Resolute Mining Company Limited has disclosed that its lease for Bibiani gold mine has been restored and its fully operational.
The mining company, in a press statement, indicated that the Honourable Minister for Lands and Natural Resources, Hon. Samuel Abu Jinapor (MP), has notified that the company becomes operational, however, subject to certain conditions.
The Minister rescinded his earlier decision in order to maintain investor confidence globally as well as to maintain Ghana’s reputation as the preferred destination for mining investment in Africa.
Currently, Ghana is the largest gold producer in Africa and among the top seven producers in the world, the Minister noted while taking this new decision.
The reinstatement of the mining lease is not a smooth one, as it includes meeting outlined conditions.
Meanwhile, Resolute Mining has agreed to adhere to the conditions, which include the government’s non-recognition of the sale or transfer of the mining lease to Chinese Company, Chifeng Jilong Gold Mining. That is, it will only approve of a sale to proceed after the express approval of the government.
This, therefore, brings an end to the ongoing sale of the gold mine to Chifeng Jilong Gold Mining.
The Mining Company is to within the next 7 days submit a report detailing the full state of affairs at the mine and a detailed plan for the redevelopment of the plan to the Ghana Minerals Commission.
The government last month revoked the Mining Company’s lease for the Bibiani gold mine and ordered a halt of all operations at the mining site. Following the abrupt termination of the mining lease, Resolute Mining indicated that it will seek legal advice to know the next action to take.
Resolute Mining records share rise
After the release of the statement and following a comment by Resolute’s interim CEO, Mr. Stuart Gale, the share price of Resolute Mining on the London Stock Exchange rose by 20%. This is an improvement after its drastic fall of 24.7% since the announcement of its termination threatened investor confidence in Resolute’s stock.
“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.
I would like to thank the Minister for his leadership and cooperation on this matter and we look forward to working with him and the Minerals Commission to identify a development option at Bibiani which sees the mine resuming production as quickly as possible for the benefit of all stakeholders.
“I would also like to thank Chifeng for their patience during this process and we look forward to continuing the working relationship which has been developed since announcing the sale in December. We remain committed to the development of Bibiani and will consider all options available to achieve this.”Mr Stuart Gale, CEO Resolute Mining
At least, this turn of events fare better compared to the previous letter which terminated the mining lease, since the letter never disclosed the reasons for termination.