Unaudited Interim Results

RNS Number : 9999J
Hummingbird Resources PLC
23 August 2019
 

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

Hummingbird Resources plc

("Hummingbird" or the "Company")

 

Unaudited Interim Results for Period Ended 30 June 2019

 

Hummingbird Resources (AIM: HUM), is pleased to announce its unaudited results for the six months ended 30 June 2019 (the "Period"). The Yanfolila Gold Mine ("Yanfolila"), Hummingbird's principal asset, showed continued improvement during the first six months of 2019, producing 51,273 ounces of gold, with production increasing and costs decreasing through the first half of the year.

 

OPERATIONAL AND FINANCIAL HIGHLIGHTS

·      Increasing quarter on quarter production in line with achieving annual production guidance

·      25-year MDA signed with the Government of Liberia over a land package of approximately 2,000km2, which includes the Company's 4.2Moz Dugbe Gold Project

·      51,034ozs of gold sold at an average price of US$1,304/oz

·      Average grade of ore processed of 2.66g/t

·      653kt of ore mined and plant recovery of 94.06%

·      US$67.1m of revenue in period (H1 2018: US$66.6m) with total all in sustaining costs1 ('AISC') of US$1,135/oz (includes Q1 AISC of US$1,297/oz and Q2 AISC of US$998/oz)

·      EBITDA2 of US$9.9m for the Period

·      Pre-tax loss US$5.8m for the Period

·      Cash of US$8m and net debt of US$43m at end of Period, keeping the Company on track for forecasted positive net cash position during 2020

·      3,500ozs of gold inventory worth approx. US$5m at end of Period

·      Undrawn US$10m overdraft facility in place

·      Construction of second ball mill at Yanfolila completed at the end of the Period, increasing throughput capacity by circa. 20%, ahead of schedule and under budget

 

OUTLOOK

·      110-125,000ozs production guidance maintained for 2019 with increased plant throughput planned in H2 2019 due to positive impact of the second ball mill

·      Targeting circa 130,000ozs annual production from 2020, +20% increase from DFS

·      Underground mining studies ongoing targeted at improving LOM economics

 

Dan Betts, CEO of Hummingbird, commented:

''Hummingbird's first half year results demonstrate a period of real progress for the group. The Yanfolila mine delivered continual improvements in the Period, with AISC falling from over US$1,200/oz in Q1 to under US$1,000/oz in Q2. The successful construction of the second ball mill and the additional throughput means we can anticipate lowering costs per ounce and increasing production through the remainder of the year.

 

Our focus has always been on responsible mining; maximising efficiency levels and delivering value. With improved economies of scale expected to come from the second ball mill together with our continuingly improving understanding of the Yanfolila orebody, we are in a stronger position. Our focus is firmly on ensuring stable, reliable and efficient production at Yanfolila.

 

The increasing gold price has also meant that our Dugbe project in Liberia looks increasingly attractive and provides added opportunity and optionality in the Company's portfolio.  Beyond our current guidance for this year, we are targeting production of around 130,000 ounces of gold per year from 2020 at Yanfolila, a circa. 20% increase from our feasibility study. We plan to continue our recent positive momentum into to the second half of the year and thank everyone who has continued to support us to this point."

 

1All-in sustaining cash costs ("AISC") is calculated as all direct mine operating costs (including mine based general and administration costs but excluding depreciation and amortisation), plus sustaining capital expenditures divided by ounces of gold sold.

 

2 Earnings before interest, tax, depreciation and amortisation, effect of impairment charges, foreign currency translation gains/losses and other non-recurring expense adjustments but including IFRS 16 lease payments.

