Ann: Quarterly Activities Report, page-25

From mining news..

Resolute’s balance sheet of bullion

RESOLUTE Mining has unveiled a distinctly different strategy to its ASX gold mining peers with the decision to hold significant bullion on its balance sheet.

• Michael Quinn​
• 25 Jan 2017​
• 1:31​
• News​

Resolute's John Welborn and Perth Mint CEO Richard Hayes
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GoldGOLD 2017John Welborn Resolute Mining
The company’s bullion holding at the end of December totalled 83,379 ounces, valued at nearly $A133 million, substantially up on the $26.4 million of bullion held just three months earlier.
Total cash, bullion and listed investments totalled $282.5 million at the end of December, compared to $272.8 million at the end of September.
Questioned about the strategy Resolute managing director John Welborn suggested it was being implemented in the belief it would maximise returns for shareholders, and that it was surprising other companies didn’t follow suit.
“Gold for a gold company is a currency,” Welborn said.
“I am surprised more companies don’t follow this ideology.”
He pointed out that Resolute’s production in both Africa and Australia effective meant it had exposure to 3-4 key currencies – most particularly the US and Australian dollars, as well as the Euro.
Holding bullion allows Resolute to better proactively juggle these exposures, according to Welborn.
He also noted how bullion was now trading at a better price than it had during the December quarter, and suggested Resolute consistently beat its peers in the gold price it realised.
According to analysts the strategy of holding gold is likely to be polarising, piquing the interest of so-called gold bugs (who, like Welborn, believe the price of gold will head north), and not necessarily impressing other investors in the investment community.
Meanwhile, Welborn also suggested that Resolute’s backing of exploration juniors with promising projects in Africa would “be a theme” for the current year.
On the production front, Resolute had a strong headline quarter with 91,224 ounces produced at all-in sustaining costs of $835 per ounce.
While that meant the company was tracking ahead of guidance, no formal change to the full-year target has yet been made.
Share in Resolute were off 2.7% to $1.45 in midday trade, capitalising the company at $1.07 billion.