Hummingbird Resources Ltd (LON:HUM) said the government of Mali has made an US$11mln investment in the local subsidiary that controls its Yanfolila gold project.
It has exercised an option to take 10% of Société Des Mines De Komana as well as having an ‘non-dilutable’ free carried interest in the same number of shares.
"I believe this is a clear signal of the government's appreciation of the enormous value accretion potential of Yanfolila in the long term,” said chief executive Dan Betts.
Mine construction began last autumn with the first gold expected to be poured by the end of the year.
Production this year
The operation is set to churn out 132,000 ounces of the yellow metal in the first 12 months.
Yanfolila remains one of the best projects among the UK-listed junior mining sector, according to resource-focused ‘house’ RFC Ambrian.
In a definitive study in February, total resources at Yanfolila were defined at 1.8mln ounces of gold with an additional 390,700 ounces of exploration potential.
The plan is to mine five open pits in succession, starting with Komana East and Komana West and then progressing to Guirin West, Sanioumale East and Sanioumale West.
There’s also the high grade Gonka resource that would be worked initially as an open pit before going underground.
Dugbe do
The company’s other major asset is the Dugbe project in Liberia. Weighing in at 4.2mln ounces, it is the country’s largest gold deposit.
Recently, a study suggested the cost of mining the deposit could drop significantly from an all-in sustaining US$900 an ounce with the addition of a hydro-electric facility to generate the power for the processing facility.