Hummingbird Resources plc has announced the signing of a conditional binding Sale and Purchase Agreement for the acquisition of the Kouroussa Gold Project located in Guinea, from Cassidy Gold Corp, following the completion of confirmatory due diligence by the Company on the Project.
The Company has also completed a more in-depth review of the Project’s geological database which highlights promising drill intersections both within and outside the current stated mineral resource used in the mine plan. These drill intersections also demonstrate the high grade nature of the targets proximal to the project and within the permit area.
Key terms of the SPA Agreement
Initial consideration of £10 million through the issue of 35,248,441 Hummingbird new Ordinary Shares, currently representing 9.0% of the then enlarged share capital of the Company.
Dan Betts, CEO of Hummingbird, commented: “I am delighted we have been able to confirm the purchase of the Kouroussa Gold Project and look forward to working with the Government of Guinea as we progress the development of the Project as quickly as possible whilst continuing to explore the remarkable geological potential at the project.
“This marks a pivotable point in Hummingbird’s story and is a significant next step in achieving our long term ambition to create a sustainable multi-asset gold producer. I would like to take this opportunity to thank all stakeholders who have contributed to getting us this far and continue to support us at this exciting time for the Company.”
Murray Paterson, VP Geology of Hummingbird, commented: “Having the opportunity to work on a new gold system at Kouroussa is extremely exciting. There is undoubtably further potential to be discovered but what is most exciting is the abundance of high grades as evidenced by the large number of gram metre intercepts >50 gram metres but also the many occurrences of visual gold. The old adage “Grade is King” is particularly relevant to Kouroussa and our technical team is looking forward to the challenge of unlocking the system’s full economic potential. We look forward to sharing the story as it unfolds.”
It is the Company’s intention to spend the next six months optimising the project with the objective of commencing construction at the start of 2021. Whilst the final design is dependent on work to be conducted during the next six months, it is anticipated that the project will be of a similar scope and flow sheet to the Company’s Yanfolila project. First gold pour is targeted within two years.
During the initial six month period the Company will analyse the optimal funding structure for the project, consistent with the letter of intent received from our west African banking partners, Coris Bank. The financing is expected to support the project with up to $100 million and will take into account the fact that the Company expects to be generating significant cash flows from its Yanfolila mine, which is due to become debt free in Q2 2021.
Over the past three weeks, following the initial due diligence into the Kouroussa project, a more in depth data review by Hummingbird’s technical team has highlighted the high grade nature of the Kouroussa gold system (includes Koekoe, Kinkine, X-Vein and Bag Farm – Junction) and the further upside potential for open pit and underground resources outside of the current stated mineral resource of 1.1Mozs.
Hummingbird Resources is a gold production, development and exploration company. The company has two core gold projects, the Yanfolila Gold Mine in Mali and the recently acquired Kouroussa Gold Project in Guinea.
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 Kouroussa Gold Project has a Resource base of 1.18Moz @ 3.08 g/t, which will be fast tracked to production, adding an additional c.100,000 oz of gold per annum to its production profile.
Hummingbird also has a controlling interest in the Dugbe Gold Project that is being developed by ARX Resources through an earn-in agreement. 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.