Resolute Mining is taking the opportunity of the boom in its shares this year to ask the market for at least $150 million in new capital.
The company’s shares were shares put into a trading halt yesterday as the gold miner seeks to raise the fresh capital via the issue of 75.6 million new shares.
The raising at $1.96 a share – a 10.5% discount to Monday’s closing price – will expand the company’s issued shares by 11.6%. Trading in the shares was suspended yesterday to allow the funds to be raised and settled by the long weekend. The shares should be re-listed early next week.
Funds raised would be used to develop Resolute’s Ravenswood gold project, which the miner has been marketing to investors.
The company recently announced that the project’s mine-life had been extended to 2029 and expected average annual production of 120,000 ounces of gold.
Resolute shares have soared 776% this year as the gold price rose, making it the top performer in the ASX 200.
Resolute’s CEO, John Welborn, said in a statement yesterday the placement provided the Company with 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.,” he said.
“During the 2016 financial year Resolute applied extraordinary discipline to reduce debt, generate cash, and progress three major feasibility studies which have revitalised our assets, our people, and our Company. A priority has been Resolute’s flagship project, the Syama gold mine in Mali.
"Construction of the Syama Underground Project commenced in July 2016 and is expected to deliver a highly profitable mine with a mine life beyond 2028, total site production of up to 250,000 ounces of gold per year, and all-in sustaining costs of US$881 per ounce.
"Resolute has committed to fully fund the US$95 million capital demands of the Syama Underground Project over the next 18 months from existing cash reserves and ongoing operational cashflows.”
“The Ravenswood Extension Project provides Resolute with a further opportunity to deliver an attractive long life, low cost gold mine in Australia. The recently published feasibility study identified that start-up capital of A$134 million will deliver production of approximately 120,000 ounces per annum at an all-in sustaining cost of A$1,166 per ounce for the next 13 years.
"The funds raised by the Placement allow Resolute to fully fund the Ravenswood Extension Project and retain the financial flexibility and balance sheet strength to advance other growth opportunities as they arise."
“While we have identified a viable pathway to production at Bibiani, our ambition for the asset is to deliver a +10 year mine life at globally competitive all-in sustaining costs. 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,” Mr Welborn said.
