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Hummingbird boosts Yanfolila, rolls over debt

Hummingbird has added more gold ounces at Yanfolila with a view to extending the mine life significantly
Hummingbird boosts Yanfolila, rolls over debt
Earthworks at Yanfolila

Like many in London’s mining and mining finance community, Hummingbird’s (LON:HUM) Bert Monro will be off to Indaba in a couple of days’ time.

What the mood will be like remains an open question, given the rather subdued air at London’s own premier event, the December Mines & Money Conference held in Islington.

But there are several reasons why Indaba could prove a more upbeat experience for Bert.

The principal one is that the gold price has been ticking up since December, fuelled by new jitters about the global economy.

And Hummingbird has lots of gold, contained in a suite of assets across West Africa.

What’s more, the gold inventory has just been given a significant boost with the addition of a further 169,000 ounces of gold at the Yanfolila deposit in Mali.

Will that whet investors’ appetites at Indaba?

Quite possibly.

“We always said Yanfolila was going to expand,” says Monro.

The thinking is that over time the project might eventually a deliver a mining reserve that will allow the seven year mine life to be significantly boosted.

Along the way though, the company will need to secure the necessary finance to get Yanfolila built.

On that score Hummingbird’s main backer, Taurus Funds Management, has just agreed to roll over the company’s US$15mln bridge facility until 8th March 2016.

Back in 2014, Taurus agreed to provide Hummingbird with an initial bridge, to be followed later by a full US$75mln financing package.

The bridge facility was secured against shares in the local subsidiary of Hummingbird, which owns Yanfolila, and carried a 9% coupon.

That the line of funding is still open is a good sign, although Monro refuses to be drawn as to the precise stage at which negotiations are.

“You could understand why anyone putting money into a gold project would want to run a keen eye over it,” he says.

In the meantime though, Hummingbird will get on with ongoing work to get costs down.

“We can’t affect the gold price,” says Monro. “But we can affect our operating costs. And we believe Yanfolila will continue to get better and better.”

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