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Hummingbird Resources provides update on Kouroussa Gold Mine

Published by
Global Mining Review,


Hummingbird Resources plc has provided an update on the development of the high-grade Kouroussa Gold Mine in Guinea. The company has secured a group level financing package from Coris Bank International to fully fund the project into production, along with internal cash flows. Additionally, the company has finalised all necessary engineering and study work to provide CAPEX and timeline estimates together with project economics.

Summary highlights

  • Kouroussa is forecast to be a high-grade, low-cost mine which will produce an average of between 120 000 – 140 000 oz for the first three years of production and average 100 000 oz over the life of mine (LOM).
  • The LOM has increased to a minimum of seven years from the original five year estimate at purchase of the project based on the optimised mine plan, and is forecast to produce at an average all in sustaining cost (AISC) in the range of US$900 – US$1000/oz throughout the LOM, with material upside potential through further exploration drilling which is currently being planned.
  • Industry leading project economics at today’s gold price of US$1750/oz:
    • IRR 71%.
    • NPV US$210 million.
    • Cumulative free cash of US$314 million.
    • CAPEX payback period of approximately two years post commencement of production.
  • Commencement of construction is to begin 4Q21, with first gold pour scheduled for the end of 2Q23.
  • Total project CAPEX of US$97.5 million for a 1 million tpy processing plant and establishment costs, with an additional budget of US$10 million for pre-production mining cost and US$7.5 million for contingencies.
  • The project is fully funded through internal cash flows and a group financing facility from Coris Bank of US$100 million at a fixed interest rate of 8.5% over four years.
  • Key operational appointments and project construction contracts have been negotiated and are set to be awarded to internationally recognised partners.
  • 16 000 m of a 24 000 m 2021 infill drilling programme to upgrade confidence in the mineral resources at Kouroussa has been completed, with the remaining metres will be finalised on schedule in 2021.
    • Kouroussa’s current mineral resources are 1.18 million oz at >3 g/t (625 600 oz indicated, and 552 700 oz inferred).
    • The focus of the infill drill programme is to convert resources to reserves. A maiden Kouroussa reserve on one of the key deposits, Koekoe (KK), will be included in the updated company reserve statement to be released this quarter followed by a subsequent company resource and reserve update based on 2021 drilling due in 1H22.
  • Environmental, social and governance (ESG) processes, initiatives and infrastructure have been imbedded into the Project design including amongst others:
    • An updated environmental and social impact assessment (ESIA) study to ensure the project delivers on leading ESG industry standards and the World Gold Council (WGC) responsible gold mining principles (RGMPs).
    • Low carbon emission initiatives, including the final tendering process, now financing is complete, for a +7 MW solar power plant and energy saving waste heat recovery systems.
    • High level of local and in-country contractor and employee utilisation.

Dan Betts, CEO of Hummingbird, commented: “The completion of the financing and the imminent commencement of building Kouroussa marks the next phase of Hummingbird’s strategy to become a multi-mine, multi-jurisdiction gold producer. Kouroussa is a low cost/high margin project which will more than double Hummingbird’s gold production, substantially improve future cash flows and generate returns for all our stakeholders. With one of the highest IRRs for a gold project in West Africa, and material upside to extend LOM through further exploration within our licences area yet to be fully explored, Kouroussa provides a strong platform for our next phase of growth.

Kouroussa will be a key contributor in Guinea's journey to becoming a leading gold producer in West Africa, following ongoing gold discoveries in the Siguiri Basin, where the project is located.

“The recent political events in Conakry have not impacted the rapid progress of the development of Kouroussa, and we have taken measures to ensure that our key priority of maintaining the safety of our employees, contractors and operations remain intact.

“Finally, I would like to personally thank Coris Bank and their team for the long-standing commitment they have shown Hummingbird and again for this financing package to support the company in building our next producing gold mine.”

Read the article online at: https://www.globalminingreview.com/exploration-development/12102021/hummingbird-resources-provides-update-on-kouroussa-gold-mine/

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