Resolute MD John Welborn
PERTH (miningweekly.com) – Gold miner Resolute Resources’ focus is shifting to its mines in Africa, with the company on Wednesday formally announcing the sale of its Ravenswood gold mine, in Australia's Queensland. A consortium, consisting of private equity manager EMR Capital and energy and mining company Golden Energy and Resources, will pay A$300-million for the project.
Up to A$50-million of the consideration will be linked to the average gold price over a four-year period, and up to A$150-million will be linked to the investment outcomes for EMR.
Resolute told shareholders that the transaction had been structured to maximise the company’s exposure to the future success of the Ravenswood expansion project, while transferring the capital expenditure funding requirements and development obligations to the consortium.
“The sale of our Ravenswood gold mine on the terms announced today provides the opportunity for exceptional value for Resolute shareholders. We have strengthened our balance sheet with a combination of immediate cash and the potential for future upside as well as removing the requirement of a large near-term capital investment,” said Resolute MD and CEO John Welborn.
“We have delivered on our objective of ensuring a new long-life future for Ravenswood under a world-class operator and can now focus our attention and energy on our African portfolio and the abundant opportunities our experience provides for further growth and value creation.”
Welborn said that the transaction delivered a fair share to all parties from the future value of the Ravenswood expansion project and effectively balances risk and reward.
“Our modelling at current gold prices demonstrates the expansion project at Ravenswood will be highly successful for EMR Capital and GEAR, and that the maximum value of A$300-million will be generated for Resolute.
“EMR Capital and GEAR are world-class mine developers and operators with outstanding track records of value generation. The EMR Capital and GEAR consortium are ideal parties to undertake the development of the Ravenswood expansion project. The upside sharing arrangement we have agreed aligns the interests of Resolute shareholders with those of EMR Capital and GEAR.“
Since the acquisition of Ravenswood in 2004, Resolute has mined and processed over 40-million tonnes of ore and produced almost two-million ounces of gold.