Shares in Hummingbird Resources (AIM: HUM) surged 17% on Friday after the Africa-focused mining company announced the resumption of operations at its Kouroussa gold mine in Guinea, ending a two-month strike by its primary contractor.
The gold producer, which operates in Mali, Guinea, and Liberia, had to suspend activities at the Kouroussa mine in March when Corica Mining Services halted work, citing contractual disputes.
Due to the stoppage, Hummingbird produced only 5,868 ounces of gold in the quarter ending March 31, falling short of its forecast.
On Friday, Hummingbird confirmed that Corica had agreed to redeploy equipment to the site and had already started ramping up operations to resume full commercial production at Kouroussa.
“Corica’s return will enable Hummingbird to mine higher-grade material and accelerate our goal of reaching a production profile of 200,000 ounces of gold this year,” said Chief Executive Dan Betts.
To mitigate risks related to its working capital, Hummingbird has secured a $10 million loan from its largest shareholder, CIG SA. The funds will support the ongoing operations at Kouroussa during the ramp-up phase.
The company is also in discussions with its primary lender, Coris Bank International, to address the financial impacts of the operational suspension. Hummingbird indicated that an update will be provided in due course.
Hummingbird has encountered several challenges in achieving full production at the Kouroussa mine. In addition to the issues with Corica, operations were disrupted last year by rain and delays in skills development.
In late afternoon trading, Hummingbird’s stock price had slightly declined but remained 6.4% higher than Thursday’s close at 10p, giving the company a market capitalization of £80 million (approximately $101 million).
