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Resolute Mining outperforms in FY16; Provides Guidance for FY17

Resolute Mining outperforms in FY16; Provides Guidance for FY17
For FY17, production guidance is forecast to be a minimum of 300,000 ounces, at ‘All-In-Sustaining-Costs’ of A$1,280/oz (US$934/oz).
Jul 07, 2016 By Simon Herrmann Ben Khouri Tags: RSG, Gold

Gold miner Resolute Mining Ltd (ASX:RSG) has announced its production figures for FY16 and guidance for FY17. Within FY16 alone, the gold miner has outperformed, in terms of both cost guidance and production. Such figures were particularly supported by stable results from their Syama Gold Mine in Mali, along with the Ravenswood Gold Mine in Queensland. For FY17, production guidance is forecast to be a minimum of 300,000 ounces, at  ‘All-In-Sustaining-Costs’ of A$1,280/oz (US$934/oz).

Resolute Announces FY16 Production Results

As mentioned previously, FY16 was a relatively strong year, in terms of production and cost. The gold miner has achieved a gold production figure of 315,169oz, at All-In-Sustaining-Costs of A$1,210/oz (US$880/oz), exceeding the anticipated figures of 315,000oz and A$1,220. Gold sales were 340,540oz, above the forecasted 340,000oz. Additionally, the gold miner has increased their efforts in decreasing debt, where in FY16 Resolute has reduced their borrowings by $91 million. Furthermore, as at the 30th June 2016, Resolute has Cash and Bullion holdings of A$101 million. 

Managing Director and CEO, Mr John Welborn commented positively on the results: “During the financial year, Resolute has applied extraordinary discipline to reduce debt, generate cash, and complete three major project studies which have revitalised and revalued our existing assets.”

FY17 Guidance of 300,000 Oz

Group gold mining for FY17 is expected to be at a minimum of at least 300,000oz, with All-In-Sustaining-Costs expected to be approximately A$1,280/oz (US$934/oz). Resolute’s Syama gold mine is expected to be a rather significant contributor, where it is forecasted to produce a minimum of 200,000oz. Additionally, their Ravenswood mine is expected to maintain production at approximately 100,000oz. Moreover, gold sales are forecasted to be approximately 325,000 oz, with the catalyst being an increase in processing efficiency, which allows a reduction in circuit inventory.

Resolute considers FY17 to be a transitional year, as the company increases their investments in long mine life extensions, particularly at Syama and Ravenswood, along with preparing for future production at their Bibiani Gold mine in Ghana.

Commenting on their outlook, Mr John Welborn was rather optimistic: “Looking forward, we will continue to focus on reducing the costs of our operations as we make investments in the exciting long mine life futures we have identified at Syama, Ravenswood, and Bibiani. We remain committed to explore all opportunities to fulfil our primary function; to reward our shareholders.”

As at 10.45am (AEDT), RSG is down 1.1%, to approximately $1.53. On the 18th of February 2016, Wise-Owl recommended buying RSG, at $0.46. 

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Simon Herrmann Author: Simon Herrmann Jul 07, 2016

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

Ben Khouri Author: Ben Khouri Jul 07, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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