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Highlights
- Commercial Production: Kouroussa Gold Mine in Guinea achieves commercial production with a four-week trailing average of ~1,900 ounces (oz) of gold.
- Full Capacity Projections: Expected steady-state annual production of ~100,000 oz over six years.
- Challenges: Lower-than-expected mill feed grades and ongoing liquidity constraints pose operational challenges.
Hummingbird Resources plc (LSE:HUM) has announced the commencement of commercial production at its Kouroussa Gold Mine in Guinea. Over the past four weeks, the operation achieved an average production of approximately 1,900 oz of gold, sold at an average price of $2,473 per oz, impacted by existing hedging contracts set to expire by the end of Q1 2025.
Production Status and Challenges
While the trailing production average is below the previously announced target of 2,000-2,500 oz per week, this is attributed to lower-than-anticipated mill feed grades. This issue stems from a temporary shortage of high-grade ore caused by mining capacity constraints. Despite this, all major equipment at Kouroussa has demonstrated the ability to operate consistently at or above design specifications, affirming the mine’s readiness for sustained operations.
Hummingbird is actively addressing these challenges by focusing on improving mining operations, plant throughput, and feed grades. The company has engaged external consultants to enhance operational performance as part of an ongoing financial and operational review led by Interim CEO Geoff Eyre.
Outlook and Guidance
At full capacity, Kouroussa is projected to produce an annual average of 100,000 oz over its initial six-year mine life. For the year ending December 31, 2024, the mine is expected to produce between 45,000 and 50,000 oz, with All-In Sustaining Costs (AISC) forecasted to remain below $1,500 per oz for the remainder of the year.
Financial Position and Liquidity Concerns
Despite the achievement of commercial production, Hummingbird acknowledges its broader liquidity challenges. The company's Yanfolila operations remain loss-making, and near-term payments related to ongoing negotiations with the Government of Mali add to financial pressures. These constraints may affect Kouroussa’s ramp-up timeline and production consistency.
Hummingbird is working with its financial partners, including the Coris Parties, to address these challenges and strengthen its financial position. The company aims to strategically allocate resources to maximize Kouroussa’s output and stabilize its operations.
