Resolute Mining Limited reported that it has forward sold 72,000 ounces of gold at an average price of A$1,715 per ounce with scheduled monthly deliveries of 4,000 ounces between December 2017 and May 2019. The average gold price received in the forward sales contracts of A$1,715 per ounce is a significant premium above Resolute’s budgeted gold price of A$1,600 per ounce.
Resolute has taken advantage of the recent strength in the A$ gold price to establish a gold hedge position to support the Ravenswood Expansion Project. The objective of the hedge is to protect project returns during the development phase of the 13-year mine life of the Ravenswood Expansion Project. Resolute is currently in a transition phase at Ravenswood as underground mining at Mt Wright comes to an end and the operation returns to large scale open pit mining.
The new A$ hedging is in addition to the remaining forward sales program of 84,000 ounces at an average price of US$1,330 per ounce which was established to support the Syama Underground Mine development program (refer to ASX announcement dated 1 September 2017).
Combined with Resolute’s existing US$ forward contracts, the group’s total hedged position represents approximately 30% of expected gold production over the next 18 months.