Resolute CEO John Welborn
KALGOORLIE (miningweekly.com) – The CEO and MD of gold miner Resolute Mining, John Welborn, has expressed frustration at the lack of consolidation and cooperation among midtier miners.
Speaking on the sidelines of Diggers & Dealers, in Kalgoorlie, Welborn said that midtier producers were hoarding their own ounces instead of looking at the best ways to create shareholder value.
“At the top end of the market you have seen significant consolidation, companies of huge complexity have come together in a way that is advantageous to shareholders, but [among midtier miners] there are limited synergies in mining, and of the synergies available, miners are not looking to actively capitalise.”
Welborn noted that synergy opportunities existed at its own operations, with its Syama gold mine, in Mali, located only 20 km from the Sissingue gold mine, in Cote d’Ivoire, owned by dual listed Perseus Mining, and its recently acquired Mako gold mine, in Senegal, only 40 km from a mill operated by gold miner Teranga Gold.
“I’m not saying that just because mines are close they should jump into bed tighter, but you would expect to see more cooperation and collaboration and ultimately consolidation than what is currently happening,” Welborn said.
He noted that following the $305-million takeover of privately-held Toro Gold, which holds the Mako mine, Resolute was still in the market to grow its asset base.
“We have made it clear that our ambition is to be a multi-mine Africa-focused gold producer, and to have a portfolio of four or six low-cost operating mines, so Mako represents an important step and we are looking for further similar opportunities.”
The Mako gold mine produced 156 926 oz of gold in 2018, at an all-in sustaining cost of $655/oz. In 2019, production at Mako has been targeted at 160 000 oz, with the project estimated to host a mineral resource of 1.22-million ounces and a reserve of 928 000 oz.
Welborn said that there was also significant opportunity for Resolute to develop its own operations, building mines to extract ounces.
“We now have a production base and a margin base that can allow us to invest in exploration and development, without fatiguing our investors,” he said.