Interim Results

RNS Number : 6338B

Hummingbird Resources PLC

24 September 2018

 

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

Hummingbird Resources Plc ("Hummingbird" or the "Company" or the "Group")

Interim Results

Hummingbird Resources Plc, announces its unaudited financial results for the six months ended 30 June 2018 ("the Period"). The Yanfolila Gold Mine ('Yanfolila'), Hummingbird's principal asset, performed solidly and in line with guidance in its first full 6 months of production pouring 51,304 ounces of gold with the Group ending the Period with US$46.2 million cash.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

·     Successful on schedule transition from construction, through ramp up, to full scale operations at Yanfolila with mine and plant operating at name plate capacity by end Q1 with commercial production declared from 1 April 2018

·     51,304 ounces of gold poured at an average mill feed grade of 3.22 g/t

·     50,667 ounces of gold sold at an average price of US$1,312/oz

·     577kt of ore mined and plant recovery of 95.64%

·     US$66.6m of revenue in period with total all in sustaining costs ('AISC') of US$884/oz (includes cost from Q1 while in ramp-up to commercial production), with Q2 AISC on gold sold US$790/oz_(1).

·     EBITDA₍₂₎ of US$21.9m for the Period

·     Pre-tax profit US$3.5m for the Period

POST PERIOD HIGHLIGHTS

·     Exploration drilling campaign targeting conversion of Resources to Reserves commenced at the beginning of Q3 with encouraging initial results from the Komana West and Guirin West Deposits:

Komana West

o  11.45m @ 8.69g/t from 69m depth (KWDD0604A)

o  25.75m @ 2.95g/t from 117m depth (KWDD0603)

o  8.05m @ 4.98 g/t from 72.4m depth (KWDD0603)

o  8.1m @ 5.52 g/t from 84.9m depth (KWDD0603)

Guirin West

o  16m @ 3.11g/t from 38m depth (GRWRC1109)

o  4m @ 8.12g/t from 13m depth (GRWRC1106)

o  9m @ 2.06g/t from 27m depth (GRWRC1104)

o  13m @ 1.91 g/t from 16m depth (GRWRC1116)

·     Approved construction of a second ball mill at Yanfolila Gold Mine which is due to be operational in Q3 2019 for a capex of US$13m. When complete, the ball mill is expected to:

o  When operating with 100% fresh ore, throughput capacity will increase from 1Mtpa to 1.24Mtpa

OUTLOOK

·     The Company maintains full year (2018) production guidance of 105,000 - 115,000 ounces gold (including Q1 ramp-up)

·     Q3 is expected to have lower production than Q2 due to it being the 'wet season' in Mali. 

1)   Total mine all in cash costs plus sustaining capital cost divided by oz of gold sold

2)   Earnings before interest (including foreign exchange), tax, depreciation and amortisation

Dan Betts, CEO of Hummingbird, commented: 

"Hummingbird's H1 interim results show a period of mature progression for the Group from developer to producer with Yanfolila delivering solid results on forecast with high grades and strong recoveries coming through the plant. Financially the Group is in a good position with strong earnings and on a corporate level our board has adapted successfully whilst attracting skills and talent appropriate for our operating status. We are coming to the end of our first full rainy season as an operator in Mali and the team have experienced one of the heaviest rains seen in the region for a decade.  This has presented new challenges which the team has worked tirelessly to overcome. Despite lower production figures anticipated in the current quarter I am happy that we remain on schedule to meet our annual production guidance. I am also pleased to report that the 2018 exploration programme is in full throttle with encouraging results coming in from the drill programme.

Once again we can report our continued safety record at site.  This is an integral focus for the Company as we look to not only operate a highly profitable mine but a safe one where all staff and contractors are working to best practice. Around the mine we remain committed to our local engagement initiatives and to implementing a collaborative and responsible approach to community relations with the Period seeing investment in community water supply, training, several new livelihoods projects and the completion of a new community health centre. We also raised around £75,000 from the sale of the first collection of SMO gold coins originating from Yanfolila, and other items donated to the charity auction, with the funds raised being donated The Pygmy Hippo Foundation and Tusk."

The interim results have also been made available on the Company's website.

