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Resolute buys Xstrata's Ravenswood for $58m

January 14, 2004 — 11.00am

Resolute Mining has acquired the old MIM Ravenswood goldmine in north-east Queensland from Xstrata for $US45 million ($57.8 million) and re-established itself as one of Australia's biggest locally controlled gold producers.

The deal will deliver Resolute additional annual production of 200,000 ounces, taking total output to 350,000 ounces, enough to rank Resolute as the third-biggest locally based gold producer, even though all of its current production comes from operations in west Africa.

Resolute ranked as one of Australia's biggest gold producers in the early 1990s but was forced to turn its attention offshore after its local operations were hit by the depletion of reserves and the then low gold price.The London-listed Xstrata inherited Ravenswood in its $2.2 billion takeover of MIM in June last year.

The operation was considered non-core, with Xstrata's main interest in MIM being its coal and copper operations in Queensland.Ravenswood is a relatively high-cost producer. In the June 2003 half-year it generated a profit of $2.5 million from the production of 77,628 ounces. Cash costs have been variable, rising from $376 an ounce in the June 2003 quarter to $534 an ounce in the September 2003 quarter before falling to $343 an ounce in the December 2003 quarter.