JOHANNESBURG (miningweekly.com) – Gold miner Resolute Mining has hedged 72 000 oz of gold to take advantage of the recent strength of the Australian dollar gold price.
The miner, which operates the Ravenswood mine in Queensland and the Syama mine in Mali, forward sold the gold at an average price of A$1 715/oz, which is a significant premium to the company’s budgeted gold price of A$1 600/oz.
The aim of the hedge is to protect project returns during the development phase of the Ravenswood expansion project. Resolute is transitioning to openpit mining at Ravenswood as underground operations at Mt Wright comes to an end.
“Our development plans at Ravenswood are supported by Australian dollar revenue and exposed to Australian dollar costs. Establishing a forward Australian dollar gold price for a portion of our production during the capital intensive development phase at levels significantly above our budgeted gold price provides additional certainty to the company’s future cash flows and project returns,” MD and CEO John Welborn said on Friday.
Resolute previously established a forward sales programme of 84 000 oz at an average price of $1 330/oz to support the Syama underground mine development programme.
Combined with the existing US dollar forward sales contracts, the group’s total hedged position represented about 30% of its expected gold production over the next 18 months.
Edited by: Creamer Media Reporter
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