

6
MODERN MINING
January 2017
MINING News
AIM-listed Hummingbird Resources has
appointed African Mining Services (AMS), a
subsidiary of ASX-listed Ausdrill Limited, as
its mining contractor at the Yanfolila gold
project in Mali, where mine construction is
currently underway ahead of the first gold
pour, expected to occur in late 2017.
Comments Dan Betts, CEO of Hum
mingbird Resources: “Appointing AMS as
our mining contractor is another major
milestone for Hummingbird and rep-
resents the single largest contract the
company will award. AMS has an excellent
reputation for high quality work with an
exemplary health and safety record. The
team also boasts over 25 years’ experience
operating in West Africa. I am delighted to
embark on this partnership with AMS as
we look forward to the commencement of
mining at Yanfolila.”
Hummingbird has appointed AMS
for an initial three-year period with an
option for the company to extend the
contract by a further year of mining. The
total value of the contract is expected to
be approximately US$112 million over
three years. The pricing represents a circa
5 % improvement for the company, as
well as increased flexibility and transpar-
ency, when compared to Hummingbird’s
Definitive Feasibility Study (DFS), released
in February 2016.
AMS anticipates incurring capital
expenditure of approximately US$38 mil-
Hummingbird appoints mining contractor for Yanfolila
lion for the acquisition of new equipment
and says it will employ around 450 person-
nel (the majority of whom will be local) for
this contract.
Mining operations at Yanfolila will be
carried out using conventional drill-and-
blast and load-and-haul mining methods
from two deposits initially. Mining is due
to commence in Q3 2017 with the first gold
pour due by the end of Q4 2017.
Yanfolila is Hummingbird’s most
advanced asset. Some 132 000 oz gold is
targeted for its first full year of production,
which would deliver around US$70 million
of free cash flow at a US$1 250/oz gold
A recent view of the Yanfolila site showing the start of construction operations. The first concrete pour
was in October (photo: Hummingbird).
Articulated haulers and excavators at work at Yanfolila (photo: Hummingbird).
price. On its initial eight-year mine life,
Yanfolila has an IRR of 60 % and an NPV of
US$162 million at a US$1 250 gold price,
making it – says Hummingbird – one of the
highest margin undeveloped gold projects
in Africa.
All in sustaining cash costs of US$695
per ounce place it in the lowest quartile
of African producers, and well placed to
operate profitably in a lower gold price
environment. Yanfolila is fully funded to
production and commitments to date rep-
resent nearly 30 % of the project capex.
According to Hummingbird, the project is
currently on budget and schedule.
There is also considerable upside at
Yanfolila, with over 1 Moz of gold outside
of the mine plan but within the permit as
well as the Gonka deposit (5 km south of
the Yanfolila plant), which – based on the
desktop study undertaken by DRA Projects
(as announced in February 2016) – can add
a further US$24 million to the NPV alone.
Yanfolila is now reported to be a hive of
activity with good progress beingmade on
the ground. A few short months ago, only
earthworks had been completed and now,
with civil works underway, the project is on
track for steelwork to begin in the coming
weeks.
Hummingbird says that in December
its executive team visited the factories
in Europe which are presently construct-
ing the ball mill and gearing and that its
members were impressed by the excellent
progress beingmade across all areas of this
critical aspect of the plant development.