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Resolute Mining Ltd – Quarterly Activities Report

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Resolute Mining Ltd - Quaterly Report

The main points for Resolute Third Quarterly Activities are as follows:

  • Gold production for the September quarter is 103,201oz at an All-In Sustained Cost (ASIC) of US$1,202/oz.
  • Gold production at Symama gold mine for the September quarter is 45,804oz, down 30% from the previous quarter at an ASIC of A$2,224, up 96% from the previous quarter.
  • Gold production at sulphide operations for the September quarter is 12,730oz, down 43% from the previous quarter, at an ASIC of A$4,197, up 133% from the previous quarter.
  • Gold production at oxide operations for the September quarter is 33,074oz, down 23% from the previous quarter at an ASIC of A$1,465, up 87% from the previous quarter.
  • Gold production at Ravenswood gold mine for the September quarter is 13,206oz, up 7% from the previous quarter at an ASIC of A$2,072, down 11% from the previous quarter.
  • Gold production at Mako gold mine for the September quarter is 44,191oz at an ASIC of A$1,055.

What were the drivers of this result?

The main driver of the sharp fall in production output and the higher ASIC for the quarter was due to the roaster downtime at the Syama gold mine. The roaster was taken offline in early October due to the detection of a crack in the main external shell. The estimated total cost of this repair is at US$5 million. The roaster is expected to be repaired and fully operational in approximately six weeks time.

What is the outlook for Resolute?

Production guidance for FY19 (to 31 December) is maintained at 400,000oz with an updated ASIC of US$1,020/oz (previously US$960/oz). This update in ASIC is due to the roaster repairs that will be taking place over the next 6 weeks. Resolute management notes:

 As a consequence of the requirement to take the sulphide roaster offline in early October and undertake repairs, the Syama sulphide AISC for the December 2019 Quarter is also expected to be abnormally high. The roaster is expected to be fully operational in early to mid-December which will enable a return to full production rates.

The spot price of gold has slightly dropped in the last few weeks. This is in light of a potential new US-China trade deal (11 October Trump announced that China and the US had reached a tentative agreement for the first phase of a trade deal) and a new potential Brexit deal. If these deals are reached, global economic and political concerns may ease, causing gold to not be as favourable, as it has been in the last number of months. Although, if these global concerns do not ease, gold is expected to continually perform well.

What is the market reaction?

The market reaction to resolute quarterly activities report is slightly positive. Resolute share price is up 1% and is currently trading at A$1.21 (Thursday 31 October).  Resolute has P/E ratio in the mid-teens and an annual dividend yield of 1.5% (unfranked).




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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ASR has no position in any of the stocks mentioned.

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