Resolute Mining Limited (ASX/LSE: RSG) has initiated a strategic review process to evaluate options for re-starting operations at the Bibiani Gold Mine in Ghana.
Managing Director and CEO John Welborn said the strategic review of Bibiani is designed to review Resolute’s plans to recommission the mine, assess capital requirements, evaluate funding alternatives, and investigate recently received expressions of interest from third parties seeking to acquire the asset.
Resolute has engaged international advisors Cutfield Freeman & Co Ltd and Treadstone Resource Partners to conduct the strategic review during the first half of 2020 and explore various options for Bibiani including off-balance sheet financing of Resolute’s proposed recommissioning plan, joint ventures, and the partial or complete divestment of the asset.
Mr Welborn said Bibiani is a historically significant gold mine situated in the western region of Ghana and has been a major gold producer in the region.
“Importantly, it has available mining and processing infrastructure on site consisting of a three million tonne per annum mill and processing plant, and existing underground mining infrastructure,” Mr Welborn said.
Resolute acquired Bibiani in 2014 through a Scheme of Arrangement supported by the Ghanaian Government. The company placed the mine on care and maintenance following the acquisition to complete exploration activities designed to enable the development of an economically viable, long term, larger scale underground operation.
In July 2018, Resolute released an updated feasibility study which demonstrated the potential for Bibiani to produce ~100,000 ounces of gold annually at a life-of- mine All-In Sustaining Cost of US$764/oz over a ten-year mine life. Current Mineral Resources at Bibiani consist of 21.7 million tonnes at 3.6 grams of gold per tonne for 2.5 million ounces of gold.
“The strategic review will seek to maximise value for Resolute shareholders while ensuring that all local stakeholders in Ghana continue to benefit from the essential economic and social advantages that re-establishing successful and sustainable operations at Bibiani will provide,” Mr Welborn said.
“No binding agreement has been entered into regarding the financing or divestment of Bibiani and there is no guarantee that the strategic review will result in any specific transactional outcome.
“In pursuit of its ambition to be a low-cost, multi-mine African-focused producer, Resolute continues to actively evaluate growth opportunities both internal and external to the Company’s existing portfolio.”