Nioko Resources to acquire Hummingbird Resources
Nioko Resources, a wholly owned subsidiary of creditor CIG, is set to purchase Hummingbird Resources in an all-cash deal. The move follows Hummingbird’s struggles with ongoing operational performance issues at Yanfolila gold mine in Mali and delays in ramp-up after entering commercial production at Kouroussa mine in Guinea.
The Yanfolila Gold Mine is a high-grade open-pit gold mine in southern Mali. The mine is currently focused on unlocking its underground potential, with the Komana East Underground Operation being a key part of this expansion. The Komana East Underground Operation has underground reserves of 265,100 ounces. The Kouroussa Mine is situated in the prolific Siguiri Basin in Guinea and currently has a high-grade Resources base of 1.2 Moz at 2.93 g/t and Reserves of 681 Koz at 3.85 g/t.
These challenges have put substantial strain on the company’s finances and ability to meet debt obligations. The deal inked will see Nioko purchase all outstanding shares it does not already own for 2.6777 pence per share.
Debt-to-equity deal
Nioko currently holds 41.81% of Hummingbird’s share capital. Hummingbird’s board unanimously recommends the offer, which aligns with the subscription price set under the prior debt-to-equity conversion agreement with CIG (November 2024).
Hummingbird owes a $30 million debt repayment to CIG due by the end of December. Additional external financing is needed to address infrastructure improvements and creditor concerns. Following the debt-to-equity conversion, Nioko’s ownership will rise to 71.8%. The acquisition offers minority shareholders a chance to recover cash before Hummingbird’s eventual delisting.
Earlier this year, Hummingbird put its 53%-owned subsidiary, Pasofino Gold (TSXV: VEIN), up for sale, with one deal signed. The transaction is expected to close in Q1 2025, pending satisfaction or waiver of all offer conditions.
