Hummingbird Resources (HUM) released its operational and trading update for the third quarter ending on September 30, 2023, which showed a steady increase in production at its Yanfolila Mine in Mali and rising production at its less advanced Kouroussa Mine in Guinea. 

Yanfolila produced 18,399 ounces of gold in Q3, marking a 9% increase from the same period in 2022 when 16,827 ounces were produced. The total gold production as of the end of September 2023 reached 69,546 ounces. 

The All-In Sustaining Cost (AISC) for gold produced at Yanfolila in Q3 2023 was US$1,651 per ounce, a 24% decrease from 2022 when costs stood at US$2,161 per ounce. The average AISC for the period ending in September 2023 was US$1,298 per ounce.

18,550 ounces of gold were sold in the quarter at an average realized price of US$1,918 per ounce, compared to 16,917 ounces sold at US$1,713 per ounce in Q3 2022. The company held 1,834 ounces of gold inventory as of the end of September 2023.

Kouroussa Mine produced 1,047 ounces of gold in the quarter, with an additional 614 ounces produced after the period end as it continued to overcome challenges stemming from seasonal weather, equipment commissioning, and the recruitment and training of local and national Guinean personnel. The company anticipates reaching a production target of approximately 10,000 ounces in the second half, leaving it on track for a full year of commercial production from FY24.

The processing plant at Kouroussa demonstrated improving performance, with an availability rate of approximately 82%. The plant is expected to operate consistently on a 24-hour basis from the fourth quarter.

Overall, that saw the company report an adjusted EBITDA of approximately US$1.2 million in the quarter, compared to a loss of US$8.9 million a year earlier. The cumulative adjusted EBITDA as of the end of September 2023 stood at approximately US$34.3mn, with brokers anticipating FY23 EBITDA of US$53m on sales of US$199m.

 

View from Vox

As of the end of September 2023, Hummingbird has produced 69,546 ounces of gold at Yanfolila, well on its way to meeting its FY23 production guidance of 80,000 to 90,000 ounces, with AISC expected to remain below US$1,500 per ounce.

The company also announced a refinancing and funding package to provide additional cash liquidity and capital support, while both Yanfolila and Kouroussa mines are on track for full commercial production, with increased cash flow generation expected from FY24. This will facilitate material balance sheet deleveraging, with scheduled repayments of approximately US$77m in FY24, US$61m in FY25, and the remaining US$15m by the end of FY28.

Overall, that leaves the company on track to hit its target of approximately 200,000 ounces of gold production per annum, with an update on Q4 and FY23 production scheduled for the end of January 2024.