Hummingbird Resources plc reported an increase in gold production and a stronger balance sheet but a rise in costs in its third quarter results posted today.
The gold exploration company operating in Guinea, Liberia and Mali in West Africa announced gold production rose to 24,722 oz of gold poured (Q2 2020: 24,054 oz) on an all-in sustaining cash cost of $1,283 per oz for Q3 2020 (Q2 2020: $983)
Gold sales during Q3 were reported at 23,794 oz at an average realised price of $1,919 oz.
Strong cash generation resulted in gross cash of $9m as at 30 September 2020 (Q2 2020: $6m) after $5m development expenditure during the period including exploration programmes, expansionary capex; and preliminary pre-development costs at the Kouroussa Gold Project in Guinea.
As the region enters the dry season Hummingbird expects a better fourth quarter with expectations for the full year to be at the lower end of production guidance of 110,000 – 125,000 oz.
Extreme rainfall, the pandemic and the temporary closure of the Mali border (now reopened) due to the coup caused logistical issues which had a negative impact on Hummingbird’s costs.
The company said that although some of the issues had been resolved, there would be an impact on full year cost guidance of $995 oz.
Total bank debt decreased from $19m to $7m and the net debt position fell to $10m.
OPERATIONS
Hummingbird said it continued to see successes in exploration and drilling with new results from Sanioumale West SW (in reserves) and the initial results from SE (not in reserves) are very positive like the SW 15m @ 3.72 g/t from 47m depth hole and the SE 16m @ 9.64 g/t from 47m depth hole.
At Kouroussa, Hummingbird’s pre-development plans continue with the front-end engineering design analysis (FEED) which is expected to be nearing completion by the end of the year.
Looking ahead, Hummingbird is developing its 2021 corporate budget plans which include exploration and drilling for Yanfolila and Kouroussa; Kouroussa development; and improving operational efficiency. (bit.ly/2HFjYji)
The company promoted mine manager Edrich Welthagen to general manager at the Yanfolila mine, and Shaun Bunn SVP of Projects Delivery and John Meneghini SVP Operations are reporting directly to the executive committee.
Chief executive Dan Betts said that despite climate, health and logistical issues the company expected a strong finish to the year in terms of production.
He added that deleveraging the company’s balance sheet to nearly zero was a major milestone and significant achievement.
“Our 2020 exploration programme has led to some stellar drill intersections particular at the Sanioumale West and East deposits and we are excited to model these and see the potential impact on the life of mine at Yanfolila.
“We continue to make solid progress at Kouroussa ahead of commencing construction of our second mine, which, when built, will see the company as a circa 220,000 oz producer.”
ENVIRONMENT AND SOCIAL
The company’s Mali community projects include reforestation (20 hectares so far); sponsorship of 11 teachers at eight schools; local soap manufacturing; sponsorship of 10 garden markets with 675 local workers; support for four poultry farms with 40 employees; beehive manufacturing with 75 hives operating; rehabilitation of five manual pumps, increased capacity of a water tower, and constructed 14 latrines; and continuation of malaria spraying programme.