- Syama Gold Project in Mali is Resolute’s flagship project, a mine it expects to fully automate this year and then power with solar energy by next year
- A record quarterly production of 84,552 ounces of gold was produced at Syama in the March 2019 financial quarter, a 50% increase
- Total gold production for the company in March quarter 2019 was 98,105 ounces, a 33% increase
What does Resolute Mining do?
Resolute Mining Ltd (ASX:RSG) (FRA:RSM) (OTCMKTS:RMGGF) is a gold producer in Africa and Australia that is focused on long-life mines. It is run by John Welborn, an investor and chartered accountant who is a director of the World Gold Council. Welborn was previously head of specialised lending in Western Australia for Investec Bank (Australia) Ltd.
The managing director & CEO serves on a number of boards, including Orbital Corporation Limited’s (ASX:OEC) (OTCMKTS:OBTEF) (FRA:OREA), where he is chairman.
He is also a director of Equatorial Resources Ltd (ASX:EQX) (FRA:PBU) and Kilo Goldmines Ltd (CVE:KGL) (FRA:02K1).
What does Resolute Mining own?
Key assets are the company’s flagship Syama Gold Project in Mali, West Africa; Ravenswood Gold Project in Queensland, Australia; and Bibiani Gold Project in Ghana.
Syama and Ravenswood are both producing assets, with the company's total quarterly gold production of 98,105 ounces in the March quarter of 2019 being an increase of 24,414-ounces, or 33%, on the December quarter of 2018.
The company reported on Monday that strong operating performance and cashflow generation had allowed it invest in growth activities during the quarter without further drawdown of debt facilities.
Resolute's 80%-held Syama project is 30 kilometres from the Côte d’Ivoire border and 300 kilometres southeast of the Mali capital Bamako.
The company holds its stake through Societé des Mines de Syama while the Malian government owns the remaining 20% stake.
Commissioned in December 2018, the project has two fully operational parallel sulphide and oxide processing plants with the site capable of producing more than 250,000 ounces a year.
In March quarter 2019 production ounces at Syama were increased by about 50% to 84,552 ounces, with 13,336 of those ounces from Syama Sulphide operations.
Syama oxide operations meanwhile produced a record 71,186 ounces in the quarter.
Ore mined underground at Syama increased 45% to 244,396 tonnes.
The company reported on Monday: “Strong performance from the oxide operations has supported a decision to prioritise infrastructure, development, and the automation implementation program at the Syama Underground Mine during the March 2019 quarter.
“The focus on development has resulted in a more modest increase in underground ore production.”
The revived mine is expected to reach a world-first full automation status by September quarter of 2019 and be powered by a hybrid solar grid which will be operational in 2020.
Underground mine ramp-up at Syama is also now targeted for September quarter 2019.
Ravenswood mine in Queensland produced 13,554 ounces of gold in March quarter 2019, a 22% decline on December quarter 2018 put down to local weather and limited Mt Wright ore supply.
By February 2019, Resolute's total investment in exploration and discovery at its projects had been $193 million since 2010, with its historical cost calculated as $33 per reserve ounce and $19 per resource ounce.
Its ore reserve was 5.8 million ounces of gold while its resources were 16.6 million ounces after accounting for mining depletion and additions due to exploration.
Ravenswood has the most managed ore reserves, with 69.88 million tonnes grading 0.8 g/t for 1.73 million ounces, while Bibiani has the highest grading with 6.4 million tonnes grading 3.3 g/t for 660,000 ounces.
Syama is a close second on the ore-reserve grading front, with 42.41 million tonnes grading 2.5 g/t for 3.41 million ounces.
The global mineral resources of 16.6 million ounces corresponded to incremental resource increases at Ravenswood’s Buck Reef West and Syama, with managed mineral resources at the three projects of 15.2 million ounces of gold, and attributable mineral resources from equity investments of 1.4 million ounces.
Ravenswood had 30,000 ounces of forward-sold gold in the December quarter of 2018 at an average price of A$1,887 an ounce.
The spot gold price overnight was $1,309.55 an ounce (A$1829.43).
Annual production of 300,000 ounces a year at Syama at a US$746 an ounce all-in sustaining cost (ASIC) will help put the company on a path to 500,000 ounces.
Yearly production at Ravenswood for the target is 115,000 ounces a year at a US$823/ounce AISC while Bibiani’s target is 100,000 ounces a year at a US$764/ounce AISC.
Resolute has been planning a London Stock Exchange listing this year.
The company had December 31, 2018 with A$117 million cash, bullion and listed investments and a further A$134 million in a gold circuit inventory of 74,000 ounces.
Resolute’s next quarterly activities report is expected to be posted on April 30, 2019.
Inflection points
Increased reserves, resources and production at the company’s projects
Continued forward-sells of gold ounces, especially from Ravenswood in Australia
Progress with delivery of fully-automated mining activity at Syama in Mali
Bibiani development and on-boarding in Ghana
Resolute managing director & CEO John Welborn predicts “powerhouse” production
“Syama is becoming the robust, flexible, high-production, low-cost gold mine we have envisaged,” Resolute managing director and CEO John Welborn told the market on Monday.
“Syama will be a powerhouse of gold production for Resolute for many years to come.
“Underground ore production will continue to ramp-up.
“Importantly, we have provided the team additional time to optimise and commission the most advanced underground mining automation system in the world.”
Resolute managing director & CEO John Welborn will deliver an electrification case study during a renewables in mining session on day 1 of the June 19-20 Energy and Mines Australia Summit at Westin Perth. Welborn will focus on the delivery of low-cost electricity with solar energy and storage during his 11am presentation.