Hummingbird Resources PLC Update on Dugbe Gold Project (9521E)

TIDMHUM

RNS Number : 9521E

Hummingbird Resources PLC

01 November 2022

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

1 November 2022

Hummingbird Resources plc

("Hummingbird" or the "Company")

Update on Dugbe Gold Project

Pasofino Announces Exercise of Right to Consolidate Ownership of the Dugbe Gold Project

Hummingbird Resources plc (AIM: HUM) is pleased to report that Pasofino Gold Ltd ("Pasofino") has provided notice to exercise its right to convert Hummingbird's 51% interest in the Dugbe Gold Project ("Dugbe") to a 51% interest in Pasofino, such that Pasofino would become the owner of 100% of Dugbe (prior to giving effect to the 10% carried interest of the Government of Liberia) and Hummingbird would own 51% of Pasofino (the "Consolidation").

The Consolidation is subject to all required government, TSX Venture Exchange and shareholder approvals .

Pasofino will issue to Hummingbird such number of common shares of Pasofino that results in Hummingbird owning 51% of the outstanding Common Shares of Pasofino on completion of the Consolidation. In addition, Hummingbird has an anti-dilution right that provides that if, as and when any warrants outstanding as at the date the option satisfaction notice was issued by Pasofino are exercised, Pasofino shall issue to Hummingbird one Common Share for each Common Share issued in connection with such exercise.

The announcement by Pasofino can be accessed through the following link: https://pasofinogold.com/news/default.aspx

Dan Betts , CEO of Hummingbird Resources, commented: "With this consolidation, Hummingbird moves to owning 51% of Pasofino which simplifies the ownership structure and ensures that what is one of the largest gold projects in West Africa has clear visibility of its own. With 2.8m oz of gold reserves, unrivalled exploration potential and a recently completed feasibility study, this project has some of the most attractive economics of any development project in the region and it is the objective to now maximise value for all stakeholders."

Krisztian Toth, Chairman of the Board of Pasofino, commented: "We are excited to consolidate the ownership of the world class Dugbe Project under Pasofino. By consolidating ownership of the Dugbe Project, Hummingbird and Pasofino are better placed to execute on the strategic review process being undertaken to identify opportunities to generate maximum value for each of our stakeholders."

ABOUT THE DUGBE GOLD PROJECT

The 2,559 km(2) Dugbe Gold Project is in southern Liberia and situated within the southwestern corner of the Birimian Supergroup which is host to most West African gold deposits. To date, two deposits have been identified on the Project; Dugbe F and Tuzon discovered by Hummingbird in 2009 and 2011 respectively. The deposits are located within 4 km of the Dugbe Shear Zone which is thought to have played a role in large scale gold mineralization in the area.

A significant amount of exploration in the area was conducted by Hummingbird up until 2012 including 74,497 m of diamond coring. Pasofino drilled an additional 14,584 metres at Tuzon and Dugbe during 2021. Both deposits have Mineral Resource Estimates dated 17 November 2021 with total Measured and Indicated of 3.3 Moz with an average grade of 1.37 g/t Au, and 0.6 Moz in Inferred. Following the completion of the Feasibility Study in June 2022 a Mineral Reserve Estimate was declared, based on the open-pit mining of both deposits over a 14-year Life of Mine. A technical report for the Dugbe Gold Project was prepared in accordance with National Instrument 43-101 and filed on SEDAR at www.sedar.com and on the Company's website.

Highlights of the Feasibility Study as previously announced include:

Strong financial metrics :

- Pre-tax NPV5% of USD690M (USD530M post-tax), 26.35% IRR (23.6% post-tax) at a base gold price of USD1,700/oz.

   -     Fast capital payback of approximately 3.5 years from start of production: 
   -     Life of mine (LOM) All In Sustaining Cost (AISC) of USD1,005oz and USD29/t cash cost. 

- Pre-production capital requirement of USD397M excluding owners' costs for a 5Mtpa processing plant.

