Hummingbird Resources is very much a newcomer as far as Aim-traded junior exploration companies are concerned, as it listed earlier this year at a time when investors were being jolted by predictions of a commodity downturn from various „advisors‟ and were turning their backs on the mining sector. This had an exaggerated impact on Aim-traded juniors where liquidity was limited. On the basis that every cloud has a silver lining, if not gold or copper, now is a good time to take a look at such companies, as there is hidden value around. In the case of Hummingbird, it listed on the potential of its gold assets in the east of Liberia and not too much notice was taken of the joint venture that it has put together with Petmin to explore for iron ore on the Mt Ginka Ridge in the north.
This project can no longer be overlooked, though, as a helicopter-borne aeromagnetic and radiometric survey has now been completed which has helped to identify the extent and nature of the deposit. Mt Ginka is similar to the Mbanga deposit discovered by Sundance Resources in Cameroon, and to other deposits in Brazil. That bodes well, but in bulks infrastructure is almost as key as geology, and here Hummingbird has an advantage which investors seem not yet to have picked up on.
Mt Ginka is only 40 kilometres east of BHP Billiton‟s Mount Kitoma iron ore exploration project, and 20 kilometres south of Arcelor-Mittal‟s Yekepa project, which contains the Mount Nimba iron ore mine. More to the point, it‟s only 15 kilometres from a railway line which connects this iron ore region to the newly refurbished deep water port of Buchanan. To cap it off, road access is easy.
The aeromagnetic survey proves the existence of a continuous magnetic unit, interpreted as iron formation, extending along strike for about 20 kilometres. It has a surface width of between 150 metres and 250 metres and extends to around 1,000 metres down dip. The joint venture company owned by Hummingbird and Petmin is called, most appropriately, Iron Bird, and it has started a programme of trenching, mapping and drilling to obtain samples for metallurgical testwork. At the moment Hummingbird holds 85 per cent of Iron Bird, but once Phase 1 of the work programme has been completed Petmin can invest another US$1.5 million in Iron Bird and then they will each have a 50 per cent interest and will fund accordingly.
Dan Betts, chief executive of Hummingbird, is clearly excited by the findings. “We always knew it had plenty of potential, as Mount Nimba, only 20 kilometres to the north, produced between 12 and 24 million tonnes of direct shipping ore between 1964 and 1989. To qualify as direct shipping ore it has to be high grade – probably better than 50% iron – and we have taken surface grab samples ranging in grade from 33% to 54% iron.”
The likely sources of the magnetic signatures picked up by the survey are lenses of Archaean magnetite itabirite. These lenses were first mapped at Mount Ginka by the US Geological Survey back in the 1970s. Now a decision will have to be made, once the metallurgical testwork is finished, as to whether a commercially saleable magnetite concentrate can be produced at a profit. Jan du Preez, chief executive of Petmin, has already made clear that his company is ready to fund Stage 2 of the programme.
Back to gold, where Hummingbird‟s most advanced exploration has taken place in the Dugbe, Joe Village and Zia licence areas in the highly prospective Birimian sequence in the east of Liberia. The Dugbe F project already has a resource estimate of 20.9 million tonnes at 1.82 grams per tonne gold to give 812,000 ounces, and two thirds of this is in the indicated category. Last month further assay results were announced from drilling which extended the area of known gold mineralization. The drilling took place along the Dugbe Shear Zone and is the first to take place within the Joe Village licence which runs alongside Dugbe. One intersection of 3.13 metres at Joe Village graded 6.82 grams per tonne gold, but most of the other intersections were longer, but of a more modest grade. The great thing, as far as Dan Betts is concerned, is that the Dugbe F structure continues into Joe Village. The likelihood now is that there will be a significant uplift in the resource by October.
At Minesite we expect a bit of sense to return to the junior mining sector by September when investors, retail and professional, have returned from their summer holidays. At that stage it will be timely then for them to reflect on the fact that Hummingbird is involved in the two sectors most appropriate for Liberia – gold and iron ore. In our original note on the company we mentioned that African Aura had recently spun off Aureus Resources to make its own fortune in that country under the leadership of Dave Reading. Its successes will focus attention on Hummingbird, which will also benefit from the activities of the big boys in iron ore. Time for a bit of patience, but it should be well worth it.
© 2009 Petmin Limited