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Hummingbird Resources shares collapse after halting Mali mine

Yanfolila gold mine, located in southern Mali. (Image courtesy of Hummingbird Resources.)

Shares in Hummingbird Resources (LON: HUM) fell as much as 20% to 13.23p on Monday after it halted operations at its Yanfolila gold mine in southern Mali, the company’s only producing mine, on safety concerns.

The miner said unrest and illegal road blockades in the region where the mine is located have dented its ability to safely continue mining at Yanfolila, adding the operation will remain closed until conditions improve.

Hummingbird warned the stoppage will affect full-year production, placing it below the bottom end of the 2021 guidance range. The miner had expected to produce between 100,000 to 110,000 gold ounces from Yanfolila this year.

The company said it was difficult to evaluate the full impact of the disruption, adding that it would provide further details as soon as there is more clarity on the situation.

“The government of Mali is aware of the situation and is actively engaged in resolving these disruptions and we anticipate the situation will be short lived,” chief executive Dan Betts said in the statement.

Hummingbird said the current illegal action is from a small minority and not representative of the communities where the company operates. 

Shares in the company recovered a bit in late afternoon trading, but they were still trading almost 11% down at 14.83 pence around closing time. Hummingbird Resources’ market capitalization stands at £56.85 million (about $76m).

Yanfolila is a high-grade open pit mining operation with underground potential, which poured first gold in December 2017.

The company’s latest Mineral Resources Estimate at the mine stands at 1.92 million ounces, with a current 7.9mt of reserve ore @ 2.66g/t for 676,000 ounces of gold.

An updated reserve statement is expected in coming weeks.