Resolute Eyes Value From Exploration

Following the sale of its last remaining Australian asset in March this year, gold miner Resolute Mining is now a fully focused West African gold miner looking to grow its resource base to include a further two more gold mines, MD John Welborn tells SA Mining.

“Africa is fundamental to our portfolio – geologically, geographically and economically, the continent offers huge opportunities for growth. Furthermore it is a suitable match for our skills sets. As such, we are actively seeking new opportunities to grow our African footprint and have a number of joint venture initiatives and equity stakes in gold explorations companies,” says Welborn.

The West African gold miner currently operates two producing gold mines – the Syama Gold Mine in Mali, West Africa, which comprises the Syama underground mine and the Tabakoroni open-pit operation and the Mako Gold Mine, in Senegal, West Africa.

For the 2020 financial year, the operations will together deliver roughly 430 000 gold ounces per annum; with 260 000oz from Syama and 160 000oz from Mako.

“However, going forward we are looking to produce around 400 000oz of gold per annum with about 260 000oz from Syama and around 140 000oz from Mako. While we are not focused on a specific production goal, what we would like to have is a portfolio with four operating mines,” says Welborn.

Aside from the ASX- and LSE-listed gold miner’s Bibiani Gold Mine in Ghana which is currently on care and maintenance while the company “runs a strategic review on that asset”, Resolute has a healthy portfolio of strategic investments from which it plans to unlock growth opportunities.

The miner has a 16% stake in Orca Gold, an emerging 200 000+ gold producer in Sudan, a 10.7% stake in Oklo Resources, a gold exploration company progressing its flagship project Dandoko, in West Mali, a 15% stake in Mako Gold, which is focused on the discovery of large high-grade gold deposits in West Africa, a 26% stake in Manas Resources, an ASX-listed gold company with three key assets in Côte d’Ivoire and a 27% stake in Loncor Resources, a Canadian gold exploration company focused on projects on the Ngayu Belt in the Democratic Republic of the Congo.

Aside from these joint venture opportunities, Resolute is also busy with expansion opportunities on its existing operations, which includes a new feasibility study on the Tabakoroni open-pit operation located 30km south of the Syama Gold Mine.

The company also recently updated the life of mine (LOM) for the Mako gold project. The updated LOM generated a 39% increase in total gold production and a mine life extension of two further years of production. The original mine plan at Mako consisted of a seven-year mine life expected to produce 890 000 ounces of gold. The new LOM has a total mine life of nine years, producing a total of 1.24 million ounces of gold, the company said.

Resolute’s annual exploration spend is $20m, however Welborn says this excludes exploration spend by joint venture and equity partners to progress strategic joint venture projects.

“Our strategy for Africa, aside from the expansion of our portfolio aimed at building more new gold mines, is also to leverage off our existing production base to provide economic returns to shareholders, the government and the communities in which we operate.”

Impact of COVID-19

With the onset of the pandemic, it is certainly not business as usual for any company, and coupled with geopolitical factors, including the impending United States election and the recent explosions in Beirut, Lebanon, these activities have been wreaking havoc on world markets.

For gold producers though, this has been a boon, with gold on the receiving end of a highly favourable price, flirting close to the $2 000/oz mark.

“While I don’t feel that the pandemic has severely impacted on production, I do think it’s exciting times for the gold miner given the rising value of the metal.”

According to Welborn the pandemic has not affected its operations but has forced the company to take stringent measures aimed at protecting its workforce.

“We have implemented new protocols, linked to hygiene and isolation, and have put our knowledge related to Ebola and to general health to good use in preparing for the pandemic. I am proud of the way we have handled the situation – we don’t have any active cases and continue to implement measures to ensure that we keep our people safe.”

According to Welborn, a key change that businesses will see going forward, aside from improved levels of hygiene, is the focus on localisation of the workforce, with a reduced reliance on expats. “This is a motivation for us to further empower and train our local workforce.”

Furthermore, African jurisdictions will become more technology-focused as they look towards technology for solutions to their problems.