Resolute Mining Limited (ASX:RSG) has forward sold an additional 35,000 ounces of gold at an average price of A$1,728 per ounce with scheduled monthly deliveries of 5,000 ounces between June 2019 and December 2019.
The company has taken advantage of strength in the A$ gold price to extend its gold hedge position supporting the Ravenswood Expansion Project in Queensland.
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The average gold price received in the forward sales contracts of A$1,728 per ounce is at a premium to Resolute’s budgeted gold price for Ravenswood Gold Mine of A$1,700 per ounce.
The objective of this hedging is to protect project returns during the staged development phase of the new 14-year mine life of Ravenswood.
Resolute’s development phase at Ravenswood will see underground mining at Mt Wright come to an end during the current financial year and the operation transition back to large scale open pit mining.
The new A$ hedging is in addition to the company’s remaining forward gold sales program of 50,000 ounces.
Resolute’s total gold hedge book as at October 5, 2018, including today’s new A$ gold hedges, consists of 85,000 ounces in monthly deliveries out to December 2019 representing less than 20% of its expected gold production over this period.
Resolute managing director and chief executive officer John Welborn said: “We actively manage our gold sales and hedging strategies to take advantage of gold price volatility, maximise revenues, and protect the company’s balance sheet.
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“Establishing forward gold price certainty for a limited portion of our near-term production during periods of capital intensive development at levels above our budgeted gold price protects and supports the company’s future cash flows and project returns.
“With long mine lives, large gold inventories, and an industry leading production growth profile, Resolute remains strongly leveraged to future upside in gold prices.”