SHARES in Resolute Mining were 12% higher in Sydney on Wednesday following the publication of the firm’s second quarter results in which it affirmed full-year gold production guidance of 430,000 ounces for the 2020 financial year.
Today’s improvement means Resolute has gained just over 20% in the last week taking the company to a new 12-month high, and its highest valuation since October.
Production for the June quarter came in at 107,184 ounces (Q1: 110,763 oz), produced at an all-in sustaining cost of $1,033/oz ($1,107/oz). The lower production was partly a result of having sold Ravenwood, an Australian mine that last quarter registered just over 11,000 oz for the company.
Cash and bullion held at the end of the quarter on June 30 was slightly lower at $87.5m compared to $95.5m at the close of the previous quarter.
Resolute said that it would target debt reduction in the second half of its financial year. The company had gross debt of $307m and net debt of $220m.
The company is benefiting from the improvement in the dollar gold price but it is also limited to some extent by a hedging programme. In terms of prior funding obligations, Resolute must sell forward 30% of production for 18 months, about 213,000 oz.
Gold sales of 110,660 oz were dispatched for $1,446/oz. Since March, 60,000 oz has been hedged at $1,744/oz for delivery between July and November. The balance of production is fully exposed to the spot gold price, currently over $1,800/oz.
The coming quarters will feature a life of mine plan for Syama and a pre-feasibility study for the development of an underground mine at Syama’s Tabakoroni section. A study on the future viability of the currently mothballed Bibiani in Ghana is also underway.
John Welborn, CEO of Resolute, said employees deserved credit for battling through conditions created by the Covid-19 pandemic. “Congratulations and thanks are due to Resolute’s people for their dedication and commitment during a period of unprecedented uncertainty associated with the COVID-19 pandemic,” he said.
“I am particularly pleased with the performance of the Syama Underground Mine and Syama Sulphide operations during the June quarter where we produced 35,248 oz of gold based on achieving our targeted mining and processing outcomes including an improved overall recovery rate of 80%,” he said.
“We expect to continue to improve production and deliver lower costs at Syama in the second half of 2020 while we evaluate further value enhancements and exciting exploration opportunities,” he said.
