Hummingbird Resources

New resource figures from West Africa gold play Hummingbird's (HUM) Dugbe project in Liberia could suggest a potential three million oz or thereabouts.

The new resource, expected within a fortnight, should reflect drilling results from the project's Tuzon prospect and so add significantly to an existing estimate of 1.8m oz at 1.2 grammes of gold per tonne of ore for the Dugbe F prospect.

Recent drilling results from Tuzon have shown intersections ranging from 14.67 metres with 2.54 grammes a tonne to 22.98 metres at 1.56 grammes a tonne. The grades are low, but so are anticipated eventual extraction costs, which the company puts at between $500 and $600 an ounce, compared with gold's current market price of more than $1,600 an ounce.

Hummingbird – chaired by former Gold Fields boss Ian Cockerill and steered by managing director and co-founder Dan Betts – says its licence area in the Dugbe Shear Zone in eastern Liberia (part of West Africa's gold-rich Birimian Craton) contains several other prospects, with similar potential to those already drilled. The London-based company also has a 50-50 iron ore joint venture in the area, 15 km from a railway, with another company, Petmin, of which Cockerill is executive chairman.

Hummingbird raised £30.1m at 167p, £25.5m of it for the company, when it floated on AIM at the end of 2010. Betts and his colleagues had been probing virgin gold prospects in previously strife-torn but now notably mining-friendly Liberia since 2005. The company still has £12.5m in the bank and its declared aim is not to sell off its projects or itself, but to become a mining company, though perhaps with partners.

The shares have mostly traded below their float price, fluctuating between 169p and 103p over the past year. Highlighted by Growth Company Investor in November at 126p, they have now reached 136p and should make further progress.