Resolute releases staunch production forecast

THE BOURSE WHISPERER: Unhedged ASX-listed gold miner Resolute Mining has released its Group gold production and cash cost guidance for the coming 2011-12 year.

Resolute has forecast its gold production in the coming year will increase to 410,000 ounces at a cash cost of $730 per ounce.

The company wasn’t backward in coming forward by saying the forecast cements its position as the second largest primary listed gold producer on the Australian Securities Exchange and represents a substantial increase in unaudited, 2010-11 year production of 330,000oz and reduction in cash costs from $900 per ounce.

Resolute is supporting its continued improvement outlook through ongoing progress it is achieving at its Syama operation in Mali.

The company expects increased plant throughput and higher head grades over the period, which it is confident will lift production and reduce cash costs per ounce.

This confidence has been consolidated by the performance of the plant since the completion of the scheduled Syama shutdown in June this year.

“Our strengthening outlook not only provides encouragement for our team making great strides in the turnaround of Syama, but it also provides the financial base to turn our attention towards the growth opportunities we see in Syama and Ravenswood in Australia,” Resolute Mining chief executive officer Peter Sullivan said in the company’s ASX announcement.

“The robust cash flows we expect in the coming years will leave Resolute unhedged, ungeared and well positioned for growth as well as considering direct returns to our shareholders.”

In the coming year Resolute plans on making progress at several development projects to improve its long term production profile and cost structure.

At Syama this involves an expected future increase in gold production through the addition of an oxide circuit to treat ore from near-surface deposits discovered along strike to the north and south of the main pit.

In addition, a lift in gold reserves and extension of the overall mine life is anticipated following the results of the feasibility study underway investigating the planned deepening of the main Syama pit.

At Ravenswood in Queensland the reopening of the Sarsfield open pit will deliver a long-term ore source for the Ravenswood plant.

The process to obtain all regulatory approvals for this has commenced.

In addition further development drilling to extend the depth of the Mt Wright ore body is planned.