Did Liberia Award Its Gold Mine Field to A Bankrupt Company?


By Yanqui Zaza

Let’s take a break away from the money laundering debate or the source of the $536M loan and focus on the concessionary agreement awarded to “Hummingbird…which currently holds 14 exploration licenses for all minerals, covering over 7,000 square kilometers located within a significant proportion of eastern Liberia…” The Hummingbird Resources concession was one of those proposed agreements which was submitted for approval by former President Sirleaf but was not approved before she left office. Further according to reports, the company is expected to mine about 14 trillion ounces of gold over the 20-yr life span of the project. The World Bank affiliate, International Finance Corporation (IFC), is said to have invested US$8m in the project.

Just like his predecessors, President Weah is faced with the tasks to make a decision between of what Professor, Dr. Nicola Fuchs-Schundeln called “Self-Interest vs. the Common Good.” For instance, did the government award the concessionary agreement to Hummingbird Resources because of Special Interest such as the World Bank, Liberia’s lender and economic adviser? Or, will the government protect the interest of Monrovia-Landlords against the interest of tenants, will the government differentiate some desired bonus payments from bribery; will the government prevent concessionary companies from polluting communities or exploiting Liberia natural resources?


ITEM 2008 2009 2010 2011 2012 2013 2014 2015 2016
(LOSS) <526K> <312K> <1M> <2M> <3M> <3> <3M> <4M> <8M>
ASSETS 3M 4M 15M 52M 51M 62M 97M 109M 139M
CASH 404K 719K 7M 32M 15M 13M 9M 9M 53M

SOURCE: 2008-2016 AUDITED FINANCIAL STATEMENTS. The sign (<>) represents negative amounts, the letter M represents millions of dollars and k represents thousands of dollars.

The combined income statement of each of the nine years did not show any revenue but reported losses. So, why did our government award a lucrative gold mine field to a business that has not generated any revenue from 2008 to 2015, including the year it was awarded the concessionary agreement? More so, it has no information or history on labor issues since it had limited Liberian employees, if any.  Nor does it have a history of honoring environmental laws or a history of paying taxes to a government on time. Did our government receive and review Hummingbird Resources’ revenue projection and cash flow? If not, how did our government determine the economic viability of Hummingbird Resources (Liberia)?

The previous government, which was anti-poor, awarded sweet heart deals, and also instituted anti-poor economic arrangements and, thereby, did not generate adequate resources to finance development programs. In fact, Mr. George Will, a conservative writer of the New York Times, argued that big business wanting to reduce the influence of government bureaucrats usually reduce government revenue, consequently, starving it from funding programs. Well, guess what, if Liberia were to efficiently invest in agriculture, healthcare, housing, education, etc., it would not have become cash strapped.

On the other side of the coin, why would a slave-plantation-type industry such as the Liberian Firestone Rubber Plantation invest in education since it depends on unskilled work force to make more profits? In fact, the American Medical Association, in order to increase its profits, lobbies Congress to limit the supply of physicians and competition from non-physicians, according to a book called “Free to Choose,” authored by Mr. Milton Freidman, Nobel Memorial Prize-winning economist.

Globally, big business usually shifts money away from poor citizens to its rich client as Ms. Saskia Sassen explained in her book called “Expulsion-Brutality and Complexity.” During the 2008 financial crisis for instance, Greek taxpayers bailed out the banking industry and became a $300 billion debt country, primarily because of fraudulent financial assets called derivatives, Ms.  Sassen added. How did Greece become bankrupt? She explained that Goldman Sachs deceptively persuaded Greece to invest into portfolios-portfolios that Goldman Sachs knew were worthless, obligating Greece to reimburse investors for the worthless portfolios.

In the case of Hummingbird Resources, its management can use accounting principles and legal rules to shift money away from Liberia, for example, by increasing Hummingbird Resources-Liberia’s expenses (for instance, royalty expense and management fees). In another example, it could reduce Hummingbird Resources-Liberia’s taxable income by using some portion of the accumulated net operating loss of $24M (i.e., the combined losses from 2008-2016) and some portion of the $6M stock options (future salary) offered to its chief executives.

It is okay to deduct royalty fees, for the parent’s goodwill or patent. However, management should use industry standard royalty rates. Additionally, management fees paid to a foreign parent for work performed on behalf of a domestic subsidiary can be considered as a regular business activity. Again, management should be discouraged from overestimating such expenses.

