The Resolute Mining Limited (ASX: RSG) share price is pushing higher in morning trade.
At the time of writing the gold miner’s shares are up 2.5% to $1.14.
Why is the Resolute share price pushing higher?
Investors have been buying the company’s shares following the release of its production update for FY 2019 and guidance for the year ahead.
During FY 2019 Resolute reported gold poured of 384,731 ounces and gold sales of 394,920 ounces. This compares to its production guidance of 400,000 ounces.
Also missing its guidance was its All-In Sustaining Cost. That came in at US$1,090 per ounce, compared to its guidance of US$1,020 per ounce. Issues at its Syama operation were behind the underperformance.
Resolute also revealed that it received an average US$1,344 per ounce for its gold, which means a margin of US$254 an ounce.
This left the gold miner with cash, bullion and listed investments of US$127 million at the end of FY 2019.
What about FY 2020?
With the issues at Syama now resolved, management appears confident that FY 2020 will be much stronger.
It expects to increase its production to 500,000 ounces, almost 30% higher year on year.
It also expects a sharp drop its All-In Sustaining Cost. This is forecast to come in at US$980 an ounce. This represents a 10% reduction on FY 2019’s costs.
On an operation by operation basis, management expects Syama production of 260,000 ounces at US$960 an ounce, Mako production of 160,000 at US$800 an ounce, and Ravenswood production of 80,000 at US$1,200 an ounce.
Resolute’s managing director and CEO, John Welborn, was optimistic on the year ahead.
He said: “Production guidance for 2020 of 500,000 ounces is a significant milestone for Resolute. Following completion of the repairs at Syama in late 2019, we have started 2020 with all our operations operating at nameplate capacity and generating positive cashflows. Strong operating cashflows, and reduced capital demands, will support a stronger balance sheet and create further opportunities for Resolute’s growth and ambition.”
The post Resolute Mining share price higher on FY 2020 guidance appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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