AUSTRALIAN-listed gold producer, Resolute Mining, has approved the $95m extension of its 80%-owned Syama gold mine in Mali which will increase production a quarter to 250,000 ounces a year.
Current production of 200,000 ounces annually is from an open pit operation. The increase in production will be through development of an underground mining which descends to a maximum depth of 600 metres, the company said following publication of a definitive feasibility study today. Underground development is due to begin immediately with first ore to be delivered to the mill in December.
The underground mine has an initial operating life of more than 12 years and all-in-sustaining costs of $881/oz. There was “strong potential for further extensions and enhancements,” it added.
The extension will be funded internally from current balance sheet and future operating cash flows. Earlier this month, Resolute removed some expensive debt off its balance sheet with the conversion and redemption of $15m in convertible notes which were due in 2017.
“Syama is the production and cash flow engine of the company and we can now proceed with confidence in building a long life underground mine that will provide a base for further growth in our business,” said John Welborn, MD and CEO of Resolute.
In addition to the expansion at Syama, Resolute Mining has completed a feasibility study for its Bibiani gold mine, situated in Ghana which will cost $75m in start-up capital, and produce a further 100,000 oz/year of gold over five years. It is due to begin first production early next year.
Resolute, which has seen its share price double in three months to A$1,28/share, is also due to begin open cut mining from its Ravenswood gold mine in Queensland, Australia.
“Syama will remain Resolute’s flagship mine and will achieve our ambition of it becoming a 250,000 ounce per annum producer in its own right,” said Welborn.
