The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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The December quarter should be a good one for them. They should have more unhedged gold, so the average price received will be higher.
Not only did they have the strike and consequent roaster shut down in the September quarter the grades poor were at Syama, in particular the oxide, this should be much better this quarter as they use ore from Cashew. Mako should be up a bit as well as the reduction last quarter was due to scheduled planned shutdowns.
Going forward, if they can, as it looks like, keep the lower cost oxide stream going at Tabakoroni it will give them some time to get their debt down before any capex is need for going underground.
With the Bibiani sale there does seem to be a change in sentiment, a good quarter will help keep the momentum going. We will find out in early Jan….
https://news.sky.com/story/brexit-eus-ursula-von-der-leyen-says-there-is-a-path-to-an-agreement-12163875
Brexit: EU's Ursula von der Leyen says there is a 'path to an agreement'
"The path may be very narrow but it is there," the European Commission president says on hopes of a deal between the two sides.
Well, Oz likes the deal - 10% up overnight. Presumably, London price should correct to match.
400,000 ounce per year gold miners don't usually trade with a mcap of £475m!
I think a fair number of reservations are already built into the bargain basement price. Hoping that the new CEO will be a great deal more competent and a lot less of a bull**** artist!
I still have some (well quite a few) reservations about rsg, but agree it is cheap at this price. I was holding off until it was clear how they would fund going underground at Tabakoroni. They also seem to have pushed back on the start date for this, assumedly pressure to get debt under control first.
If we get some clarity over the tax situation and they hit their targets then it does have the potential to jump on the next quarterly in Jan (but I have thought that before ...)
I was surprised that we got to hear first, so hopefully the asx will push this up tonight.
I've bought a few today using much the same logic.
Australia hasn't yet had a chance to react to this news, which I believe it will take as a big positive. All in all, I make it that Resolute is oversold now, and hopefully a new CEO will mark a new beginning for the company.
This is for $105M, going forward, they have the potential to realise a further $188M from the Ravenswood sale. They have at least A$50M in equity stakes in exploration companies(Oklo/Orca/Loncor/Manas/Mali lithium), plus a joint exploration project with Toya which is due to report soon.
Net debt was $234M at the last update.
They will need about $90M for the Tabakoroni development (but not yet), this should be covered the the Bibiani sale and so eliminate the need for an equity raise.
The new power plant battery storage is due to be commissioned soon which should reduce costs on the sulphide circuit, this is where the ASIC has always been high so it could make a significant difference ( note- Aggreko get half of the value of the energy savings, not always clearly flagged by rsg…)
Hopefully they have been managing to sell gold for more than it costs to mine it this quarter, so I have decided to tentatively start a holding here again. On average I have done little better than break even on this in the past, hope to do a bit better this time!
Resolute is pleased to announce that it has agreed to sell its interest in the Bibiani Gold Mine in Ghana, through the sale of shares in Mensin Bibiani Pty Ltd, to Chijin International (HK) Limited, a wholly owned subsidiary of Chifeng Jilong Gold Mining Co. Ltd, for total cash consideration of US$105 million.
https://www.miningmx.com/trending/44559-un-reports-6000-children-forced-into-gold-mining-in-mali-amid-covid-19-pandemic/
I was just looking to see if it was time to return to RSG and came across this report, having lost out at BOOhoo - Just wondering if the company has made any announcements, if not someone ought to ask them.
https://www.kitco.com/news/video/show/Market-Analysis/3109/2020-11-26/Gold-price-to-fall-to-$1000-before-strongest-boom-in-history--Harry-Dent-Pt-22#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DMarket-Analysis
Gold price to fall to $1,000 before strongest boom in history – Harry Dent (Pt. 2/2)
Nov 26, 2020
Guest(s): Harry Dent Founder, Hs Dent
From 2022 on, I’d be buying gold hand hand in fist, it’s going to hold up better than most commodities,” said Harry Dent, founder of HS Dent, who is calling for gold to see its final rally to $2,200 an ounce next year before falling to multi-year lows until 2022.
