Several announcements since Hummingbird Resources’ January DFS suggest that it has successfully added substantial value to its Yanfolila Project. Having been asked a number of questions on this topic, we are reviewing the project and its value. Yanfolila is a very attractive mid-scale, high-grade, open-pittable gold development project with low capital intensity and low projected operating costs.
We maintain our BUY rating and target price of 45p. We established our TP at the time of the DFS publication in January 2016, since when the potential development of Gonka and the optimised mine plan have been announced, adding considerably to the value proposition. However, pending the finalisation of the project financing, we continue to value Yanfolila on a 0.7x multiple to derive our target price of 45p.