Hummingbird Resources Share Discussion Threads

[techandy] 04/6/2020 08:23

25p by close of play

[kennyp52] 04/6/2020 08:13

BT1 ... very long term investor in a company he says has a CEO that will never run it properly and the share price is very unlikely to increase . I cannot think of a more ridiculous investor statement which leads me to think he is just a disgruntled shareholder with a personal gripe or a paid deramper that likes self harm .

[rickyhatton] 04/6/2020 08:13

Looks really excellent news to me.

ARX pay for all pre production costs excluding mine build costs (including $10m for exploration) and the DFS to earn half the project. Derisks massively for HUM. Which is what most shareholders and Company wanted. Fantastic

Hum

Needs a few things to fall into place to progress it.
But now the large project has momentum.

Once market understands this it should be good+++ for the SP

[rickyhatton] 04/6/2020 08:09

Looks excellent news to me!

[jbravo2] 04/6/2020 07:44

I think it’s a disgraceful deal. I suspect the shareholding of the directors was the key decision driver rather than the deal for HUM shareholders.
It’s not like they don’t have form of course.
Proves itself as a vehicle for director enrichment first and foremost.

[aim999] 04/6/2020 07:39

And they have to pay a deposit .... so not fluff

[aim999] 04/6/2020 07:39

Better to have 51% of something than 100% of nothing.....at least Betts will be dipping his hand in his pocket and not ours

[catsick] 04/6/2020 07:16

Seems like a good Idea small bit of cash and jv partner puts in 10m usd to get the project to shovel ready and means all the prodigious cash the mine is now generating can be given to shareholders...

[replicas1967] 04/6/2020 07:11

Up she goes

[temujiin] 04/6/2020 07:08

Talking of Dugbe, Earn-in agreement with ARX


04 June 2020

Hummingbird Resources plc / Ticker: HUM / Index: AIM / Sector: Mining

Hummingbird Resources plc

("Hummingbird" or the "Company")

Earn-in agreement with ARX on the Dugbe Gold Project

Hummingbird Resources plc ("Hummingbird" or the "Company") (AIM:HUM) is pleased to announce that it has entered into a conditional earn-in agreement with ARX Resources Limited ("ARX") in respect of the Company's Dugbe Gold Project ("Dugbe" or the "Project"), located in Liberia, which requires ARX completing a Definitive Feasibility Study, carrying out a significant exploration programme and covering all Project costs over the 2 year earn-in period (the "Earn-in"). The Earn-in entitles ARX to earn up to a 49% interest in the Project, and is subject to various conditions, including the payment by ARX to Hummingbird of a non-refundable deposit of US$2m.

In addition, the Company has secured the right to acquire an exploration licence which is surrounded on all sides by the Company's existing Mineral Development Agreement (the "Central Licence").

Dugbe Gold Project - Earn in Agreement

The key terms of the Earn in Agreement with ARX are:

1. The payment of a non-refundable US$2 million deposit (the "Initial Deposit") by ARX to Hummingbird within four weeks of signing the Earn in Agreement for a three month extendable exclusivity period, conditional, amongst other things, on the Company receiving a waiver from the Government of Liberia on its pre-emptive right over equity investment into the Company's subsidiary, Hummingbird Resources (Liberia) Inc., which holds the Project, and consent from the Anglo Pacific Group Plc (which holds a royalty interest over part of the Dugbe Gold Project, as set out in the announcement of 18 December 2012), both of which are expected to be forthcoming shortly.

2. Subject to ARX demonstrating initial funding of at least US$10m (including the US$2m Initial Deposit) within the exclusivity period, ARX has the right to operate the Project under the oversight of a joint management committee and to earn into a 49 per cent economic interest in the Project (net of any interests of the Government of Liberia and Anglo Pacific Group Plc) over a two year period through:

a. Completing a Definitive Feasibility Study, under joint management committee oversight, on the Project with the objective of being able to attract funding for the development of the Project;

b. Undertaking a mutually agreed exploration programme of circa US$10m with the objective of materially increasing the known resource base of the Project; and

c. Covering the overhead and operating costs associated with the Project during the 2 year earn in period.

