Hummingbird Resources PLC said on Monday that its Kouroussa gold mine in Guinea has reached commercial production, though output has fallen short of target levels.
Shares in Hummingbird fell 27% to 1.49 pence in London on Monday morning.
The gold miner with operations in Mali, Guinea and Liberia achieved a four-week trailing average production of around 1,900 ounces of gold in the site.
Production had an average selling price of $2,473 per ounce, slightly under the spot gold price due to hedging contracts scheduled to conclude in the first quarter of 2025. As of Friday, the spot gold price was $2,712.82 per ounce.
Kouroussa’s production figure is below the previously announced target of 2,000-2,500 ounces per week, primarily due to lower-than-expected mill feed grades caused by mining capacity constraints. However, the company noted that all major equipment at Kouroussa is operating at or above design capacity, saying that it demonstrated the mine’s potential to sustain commercial operations.
At full capacity, Kouroussa is expected to produce an average of 100,000 ounces of gold annually over its initial six-year mine life. For 2024, the company has provided updated production guidance, estimating 45,000-50,000 ounces of gold at an all-in sustaining cost below $1,500 per ounce for the remainder of the year.
Despite achieving commercial production at Kouroussa, Hummingbird acknowledged that the group as a whole is unlikely to generate sufficient near-term cashflows to alleviate its current liquidity challenges. These issues are exacerbated by the loss-making operations at the Yanfolila gold mine in Mali and anticipated near-term payments related to ongoing negotiations with the Malian government.
The company said it is closely monitoring liquidity across the group and strategically allocating resources to support Kouroussa’s ramp-up and maximize operational output.
For the six months ended June 30, the company reported a pretax loss of $29.6 million, swung from a profit of $4.1 million in the same period last year. Revenue declined to $65.1 million from $103.2 million, while cost of sales eased to $73.6 million from $77.4 million.
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