First Quarter Operational Update

RNS Number : 2711E

Hummingbird Resources PLC

08 April 2014

 



8 April 2014

Hummingbird Resources plc

("Hummingbird" or the "Company") (AIM: HUM)

First Quarter Operational Update

Fully funded through DFS Completion

 Resource Upgrade Materially De-Risks the Project

Hummingbird Resources, the Liberian gold exploration and development company, announces an operational update for the three months ended 31 March 2014.

Highlights

Corporate Developments

·     Final US$5 million tranche of royalty funding agreement with Anglo Pacific Group ("Anglo Pacific") received.

·     Cash of US$9m at 31 March 2014, fully-funded beyond completion of the Dugbe 1 Project ("Dugbe 1") Detailed Feasibility Study ("DFS")

Operational Developments

·     Material increase to Tuzon Resource grade and ounces

o  2.47 Moz @ 1.47 g/t constrained in a US$1,500 pit

o  2.12 Moz @ 1.56 g/t constrained in a US$1,200 pit

·     Total resource inventory at Dugbe 1 increased to 4.2 Moz (Tuzon and Dugbe F deposits*)

·     DFS on track for completion in Q3 2014

·     Initial Dugbe F infill drilling results support concept of higher grade starter pits

Exploration Developments

·     Detailed 1:10,000 airborne magnetic and radiometric survey data completed over the Dugbe 1 area

·     47 targets identified with follow up exploration work including soil sampling underway

·     1,050 soil samples across 3 grids being taken within 5km of existing resources

Dan Betts, Managing Director of Hummingbird Resources said:

"We have grown the Tuzon Resource significantly this quarter by adding 500,000 ounces to reach 2.5Moz and the grade across the entire Resource has increased by over 20% to 1.5g/t. This includes 1.9 Moz Indicated at 1.56 g/t within a US$1,200 pit which materially de-risks the project.

We received our last US$5m royalty payment from Anglo Pacific which leaves us fully funded beyond our DFS which remains on track for completion in Q3 2014. 

We are actively exploring in the areas closest to Dugbe 1 based on existing soil geochemical data and the newly interpreted 1:10,000 airborne magnetic and radiometric data. It remains our belief that Dugbe 1 will grow to be significantly larger than the existing 4.2Moz gold resource and it is our intention to continue low cost exploring, as funds allow, to find those ounces."

DFS and Operational Update

Q1 2014 was notable for the significant upgrade to the Mineral Resource at Tuzon, increasing the total resource inventory to 4.2Moz from 3.8Moz. The final US$5 million tranche of royalty funding was subsequently received from Anglo Pacific.

The DFS remains on schedule for delivery in Q3 2014.

Material Increase to Tuzon Resource

The significant upgrade in the Tuzon Resource has seen the Indicated Resource grade increase from 1.23 Au g/t to 1.56 Au g/t within the US$1,200/oz Au constrained pit, and the total Indicated Resource increased to 42 Mt @ 1.5 Au g/t for 2.0 Moz within a US$1,500/oz Au constrained pit.

The table below outlines the Tuzon Mineral Resource across both US$1,500 and US$1,200 pit shell scenarios:

US$1,500 Mineral Resource for the Tuzon Gold Deposit

Classification	Tonnage (Kt)	Au (g/t)	Au (Koz)
Total Indicated	41,800	1.51	2,031
Total Inferred	10,201	1.32	435
Grand Total	52,001	1.47	2,466

US$1,200 Mineral Resource for the Tuzon Gold Deposit

Classification	Tonnage (Kt)	Au (g/t)	Au (Koz)
Total Indicated	37,400	1.56	1,879
Total Inferred	4,965	1.55	244
Grand Total	42,365	1.56	2,123

*Total resource inventory is the Dugbe F inferred resource of 1,764 Koz + the Tuzon US$1,500 pit shell resource of 2,466 Koz

*Reported with cut-off grade of 0.5 g/t

Metallurgy

Results from the Preliminary Economic Assessment ("PEA") showed recovery rates of 88-90% from CIL processing. Since the PEA extensive metallurgical test work has been conducted. In Q1 the test work included the following:

·     Trade off studies looking at the additions of lead nitrate, oxygen or alternative additives to improve recovery

·     Flotation options being reconsidered with a potential re-grind circuit also analysed

Variability test work is underway to optimise and confirm the process flow sheet.