(together the "Earn in Conditions")

3. ARX has the right to extend the earn in period (of two years) by up to 12 months for payment of US$1m per month.

4. Subject to meeting the Earn in Conditions, ARX has the right to be granted the 49 per cent economic interest in the Project.

5. On being granted the 49 per cent economic interest in the Project, the parties undertake to enter into a customary joint venture agreement, as well as both having the right, subject to certain protections, to convert the Company's 51 per cent controlling interest in the Project into a 51 per cent controlling interest in ARX or any then listed parent company.

6. On ARX commencing the 2 year earn in period as Operator, it is intended that Mr Daniel Betts and Mr Ernest Nutter will join the board of ARX as non executive directors.

Whilst the Company has confidence in the ability of ARX to meet the funding conditions referred to above, there is no guarantee it will be able to, and therefore no guarantee that the Earn-in Agreement will proceed as intended.

Central Licence option agreement

Additionally, the Company has secured the opportunity to acquire the Central Licence (see map attached - ) from MES Mining Corporation (a company incorporated in Liberia) (the "Option Agreement"). The key terms of the Option Agreement are:

1. The payment, within four weeks, of an option fee of US$0.6 million to secure a three month extendable exclusivity period for technical due diligence on the Central Licence.

2. Should the Company exercise the option, the consideration payable is:
a. Initial consideration of US$0.5 million payable on exercise.
b. Deferred consideration of US$0.9 million payable within 12 months.
c. Contingent consideration in the form of a sliding scale royalty of up to 1 per cent of commercial production (capped at 3m ounces of production) from the Central Licence area (in the event it is brought into production).

Under the Earn in Agreement ARX will have the right to direct the Company to exercise the option to acquire the Central Licence by meeting the costs of exercise and subsequent overhead and operating costs associate with the Central Licence which shall then be included within the Project which ARX are earning into.

Related Party Transaction

Whilst a number of parties have expressed interest in the Dugbe Project and carried out varying levels of due diligence, ARX's proposal was both a significant improvement on the non binding potential transaction with ARX as announced on 14 January 2020 and by far the most compelling proposal due to a combination of factors. In particular ARX's team has a strong track record in funding and advancing projects, has moved quickly to close this transaction to invest significantly in order to unlock the material potential of the project, whilst allowing Hummingbird to retain a controlling 51 per cent interest in the project. Additionally the earn in is in line with the Company's previously stated strategy of seeking to unlock the latent value of the Project including through partnerships and allowing the Company to develop other prospective strategic opportunities to capitalise on the platform we have built through the exploration of potential M&A opportunities.

Three directors of the Company (Daniel Betts, Ernie Nutter and Thomas Hill) have invested into ARX in support of ARX's strategy to develop Dugbe, as well as to demonstrate their personal commitment and long term belief in the potential of the Dugbe Gold Project. The three directors have an aggregate holding of 39%in ARX as at today's date, which is likely to be diluted in the normal course as a result of ARX's upcoming fundraising activities in order to satisfy the conditions of the Earn in Agreement. Each of their investments was on the same terms as third parties investing at the time, and the Company's interaction with ARX was handled by an independent committee of the Hummingbird Board, chaired by the Chairman, and comprising the three other directors (in addition to the Chairman) (the "Independent Committee").

The Company entering into the Earn-in Agreement with ARX constitutes a related party transaction pursuant to AIM Rule 13. Accordingly, the Independent Committee consider, having consulted the Company's Nominated Adviser, Strand Hanson Limited, that the terms of the Earn in Agreement are fair and reasonable insofar as Hummingbird's shareholders are concerned.

Dan Betts, CEO of Hummingbird, commented:

"As anybody who has been involved with, or observed, Hummingbird since 2007 will know, the origin of the Company is in exploration in Liberia and particularly the Dugbe Gold Project. Hummingbird was the first mover into eastern Liberia, pioneering exploration in a region that had never been mapped and the geology was not known at all. It is to the immense pride of all who have been involved in that journey that we were able to discover not only the significant mineral resource at the Project but what we believe to be a district scale gold province of potentially global significance.

