Hummingbird fully funds $88m Yanfolila gold project

HUMMINGBIRD Resources has fully-funded its $88m Yanfolila gold project which is situated in west Africa’s Mali following a $45m debt package, and $10m cost overrun facility. It also has extended existing bridge finance.

The bridge finance, increased with shareholder Taurus Funds Management, allows Hummingbird to drawn down a further $10m ($25m in total) to continue commissioning Yanfolila while documentation relating to the $55m debt package is concluded.

Yanfolila will produce 132,000 oz of gold in its first full year of production and a life of mine average of about 107,000 oz/year based on the results of a definitive feasibility study.

The study estimated all in sustaining costs of $695/oz which is comparable to some of the costs recorded by Randgold Resources, although Hummingbird’s investment returns planning is at a gold price of $1,250/oz. The gold price is currently trading at $1,173/oz.

Construction of the project will take about 12 months with first production planned for the final quarter of 2017, the company said in its study earlier this year. In June, the company said it had raised $71m in equity in line with Taurus’ requirement the project have less finance from debt.

“I am happy to report that construction is now well under way with over 20% of the project capital expenditure committed,” said Daniel Betts, CEO of Hummingbird Resources in a statement.

“We are very pleased with the progress made to date on site and securing this additional debt facility sees the final corporate hurdle overcome in order to expedite the construction process ahead of our initial gold pour,” he said.

Hummingbird bought the Yanfolila prospect from South Africa’s Gold Fields in 2014 for $20m. However, Gold Fields – which was Hummingbird’s largest shareholder with a 19.9% stake – did not participate in the equity raising earlier this year which saw its investment in the firm post-placement fall to about 6.7%.