Gov’t Signs US$100M Mineral Agreement

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(L-R) Hummingbird President_web.jpg

The development of the Dugbe Gold Mine in Sinoe County, accelerated with the government yesterday signing a 25-year Mineral Development Agreement (MDA) with Hummingbird Resources-Liberia, a subsidiary of Hummingbird Resources Plc (HUM).

At yesterday’s signing ceremony in Monrovia, the government of Liberia (GOL) was represented by the Chairperson of the National Investment Commission (NIC), Etmonia David Tarpeh, and representatives of the Inter-Ministerial Concession Committee (IMCC), which included the Ministers of Lands, Mines and Energy, Finance and Development Planning, Justice, and Hummingbird Resources Liberia Incorporated.

Before she affixed her signature to the Agreement, Madam Tarpeh expressed the hope that the signing will restore investor’s confidence in doing business with Liberia.

She recalled how the Ebola outbreak in March last year had serious effects on the country’s economic activities with declines in the Gross Domestic Product (GDP), foreign direct investments as well as slowing domestic growth.

Madam Tarpeh disclosed that according to the Agreement, Hummingbird Resources will create over 200 direct jobs and invest in excess of US$100 million over 25 years.

“It is also expected to begin implementation as soon as practicable after the MDA is ratified by the National Legislature and published in handbills,” Madam Tarpeh asserted.

She said thereafter, as necessary, HUM will no later than the first anniversary following the first commercial production, upgrade the existing road between Greenville and Dugbe to a two lane road for general public use with capacity for handling heavy traffic.

According to her, the company, subject to demand, will generate and sell at cost ten percent of its electric energy to the government for the community’s use.

She expressed gratitude to the chief executive officer of the company for the opportunity and hope that they will work together to ensure that both parties meet up with their obligations.

Stephen B. Dorbor, Deputy Lands, Mines and Energy Minister, said historically, Liberia’s economy heavily depends on the mining industry with concentration on iron ore.

With the MDA, he said it became clear to him that Liberia is diversifying its mining industry from iron ore to other products, primarily gold.

Minister Dorbor assured Hummingbird of government’s commitment to the mining industry and other mineral agreements.

He said at the ministerial level, the current mining law, which is intended to protect the interests of investors as well as Liberians, is being reviewed.

The president and CEO of the company, Daniel E. Betts, acknowledged NIC as well as those officials who supported his company during the process leading to a final negotiation.

Mr. Betts told the gathering that his company will uphold its commitment to provide basic services to the people of Sinoe and the government as stipulated in the Agreement.

“This is a commitment that we will honor and look forward to building a strong and vibrant working relationship with the people of Sinoe,” Mr. Betts said.

Sinoe County Senator J. Milton Teahjay, told Mr. Betts that as soon as the ratification process is concluded by Lawmakers, the people of Sinoe will be propelled to work with his company.

He expressed the hope that the Betts management will abide by the Agreement by keeping to the terms, “because we don’t want to experience another Butaw in Sinoe where Golden Veroleum-Liberia (GVL) is operating.”

The Agreement also indicated that following the ratification and publication of the Agreement into law, HUM will pay a signature fee of US$1.5 million to the GOL, and thereafter, pay US$1.5 million on the granting of the Mining License.

On an annual basis, commencing on the first anniversary of the effective date of the Agreement, HUM will make an annual contribution to the government to go into a social fund for the affected communities. During years one and two US$100,000; years three and four, US$150,000, years five to ten US$200,000 in annual contributions to the social fund and 11 years and onward US$250,000 throughout the life of the agreement.

The company will also pay all other taxes and duties as set out in a fiscal agreement between the GOL and HUM.

In keeping with the government’s Economic Recovery Plan (ERP), the government has ensured that the MDA socially obligates HUM to, among other things, give first priority to qualified Liberians in terms of employment, help improve access to education and health care, give preference to Liberian suppliers in terms of procurement and obey the environment laws of Liberia.

Founded in late 2005, Hummingbird Resources is a West African gold explorer and developer (AIM: HUM), which was listed on AIM in December 2010. Since IPO the Company has significantly grown its initial resource from an initial 0.8Moz to 4.2Moz at its Dugbe 1 Project with the acquisition of Gold Fields and gold assets in Mali. Hummingbird is now a multi-project, near-term producer with a 6Moz gold resource and 5,000 km2 of exploration ground.

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