"Equal to that pride has been our frustration. Ultimately the Project was seen by many as too large, and ultimately too big for a junior to develop. I am proud of the fact we were nimble enough to change direction and acquire the Yanfolila project in Mali. Subsequently we have developed, financed, built and operated Yanfolila - and in the process we have learned a great deal about what our strengths and weaknesses are.

"Whilst we continue to believe completely in the potential of the Dugbe Gold Project we also realise that it is a very different project to what we are focused on at Yanfolila. In order to unlock its value, it needs a large investment of capital and management time in both the DFS and to further showcase its exploration potential which was demonstrated when the first 164 holes we drilled all intersected mineralisation.

"We are delighted that ARX has committed to invest significantly in the project to help us to finally start to unlock the value at Dugbe, while keeping the project under our control. We are confident in a highly effective collaborative partnership. This confidence is evidenced by making our own individual investments in ARX and that Ernie and myself will join the ARX board once the deal is consummated. ARX is not only committing significant risk capital up front but comes with a proven management team with significant west African experience. Our partnership with ARX will provide fresh eyes, fresh energy and fresh thinking to a project we have been looking to unlock for some time and we are truly excited about how the project will progress.

"Additionally we have secured the opportunity to consolidate the land package with the option to acquire the Central licence. This licence has always been of potentially significant importance in our goal to fully explore the mineralisation of the region and we are excited to see how this may enhance the Project.

"I look forward to updating the market on our progress in partnership with ARX at Dugbe with the objective of progressing the Project towards a significant mine which will benefit all stakeholders."

Ian Stalker of ARX said

"We are delighted to have to opportunity to work with Hummingbird on the Liberian Dugbe Gold Project. With Dugbe's established 4 million Oz Resource base and with a highly experienced West African Mining Team (including mine-builders), we are ready to get going on taking the Project through a DFS and beyond! In this current gold market the Project is well placed to be advanced rapidly."

About ARX

ARX Resources Limited is a private BVI incorporated company. The Company was founded by Stephen Dattels, former Executive Vice President and a Director of Barrick Gold Corporation, and Michael Beck, a former partner of N. M. Rothschild & Sons, who formed a partnership in the mid 1990's to jointly fund and develop resource projects in developing countries involving the full suite of mineral resources and oil & gas. Since that time they have been involved in financings and project development involving billions of dollars on several continents in a myriad of resources including: gold, nickel, chromite, coal, iron ore, copper, uranium, lithium, cobalt, potash, titanium, industrial minerals and oil & gas.

In structuring its Option Agreement and Joint Venture with ARX, it necessitated bringing on board a successful mine finance group in addition to a world class operating team which would operate hand in hand with Hummingbird but would be independently run ensuring, minimal strain on Hummingbird's human resources and no strain on its financial resources. The team that has joined ARX consists of Ian Stalker and members of his technical team. Ian has been responsible for developing multiple mines over several decades. He has been involved in bringing into production multiple successful African gold mines and operating same including: the Obuasi expansion for Ashanti Goldfields in Ghana, the Siguri Mine in Guinea, the Bibiani Gold Mine in Ghana and the Geita Gold Mine in Tanzania.

Ian Stalker, who is expected to be appointed as CEO of ARX, has worked with Mr. Dattels and Mr. Beck on many of their mining ventures as a director often in the position of CEO. Mr. Stalker is an international mining executive with over forty plus years of "hands on" experience in mine development and operations in Europe, Africa and Australia. Mr. Stalker was a Vice President of Gold Fields Ltd., which at one point was the world's fourth largest gold producer. He has successfully overseen the development of several mineral projects in Africa from defined resources through feasibility study into operational mines and thereafter continued to manage ongoing operations and expansions.

[plasybryn] 04/6/2020 04:45

I don't disagree with a lot of what you say. Of course we have lost our PR man Bert Monroe to Cora which is a shame. The Co. now is more about letting the numbers speak for themselves - proof in the pudding etc. I feel there is something of a history with communication. They are very wary of BB's seeing them, I believe, as a cesspit of misinformation and strange anti Co. bias. We can see that for ourselves. Very sad and uncalled for. I'm an investor in AAU and the BB there is so much more constructive.