"I’m expecting gold to go up…when this crisis starts to build next year, it’s going to see more stimulus, it’s going to go up at first. I have a target of $2,200,” Dent said. “$2,200 is the strong resistance in the coming months and then crash back down to its 2015 lows, around $1,000
That is the million dollar question.
The US Elections came and went, the USD fell as markets rallied but it's had little impact on gold prices. In the same week the Bank of England pumped another £150 billion into the economy, although really it was just spent buying government debt as per usual and that too did little for safe haven demand.
The vaccine news from Pfizer and Moderna this past week or two has had a cooling affect on precious metal prices and companies that produce them. A lot of investors are piling back into the depressed airline and hospitality sectors despite the worsening infection rates and Covid deaths across Europe, the US and much of the world.
I'm also trying to weigh up if the gold sector will weaken further in the immediate future and whether it would be prudent to reduce my position. Gold stocks like RSG have taken sizeable hits despite establishing strong support in the $1850/oz range, much higher than a year ago (Nov 19: $1450/oz). This quarter many gold stocks I am invested in or watch have lost 15-20% of their market value despite most delivering encouraging Q3 reports. RSG was one of the few that underdelivered and was clobbered as a result. The outlook for Q4 and further out to 2021 is much improved.
So what will get this sector moving? I believe the rollout of the vaccine will and here is why. While a lot of investors have increased their exposure to gold, many more have parked their cash into the USD. As the vaccine is delivered and markets begin to take on more risk the USD will fall and what is bad for the dollar is generally good for gold. Reuters are reporting the 'vaccine rollout could cause U.S. dollar to fall 20% in 2021' as it is coupled with increased monetary easing.
https://uk.reuters.com/article/instant-article/idUKKBN27W25E
If gold remains around this level I'd expect investor demand to stay fairly subdued up until Christmas time when we may see some interest in the lead up to January results. I don't think many are expecting RSG to meet their quarterly target of around 100koz and AISC of $1,100/oz. Until we know either way 50p is going to be a tough nut to crack.
Anyone any idea why no trades shown today or live price on here of Google?
Any ideas as when this share will be on the rise, considering what's happening? Any help greatly appreciated.
Further to the point on hedging
"Resolute maintains a policy of undertaking discretionary hedging in compliance with funding obligations, which require a minimum of 30% of the next 18 months of forecast production to be hedged."
The Forward Price agreed for this quarter is $1,647 for 60,000 ounces. Assuming they don't carry any over into next quarters hedged production that will likely result in two thirds of this quarters production being hedged so we are looking at 100,000 at an average realised price of $1740/oz this quarter.
· Total gold production of 87,303 ounces
· Realised gold price for the quarter averaged US$1,694/oz
· All-In Sustaining Cost (AISC) of US$1,284/oz
· Syama Sulphide recovery rate of 79.5%
· Tabakoroni Pre-Feasibility Study released (22% increase)
· Syama Union confirms cancellation of further planned strike action
· Mali interim government established and ECOWAS sanctions lifted
· Cash and bullion of US$106 million with net debt of US$234 million at 30 September 2020
· CY20 production is expected at the lower end of the guidance of 400,000oz to 430,000oz
There were quite a few negatives namely reduced production, lost value owing to prices hedging and costs rising but this was skewed by the strike action and compounded with Covid restrictions. Gold production at Syama during the quarter was 46,622oz at an eye watering $1,628/oz AISC! Production this quarter should be back to around 60koz at AISC of $1200/oz as the company are expecting to process higher grade ore at the sulphide operations and at the Cashew prospect which is already providing higher grade oxide material for processing in the December quarter.
Despite the operational difficulties there are positives to be drawn from the update. Namely the company sold 91,000 ounces at an average price of $1694/oz which compares to 111,000 ounces at 1446/oz in the previous quarter. Hedged sales should reduce this quarter which should lead to higher realised prices with gold trading steady around $1900.
Of importance for RSG, HUM, CAPD and CORA holders: An interim government has now been established in Mali following the Coup on 18 August 2020. This government has the support of ECOWAS which has lifted all previously imposed sanctions on Mali. As a result, supply links into Mali have re-opened and transportation of key consumables to Syama has been re-established.
