Hummingbird Resources – Security Incident

Artisinal Miners at work

Late yesterday HUM put out an RNS (as below) informing shareholders/investors of a security incident within Hummingbird’s licence blocks. It’s unstandable to see the usual knee-jerk reaction from retail investors in particular as the event is unfortunate and the RNS (due to rules) small on detail and as thus ‘open’ to interpretation. HUM will update further but the ‘word on the street’ is that the Mali Government forces were called in to ‘remove’ some Artisinal Miners from HUM’s Komana West licence block. The Mali Government are known for a zero tolerance policy and understandably when policing the North which is volatile with terror groups and other bandits. However, HUM’s Yanfolila Mine is in Southern Mali which is a different place entirely. Broadly peaceful and community driven. Unfortunately, whilst there are regional differences – the policing is much the same. Artisinal Mining is rife throughout Mali and most deaths occur through dangerous and risky gold extraction methods. Many Artisinal Miners lose their lives while hunting for Gold. For some it is a risk worth taking as any discoveries can be worth a decade of normal earnings and that’s assuming they are lucky enough to be employed. HUM runs several community projects designed specifically to build infrastructure such as sanitised water or schools etc. HUM also have a policy of recruiting Mali workers rather than expats. HUM has a work force that is 5% expats and 95% Mali locals. In the below RNS it is noted that 2 of the 3 Artisinal Miners were not from the local area. Whilst Mali has vast areas of untaped Gold exploration, foreign Artisinal Miners will look for easy pickings in and around existing Gold discoveries. The Mali Government clearly have a strict policy especially as they are keen to sell more licence blocks to international companies who have the capital resource and experience to extract the Gold and in turn create jobs for the local communities. Similar issues occur across africa whether it be diamonds, Gold or even Oil. Governments take strong action because if they didn’t, the Artisinal Miners could disrupt the Governments ability to attract international companies and gain much needed revenues.

Komana West is due for operations in Q3 and HUM also plan further exploration work elsewhere across the licence block. It’s unclear whether there are many other Artisinal Miners in the surrounding area but after yesterday’s events they would be wise to move into safer zones outside known Mali Government designated licence blocks.

Using this kind of force is impossible to comprehend or understand from a ‘western perspective’ especially without the facts or true context. But Africa is not alone. You don’t have to look too far east to see Journalists being ‘vanished’, ‘poisoned’ or just plain shot dead in cold blood for going against the establishment. Africa is far from perfect but whether killing elephants for ivory or illegally mining gold – the response is the same.

Hummingbird Resources will provide an update (eg more detail) on the incident. Although one would imagine that it will only come once Mali officials have sanctioned it and even then I’m not sure it will say too much more than what has been communicated thus far.


RNS: 29 May 2018
Hummingbird Resources plc
Security incident in Mali

In recent days, a limited number of people in the local area have disputed the Company’s plan, previously agreed with local community leaders, the Government of Mali’s Ministry of Mines and local government, to extend mining operations within the Company’s permit area to the Komana West deposit. Our understanding is that this group of people were acting unilaterally to stop the Company carrying out initial site preparation work at Komana West.

The Company has been informed by the Malian National Guard that while upholding the rule of law, requested of them by the Government of Mali, a security incident occurred. Very regrettably, we have been informed that this incident has led to the loss of at least three lives (two of which are believed not to be Malian nationals). The Company expresses its sincerest condolences to the families of the deceased and others affected by this incident.

All Hummingbird employees and contractors are safe. The process plant continues to operate at this time.

The Government of Mali has a 20% interest in the Yanfolila Gold Mine and the mine has a 95% Malian work force.

Further updates will be given by the Company as appropriate.