Hummingbird Resources plc has received a strategic two-tranche investment of US$15 million from African investment company CIG SA.
USES
The investment will help ensure the start of production by the end of Q2 2023 at the company’s second gold mine Kouroussa in Guinea, and help accelerate further exploration.
“As we bring the development of our second mine at Kouroussa into production by the end of Q2 this year; we see this investment as the first step of a partnership with the ambition of building a multi asset international gold producer built on strong foundations in West Africa,” said chief executive Dan Betts.
TRANCHES
The company said that CIG had more than $100m active investments across a number of sectors including mining and construction.
A firm first tranche of $3.8m involves the issue of 39,360,800 new ordinary shares of £0.01 of the company, resulting in CIG holding 8.6% in the company.
The conditional second tranche, subject to shareholder approval, of $11.2m is in exchange for 117,724,008 new ordinary shares.
Both tranches are issued at a subscription price of 7.79 pence, representing a 2% premium.
The company said it had received the $15m which is held on deposit pending the approval at Hummingbird’s general meeting.
CASSIDY GOLD CORP
The company added it had also settles the deferred payment in shares to Cassidy Gold Corp for the acquisition of Kouroussa.
The consideration was payable, under the terms of the agreement, owing to the increased size of Hummingbird’s reserve base at Kouroussa as published last year.
The agreement stated that deferred consideration of £10 for every ounce of gold reserve published by Hummingbird in excess of 400,000 gold ounces (subject to a maximum 1,000,000 ounces, and 100,000 ounce thresholds) becomes payable to Cassidy in cash or new ordinary shares, at Hummingbird’s discretion following the end of the relevant financial year.
In June 2022, the company published the reserve of 647,000 ounces (at 4.15g/t) at Kouroussa, and now pays deferred consideration in respect of 200,000 excess ounces to Cassidy.
Hummingbird’s settlement of liabilities on behalf of Cassidy sees the reduction by £532,032 of initial deferred consideration due of £2,000,000.
The company will issue 22,688,844 new ordinary shares to Cassidy.
ADMISSION
Following the issue of the total 157,084,808 ordinary shares to CIG and the deferred consideration shares to Cassidy, CIG will hold 27% of Hummingbird’s enlarged share capital.
On admission of the 39,360,800 first tranche shares and the 22,688,844 Cassidy deferred consideration shares, the company’s issued share capital will consist of 455,773,694 ordinary shares, all with voting rights.