15th Dec 2015 10:15
LONDON (Alliance News) - Hummingbird Resources PLC on Tuesday reported a maiden ore reserve estimate for its Yanfolia gold project in Mali suggesting the asset could hold way over 2.0 million ounces of gold, but Hummingbird conceded that first gold will not be poured from the project until 2017.
The miner said the maiden ore reserves represent a 20% increase from the in-pit mineral resource outlined in its optimisation study. Its defined reserves at the project lie in the Komana East and Komana West pits, the company's initial focus areas, with "significant" resources at other nearby deposits including Guiren West, Gonka, Sanioumale East and Sanioumale West, which will be mined at a later stage.
As a result of the maiden ore reserve secured by the company, Hummingbird now has a maiden probable reserve estimate of 6.82 million tonnes of ore at a grade of 3.03 grammes of gold per tonne, yielding a total of 665,600 ounces of gold.
That is a rise of 118,600 gold ounces from the in-pit mineral resource reported in the optimisation study back in March, and a 15% lift in grade, the company said.
"Achieving a maiden ore reserve at Yanfolila is a significant milestone for the company. With an increased gold grade of 3.03 grammes of gold per tonne, it confirms Yanfolila as a quality, high-grade, low cost project," said Chief Executive Dan Betts.
The maiden ore reserve also has converted all of the in-pit indicated resources into indicated reserves, whilst the gross mineral resource has been updated to 1.8 million ounces of gold at an average grade of 2.54 grammes of gold per tonne.
The main difference between resources and reserves is that mineral or ore resources are potentially valuable and have a reasonable prospect of being extracted, whilst reserves are legally and economically recognised as extractable.
In addition, Hummingbird said the plant capacity at the project will be increased to 1.24 million tonnes of ore per year from the previous 1.00 million tonne capacity, representing a 24% increase. That will allow the miner to produce 120,000 ounces of gold in the first full year of production and for it to mine all types of ore, including fresh ore.
"We have increased the size of our processing plant to process up to 1.24 million tonnes per annum, as well as processing harder, fresh ore types. The ability to process greater volumes of fresh ore has allowed us to expand and deepen the open pits of our maiden ore reserve, resulting in more recoverable gold," said Betts.
There also is a further 390,700 ounces of gold at a grade of 1.92 grammes per tonne that has been previously booked as mineral inventory by previous owners, but this still has to be converted to a JORC-compliant mineral resource.
"Additionally, the plant has been designed with the ability to further increase capacity to 1.5 million tonnes per annum. With so many indicated ounces outside the mine plan at nearby deposits and high-grade underground potential at Gonka, the company believes there remains significant production upside at Yanfolila," the chief executive said.
Hummingbird now will release updated project economics in January, but stressed its schedule remains unchanged with Yanfolia expected to take between 12 to 15 months to construct.
Hummingbird has faced some delays at the project, and conceded first gold would likely be poured from Yanfolia in 2017 rather than in 2016 as originally forecast.
Hummingbird shares were down 0.7% to 14.15 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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