Hummingbird Regulatory News (HUM)

12 June 2014

Hummingbird Resources plc

("Hummingbird" or the "Company") (AIM: HUM)

Proposed Acquisition of all of Gold Fields' Gold Assets in Mali

Hummingbird, the gold exploration and development company with assets in Liberia, announces that it has entered into a conditional Sale and Purchase Agreement, with wholly owned subsidiaries of Gold Fields Limited ("Gold Fields"), to acquire all of Gold Fields' mining and exploration interests in Mali.

Highlights

· Hummingbird to acquire the Yanfolila Project with a current mineral inventory of 1.8Moz of gold at 2.8g/t

· Consideration of US$20m payable in Hummingbird ordinary shares issued at 56 pence per share

· Consideration equates to an EV/oz acquisition cost of US$11 per managed ounce

· The Company's business case for the Yanfolila Project aims to deliver:

o First gold production by the end of 2015 at an estimated AISC of US$700/oz (estimated C1 cash cost US$503/oz)

o Initial oxide only CIL operation with estimated capex of US$52m

o 80k ozs targeted in year 1 of production

o Project IRR of 53% and payback in under 2 years (using a US$1,250 gold price)

o Significant exploration potential with over 3,200km2 of exploration ground and access to Gold Fields' database from 420,000m of drilling, including identified oxide targets that have already been drilled

· Yanfolila Project is fully permitted with a 30 year mining licence granted

· Approximately US$100m spent historically on the Yanfolila Project

· Upon completion of the acquisition, Hummingbird will be re-positioned to have:

o 6Moz gold inventory and extensive exploration upside with 5,000km2 of licence area

o Projects combining near-term production with scale and longer-term growth

o Production pipeline of over 200k oz per annum

· Gold Fields will become the Company's largest shareholder, with 26.3% of the enlarged share capital of the Company

· Gold Fields' Yanfolila management team will be joining the Company on completion of the transaction

· Hummingbird has received preliminary expressions of interest from a number of parties to fund the Yanfolila Project through construction

· The Company has already commenced the resource re-modelling as part of the optimisation

Dan Betts, Managing Director of Hummingbird said:

"This acquisition will transform Hummingbird from a single-project company into a multi-project, near-term producer. Hummingbird's strategy has always been to create a mid-tier gold company that has a portfolio of assets encompassing exploration, development and production and this is a major step to fulfill that ambition. We believe Gold Fields' decision to accept Hummingbird shares as consideration for the acquisition underlines the potential of the Yanfolila Project, our portfolio in Liberia and their confidence in our ability to bring both projects into production.

The Yanfolila Project provides us with a fast, simple and low cost route to production which we expect to commence next year at an initial rate of 80koz per annum. The expected cash flow from this project will allow us to continue to optimise the development of our 'company-making' Dugbe 1 Project in Liberia and open up a number of further funding opportunities.

The difficult market for the mining sector has allowed us to acquire an attractive and highly profitable asset which we intend to 'right-size' and bring into production within 18 months. The project has excellent grade with low capex and opex, and has been acquired at what we feel is a very attractive valuation of $11 per managed oz of resource which compares favourably to recent transactions. We believe this deal to be transformational for the Company and look forward to bringing both projects into production."

Nicholas J Holland, Chief Executive Officer of Gold Fields said:

"We are pleased to have agreed terms to sell the Yanfolila Project to Hummingbird for consideration of US$20m in shares. Yanfolila is a robust, high grade project but the scale of the known resources do not support a Gold Fields' scale operation and are better suited to development by a junior. Due to the quality nature of the asset and Hummingbird's ability to unlock this value we have sought to retain exposure to the upside through a significant shareholding in Hummingbird. We look forward to seeing the development of Yanfolila and share in Hummingbird's desire to see it brought to production in the near future."

