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Hummingbird: Mali to increase Yanfolila gold project stake to 20%

Hummingbird Resources Plc said Feb. 2 that the government of Mali has agreed to increase its interest in the Yanfolila gold project to 20%

The government exercised its option to acquire an additional 10% interest in the project through the acquisition of a stake in the company's Société des Mines de Komana SA subsidiary, which holds the Yanfolila project, for about US$11 million.

Mali already holds a 10% free carried interest in Yanfolila.

The first installment of US$1 million payable by Mali will be satisfied in settlement of an equivalent sum owed by the company to the government in respect of historical costs, while payment terms for the balance are expected to be agreed in due course.

Additionally, Hummingbird noted that the agreement will enable it to proceed with issuing the government its 10% free carried shares, which are non-dilutable and carry the right to a priority dividend.

The government also secured the right to appoint two directors to the company's board.

The key terms of the fiscal regime for Société des Mines also include a 3% royalty, tax rate of 30% after deduction of depreciation, recovery of historic costs, carry forward losses, and a value-added tax holiday for three years after the start of production.