Hummingbird Resources (HUM) , an Africa-focused gold explorer, issued an updated reserves and resources statement for its portfolio as of 31 December 2022. Updated reserves totalled 4.03 million ounces (Moz) of gold and resources totalled 6.95 Moz, a net decrease of 98 thousand ounces (Koz) and 327 Koz respectively.
While group reserves and resources decreased slightly, reserves at Hummingbird's newly operational Kouroussa gold mine in Guinea increased by 28 Koz to 676 Koz at 4.13g/t and resources increased 30 Koz to 1.23 Moz at 3.06g/t (2022: 1.20 Moz at 3.02g/t).
At HUM's Yanfolila gold mine in Mali, total reserves decreased by 126 Koz to 593 Koz at 2.64g/t (2022: 719 Koz at 2.85g/t) and resources decreased by 360 Koz to 1.71 Moz at 2.21g/t (2022: 2.07 Moz at 2.22g/t).
At Dugbe gold project in Liberia, reserves remained as per last statement at 2.76 Moz at 1.30g/t and resources at 4.01 Moz at 1.27g/t, of which Hummingbird retains a 51% controlling interest.
As mentioned in July's operational and trading update, HUM is currently finalising exploration plans for both Kouroussa and Yanfolila, with extension drilling having re-commenced at Yanfolila's Gonka and Sanioumale West deposits. Naturally, the focus of the new exploration programmes will be to increase the respective resource bases and ultimately enlarge the reserves bases and LOM at both assets. Further detail on the extension drilling and overall exploration plans is expected later in 2023.
View from Vox
Despite the small decrease in group reserves and resources, Hummingbird achieved notable operational progress across its portfolio over the past 18 months, with new construction and ramp-up at Kouroussa, which is expected to achieve steady state production in Q4 2023, and successful return to consistent operational performance at Yanfolila.
We expect further good news from Kouroussa, which holds significant untapped exploration upside, as Hummingbird's work programme advances over the next 12 months with the goal of lifting the LOM of the mine to 10+ years and increasing the reserve profile to over 1 Moz. Kouroussa is located within Guinea's gold prolific Siguiri Basin.
Yanfolila's numbers decreased as it went through a transition following the curtailing of exploration activities in 2022 and operational depletion. Since then, re-interpreting of geology from grade control drilling and better in-pit mapping has increased geological confidence for mining plans.
Yanfolila currently has a projected LOM of approximately 6 years based on its existing reserve profile and Hummingbird is confident it can maintain and extend it. Exploration plans on greenfield and existing brownfield sites at Yanfolila are currently being implemented and expected to add to the resource base in H2 2023 through to 2024.
At Dugbe, a definitive feasibility study (DFS) was completed by Pasofino Gold in June 2023. The DFS showcased a high pre-tax NPV of US$690m (US$530m post tax), a significant 2.76Moz reserve base, long life of mine of 14 years, with upside given material exploration potential available, and a low AISC profile of US$1,005 per oz.
With Yanfolila's performance steadily improving and Kouroussa production ramping up after first gold pour in June, Hummingbird is at a value inflection point. After a tripling of its reserves to 4.1 Moz last year, the company has strong momentum into H2 2023 and beyond.
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