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Resolute Mining begins first stope production at Syama Underground, maintains FY19 guidance

Last updated: 15:35 23 Oct 2018 AEDT, First published: 00:35 23 Oct 2018 AEDT

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Location of initial 1130 North stope at Syama overlayed with blue 2016 and yellow June 2018 ore reserves

Resolute Mining Ltd (ASX:RSG) has begun first stope ore production during the September quarter at its new Syama Underground Mine as the Africa-focused gold producer prepares for sub-level caving in December.

Total production for the quarter was 55,508 ounces at an all-in sustaining cost (AISC) of $1,560 an ounce and the company has reaffirmed its financial year 2019 guidance of 300,000 ounces at an AISC of $1,280 an ounce.

The Perth-based company's cash, bullion and listed investments totalled $115 million at the end of September with 68,210 ounces of gold in circuit worth an additional $112 million.

 

Resolute managing director & CEO John Welborn said the company was poised to enter a new era which will be defined by the success of Syama, the world's first customised, fully-automated underground mine.

He said: "The highlight of the September quarter was the delivery of first stoping ore from the Syama Underground Mine, a crucial milestone in the path towards full production.

"Significant progress was made towards installing critical ventilation and pumping infrastructure which will support production until at least 2032.

"We will commence sub-level cave production in December 2018 and then implement full automation as we ramp-up to steady-state production by June 2019."

READ: Resolute Mining adds to its gold hedge book as production increases

Welborn commented that production and cost performance for the quarter was reduced due to a scheduled biennial roaster shutdown at Syama.

He said: "The roaster maintenance was successfully completed over a 7-week period during the quarter which resulted in significantly lower production from the Syama sulphide circuit than we would typically achieve.

"Similar to our regional peers, Syama experienced significantly higher than average rainfall during the quarter, about 500 millimetres above average year-to-date, which presented challenges from a materials handling perspective.

"Excess rainfall at Syama limited our ability to process transitional ore through the sulphide circuit to supplement production during the roaster shutdown."

Syama automated decline

 

READ: Resolute Mining asks investors to ratify shares-for-investment in Manas Resources, Orca Gold, Loncor Resources

The company reported that it had also achieved a milestone at its Ravenswood Gold Mine in Queensland, where the site's new beneficiation plant has become operational.

Work towards bringing the new plant online reduced milling time and resulted in lower production as well as higher-than-normal costs on a quarterly basis.

Beneficiation is being introduced to the mine as part of the Ravenswood Expansion Project which will see the Ravenswood produce an average of about 115,000 ounces at an AISC of $1,097 per ounce over a 14-year mine life.

READ: Resolute Mining managing director and CEO buys more shares

Welborn noted that the quarter's performance was broadly consistent with Resolute's overall operating plan from a production and cost perspective.

He said: "We are building new long-life, low-cost mines at both operations and remain on track.

"At Syama, access to the higher-grade sulphide ore will accelerate in the second half of FY19 and provide an immediate and material improvement in production.

"The new Syama Underground Mine has a mine life to at least 2032 with life-of-mine AISC of US$746 per ounce.

"Once in production, Syama will be capable of delivering in excess of 300,000 ounces gold per annum and underpin Resolute's growth pathway to a low-cost 500,000-ounce producer."

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