Geotechnical

All onsite geotechnical work on the Tuzon deposit has now been completed under the supervision of Coffey Mining. Mine plant infrastructure and the Tailings Management Facility ("TMF") locations have been identified pending final DFS results. Geotechnical samples are currently being analysed by Civilab in South Africa.

Power

The US based company, US Power and Environment ("USP&E"), are currently undertaking a feasibility study to assess all power options for the mine as part of the DFS. USP&E aims to identify the most cost-effective power option using the application of the most modern and efficient power generation technology. A number of options have already been identified from earlier studies.

Dugbe F Infill Results

Initial results are back from the 1,201m Dugbe F infill drill programme. This programme has been targeting near surface high-grade zones. The results so far have been in line with the Company's expectations. We await the full set of results together with the geological interpretation to see what impact they could have on the potential mine scheduling at Dugbe 1. 

Highlights of the drilling includes:

DFDC301            10.0m @ 1.6 g/t

DFDC307            9.0m @ 2.07 g/t

DFDC313            12.6m @ 1.72 g/t

DFDC314            10.5m @ 1.66 g/t

DFDC318            17.0m @ 1.76 g/t

DFDC326            10.5m @ 1.83 g/t

Full table of results can be found in Appendix 1. Please click on the following link to see a location map of the drill results: http://www.rns-pdf.londonstockexchange.com/rns/2711E_-2014-4-7.pdf

Financing

In March 2013, Hummingbird received the final tranche of US$5 million from Anglo Pacific taking the cash balance of the Company to US$9 million. The Company is now fully funded up to and beyond the completion of the DFS.

Endeavour Financial is assisting the Company in reviewing a variety of funding options to enable Hummingbird to commence mine construction as quickly as possible following the completion of the DFS.

Exploration Upside

Further to the 1:50,000 airborne magnetic and radiometric survey completed in 2013 a more detailed 1:10,000 magnetic and radiometric interpretation has been completed over high level targets in close proximity to the existing 4.2 Moz at Dugbe 1.  The 2013 1:50,000 survey covered over 17,000 line kilometres highlighting 140 exploration targets. The more detailed interpretation has identified 47 of these targets as having significant geological interest meriting further exploration. 

On the back of the survey results, three soil grids have been planned and 1,050 soil samples are due to be taken across them. The samples will be taken on a 200m x 25m line spacing, and for the highest order targets, on a 100m x 25m line spacing. This exploration programme will be carried out by the Company's in-house geological team who have recently completed the infill drill programme and subsequent interpretation leading to the upgrading of the Tuzon Resource to 2.47 Moz at 1.47 g/t. 

The map link below shows the 3 soil grid areas and their proximity to our existing Dugbe 1 Project. http://www.rns-pdf.londonstockexchange.com/rns/2711E_1-2014-4-7.pdf 

Environmental and Social Impact Assessment ("ESIA")

The ESIA remains on track and includes the following work having been completed throughout Q1 2014:

·     Biodiversity baseline field work completed with recent surveys covering large mammals and primates, freshwater fish and macro-invertebrates, flora and habitat mapping over a study area of 10,000 ha

·     Hydrology studies continue with daily and monthly monitoring

·     Socio-economic baseline study completed, including cultural heritage and community health and safety assessment

·     Household surveys and 50 issue specific focus group meetings held

·     Continued close interaction between both the ESIA and DFS teams as part of the optioneering and design process

Throughout Q2 the Company will continue to work with AMEC to complete the ESIA and the final round of stakeholder engagement with the government, NGOs and local communities. Delivery of the ESIA to the Environmental Protection Agency ("EPA") is due in early Q3 2014.