Tabakoroni exploration success continues with intercepts like 5m @ 116.3g/t following the Mineral Resource update which put the total resource above 1Moz at 4.4 g/t. Mining during 2020 at the "Porphyry Splay" pit extracted over 40,000oz from a small shallow open pit, exceeding expectations. The company expect a remodelling of the area will lead to a restart to open pit mining activities.
Thankyou
The Mali political situation has not had an impact. (beyond a lack of clarity about a $58M vat bill)
The issue is operational as is stated in the rns ' a new CEO to take Resolute forward, to deliver improvement in operational outcomes'
Can't say I'm disappointed by JW departure. Good assets here and story...which i'm sure the next CEO will fix
Is the underperformance here mainly due to Mali siuation or the operations? Thanks for any help
Firstly, JW was one of the most responsive CEO's to emailed questions, so I will accredit him with that.
But I agree, things have not been good at rsg under his tenure of late. An example is where they spent lots on automation, then during the previous quarter, resorted to drivers and found that they were getting better productivity.... Cracks in the roaster, pit wall collapses and strikes in the past year could arguably have been avoided with better management.
There was nothing in the Tabakoroni update to tempt me back in. I struggle to believe the proposed AISC, when you look at the sulphide circuit results for Syama for the last quarter the ASIC was $1333, given the extra haulage it is hard to see this being reduced by $350.
CEO John Wellborn sacked - no tears for him.
But just ahead of quarterlies as well, which makes me think there may be bad news on its way.
TBTT - I think regardless of reporting practices, the issue of whether or not there were other underlying reasons for the withdrawal of guidance has been disproved. The other uncertainties highlighted, namely the impacts of the coronavirus pandemic and ECOWAS sanctions is affecting all Mali-based mining operations (HUM are more exposed than RSG but the share price is doing well).
Guidance has been reinstated albeit with the loss of 15,000 ounces due to the strike action. The company expected this to run longer than the 10 days mentioned previously. The removal and reimplementing of guidance was little more than posturing to get the unions around the table.
Today's update confirms RSG are on track to meet 400,000 ounces minimum this year.
"Resolute Mining Limited is pleased to announce negotiations with the Union Nationale des Travailleurs du Mali (UNTM), the union representing workers at the Company's Syama Gold Mine (Syama) in Mali, have resulted in the signing of a conciliation agreement which confirms the cancellation of further planned strike action at Syama.
Conciliation Agreement
A compromise has been achieved between Resolute's subsidiary company in Mali and the UNTM under which a commission will be established to evaluate measures in response to COVID-19 and current economic conditions. The UNTM has agreed to be involved in identifying solutions and has cancelled proposed strike action at Syama.
Following the conciliation agreement operations at Syama have returned to normal and all efforts will be made to ensure a stable industrial relations platform is maintained for the rest of 2020 and beyond. While no guarantee can be provided that the UNTM will not reinstate future strike action, all parties have agreed to the framework of a win-win partnership. The industrial relations dispute and strike actions taken prior to the agreement will result in reduced gold production in the current quarter. The total expected negative impacts on Syama for the September 2020 quarter is a delay in production of approximately 15,000 ounces of gold.
Guidance Update
Following the cancellation of further strike action, Resolute has reinstated production guidance for the 12 months to 31 December 2020. Taking into consideration the negative impact of the industrial relations dispute in the current quarter and other uncertainties relating to the potential impacts of the coronavirus pandemic and ECOWAS sanctions, Resolute has provided an updated guidance range based on previous 2020 guidance.
Total production for 2020 is now expected to be within the range of 400,000 ounces to 430,000 ounces of gold at an All-In Sustaining Cost of between US$980 per ounce and US$1,080 per ounce.
Hi Shareminator!
We'll have to agree to disagree on this one. Yes, Resolute is indeed cheap, but I think it is cheap for good reasons. Not least, it's long history of deceptive and misleading financial reporting.
I'm not a shorter, and there are a lot of other (gold)fish in the pond, so I'll leave it there.