Liberian Govt., Hummingbird Sign US$250m Gold Mining Deal
The Government of Liberia and Hummingbird Resources Inc. have signed a Gold-Mineral Development Agreement worth over US$250million to develop the largest gold mine in the Southeast and Liberia at large.
On January 10, the Government represented by the National Investment Commission (NIC), Ministries of Finance & Development Planning; Lands, Mines & Energy and Justice, and Hummingbird Resources Inc. signed the 25-year Mineral Development Agreement-Gold (MDA-G) to develop the largest gold mine in the South-Eastern region.
Hummingbird acknowledges that it has successfully defined about 3.8Moz at 1.24g/t Au, making the project the largest gold discovery in Liberia’s history, a statement from the National Investment Commission (NIC).
The Government, represented by the Inter-Ministerial Concession Committee (IMCC) headed by the Chairman of the NIC, Molewuleh B. Gray, believes that the signing of this agreement is critical and a highly positive development for the economy.
Other Government representatives of the IMCC included the Office of Legal Advisor to the President, the Minister of Lands, Mines & Energy, Minister of Finance & Development Planning, and the Minister of Justice.
Hummingbird Resources was represented by its Chief Financial officer, Mr. Tom Hill.
Hummingbird Resources Inc. is a UK-based Gold Mining Company with operations in Mali and Liberia.
Founded in late 2005, Hummingbird Resources is a West African gold producer, developer and explorer (AIM:HUM), which is listed on AIM in December 2010.
Since Initial Public Offering (IPO), the Company has significantly grown its global resource inventory from an initial 0.8Moz to 6.4Moz across two countries, Mali and Liberia.
In 2018, the Hummingbird Resources Inc. agreement was re-negotiated by the Inter-Ministerial Concession Committee through thorough due diligence, analysis, and evaluation of the MDA proposal.
The signing of the agreement concludes the review and re-negotiation for this MDA.
The Hummingbird project will operate across Sinoe, Grand Kru, River Gee and Maryland counties and directly benefit these counties as well as bring further benefits to other counties in the southeast which have been isolated in terms of economic activity.
Significantly, the southeast corridor will be linked to the rest of the country and its people will share in the economic growth and development of Liberia, something which has been lacking over the years.
Through improved education, road connectivity, gainful employment, and access to opportunities for development for those in the southeast will be much improved.
Following ratification and publication of the agreement into law, Hummingbird will pay a signature fee of US$3 million to the Government of Liberia, with US$1.5 million to be paid within 15 days of the effective date and thereafter, US$1.5 million to be paid on the granting of the Mining License.
A Royalty of three percent (estimated to bring in millions of dollars in revenue) is given to the Government of Liberia on gold revenues.
Additionally, the agreement allows 10% percent shares for Liberians.
Hummingbird will also pay all other taxes and duties as set out in a fiscal agreement between the GoL and Hummingbird.
In keeping with Government’s Pro-Poor Agenda, it has ensured that the MDA socially obligates Hummingbird to, among other things, give first priority to qualified Liberians in terms of employment, to help improve access to education and health care, give preference to Liberian suppliers in terms of procurement, and obey the Environmental Laws of Liberia.
The key benefits as of the Hummingbird Agreement, include jobs. Over 1,000 direct jobs and around 2,500 indirect jobs.
All unskilled jobs will be given to Liberians while preference will be given to qualified Liberians for skilled labor positions.
Under roads and infrastructure, Hummingbird will upgrade the existing road from Greenville to Dugbe to two-lane laterite road for general public use with capacity for handling of heavy traffic to be completed no later than first anniversary following first commercial production.
Hummingbird will maintain and where appropriate rebuild to extend existing roads within exploration area and will construct a two-story permanent building as corporate headquarter in Sinoe County.
Hummingbird will also help to develop, upgrade and maintain the Port of Greenville.
Based on the education component of the agreement, Hummingbird will invest US$50,000 per year for high school and university scholarships to Liberians in the production area and US$75,000 per year for the environmental science department of the Tubman University.
The mining company will also pay US$50,000 one-time contribution, to both the scientific research and mineral development funds, respectively.
Social Development Contribution from the company will be on an annual basis, commencing on the first anniversary of the effective date and Hummingbird shall make an annual contribution to the Government through a Community Development fund for the affected communities.
It shall be as follows: Year 1-4: US$100,000 for Sinoe County; US$100,000 for Grand Kru; US$50,000 for River Gee and US$50,000 for Maryland County, while Year 5-10 will be US$200,000 for each Production Area, and Year 11 and onward US$250,000, throughout the term of the agreement.
The Chairman of the NIC, Molewuleh B. Gray, pledged his support to ensuring that investors are attracted to Liberia so as to enhance the Government’s Pro-Poor Agenda for Prosperity and Development (PAPD).
The Chairman reiterated his commitment during the signing of the agreement, indicating that the aligning of the agreement is the “beginning of brighter days for the people of the southeast” as the Hummingbird project will bring many key benefits to the Southeastern region of Liberia in support of the Government’s PAPD.