Corporate Social Responsibility

The implementation of the community development plan continued throughout Q1 and involved the following activities:

·     Construction of 8 new hand-pumps to provide safe drinking water across 6 key affected communities ongoing through our local NGO partner

·     Training in hand-pump maintenance, water and sanitation, and environmental health given to all local communities to help contribute to the long-term sustainability of the project

·     Construction of 3 new community meeting centres

·     Renovation of church building underway

·     Road renovations on main road connecting Tuzon to the port at Greenville

·     Two bridges rebuilt, ongoing road surface maintenance

·     Regular stakeholder engagement with local communities continues ensuring positive relationships between the Company and its local stakeholders

·     Capacity building of local Forestry Development Agency ("FDA") staff as a component of the ESIA baseline studies

Note: David Pelham has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules. David Pelham is a Director of the Company and is a member of the Institute of Materials, Minerals and Mining.

ENDS

Enquiries:

Hummingbird Resources plc

Daniel Betts, Chief Executive Officer
Thomas Hill, Finance Director
Robert Monro, Head of Business Development	[phone]
Cantor Fitzgerald Europe
Nominated Adviser and Broker
Stewart Dickson / Julian Erleigh / Jeremy Stephenson	[phone]
FTI Consulting LLP
Financial PR
Ben Brewerton / Oliver Winters / Sara Powell	[phone]

Notes to Editors

About Hummingbird Resources Plc

Hummingbird Resources plc is an AIM quoted mineral exploration company incorporated in England and Wales and headquartered in London. Since its establishment in November 2005, the Company and its subsidiaries (the "Group") has been active in Liberia, West Africa, and is currently the holder of the largest area of mineral exploration ground in the highly prospective Birimian geological region of eastern Liberia. The Group has published a PEA on its project showing that using a $1,500 gold price, on a 3.5Mtpa tank leach operation, The project has an NPV of US$337m on a Capex of US$212m for an IRR of 43.4%. This gives a payback period of 3 years and is based on a 10% discount rate and US$1,500 gold price (three year average gold price at time of release).

The Group has recently published a Mineral Resource estimate for the Tuzon deposit constrained within a US$1,500 pit shell and using a 0.5 g/t cut off grade comprising of an Indicated Resource of 41.8 Mt at an average grade of 1.51 g/t Au for 2.03 Moz of gold and an Inferred Resource of 10.2 Mt at an average grade of 1.32 g/t Au for 0.43Moz of gold in accordance with the Canadian Institute of Mining, Metallurgy and Petrology Definitions Standards ("CIM Code") for Reporting of Mineral Resources and Ore Reserves. The Group has also published a NI43-101 compliant Inferred Resource on its Dugbe F deposit of 43.01 million tonnes at 1.28 g/t Au to give 1,764,000 ounces of gold using a lower cut-off grade of 0.5 g/t Au and no upper cut-off grade.

In Q3 2014, the Group is due to release a Detailed Feasibility Study and Front End Engineering Design. The Group's licence areas constitute a significant proportion of eastern Liberia's Birimian sequence.

For more information, please visit www.hummingbirdresources.co.uk

Appendix 1:

