IFC’s investment in Hummingbird Resources (LON:HUM) represents a prestigious endorsement of the quality and potential of its gold assets in Liberia, according to broker Shore Capital.
It should also make it easier to obtain debt financing when the time comes to construct a mine, the broker adds.
Hummingbird and IFC, part of the World Bank, announced today they had completed the subscription agreement first announced in August.
IFC has put up £3m for 5.4% of the Liberia-focused gold group, which will be used to move forward the Dugbe 1 gold project.
Hummingbird previously said that the IFC would receive 3.2m shares (5.4% of Hummingbird’s issued capital) at 93p/share, plus half a warrant per share (144.15p/share strike, 5-year term).
Tom Butler, IFC global head of mining, said: "Hummingbird shares IFC's commitment to responsible mining exploration. The Dugbe 1 Project has good prospects and the potential to bring significant future economic benefits to Liberia."
The broker added that Hummingbird is well-funded (US$11.5m of cash in August, before the IFC funding) with large tracts of prospective exploration ground.
Hummingbird has 3.8 mln ounce resource at Dugbe 1 with the potential to delineate much more in various areas over coming months.
Additionally, Hummingbird will benefit from access to the IFC’s socio-environmental expertise, reckons Shore.
House broker Liberum added the investment is a key milestone for Hummingbird as it reduces the need for a dilutive equity fundraise in the near term.
The high standard of the IFC investment checklist also provides comfort on the robustness of the project in regards to licence tenure, technical and environmental due diligence and the relative safety of investing in Liberia, the broker said.
Having the IFC on board also provides future debt financing optionality and will allow the IFC to move at a faster pace in future debt/equity raisings, while giving comfort to other potential lenders.
Shares were little changed at 108.5p.