London - Hummingbird Resources, owner of gold exploration licenses in Liberia, agreed to acquire Gold Fields’s Yanfolila project in Mali for $20 million (R215 million) in stock.

Gold Fields will become Hummingbird’s largest shareholder after the transaction, with a 26 percent stake, the London-based company said in a statement today.

Johannesburg-based Gold Fields has been cutting costs and focused on generating cash after spinning off three mature and profitable South African mines to create Sibanye Gold last year.

“This acquisition will transform Hummingbird from a single-project company into a multi-project, near-term producer,” Managing Director Daniel Betts said in the statement.

“Hummingbird’s strategy has always been to create a mid-tier gold company that has a portfolio of assets encompassing exploration, development and production and this is a major step to fulfil that ambition.”

Hummingbird is seeking to start production next year at its Liberian project, which has 4.2 million ounces of gold resources.

Betts, who has a family business in Birmingham, England, that has been refining gold for 250 years, aims to have annual production of 200,000 ounces with a mine life of about 15 years.

About $100 million has already been invested at Yanfolila in Mali, which has a 30-year mining license with 1.8 million ounces of gold inventories, according to the statement. - Bloomberg News