Calculated at 0.5 g/t Au lower cut-off						Drill collar information
Hole ID	From	To	Interval (m)	Grade (g/t Au)		EUTM Survey	NUTM Survey	RL Survey	DIP	AZ	EOH
DFDC281	0	1.3	1.3	0.32		549518	562207	135.13	-50	295	14.3
	6.8	9.3	2.5	0.61
DFDC282	10.3	11	0.7	6.72		549537	562192	136.32	-50	295	14.3
DFDC284	12	12.7	0.7	0.55		549563	562173	133.57	-50	295	12.7
DFDC286	18	29	11	0.78		549615	562158	134.61	-60	295	33.6
DFDC287	1.1	3.6	2.5	1.28		549531	562290	133.53	-60	295	27.6
DFDC288	0	6.1	6.1	0.56		549551	562282	133.69	-60	295	29.1
DFDC289	1.1	6.1	5	1.52		549566	562276	133.95	-60	295	12.6
DFDC290	0	8	8	1.36		549585	562268	132.99	-60	295	12.5
DFDC291	0	6.6	6.6	1.04		549604	562260	130.92	-50	295	12.6
	9.1	12.5	3.4	0.54
DFDC294	1.2	2.2	1	0.66		549565	562356	135.6	-50	295	17.2
DFDC295	0	2.2	2.2	0.56		549578	562351	135.11	-50	295	27.5
DFDC296	8.3	10	1.7	0.67		549623	562338	130.36	-60	295	24.5
	0	5.3	5.3	0.95
DFDC297	16	17	1	2.25		549709	562286	120.96	-60	295	60.3
	24	26.1	2.1	0.85
	30	43.7	13.7	1.2
	46.7	47.7	1	0.75
DFDC300	1.5	10	8.5	1.39		549616	562419	134.54	-50	295	21.7
DFDC301	1.3	2.8	1.5	0.96		549648	562407	130.26	-50	295	30.8
	5	15	10	1.6
DFDC302	1.5	3	1.5	0.61		549613	562519	146.34	-50	295	14.2
DFDC303	0	6.2	6.2	1.34		549631	562511	145.99	-50	295	18.7
DFDC304	0	8.7	8.7	1.34		549655	562498	142.6	-50	295	21.4
DFDC305	0	15	15	0.99		549673	562492	141.93	-50	295	27.5
DFDC306	15	19	4	0.67		550780	563568	116.18	-60	295	30.6
DFDC307	35	37	2	1.72		550825	563537	115.45	-60	295	51.4
	43	44	1	0.69
	5.3	14.3	9	2.17
DFDC308	71.2	76	4.8	0.89		550901	563505	126.23	-60	295	81.5
	47	59	12	1.41
	67	69	2	1.93
DFDC312	4	11	7	1.35		550797	563634	111.62	-50	295	21.5
	14	15	1	1.07
DFDC313	7.4	20	12.6	1.72		550810	563633	110.52	-50	295	24.5
DFDC314	4.5	15	10.5	1.66		550859	563610	114.46	-60	295	30.5
	23	30.5	7.5	1.47
DFDC316	56	60	4	0.68		550920	563582	118.12	-60	295	78.5
	64	71	7	0.9
DFDC317	0	11.8	11.8	1.12		550833	563709	106.32	-50	295	12.7
DFDC318	0	17	17	1.76		550844	563702	105.8	-50	295	22.8
DFDC319	0.6	6.2	5.6	0.76		550878	563684	110.66	-50	295	19.7
	14.1	19.7	5.6	1.64
DFDC320	1	10	9	1.16		550889	563679	111.58	-50	295	20
	13	14	1	0.7
DFDC323	3	4.5	1.5	1.62		550866	563732	105.12	-50	295	12.7
	8.7	12	3.3	1.47
DFDC325	3.7	17	13.3	1.35		550891	563788	105.03	-50	295	21.5
DFDC326	0	3.6	3.6	1.08		550904	563777	104.58	-50	295	24.5
	7	17.5	10.5	1.83
DFDC328	0	3.7	3.7	1.32		550915	563855	107.96	-50	295	15.5
	8.2	11.7	3.5	2.06
DFDC329	6	11.5	5.5	1.35		550933	563847	106.27	-50	295	24.5
	15.5	19.5	4	0.5
DFDC330	8.8	9.5	0.7	0.57		550974	563826	103.38	-50	295	42.5
	32.5	36.5	4	1.94
DFDC331	8.4	9.7	1.3	1.96		550982	563917	106.54	-50	295	9.7
DFDC332	16.7	18.7	2	1.16		550996	563908	106.31	-50	295	21.5
DFDC333	20.5	21.5	1	1.31		551019	563888	106.66	-50	295	39.5
	30.2	33.3	3.1	0.69

 

END

 

 

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