From www.miningnews.netResolute shares soar on Syama...

From www.miningnews.net


Resolute shares soar on Syama option

Michael Quinn


Tuesday, September 23, 2003
RESOLUTE Mining's capitalisation has doubled in the last couple of months as the market speculates its option over the multi-million ounce Syama project in Mali may be exercised.

MiningNews.net was unable to contact Resolute CEO Peter Sullivan, who is currently on leave, but a spokesman for the African miner said no news on Syama was expected ahead of the company's September quarterly report due to be released next month.

The spokesman attributed the strong rise in the share price to Syama, the gold price, and the company's better-than-expected $15.3 million profit earlier this month

Syama, though, is the key.

Resolute has a 12 month option (costing US$75,000 per month till early next year) to pay up to US$12.6 million for an 80% stake in measured and indicated resources of more than 5 million ounces.

The catch is the ore is metallurgically difficult to treat, with Resolute's early testwork showing that costly roasting may be required if all of the orebody is to be targeted.

Whole-of-ore roasting by previous miners BHP and Randgold proved problematic based on the high cost of maintaining the roaster at optimum operating temperature.

Resolute is also looking at pressure oxidation techniques used at the Macraes mine in New Zealand, and the possibility of targeting specific, metallurgically simple, parts of the orebody.

"At these higher gold price levels, Syama using any treatment process would probably make money and if an [investor] wants to have exposure to upside in the gold price there's plenty of exposure, with Resolute having an option over a multi-million ounce gold deposit … completely unhedged and very low acquisition price," Resolute's spokesman said.

Shares in Resolute were up 3 cents to $1.33 in morning trade.