• She could become the sole owner
• De Hummingbird resources
• Owner of the Yanfolila and Kouroussa mines
Nioko resources Corporation, a subsidiary of Coris Invest group (CIG SA), could become the majority shareholder of the mining company Hummingbird Resources Plc. The announcement was made on November 6, by the English company owning two main gold projects, the operational Yanfolila gold mine in Mali and the Kouroussa gold mine in Guinea.
Hummingbird has faced operational issues over the past two years as it struggled to meet ramp-up plans for its $120 million Kouroussa project in Guinea. In December 2023, it unveiled a recapitalization after agreeing to reduce its debt by $122.8 million over three years, starting with a $77 million debt repayment by the end of the year. Since September 2024, it has begun an operational and strategic review as part of which it will reduce its costs, sell non-essential assets and reshuffle its management.
On November 1, 2024, Hummingbird provided an update on ongoing discussions with its major lenders, including, CIG Sa and Nioko Resources Corporation, regarding the Company’s liquidity position, a proposed debt restructuring, a partial conversion of debt into shares and a possible offer for all issued and to be issued shares of the Company which are not held by Nioko. Despite the company’s efforts, continued challenges, related to operational performance at Yanfolila, equipment availability, working capital constraints and additional delays in ramping up operations at Kouroussa, have strained Hummingbird’s balance sheet and its ability to meet its short-term debt repayment obligations.
Transform debt owed into shares…
To meet the Company’s immediate obligations, Coris Invest Group provided, on November 6, 2024, an outstanding loan of US$10 million to Hummingbird, inflating the amount owed to Coris Invest to US$30 million. Faced with the current inability for Hummingbird to pay off its debt, Idrissa Nassa’s Company proposed to the Board of Directors of Hummingbird, which gave its agreement in principle, to convert this debt of 30 million US dollars into shares at benefit of Coris Invest Group, through its subsidiary Nioko resources Corporation. An operation which will increase the stake of Nioko resources Corporation (71.8%). And that’s not all. The press release published by Hummingbird informs that once this debt-for-equity conversion is completed, Nioko resources Corporation, majority shareholder of the mining company, intends to request the delisting of the shares of the company Hummingbird from the Alternative listing. investigative market (AIM).
Appointments to the Board of Directors
As part of the debt restructuring, Geoff Eyre has been appointed interim CEO with immediate effect, at the request of Nioko and with the agreement of the Hummingbird Board, to carry out a full financial and technical review of the company.
In addition, following the company’s September 27, 2024 announcement, Burkina Faso, Oumar Toguyeni, joined the Board of Directors. Mr. Toguyeni is currently a director of Nioko Resources Corporation, the Company’s largest shareholder and a wholly owned subsidiary of CIG.
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Nioko resources Corporation in brief
SIf the terms of the contract are completed, Niko Resources Corporation will become the sole owner of Hummingbird Resources and the two mining projects of Kouroussa in Guinea and Yanfolila in Mali. These two mines have the potential to deliver 200,000 ounces of gold per year, which would make Nioko a key player in gold mining in the sub-region. Apart from these two mines, Nioko is the largest shareholder of Orezone Gold, a Canadian company which operates the Bomboré gold mine in Burkina Faso.
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How might the consolidation of ownership in mining companies, as seen in the case of Hummingbird Resources and Nioko Resources, affect competition and industry practices in the broader mining sector?
Welcome, ladies and gentlemen, to another edition of our World Today News interview series. Today, we have with us two esteemed guests who are experts in their respective fields to discuss the ongoing negotiations between Hummingbird Resources Plc and Nioko Resources Corporation. Joining us from London, we have Mr. John Smith, an investment banker and financial analyst with over 15 years of experience in the mining sector. And joining us from Conakry, Guinea, we have Ms. Fatou N’Diaye, a mining engineer who has worked extensively on the West African gold mining belt.
Mr. Smith, let’s begin with you. As an investment banker, how do you see this proposed debt owed conversion into shares benefiting both Hummingbird Resources and Nioko Resources Corporation? And what are your thoughts on the impact it could have on the industry as a whole?
John Smith: The proposed debt-for-equity conversion is a classic restructuring move to save a company from financial distress and avoid bankruptcy proceedings. It benefits both parties involved in that it reduces pressure on the balance sheet and provides the company with fresh capital to meet its immediate obligations. For Nioko Resources Corporation, it increases its stake in Hummingbird Resources from 71.8% to potentially 100%, making it the sole owner of two significant gold mining assets in Mali and Guinea. This could be seen as a positive move for the industry as it consolidates ownership and potentially streamlines operations, reducing costs and improving efficiencies. However, it also raises concerns about the potential for monopolistic practices and reduced transparency in the sector.
Ms. N’Diaye, as someone who has worked extensively in the West African mining industry, what are your thoughts on these types of debt-for-equity conversions? And what kind of impact do you see it having on the local communities and employees of these mines?
Fatou N’Diaye: Debt-for-equity conversions are not uncommon in the mining industry, especially when companies are facing financial difficulties. They can be beneficial if they help stabilize the company and ensure its long-term viability. However, they can also lead to job losses and other negative consequences for local communities if not managed properly. It is cru
