Hummingbird Regulatory News (HUM)

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

19 April 2023

Hummingbird Resources plc

("Hummingbird" or the "Company")

Q1 2023 Operational and Trading Update

Consecutive strong quarterly production of +27koz & improved AISC profile of US$1,109 per oz

Hummingbird Resources plc ("Hummingbird" or the "Company") (AIM: HUM) is pleased to announce an operational and trading update for the first quarter of 2023 ("Q1 2023").

Operational update

Yanfolila, Mali

· Quarterly gold production for Q1 2023 of 27,262 ounces ("oz") (Q4 2022 of 28,264 oz, and Q1 2022 of 15,548 oz).

· AISC of US$1,109 per oz for Q1 2023 (a +11% improvement from Q4 2022 of $1,248 per oz and +50% from Q1 2022 of US$2,235 per oz).

· 26,380 oz of gold sold in Q1 2023 at an average realised price of US$1,878 per oz (Q4 2022: 27,860 oz of gold sold at an average realised price of US$1,726 per oz). The Company held 2,810 oz of gold inventory on 31 March 2023, valued at c.US$5.6 million.

Kouroussa, Guinea

· Kouroussa construction is fully funded, on budget and remains on track for first gold pour by the end of this quarter, Q2 2023.

· >2.5 million lost time injury ("LTI") free hours now achieved, a key ongoing safety metric for the Kouroussa construction team, with over 1,000 construction and mining personnel on site currently.

Dugbe, Liberia

· The strategic review of options to best realise the maximum value of Dugbe for all stakeholders is ongoing with our joint venture partner, Pasofino Gold Limited ("Pasofino").

Corporate

· Strategic investment by CIG SA ("CIG") and successful placement ("the Placement") of c.US$17.1 million during Q1 2023, completing the funding required to ensure Kouroussa goes into production as scheduled, and to fast-track exploration at that asset.

· Consecutive strong and improved quarterly Group EBITDA, up +59% to c.US$17.5 million for Q1 2023, versus Q4 2022 of c.US$11 million.

Outlook

· Similar trends from Q1 2023 levels expected this quarter, Q2 2023.

· As previously stated, an updated Group wide full year guidance update to be provided once Kouroussa is in production and ramping up.

Dan Betts, CEO of Hummingbird, commented:

"Hummingbird's second mine, Kouroussa, remains on track to pour first gold this quarter. The Project remains on time and on budget, and will mark a major milestone in the development of the Company to realising our ambitions of being a multi-mine, multi-jurisdiction gold producer. The mine will more than double our production profile, reduce the Group's cost of production, and diversify risk. The achievement of over 2.5 million LTI free hours at the Project is also a fantastic accomplishment by the team, for which we are proud of.

At Yanfolila, we continue to see operational improvements which is very positive, with a mine adding good cash flow returns to the business and performing more in line with expectations. Yanfolila had a positive quarter in terms of production and improved AISC profile, with many of the operational changes made in H2 2022 coming through to the bottom line in terms of a more stabilised and predictable performance at the mine.

The quarter also saw the Company take on a strategic investment from CIG. This investment has helped ensure that we can deliver Kouroussa without the risk of delay; but possibly more importantly, it gives us a strategic partner with whom we share a long-term ambition of continuing to grow Hummingbird into a multi-mine, multi-jurisdiction gold Company."

Operational Update

Note: Ore mined includes high grade, low grade, and marginal material. Ore processed is a blend based on preferential feed of high grade and low grade, with marginal ore added as an incremental feed source.

Yanfolila, Mali

· Q1 2023 saw production of 27,262 oz, being another consecutive strong production quarter for the Company, following Q4 2022 gold production of 28,264 oz.

o  Similar trends are expected in Q2 2023, with mining continuing primarily in the high-grade Komana East ("KE") deposit.

o  KE deposit will be largely mined by early Q3 2023, with the mine plan increasingly shifting to other open pit deposits, including Sanioumale East ("SE") which is currently being prepared for mining in H2 2023.

o  Further, initial development of the Komana East underground mine ("KEUG") began in Q1 2023, with first underground production scheduled by year end, for a full underground production year in 2024, with more details below.

· Ore processed totalled 366,622 tonnes ("t"), showing another good consecutive quarterly result, as the key target mine area for the quarter, being KE, was mined.

· Mill feed grade for Q1 2023 averaged 2.41 grammes per tonne ("g/t"), in line with the mill feed grade as seen in Q4 2022 of 2.45 g/t.

· Processing plant recovery rates for Q1 2023 were 94.41%, in line with the Company's historical average, and as seen in Q4 2022.

· KEUG initial development work began in Q1 2023, with portal hole access works started, design works completed and key underground mining equipment from international underground mining specialists Epiroc beginning to arrive on site. A more detailed update will be given in our Q2 2023 operational update on the KEUG mining progress and economics. With a +278,000 oz Reserve, at 3.94 g/t, and increased mine life potential with further drilling, the KEUG will be a key deposit to underpin Yanfolila's future production profile.

· The contract with Yanfolila's contract miner JCM was terminated on 31 March 2023 as a result of ongoing poor equipment availability which materially impacted the operational performance of Yanfolila. The Company is currently supporting a transition of mining activities to a new contractor, with the ongoing support from Corica Mining Services (West African contract mining specialist, and Kouroussa's contract miner), including the excavators Corica have supplied for continued mining at Yanfolila without disruption.

