RESOLUTE Mining would meet its minimum debt repayments this year despite running into complications regarding the sale of its Bibiani mine in Ghana.
The UK- and Australian-listed gold producer expected to bank about $105m from the sale before the Ghanaian government terminated the mining lease earlier this month.
Proceeds from the sale – to China’s Chifeng Jilong Gold Mining Company – were to be used to accelerate the deleveraging of the firm’s balance sheet, said Stuart Gale, interim CEO of Resolute Mining, in an announcement today.
The company also reiterated production, cost, and capital expenditure guidance for the year and said that it expected “robust operating cash flow generation”. Gold production is estimated to be between 350,000 to 371,000 ounces this year.
Resolute added it expects to generate sufficient operating cash flows to support debt repayments of $50m in 2021 including the early repayment of $25m over and above the minimum debt repayment obligations of $25m which are due in September 2021.
Net debt as of December 31 stood at $230m, a 28% year-on-year reduction, after taking into account cash and bullion of $106m.
Resolute said it continued to “… work through all options” in resolving the surprise development ahead of completing the sale.
Shares in Resolute Mining touched a 12-month low on Tuesday when it traded at 44 Australian cents per share. Today’s announcement has helped restore a mote of vim to the share price which is trading nearly 5% higher.