 

**ENDS**

 

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

Daniel Betts, CEO

Thomas Hill, FD

Robert Monro, IR

Hummingbird Resources plc

Tel: +44 (0) 20 7409 6660

 

 

 

James Spinney

Ritchie Balmer

James Bellman

Strand Hanson Limited

 

Nominated Adviser

Tel: +44 (0) 20 7409 3494

 

 

 

Ed Montgomery

James Asensio

Canaccord Genuity Limited

 

Broker

Tel: +44 (0) 20 7523 8000

 

 

 

Gordon Poole

Owen Roberts

Ollie Head

Camarco

 

Financial PR/IR

Tel: +44 (0) 20 3 757 4980

 

Notes to Editors:

Hummingbird Resources (AIM: HUM) is a leading gold production, development and exploration company.  The Company has two core gold projects, the Yanfolila Gold Mine in Mali and the Dugbe Gold Project in Liberia.  Yanfolila produced its first gold pour on time and budget in December 2017.  Yanfolila held pre-production Probable Reserves of 710,535oz @ 3.14g/t, total Resources (inclusive of Reserves) of 2Moz of gold.  The Dugbe Gold Project has Resources currently totalling 4.2Moz of gold and a completed NI 43-101 compliant PEA on the project showing a 29% IRR and US$186m NPV at a US$1,300 gold price.

In addition to Hummingbird's production and development assets, the Company also has an exploration footprint of ~4,000km2 and is a shareholder in AIM listed Cora Gold, which is advancing a portfolio of prospects in Mali and Senegal.

 

 Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2019

  

 

 

Unaudited

30

June

Unaudited

30

June

Audited

31

December

Continuing operations

Notes

2019

$'000

2018

$'000

2018

$'000

 

 

 

 

 

Revenue

 

67,148

66,614

 116,539

Production costs

 

(44,900)

(38,260)

(88,157)

Amortisation and depreciation

 

(17,896)

(14,655)

(19,881)

Royalties and taxes

 

(2,098)

(2,609)

(3,942)

Cost of sales

 

(64,894)

(55,524)

(111,980)

Gross profit

 

2,254

11,090

4,559

Share based payments

 

(764)

(420)

338

Other administrative expenses

 

(4,876)

(4,239)

(9,834)

Operating (loss)/profit

 

(3,386)

6,431

(4,937)

Finance income

 

1,034

2,106

 4,797

Finance expense

 

(3,474)

(4,869)

(9,119)

Share of associate loss

 

(62)

(142)

(235)

Share of joint venture loss

 

-

-

(2)

Impairment of associate

 

-

-

(2,044)

Reversals in impairment of financial assets

 

12

-

88

Losses on financial assets measured at fair value

 

(2)

-

(198)

(Loss)/profit before tax

 

(5,878)

3,526

(11,650)

Tax

 

(666)

(915)

(1,163)

(Loss)/profit for the period/year

 

(6,544)

2,611

(12,813)

 

 

Attributable to:

 

 

 

Equity holders of the parent

 

(5,235)

1,648

(10,250)

Non-controlling interests

 

(1,309)

963

(2,563)

Loss for the year

 

(6,544)

2,611

(12,813)

 

 

(Loss)/earnings per share (attributable to equity holders of the parent)

 

 

 

 

 

 

 

 

 

Basic ($ cents)

4

(1.482)

0.48

(2.93)

Diluted ($ cents)

4

(1.482)

0.44

(2.93)

 

 

Consolidated Statement of Financial Position

As at 30 June 2019

 

 

Unaudited

30

June

Unaudited

30

June

Audited

31

December

 

 

2019

2018

(restated)

2018

 

Notes

$'000

$'000

$'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible exploration and evaluation assets

 

72,667

63,971

69,171

Intangible assets software

 

319

174

118

Property, plant and equipment

 

139,390

136,176

140,723

Right of use assets

 

19,088

-

-

Investment in associates and joint ventures

 

675

3,668

1,528

 

 

232,139

203,989

211,540

Current assets

 

 

 

 

Inventory

 

12,153

8,219

13,807

Trade and other receivables

 

13,954

11,628

13,316

Unrestricted cash and cash equivalents

 

3,994

41,918

17,320

Restricted cash and cash equivalents

 

4,187

4,302

4,210

 

 

34,288

66,067

48,653

Total assets

 

266,427

270,056

260,193

Liabilities

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings

 

29,959

43,265

40,819

Lease liability

 

