Modern Mining Marchh 2017

GOLD

Construction of the Yanfolila gold project in Mali is nowmore than a third complete and the developer, AIM-quoted Hummingbird Resources, is confident that the newmine – which will produce 132 000 ounces of gold in its first year of operation – will pour its first gold in late December this year. Hummingbird’s Head of Business Development, Robert Monro, told Modern Mining at the recent Mining Indaba in Cape Town that the site was currently a hive of activity with construction work pro- ceeding on schedule and major long-lead items now starting to arrive on site. Yanfolila a hive of activity

L ocated in the Sikasso region of south-west Mali close to the bor- der with Guinea, Yanfolila was acquired by Hummingbird from Gold Fields in 2014 in a deal worth US$20 million (with Gold Fields accept- ing payment in Hummingbird shares). In the roughly six years that it held the project, Gold Fields spent in the region of US$100 million on exploration and development studies, tak- ing it to a very advanced stage. Commenting at the time on Gold Fields’ decision to relinquish Yanfolila, CEO Nick Holland said: “Yanfolila is a robust, high-grade project, but the scale of the known resources does not support a Gold Fields-scale operation and is better suited to development by a junior.” Gold Fields was planning a 3 Mt/a opera- tion at Yanfolila. Hummingbird has scaled this back considerably to 1,24 Mt/a, in the process bringing down the capex to a remarkably low US$79 million. “We’ve benefited from the fact that we inherited a high quality project with a significant amount of infrastructure from Gold Fields,” says Monro. “This included a well- developed mine camp, able to house around

80 employees, which we’re in the process of expanding by 30 %. Quite apart from this, however, Yanfolila has no issues which would complicate mining or processing and this has helped to keep the capex low. The ore, for example, is amenable to processing via simple gravity and CIL processing.” He adds that a major saving has also been possible in respect of the tailings storage facility (TSF). “We have a natural valley available for this facility – so really all we need is an embank- ment wall and a clay liner for the basin.” Since acquiring Yanfolila, Hummingbird has been steadily improving the economics of the project, producing an Optimisation Study (in March 2015), a DFS (in January 2016) and an Optimised Mine Schedule (in February 2016). The result is that Yanfolila now has outstand- ing metrics. The NPV (at an 8 % discount rate and a gold price of US$1 250) is estimated at US$162 million and the after-tax IRR at 60 %. The project remains very robust at a gold price of US$1 100 with the IRR in this case being 42 %. The all-in sustaining cash cost (AISC) is very competitive at around US$700 per ounce and will place the mine in the bottom quartile

20  MODERN MINING  March 2017