AIM-quoted Hummingbird Resources has signed a letter of intent to secure a 50% interest in the Kobada gold project in Mali owned by African Gold Group.“Based on the due diligence we have completed to date we believe we will be able to truck a high-grade concentrate to the Yanfolila processing plant from Kobada," comments Hummingbird Resources CEO, Dan Betts.
"This high-grade concentrate would have a material increase to our annual production rates and could add up to an additional 50 000 ozpa to our existing average life of mine production of 107 000 oz.
“The Yanfolila gold mine currently has a 7.5 year mine life based on reserves and we have over 1 Moz gold in resources that we will look to convert to reserves and extend this mine life once in production.
"This deal with African Gold Group gives us a path to 150 000 oz production per year within three years from now combined with the organic extension of mine life from existing resources extending it well beyond 10 years.
"This could significantly improve the production profile of Yanfolila and materially improve the mine’s NPV.
“We are extremely excited about the optionality the deal provides Hummingbird Resources and working with the management of African Gold Group who have a strong track record of creating shareholder value within the industry.”
Stephan Theron, African Gold Group CEO comments: “This transaction with Hummingbird Resources is significant for us as it validates the intrinsic value of the Kobada gold project and fast tracks the planned development program.
"Hummingbird Resources provides us the financial capacity to develop the Kobada gold project and we are also gaining a partner with operational presence in Mali.
"Kobada provides Hummingbird Resources the ability to further increase production output at its Yanfolila mine.
"The partnership is a win-win for both groups. We look forward to working with the Hummingbird Resources team on this transaction,” concludes Theron.
Feature image credit: Wikimedia Commons