Hummingbird (HUM ), an Africa-focused gold explorer, unveiled additional details related to its fundraising efforts, adding to its February 7 announcement of a US$15m investment by CIG SA.
Adding to the US$15m investment by CIG SA announced earlier this month, Hummingbird confirmed a conditional subscription of US$1.5m from existing institutional shareholders, and an open offer to raise up to US$2.4m from other shareholders at the same price.
All new shares will be issued at 7.79p/share, representing a 2% premium to the 30-day VWAP ending on 5 February 2023. CIG's investment is being effected at the same price of 7.79p/share in two tranches.
In total, the CIG investment, the subscription, and the open offer (assuming full take up) will result in total gross proceeds for Hummingbird of US$19m. Hummingbird said proceeds would be used to strengthen its balance sheet and provide improved liquidity to ensure its second gold mine, Kouroussa, can be brought into production as scheduled by the end of Q2 2023.
Dan Betts, CEO of Hummingbird, commented: "We are delighted to welcome CIG as a key strategic investor into the Company. CIG's investment endorses the Company's strategy for growth with a strategic partner to underpin that ambition - both in the West African region and beyond. Further, the Subscription and the Open Offer have been added to make sure our existing shareholders have the opportunity to participate alongside the CIG Investment. The Placement will strengthen the Company's balance sheet to ensure Kouroussa comes into production on schedule by the end of Q2 2023 to take the Company to be a +200,000 ounce gold producer and will also accelerate exploration at the asset where we see material upside potential in extending its life of mine."
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A fresh injection of capital into Hummingbird's balance sheet will support the company's ambitious growth strategy and ensure its Kourussa gold mine in Guinea remains on schedule for first gold pour at the end of Q2 2023. Kuroussa boasts a current reserve of 647,000 oz at 4.15 g/t. The mine is estimated to produce 120,000-140,000 oz for the first 3 years of production and average 100,000 oz over its initial life of mine (LOM).
Kourussa is undergoing exploratory drilling, with potential LOM upside expected in H2. Hummingbird expects Kourussa to push it past 200,000 oz of gold production.
Announced earlier this month, CIG's US$15m investment into Hummingbird represents an endorsement of the company's growth strategy in West Africa. Upon completion of both tranches, CIG will hold a 25.6% interest in Hummingbird. Today's announcement of an added placement and open offer will boost that liquidity injection to US$19m, ensuring the company remains funded to fast-track remaining exploration of Kuroussa and future assets.
Hummingbird's flagship mine at Yanfolila, Mali outperformed last quarter with strong momentum continuing into the current quarter. With Kouroussa on track to begin production by end of Q2 2023, the company is at a pivotal juncture for growth that may begin reflecting in its balance sheet in H2. Current and prospective investors should Hummingbird to be notified of its next quarterly update and developments at its two key projects.