Gold miner Resolute Mining (RSG) could have timed its market entry perfectly as it lists today on the Main Market of the London Stock Exchange.
Its listing comes as the price of gold hit $1,385.40 per ounce, a five-year high, which market commentators have put down to a weakening US dollar and a fears that action in the bond market is signalling a potential recession in the near-term.
Resolute is an established gold producer with mines in Australia and Mali, and it is looking to restart a mine in Ghana. Stockbroker Numis has forecast 312,000 ounces of gold production in the current financial year at an all-in sustaining cost of $923 per ounce.
The £445m market cap business is already listed on the Australian Securities Exchange and hasn’t raised any new money as part of its London market debut.
Speaking to Shares, Resolute’s chief executive John Welborn said the firm chose London for a dual listing as it would be ‘more likely to find investors who understand African-focused miners’ than is currently the case in the Australian market.
He added: ‘We want to attract the right type of investor. We want the value of our stock to do better, and we think we’ll get a fair rating in London.
‘London is an investment pool which understands and backs Australian mining companies. We’re looking for a new class of investor, which is risk-focused and looks at environmental, social and governance factors, looks at technology angles, etc.’
WORLD'S FIRST AUTOMATED MINE
Resolute wants to make its Syama mine in Mali fully automated. Once the upgrade project is complete the mine should produce 300,000 ounces of gold a year, up from its current rate of 200,000 ounces a year. Numis said automation could see Syama’s all-in sustaining cost figure fall from $1,052 per ounce in 2018 to $746 per ounce over the life the mine.
Welborn said there is a ‘gap in the market’ for miners with the technology used by Resolute, and added: ‘People were telling us we’re crazy to make it automated, but we believe you’d be crazy not to. The mine lends itself to automation.’
AMBITIOUS GROWTH
The company has ambitious growth plans, and Welborn said it hopes to have one to three additional mines in the next three to five years with a focus on assets with a life of over 10 years.
He added that the firm hopes to ‘scale up’ through its current investments in other junior miners, with stakes ranging between 11-27% in six gold exploration companies, as well as through acquisitions.
