26/08/2014 - 10:37

Resolute down as gold revenue slides

26/08/2014 - 10:37

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Perth gold company Resolute Mining says the combination of lower gold prices and higher costs were behind a 60 per cent drop in full-year profit, to $33 million..

Resolute down as gold revenue slides
Resolute's Bibiani processing plant.

Perth gold company Resolute Mining says the combination of lower gold prices and higher costs were behind a 60 per cent drop in full-year profit, to $33 million.

Revenue from gold sales fell 15 per cent, to $527 million, the company said, in the main due to the completion of mining at its Golden Pride mine in Tanzania.

Resolute said the average cash cost per ounce of gold produced was $922, up from $811/oz last year.

“A weaker Australia dollar, planned maintenance shutdown activities and a ramp up at Syama early in FY14 contributed towards the increase in reported AUD costs per ounce,” the company said in a statement.

“Profit margins were impacted by a lower gold price and higher cash costs.”

Resolute declared no dividend payouts for the year.

In late March, the company suspended operations for several weeks at its Syama gold mine in Mali to expand and perform maintenance, which had a large impact on gold production and cash costs during the year.

However, Resolute said the mine expansion was progressing well and was on track for the commissioning of a new oxide processing plant at the site in January next year.

“An underground pre-feasibility study at Syama delivered a 54 per cent increase in ore reserves 3.15 million ounces with an additional 14.3 million tonnes of ore supporting a high volume, low cost and financially viable operation extending long term production by at least seven years to beyond 2025,” Resolute said.

In June, Resolute completed the acquisition of a 90 per cent interest in the Bibiani gold project in Ghana from Noble Mineral Resources, with the Ghanaian government holding the remaining 10 per cent.

Resolute is yet to commence a feasibility study on its proposed underground operation at the mine, but said work would start promptly on a 20,000-metre drill program to better define the underground resource at the site.

“Bibiani will continue under care and maintenance while the feasibility study is progressed,” the company said.

Resolute said production in FY15 would be hit hard by the recent closure of its Golden Pride mine in Tanzania, along with lower grade ore at Ravenswood in Queensland.

“However the company will benefit from increased production at Syama following the commissioning of the new parallel oxide processing plant,” it said.

Resolute shares fell by 2.2 per cent to 57.2 cents per share at 10:45am.

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