Confidence about a prospective gold mine in Mali got a significant boost, after the company behind the project raised US$67 million to go toward construction.
As reported by mining.com, AIM-listed Hummingbird Resources (LSE:HUM) placed 103,698,254 shares at 22 pence per share and a subcription offer for another 105 million shares at the same price.
The GBP45.8 million will be plowed into construction of the Yanfolia Gold Project, a mine located 200 kilometres south of Malian capital Bamako.
The Telegraph reports the mine having an eight-year lifespan with around 6 million ounces of gold underground. First production is slated for 2017 with an initial output of 132,000 ounces. The remainder of the mine’s GBP55 million cost will be financed through debt.
“We are now in a position to commence full-scale construction in order to bring Yanfolila, one of the highest margin undeveloped gold projects in Africa, to production,” said Managing Director Dan Betts, in a statement. “This equity placement enables Hummingbird to move immediately into detailed engineering with a clear timeline to production. The Company will now have a strong balance sheet and is positioned to negotiate the best possible debt terms for our shareholders.
“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. Yanfolila will produce over US$70m of free cash flow in its first full year of steady state production.”
Shares in Hummingbird Resources fell initially on the announcement, dropping by 4 percent Thursday, but rose again on Friday to close at an even 24 pence/share.