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Resolute Mining sees 2020 gold production at 500,000 oz

London — West Africa and Australia focused gold miner Resolute Mining forecast gold production for 2020 of 500,000 oz at an all-in sustaining cost of $980/oz, the company said Monday.

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The London-listed miner said 2020 gold production from its Syama mine in Mali was expected to be 260,000 oz at an all-in sustaining cost, or AISC, of $960/oz, with Syama sulphide production expected to accelerate in the March 2020 Quarter.

The company aims to work towards its target of Syama annual production rates of 300,000 oz at an AISC of $750/oz through the expansion of mining rates at the Syama Underground Mine and the addition of a future high-grade underground mine at Tabakoroni Open Pit Mine, located 32 km south of the Syama processing plant.

Mining and processing will continue at similar rates to 2019 at the Mako gold mine in eastern Senegal, an asset acquired in July 2019 for $274 million. However, ore grades will be lower due to depletion of high-grade stockpiles, the company said.

Gold production from Mako for 2020 is expected to be 160,000 oz at an AISC of $800/oz, it said.

At the Ravenswood gold mine in Australia, completion of stage 1 of the Ravenswood Expansion Project, or REP, has increased processing capacity to 5 million mt/year enabling a production target for 2020 to be set at 80,000 oz of gold at an AISC of $1,200/oz, Resolute said.

"CY20 Group production guidance of 500,000 oz is in line with our estimates of 502,000 oz, although Group AISC guidance is higher than expected, mainly driven by Ravenswood," Canaccord Genuity mining analysts said in a research note Monday.

Canaccord analysts said that guidance for Syama and Mako production was broadly in line with their expectations of 253,000 oz at $1,045/oz and 160,000 oz at $800/oz, respectively.

The company forecast capital expenditure for operating assets at $15 million as well as investment in exploration and other development capital expenditure at $25 million.

"Capex guidance is lower than our model assumptions pending outcomes of the Ravenswood strategic review and FID (final investment decision) for REP200 expansion," the analysts added.

2019 output guidance falls short

Resolute total gold production for the 12 months to December 31 came to 384,731 oz, representing a variance of less than 4% to 2019 production guidance of 400,000 oz, and at an AISC of $1,090/oz relative to cost guidance of $1,020/oz.

The difference was a result of the unscheduled material loss of production at the Syama Gold Mine in Mali being offline for the majority of the fourth quarter of 2019.

The sulphide roaster, a key component of the sulphide processing circuit at Syama, was taken offline in early October due to the detection of a crack in the main external shell. However, it was brought online in December and heated to normal operating temperature, with roaster feed running at nameplate capacity.

"Following completion of the repairs at Syama in late 2019, we have started 2020 with all our operations operating at nameplate capacity and generating positive cashflows," Resolute CEO John Welborn said in a statement Monday.

The company sold 394,920 oz of gold in 2019 at an average price received of $1,344/oz, Resolute said.

Cash, bullion and listed investments were at $127 million as of December 31, 2019, it said.