Conference Call

Hummingbird will be hosting a conference call for analysts at 10:30am to discuss the announcement, please find details below:

Time & Date: 10.30am - 12 June 2014

Dial-In: +44 (0) 1452 569393

Passcode: Hummingbird Resources

ENDS

Enquiries:

Hummingbird Resources plc

Introduction

The Company has entered into a conditional Sale and Purchase Agreement with Gold Fields Metals BV and Gold Fields Orogen Holding (BVI) Limited (the "Vendors") to acquire all of Gold Fields' mining and exploration interests in Mali, represented principally by the Yanfolila Project.

The acquisition of these interests is to be satisfied through the issue of 21,258,503 ordinary shares in the capital of the Company ("Consideration Shares"). These Consideration Shares are to be issued at an issue price of 56 pence per share. The issue price was calculated by reference to the volume weighted average price of the Company's ordinary shares for the 15 days prior to 25 April 2014, being the date upon which the parties entered into a binding exclusivity agreement.

The acquisition is conditional upon shareholder approval of an ordinary resolution to provide the Directors with the sufficient authority to allot the Consideration Shares, and upon the Consideration Shares being admitted to trading on AIM.

Strategy

The Board believes that the current dynamics of the gold industry present an opportunity to augment the Company's existing assets through the careful acquisition of high-quality projects that are either being divested or are in a distressed condition, as the current gold price environment adversely impacts on the economic returns expected by larger companies or presents limited funding opportunities respectively. The Board has a clear strategy to build a multi-project gold company that has a portfolio of assets encompassing exploration, development and production. The acquisition, and in particular the Yanfolila Project, represents an important milestone in the execution of this strategy.

Details of the Acquisition and Sale and Purchase Agreement

Pursuant to the Sale and Purchase Agreement, the Company has agreed to acquire through a wholly owned subsidiary all of the share capital owned by Gold Fields in the acquisition target group, as well as benefit from the assignment to the subsidiary of all outstanding loans owed by the target group to Gold Fields.

The purchase price of the acquisition is US$20,000,000 which will be satisfied by the issue and allotment of Consideration Shares to the Vendors or their nominees. The issue price of the Consideration Shares is 56 pence per share and has been calculated by reference to the volume weighted average price of the Company's ordinary shares for the 15 days prior to 25 April 2014, being the date the parties entered into a binding exclusivity agreement.

Following the approval and allotment of the Consideration Shares, Gold Fields will have an interest of 26.3% of the enlarged share capital of the Company. The Sale and Purchase Agreement contains certain provisions relating to this shareholding following the issue of the Consideration Shares:

i. Each Vendor has undertaken to the Company that for a period of twelve months following completion of the acquisition it will not dispose of any Consideration Shares in response to a third party offer unless it has given the Company's broker the opportunity to find another buyer for all such shares. If such an offer from another buyer is not accepted by the Vendor it may only dispose of the Consideration Shares at the same or a higher price. In circumstances where the Vendor wishes to dispose of any Consideration Shares but has no third party already offering to buy them, the same provisions apply except that if the offer from the buyer found by the broker is not accepted, the Vendor has up to two months to dispose of the Consideration Shares on no less favourable terms, with the broker having the opportunity to refresh its offer and reset such time period. These provisions seek to maintain an orderly market in the Ordinary Shares of the Company;

ii. Each of the Vendors has undertaken to the Company that for a period of twelve months neither it nor any of its affiliates will acquire any further interest in ordinary shares in the Company (except under circumstances 'iii' below); and

iii. for so long as the Vendors or any of their affiliates holds more than ten per cent. (in aggregate) of the Company's issued share capital, subject to certain limited exceptions, the Company shall give the Vendor the right to maintain its aggregate percentage interest in the share capital of the Company should the Company intend to issue securities which could dilute the Vendors' shareholdings.

