Shares in Hummingbird Resources (AIM: HUM) surged 17% on Friday following the Africa-focused company’s announcement that operations had restarted at its Kouroussa gold mine in Guinea. This comes after a two-month strike by its primary contractor.
Resumption After Contractor Strike
The gold producer, which operates in Mali, Guinea, and Liberia, had suspended activities at the Kouroussa mine in March when Corica Mining Services halted work due to alleged contractual breaches.
Quarterly Gold Production Impacted
Hummingbird reported that the halt resulted in only 5,868 ounces of gold being produced in the quarter ending March 31, falling short of the company’s projections.
Contractor Redeployment and Production Goals
On Friday, the company announced that Corica had agreed to redeploy equipment to the site and has already begun ramping up operations to fully resume commercial production at Kouroussa.
“Corica’s return to work will enable Hummingbird to increase the mining of higher-grade material and accelerate our goal to achieve a production profile of 200,000 ounces of gold this year,” said CEO Dan Betts.
Financial Measures and Support
To mitigate risks associated with its working capital, Hummingbird secured a $10-million loan from its largest shareholder, CIG SA. This funding will support Kouroussa’s ongoing operations during the ramp-up phase.
The miner is also in discussions with its primary lender, Coris Bank International, to address the financial implications of the operational suspension. An update will be provided in due course.
Production Challenges and Stock Performance
Hummingbird has encountered difficulties in bringing the Kouroussa mine to full production. In addition to issues with Corica, last year’s operations were hampered by rainfall and delays related to skills development.
Despite a slight decline in the afternoon, the company’s stock price remained 6.4% higher than Thursday’s close, trading at approximately 10p. This positions the company with a market capitalization of £80 million (roughly $101 million).
