HUMMINGBIRD Resources has secured $55m in funding which it will use to support Kouroussa, a new mine in Guinea as well it assist ongoing efforts to stabilise operations at its Yanfolila operation in Ghana.
The debt is provided by Coris Bank with $35m allocated to Kouroussa, which produced its first gold in the second quarter, and the balance to Yanfolila where the money will be used to develop the mine’s underground operations.
“This package will provide additional flexibility in 2023 to allow Kouroussa to reach steady state production and provide additional capital support for the group,” said Dan Betts, CEO of Hummingbird Resources.
He was commenting in the firm’s interim results update in which the firm reported $33.1m in adjusted Ebitda for the six months ended June compared to last year’s $9.3m loss. A pretax profit of $4.1m was reported for the six months (2022: -$23.9m). The company ended the period with net debt of $122.8m.
Hummingbird plans to repay $77m of debt in its 2024 financial year, a further $61m in 2025, with the balance settled by the end of its 2028 financial year.
Operationally, the company had a better performance than in the first six months of last year. Production totalled 51,149 ounces (2022: 35,668 oz) at an average price of $1,927 per oz ($1,899/oz).
Betts said this was the result of “focused efforts by the team over the last year to stabilise the Yanfolila operation and re-establish a more reliable platform” from which to grow the company. Kouroussa, a 120,000 to 140,000 oz/year mine, produced 1,000 oz in the second quarter after commissioning.
Hummingbird had targeted production of 80,000 to 90,000 oz this year but expects to reach around 200,000 oz in 2024 once Kouroussa has ramped up.
Hummingbird had a tough year in 2022 as Yanfolila faltered just as the company reached the final stages of building Kouroussa. Betts described it as a “shit-show” and that the firm’s share price was priced for failure.
The stock has recovered 36% this year although it has fallen under pressure in the last week falling 12.7%. Hummingbird is currently capitalised at £57m.
