Aim-listed gold producer Hummingbird Resources has said its Yanfolila gold mine, in Mali, is well-positioned to meet its financial year 2023 guidance, while the Kouroussa gold mine, in Guinea, is gearing up for a full year of commercial production in the 2024 financial year.
Discussing the company’s operational and financial performance for the third quarter, ended September 30, CEO Dan Betts said the third quarter was traditionally the most challenging period owing to it being the wet season.
“However, during the quarter, Yanfolila performed in line with our expectations, and with over 69 000 oz of gold produced [for the nine months to September 30], we are well positioned to comfortably meet our full-year 2023 production and all-in sustaining cost (AISC) guidance,” he said on October 26.
During the third quarter, Yanfolila produced 18 399 oz of gold, marking a 9% increase from the same period in 2022 when 16 827 oz were produced. The total gold production at Yanfolila as of the end of September stands at 69 546 oz.
The AISC at Yanfolila was $1 651/oz of gold produced during the third quarter, representing a 24% decrease compared to the third quarter of 2022, when it was $2 161/oz. The average AISC for the period up to the end of September was $1 298/oz.
In the third quarter, 18 550 oz of gold was sold at an average realised price of $1 918/oz, in contrast to the third quarter of 2022 when 16 917 oz were sold at $1 713/oz. As of the end of September 2023, the company held 1 834 oz of gold in inventory.
In the third quarter, Kouroussa produced 1 047 oz of gold, with an additional 614 oz shortly after. The company’s updated production expectations for the second half of 2023 are about 10 000 oz, with the mine on track for a full year of commercial production in the 2024 financial year.
“At Kouroussa, we have focused on ramping up the operation across all disciplines and . . . have achieved over one-million lost time injury- (LTI-) free hours since commissioning the plant in the second quarter. We expected challenges during the six-month ramp-up period. However, our plant has exceeded expectations, regularly meeting nameplate capacity in the third quarter.
”We encountered hurdles in increasing mining volumes and ramping up the recruitment and training of local and national Guineans during the quarter. We’re actively addressing these challenges, targeting increased operational performance in the fourth quarter, setting the mine up for full commercial production from the 2024 financial year,” Betts said.
Throughout the third quarter, the processing plant’s overall performance continued to improve, with availability reaching about 82%. The plant is expected to operate on a consistent 24-hour basis during the fourth quarter.
Mining volumes at Kouroussa faced challenges during ramp-up, primarily owing to seasonal weather, equipment commissioning, and the recruitment and training of local and national Guinean personnel. The company said it is actively resolving these issues, with improvements expected to accelerate during the fourth quarter.
The group achieved adjusted earnings before interest, taxation, depreciation, and amortisation (Ebitda) of about $1.2-million in the third quarter, compared with a loss of $8.9-million in the third quarter of 2022. This resulted in a cumulative adjusted Ebitda of about $34.3-million as of the end of September.
Hummingbird further noted that a group refinancing and funding package had been agreed upon to provide additional cash liquidity and capital support. With both mines on track for full commercial production and increased cash flow generation in the 2024 financial year, significant balance sheet deleveraging is set to start next year, with scheduled repayments of about $77-million in the 2024 financial year, about $61-million in the 2025 financial year, and the remaining $15-million payable by the end of the 2028 financial year.
With 69 546 oz produced by the end of September at Yanfolila, the company said it was on track to meet its 2023 financial year production guidance of 80 000 oz to 90 000 oz, with the AISC remaining below $1 500/oz.
Betts said the company’s focus remained on becoming a 200 000 oz/y gold producer, with formal 2024 financial year group production and AISC guidance expected at the fourth-quarter operational and trading update, set for the end of January next year.
“The refinancing and funding package agreed with our long-term finance partners Coris Bank provides increased financial flexibility for Hummingbird, with material deleveraging projected to begin in the 2024 financial year. Importantly, we remain on track to deliver about 200 000 oz/y, establishing ourselves as a midtier, multi-asset, multi-jurisdiction gold producer,” Betts said.