The Syama mine in Mali.
ASX-listed gold miner Resolute Mining has revised its full-year guidance down to between 330 000 oz and 340 000 oz from the initial guidance of about 350 000 oz, owing to mining lower grades at its Syama oxide operation in Mali, which has impacted on production in the year to date.
All-in sustaining cost (AISC) guidance, however, has been maintained at $1 480/oz, the company said in the release of its third-quarter activities report for the three months ended September 30.
Capital expenditure (capex) guidance was also reduced to $70-million, excluding the company’s Syama North Phase 1 Expansion capital, from the original guidance of $88-million.
"It has been a tougher-than-expected quarter for Resolute at the Syama oxide operation as a shift in the mine plan due to the high-carbon pocket of Tabakoroni ore encountered in the second quarter continued to affect the operation. Mako and Syama Sulphide performed in line as expected for the quarter. In the fourth quarter, we expect an improvement at both Syama operations and a similar performance at Mako. This has been reflected in our revised guidance,” Resolute CEO and MD Terry Holohan said on October 31.
Quarterly production in terms of gold poured was 74 056 oz compared to the second-quarter total of 84 372 oz. This was driven by a weak quarter from Syama Oxide owing to issues stemming from the high-carbon pocket of Tabakoroni ore. Mako and the Syama sulphide operation performed in line with expectations.
The company reported an AISC of $1 459/oz in the third quarter, a 2% decrease from the June quarter mainly owing to the realisation of the ongoing cost reduction initiatives, which was offset by the reduction in gold poured in the quarter.
Quarterly gold sales of 76 524 oz at an average realised gold price of $1 917/oz compared to the second-quarter sales of 84 907 oz at an average realised gold price of $1 922/oz.
Cash generation was $8.6-million, excluding debt and interest payments and working capital movements.
Quarterly capex was $16.3-million, compared to the second-quarter capex of $18.6-million, with non-sustaining capital of $8.9-million, sustaining capex of $4.6-million, and exploration spend of $2.8-million.
Net cash was reported at $2.2-million, up from a net debt position of $17.2-million in the June quarter, including cash and bullion of $78-million. The available liquidity, including cash, bullion, and undrawn revolving credit facility, amounted to $158-million.
“Despite the tough quarter, the company continued to generate healthy cash flow as net debt improved by $19.4-million, bringing us as predicted into a positive net cash position. This speaks to the realisation of the cost reduction activities and the robustness of our operations,” Holohan said.
Syama North's measured and indicated resources increased by 47% to 2.7-million ounces grading 3 g/t, from 1.86-million ounces grading 3 g/t, following the infill diamond and reverse circulation drilling campaign conducted in the first half of the year. A reserve update is expected in the December quarter, the company said.
The released three-year production and cost forecast for Syama and Mako [in Senegal] operations show total group gold production from 2024 to 2026 exceeding 1-million ounces, and group AISC reducing by over $200/oz.
“The release of our three-year forecast during the quarter shows the company's organic growth path to increase ounces and improve margins across the group. The Syama North Phase I Expansion project should enable stable gold production in excess of 260 000 oz/y with the flexibility of having two reliable sources of ore. At Mako, we have two extremely strong years ahead of us with production around 135 000 oz/y at very healthy margins,” Holohan said.
He said that exploration continues at Mako to extend the mine's life.
“Our focus for the remainder of 2023 is on continued sustainable reduction in costs across the Resolute group and an increased gold production in the final quarter," Holohan said.
The total recordable injury frequency rate for the third quarter increased to 1.55 from 0.79 in the second quarter as a result of eight recordable injuries during the quarter.