In a spot of late spring cleaning, Hummingbird Resources (LON:HUM) has sold its interest in the Asheba gold licence in Ghana to a private company called Taoudeni Resources.
The consideration is 10% of Tauodeni plus US$1.00 per every additional ounce of gold discovered.
Based on work done by the South African mining giant Gold Fields, Hummingbird and Taoudeni set the gold inventory at Asheba at 176,000 ounces.
However, Taoudeni’s Niall Tomlinson, who’s previously worked for Alecto (LON:ALO), Rio Tinto (LON:RIO), and the famous mining consultancy SRK, reckons that there is “significant potential” for the delineation of additional gold mineralisation.
And Hummingbird wouldn’t disagree, which is why it’s retaining its 10% stake, but it has its hands pretty full elsewhere, in particular with the ongoing development of the Yanfolila gold project in Mali, which it acquired from Gold Fields as part of the same deal in which it acquired Asheba.
Hummingbird’s chief executive Dan Betts laid out the attractions of the deal in plain language.
“This transaction allows us to participate in the upside of both Asheba and Taoudeni as its team unlock the gold project’s potential value with no capital commitment required by Hummingbird,” he said.
The key phrase there is “no capital commitment”, because, although Hummingbird has been more adroit than many in the sector in securing funding to keep going, investors in mining are in no mood to see cash squandered on projects that are peripheral to the main offering, and, in comparison to Yanfolila, which is slated to start producing at a rate of 79,000 ounces a year in the first half of next year, Asheba is peripheral.
In addition, Hummingbird also has the multi-million ounce Dugbe project in Liberia coming along behind, so there’s little likelihood that Asheba would have got any serious attention for a good while yet.
This way, Tauodeni gets another asset to play with, Hummingbird retains its upside, and the government of Ghana is happy that the licences it awards do actually get used.