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- Shares in Resolute Mining (RSG) have enjoyed a boost today after the company’s Bibiani mining lease in southwest Ghana was reinstated
- It follows a letter that was received last month from the Ghanaian Minerals Commission advising that the mining lease for Bibiani had been terminated
- As a result, the US$105 million (roughly A$137.17 million) all-cash sale of Bibiani to Chifeng Jilong Gold Mining was put on hold
- Ghana says it does not recognise the sale of the project, but said a future deal may be possible with prior government approval
- Resolute Mining is up 14.26 per cent to $0.54 per share
Shares in Resolute Mining (RSG) have enjoyed a boost today after the company’s Bibiani mining lease in southwest Ghana was reinstated.
The gold miner, which is also listed on the London Stock Exchange, was thrust into damage control last month after receiving a letter from the Ghanaian Minerals Commission advising that the mining lease for the Bibiani Gold Mine had been terminated.
While the company would need to cease all operations at the site, the letter also hamstrung a US$105 million (roughly A$137.17 million) all-cash deal under which Resolute — through its subsidiary Mensin Gold Bibiani Limited (MGBL), holder of the lease — would sell the project to Shanghai-listed Chifeng Jilong Gold Mining.
The sale was announced in December last year, with Chifeng expressing its intent “to progress the redevelopment of Bibiani as soon as is possible.”
According to a feasibility study completed in 2018, a successful restart of mining at Bibiani — which is estimated to host around 2.5 million ounces of gold — would require a total capital cost of $115 million. Should that occur, however, the mine would produce approximately 100,000 ounces of gold each year over a ten-year mine life.
Despite the reinstatement of the mining lease — which is designed to maintain Ghana’s reputation as the preferred destination for mining investment in Africa — the country’s Minister for Lands and Natural Resources, Samuel Jinapor, “does not recognise the purported sale or transfer of the Bibiani Gold Mine to Chifeng Jilong Gold Mining.”
He added that a future sale could be possible, but that it would require the prior approval of the government in accordance with the Ghanaian Mining Act. The same goes for any third party looking to acquire a stake in the Bibiani Gold Mine.
In order to fully secure the restoration of the Bibiani lease, Resolute will now need to submit a report detailing the environmental, health and safety conditions at the site, along with an in-depth plan for the redevelopment of the mine, within the next seven days.
“We are very pleased to have come to a quick and amicable resolution which provides clarity and confirmation of MGBL’s Mining Lease at the Bibiani Gold Mine,” said Stuart Gale, Interim CEO of Resolute Mining.
“I would like to thank the Minister for his leadership and cooperation on this matter and we look forward to working with him and the Minerals Commission to identify a development option at Bibiani which sees the mine resuming production as quickly as possible for the benefit of all stakeholders.”
Gale also thanked Chifeng for their patience during the resolution process and said Resolute remains committed examining all options related to the development of Bibiani.
Resolute Mining is up 14.26 per cent to $0.54 per share at 1:19 pm AEST.
