Resolute Mining Limited (ASX: RSG) released its quarterly report for the period ended 30th September 2019 this morning. Here’s what you need to know.
Resolute has more than 30 years of experience as an explorer, developer and operator of gold mines in Australia and Africa and has produced more than 8 million ounces of gold. Resolute currently has four mines in its portfolio: Syama in Mali, Mako in Senegal, Bibiani in Ghana and Ravenswood in Queensland.
Resolute reported gold production of 103,201 ounces during the quarter at an all-in sustaining cost (AISC) of US$1,202 per ounce. Production is up from 78,132 ounces in the June quarter while AISC is also up from US$939 per ounce.
The boost in production is partly due to the Mako mine, which produced 44,191 ounces of gold at an AISC of US$716 per ounce in its first-quarter under Resolute ownership.
Cash, bullion and listed investments at 30th September 2019 were $179 million, up from $56 million at the end of the June quarter.
Production guidance for FY19 (ending 31st December) was maintained at 400,000 ounces but AISC guidance has been revised up from US$960 per ounce to US$1,020 per ounce.
Resolute CEO John Welborn said results were impacted by unscheduled maintenance at the Syama mine.
“Delivering gold production of more than 100,000 ounces in the September quarter is a good result considering the Syama roaster was offline for unscheduled maintenance for part of the period,” he said.
“Resolute is now operating our new automated underground mine at Syama in Mali and we have integrated the strongly cashflow generative Mako Gold Mine in Senegal into our African operations.”
Time To Buy Resolute Shares?
Resolute is building up its production capacity relatively quickly, but with year-to-date production of 279,438 ounces, the company still needs a record fourth quarter to reach 400,000 ounces by year-end.
This may be achievable, but I’m more concerned about the growing AISC, which was up 28% over the quarter. Greater production won’t be a benefit if costs continue increasing with it.
Personally, I try to avoid price-taking commodity businesses because of the unpredictable nature of prices and costs.
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Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.