RESOLUTE Mining has added 37,200 ounces of gold to its hedge book, edging up total gold sold in forward contracts to more than half of the 400,000 oz targeted this year.
The latest contract is scheduled for monthly deliveries of 1,200 oz between July and December 2020 and in deliveries of 5,000 oz between January and June 2021. The gold was sold forward for an average price of $1,562/oz.
“Incremental expansion of our US dollar hedging position at current levels which are significantly above our budgeted gold price, protects and supports Resolute’s revenue and cash flow,” said John Welborn, CEO of Resolute Mining.
“With long mine lives, large gold inventories, and an industry leading production growth profile, Resolute remains strongly leveraged to future upside in gold prices.”
Resolute’s total gold hedge book as at 20 January 2019, including the new US dollar gold hedges, consists of 215,000 oz in monthly deliveries out to June 2021. This represents less than 3% of Resolute’s ore reserves, the company said.
Resolute said it had “… taken advantage of market volatility and current gold price strength” to incrementally extend its US dollar denominated gold hedge position. It would secure price certainty for a portion of the US dollar revenues generated from Resolute’s African gold mines: the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.
Resolute has opened 2020 on a busy note.
On January 15, it confirmed the sale of its 54,500 oz/year Ravenswood mine in Australia’s Queensland to a consortium led by EMR Capital for A$100m. It earlier in the month said it would extend its forward sales to a total of 177,800 ounces for 2020, equal to about 44% of total production.
On January 13, it said it would target gold production for the 2020 financial year of some 500,000 ounces at an all-in sustaining cost (AISC) of $960/oz.
It added that it would significant in-roads into net debt which was $267m as of December 31 through a combination of increased cash flow and the refinancing of a $130m loan that was provided by Taurus Funds Management.
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