Metals & Mining
Hummingbird Resources — Redefining the Upside
We are initiating coverage of Hummingbird Resources ( LON:HUM) with a BUY rating and a target price of 45p. Our valuation suggests that, in a base case, the Yanfolila Project more than underpins the current share price, and that the potential to add mineable material at the project, and the considerable optionality at Dugbe 1, are not currently being valued by the market.
Key catalysts include the completion of funding and resource additions. We believe that key catalysts for the share price include: satisfaction of the outstanding conditions precedent for Yanfolila development financing draw-down, which the company aims to achieve by the end of the year; and the likely additions to mineable resources at the project. We also believe that a re-scoping exercise for Dugbe 1, comprising both the Tuzon and Dugbe F deposits, has the potential to outline a deliverable project.