Gold exploration firm in £89m flotation

BIRMINGHAM based gold exploration company Hummingbird Resources began trading on the Alternative Investment Market (AIM) for the first time today.

The firm will have a post-float market capitalisation of £89.1m. It has issued ordinary shares at £1.67 per share, raising £25.5m ($40m) for the company and £4.6m ($7.2m) for certain selling shareholders, following high demand for the shares.

Hummingbird has been exploring for minerals in Liberia since its establishment in November 2005 and is currently the holder of the largest area of mineral exploration ground in the geological region of Eastern Liberia, with licences prospective for iron ore, other minerals and gold – which is its focus at present.    

The company was co-founded by Dan Betts, son of Stephen Betts, chairman of Betts Metals and who is also a non-executive director of Hummingbird, a Midlands family that has been smelting, refining and dealing in precious metals in Birmingham’s Jewellery Quarter for 250 years and seven generations.

The company has focused its exploration activities in largely unexplored areas of Liberia, close to geographical formations known to host multi-million ounce gold deposits in nearby countries, such as Ghana and Mali and its exploration licences cover over 7,000 square kilometres in total.

Following recent exploration and subsequent resource drilling, Hummingbird has recently confirmed an indicated and inferred gold resource of 20.90 million tonnes at 1.208 g/t to give 812,000 oz using a cutoff grade of 0.5 g/t.

The money raised through flotation is likely to be used to fund further exploration work.

Daniel Betts, chief executive of Hummingbird Resources, said: “The highly prospective region of Eastern Liberia represents one of the most exciting mineral exploration areas in West Africa and our position as holder of the largest area of mineral exploration ground in the region provides an excellent opportunity for substantial resource growth.

“The funds raised in connection with today’s admission to AIM will help the company further develop through the continued and systematic exploration of its licence areas. We aim to improve our understanding of the targets we have already identified and to discover further significant gold resources in the region.”

Law firm Cobbetts advised the firm on its fundraising and admission to AIM.

Partner Charles Bond led a team assisted by David Brennan, Dominic Prentis, Donna Fitzpatrick and Sophie Cooke.

Mr Bond said: “Hummingbird has made notable progress through it exploration of Eastern Liberia and is now in a position to take its projects to the next stage of exploration and drilling. Its admission to AIM will provide the additional capital to allow the company to realise its ambitions.  It’s proof of the talent, enthusiasm and entrepreneurial spirit of a Midlands family.

“There is renewed optimism surrounding AIM and this latest admission represents further interest in the market from basic materials companies. Our pipeline suggests that this trend will continue into 2011.”