Large Mineral Reserve with potential for expansion:

   -     2.27Moz gold produced over a 14-year LOM. 
   -     Average annual production of 200,000oz for the first 5 years. 
   -     2.76Moz of Mineral Reserves. 

- Additional 67koz of Inferred Mineral Resources within the FS pit and immediate sidewalls which have not been included in the Mineral Reserves.

Simple project with economies of scale :

   -     LOM strip ratio of 4.21:1 highlighted by a low 3.56:1 ratio in the first five years. 
   -     Simple (Gravity-CIL) process flow sheet which enhances project economics. 

- Low power costs of USD0.175/kWh, with opportunities for long-term savings with alternative renewable energy sources.

In addition to the existing deposits there are many gold prospects within the Project including the Bukon Jedeh area and the DSZ target on the Tuzon-Sackor trend where Pasofino has discovered a broad zone of surface gold mineralisation in trench and outcrop along strike from Tuzon. At this and several of the other prospects no drilling has been carried out to date.

In 2019, Hummingbird signed a 25-year Mineral Development Agreement ("MDA") with the Government of Liberia providing the necessary long-term framework and stabilization of taxes and duties. Under the terms of the MDA, the royalty rate on gold production is 3%, the income tax rate payable is 25% (with credit given for historic exploration expenditures), the fuel duty is reduced by 50%, and the Government of Liberia is granted a free carried interest of 10% in the Project.

About Pasofino Gold Ltd.

Pasofino Gold Ltd. is a Canadian-based mineral exploration company listed on the TSX-V (VEIN). Pasofino, through its wholly-owned subsidiary, owns a 49% economic interest (prior to the issuance of the Government of Liberia's 10% carried interest) in the Dugbe Gold Project. Pasofino has exercised its option to consolidate ownership in the Dugbe Gold Project by requiring conversion of Hummingbird's 51% ownership of the Project for a 51% shareholding in Pasofino, such that Pasofino would own 100% of the Project (prior to the government of Liberia's 10% carried interest), subject to the receipt of all required government, TSX Venture Exchange and shareholder approvals.

   For further information please visit   www.hummingbirdresources.co.uk  or contact: 
 
 Daniel Betts,           Hummingbird Resources   Tel: +44 (0) 20 
  CEO                     plc                     7409 6660 
  Thomas Hill, 
  FD 
  Anthony Köcken, 
  COO 
  Edward Montgomery, 
  CSO & ESG 
 James Spinney           Strand Hanson Limited   Tel: +44 (0) 20 
  Ritchie Balmer          Nominated Adviser       7409 3494 
                        ----------------------  ---------------------------- 
 James Asensio           Canaccord Genuity       Tel: +44 (0) 20 
  Gordon Hamilton         Limited                 7523 8000 
                          Broker 
                        ----------------------  ---------------------------- 
 Bobby Morse             Buchanan                Tel: +44 (0) 20 
  George Cleary           Financial PR/IR         7466 5000 
                                                  Email: [e-mail] 
                        ----------------------  ---------------------------- 
 

Notes to Editors:

Hummingbird Resources plc (AIM: HUM) is a leading multi-asset, multi-jurisdiction gold production, development and exploration Company, member of the World Gold Council and founding member of Single Mine Origin (www.singlemineorigin.com). The Company currently has two core gold projects, the operational Yanfolila Gold Mine in Mali, and the Kouroussa Gold Mine in Guinea, which will more than double current gold production when production, scheduled for first gold pour end of Q2 2023. Further, the Company has a controlling interest in the Dugbe Gold Project in Liberia that is being developed by Pasofino Gold Limited through an earn-in agreement. The final feasibility results on Dugbe showcase 2.76Moz in Reserves and strong economics such as a 3.5-year capex payback period once in production, 14-year life of mine at a low AISC profile of US$1,005/oz. Our vision is to continue to grow our asset base, producing profitable ounces, while central to all we do being our Environmental, Social & Governance ("ESG") policies and practices.

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November 01, 2022 09:39 ET (13:39 GMT)