Operating Review

Yanfolila delivered a solid H1 production figure of 51,304 ounces of gold poured and the processing plant performing strongly. The mine is on track to achieve its 2018 production target of 105,000 - 115,000 ounces.  A total of 50,667 ounces of gold was sold at an average price of US$1,312/oz.

During the period, the plant met the design criteria and capacity.  The design feed rate to the plant was achieved and sustained with excellent gold recoveries from the CIL circuit, with recoveries exceeding the design figure of 93%, consistently at over 95%. The Company has hired and trained plant operators from local villages, which is in line with one of its objectives to provide local employment. The success of this can be seen in the consistently strong performance of the plant and we will continue to ensure that community development is prioritised.

Focus and emphasis was placed on shovel optimisation and increased utilisation over the entire suite of equipment in order to build an optimal ore stockpile. This has allowed a greater blending capability for the processing plant in terms of the type of material and grade delivered.

Hummingbird's safety record continued to improve with the Group having achieved 500,000 LTI free hours in the period.

Exploration Review

The 2018 exploration strategy aims to bring as much of the approximately 1.5Moz of Resources, not currently in Reserves, into the Life of Mine plan.  The focus is on prioritising those areas that have the greatest impact to the mine life, as well as discovering extensional Resources within the licence area to ensure a healthy pipeline of ore Reserves. 

Initial results from the Group's exploration programme were encouraging with the first batch of results showing significant numbers of positive drill intersections defining in places new zones of mineralisation not currently defined as Resources and not in the current mine plan.

At Komana West, based on the revised model, a number of mineable widths are coming through on drill intersections outside of the current pit design and extending zones within the current pit design deeper. Once drilling has confirmed the geometry of the new zones, modelling will be carried out to confirm the tonnes and grade of these zones and the pit optimisation re-run before they can be added into the mine plan.

At Guirin West ('GW'), drilling has been strictly to infill and de-risk the+70koz Resources already delineated.  The drilling has confirmed the existence of shallow oxide mineralisation suitable for extraction by open pit mining. No Reserves or Resources from GW are currently in the current mine plan and any Reserves delineated will be available for immediate mining in the short term due to the shallow nature of the mineralisation, the close proximity to the processing plant and current haul road infrastructure.

Community

The Group has carried out significant community work throughout the period including the construction of a new community health centre in Bougoudale village, which comprised of construction of the main building, a pharmacy, maternity unit, borehole, water supply system and accommodation. The Group's existing water supply initiatives have continued, with new boreholes equipped with pumps and solar panels constructed in four villages and distribution networks installed to communal taps. The estimated total number of beneficiaries of these projects amounts to over 5,000 people across four villages. A major focus for the period has been the implementation of several new livelihood development projects including two irrigated market gardens targeting 200 women, as well as four poultry projects. We look forward to seeing positive economic returns from these projects in the coming months. Vocational training for 25 youths in welding was undertaken for 3 months in partnership with local NGO Nege Blon. This training included a one month work placement at companies working in Mali.  Initiatives such as these have seen Hummingbird be successfully aligned with the local communities.

 

Consolidated Income Statement

For the six months ended 30 June 2018

		Unaudited six months  ended 30 June	Unaudited six months  ended 30 June	Audited year ended 31 December
		2018	2017	2017
	Note	$'000	$'000	$'000
Continuing operations
Revenue		66,614	-	-
Cost of sales		(55,523)	-	-
Gross Profit		11,090	-	-
Administrative expenses		(4,659)	(3,713)	(6,775)
Operating Profit / (Loss)		6,431	(3,713)	(6,775)
Finance income		2,106	1,556	6,514
Finance expense		(4,869)	(457)	(6,877)
Share of loss of associate		(142)	-	(117)
Profit on disposal of subsidiaries		-	-	1,919
Profit / (Loss) before tax		3,526	(2,614)	(5,336)
Tax		(915)	-	-
Profit /(Loss) for the period/year		2,611	(2,614)	(5,336)
Non-controlling interest		(963)	-	-
Profit /(Loss) for the period/year attributable to equity holders of the parent		1,648	(2,614)	(5,336)
Profit / (Loss) per ordinary share
Basic (US$ cents)	3	0.48	(0.76)	(1.55)
Diluted (US$ cents)	3	0.44	(0.76)	(1.55)

There was no other comprehensive income in the current or prior periods.

