Resolute Mining Limited (ASX: RSG) has an experience of over 28 years of gold production, development, innovation, and exploration. It has added 8 million oz to its global resources since 2010. Its global mineral resource increased from 8.1 million oz in 2010 to 16.5 million oz in 2018 whereas its global Ore reserves increased from 2.4 million oz to 5.9 million oz in 2018. Its significant and strategic investments have helped it to increase the mine life of Syama, Ravenswood, and Bibiani gold mines.
It has been in the news for quite some time with respect to FY19 indications for Syama DFS update with delivery of more than 300k oz pa at US$960/oz AISC, Ravenswood Expansion Project targeting enhanced throughput capacity, decent shareholder returns with last dividend of 2.0 cents per share and recent strengthening of hedge book with additional forward sales.
As per December quarter updates, the group implemented the forward sale of 30000 ounces of gold via scheduled monthly deliveries of 5000 ounces at an average price of US$1335 per ounce between July 2019 and December 2019. The major objective of this move was to secure a high price of gold before any price fluctuation in future as Syama goldmine is scheduled to meet its capacity in June 2019. This step is an enhancement to the existing hedging program of Resolute for 116000 ounces of gold, where 31000 ounces of gold forward were sold at an average price of US$1256 per oz, and rest 85000 ounces of gold forward were priced between A$1715 per oz and A$1783 per oz.
Resolute’s MD and CEO, Mr. John Welborn lately told the media that they would continue this program of hedging gold to benefit from the gold price fluctuations to increase their revenue and protect the interest of their shareholders. The strategic investments to increase the mine life of their gold mines is now proving to be fruitful, and they remain strongly leveraged to any further gold upside price movement.
All in all, the group has demonstrated the potential to achieve its guidance while developments at its flagship project and other growth projects have been on track. The Syama oxide operation and potential to ramp-up underground operation towards full capacity are part of progressive steps. The recent updates on stabilization of sub-level cave and aim to have set the mining fleet as per the schedule are other important aspects. The focus on listing of stock in London is expected to set other key milestones while transition may be accompanied by few challenges. Lately, RSG’s directors have been seen to be changing their interests in terms of shareholding in the company.
With regards to stock performance, RSG shares last traded at A$1.125 (down 0.445% on February 01, 2019) with the market capitalization of around A$ 855.99 million. The earning per share is 0.089 AUD and price to earnings ratio is 12.77 and annual dividend yield is 1.77%. Its 52 week high has been noted at $ 1.144 and 52 week low at $0.910.
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