Berenberg reiterates 'buy' rating on Hummingbird Resources

Berenberg said the move was a "key development" in the company’s strategy to become a multi-asset gold producer as Kouroussa was a high-grade, high margin project with a number of similarities to, and synergies with, its Yanfolila gold mine in southern Mali, which enables it to leverage construction and operational expertise.

Furthermore, the German bank highlighted that Hummingbird has received a letter of intent from Coris Bank to provide up to $100m for the development of Kouroussa, which more than covers capex requirements.

"This acquisition fits well within the company's strategy, which remains focused on extending the life of mine at Yanfolila through exploration, along with diversifying cash flows through high-margin projects," said Berenberg.

"As a result, Kouroussa bolsters the portfolio, with Hummingbird set to become a multi-asset gold producer in the mid-term with expected production of circa 200,000 ounces per annum at an all-in sustaining cost of circa $815/oz."

Berenberg adjusted its model to reflect Hummingbird's 2019 final results, cost pressures at Yanfolila and the acquisition of Kouroussa.