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(Alliance News) - Hummingbird Resources PLC on Wednesday refuted claims of a contract breach from Corica Mining Services, regarding the suspension of services at the Kouroussa gold mine.
Shares in Hummingbird were down 21% at 6.30 pence during late dealings on Wednesday in London.
On Monday, Hummingbird said that Corica had suspended mining operations at the Guinea-based mine as a result of "various contractual disputes".
It alleged that Corica "failed to meet mining contract volumes due to delays in mining equipment mobilisation, commissioning, and overall operating performance", and said it had issued a notice for its principal contract miner to resume mining by Tuesday.
Hummingbird added that it would resume operations itself, or work with alternative contractors, if Corica did not comply.
On Wednesday, however, Corica said that Hummingbird had committed "substantial breaches" under their contract.
It said Hummingbird had "failed to make payments to Corica for mining services performed" and "failed to provide a company deed of guarantee". Further, Corica said its unpaid invoices to Hummingbird totalled approximately USD27 million for work completed at Kouroussa.
It said any recommencement of works at the gold mine was conditional on Hummingbird paying all invoices due to Corica, and providing a company deed of guarantee, within 28 days. This period commenced when Corica issued Hummingbird with a formal notice of the work suspension on Monday.
Later on Wednesday, Hummingbird said that it "completely rejects" Corica's portrayal of the situation, most specifically "the accuracy of the balance quantum of monies due and the requirement for payment as presented by Corica under the terms of the mining contract".
Hummingbird argued that Corica has consistently underperformed against contractual targets, and failed to meet volumes. It explained that, as it issued Corica with a breach of contract in July last year, it has the right to withhold payments under the contract's terms.
Further, Hummingbird added that it is "seeking to engage with Corica", and is in discussions with other stakeholders, including additional mining contractors, to find a resolution to the current issues.
By Holly Beveridge, Alliance News reporter
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