Technical studies at Hummingbird Resources' (LON:HUM) Yanfolila gold project in Mali have shown the economics of the open pit operation can be further improved, the firm said, as it unveiled a £3.5mln fundraising.
Work since an optimisation study in March means the miner is now focusing on an initial two pit mine plan at Komana East and West to simplify the process in early years of debt repayment with a further three pits to be brought online later.
More ounces is due to be garnered from these two pits than was previously mined from five, the firm highlighted.
The March study highlighted robust economics of the 1.8mln ounce site showing it as a high grade open pit gold project processing 1Mtpa (million tonnes per annum) of ore.
Net present value (NPV) was put at US$72.4mln, IRR (internal rate of return) at 35.1% and low all in cash costs of US$733 per ounce of gold for a 6.5 year life-of -mine production and average annual production of 79,000 ounces.
The latest work points to an increase of IRR by around 15% and net present value (NPV) by around US$20mln, the company stated. Life of mine production is improved by around 8%, the firm added.
The first gold pour at the site is earmarked for the first half next year.
Dan Betts, chief executive, said: " The technical de-risking studies show the significant potential for material economic improvement of the open-pit mining operation.
"We are extremely pleased with the results of these programmes to date and look forward to updating the Yanfolila financial model in the coming weeks and seeing further significant economic improvements from within it as we look to develop and build a leading West African gold mining operation."
The firm has kicked off initial earthworks and work constructing the process, plant infrastructure, security facility areas and storm event pond. Progress is now at 75% complete against a targeted 55%.
Due to the significance of these improvements to the mine plan, the firm said it was working closely with Taurus Funds Management to advance the US$75mln funding arrangements as quickly as possible and with engineers to reconfigure the process flow sheet.
Separately, Hummingbird said it had brought in around £3.5 million, before expenses, through placing around 10.6mln shares at 33 pence per share to advance Yanfolila to near-term production and for working capital purposes.
Bert Monro, head of business development, said this fundraise was "complementary" to the Taurus financing, and discussions were ongoing on drawing the remaining US$65mln following the US$10mln bridge facility.
"That process is going very smoothly and in line with our expectations."
City firm Investec noted today :" We are encouraged by the progress being made at Yanifolila. Since the company acquired the project from Goldfields they have made considerable improvements to the proposal, and we hope to see ongoing work from within the tenement package to delineate further value."
Shares in Hummingbird eased 9.33% to 34p each.