Resolute Mining Limited (ASX:RSG) has taken advantage of strength in the gold price to extend its US dollar dominated gold hedge position for the first half of 2021 - forward selling 30,000 ounces of gold at an average price of US$1,590 per ounce.
Managing director and CEO John Welborn said Resolute continued to successfully maximise operating cash flows through responsible hedging strategies.
He said: “Incremental expansion of our US dollar hedging position at levels which are significantly above our budgeted gold price, protects and supports Resolute’s near-term cash flows.
“Resolute’s hedging program has strong support from our syndicate banks as our modest hedge book protects the Company’s balance sheet and supports our goldlinked revenues.
“With long mine lives and large gold inventories, Resolute remains strongly leveraged to future upside in the gold price.”
The hedging secures price certainty for a portion of the US dollar revenues generated from Resolute’s African gold mines, the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.
Forward gold sales program
The sale will involve scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
This extends Resolute’s existing US dollar forward gold sales program, which consisted of 115,000 ounces of gold forward sold at an average price of US$1,535 per ounce in scheduled monthly deliveries to June 2021.
Resolute’s total gold hedge book at 17 February 2020, including the new US dollar gold hedges, consists of 225,000 ounces in monthly deliveries out to June 2021 representing less than 3% of ore reserves.