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Hummingbird inks LOI for Mali gold project earn-in

By BFN News | 08:09 AM | Thursday 28 September, 2017

Hummingbird Resources has signed a letter of intent regarding a potential earn-in to a 50% interest in the Kobada gold project in Mali owned by African Gold Group Inc and initial investment into AGG. Hummingbird said the transaction was subject to certain conditions, including that binding agreements were entered into within 45 days. Hummingbird said Kobada had a measured, indicated and inferred gold resource of 2.2m oz (including 511,000 oz of reserves). Highlights: - Potential to create a high-grade concentrate at Kobada to be trucked to Yanfolila for processing to add an additional 50,000oz gold per annum to Yanfolila - Initial investment in AGG of C$3.6m for approximately 9.9% (40,000,000 Units at C$0.09c/Unit (each Unit consisting of a share and a warrant at C$0.12 per share)) - 120-day exclusivity period for due diligence - During exclusivity period Hummingbird has the right to increase shareholding in AGG to 19.2% for a further consideration of C$4.4m at C$0.09c/share paid in Hummingbird shares and to manage the DFS on the project funded by AGG - On completion of the DFS Hummingbird has the right to acquire 50% interest in Kobada through funding capex of the project - Hummingbird to receive 70% of cashflows until capex recovered Chief executive Dan Betts said: 'Based on the due diligence we have completed to date we believe we will be able to truck a high-grade concentrate to the Yanfolila processing plant from Kobada. 'This high-grade concentrate would have a material increase to our annual production rates and could add up to an additional 50,000oz per annum to our existing average life of mine production of 107,000oz. 'The Yanfolila Gold Mine currently has a 7.5 year mine life based on reserves and we have over 1Moz gold in resources that we will look to convert to reserves and extend this mine life once in production. 'This deal with AGG gives us a path to 150,000oz production per year within three years from now combined with the organic extension of mine life from existing resources extending it well beyond 10 years. 'This could significantly improve the production profile of Yanfolila and materially improve the mine's NPV. 'We are extremely excited about the optionality the deal provides Hummingbird and working with the management of AGG who have a strong track record of creating shareholder value within the industry.' At 8:09am: (LON:HUM) Hummingbird Resources share price was +1.5p at 35.25p Story provided by

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