[goldgoldgold1] 04/6/2020 04:29

I like your positive attitude PB.

You are right that the company has done a pretty good job when it comes to execution. Fine the share price hast performed but thats hard to blame squarely on management.

I think where they could be better is communication and on forward guidance. I think given the current situation they should be having a huge PR push, speaking to every news channel, pumping out information on social, speaking at conferences etc.

I nod to a divi or a buyback is all they need to do to see this race higher.

I have a good feeling that something is going to come out of Dugabe as well - There has been nothing at all in terms of communication about it, its a huge resource and with Gold at these prices is an attractive acquisition. I think that the silence means something is brewing.

[plasybryn] 04/6/2020 02:46

Oh and very approachable. All I want know is to learn about their plans for a firm dividend strategy starting say 2021. Perhaps Dugbe could be monetised and the funds returned to shareholders in a special one off dividend? 4.2m oz is no mean asset which imo isn't currently in our mkt. cap. valuation.

[plasybryn] 04/6/2020 02:41

I think this has the making of a great gold co. They have done really well imo. Delivered mine on time & on budget. Delivered second mill on time and on budget. Clear objectives which are being implemented as stated, in fact debt will probably be cleared ahead of schedule. Great social programme in an area of need. Great website. Very clear and easy to find all the information.,The next 12 months is going to be an exciting ride. IMO Dyor

[borderterrier1] 04/6/2020 00:45

New_Buyer You only need to read the LSE bb to realize that there are lots of disgruntled shareholders out there now, many with long memories. Mud sticks. Do you blame them? Pathetic way to run a company. I could do better, much better with half the salary. Please put my name forward.

[waldron] 03/6/2020 22:50

FWIW

A good long term bet but looking toppy at present

[temujiin] 03/6/2020 22:45

For any that haven't seen this. Credits to Twogoals on LSE

HUM Target Price - 47p

Berenberg view: Following the difficult start to the year, the company made significant improvements throughout 2019 and reported its first profitable year for the business. Hummingbird had already reported several key financial figures such total group sales and net debt; however, it is positive to see earnings and profit come in better than our forecasts.

We are also encouraged that production guidance is maintained; however, the company flagged continued cost pressures from COVID-19, which may increase AISC by USD100/oz for the year. While this is a slight negative, we believe the relatively high strip nature of the deposits at Yanfolila means that Hummingbird is likely to benefit from lower diesel prices in the form of cost tailwinds. In addition, given that we believe the gold price remains well supported for the year, we expect little impact on FCF generation potential.

Overall, the deleveraging story remains intact, with a net cash position expected by the end of 2020 (we forecast net cash of USD24m for end-2020). Furthermore, the 2020 exploration programme is providing encouraging drilling results, which are expected to prove up underground resources at Komana East, along with targeting new greenfield deposits.

We value Hummingbird on an SOTP basis, with a DCF valuation for Yanfolila and Dugbe.

[ukgeorge] 03/6/2020 22:07

hxxps://hummingbirdresources.co.uk/wpcontent/uploads/2020/06/c116556_CCL_High_interactive.pdf

At least a share buyback may start.....

[waldron] 03/6/2020 21:29

chuckle ted

you are far from thick so stop playing modest

[podgyted] 03/6/2020 21:04

Are the full financial statements available yet - may be being thick, but I can't find on their website.

[borderterrier1] 03/6/2020 21:04

And today Berenberg brokers rate Hum at 47p. Just as three years ago Beaufort, the Hum brokers (successfully prosected by the FBI for pump and dump violations) rated it at 60p. Oh, great!!!! I'll top up while I can. Fill my boots. This will re-rate and I'll make a fortune. Then I can go to GB delusional idiot on the LSE bb party. Don't make me laugh! We're all suckers.

[ukgeorge] 03/6/2020 20:27

Go Nicole Bulcher aka NB for HUM

Roll on in 6-8 weeks Q2's being exceptionally good.

[ntv] 03/6/2020 20:24

Whilst one albatross does not make a summer,the next update is the all important one otherwise the vultures will be circling above the board

[new_buyer] 03/6/2020 20:21

Dum and Dummer!!