Resolute Mining Ltd. said Jan. 15 that it signed definitive agreements for the sale of the Ravenswood gold mine in Queensland, Australia, to a consortium composed of EMR Capital Pty. Ltd. and Golden Energy and Resources Ltd. for up to A$300 million.
The total proceeds will include A$100 million of up-front value, consisting of A$50 million in cash and A$50 million in promissory notes, and up to A$200 million in potential payments, consisting of up to A$50 million linked to the average gold price over a four-year period and up to A$150 million linked to the investment outcomes of Ravenswood for EMR.
Resolute said that proceeds from the sale will be used to reduce debt and strengthen the company's balance sheet.
Completion of the sale is targeted before March 31.
The company noted that the sale terms ensure that Resolute retains upside exposure with no requirement to fund the capital expenditure associated with the Ravenswood expansion project.
Based on the carrying value of Ravenswood, Resolute will book a gain on its sale in the company's accounts for full-year 2020. Resolute does not expect the sale to create a tax liability in the current tax accounting year.