Consolidated Balance Sheet

As at 30 June 2018

		Unaudited 30 June	Unaudited 30 June	Audited 31  December
		2018	2017	2017
	Note	$'000	$'000	$'000
Assets
Non-current assets
Intangible exploration and evaluation assets		63,971	60,989	63,249
Intangible assets software		174	171	163
Property, plant and equipment		136,176	75,036	129,954
Investments in associate		3,668	2,711	3,704
		203,989	138,907	197,070
Current assets
Inventories		8,219	-	1,392
Trade and other receivables		13,531	24,796	15,135
Unrestricted cash and cash equivalents		41,918	71,006	36,210
Restricted cash and cash equivalents		4,302	-	4,410
		67,970	95,802	57,147
Total assets		271,959	234,709	254,217
Liabilities
Current liabilities
Trade and other payables		(33,084)	(11,786)	(28,422)
Other financial liabilities		(15,974)	(15,967)	(16,368)
Borrowings		(18,945)	(1,309)	(11,246)
Total current liabilities		(68,003)	(29,062)	(56,036)
Non-current liabilities
Borrowings		(43,265)	(58,361)	(53,404)
Provisions		(12,756)	-	-
Total liabilities		(124,024)	(87,423)	(109,440)
Net assets		147,935	147,286	144,777

Consolidated Balance Sheet (continued)

As at 30 June 2017

Equity
Share capital		5,260	5,156	5,176
Share premium		150,846	148,516	148,930
Other Reserves		-	2,000	2,000
Retained earnings		(13,305)	(19,235)	(15,500)
Equity attributable to equity holders of the parent		142,801	136,437	140,606
Non-controlling interest		5,134	10,849	4,171
Total equity		147,935	147,286	144,777

 

Consolidated Statement of Cash Flows

For the six months ended 30 June 2018

		Unaudited six months ended 30 June	Unaudited six months ended 30 June	Audited year ended 31   December
		2018	2017	2017
		$'000	$'000	$'000
Operating activities
Profit / (Loss) before tax		3,526	(2,614)	(5,336)
Adjustments for:
Finance income		(2,106)	(1,556)	(6,514)
Finance expense		4,869	457	6,877
Depreciation of property, plant and equipment		14,713	6	10
Share of associate loss		(142)	-	117
Profit on disposal of subsidiaries		150	-	(1,919)
Share based payments		420	210	424
Operating cash flows before movements in working capital		21,430	(3,497)	(6,341)
Increase in inventories		(3,327)	-	(1,392)
Decrease (increase)in receivables		1,365	(974)	5,294
Increase / (decrease) in payables		15,289	(565)	1,790
Net cash inflow / (outflow) from operating activities		34,757	(5,036)	(649)
Investing activities
Purchases of intangible exploration and evaluation assets		(720)	(350)	(1,233)
Purchases of intangible software assets		(25)	(176)	(185)
Purchases of Property, Plant and Equipment		(22,430)	(21,855)	(56,368)
Purchases of shares in associates		-	(242)	(741)
Purchase of shares in other companies		(105)	-	-
Interest received		102	196	320
Net cash used in investing activities		(23,178)	(22,427)	(58,207)
Financing activities
Exercise of warrants		-	-	434
Loan interest paid		(3,650)	(934)	(3,955)
Loans repaid		(1,341)	(15,000)	(15,000)
Financial liabilities issued net of issue costs		-	59,257	57,980
Net cash (used in) / from financing activities		(4,991)	43,323	39,459
Net Increase / (decrease) in cash and cash equivalents		6,588	15,860	(19,397)
Effect of foreign exchange rate changes		(988)	1,307	6,178
Cash and cash equivalents at beginning of period/year		40,620	53,839	53,839
Cash and cash equivalents at end of period/year		46,220	71,006	40,620

