Hummingbird Resources: From Challenges to Transformation

1. Introduction?

On January 15, 2025, Hummingbird Resources, a company specializing in Africa-focused operations, announced an agreement with Mali’s military-led government to continue operating the Yanfolila Gold Mine under the country’s new mining law. As part of the agreement, Hummingbird Resources will pay a $16.4 million settlement in two phases and propose plans to enhance production and extend the mine’s service life.?

This agreement follows Barrick Gold’s suspension of operations in Mali, during which the government increased its stake in mining projects from 10% to 20%. In 2023, the Yanfolila mine produced 83,965 ounces of gold, with proven reserves of 493,000 ounces at a grade of 2.5 g/t.?

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2. Nioko’s Acquisition of Hummingbird Resources?

On January 3, 2025, Nioko Resources announced that its ￡13.8 million ($17.1 million) acquisition of Hummingbird Resources was nearing completion. Upon closing, Nioko will hold a 71.8% stake in Hummingbird, which will subsequently delist from the stock market.?

Hummingbird Resources, founded in 2005 and previously listed on the London Stock Exchange, focuses on gold exploration and production in West Africa. Its key assets include:?

·?????? Yanfolila Gold Mine (Mali): The company’s first operational mine, producing approximately 80,000 to 90,000 ounces of gold annually, with exploration potential to extend its life.?

·?????? Kouroussa Gold Mine (Guinea): Commissioned in 2024, Kouroussa is expected to significantly increase production capacity, targeting annual output of approximately 200,000 ounces starting FY2024.?

·?????? Dugbe Gold Project (Liberia): Hummingbird holds a 53% stake in this large-scale project, which, once fully developed, is projected to produce 200,000 ounces of gold annually. The project is currently being developed by Pasofino Gold Ltd.?

Despite the potential of these assets, Hummingbird faced financial challenges due to operational difficulties at Yanfolila and production delays at Kouroussa. These issues culminated in the company’s decision to sell to Nioko in December 2024 for ￡13.8 million in cash.?

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3. Yanfolila Gold Mine Project?

Located in southern Mali, the Yanfolila Gold Mine is a high-grade open-pit mine with significant underground potential. The weathered layer above the fresh rock varies in thickness from 40 to 80 meters, comprising laterite, saprolite, and slightly weathered bedrock. Initial geotechnical studies suggested inter-ramp angles of 44° for the weathered zone and 40° for the fresh rock due to the relatively fragile nature of the saprolite.?

A risk mitigation study for the Komana West pit revealed no hydraulic connection between the Sankarani River (approximately 200 meters from the pit) and the mining area. This finding significantly reduced environmental risks, allowing for steeper pit slopes and optimized strip ratios. The resulting design improvements increased profitability and reduced the risk of pit wall failures.?

4. Kouroussa Gold Mine?

The Kouroussa Gold Mine in Guinea was intended to be a major contributor to Hummingbird’s production growth but faced a significant setback in March 2024. Corica Mining Services, citing contract breaches, halted operations and accused Hummingbird of failing to pay $27 million for completed work. Hummingbird countered, alleging that Corica failed to meet contracted mining volumes due to delays in equipment mobilization and commissioning.?

As a result, Kouroussa produced only 5,868 ounces of gold in the first quarter of 2024, exacerbating Hummingbird’s financial woes and highlighting the operational challenges faced by the company.?

Conclusion?

The journey of Hummingbird Resources underscores the complexities of technical, financial, and operational management in the mining sector. From managing risks at Yanfolila to navigating disputes at Kouroussa, the company’s experiences offer valuable lessons for the industry. Under Nioko Resources’ stewardship, it remains to be seen whether Hummingbird can chart a new course toward stability and growth.?