Hummingbird says Pasofino Gold sale in the works

Hummingbird Resources (AIM: HUM) said Thursday the potential acquisition by an unnamed company of its 53%-owned subsidiary Pasofino Gold (TSX-V: VEIN) has been opened to more potential bidders.

Pasofino Gold, which owns the Dugbe gold project in Liberia, announced in September that it had signed an exclusivity agreement with a counterparty. This company, which offered US$75 million ($105 million) cash for Pasofino, was originally given until Nov. 7 to firm up its interest in the gold junior.

Pasofino continues discussions with the interested party on a non-exclusive basis, facilitating the potential buyer’s efforts to secure financing for the acquisition, Hummingbird said. They declined to name any counterparty, citing an ongoing competitive process to finalize a sale of Pasofino.

“Pasofino has also expanded access to its data room to additional interested parties and is arranging preliminary site visits for those conducting due diligence as part of their assessment,” Hummingbird noted in a press release.

Cash injection

Hummingbird faced financial issues due to problems at its Yanfolila and Kouroussa gold mines. In July, it spoke with its main lenders, including Coris Bank and CIG, to address its liquidity concerns.

On Nov. 6, Nioko Resources, a subsidiary of CIG, became Hummingbird’s largest shareholder. It acquired 334.7 million shares in a debt-to-equity conversion. This converted about US$30 million of unsecured debt owed to CIG into new shares at 2.7 pence each, increasing Nioko’s ownership in Hummingbird to about 71.8%.

Selling Pasofino could boost Hummingbird’s coffers during a restructuring.

Nioko plans to delist Hummingbird from the AIM market. It is ready to offer for the remaining shares at the same price as the debt-to-equity conversion.

Dugbe review

Pasofino has been looking to enhance the value of its Dugbe project by securing funding for the various optimization initiatives outlined in its 2022 feasibility study. These include a review of the initial capital cost and operating costs assumed in the study and the mine’s energy supply.

The Dugbe project is in the Birimian geological province, host to most West African gold deposits. The property covers 2,559 sq. km and contains two deposits that are 4 km apart, both discovered by its previous partner and majority shareholder Hummingbird.

The 2022 feasibility study outlined an open-pit mineral reserve estimate of 66 million tonnes grading 1.3 grams gold per tonne for 2.76 million oz. of metal, planned to be mined over 14 years, with an output of 200,000 per year for the first five years.

In late 2023, Pasofino took full ownership of Dugbe after acquiring Hummingbird’s 51% interest.