(Alliance News) - Hummingbird Resources PLC on Wednesday said it swung to profit in the first half of 2020 thanks in large part to a surging gold price combined with increased sales.
The company has two core gold projects, the Yanfolila mine in Mali and the recently acquired Kouroussa project in Guinea. It swung to a USD23.8 million pretax profit for the six months ended June 30 from a USD5.9 million loss the year before.
Revenue was a major contributor to this, up 37% at USD92.0 million from USD67.1 million. This resulted from a 9.9% increase in the amount of gold sold to 56,095 ounces from 51,034 ounces coupled with a sharp 24% increase in the average price to USD1,621 per ounce from USD1,304 an ounce.
Hummingbird had cash of USD6 million and net debt of USD20 million as at June 30, having paid down debt and interest of around USD16 million in the period. It had a gold inventory on hand at that time of 4,000 ounces, worth around USD8 million.
Including the value of this gold inventory in Hummingbird's net debt calculation, net debt was around USD12 million.
Hummingbird maintained its 2020 guidance of 110,000 to 125,000 ounces of gold at an all-in sustaining cost of as much as USD995 per ounce. It is also on track to fully repay its bank loans by the end of the first half of 2021.
Chief Executive Dan Betts said: "During the period we made a pretax profit of USD23.7 million, significantly reduced our bank debt and are on track to pay off all currently held debt by the end of the first half of 2021. We are therefore in a strong position to deliver our goals for the second half of 2020, maintaining our production guidance for Yanfolila whilst progressing Kouroussa, which provides us with the potential to become a near term multi asset producer, near doubling our current production profile."
On Wednesday last week, Mali's president said he was resigning to avoid "bloodshed", hours after his arrest by troops in a coup. Ibrahim Boubacar Keita's government had been beset by months of protests over economic stagnation, corruption, and a brutal Islamist insurgency that has claimed thousands of lives.
Betts said: "The recent political unrest in Mali, while a concern, has not impacted our current operations, which are some 280 kilometres from the capital, however, we are closely monitoring any potential impact it may have on logistics. We have a highly capable security team in country and on site who are keeping our operations, contractors and management teams well informed of on- going developments so as to safeguard our employees, contractors, communities, operations and assets."
Shares in Hummingbird were marginally higher at 34.02 pence in London on Wednesday morning.
By Anna Farley; annafarley@alliancenews.com
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Hummingbird (HUM)