unless the context otherwise requires:

Expected Timetable of Principal Events

Each of the times and dates in the below is indicative only and may be subject to change by the Company, in which event details of the new times and dates will be notified to shareholders by announcement through a Regulatory Information Service.

Certain of the events in the above timetable are conditional upon, inter alia, the approval of the Resolutions to be proposed at the General Meeting.

All references to time and dates in this document are to time and dates in London.

* To the extent that Nioko does not make an announcement of an intention to make an offer at least seven (7) days before the General Meeting, then the directors intend to adjourn the General Meeting until seven (7) days after such an announcement is made.

Statistics of the Debt-to-Equity Conversion

* The exchange rate used throughout this document for converting US dollars to pounds sterling is US$1.2981 : GBP1.00

** Assuming the exercise of the 42,589,480 in-the-money options over Ordinary Shares that are outstanding

**ENDS**

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. Furthermore, 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:

IMPORTANT NOTICES

Stifel Nicolaus Europe ("Stifel"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Hummingbird and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Hummingbird for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement. Neither Stifel, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Stifel in connection with this announcement, any statement contained herein or otherwise.

Strand Hanson Limited ("Strand Hanson"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Hummingbird and for no one else and will not be responsible to anyone other than Hummingbird for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither Strand Hanson, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Strand Hanson in connection with this announcement, any statement contained herein or otherwise.

Canaccord Genuity Limited ("Canaccord"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Hummingbird and for no one else and will not be responsible to anyone other than Hummingbird for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither Canaccord, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Canaccord in connection with this announcement, any statement contained herein or otherwise.

Publication on website

Pursuant to Rule 26.1 of the Code, a copy of this Announcement and other documents in connection with the Possible Offer will, subject to certain restrictions, be available for inspection by Hummingbird on its website at https://www.Hummingbird.co.uk/investors/possible-offer/ no later than 12 noon (London time) on the day following this Announcement. The contents of the websites referred to in this Announcement are not incorporated into, and do not form part of, this Announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.