Resolute Mining ups gold reserves by 12%, to 5.3M oz

Resolute Mining (ASX:RSG) had some good news to share with investors last Thursday, as the Australia and Africa-focused gold producer announced a new resource estimate.

The company said its total JORC-compliant gold reserves (proven and probable) increased by 12 percent to 5.3 million ounces, which it largely attributed to a prefeasibility report released in June at its flagship Syama gold mine in Mali, which is moving to an underground operation. Despite experiencing mine depletion as a result of meeting full-year 2015 production of 328,684 ounces, Resolute still managed to increase reserves by 200,000 ounces. Total gold resources stand at 9 million ounces.

The news played well on the Australian stock exchange, with investors bidding up the stock 4 percent on Friday to 25 cents a share.

Underground reserves at Syama were upgraded to 2.3 million ounces at 2.8 grams per tonne as a result of recent diamond drilling results, which will extend the mine's life until 2028 according to Resolute. At its Bibiani project in Ghana, Resolute increased resources to 1.9 million ounces at 3.7 g/t gold. Bibiani would be an underground operation and a feasibility study on the project is currently underway.

Along with Syama, Resolute Mining also mines gold from its Ravenswood gold mine in northeast Queensland. The $170-million market cap company is an established gold producer with over 25 years continuous production according to its website. Resolute Mining expects to produce 315,000 ounces of gold next year at cash costs of $990 per ounce.

Highlights from the press release:

  • 5.3 million ounces (“Moz”) of gold in JORC Compliant Ore Reserves
  •  9.0 Moz of gold in Total Mineral Resources (exclusive of Ore Reserves)
  • Ore reserves increased by 200,000 ounces after mining depletion relating to FY2015 production of 328,684oz
  • New Probable Ore Reserve of 2.3Moz @ 2.8g/t Au for the Syama Underground provides mine life for the sulphide operation to at least 2028
  • The combination of available Ore Reserves and Mineral Resources outlined in development projects at Bibiani in Ghana and at Ravenswood in Queensland provide strong future growth opportunities for the Company