PERTH (miningweekly.com) – Gold miner Resolute Mining is expected to make a final investment decision on the Bibiani underground mine, in Ghana, in 2019, the company said on Friday, announcing that it had received an environmental permit authorisation to recommission the mine and processing plant.
Resolute said on Friday that the permit is valid for a period of 18 months, and can be renewed by application to the Ghanaian Environmental Protection Agency.
Following the receipt of the permit, the ASX-listed miner updated a 2016 feasibility study on the project, which has resulted in a lower all-in sustaining costs (AISC) and a longer mine life, as a result of a 2017 increase to the mineral resource, as well as improved mine optimisation and design, and refinement of operating and capital costs.
The restart is expected to require a start-up capital investment of $75-million and project capital of $115-million, with gold production expected to be maintained at around 100 000 oz/y over a ten-year mine life.
The AISC is expected to be within the range of $700/oz to $800/oz, with life-of-mine production estimated at about one-million ounces, based on the 21.7-million tonne resource, grading 3.6 g/t gold.
Resolute MD and CEO John Welborn told shareholders that the company was pleased to have received a key statutory approval, and to have completed an updated study that confirmed Bibiani represented a compelling growth opportunity for Resolute.
“Resolute continues to progress the opportunity to recommission Bibiani. We are honouring our commitments to the Ghanaian government and being highly disciplined in our pursuit of value creation for all stakeholders.
“Receipt of our environmental permitting is a significant step in the pathway towards turning the mine back on. Bibiani has produced around four-million ounces of gold over a long history and is a regionally important gold mine providing important economic and social benefits to the local population.”
Welborn said that the updated study also proved the project could meet Resolute’s thresholds of producing 100 000 oz of gold a year over a ten-year mine life, at an AISC in the region of $750/oz.
“We will now focus on an operational readiness programme with the intention of making a final investment decision in 2019. A positive decision will only be made on the basis of a complete and compelling recommissioning plan supported by a functional operational readiness plan, all required approvals, a clear funding strategy, and the availability of Resolute’s project team.
“Bibiani is a key contributor to our goal of establishing Resolute as a 500 000 oz/y producer,” he added.
Operations at Bibiani were suspended in 2013 on the back of declining gold prices, by then owner Noble Mineral Resources.
Meanwhile, Resolute on Friday also announced that it had established a $100-million revolving loan facility with Investec Australia, which would provide the company with flexible access to low-cost funding for new growth initiatives.
The new facility is fully underwritten by Investec, and has an initial three-year term. Following the satisfaction of standard conditions, Resolute can draw on the facility as required, for any corporate funding purposes.
“This revolving credit facility ensures Resolute has the financial flexibility to pursue our growth agenda and act on opportunities as they arise,” Welborn said.
“We maintain a strong balance sheet and ensuring a modest level of gearing is available to the company is a sound and appropriate strategic decision given our ambitions and outlook.”