Resolute raises major funds

PERTH (miningweekly.com) – Gold miner Resolute Mining will raise A$150-million through a share placement to fund long-life production growth.

The ASX-listed company said on Tuesday that it would place a minimum of 76.5-million new shares, priced at A$1.96 a share, to raise the funds. The placement price represented a discount of 10.5% to the company’s last closing price, and an 11.1% discount to the five-day volume-weighted average price.

MD and CEO John Welborn said that the placement provided the company with the strength and flexibility to achieve current project development ambitions.

“Few gold companies have the genuine capacity and optionality to fully fund growth of scale across multiple quality assets, while preserving a conservative balance sheet.

“During the 2016 financial year, Resolute applied extraordinary discipline to reduce debt, generate cash and progress three major feasibility studies, which have vitalised our assets, our people and our company. A priority has been Resolute’s flagship project, the Syama gold mine in Mali.”

Welborn said that construction of the Syama underground project started in July this year, and is expected to deliver a highly profitable mine, with a life beyond 2028, total site production of up to 250 000 oz/y, and all-in sustaining costs of $881/oz.

“Resolute has committed to fully fund the $95-million capital demands of the Syama underground project over the next 18 months from existing cash reserves and ongoing operational cash flows.”

Meanwhile, funds from the placement will also be used to advance the development of the Ravenswood extension project, in Queensland, and for drilling and evaluation activity at the Bibiani gold mine, in Ghana.

Resolute recently revealed that the Ravenswood expansion project feasibility study estimated that average yearly gold production of 120 000 oz could be achieved, with the capital investment tipped at A$134-million for prestripping, and staged processing plant expansion to five-million tonnes a year from the 2.8-million-tonne-a-year capacity at the end of October this year.

Welborn said that while Resolute had identified a viable pathway to production at the Bibiani mine, the company’s ambition for the asset was to deliver a mine life of more than ten years, at a globally competitive all-in sustaining cost.

“To achieve this, further exploration drilling is required with the aim of expanding our reserve base and building a bigger project. The placement provides an additional A$15-million to advance our exploration agenda at Bibiani.”