Are more jobs to come?
Resolute Mining expects no changes to employment at the Ravenswood gold mine in Queensland after agreeing to sell the operation to EMR Capital.
The gold miner has established a sale agreement with a consortium comprising a fund that is managed by EMR Capital and Singapore-listed Golden Energy and Resources (GEAR).The consortium is an ideal party to undertake the development of the Ravenswood expansion project, according to Resolute managing director John Welborn.
Ravenswood will be EMR Capital’s third mining operation in Queensland. The resources private equity manager also owns the Capricorn copper mine near Mt Isa and the Kestrel coking coal mine near the Bowen Basin with partners Adaro and Mitsui. GEAR has investments in gold and coking coal producers in Australia via Westgold Resources and Stanmore Coal. The Ravenswood mine is set to follow through its expansion project according to current mine plans under the leadership of the consortium.The transfer of ownership is not expected to result in any immediate changes to employment or contract relationships at Ravenswood, according to Resolute. “The divestment has strong strategic merit for Resolute,” Welborn said. “We have delivered on our objective of ensuring a new long-life future for Ravenswood under a world-class operator and can now focus our attention and energy on our African portfolio and the abundant opportunities our experience provides for further growth and value creation.”
Resolute will use the cash received from the Ravenswood sale to reduce debt and strengthen the company’s balance sheet. The company has also structured the transaction to maximise its exposure to the future success of the Ravenswood expansion project. Last year, Resolute executed a strategic review of Ravenswood to focus on development scenarios and funding requirements. The sale terms agreed with the EMR Capital and GEAR consortium ensure that Resolute retains upside exposure with no requirement to fund the future capital expenditure associated with Ravenswood.
EMR Capital chief executive Jason Chang said the purchase of Ravenswood reflected the company’s positive view on the future prospects for the mine as one of Australia’s high potential gold mines with scale, strong production and reserve/resource upside. “The Ravenswood acquisition creates a truly exciting opportunity to leverage the positive macro fundamentals in the gold sector and EMR’s strong operational expertise,” Chang said.
“We look forward to realising the potential Ravenswood offers to ramp up production, expand resources and reserves and extend mine life. ”The acquisition also underpins GEAR’s continued diversification into gold in Australia. “After Westgold, this will be GEAR’s second gold investment in Australia diversifying its revenue streams to include that of counter-cyclical precious metals,” GEAR senior head of investments Mark Zhou said. Resolute will receive cash proceeds of up to $300 million comprising $100 million of upfront value, up to $50 million linked to the average gold price over a four-year period and up to $150 million linked to the investment outcomes of Ravenswood for the EMR fund. The transaction is expected to complete in March.
“Since acquisition in 2004, Resolute has mined and processed over 40 million tonnes of ore and produced almost two million ounces of gold,” Welborn said.
“I congratulate the Resolute team, both past and present, for our performance at Ravenswood.”