 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2018

	Share capital $'000	Share premium $'000	Shares to be issued $'000	Retained earnings $'000	Total equity attributable to the parent $'000	Non-controlling interest $'000	Total equity $'000
For the six months ended 30 June 2017
As at 1 January 2017	5,156	148,516	-	(17,262)	136,410	-	136,410
Shares to be issued in parent company	-	-	2,000	-	2,000	-	2,000
Shares to be issued in subsidiary	-	-	-	-	-	10,849	10,849
Share based payments	-	-	-	641	641	-	641
Total comprehensive loss for the year	-	-	-	(2,614)	(2,614)	-	(2,614)
As at 30 June 2017	5,156	148,516	2,000	(19,235)	136,437	10,849	147,286
For the year ended 31 December 2017
As at 1 January 2017	5,156	148,516	-	(17,262)	136,410	-	136,410
Acquisition of minority interest	-	-	2,000	(1,000)	1,000	-	1,000
Disposal of minority interest	-	-	-	6,678	6,678	4,171	10,849
Exercise of warrants	20	414	-	-	434	-	434
Share based payments	-	-	-	1,420	1,420	-	1,420
Total comprehensive loss for the year	-	-	-	(5,336)	(5,336)	-	(5,336)
As at 31 December 2017	5,176	148,930	2,000	(15,500)	140,606	4,171	144,777
For the six months ended 30 June 2018
As at 1 January 2018	5,176	148,930	2,000	(15,500)	140,606	4,171	144,777
Total comprehensive Profit for the period	-	-	-	1,648	1,648	963	2,611
Owners acquisition of minority interest	84	1,916	(2,000)	-	-	-	-
Share based payments	-	-	-	547	547	-	547
As at 30 June 2018	5,260	150,846	-	(13,305)	142,801	5,134	147,935

 

Notes to the interim results

For the six months ended 30 June 2018

1          General information

Hummingbird Resources plc (the 'Company'), was incorporated in England and Wales under the Companies Act. The address of the registered office is 49-63 Spencer Street, Hockley, Birmingham, West Midlands, B18 6DE.

The nature of the Group's operations and its principal activities is the exploration, evaluation, development and production of mineral projects.

2          Basis of preparation

The consolidated interim financial information has been prepared using policies based on International Financial Reporting Standards issued by the International Accounting Standards Board ("IASB") as adopted by the European Union, which are expected to be applied in the Group's financial statements for the period ended 31 December 2018.

The consolidated interim financial information for the period 1 January 2018 to 30 June 2018 is unaudited, does not include all the information required for full financial statements and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2017.  In the opinion of the Directors the consolidated interim financial information for the period represents fairly the financial position, results from operation and cash flows for the period in conformity with generally accepted accounting principles consistently applied. The consolidated interim financial information incorporates comparative figures for the interim period 1 January 2017 to 30 June 2017 and the audited financial year to 31 December 2017.  As permitted, the Group has chosen not to adopt IAS34 'Interim Financial Reporting'.

The annual financial statements of Hummingbird Resources plc are prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the International Accounting Standards Board ('IASB') and as adopted by the European Union.  The Group's consolidated annual financial statements for the year ended 31 December 2017, have been filed with the Registrar of Companies and are available on the Company's website www.hummingbirdresources.co.uk. The auditor's report on those financial statements was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.

3          Profit / Loss per ordinary share

Basic Profit or loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period/year.

The calculation of the basic and diluted profit per share is based on the following data:

	Unaudited six months  ended 30 June 2018 $'000	Unaudited six months  ended 30 June 2017 $'000	Audited year ended 31  December 2017 $'000
Profits / (Losses) Profit or Loss for the purposes of basic loss per share being net profit or loss attributable to equity holders of the parent	1,648	(2,614)	(5,336)
Number of shares	Number	Number	Number
Weighted average number of ordinary shares for the purposes of basic loss per share	346,841,464	343,241,250	343,566,800
	US$ cents	US$ cents	US$ cents
Profit / (Loss) per ordinary share
Basic (US$ cents)	0.48	(0.76)	(1,55)
Diluted (US$ cents)	0.44	(0.76)	(1,55)

4          Share capital

4.1         Issued equity share capital

		Unaudited 30 June 2018 Number	Unaudited 30 June 2017 Number	Audited 31 Dec 2017 Number
Issued and fully paid
Ordinary shares of £0.01 each		350,938,603	343,241,250	344,741,250
		Unaudited 30 June 2018 $'000	Unaudited 30 June 2017 $'000	Audited 31 Dec 2017 $'000
Issued and fully paid Ordinary shares of £0.01 each		5,260	5,156	5,176

 

END

 

 

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