RESOLUTE resources (ASX: RSG) has inked definitive agreements for the $300m sale of its Ravenswood gold mine in Queensland to Golden Energy and Resources.
The cash will be split up into a $100m upfront payment and up to $200m in potential payments contingent with gold prices, future gold production from the mine, and the investment outcomes for the mine for EMR Capital.
This includes up to $50m linked to the average gold price over a four-year period, and up to $150m linked to the investment outcomes of Ravenswood for the EMR Fund through upside sharing payments.
Since purchasing the mine in 2004, Resolute has processed more than 40mt ore, resulting in about 2moz gold.
The company said that there would be no immediate changes to the Ravenswood employment or contract relationships, and that current mine plan and development plans would continue.
The sale, according to a statement, provides “strategic clarity and is consistent with Resolute’s ambition of being a low-cost multi-mine African-focused gold producer,” and that “Transaction terms maximise financial returns for Resolute from the Ravenswood Gold Mine with no future capital or funding requirements”.
Resolute managing director, John Welborn, said the sale would strengthen the company’s balance sheet while removing the need for significant near-term capital investment.
“We have delivered on our objectives of ensuring a new long-life future for Ravenswood under a world-class operator and can now focus our attention and energy on our African portfolio,” he said.
Golden Energy and Resources is a Singapore-based company primarily focused on the mining, marketing and trading of thermal coal.
The company is the largest shareholder in Australia’s Stanmore coal, the Ravenswood mine becoming its second investment in Australia.
