Hydro-Electric Collaboration Agreement in Liberia

RNS Number : 3783J

Hummingbird Resources PLC

07 April 2015

 

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

 7 April 2015

Hummingbird Resources plc ("Hummingbird Resources" or "the Company")

Signs Hydro-Electric Collaboration Agreement in Liberia

Hummingbird Resources, the multi-project gold company, is pleased to announce it has signed a collaboration agreement ("the Agreement") to embark on the planning and development of a 20-30MW hydro-electric power ("HEP") plant in southeast Liberia, Africa, in an area ±10km km from Hummingbird's 4.2Moz Dugbe 1 Gold Project ("Dugbe 1").  The Agreement has been signed with IFC InfraVentures, the IFC Global Infrastructure Project Development Fund, and Aldwych International, a leading energy company active in the growing economies of Africa.  

Highlights

·    HEP plant, if developed, would:

o significantly contribute to the domestic power supply in southeast Liberia

o provide considerable potential to reduce operating costs of Dugbe 1 through the delivery of low-cost power

·    HEP Pre-feasibility study ("PFS") to be conducted by Knight Piésold Consulting (Vancouver) to assess the technical and economic viability of the HEP project

·    The PFS will be in two phases:

o Phase 1: preliminary engineering, draft PFS report and installation of stream gauge and flow monitoring equipment

o Phase 2: one year of flow rate recording, stream gauge maintenance, hydrological analysis and final PFS report

o PFS is expected to be completed by April 2016

·    The study will be funded by IFC InfraVentures for circa US$265,000

Dan Betts, CEO of Hummingbird Resources, said, "This collaboration represents an extremely exciting opportunity for Hummingbird, working together with two highly regarded partners, IFC InfraVentures and Aldwych International, to develop a sustainable source of power for Dugbe 1 and to secure the future domestic power supply for the southeast Liberian region and in particular the town of Greenville.   With the HEP PFS   fully funded by IFC InfraVentures, we believe, if successful, this HEP scheme will create a catalyst for growth of the region and provide a significant potential opex-saving opportunity for Dugbe 1.

"We remain dedicated to creating maximum value for shareholders and in this respect we continue to make significant progress with regards to our other gold project, Yanfolila in Mali.  Having just raised US$8.9million on top of our US$75 million debt facility with Taurus, mine construction at Yanfolila is due to commence imminently with first production targeted for H1 2016. 

"In addition to our secured funding, we are conducting an open offer, as announced on 20 March 2015, to allow existing eligible shareholders to participate on the same terms as the placing.  The open offer remains open until 14 April, and we look forward to updating the market on this in due course."

Further Information

In February 2014 Knight Piésold Consulting ("KP") conducted a desk-top study with positive results regarding the development of a 20-30MW HEP plant to supply future power to Dugbe 1 once in production, and to contribute to the domestic power supply in the region.

Under the Agreement, the parties plan to embark on the development of a HEP plant.  The participating parties will cooperate in a partnership with respect to conducting Pre-feasibility Studies ("PFS") for the HEP plant which would include engaging KP again to perform the PFS relating to the HEP plant, comprising project management, stream gauge installation, stream gauge maintenance and preliminary engineering to assess whether the power plant is technically and economically feasible to dispatch affordable electricity to Dugbe 1 and the surrounding areas.  The PFS will be performed in two stages and is expected to be completed by April 2016.

Dugbe 1 Gold Project - Liberia

Dugbe 1 is located within the Birimian Basin, the world's second largest gold producing region, characterised by exceptionally large, homogenous grade deposits which offer vast exploration and development scope.  With a current Resource of 4.2Moz Au at an average gold grade of 1.4 g/t Au, Dugbe 1 offers a large-scale development opportunity for Hummingbird. The Company completed a Preliminary Economic Assessment ("PEA") in April 2013 which demonstrated the viable economics of developing a 20 year gold mining project with initial gold production of 125,000 ounces, an NPV of US$186 million, IRR of 29% using a US$1,300 gold price.  The Company is continuing to advance Dugbe 1 and is progressing Definitive Feasibility Study optimisation work evaluating the large 4.2Moz gold resource, mining, processing and power capabilities with a view to future production viability.

IFC InfraVentures

IFC InfraVentures is the IFC Global Infrastructure Project Development Fund which helps develop public-private partnerships and private projects for infrastructure in developing countries. It provides early-stage risk capital and actively participates in the project development phase to create private infrastructure projects that are commercially viable.

Through IFC InfraVentures, the World Bank Group has set aside a US$150 million fund, from which IFC can draw to initiate project development in the infrastructure sector.  IFC serves as a co-developer and provides expertise in critical areas, while partially funding project development. 

Aldwych International

Aldwych International ("Aldwych") was established in 2004, for the purpose of developing, owning and operating power generation, transmission and distribution projects in emerging economies, primarily Africa.

The Aldwych management has a long history of international power industry experience and has successfully financed or re-financed 20 power projects worldwide totaling over 11,000MW and US$3.75 billion, in both the developed and the developing world.

With early investments from the Shell Foundation and the Dutch development bank FMO, and significant subsequent funding from the Pan-African Infrastructure Development Funds, Aldwych is able to combine its skills and expertise with access to the significant reservoir of funds dedicated to infrastructure projects in its target countries.

Aldwych is committed to supporting the economic and social development of the countries in which it invests, by delivering the power they need in a sustainable and affordable manner and in a spirit of partnership and cooperation.

**ENDS**

For further information please visit www.hummingbirdresources.co.uk or contact: 

Daniel Betts Thomas Hill Robert Monro	Hummingbird Resources plc	Tel: [phone]
Stewart Dickson  Jeremy Stephenson	Cantor Fitzgerald Europe Nominated Adviser and Broker	Tel: [phone]
Lottie Brocklehurst Felicity Winkles Hugo de Salis	St Brides Partners Ltd Financial PR/IR	Tel: [phone]

Notes to Editors:

Hummingbird Resources (AIM: HUM) is building a leading gold production, development and exploration company. The Company has two core gold projects, the near-term production Yanfolila project in Mali and the Dugbe 1 project in Liberia. Its current focus is on bringing Yanfolila, which has a 1.8Moz gold inventory, to production in H1 2016.  The high grade gold project has the potential to turn a profit in a varying gold price environment and will allow for quick returns with low operating costs. A mandate setting out the key terms of a proposed US$75 million debt facility has been agreed with Taurus Mining and initial mine construction is expected to commence in H1 2015.

The 4.2Moz Dugbe 1 project in Liberia provides Hummingbird with excellent development upside.  An optimisation of the DFS is on-going whilst Yanfolila is brought to production in the near-term.  Additionally, the Company has 5,000km² highly prospective exploration ground in Mali and Liberia and is constantly evaluating new quality assets.

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

 

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