Did our government learn any lessons from the 66 fraudulent concessionary agreements that former President Ellen Johnson Sirleaf government signed and awarded to profiteers? Did the World Bank, Liberia’s economic adviser, recuse itself, if it were involved in negotiating the Hummingbird Resources concessionary agreement since its 100% owned subsidiary (International Finance Company) is one of the owners? Was Hummingbird Resources incorporated for the sole purpose of mining gold in Liberia since a significant portion of its assets was allocated to Intangible Exploration and Evaluation assets?

Finally, awarding a gold mine field covering 7,000 square kilometers to a company that has zero revenue, and has accumulated over $24M net operating loss from 2008 through 2016, is not a good beginning for the Pro-Poor Government.

Source: Hummingbird financial statements from the years: 2011, 2013, 2015, 2016; as well as the company’s Admission to trading on AIM.


  1. Are begging for a lawsuit by smearing an LSE-listed company? ALL development-stage mining companies have no revenues and incur losses. As Hummingbird’s flagship project Yanfolila entered commercial production in April 2018 and free cash flow expected at around USD 60mn per year, you can expect massive revenues and income for 2018. And this line:
    “the company is expected to mine about 14 trillion ounces of gold over the 20-yr life span of the project.”

    This equals to 700 million ounces per year, which is around seven times the current annual gold production in the WORLD. The Dugbe gold project has total resources of around 4 million ounces, so get your facts straight

    • Berberov, thanks for schooling Comrade J. Nikita Zaza. He’s an avowed socialist, and he’s known for making up stuff (lying) to suit his world view.

  2. Dear Liberian Observer,
    You really need to take down this article and fire the author before you are sued. It’s libel, plain and simple.
    Hummingbird is a London listed LSE company which owns and operates the highly profitable Yanfolila mine in Mali – actually, it’s rolling in cash right now. As the previous poster noted, “14 trillion ounces in gold” is pure nonsense and probably more gold than has ever been mined in all of human history. So far Hummingbird have discovered 4.2 million ounces of gold at Dugbe – a decent amount but not world shattering. It’s not easy or cheap gold to mine, either, so you should be supporting the company in its efforts all you can. It’s not a given that Dugbe will ever be fully developed.
    I’d also note that Hummingbird runs some best-in-class social development projects in Mali, including Water, Health and Hygiene programmes, soap making initiatives and market-gardening initiatives. You’re actually libelling one of the best and most honest gold miners out there.
    Furthermore, you published an article yesterday which claimed a Liberian politician owned 10% of Hummingbird. He doesn’t. By law, Hummingbird’s larger shareholders are publicly disclosed (see Hummingbird website), and nobody (least of all a Liberian politician) owns that much of the company.
    It really is shameful you publish such complete nonsense.

  3. Your article is not factual at all. It is disgraceful for your organisation tl be publishing such non sense. It is very clear that your reporter may have been bribed by vested interests tk write such a disingenous story. You should the article and offer a alolgy to your esteemed readers and tl Hummingbird resources who have recently raised thousands of pounds in charity for conservation causes in Africa. As a contributor to their charitable causes I feel aggrevied at your article. Shame on you.

  4. Hummingbird company may just be another “Shell Company” or “Covert Front” set up by the Sirleaf’s to have a monopolistic control or share on future mining interests in the SouthEast of Liberia.

    The current regime will have to connect the dots or be condemned to remain in the economic strangle hold of the Sirleaf dynasty.

    • Can I suggest you do some basic research? That’s what the internet is for!
      Hummingbird Resources is a London listed public company with a market capitalisation of 110 million pounds and a major operational gold mine in Mali. It is anything but a “shell company”.

  5. “A bankrupt company” ?

    What company is that then ??

    NOT Hummingbird Resources, $41m cash at 31st Dec 2017 and cash flow positive ($60m pa) from Feb 2018.
    Not only have they just build a mine from scratch in Mali but they also hold very high social community values.
    They have shown their credentials and have the skills, contacts and expertise to replicate what they have done in Mali for the benefit of all in Liberia.

