Hummingbird Resources - Initiation of Coverage

Mid-tier gold stock in the making - developing further gold mines in West Africa on the back of strong cash flow from Yanfolila

Hummingbird joined AIM in 2010 raising funds to develop its 4.2Moz Dugbe Gold Project in Liberia. In June 2014, during the worst of the downturn in the mining sector, the entrepreneurial board masterminded the opportunistic acquisition of Gold Field’s Mali gold portfolio including Yanfolila, a smaller higher-grade project which Hummingbird’s team of mine builders successfully put into production both on time and on budget.

  • Yanfolila open pit gold mine in Mali producing at 110,000 oz a year

    Gold production set to rise to 120-130k oz pa this year at this high grade, low-cost mine boasting compelling economics. US$8 million per year of planned infill drilling should boost reserves, increase mine life and ensure that Hummingbird benefits from its enviable cash flow for many years.

  • Liberia’s largest gold project with a lot more exploration potential

    The 4.2Moz Dugbe Gold Project has a PEA for a 125,000 oz per annum mine. But, there is obvious scope for a far larger project which is expected to be outlined in a forthcoming optimised DFS. Ongoing negotiations with well-financed joint-venture partners could fund the development through to production.

  • Developing multiple assets backed by large & fast-growing resources

    The board is seeking to invest the cash generated at the first mine into additional gold projects, utilising their impressive skills to bring further development projects into production & add substantial value.

  • NPV and peer group analysis suggests an upside of 52%

    Our conservative valuation illustrates the clear upside potential. We initiate coverage of Hummingbird with a target price of 46.43p and Conviction buy stance.


    Hummingbird Resources is a research client of Align Research. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to Dec 2016A 2017A 2018E 2019E
Revenue (US$'000) - - 143,000 169,000
Pre-tax (US$m) (8,442) (5,336) 5,770 13,850
EPS (US cents) (3.60) (1.55) 1.66 3.95
Source: Company accounts & Align Research