Corica Mining Services on Wednesday accused Hummingbird Resources PLC of ‘substantial breaches’ of contract, including failure to pay for its work at the Kouroussa gold mine.
Shares in Hummingbird plummeted 28% to 5.79 pence on Wednesday afternoon in London.
Hummingbird, a gold producer with operations in Mali, Guinea and Liberia, said on Monday that Corica had suspended mining operations at the mine in Guinea due to ‘various contractual disputes’.
Hummingbird said Corica’s actions were ‘a clear breach of the mining contract’, and alleged that Corica ‘failed to meet mining contract volumes due to delays in mining equipment mobilisation, commissioning, and overall operating performance’.
It said it had issued a notice instructing the Africa-focused company, its principal contract miner for Kouroussa, to resume mining by Tuesday. Hummingbird added that it would resume operations itself, or work with alternative contractors, if Corica did not comply.
On Wednesday, however, Corica said that since the start of mining operations in September 2022, Hummingbird had committed ‘substantial breaches’ under their contract.
It said Hummingbird had ‘failed to make payments to Corica for mining services performed’ and ‘failed to provide a company deed of guarantee, the provision of which is an express term of the contract’.
Corica said its unpaid invoices to Hummingbird totalled approximately $27 million for work completed at Kouroussa.
‘Each of these substantial breaches of the contract gives rise to a separate and express right for Corica to suspend work at Kouroussa,’ the company added.
It said any recommencement of works at the gold mine was conditional on Hummingbird paying all invoices due to Corica, and providing a company deed of guarantee, within 28 days. This period commenced when Corica issued Hummingbird with a formal notice of the work suspension on Monday.
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