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Resolute Mining, the Perth-based gold producer with a significant African footprint, has dramatically expanded its portfolio with a daring $150 million swoop for two promising gold projects in Côte d’Ivoire. The acquisition of the Doropo and ABC projects from mining heavyweight AngloGold Ashanti marks a significant strategic shift for Resolute, promising a near-term surge in production and a deeper foothold in a burgeoning West African mining hotspot.
In a move that has sent ripples through the gold mining sector, Resolute announced the binding agreement, outlining a phased payment structure. An initial $25 million cash injection will be followed by $50 million in 18 months and a final $75 million after 30 months. The deal also includes a 2% royalty on the ABC Project and a potential $10 million bonus should a feasibility study unveil a gold reserve exceeding a hefty 1 million ounces.
Adding an intriguing twist, Resolute will hand over its exploration permits in Guinea to AngloGold, pending government approval. Should this transfer hit a snag within 18 months, Resolute will instead cough up $25 million to its counterpart.
The jewel in the crown of this acquisition is the Doropo Project, a near-ready development boasting a definitive feasibility study and a substantial 1.88 million ounces of gold at a respectable grade of 1.53 grams per tonne. The 2024 study envisions an open-pit operation churning out an average of 167,000 ounces of gold annually over a decade, with an impressive average all-in sustaining cost (AISC) of just US$1,047 per ounce.
This strategic grab is poised to significantly boost Resolute’s annual gold production beyond the coveted 500,000-ounce mark, complementing its existing Syama mine in Mali and the Mako operation in Senegal. Resolute is bullish on the deal, predicting a highly accretive outcome for its investors, citing the 2024 study’s robust 34% post-tax Internal Rate of Return (IRR) and a swift 2.1-year payback period based on a gold price of $1,900 per ounce.
However, Resolute isn’t resting on its laurels. The company intends to refine and de-risk the existing plans, with a keen focus on optimizing pit designs to align with their more optimistic gold price assumption of $1,950 per ounce (compared to the study’s $1,450). They will also explore adding diesel backup power, re-evaluate site layouts, and refresh cost estimates to reflect current market conditions.
The timeline suggests a final investment decision by the close of 2025, followed by approximately two years of construction, with the first gold pour anticipated by mid-2028. Resolute plans to fund this ambitious undertaking through existing cash reserves and by tapping into external debt facilities, with a project finance process already in the pipeline.
The ABC Project, while still in the exploration phase, adds further allure with an inferred mineral resource estimate of 2.16 million ounces grading 0.9 grams per tonne, hinting at significant future potential.
Resolute’s Managing Director and CEO, Chris Eger, was effusive about the acquisition, stating, “This acquisition marks an exciting new chapter for Resolute. We believe it is a highly accretive transaction that provides a foundation for future value creation for all stakeholders.” He emphasized the strategic importance of Côte d’Ivoire as a “stable, well-established mining jurisdiction” and highlighted the opportunity to leverage their existing exploration presence in the country.
Eger further noted that adding a third mining jurisdiction is a “pivotal moment” for the company, signalling a clear shift towards growth. He anticipates that Doropo will become a low-cost asset, significantly bolstering the group’s cash flow and complementing the established operations at Syama and Mako.
“The addition of Doropo and ABC fits into Resolute’s strategy of becoming a diversified leading gold producer in Africa with strong growth potential,” Eger affirmed. He also expressed enthusiasm about inheriting a “very capable and dedicated in-country team,” crucial for advancing the Doropo project.
Resolute is now focused on securing the necessary permits, bolstering its project team, and initiating a thorough review of the project in conjunction with the front-end engineering and design process. The company is confident in replicating past successes in developing high-quality gold mines, promising significant value creation for Côte d’Ivoire, local communities, and its shareholders. This bold move firmly positions Resolute Mining as a rising force in the African gold landscape.