The Sale and Purchase Agreement is on customary terms and contains normal protections that a purchaser would require from a vendor in these circumstances, such as representations and warranties from the Vendors about the target group, certain indemnities in relation to taxation and other amounts that may become due from the target group and an adjustment to the purchase price should the target group's working capital amount at completion not be as anticipated. A fee of up to US$1,000,000 is also payable by the Company if the shareholder resolution to approve the issue of the Consideration Shares is not passed.

The Yanfolila Project

Background & Location

The Yanfolila Project is located in the southwest of the Republic of Mali in the Yanfolila Belt. The nearest major settlement is the town of Yanfolila 40km to the east. The Yanfolila Project extends over approximately 50km north and south and 25km to the east and west. The site can be accessed from the capital Bamako via a 285km road, of which the first 245km are on sealed road. By car the total journey time from Bamako to the Project site is between four to five hours. The nearest airport to the Project is the Senou International airport in Bamako.

In 1992 BHP Billiton ("BHP") identified several anomalies at Komana and began exploration work in the Yanfolila area. Subsequently Randgold Resources ("Randgold") took control of the Komana permit and commenced a drilling campaign of 547m. Randgold later formed a joint venture with North Ltd and drilled a further 2,116m. The campaign led to the declaration of 280,000 ounces at Komana. However, Randgold decided not to continue its exploration activities.

Since the discovery of the Yanfolila anomalies by BHP, a large amount of exploration work has been carried out on the project site, including more than 420,000m of drilling. The extensive exploration work has been well documented and a detailed core archive has been created on site.

Glencar Mining plc ("Glencar") completed extensive drilling of the Komana deposits from 2004 to 2008 when it published Indicated and Inferred Mineral Resources for the deposits.

In 2009 Gold Fields, through a wholly owned subsidiary, reached agreement with Glencar on the terms of a recommended cash offer for the entire issued share capital of Glencar. At the time, Glencar's principal asset was the Komana project which now forms part of the Yanfolila Project. Gold Fields has an 85% interest in the Komana project with a Malian partner holding a 5% interest, assuming the Government of Mali takes up its free carried interest of 10%. The Government of Mali also has the right to purchase a further 10% interest. The Company will acquire Gold Fields' 85% interest in the Komana project pursuant to the transaction.

Geology

The following description of the geology of the Yanfolila Project is extracted from the Gold Fields Limited Mineral Resource and Mineral Reserve Supplement to the Integrated Annual Review for the year ended 31 December 2013.

The Yanfolila Project is located in the Yanfolila greenstone belt along the eastern margin of the Siguiri Basin, which is part of the Birimian volcano-sedimentary series of the West African craton.

Gold mineralisation at the Yanfolila Project occurs in a deformed stratigraphic sequence of basalt, polymictic conglomerate, feldspathic sandstone, siltstone and greywacke. Mineralised mafic intrusive rocks are also present at some locations. Regional scale, cross-cutting faults and structural lineaments, as well as rheologically contrasting rock types, appear to control the localisation of gold. Mineralisation styles are dominated by vein, breccia and intrusive types. Lodes are characterised by intense albite-carbonate veining and pervasive sulphide alteration. Weathering and oxidation of the sulphide component generally extends to a depth of 30 to 50 metres, with a well-developed saprolite zone.

Mineral Resources

Gold Fields declared a mineral resource for the Yanfolila Project in December 2012 based on an internal Competent Persons Report dated 31 December 2012 (the "Mineral Resources"). The Mineral Resources were reported as unchanged (due to the suspension of geological and resource estimation studies in 2013) in the Gold Fields Mineral Resource and Mineral Reserve Supplement to the Integrated Annual Review for the year ended 31 December 2013 and are presented in extract below.

Notes:

1. The above Mineral Resources were reported in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources, and Mineral Reserves, 2007 Edition (SAMREC Code).

2. These Mineral Resources are reported without dilution and ore loss.

3. The Mineral Resources are constrained within optimised open pit shells using scoping study parameters including mining, processing and administration cost estimates; mining parameters; and process recoveries for gold.

