RESOLUTE Mining trimmed production guidance for 2020 to between 400,000 and 430,000 ounces after the company avoided a proposed 10-day strike at its flagship Syama mine in Mali.
Syama accounts for about two-thirds of Resolute’s annual production with the balance mined at the Mako gold mine in Senegal.
The Sydney- and London-listed gold producer said in an announcement today that a proposed strike had been cancelled, but some 15,000 oz in gold production had been lost in the third quarter as a result of stoppages.
All-in sustaining cost (AISC) of between $980/oz and $1,080/oz was forecast for the year which compares to second quarter AISC of $1,033/oz (March: $1,107/oz).
A “conciliation agreement”, signed between Resolute’s local subsidiary, Société des Mines de Syama S.A. (SOMISY), and the mine’s union, Union Nationale des Travailleurs du Mali (UNTM), would evaluate and support measures “… that SOMISY believes are required in response to COVID-19 and current economic conditions”, said Resolute.
Shares in the company recovered by nearly 5% in Australia today after receiving a knock last week. The market values Resolute Mining at just over A$1bn.
The UNTM has agreed to be “… involved in identifying solutions and has cancelled proposed strike action at Syama,” said Resolute but the company warned there could be no guarantees.
The lower guidance, which compares to the firm’s July forecast of 430,000 oz, was also influenced by potential impact of sanctions imposed by the Economic Community of West African States (ECOWAS).
The sanctions related to political developments in the country that resulted in the resignation in August of Mali president, Ibrahim Boubacar Keita, following a period of civil disruption and violence.
Keita has been replaced by the country’s former minister of defence, retired colonel Bah N’DAW as interim President, who was sworn in on September 25. N’DAW will run Mali for a maximum of 18 months in which time elections are to be held.
ECOWAS had previously agreed to normalise relations with Mali on the provision formal elections take place within 18 months and the transitional arrangements include civilian rule and confirm maintenance of Mali’s constitutional democracy, said Resolute.
“Consistent with previous announcements, operations at Syama have not been impacted by recent political events,” the company said.
“Resolute will continue to monitor the progress of the new transitional government including the potential impact of ECOWAS sanctions which, if sustained, may have an impact on supply links to and production at Syama,” it added.