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Hummingbird Resources (LON:HUM) says its Yanfolila gold mine is a perfect project to bring into production in the current tricky market conditions.
The mine in Mali has a resource of 1.8mln ounces, but a recent optimisation study highlighted a low –cost, high grade route to produce between 80-100,000 ounces annually over seven years.
Dan Betts, chief executive, added today that following additional grade control and in–filling work he is sure the economics of its Yanfolila can be improved further ahead of scheduled first production next year.
“That would make it a high margin, high return operation that can generate profit at lower gold prices, which presents a perfect project to bring into production in the current market conditions. “
Hummingbird is now in the process of finalising its final draw down with finance partner Taurus for the US$75mln to commence full scale construction ahead of a targeted first gold pour in 2016.
Elsewhere, the recent favourable report on a possible hydro–electric power plant 10km away from its Dugbe gold project in Liberia presented a very compelling opportunity for Hummingbird, said Betts.
Cantor Fitzgerald said: “Today's interims provide a useful reminder of the significant progress Hummingbird has made at its two gold projects in West Africa.”
With significant news flow expected in the coming months, the broker reiterated its ‘buy’ recommendation and has a target price of around 99p on the stock.
Losses for the half year to June were US$1.88mln (US$3.4mln) with cash at the period end of US$5.6mln. As Hummingbird is still in development phase, there were no interim revenues.