Hummingbird Resources Regulatory News (HUM)

Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining

27 February 2020

Hummingbird Resources plc

Update on Incentive Plan, Exploration Programme and Safety Record

Hummingbird Resources plc ("Hummingbird" or the "Company") (AIM: HUM) provides an update on the awards made under its performance orientated incentive plan for 2019 ("HIPPO2019") and announces the awards to be made under its new 2020 performance orientated incentive plan ("HIPPO2020").

Vested Options under HIPPO2019

Under the amended HIPPO2018 incentive scheme, as announced on 30 January 2019, which is known as HIPPO2019, the following Restricted Share Units ("RSUs") will vest in line with achieved performance criteria and following approval of the recently constituted Remuneration Committee.

* The RSUs under HIPPO2019 consist of options granted over ordinary shares in the Company of £0.01 each ("Shares") and have an exercise price of £0.01 per Share. RSUs vest subject to performance and continuous employment criteria being met.

As can be seen from the table above, as a result of HIPPO2019's strict performance criteria on production and cost targets, and the Company's track record of aligning management and shareholders' interests, only 20% of the HIPPO2019 scheme has vested (or will vest), while the remainder has lapsed.

Grant of RSUs under HIPPO2020

Consistent with prior years, the HIPPO2020 incentive scheme is aligned to the Company's key objectives in 2020, namely delivering on the Yanfolila mine plan and deleveraging strategy as set out in the Company's announcement dated 3 February 2020. In line with the Company's disciplined approach in prior years, awards under HIPPO2020 only vest into new Ordinary Shares on achieving the relevant performance criteria, which are laid out in Appendix 1.

Under HIPPO2020, the following RSU awards have been made.

* The RSUs under HIPPO2020 consist of options granted over ordinary shares in the Company of £0.01 each ("Shares") and have an exercise price of £0.01 per Share. RSUs vest subject to performance and continuous employment criteria being met.

The Board, led by its recently constituted Remuneration Committee and external remuneration advisers, is in the process of reviewing the appropriate balance of future short and long term incentives and retention structures for Directors and key employees in light of the Company's potential development paths. Further updates will be made on conclusions of this exercise as and when appropriate.

Update on 2020 Exploration Drilling Programme

As announced on 03 February 2020, the Company is recommencing exploration activities at the Company's Yanfolila Gold Mine as it seeks to augment existing deposits containing Indicated and Inferred Resources into the current 5 year mine plan.

Three rigs are now on site with preparation taking place to commence drilling on 1 March 2020 as part of the 3-fold exploration strategy targeting both open pit and underground Resources and Reserves at Sanioumale East & West and Komana East.

Safety at Yanfolila Gold Mine

The Company is pleased to announce that Total Recordable Injury Frequency Rate ("TRIFR") at the Yanfolila Mine in Mali has continued to improve and dropped below our target of 2.5 per 1,000,000 hours. Health and Safety remains an integral part of the business as we remain committed to continuous improvement through learning, adapting and anticipation to prevent recurrence of incidents.

Related Party Transaction

The participation of Daniel Betts and Thomas Hill in the HIPPO2020 scheme is deemed a related party transaction pursuant to the AIM Rules for Companies. The Directors, with the exception of Daniel Betts and Thomas Hill, having consulted with Strand Hanson Limited, the Company's nominated adviser, consider that the terms of the participation of Daniel Betts and Thomas Hill in the HIPPO2020 scheme are fair and reasonable insofar as shareholders are concerned.

Appendix 1 - HIPPO2020 Incentive Scheme

The RSUs under HIPPO2020 consist of options granted over ordinary shares in the Company of £0.01 each ("Shares") and have an exercise price of £0.01 per Share. 

Subject to the performance criteria being met for each respective tranche and continuous employment with positive performance, under normal circumstances, the RSUs shall vest 50% by 31 March 2021, 25% by 31 December 2021 and 25% by 31 December 2022:

(a) Production Tranche:

i. 1/9 of the RSUs will vest if 120,000 (or more) ounces of gold are poured between 1 January 2020 and 31 December 2020.

ii. A further 1/9 of the RSUs will vest if 125,000 (or more) ounces of gold are poured between 1 January 2020 and 31 December 2020.

iii. A further 1/9 of the RSUs will vest if 130,000 (or more) ounces of gold are poured between 1 January 2020 and 31 December 2020.

(b) Cost and Cashflow Tranche:

i. 1/6 of the RSUs will vest if the Yanfolila AISC (as announced by the Company), as normalised for a US$0.70 / litre fuel price and a US$1,350 gold price, is equal to or lower than US$850 per ounce sold;

ii. 1/6 of the RSUs will vest if the Company is in a net cash position by 31 December 2020.

(c) Performance Tranche:

i. up to 1/3 of the RSUs may vest based on participant performance against individually set KPIs and the Company's overall ESG and safety performance, at the Board's discretion, following the recommendation of the Remuneration Committee.

Once vested, any RSUs may be exercised during a set exercise period determined by the Company and notified to the option holders. This is intended to be a minimum of a one week period per year when the Company is in an "open period" under MAR. Unvested RSUs will normally lapse on cessation of employment for any reason. The RSUs holders will retain vested RSUs following cessation of employment and will have two years from the date of cessation of employment to exercise, after which the option shall lapse.

**ENDS**

For further information please visit www.hummingbirdresources.co.uk or contact: 

Notes to Editors:

Hummingbird Resources (AIM: HUM) is a leading gold production, development and exploration company. The Company has two core gold projects, the Yanfolila Gold Mine in Mali and the Dugbe Gold Project in Liberia. Yanfolila produced its first gold pour on time and budget in December 2017. At 31 October 2019 Yanfolila has a 7.9Mt of Reserve ore @ 2.66 g/t for 676,000ozs gold. At 31 March 2019 Yanfolila had a total Resource base (inclusive of Reserves) of 28Mt of Ore @ 2.23 g/t for 2,005,300ozs gold. The Dugbe Gold Project has Resources currently totalling 4.2Moz of gold and a completed NI 43-101 compliant PEA on the project showing a 43% IRR and US$337m NPV at a US$1,500 gold price.

In addition to Hummingbird's production and development assets, the Company also has an exploration footprint of ~4,000km2 and a significant shareholder in AIM listed Cora Gold, which is advancing a portfolio of prospects in Mali and Senegal.