06 Jun Mali gold project gets $67m boost
Hummingbird Resources (AIM:HUM) has raised US$67 million for the construction of its Yanfolia Gold Project in Mali, a mine located 200 kilometres south of Malian capital Bamako.
The AIM-listed company placed 103,698,254 shares at 22 pence per share and a subscription offer for another 105 million shares at the same price.
The mine has an eight-year lifespan with around six million ounces of gold underground. First production is set for 2017 with an initial output of 132,000 ounces.
“The Company will now make a number of key hires to strengthen the team. We look forward to making further announcements as we start delivering significant milestones at Yanfolila,” said Dan Betts, Hummingbird’s managing director. “Yanfolila will produce over US$70m of free cash flow in its first full year of steady state production.”
Hummingbird shares fell by 4 per cent last Thursday after the announcement, but rose again on Friday to close at an even 24 pence a share.
Mali’s mining industry suffered a crisis last November due to a terrorist attack at a hotel that left 14 people dead.
Despite the increased risk, Mali mining is become much more attractive following a series of positive developments for the sector according to risk consultancy Verisk Maplecroft.