Mine construction at the Kouroussa gold project in Guinea must start within one year. This is one of the conditions following the government of Guinea granting AIM-listed Hummingbird Resources the mining licences for its project in the West African country.
Other key terms of the mining licences include: A 15 year, renewable licence term; a 5% loyalty payable to the Federal Government of Guinea; 1% contribution to Local Development Fund; and 30% tax on profits.
The grant triggers the requirement to pay the initial consideration of £10 million to Cassidy Gold Corp, which will be satisfied by issue of shares in Hummingbird.
The government has the right to a 15% non-dilutable free carried interest in the share capital of Kouroussa Gold Mine SA, the wholly owned subsidiary of Hummingbird which owns the project, with the right to acquire a further 20% participating interest for cash.
Development will have a significant economic impact
Abdoulaye Magassouba, Minister of Mines commented, “This project is part of the reinforcement of the industrial production of gold in Guinea and will have a significant economic impact in Kouroussa and in the country, while contributing to the resilience of the mining sector. We look forward to an ongoing strong relationship with Hummingbird Resources and supporting the development and running of the operation going forward for the success of all stakeholders.”
Dan Betts, CEO of Hummingbird Resources, added: “This marks an important step for the company as we move from being a single asset producing gold company, towards being a multi-asset producing gold company in multi-jurisdictions.
“I would like to thank the Government of Guinea and the people of Kouroussa. We look forward to working with them, and all our stakeholders, in developing and running a world class gold mine that embodies industry leading environmental, social and governance standards that the country, local people and the company can be proud of.“