5,791

-

-

Provisions

 

13,700

12,756

13,541

 

 

49,450

56,021

54,360

Current liabilities

 

 

 

 

Trade and other payables

 

42,704

33,084

39,787

Lease liability

 

13,351

-

-

Other financial liabilities

 

15,062

15,974

15,319

Borrowings

 

21,306

18,945

20,112

 

 

92,423

68,003

75,218

Total liabilities

 

141,873

124,024

129,578

Net assets

 

124,554

146,032

130,615

Equity

 

 

 

 

Share capital

 

5,295

5,260

5,271

Share premium

 

-

150,846

-

Retained earnings

 

119,341

(14,827)

124,117

Equity attributable to equity holders of the parent

 

124,636

141,279

129,388

Non-controlling interest

 

(82)

4,753

1,227

Total equity

 

124,554

146,032

130,615

 

 

 

 

Consolidated Statement of Cash Flows

For the six months ended 30 June 2019

 

 

Unaudited   

30    

June

Unaudited     

30     

June

Audited   

31   

December

 

 

2019

2018

2018

 

Notes

$'000

$'000

$'000

Operating activities

 

 

 

 

(Loss)/profit before tax

 

(5,878)

3,526

(11,650)

Adjustments for:

 

 

 

 

  Amortisation and depreciation

 

18,056

14,713

20,006

  Share based payments

 

890

420

(338)

  Finance income

 

(1,034)

(2,106)

(4,797)

  Finance expense

 

3,784

4,869

 9,119

  Share of associate loss

 

62

(142)

235

  Share of joint venture loss

 

-

-

2

  Impairment of associate

 

-

-

 2,044

  Profit on disposal of subsidiaries

 

-

150

-

  Reversals in impairment of financial assets

 

(12)

-

(88)

  Losses on financial assets measured at fair value

 

2

-

198

Operating cash flows before movements in working capital

 

15,870

21,430

14,731

Decrease/(increase) in inventories

 

1,654

(3,327)

(8,915)

(Increase)/decrease in receivables

 

(628)

1,365

1,624

(Decrease)/increase in payables

 

(145)

15,289

 10,694

Net cash inflow from operating activities

 

16,751

34,757

18,134

Investing activities

 

 

 

 

Purchases of exploration and evaluation assets

 

(1,183)

(720)

(5,922)

Purchase of intangible assets

 

(201)

(25)

 -

Purchases of property, plant and equipment

 

(9,870)

(22,430)

(20,070)

Purchase of shares in other companies

 

-

(105)

(105)

Loans provided

 

-

-

(2,000)

Interest received

 

146

102

 181

Net cash used in investing activities

 

(11,108)

(23,178)

(27,916)

Financing activities

 

 

 

 

Exercise of warrants

 

-

-

36

Loan interest paid

 

(2,235)

(3,650)

(5,871)

Loans repaid

 

(9,849)

(1,341)

(10,911)

Lease repayments

 

(5,968)

-

 -

Loans received

 

-

-

9,168

Net cash used in financing activities

 

(18,052)

(4,991)

(7,578)

Net decrease in cash and cash equivalents

 

(12,409)

6,588

(17,360)

Effect of foreign exchange rate changes

 

(940)

(988)

(1,730)

Cash and cash equivalents at beginning of year

 

21,530

40,620

40,620

Cash and cash equivalents at end of year

 

8,181

46,220

21,530

           

 

 

 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2019

 

 

 

Share

capital

$'000

Share

premium

$'000

Other reserves

$'000

Retained

earnings

$'000

Total equity attributable to the parent

$'000

Non-controlling interest

$'000

Total

$'000

As at 1 January 2018

5,176

148,930

2,000

(15,500)

140,606

4,171

144,777

Aggregate adjustments on adoption of IFRS 9

-

-

-

(1,522)

(1,522)

(381)

(1,903)

Balance at 1 January 2018 as restated

 5,176

 148,930

 2,000

(17,022)

