March 7, 2011 / 3:40 PM / 6 years ago

PDAC-Resolute to return exploring as it boosts output

4 Min Read

* Will boost gold production to 450,000 ounces by 2012

* CEO says new ore body needed for company to grow

* Company to refocus on exploration

* Sees future development in Mali, Ivory Coast

By Julie Gordon

TORONTO, March 6 (Reuters) - Resolute Mining (RSG.AX) will boost production by 150,000 ounces over the next two years and shift its focus to exploration as it looks to secure a new ore deposit to replace gold ounces now coming online, said the CEO of Australia's No.2 gold producer.

"We've essentially developed pretty much the resource base that we have already," said Resolute Chief Executive Peter Sullivan in an interview with Reuters ahead of the PDAC prospectors and developers conference in Toronto.

"So from now on, the next growth of the company is going to come from another ore body somewhere else."

The company has current reserves and resources of 10.4 million gold ounces in Australia and Africa.

Resolute's cornerstone asset is the Syama project, located in Mali, and the company will remain focused on exploring West Africa for new projects, said Sullivan.

A feasibility study to expand Syama to include a new, 3 million ounce pit, and a second study that could extend the mine's life are both due to be completed this year.

"We have a serious operation there for a least a decade, and probably longer," said Sullivan, referring to Mali. "It's always easy to look for opportunities where you have a pretty solid base."

He said the company will spend A$12 million ($12.2 million) on exploration in 2011, including a greenfield exploration plan in Ivory Coast.

"Generally in Africa, because you're going over this ground the first time -- you do have a better chance perhaps of finding ore bodies," said Sullivan, adding that there are risks when dealing with less stable governments.

Resolute's operations in Ivory Coast have been shut down since violence erupted there over a disputed election in December.

Still, with gold prices hitting record highs on fears that Libya's escalating unrest could spread across the Arab world, the risks are worth it, said Sullivan.

"You start reviewing the countries that you are looking at," said Sullivan. "It's a bit of a judgment as to whether you do go to a country that you feel may be actually changing from a regime that may not have been so popular to one that is going to be popular."

Sullivan said he sees the northwest African nation of Mauritania, home to the Tasiast project that Kinross Gold (K.TO) acquired through its $7.1 billion bid for Red Back Mining, as the next big place for gold mining in Africa.

Like Kinross, Resolute is always eyeing opportunities to pick up a good project, or junior mining company, to help bulk out its production profile.

But Sullivan noted that high gold prices, combined with an increasingly investor friendly climate in West Africa, finding those gems is getting more difficult.

"It is now the game of finding the new projects," said Sullivan. "It's quite a competitive scene at the moment, particularly in West Africa."

$1=$0.99 Australian Editing by Frank McGurty

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