18 Dec 2012 07:00
Hummingbird Resources plc
("Hummingbird Resources" or the "Company") (AIM: HUM)
US$15 million royalty funding agreement
Hummingbird Resources plc together with its subsidiaries (the "Group"), announces that the Group has entered into a financing agreement with a wholly owned subsidiary of Anglo Pacific Group plc (LSE: APF) ("Anglo Pacific") to support further exploration and development of the Group's Dugbe 1 Project in Liberia.
Highlights
·; Anglo Pacific to advance US$15 million in three equal tranches in return for 2% net smelter return royalty
·; Agreement relates only to products mined within a 20km radius of the Group's Dugbe F Resource
·; Proceeds to be used to fund the Group's 2013 work programme
Dan Betts, Chief Executive of Hummingbird, said:
"This agreement marks the conclusion of detailed due diligence by Anglo Pacific into our project and I am delighted that this agreement cements our common goal of building a gold mine. The IFC and Anglo Pacific agreements are key milestones for Hummingbird and a clear technical endorsement of the project. The funds received from the IFC, together with the proceeds from Anglo Pacific, will fund us through 2013 and today's announcement reflects the quality and deliverability of the project."
Anglo Pacific will advance US$15 million of funding in three equal tranches subject to the satisfaction of certain criteria. Under the terms of a separate royalty deed between the same parties, the advances will be converted into a 2% net smelter return royalty from any sales of product mined within a 20km radius of Dugbe F. After an initial grace period of 6 months following the commencement of commercial production, in the event that quarterly sales of gold produced are less than 50,000 ounces, additional quarterly payments will be required until such time as the cumulative royalty paid is US$15 million (the maximum total payment in any such quarter is equivalent to the royalty that would have arisen on sales of 50,000 ounces of gold). Following this period the royalty is 2% except where both the average gold price is above $1,800 and sales of gold are less than 50,000 ounces, in which case it increases to 2.5% in respect of that quarter.
The advances and royalty will be secured over relevant Group assets and the advances are only repayable in certain limited circumstances.
The funds, alongside the recent funding from IFC, will be used to support the 2013 work programme which is focussed on progressing the Dugbe 1 Project.
The first tranche of US$5 million will be payable as soon as local consents and filings have been obtained. The second tranche is payable upon either the completion of 25,000 metres of infill drilling or the publication of the results of a scoping study on the Dugbe 1 Project; and the third tranche will become due once both a scoping study and the 25,000 metres of infill drilling have been completed.
ENDS
Enquiries:
Hummingbird Resources plc
Daniel Betts, Chief Executive Officer
Thomas Hill, Finance Director
Robert Monro, Head of Business Development +44 (0) 203 416 3560
Liberum Capital Limited
Nominated Adviser and Joint Broker
Tom Fyson / Christopher Kololian +44 (0) 203 100 2222
Jefferies Hoare Govett
Joint Broker
Sara Hale / Thomas Rider +44 (0) 207 029 8000
FTI Consulting LLP
Financial PR
Ben Brewerton / Oliver Winters +44 (0) 207 831 3113
Notes to Editors
About Hummingbird Resources PLC
Hummingbird Resources plc is an AIM quoted mineral exploration company incorporated in England and Wales and headquartered in London. Since its establishment in November 2005, the Company and its subsidiaries (the "Group") has been active in Liberia, West Africa, and is currently the holder of the largest area of mineral exploration ground in the highly prospective Birimian geological region of eastern Liberia. The Group's total Resource is 3,817,000 ounces of gold (Indicated Resource of 1,373,000 ounces Gold and Inferred Resource of 2,444,000 ounces gold).
The Group has published a NI43-101 compliant Resource on its Dugbe F deposit of 43.01 million tonnes at 1.27 g/t Au to give 1,765,000 ounces of gold using a lower cut-off grade of 0.5 g/t Au and no upper cut-off grade (Indicated Resource of 1,373,000 ounces of gold at 1.28 g/t Au and an Inferred Resource of 392,000 ounces of gold at 1.23 g/t Au). In addition, the Group has declared a maiden Inferred Resource on its Tuzon project of 52.8 million tonnes at 1.21 g/t Au to give 2,052,000 ounces gold using a lower cut-off grade of 0.5 g/t Au and an upper cut-off grade of 7.0 g/t Au. Tuzon lies 2.6km to the east of the Dugbe F deposit. Exploration is being carried out to best industry practices.
The Group currently holds exploration licences covering approximately 7,000 square kilometres in total, which constitutes a significant proportion of eastern Liberia containing the Birimian sequence.
For more information, please visit www.hummingbirdresources.co.uk
About Anglo Pacific Group PLC
Anglo Pacific Group PLC is a global natural resources royalties company. The Company's strategy is to expand its mineral royalty interests in long-life mining assets. The Company achieves this through both direct acquisition and investment in projects at the development and production stage. It is a continuing policy of the Company to pay a substantial proportion of these royalties to shareholders as dividends.