Resolute Mining Limited (ASX:RSG) has forward sold an additional 30,000 ounces of gold at an average price of US$1,250 per ounce with scheduled monthly deliveries of 5,000 ounces in the first six months of 2019.
The company has taken advantage of the strength of recent US$ gold price volatility to extend its US$ gold hedge position.
Through this hedging position, Resolute aims to secure US$ revenues from its Syama Gold Project in Mali during the ramp-up phase of the Syama underground mine.
The automated decline at Syama.
Resolute’s managing director and CEO John Welborn said he was pleased to continue Resolute’s success in maximising gold sales revenue through responsible hedging strategies.
“Establishing some US$ gold price certainty at these levels is a prudent economic decision as we enter the ramp-up phase of the Syama underground mine,” he said.
“Syama provides exposure to US$ capital and operational expenditure and our hedging program provides a level of certainty to the company’s future cashflows and project returns.”
The additional 30,000 ounces of forward sales extend the existing US$ hedge positions established in September 2017 of monthly deliveries of 6,000 ounces at US$1,330 per ounce which run to December 2018.
Resolute’s total gold hedge book as at 29 October 2018, including the new US$ gold hedges, consists of 115,000 ounces of gold out to December 2019 representing around 26% of expected gold production over this period.
Welborn said, “Resolute remains strongly leveraged to gold prices with our current hedge position representing less than 2% of our gold ore reserves.
“Resolute’s gold hedge book now stands at 115,000 ounces of gold forward sold at an average price of approximately A$1,756 per ounce (US$1,247 per ounce).”