Resolute Mining’s Shares Tumbled After Releasing Its Quarterly Activity Report Of September Quarter

  • Oct 23, 2018 AEDT
  • Team Kalkine
Resolute Mining’s Shares Tumbled After Releasing Its Quarterly Activity Report Of September Quarter

On 23 October 2018, Resolute Mining Limited (ASX: RSG) released its quarterly activity report for the period ended 30 September 2018. Following this news, the share price of the company decreased by 11.255 percent as on 23 October 2018.

Syama is a gold mine which is located in the south of Mali, West Africa. During the September Quarter, the Syama development team delivered a major milestone with first stope ore production at 1130 level which delivered from the new Syama Underground Mine as the company prepares for the initiation of sublevel caving to begin in December 2018. Moreover, significant progress has been made towards the installation of critical ventilation and pumping infrastructure which will support production until at least 2032.

Due to the scheduled biennial roaster shutdown at Syama, the Production and cost performance during the September Quarter of the company was reduced. Roaster maintenance was successfully completed over a 7-week period during the quarter which resulted in significantly lower production from the Syama sulphide circuit than the production which the company typically achieved. Syama experienced significantly higher than average rainfall during the quarter, approximately 500mm above average year-to-date, which created many challenges in material handling. Excess rainfall at Syama, limited the ability to process transitional ore through the sulphide circuit to supplement production during the roaster shutdown. 

During the quarter, the gold production at Syama was totalled 37,101oz at an AISC of A$1,390/oz. The quarterly production was reduced due to the lower availability and throughput in both the sulphide and oxide processing plants.  As at 30 September 2018, the company was having forward sales contracts of 18,000oz at an average price of US$1,330/oz for physical delivery between October 2018 and December 2018, and sale contract of 36,000oz at a price of A$1,715/oz for physical delivery between July 2018 and June 2019.

The company is having total Cash, Bullion and listed Investments of A$115.1million as at 30 September 2018. Further, the company is having an estimated recoverable gold in circuit inventory of 68,210oz with a market value of circa AUD$112 million. The company maintained FY19 guidance at 300,000 ounces of gold at an All-In Sustaining Cost of A$1,280 per ounce.

As per the Company’s CEO Mr. John Welborn, the excitement is building within the company as it is going to enter the final stages of development and commissioning at Syama of the world’s first customized fully automated underground gold mine. First stope ore and production drilling in the first level of the sub-level cave are important steps in the overall journey. The new Syama Underground Mine has a mine life to at least 2032 with life-of-mine AISC of US$746 per ounce. He further added that, once in production, Syama will be able to deliver in excess of 300,000 ounces gold per annum and underpin Resolute’s growth pathway to a low cost 500,000 ounces producer.

In the last three months the share price of the company decreased by 11.49 percent as on 22 October 2018, traded at a PE level of 13.050x. RSG’s share traded at $1.025 with a market capitalization of circa $874.93 million as on 23 October 2018 (AEST 4:00 PM).

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