viewResolute Mining Limited

Resolute Mining signs agreement to acquire 100% of Toro Gold, revises production and cost guidance

Toro Gold’s team oversaw the development of Mako from greenfields discovery in 2011 to first production in January 2018

Once the transaction is complete, Toro Gold shareholders will own 15.8% of Resolute.

Resolute Mining Limited (ASX:RSG) has signed a binding agreement with Toro Gold Limited to acquire all its shares for US$130 million cash and 142.5 million Resolute shares.

All regulatory approvals required to complete the transaction have been secured and 94% of Toro Gold shareholders have committed to accept the takeover offer, enabling Resolute to take immediate control effective August 2, 2019.

Resolute has revised its financial year 2019 production and cost guidance to 400,000 ounces of gold at an all-in-sustaining-cost (AISC) of US$960 an ounce, reflecting the inclusion of Mako production.

READ: Resolute Mining beats gold production guidance target

Resolute managing director & CEO John Welborn said the acquisition of Toro Gold was consistent with Resolute’s ambition to create a multi-mine, low-cost, African-focused gold producer.

Toro’s flagship asset is the low-cost, high-margin Mako Gold Mine in Senegal which produced 156,926 ounces of gold in 2018 at an AISC of US$655 an ounce.

The addition of Mako expands Resolute’s portfolio which comprises the Syama Gold Mine in Mali, the Bibiani Gold Mine in Ghana and the Ravenswood Gold Mine in Australia.

Mako will expand Resolute’s production base, strengthen operational cashflow, increase revenues linked to shareholder dividends and provides a strong platform for further growth.

Resolute MD John Welborn with Martin Horgan, founder & CEO of Toro Gold at the Mako Mine earlier this month


READ: Resolute Mining’s Ravenswood Expansion Project gets bigger with gold reserves up 58%

Welborn added: “The Mako Gold Mine is a high quality, strongly cashflow-generative production asset which complements our existing portfolio of large-scale, long-life mines.

“The Toro Gold team discovered the Mako orebody in 2010 and have successfully developed a high-value gold mine – we are delighted to combine our businesses.”

Mako hosts a mineral resource of 1.224 million ounces at 1.89 g/t gold and an ore reserve of 928,000 ounces at 2.05 g/t.

Revenue of US$180 million was generated by Toro Gold in 2018 and US$70 million of cashflow from operations.


Mako is a conventional truck and shovel open pit mining operation which consistently delivered recoveries of around 95% with processing through a carbon-in-leach plant comprising a crushing circuit, an 8.5-megawatt SAG mill and a gold extraction circuit.

Average production at Mako over a seven-year mine life is estimated to be 140,000 ounces a year at an AISC of US$780 an ounce.

Mako’s 2019 target production is 160,000 ounces at an AISC of US$800 an ounce.

Resolute’s production guidance for Mako for period from acquisition to December 31, 2019, is expected to be 70,000 ounces at an AISC of US$850 an ounce.

READ: Resolute Mining achieves commercial production rates at Syama, begins automation commissioning

Toro Gold founder and chief executive officer Martin Horgan was pleased to be combining with Resolute.

He said: “Resolute’s acquisition of Toro Gold provides Toro Gold shareholders with the unique opportunity of realising immediate value for their Toro Gold shareholding … while becoming part of a premier African gold producer as shareholders of Resolute.

“The contribution of our world class Mako Gold Mine to Resolute’s high-quality portfolio of large-scale, long-life assets creates a compelling African gold investment proposition under the stewardship of an excellent and proven management team which will further maximise value for shareholders.”

READ: Resolute Mining expects to begin trading on Main Market of LSE this week

Under the agreement, Resolute will acquire Toro’s shares by way of a takeover under the Companies Law 2008 for a total of $274 million in cash and shares.

The 142.5 million freely tradeable Resolute shares are valued on Resolute’s thirty-day volume weighted average price of $1.45 a share, totalling US$144 million.

The cash remainder of $130 million fully funded through a finance facility provided by Taurus Funds Management Pty Limited.

READ: Resolute Mining secures additional mining leases at Ravenswood Expansion Project in QLD

Welborn commented on Senegal as an investment jurisdiction for mining, saying he looked forward to working with the Senegalese government, a 10% partner in Mako, to maximise value in Toro’s portfolio.

He added: “Resolute has produced over eight million ounces of gold from nine mines over the last 30 years.

“The Mako Gold Mine will be our tenth operating mine and one which forms an important part of our next phase of growth.

“The acquisition also confirms our commitment to creating a leading African gold producer.”

Quick facts: Resolute Mining Limited

Price: 1.085 AUD

Market: ASX
Market Cap: $1.2 billion

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