RESOLUTE Mining has extended its forward sales to a total of 177,800 ounces for 2020, equal to about 44% of total production assuming 400,000 oz implied by the firm’s third quarter operating numbers.
“Incremental expansion of our US dollar hedging position at current levels which are significantly above our budgeted gold price, protects and supports Resolute’s revenue and cash flow,” said John Welborn, CEO of Resolute.
“Resolute’s active gold sales program and discretionary near-term hedging protects the company’s balance sheet and supports our revenue and cash flows,” he said. Shares in Resolute were 3.6% higher on the Australian Stock Exchange today.
Gold gained $10 to just over $1,540 ounce, hitting a four-month high in evening US trade after news broke that the US government killed Iranian senior commanders in a Bhagdadi air strike in Iran. According to reports US president, Donald Trump, ordered the attack.
The head of Iran’s elite Quds Force, Major-General Qassem Soleimani, was killed after a US air strike on his convoy, which was leaving the Bhagdad airport, according to reports confirmed by Iranian officials.
Resolute said today it had sold forward an additional 22,800 oz at an average price of $1,553/oz in scheduled monthly deliveries of 3,800 ounces between July 2020 and December 2020.
Despite the sales, Welborn said the company remained open to further improvements in the spot price of gold. “With long mine lives, large gold inventories, and an industry leading production growth profile, Resolute remains strongly leveraged to future upside in gold prices,” he said.
Resolute’s existing US dollar forward gold sales program consists of 55,000 oz of gold forward sold at an average price of $1,510/oz in scheduled monthly deliveries of 5,000 oz per month from February 2020 through to December 2020.
Resolute’s total gold hedge book as at 3 January 2019 consists of 177,800 oz in monthly deliveries out to December 2020 representing less than 3% of Resolute’s ore reserves, the company said.