Unsurprisingly, we’re going to take this opportunity to remind you about last week’s events for Hummingbird Resources*† (LON:HUM). In a significant step forward for the company, it announced a successful fund raising through a share placement. This should allow it to commence the construction of its Yanfolila Project in Mali, one of the world’s highest-return undeveloped gold projects. RFC Ambrian acted as financial adviser and bookrunner on the transaction.
The company raised US$67m of equity. Our analysts Jim Taylor and Imogen Whiteside summarised this succinctly: “With the funds raised representing almost double the pre-deal market cap of the company, we consider the completion of this issue to be a highly significant achievement; this is the largest equity issue for an AIM-quoted gold company in four years. This serves as a testament to the high quality of the Yanfolila Project.” Their report (Hummingbird Resources — Raises US$67m for Yanfolila Development, 2 June 2016) is available to recipients of this e-mail.
With an expected build time of 12 months, the project could be in production by the end of 2017. Yanfolila is expected to generate over US$70m in free cashflow in its first full year of steady-state production. The project requires US$79.4m in capex, and Hummingbird plans to secure the remaining financing through a debt facility, for which it has already received expressions of interest. Please get in contact if you need to find out any more about this.