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Production Update Lifts Resolute Mining
BY GLENN DYER - 13/07/2017 | VIEW MORE ARTICLES BY GLENN DYER

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RSG - RESOLUTE MINING LIMITED


Shares in Resolute Mining got a small kick along yesterday after the company revealed it had done much better in 2016-17 than expected, boosting gold production by more than forecast and slashing costs.

Directors said the company had "again significantly outperformed production and cost guidance for FY17 from outstanding results from the Syama Gold Mine (“Syama”) in Mali and the Ravenswood Gold Mine (“Ravenswood”) in Queensland, Australia.”

The shares jumped 2.7% to $1.13 which is well under the high for the past year of $2.35

That’s despite directors revealing that 2016-17 gold production reached 329,834 ounces (oz), which was above revised guidance of 325,000 oz, published in April 2017, and significantly better than original guidance of 300,000oz.

The company’s key cost measure - All-In Sustaining Costs were also better than forecast - $A1,130/ per oz (US$852/oz) -against revised guidance of $A1,150/oz and a significant improvement on original guidance of $A1,280/oz (US$934/oz).

Directors said that guidance for the 2017-18 financial year has been set at the same metrics as the original guidance for 2016-17 with gold production forecast to be 300,000oz and All-In Sustaining Costs expected to be $A1,280/oz (US$960/oz).

"The strong operating results and financial discipline implemented during FY17 has provided the Company with an exceptionally strong balance sheet,” directors said in yesterday’s filing with the ASX.

"Cash, bullion and listed investments as at 30 June 2017 totalled A$290 million. This strong treasury position is further supported by gold in circuit inventories of approximately 88,000 ounces which once poured have a valuation of an additional A$142 million,” they added.

Resolute CEO John Welborn said in yesterday’s statement the company was the "outstanding operating performance will deliver another strong financial result: “During FY17 Resolute continued to generate strong free cashflow during a period of transition at both of our operating mines.”

"Production and cost outperformance has been matched with maximised revenues from bullion sales. The exceptional FY17 operating and financial performance places the Company in a robust position to deliver on our exciting project pipeline at Syama, Ravenswood, and Bibiani.

"Given the scale of our planned capital investments in FY18 we will need to continue to demonstrate industry leading discipline as we transform the Company and deliver new long life mines which will generate exceptional returns for shareholders.

“Exploration success continues to be a value creator for Resolute and the increased exploration budget for FY18 demonstrates we remain committed to exploration as a generator of future value for our business.

“Recognising FY18 is a further year of transition we have maintained production and cost guidance at the same level as originally established for FY17. Our focus in the coming financial year is to deliver our major growth projects to create long term value for our shareholders. Operationally we will continue to work on reducing costs and implementing new technologies and increased efficiencies to drive improved performance,” he added.



View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



 

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