The Ghanaian government has restored the mining lease for the Bibiani gold mine, ASX- and LSE-listed Resolute Mining reported on Wednesday, however, the sale of the asset was now being questioned.
The company, in March this year, announced that it would seek legal advice after the Ghanaian Minerals Commission terminated the mining lease for the Bibiani gold mine, and ordered Resolute to cease all activities and operations at the mine site.
Resolute earlier this year struck a $105-million sales agreement with China’s Chifeng Jilong Gold Mining Co for the sale of the Bibiani mine, which Resolute acquired in 2004 and placed on care and maintenance shortly after.
The sales agreement followed a review of the asset to consider the benefits of continuing operations at Bibiani, or to consider if another company would be better placed to continue with Bibiani.
Minister of Lands and Natural Resources Samuel Jinapor has now advised Resolute that the mining lease has been restored subject to a number of conditions, including Resolute and its subsidiary Mensin Gold Bibiani (MGBL) acknowledging and accepting that the mining lease was terminated and that the Ghanaian government did not recognise the sale or transfer of the Bibiani mine to Chifeng.
Resolute and MGBL have been ordered to submit a report detailing the full state of affairs at the mine, including the environmental, health and safety conditions to the Ghanaian Minerals Commission within the next seven days, along with a detailed plan for the redevelopment of the mine with timelines and investment requirements.
Furthermore, any purported sale, assignment or transfer of the mining right to a third party would be subject to prior approval of the Ghanaian government, with the government also objecting to the purported sale or transfer of the asset to Chifeng, and that the creation of any interest in the mine to Chifeng or any other third party would be deemed invalid without the express prior approval of the government.
Resolute told shareholders that it would comply with the conditions imposed by the government.
“We are very pleased to have come to a quick and amicable resolution which provides clarity and confirmation of MGBL’s mining lease at the Bibiani gold mine,” said Resolute interim CEO Stuart Gale, adding that the miner was looking forward to working with the government to identify a development option at Bibiani that would see the mine resume production as quickly as possible.
A 2018 feasibility study into a Bibiani restart estimated that the project could produce some 100 000 oz/y over a ten-year mine life, at a total capital cost of around $115-million.
The project is currently estimated to host some 21.7-million tonnes, grading 3.6 g/t gold for 2.5-million ounces of contained gold.
Gale has also thanked Chifeng for its patience during the process, saying that Resolute was hoping to continue the working relationship that was established with the Chinese firm since the sale of the Bibiani asset was announced in December.
“We remain committed to the development of Bibiani and will consider all options available to achieve this,” Gale said.
Source: Mining Weekly