Hummingbird Resources Update

20 August 2012
Hummingbird Resources Update

Hummingbird Resources plc - Proposed Strategic Investment from IFC

Highlights

  • IFC, a member of the World Bank Group, is proposing making an investment in Hummingbird Resources
  • The potential investment will be IFC's first mining sector investment in Liberia
  • An investment by IFC is not only a strong endorsement of the technical strengths, socio-environmental standards and economic potential of Hummingbird's Dugbe 1 Project, but also provides ongoing access to IFC's expertise in this area
  • An IFC equity investment will help pave the way for potential future debt financing from IFC for the development of the Dugbe 1 Project

The terms of the potential investment are that IFC will make an approximate US$5m investment in the Company at a share price of £0.93, adding to the existing cash reserves of US$11.5m. Following this investment, IFC will be interested in approximately 3.2 million ordinary shares in the Company, representing approximately 5.7% of the issued share capital. IFC will also receive half a warrant per share subscribed for at a strike price of £1.4415 with a 5 year term. The investment is subject only to the execution of final documentation and the approval by the IFC board of directors.

Dan Betts, CEO, said:

"The board has carefully considered the merits of a strategic IFC investment and has unanimously concluded that it is in the best interests of existing Hummingbird Resources shareholders. Having IFC's approval to their high standard of technical, environmental and political due diligence in this investment will mark a significant endorsement to the viability of the Dugbe 1 Project.

The possibility that IFC could make its first mining sector investment in Liberia with Hummingbird Resources will be a great achievement for the Company. Investment from IFC brings with it not only a technical and environmental endorsement of the project but also support in these areas as we look to build a mine with access to their experienced team. An IFC investment also opens up the potential of future debt financing to develop the project, which will increase our optionality as we approach construction."