· As noted in our Q4 2022 Operational and Trading update, a detailed cost control and reduction programme at Yanfolila was initiated and remains ongoing with cost improvements starting to come through at site. 

· Maintaining FY2023 production guidance for Yanfolila, Mali, of 80,000 - 90,000 oz, with a full year AISC of under US$1,500 per oz, with an updated Group wide full year guidance update to be provided once Kouroussa is in production and ramping up.

· Yanfolila ESG: SE village resettlement begun in Q1 2023 and is progressing ahead of schedule for completion of new housing being built for the community, in preparation for mining at the SE deposit in H2 2023. Resettlement and new village houses are being built for the community village under the guidance of West African specialist consultants ESDCO (Environmental and Social Development Company).

Kouroussa, Guinea

· As noted in the highlights above, Kouroussa construction is fully funded, on budget and remains on track for first gold pour by the end of this quarter, Q2 2023.

· Final construction, operational readiness and commissioning programmes are being completed in preparation for first gold pour.

· Mining commenced early in the quarter, with ore stockpiles increasing on the ROM pad in preparation for commissioning and ramp up to name plate capacity in H2 2023. 

Other key operational readiness and construction updates that occurred for the quarter include:

· >2.5 LTI free hours now achieved, a key ongoing safety metric for the Kouroussa construction team, with over 1,000 construction and mining personnel on site currently. 

· Tailings storage facility construction completed, with piping infrastructure to the processing plant being installed.

· Power plant equipment arriving on site and being installed in preparation for commissioning.

· Permanent mine camp construction scheduled to be completed end of April 2023. 

· Detailed commissioning schedule developed by site and Soutex (Kouroussa's engineering contractor), with commissioning personnel identified and being hired, including those that commissioned Yanfolila in Mali.

· Processing plant labour requirements for commissioning, ramp up and full production are in place, with a key focus on hiring more personnel to fill supporting and managerial roles, with the emphasis on national and local hires where possible.

· Increasing key focus on building overall inventory supplies required for mining and production being implemented.

· Detailed Kouroussa exploration plans are being developed in H1 2023 with a view to re-initiated exploration drilling plans in H2 2023 / 2024, with the focus to increase on Kouroussa's current Reserves base of 647,000 oz at 4.15 grammes a tonne ("g/t").

Kouroussa ESG:

· Increasing healthcare and first aid training initiatives being conducted in the communities and schools at Kouroussa from our on-site clinical nursing team and global remote healthcare specialists Critical Care International ("CCI").

· Community livelihood initiatives and projects advanced during the quarter, in particular the construction of community market garden infrastructure and community water bore holes.

Financial update

· Q1 2023 AISC at US$1,109 per oz, a +11% improvement to Q4 2022 AISC of US$1,248 per oz, and below our full year AISC guidance of less than US$1,500 per oz for Yanfolila, being a key highlight of the quarter, largely driven by: lower strip ratios; improved mining techniques being installed at site; cost control; and good grades being mined from the KE open pit.

· Another consecutive strong and improved quarterly Group EBITDA of c.US$17.5 million for Q1 2023. Strong production and a reduced AISC profile, coupled with improved gold price received for gold ounces sold, leading to a +59% improvement from the Q4 2022 Group EBITDA of c.US$11 million, also another key highlight from the quarter. 

· Capital expenditure of approximately c.US$21m in the quarter, primarily at Kouroussa, funded from both operating cashflows and the Placement of c.US$17 million during the quarter.

· Net debt position c.US$110.8 million end of Q1 2023 (c.US$105.2 million including gold inventory value) consisting of:

o  Gross debt of c.US$118.7 million.

o  Cash at bank of c.US$7.9 million.

o  Gold inventory value of c.US$5.6 million.

· Further, c.US$15 million remains available and expected to be drawn this quarter, Q2 2023, from the Coris Bank International ("Coris Bank") debt facilities.

· Of the budgeted US$115 million capex for the construction of Kouroussa:

o  c.US$83 million has been paid as at the end of Q1 2023.

o  c.US$12 million to be paid this quarter and early Q3 2023.

o  c.US$20 million contractor deferrals, retention incentives and working capital not expected to be paid until Kouroussa is in full production.

· The balance of Kouroussa's capex to be funded from a combination of the recent Placement, ongoing operational cashflows and available debt facilities. 

**ENDS**

Notes to Editors:

Hummingbird Resources plc (AIM: HUM) is a leading multi-asset, multi-jurisdiction gold production, development and exploration Company, member of the World Gold Council and founding member of Single Mine Origin (www.singlemineorigin.com). The Company currently has two core gold projects, the operational Yanfolila Gold Mine in Mali, and the Kouroussa Gold Mine in Guinea, which will more than double current gold production when in production, scheduled for first gold pour the end of Q2 2023. Further, the Company has a controlling interest in the Dugbe Gold Project in Liberia that is being developed by Pasofino Gold Limited through an earn-in agreement. The final feasibility results on Dugbe showcase 2.76Moz in Reserves and strong economics such as a 3.5-year capex payback period once in production, and a 14-year life of mine at a low AISC profile. Our vision is to continue to grow our asset base, producing profitable ounces, while central to all we do being our Environmental, Social & Governance ("ESG") policies and practices.

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