HUMMINGBIRD's Yanfolila gold project in Mali. Photo: Hummingbird Resources

HUMMINGBIRD's Yanfolila gold project in Mali. Photo: Hummingbird Resources

Dan Betts: Hummingbird
Flies into Mali

Issue 89, June 2014

Hummingbird Resources sees “unbelievable value” in gold assets in West Africa, says chief executive Dan Betts.

Last week, Hummingbird paid $20m in stock for South Africa-listed Gold Fields’ asset portfolio in Mali, including the 1.8m ounce Yanfolila deposit, grading 2.8 grams per tonne.

The deal lifts Hummingbird’s total gold resource in Liberia and Mali to 6m ounces, with cap-ex of $52m expected to drive Yanfolila into production of 80,000 ounces per annum by late 2015. “We’re not looking to create a gold-plated 5m tonne a year plant,” Betts says. “We’re looking to build a 1m tonne plant and get producing cash.”

He says financing offers are “on the table”, including streams and convertible debt. “Because of the grade and the work that’s been done, and the fact that it’s $50m, not $500m... we’ve got a lot of options open to us.”

Yanfolila is sitting on sunk costs of $100m, with an 18-month payback and 6-year mine life, which Betts expects to triple. “This gold field is full permitted, it’s got a 30 year mining license, it’s got everything in place. I think the market is woefully underpaying for assets, but rather than sit there and cry about it, it presents an unbelievable opportunity.”

“Now is a once in a generation opportunity,” Betts says, “to build a gold mining company. If people want to give away million ounce gold projects for $10 an ounce, then I’ll buy them all day long if our shareholders support us.”

Hummingbird’s investor base has recently rotated from institutional funds in London, which have suffered heavy redemptions, to high profile contrarian investors in Canada and the US, including Ned Goodman and Rick Rule.

Betts sees huge scope for rolling-up assets in West Africa. “All these juniors have a head office, listing fees, lawyers, brokers. Its a big expense for a cash-strapped, high-need, beaten-up junior. But if you put ten of them together, you still only have one corporate overhead, one broker, one set of costs.”

“I fully think it’s all to play for,” he says. “We’ve just got to get on with the work and deliver. There’s always going to be people who will say you can’t, so we’ve just got to prove them wrong.” 

“We’re looking to build a 1m tonne plant and get producing cash.”

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