Resolute Mining (ASX:RSG) finally sells Bibiani mine for $122 mil

Company News

by Melissa Darmawan

Gold player Resolute Mining (ASX:RSG) has finally landed a deal to offload its Bibiani gold mine in Ghana for $122 million (US$90mil) to U.S listed company, Asante Gold.

The deal was struck after their first attempt to divest the mine for $142 million (US$105m) in December 2020 to China’s Chifeng Jilong Gold Mining Co which grinded to a halt in April this year. The Chinese miner said it didn’t receive timely information from Resolute Mining about the termination of the mining lease.

Ghanaian Minerals Commission unexpectedly cancelled the mining licence in March ordering all operations and activities at the mine to stop, to then reinstate the lease a month later blocking the recognition of the sale.

The Shanghai listed miner had already put down a down payment of $6.7 million (US$5m) upon inking the dotted line to then find out about the lease cancellation. If the deal was to go ahead, it would have marked Chifeng Jilong’s second overseas acquisition, after it bought a 90 per cent stake in the Sepon gold which would see the Chinese's mining portfolio increase from five to six.

Resolute has already banked $40.6 million (US$30m) from the newly struck agreement with another $40.6 million to be paid 6 months on or before the completion followed by another $40.6 million on or before 12 months from completion.

In February this year, the miner reported a disappointing FY20 NPAT of $49.3 million (US$36.5m) while EBITDA improved by 87 per cent compared to the prior corresponding period to $364.7 million (US $269.7m) on steady sales volumes of 395 thousand ounces though increased depreciation costs put a lid on this rise translating to the bottom line.

The new deal has received Ministerial Consent after receiving approval by the Ghanaian Honourable Minister of Lands and Natural Resources, with the transaction forecasted to complete in 10 days.

Shares in Resolute Mining are trading 5.4 per cent higher at $0.585. 

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