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(Sharecast News) - Hummingbird Resources announced on Monday that its Kouroussa Gold Mine in Guinea had reached commercial production, although its shares plunged as it also warned of ongoing cash flow issues.
The AIM-traded firm said that over the last four weeks, the mine's trailing average production was around 1,900 ounces of gold, sold at an average price of $2,473 per ounce under existing hedging contracts, which expire at the end of the first quarter of 2025.
Production levels were currently below the previously targeted 2,000 to 2,500 ounces per week due to a shortage of high-grade ex-pit ore caused by mining capacity constraints.
Despite that, Hummingbird said all major equipment had performed at or above design capacity, demonstrating the mine's operational potential.
It added that it was focussed on optimising mining operations, plant throughput, and feed grade to achieve steady-state production in the coming months.
Specialist external consultants had been engaged to assist in this process as part of an ongoing operational review led by interim chief executive officer Geoff Eyre.
At full capacity, Kouroussa was projected to produce an average of 100,000 ounces of gold annually over its initial six-year life.
For 2024, production guidance was set at between 45,000 and 50,000 ounces, with all-in sustaining costs (AISC) expected to remain below $1,500 per ounce for the rest of the year.
Despite the operational progress, Hummingbird acknowledged that group-wide liquidity challenges were persisting.
Loss-making operations at Yanfolila and anticipated payments related to negotiations with the government of Mali were said to be placing further strain on cash flow.
The company said it was actively working with its financial partners to address the issues, strategically allocate resources, and stabilise its financial position.
At 1549 GMT, shares in Hummingbird Resources were down 29.85% at 1.44p.
Reporting by Josh White for Sharecast.com.