 139,084

 3,790

 142,874

Profit for the period

-

-

-

1,648

1,648

963

2,611

Total comprehensive loss for the period

-

-

-

1,648

1,648

963

2,611

Acquisition of minority interests

 84

 1,916

(2,000)

-

-

-

-

Share based payments

-

-

-

547

547

-

547

As at 30 June 2018

5,260

150,846

-

(14,827)

141,279

4,753

146,032

As at 1 January 2018

5,176

148,930

2,000

(15,500)

140,606

4,171

144,777

Aggregate adjustments on adoption of IFRS 9

-

-

-

(1,522)

(1,522)

(381)

(1,903)

Balance at 1 January 2018 as restated

 5,176

 148,930

 2,000

(17,022)

 139,084

 3,790

 142,874

Loss for the year

-

-

-

(10,250)

(10,250)

(2,563)

(12,813)

Total comprehensive loss for the year

-

-

-

(10,250)

(10,250)

(2,563)

(12,813)

Acquisition of minority interests

 84

 1,916

(2,000)

 -

 -

 -

 -

Exercise of warrants

 11

 25

-

 -

 36

-

 36

Total transactions with owners in their capacity as owners

 95

 1,941

(2,000)

 -

 36

 -

 36

Share based payments

 -

 -

 -

 518

 518

 -

 518

Cancellation of share premium

-

(150,871)

-

 150,871

 -

 -

 -

As at 31 December 2018

 5,271

 -

 -

 124,117

 129,388

 1,227

 130,615

 

As at 1 January 2019

5,271

-

-

124,117

129,388

1,227

130,615

Comprehensive loss for the year:

 

 

 

 

 

 

 

Loss for the period

-

-

-

(5,235)

(5,235)

(1,309)

(6,544)

Total comprehensive loss for the period

-

-

-

(5,235)

(5,235)

(1,309)

(6,544)

Share based payments

24

-

-

459

483

-

483

As at 30 June 2019

5,295

-

-

119,341

124,636

(82)

124,554

 

 

1.              General information

Hummingbird Resources PLC is a public limited company with securities traded on the AIM market of the London Stock Exchange. It is incorporated and domiciled in the United Kingdom and has a registered office at 49-63 Spencer Street, Hockley, Birmingham, West Midlands, B18 6DE.

 

The nature of the Group's operations and its principal activities are the exploration, evaluation, development, and operating of mineral projects, principally gold, focused currently in West Africa.

2.              Adoption of new and revised standards

The interim financial statements have been drawn up based on accounting policies consistent with those applied in the financial statements for the year ended 31 December 2018. IFRS 16 'Leases' (outlined below), was adopted effective 1 January 2019, and this has a material impact on the interim financial statements of the group (as outlined below).

 

IFRS 16                                       (effective 1 January 2019)                 Leases

 

Initial application of IFRS 16 'Leases'

 

IFRS 16 introduces a single lease accounting model. This standard requires lessees to account for all leases under a single on balance sheet model. Under the new standard, a lessee is required to recognise all lease assets and liabilities on the balance sheet; recognise amortisation of leased assets and interest on lease liabilities over the lease term; and separately present the principal amount of cash paid and interest in the cash flow statement. The requirements of IFRS 16 extend to certain service contracts, such as mining contractors in which the contractor provides services and the use of assets, which may impact the Group.

 

The Group has applied IFRS 16 'Leases' effective 1 January 2019, with no retrospective adjustments required.

 

At date of adoption on 1 January 2019, the financial impact of applying IFRS 16 is set out below:

 

 

Right of use assets

$'000

 

 

Lease liability

$'000

 

Net asset

impact

$'000

 

 

 

 

Adoption of IFRS16 - Leases

24,959

(24,959)

-

Recognition of assets and liabilities at 1 January 2019 under IFRS 16

24,959

 

(24,959)

 

 

-

 

As previously announced in the 31 December 2018 annual report, the Group adopted IFRS 9 on 1 January 2018. Following this adoption, all the Group's financial assets at 1 January 2018 which were previously classified as loans and receivables under IAS 39 and are now classified as assets at amortised cost under IFRS 9.

