Resolute Mining Limited (ASX: RSG) signs an agreement with Africa’s Ignite Energy to jointly develop a new solar hybrid power plant at the Company’s Syama Gold Mine in Mali.
As per the terms of agreement, the new 40 megawatt (MW) solar hybrid power plant at Syama will be independently designed, constructed, owned, funded and operated by Ignite Energy. And in return Ignite Energy guarantees to supply power to Resolute over a term of between 12 and 20 years, subject to maximum tariff.
The agreement comes in line with company’s objective to reduce its reliance on diesel prices to minimum. Currently, Resolute generates power through the company operated 28MW diesel fired power station at Syama which costs within the range of USD$0.20/kWh to USD$0.24/kWh depending on the ongoing diesel fuel prices.
The development of this new power facility will replace Resolute’s existing diesel generated power plant and, more importantly, will save around 40% on the company’s current operating costs of power at Syama. Besides, this plant backed by solar, battery, and heavy fuel oil (HFO) technologies will reportedly reduce carbon emission and provide greater efficiencies of integrated battery storage hybrid technology and improved engine technologies to Resolute.
Managing Director and CEO, Mr. John Welborn stated that the partnership with Africa’s leading power project operator Ignite Energy will result into a development of low-cost solar hybrid power solutions for gold mine Syama, hence positioning Resolute Mining as a global leader in energy solutions for the mining sector.
However, the signing of exclusive Power Purchase Agreement is expected to be final in the first half of 2019 after which the staged development of the ‘Solar Hybrid Power Plant’ would be reportedly commenced in 2019 for the plant to become fully operational by the end of 2020.
The project is expected to be the world’s largest off-grid, fully integrated hybrid power plant for a stand-alone mining operation along with the further potential for future expansion of battery storage and solar plant to accommodate future electric automated fleet and create a local micro grid to benefit local Mali communities.
This cost-effective power solution is taken into consideration in Resolute’s Definitive Feasibility Study update for Syama, released in July this year. The update eyes the power project as a principal component of delivering the reduced All-In Sustaining Cost of US$746 per ounce for the Syama Underground Gold Mine.
Despite announcing the Joint Development Agreement for new solar hybrid power plant, Resolute Mining Limited concluded its day flat on ASX. The stock price of RSG last traded at $0.960 with PE ratio of 10.850 x and market capitalization of $727.21 million.
However, 2,402,936 shares changed hands in today’s trading session, i.e. 26 November 2018, while over the past one year the stock has witnessed a negative performance change of 5.88%.