Last checked at 25 Jan 2011 07:00
25 January 2011
Hummingbird Resources plc("Hummingbird" or "the Company" or "the Group")
Agreement regarding Mount Ginka Iron Ore Exploration Licence, Liberia
Hummingbird Resources Plc (AIM:HUM) is pleased to announce that, further to the Memorandum of Understanding entered into on 28 June 2010, on 24 January 2011, and together with its wholly owned subsidiary Iron Bird Resources Inc ("Iron Bird"), it entered into an agreement with Petmin Limited ("Petmin") relating to Hummingbird's Mount Ginka licence for exploration of iron ore in northern Liberia ("the Agreement").
Under the Agreement Petmin will provide up to a total sum of US$2m for the exploration of the Mount Ginka licence area in a two stage plan to ascertain the commercial viability of the project.
The key terms of the Agreement are:
- Iron Bird will issue new shares equivalent to 15% of its issued share capital to Petmin for a consideration of US$500,000 ("First Phase Investment"). This investment is conditional on the transfer of the Mount Ginka licence to Iron Bird.
- The First Phase Investment will be used for the purpose of demonstrating whether a commercially saleable magnetite concentrate can be produced ("Phase 1 of the Work Programme").
- On successful completion of Phase 1 of the Work Programme, Petmin will invest a further US$1,500,000 in Iron Bird, to increase its shareholding to 50% ("Second Phase Investment").
- The Second Phase Investment will be utilised to demonstrate the scale of the resource within the licence area.
Phase 1 of the Work Programme will commence with an aeromagnetic survey which has been contracted to be flown shortly. Following this, Phase 1 of the Work Programme is expected to progress with grab sampling, trenching, pitting and scout drilling with the aim of obtaining a representative sample for metallurgical test work.
Mount Ginka - Geology and Location
The itabirite ridge in the Company's Mount Ginka licence area is east west trending with a 30 kilometre long strike length and reaches elevations of up to 500 MASL, with an average elevation of approximately 400 MASL. The ridge is dissected halfway through by a structural break. The itabirite ridge has a near vertical dip and measures up to 400 metres in thickness.
The Mount Ginka licence area covers approximately 155 square kilometres and is situated in Nimba County in north central Liberia. It is located approximately 15 kilometres south of Yekepa, a major iron ore deposit located at Mt Nimba, which is currently being developed by Accelor-Mittal. In addition BHP Billiton is undertaking iron ore exploration approximately 30 kilometres northwest of Mount Ginka at the Mount Kitoma licence area.
The Mount Ginka licence area is approximately 200 kilometres from Monrovia and can be easily reached via road access. The licence area is located in Nimba County, which has an extensive history of iron ore production. The project area is favourably situated 15 kilometres from a railway line, which connects Mount Nimba to the deep water port at Buchanan on the coast. The railroad is currently undergoing reconstruction to service BHP Billiton's and Arcelor-Mittal's projects located nearby and once completed the Group will be entitled to use this railroad in accordance with the terms of Arcelor-Mittal's licence. Furthermore, the surrounding area to Mount Ginka has numerous small roads and tracks making local access relatively simple.
Dan Betts, CEO of Hummingbird, commented:
"We are delighted to have finalised the terms of this agreement and look forward to working with a team we know well to progress the Mount Ginka project. This deal allows us to understand the commercial viability of the project at no cash cost to our shareholders, and we look forward to the results of the contracted aeromagnetic survey."
Jan du Preez, CEO of Petmin, commented:
"The Mount Ginka JV with HUM represents an early stage, cost effective entry into a potentially prospective venture. It is further progress on our stated intention of diversifying both our product mix and expanding our global footprint."
Enquiries:
Hummingbird Resources plcDaniel Betts, Chief Executive OfficerTom Hill, Chief Financial Officer and Company Secretary+44 (0)20 7766 7560Liberum Capital LimitedNominated Adviser and Joint BrokerTom Fyson / Richard Bootle+44 (0)20 3100 2000Mirabaud Securities LLPJoint BrokerPeter Krens+44 (0) 20 7321 2508Threadneedle Communications LimitedGraham Herring / Beth Harris+44 (0)20 7653 9850
Notes to Editors
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 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 geological region of eastern Liberia. The Group's licences are prospective for gold, iron ore and other minerals.
The Group currently holds 14 exploration licences for all minerals except iron ore, covering over 7,000 square kilometres in total, which constitutes a significant proportion of eastern Liberia containing the Birimian sequence. In addition, the Group holds one iron ore exploration licence covering 155 square kilometres which is located in northern Liberia close to BHP Billiton's Mount Kitoma iron ore exploration project, as well as Arcelor-Mittal's Yekepa project containing the Mount Nimba iron ore mine.
The Company's most advanced gold exploration has taken place in the Dugbe, Zia and Jababli licence areas, with Dugbe Block F currently in the stage of resource drilling, with a recently confirmed gold resource of 20.90 million tonnes at 1.208 g/t to give 812,000 oz using a cutoff grade of 0.5 g/t. The exploration has been based on sound geological premises and has been executed in an efficient and practical manner according to best industry practices. This has led to success in the discovery of the Dugbe deposit and independent recognition of what promises to be a new gold province.
For more information, please visit www.hummingbirdresources.co.uk
Petmin Limited
Petmin is a multi-commodity mining and processing company and one of the leading producers of quality anthracite and silica in South Africa. The Company is primarily focused on a mix of quality, cash-producing assets and projects, with a diverse geographical spread of commodities that feed into infrastructure growth and urbanisation.
Petmin has been listed on the JSE Limited (JSE) since 1986 and the London Stock Exchange's Alternative Investment Market (AIM) since 2006.
For more information, please visit www.petmin.co.za