    From the 2017 audited accounts …”In addition, it is worth mentioning a few of the community initiatives already accomplished by
    the Company in 2017, which further highlights our commitment to all of the stakeholders and
    communities within our areas of operation. I would particularly like to thank our partners CCI
    (Critical Care International) for their assistance in the roll-out of our healthcare initiatives.
    We have conducted over 1,000 hours of healthcare teaching, with 12 healthcare workers
    reporting to use their newborn resuscitation skills on a weekly basis on infants who would
    otherwise have died.
    We have assessed > 1,000 children for malnutrition, with 159 detected cases being successfully
    treated. We have made a significant contribution to the Malian blood bank and in February we
    proudly contributed 151 units of blood over 3 days. Nationally, the blood bank records an average
    of just 15 donors per day. Company doctors have assisted in several dozen community incidents,
    from road traffic accidents to complex medical problems and birthing issues. We have been
    involved in building the Bougoudale village clinic and are training the necessary staff to run it.
    This is a significant facility that we believe will have a major benefit for the community. In
    education, the Company has made donations to support salaries of 20 teachers in three
    communes. The Company has more than doubled the water supply to Bougoudale, with a
    sustainable solar powered water pump and distribution facility. The Company has built
    sustainable livelihoods for over 300 women across 10 villages working in the now cash flow
    positive soap factory and we will continue to support this further. Looking ahead, the Company
    has committed significant investment to the community development plan which will address the
    five pillars of:
     Water & sanitation
     Community health
     Education
     Food, security & agriculture
     Local economic development “

  6. Honorable Martin Scott,

    I suggest that you visit the balance sheet for each of the tax year. I included some
    of the numbers such as the Total Assets, including cash. So, before you comment
    please visit the income statement and balance sheet from 2008 through 2016.

    I did not use numbers from one year, two years or six years. I took numbers from 2008
    through 2016. If you do not understand, please ask for explanation.


    • Hey Comrade J. Nikita Zaza, I’ve looked at the Hummingbird’s financials (income statements and balance sheets), and here are my conclusions:

      1) Most mineral development companies, like Hummingbird (Dugbe Gold Project), make money by digging the precious metal (gold) out of the ground and SELLING it on the open market.

      2) So far, Hummingbird have discovered 4.2 million ounces of gold at Dugbe. But they haven’t SOLD an ounce yet. Zero. Nothing!

      3) If you look at Hummingbird Financials (income statement) from 2008-2016, you will see that there are NO revenues.

      4) But hey, do you KNOW that it’s “normal” for MINERAL DEVELOPMENT companies, like the Dugbe Gold Project in Liberia, to incur losses the first 7 to 10 years because of the nature of their business (mineral development)??

      5) As noted in a previous posting (Robert George), gold “is not cheap to mine”, but Hummingbird (Dugbe Project) is expected to generate reveunes, once they start selling.

      6) In previous postings, Robert George and Lyudmil Berberov stated the FACTS about Hummingbird, but will that stop you from LYING and taking a socialist perspective in describing the Dugbe Gold Project in Liberia??

      7) Last, but not the least: When will YOU realize that the old Soviet empire, that proclaimed the superiority of central planning and state ownership has FAILED, and failed miserably??

  7. A look at the financials in the article actually shows the company did well since 2008. Remember, a company in this industry usually incur huge expense initially to acquire assets and will eventually breakeven after few years of operation, before realizing a return on investment. If you look at the chart, in 2008, a $526k lose increased 16 times to about $8,416m by 2016. So if assets and cash on hands were to increase comparably, there would’ve been $48m in Assets and about $6,464m in cash. But instead, looking at your chart, they had $139m in Assets (which means they were acquiring assets and investing in labor to meet obligations); that’s 48 times what they had in 2008. And instead of $6,464m in cash, they had $53m. Investors reviewing a company’s financials to determine if they should buy its shares would look favorably at least on these ratios. Of course, other factors would be considered. Public disclosure of publicly traded companies financial and shares ownership are major and significant requirements set by regulatory mandates as investors rely on these information to make major investment decisions. Inaccuracies can result in the firms being sued by investors if they believe they lost due to reliance on false disclosure made by the company. So, I encourage this paper and others to accurately vet their story with appropriate experts and gain proper understanding of industry terminologies used.For example, you called derivatives as fraudulent financial assets. They are not. They are complex financial instruments that are structured to maximize profitability of investment and should be used only by sophisticated investors. The downside is if they are not properly managed. Also, the financial crises of 2008 was mostly due to failure in the subprime mortgage default and the securitization of the mortgages and their subsequent default.


Please enter your comment!
Please enter your name here