Gold miner Hummingbird Resources PLC (LSE:HUM) said trading has deteriorated further in recent weeks and unless shareholders agree to the recent offer from major shareholder Nioko it faces administration or insolvency.
Geoff Eyre, interim chief executive, added: "Recent independent assessments have highlighted significant operational challenges at both the Kouroussa and Yanfolila sites, which continue to perform very poorly.
“Kouroussa requires fundamental improvements in mining, processing and site infrastructure which will take a significant amount of time and money to deliver.
“Yanfolila's future viability depends on substantial exploration investment and successful extension of its mine life.
“The company faces immediate financial pressures that require urgent recapitalisation.
“Whilst the board has explored multiple options, the transaction presented to shareholders represents the only viable path forward.
“If not for the forbearance of lenders and other creditors, the company would have run out of financial runway many months ago.
“The board recommend that all shareholders vote in favour of the resolutions at the forthcoming shareholder meeting to provide the company with the opportunity to repay creditors in full in due course and provide some value return to shareholders."
Nioko has offered 2.6777p in cash for each Hummingbird share, which dropped 11% to 1.95p today.