The share price of Resolute Mining Limited (ASX: RSG) has dipped by as much as 5.45% today.
The fall in the Resolute share price is due to the termination of the sale agreement for the Bibiani gold mine.
Resolute share price
Termination of the sale agreement
In December 2020, Resolute and Chifeng Jilong Gold Mining Co. Ltd entered into the sale agreement.
On 24 March 2021, the company was advised by the Ghanaian Minerals Commission that on the instructions of the Ghanaian Honourable Minister for Lands and Natural Resources, the mining lease for the Bibiani Gold Mine was terminated.
However, on 14 April 2021, Resolute disclosed it had been informed by the Minister that the mine has been restored.
Chifeng decided to terminate the agreement on the basis that the mining lease has been revoked or terminated or the validity of the mining lease has been materially impacted. As a result, Resolute must refund the deposit of US$5 million plus any accrued interest to Chifeng.
What now for Resolute?
Resolute said it would consider all options for the successful development or sale of Bibiani and will provide further information.
As you can see, the future of mining companies is heavily dictated by regulatory and political decisions.
It’s almost impossible to gain an understanding of the likelihood of success in attaining approvals for mining leases.
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