4. The commodity price used in this study was US$1,650/oz gold.

5. The Company understand the cut-off grade used was 0.6 g/t

The Board believes that the Mineral Resource Estimate could be enhanced by adjusting the modelling variables and bringing in more recent data. The Board believe that the following mineral inventory may be considered to be more representative of the Yanfolila Project when considering the intended optimisation of the mineral resources that the Board intends to pursue following the acquisition.

Notes:

1. The above mineral inventory is unconstrained and does not conform to a recognised resource reporting standard such as JORC or SAMREC and as such cannot be relied upon for economic assessment purposes.

2. A significant amount of new infill drilling, collection of supporting data and detailed geological modeling has been completed since the reporting of the December 2012 Mineral Resource to account for the potential resource increases suggested by the unconstrained mineral inventory.

3. These mineral resources are presented without dilution and ore loss.

4. The cut-off grade used in this estimate is 1.0 g/t

Level of Study

Gold Fields ranked the Yanfolila Project as an advanced stage project.

Gold Fields Limited completed an internal Competent Persons Report dated 31 December 2012 in which the deposit was subjected to scoping study level mining and economic assessment. Subsequently, Gold Fields also carried out an Environmental and Social Impact Assessment ("ESIA"). The final ESIA report was approved in April 2013 and an environmental permit was awarded.

In an effort to reduce possible capital requirements, mitigate areas of project risk and potentially lead to an early construction decision for the Yanfolila Project, Gold Fields completed a de-risking study ("DRS") in August 2013. The DRS investigated open-pit mining of oxides and fresh ore types from the main Komana East and Komana West deposits, with supplementary feed from satellite deposits such as Gonka. The study confirmed that the material types hosted at the Yanfolila Project are free-milling and amenable to conventional gravity and CIL recovery processes. Following the ESIA approval and the DRS the Government of Mali granted a valid Exploitation Permit covering the Komana deposit within the Yanfolila Project on 13 February 2014 which is valid for 30 years.

Technical Services

Recognising the retained knowledge within Gold Fields, the Company has agreed to purchase technical services from Gold Fields for up to twelve months from completion of the acquisition, whereby Gold Fields will, subject to available capacity, make available certain resources to assist with development of the Yanfolila Project.

Future Development Strategy by Hummingbird

The Company proposes to scale down the Yanfolila Project and in phase 1 mine oxide material only, to enable the development of a low cost mining operation at Yanfolila. The Directors believe that the Yanfolila Project is an opportunity to create a low cost mining operation that yields high cash flows early in the project life. The Yanfolila Project is at an advanced development stage and it is expected to require low upfront capital investments while it retains significant potential for expanding the mining operations and resource base.

Based on the studies completed by Gold Fields the Directors have estimated the preliminary economics of the Yanfolila Project having adjusted the size of the project with the intention to mine oxide material only in Phase 1. A summary is set out below. As the Company conducts further work and updates the DRS, the preliminary economics set out below may be revised.

Notes:

1. The above economics have not been independently verified and do not conform to a recognized standard such as JORC or SAMREC and as such cannot be relied upon for economic assessment purposes.

2. Average production over the initial mine life is estimate to be approximately 55,000oz per annum

3. After Tax IRR of 34% using US$1,000 gold price

The Company expects to optimise and re-scope the DRS during the second half of 2014 to reflect the change in production strategy. As the Company expect to retain a significant proportion of the team currently employed by Gold Fields, much of the future work will be handled by in-house experts.

Funding arrangements are planned to be run in parallel to the DRS update, with completion of funding anticipated during the second half of 2014. Construction of the Yanfolila Gold Mine is expected to commence in early 2015 after completion and positive review of the updated DRS. The Company forecasts a 12 month construction phase with production start-up scheduled for late 2015.

For the purposes of the AIM Rules, as at 31 December 2013, the Yanfolila Project (excluding the remainder of the Target Group) was valued at US$16 million as an asset held for sale in the Annual Financial Report of Gold Fields. As the assets in the target group are in the exploration and development stage, no revenue or profits have been derived from these minerals' interests. The Directors believe that approximately US$100 million has been spent on the development of the Yanfolila Project historically.

