Hummingbird Resources (HUM.L) continues to do well in Mali as its Yanfolila project is still processing high-grade material, resulting in a quarterly production of 27,500 ounces gold with an excellent performance of in excess of 10,000 ounces gold in May.
Additionally, Hummingbird is increasing its mining rate in anticipation of the commissioning phase of its second ball mill. Although it processed more tonnes than it mined in Q1, the situation has now completely reversed and Hummingbird mined approximately 95,000 tonnes more than it processed during the second quarter as it’s increasing its stockpile to ensure a smooth transition to a dual ball mill operation.
This should have a meaningful impact on the total gold production as Hummingbird is maintaining its production guidance at 110,000-125,000 ounces of gold despite producing just 51,000 ounces in the first semester. This implies the production guidance for the second half of the year will be 59,000-74,000 ounces, and the AISC should continue to drop from the $998/oz reported in the first half of the year. For 2020, Hummingbird expects to reach its new steady-state production level of 130,000 ounces of gold per year, a 20% increase compared to the anticipated production rate as envisaged in the feasibility study that was completed in 2016. The higher production rate and high gold price will help Hummingbird to quickly move from a net debt to a net cash position, putting it in an excellent position to pursue additional consolidation opportunities in Africa.
Disclosure: The author has no position in Hummingbird Resources