Resolute Mining Ltd. clarified on Jan. 8 that it has not made a decision regarding a potential spin-off or sale of its Ravenswood gold mine in Queensland, Australia, although it expects to undertake a strategic review of the asset in the first half.
The Australian reported earlier that the miner would consider a potential spin-off or sale of Ravenswood in the first half of this year, amid its plans to seek dual listing in London and shift its entire focus to Africa.
The recent expansion study for Ravenswood pegged a net present value of just under A$500 million. The company's market capitalization stands around A$900 million, which is almost entirely represented by the value of its Syama gold mine in Mali.
Resolute is planning to develop Ravenswood as a larger, low-grade open-pit mine that is expected to produce about 140,000 ounces per annum over an estimated 14-year mine life.
"We love the asset but it's in the wrong continent for us," the report cited Managing Director and CEO John Welborn as saying.
Welborn also told The Australian that the potential spin-off or sale of Ravenswood could generate value for the company that it does not currently reflects in its valuation.
"Clearly there's an opportunity of potentially separating Ravenswood out through a spin-off to our shareholders or something like that, and that's something we're looking at," said Welborn.
The executive added that Resolute was actively seeking potential opportunities, but historically the company generated the maximum value by acquiring deposits that it could later develop into mines, instead of taking over established operations.