HUMMINGBIRD Resources announced on Friday an operational and strategic review in which it will cut costs, sell non-core assets and overhaul management, starting with founding CEO Dan Betts who will step down.
“After 17 years of building Hummingbird from a grassroots exploration company to a gold producer with an annual run rate exceeding 200,000 ounces, I believe the time is right for a new leadership team to guide the company through its next phase,” Betts said.
Betts will become Hummingbird’s full time executive chairman.
As part of today’s review announcement Hummingbird also confirmed it had secured a $30m loan from CIG SA. Shares in Hummingbird fell 12% in early London trade taking the year-to-date losses to nearly 28%.
Hummingbird has been mired in operational problems over the last two years as it struggled to meet ramp up plans for its $120m Guinea project Kouroussa. In December it unveiled a recapitalisation after previously agreeing to cut $122.8m in debt over three years starting with a $77m debt repayment by the end of this year.
As part of the recapitalisation, it also agreed to hedge 15% of its gold production which compounded its problems this year as the gold price repeatedly racked up all-time records. Shareholders in Hummingbird have largely missed the bull gold market as a result.
In today’s update, the company said commercial production at Kouroussa would be delayed, once again, this time to the fourth quarter. It blamed the delay on “lower-than-forecast mining volumes, delayed pit staging, and processing plant optimisation”. The mine is more than a year late achieving commercial output.
An independent review of the company’s management structures has been commissioned while a chief transformation officer has been appointed to oversee the process. An experienced mining professional will also be appointed to review the firm’s operating performance including efforts towards the continued ramp up of Kouroussa.
As part of planned asset sales, the company said it had held discussions regarding the sale of the Dugbe project in Liberia.
In addition, Oumar Toguyeni, a director of Nioko Resources Corp., the company’s largest shareholder, will join the board as a non-executive. The shake up at Hummingbird carries the blessing of Coris Bank, Hummingbird’s primary lender, the company said.
