HUMMINGBIRD Resources said its all in sustaining cost guidance (AISC) of $995 per ounce for the 2020 financial year was under threat following “extreme rains” in the third quarter which took AISC to $1,283/oz compared to $983/oz in the second quarter.
Costs related to the Covid pandemic, and the temporary closure of the Mali border as a result of the coup of its former president Ibrahim Boubacar Keita, also impacted costs. The borders have since been reopened. “Although some of these issues have been resolved, there will be an impact on full year cost,” said Hummingbird in a third quarter announcement.
Full year gold production, which was previously forecast to be between 100,000 to 125,000 ounces, was likely to be “at the lower end of guidance”, the firm said. Production for the third quarter had come in at 24,722 oz (Q2: 24,054 oz).
However, the gold price is supportive and has helped the company make significant in-roads into its net debt which stood at about $10m. A 4,600 oz gold inventory had been valued at around $9m which would all but rub out net debt.
Hummingbird said it was pressing on with the development of its Kouroussa prospect. It was waiting for the award of the mining license to then begin development works which are expected early 2021.
In June, Hummingbird announced the all-paper takeover of Kouroussa, situated in Guinea, from Cassidy Gold equal to about £10m. If developed, the company would double total gold production which is currently derived from its Yanfolila gold mine.
“We continue to make solid progress at Kouroussa ahead of commencing construction of our second mine, which, when built, will see the company as a circa 220,000 oz producer,” said Dan Betts, CEO of Hummingbird Resources. He also forecast a strong finish to the year after the third quarter’s “heaviest rains” on record in Mali.