Hummingbird Regulatory News (HUM)

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

31 August 2016

Hummingbird Resources plc ("Hummingbird Resources" or "the Company")

Results of PFS for Hydro-Electric Power Plant in Liberia

Hummingbird Resources, is pleased to announce the final results of a 14 month hydro-electric power ("HEP") Pre-Feasibility Study ("PFS") in the proximity of Hummingbird's 4.2Moz Dugbe Gold Project ("Dugbe" or "the Project"). The PFS, which was funded by IFC InfraVentures and carried out by Knight Piésold, confirms the potential viability of a range of options for HEP plants with the ability to supply a sustainable source of power for Dugbe, as well as the southeast Liberian region. Importantly, the HEP plant also offers the potential to reduce the all in sustaining costs ("AISC") of the Dugbe Gold Project.

Highlights:

· Five alternative solutions from 10-30MW of hydro-electric power

· Capex ranges from US$51.5-143.5m dependent on size of option selected

· Offers a hydro-electric power solution for the Dugbe Gold Project, with potentially materially positive cost and environmental benefits

Dan Betts, CEO of Hummingbird Resources, said:

"As the largest gold deposit in Liberia, with a US$186m NPV at a US$1,300 gold price, we are obviously keen to move the Project forward towards development and the delivery of the hydro power PFS is a tangible deliverable in this process. The PFS, which has been fully funded by IFC InfraVentures, has assessed the various options for a hydro-electric power plant 10km from our Dugbe Gold Project, which could provide significant savings to our overall power cost for Dugbe, but also has the potential to provide surplus power to the local region.

"Power costs make up over a third of our total process Opex at Dugbe and finding savings in this area will have positive implications to the Project's economics. We had been using an estimate of US$0.28c/kW for rented diesel power in the PFS. Taking the total Capex and Opex for the HEP plant, over the current 20 year mine life, gives you a theoretical cost of US$0.05c/kWh. This number does not compare directly, since it does not include the impact of the financing cost of building the hydro plant as it is not yet known how this will be done or by whom. However, assuming a suitable financing solution was found, this could have a materially positive impact on the economics of the Dugbe Gold Project. Therefore, we are now considering our next steps with our partners on the PFS."

Further Information

In Q2 2015 a Collaboration Agreement was signed for the funding and development of a hydro-electric power plant approximately 10km from Hummingbird's 4.2 million ounce Dugbe Gold Project. The Collaboration Agreement was signed between Hummingbird and IFC InfraVentures, the IFC Global Infrastructure Project Development Fund, and Aldwych International, a leading energy company active in the growing economies of Africa.

Knight Piésold (Vancouver), a leading engineering and consulting company, recently completed its fifth and final scheduled site visit in order to assess and take readings from the run-of-river flow rate monitors that were set up at the start of the 12 month monitoring programme.

Knight Piésold has assessed a range of hydropower options, including:

Spreading the capital and operating cost for each option, over 20 years, the cost of a unit of power is between US$0.05-0.06c/kWh. However, this does not include the cost of the debt and equity required to finance the building of the plant, which will add to the figure. In comparison, the current power plan is based on a rented diesel power estimate of approximately US$0.28/kW and was calculated when world oil prices were significantly higher than they are currently. Of the US$903/oz AISC in the Company's 2013 Scoping Study, in excess of 30 per cent is the cost of rented diesel power.

There is also precedent for the potential reduction of capital costs by changing the canal from a concrete lined structure to an earth lined canal with larger cross sectional area and flatter side slopes. Depending on geotechnical conditions, unlined earth canals could be a viable option that could result in significant cost savings, but they will likely require more annual maintenance, adding to the operational costs.

To view a map of the watershed catchment areas please click on the following link:

http://www.rns-pdf.londonstockexchange.com/rns/4597I_-2016-8-30.pdf

About Knight Piésold

Knight Piésold has been in the hydropower business for over 80 years with extensive experience in large and small hydroelectric projects throughout the world. Its experience includes water storage projects, run-of-river projects and pumped storage projects. Knight Piésold provides a "one-stop-shop" for hydropower development, from resource identification and evaluation, financial services, environmental impact assessments and permitting, through to project management, site investigations, detailed engineering design, site supervision, O&M staffing and training, commissioning, and asset management. The improvement of existing units and facilities through power facility additions at existing dams, replacement of aging or low efficient equipment, and equipment upgrades or improvements, are also key elements of Knight Piesold's hydropower practice. Past projects include the 235MW East Toba and Montrose Projects and 150MW Kwalsa and Upper Stave Hydroelectric Projects in Canada, the 1,333MW Ingula Pumped Storage Scheme in South Africa, the 247MW Kalungwishi Hydroelectric Project in Zambia, and the 150MW Casecnan Multi-Purpose Hydroelectric Project.

Dugbe - Liberia

The Dugbe Gold Project is located within the Birimian Basin, the world's second largest gold producing region, characterised by exceptionally large, homogenous grade deposits which offer vast exploration and development scope. With a current Resource of 4.2 million ounces of gold at an average gold grade of 1.4 g/t, Dugbe offers a large-scale development opportunity for Hummingbird. The Company completed a Preliminary Economic Assessment ("PEA") in April 2013 which demonstrated the viable economics of developing a 20 year gold mining project with initial gold production of 125,000 ounces, an NPV of US$186 million, IRR of 29% using a US$1,300 gold price. Hummingbird signed a Mineral Development Agreement with the Government of Liberia in July 2015, giving the Company security of tenure and right to mine for at least the next 25 years. Hummingbird is continuing to advance Dugbe and is progressing Definitive Feasibility Study optimisation work evaluating the large 4.2Moz gold resource, mining, processing and power capabilities with a view to future production viability.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

**ENDS**

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

About Hummingbird Resources Plc

Notes to Editors

Hummingbird Resources (AIM: HUM) is building a leading gold production, development and exploration company. The Company has two core gold projects, the near-term production Yanfolila Gold Project in Mali and the Dugbe Gold Project in Liberia. It is currently building Yanfolila targeting first production by end of 2017, which has a Probable Reserve of 709,800oz @ 3.14g/t and total Resources of 1.8Moz of gold and an additional 390,700oz of non-compliant exploration potential. The high grade gold project has low operating costs of US$695/oz AISC with 132,000ozs of first full year's production.

The 4.2Moz Dugbe Gold Project in Liberia provides Hummingbird with excellent development upside. An optimisation of the DFS is on-going whilst Yanfolila is brought to production in the near-term. Additionally, the Company has 4,000km2 highly prospective exploration ground in Mali and Liberia and is constantly evaluating new quality assets.