 

Following this adoption, the 30 June 2018 interim financial statements have been restated. The financial impact of applying IFRS 9 (at 1 January 2018) is set out below:

 

 

IAS 39

Loans and receivables

$'000

IFRS 9

Financial assets at amortised cost

$'000

Total

$'000

Loss allowance at 1 January 2018 under IAS 39

-

-

-

Loss allowance on transition to IFRS 9

-

1,903

1,903

Loss allowance at 1 January 2018 under IFRS 9

-

1,903

1,903

 

 

 

 

 

Total

$'000

Net assets, as previously reported at 1 January 2018

 

 

144,777

Loss allowance on transition to IFRS 9

 

 

(1,903)

Net assets, as restated at 1 January 2018

 

 

142,874

 

 

3.              Significant accounting policies

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 2019.

 

The consolidated interim financial information for the period 1 January 2019 to 30 June 2019 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 2018.  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 2018 to 30 June 2018 and the audited financial year to 31 December 2018.  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 2018, 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 although unqualified, contained an emphasis of matter paragraph in respect of risks surrounding the going concern assumption of the Company at that date.

 

4.              (Loss)/earnings per ordinary share

Basic (loss)/earnings per ordinary share is calculated by dividing the net (loss)/profit for the period/year attributable to ordinary equity holders of the parent by the weighted average number of Ordinary shares outstanding during the period/year.

 

The calculation of the basic and diluted (loss)/earnings per share is based on the following data:

 

 

Unaudited six months ended 30 June 2019

$'000

Unaudited six months ended 30 June 2018

$'000

Audited year ended 31 December 2018

$'000

(Loss)/Profit

(Loss)/profit for the purposes of basic (loss)/earnings per share being net (loss)/profit attributable to equity holders of the parent

 

(5,235)

 

1,648

 

(10,250)

 

Number of shares

 

 

30 June 2019

Number

 

 

30 June 2018

Number

31 December 2018

Number

Weighted average number of ordinary shares for the purposes of basic loss per share

353,253,897

346,841,464

349,510,437

 

(Loss)/earnings per ordinary share

 

 30 June 2019

$ cents

 

30 June

 2018

$ cents

31 December 2018

 $ cents

Basic

(1.48)

0.48

(2.93)

Diluted

(1.48)

0.44

(2.93)

           

 

At 30 June 2019 there were 25,761,011potentially dilutive ordinary shares. Potentially dilutive ordinary shares include share options issued to employees and directors, warrants issued and the conditional acquisition of the 20% interest in the Joe Village licence. For period ended 30 June 2019 and year ended 31 December 2018, because there is a reduction in loss per share resulting from the assumption that the share options and warrants are exercised, the latter are anti-dilutive and are ignored in the computation of diluted (loss)/earnings per share and therefore there is no difference between basic and diluted loss per share.

5.              Contingent liabilities

In January 2018 the Company was served with a Particulars of Claim by Taurus Funds Management Pty Ltd, Taurus Mining Finance Fund LP and Taurus Mining Finance Annex Fund LP, in relation to alleged breach of contract on termination of a Mandate for finance. Damages sought by the claimants are just under US$10 million.  The Company has received strong legal advice that the claim will be successfully defended, and therefore no provision has been made. If, however ultimate resolution of the claim differs from the Company's assessment, a material adjustment to the financial position and results could arise.

 

6.              Share capital

Authorised share capital

 

As permitted by the Companies Act 2006, the Company does not have an authorised share capital.

 

 

 

 

Unaudited six months ended 30 June 2019

Number

Unaudited six months ended 30 June 2018

Number

Audited year ended 31 December 2018

Number

Issued and fully paid

Ordinary shares of £0.01 each

 

353,688,201

 

350,938,603

 

351,826,899

 

Issued and fully paid

 

 

 

30 June 2019

$'000

 

 

30 June 2018

$'000

31 December 2018

$'000

Ordinary shares of £0.01 each

5,295

5,260

5,271

           

 

 

 

 


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