Resolute Mining has reported slow gold production during the September quarter, less than a week after John Welborn's departure.
Shares in Resolute Mining were down this morning after the goldminer reported slow production during the September quarter, less than a week after the departure of managing director John Welborn.
Resolute, which operates three goldmines in West Africa, produced 87,303 ounces in the three months to September 30, down 19 per cent on prior quarter.
That was primarily due to the impact of industrial action in Mali, home to Resolute’s Syama mine.
Resolute also averaged a realised gold price of $US1,694/oz over the September quarter compared to the average spot price of $US1,913/oz, as well as operated at higher all-in sustaining costs.
The news sent Resolute’s shares down 8 per cent at 10:35am AEDT to trade at 86 cents.
The company early last month said it had received a notice from the local workers union in Mali of a 10-day strike at the Syama operations if certain demands were not met.
It followed the resignation of the nation’s president in August, which led to dissolution of the government.
An interim government has been established and further strike action has been cancelled, Resolute said in September.
Meanwhile, the Mako goldmine in Senegal had performed consistently over the September quarter, Resolute said, despite production being slightly lower on the June quarter.
Looking ahead, the company expects to meet its production and costs targets for the calendar year.
However, Resolute predicts it will meet the lower end of its production guidance of between 400,000oz and 430,000oz, and the top end of its costs of $US980-1,080/oz.
It held cash and bullion of $US106 million ($A149 million) at September 30, while net debt stood at $US234 million ($A330 million).
The Q3 results come less than a week after the goldminer announced John Welborn would step down as managing director and chief executive after a five-year tenure.
His position will be temporarily filled by chief financial officer Stuart Gale, while the company undertakes its search for a new leader.
Resolute shares closed down 6 per cent to trade at 88 cents.
Meanwhile, goldminer Saracen Mineral Holdings says it is on track to meet its full-year production and financial targets after a solid first quarter at its WA operations.
Saracen, which recently agreed to merge with fellow Kalgoorlie Super Pit owner Northern Star Resources, produced 154,338oz during the September quarter.
Production included 55,190oz from Saracen's share in the Super Pit, 54,987oz from its Carosue Dam operations, and 44,221oz from Thunderbox.
The company generated $98 million in free cash flow during the quarter, boosting its cash balance to $467 million. Its net debt stood at $146 million.
Saracen expects to produce between 600,000oz and 640,000oz in FY21, at an AISC of $1,300-1,400/oz.
Managing director Raleigh Finlayson said the company had achieved a solid start to the financial year; though, the performance was marred by the death of an underground worker at Carosue Dam in July.
The Department of Mines Industry Regulation and Safety is still investigating the incident.
Meanwhile, Saracen's planned merger with Northern Star is expected to complete in February next year.
"The further growth at our existing assets and those of Northern Star, along with the synergies we stand to generate through the planned merger, puts our combined business in an extremely enviable position," Mr Finlayson said.
"We will be generating substantial growth while most of the global gold industry is shrinking, we will be reducing costs in the process, and all in tier-one locations."
The merged group is expected to have a market value of $16 billion and an immediate production of 1.6 million ounces per annum, with plans to expand to 2moz.
Shares in Saracen closed down 0.2 per cent to trade at $6.08.