For more information regarding the acquisition and the Yanfolila Project, a corporate presentation is available on the Company's website: www.hummingbirdresources.co.uk

Update on Dugbe 1 Project

The Dugbe 1 Project DFS remains on track for completion in Q3 2014. Aspects of the study are still under review with optimisation being considered to maximise the returns attributable to the project. The Directors intend to review these options with the objective of how to optimise the development of the Dugbe 1 Project in light of the potential early, low cost production at Yanfolila.

Dugbe 1 is a significant project with extensive upside potential. The Dugbe Shear Zone remains a highly prospective underexplored Birimian land package of around 2,000km2. The Directors believe the 4.2Moz gold discovered to date at the Dugbe 1 Project has the potential to be increased significantly.

Long Term Incentive Plan

The Company has a long stated policy to adopt a long-term incentive plan. In the context of the acquisition's impact on the Company, the Board believes that this is the appropriate opportunity to align the interests of shareholders and executive directors whereby the management team share in the value added to shareholders only if material value creation occurs. Further details about these proposals, together with the ordinary resolution to be proposed at the General Meeting, are set out in the Notice of General Meeting to be sent to shareholders shortly.

General Meeting

Shareholders will shortly be sent a notice convening a General Meeting of the Company.

The Board confirms that it is in receipt of irrevocable undertakings to vote in favour of the resolutions to be passed at the General Meeting, including for the issue of the Consideration Shares, from a significant number of shareholders.

The Directors consider the acquisition to be in the best interests of the Company and its shareholders as a whole. The Directors have based their recommendation on the strategy of the Company and the position of the various mineral projects in their respective lifecycles.

Accordingly, the Directors unanimously recommend shareholders to vote in favour of the resolutions to be proposed at the General Meeting, as they intend to do or procure to be done in respect of their own beneficial holdings of existing ordinary shares, which amount, in aggregate, to 8,467,330 ordinary shares representing approximately 14 per cent. of the current issued share capital of the Company.

Qualified Person Review

David Pelham has reviewed and approved the technical information contained within this announcement in his capacity as a Qualified Person, as required under the AIM rules. David Pelham is a Director of the Company and is a member of the Institute of Materials, Minerals and Mining.

Mark Fleming has also reviewed and approved the technical information contained within this announcement in his capacity as a Qualified Person, as required under the AIM rules. Mark Fleming is a consultant for the Company and is a member of good standing with the Australasian Institute of Mining and Metallurgy (MAusIMM) and is a Fellow in good standing with the Australian Institute of Geoscientists ("FAIG").

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 has published a PEA on its project showing that using a $1,500 gold price, on a 3.5Mtpa tank leach operation, The project has an NPV of US$337m on a Capex of US$212m for an IRR of 43.4%. This gives a payback period of 3 years and is based on a 10% discount rate and US$1,500 gold price (three year average gold price at time of release).

The Group has recently published a Mineral Resource estimate for the Tuzon deposit constrained within a US$1,500 pit shell and using a 0.5 g/t cut off grade comprising of an Indicated Resource of 41.8 Mt at an average grade of 1.51 g/t Au for 2.03 Moz of gold and an Inferred Resource of 10.2 Mt at an average grade of 1.32 g/t Au for 0.43Moz of gold in accordance with the Canadian Institute of Mining, Metallurgy and Petrology Definitions Standards ("CIM Code") for Reporting of Mineral Resources and Ore Reserves. The Group has also published a NI43-101 compliant Inferred Resource on its Dugbe F deposit of 43.01 million tonnes at 1.28 g/t Au to give 1,764,000 ounces of gold using a lower cut-off grade of 0.5 g/t Au and no upper cut-off grade.

For more information, please visit www.hummingbirdresources.co.uk

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