Return of Resolute Lease Comes with a Rider

Gold miner Resolute has regained its Bibiani gold mining lease in Ghana but unfortunately, that is all it has gotten back.

The Ghanaian government terminated the lease last month with no notice and no apparent reason.

But yesterday Resolute told the ASX the lease had been returned – but with conditions.

One of those conditions placed on the restored lease explains the original decision – the government has retained control over who can buy the lease and in effect has, for the time being, stymied the plan by Resolute to sell the lease to a Chinese company for $US105 million.

The government told Resolute that it cannot sell the Bibiani project to China’s Chifeng Jilong without “express permission”.

That means the government was upset at Resolute’s move last December to see the lease. The company seems to have needlessly upset the government.

In agreeing to return the lease, the Ghanaian government said it did not recognise Resolute’s purported $US105 million sale of the Bibiani Gold Mine to Chifeng Jilong Gold Mining Co, as announced in December.

Ghana also “objects to the purported sale or transfer to Chifeng”, and said that the creation of any interest in the mine to Chifeng or any third party will be deemed invalid without the express prior approval of the government.

Resolute must also submit to the Ghanaian Minerals Commission an environmental report on the mine and a detailed plan for its redevelopment.

Resolute says it intends to comply with the conditions imposed by the Minister.

“We are very pleased to have come to a quick and amicable resolution which provides clarity and confirmation of (our) mining lease at the Bibiani Gold Mine,” Resolute’s interim CEO Stuart Gale said.

Mr Gale said he was looking forward to working with the minister and the Minerals Commission to identify a development option at Bibiani which sees the mine resuming production as quickly as possible.

He also thanked Chifeng “for their patience during this process.”

“We look forward to continuing the working relationship which has been developed since announcing the sale in December,” Mr Gale said. “We remain committed to the development of Bibiani and will consider all options available to achieve this.”

It seems Resolute now wants to be the owner.

That was a decision investors were happy with – Resolute shares bounced more than 14% by the close yesterday, ending at 54 cents.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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