The Resolute Mining Limited (ASX: RSG) share price has pushed higher in morning trade following an update on its Ravenswood operation.
At the time of writing the gold miner's shares are up 1.5% to $1.19.
What did Resolute announce?
This morning Resolute announced that it has signed definitive agreements for the sale of the Ravenswood Gold Mine in Queensland to a consortium comprising a fund managed by private equity manager EMR Capital and leading energy and mining company Golden Energy and Resources.
According to the release, sale proceeds of up to A$300 million in cash will be received by Resolute.
This comprises A$100 million of upfront value and up to A$200 million in potential payments. The latter is contingent on future gold prices, future gold production from the mine, and the investment outcomes from the mine for EMR Capital.
Management notes that this means the transaction is structured to maximise Resolute's exposure to the future success of the Ravenswood expansion project. It also transfers the capital expenditure funding requirements and development obligation to a highly credentialed and experienced consortium with a strong relevant track record in successful project development.
The company's managing director and CEO, John Welborn, was delighted with the transaction.
He said: "The sale of our Ravenswood Gold Mine on the terms announced today provides the opportunity for exceptional value for Resolute shareholders. We have strengthened our balance sheet with a combination of immediate cash and the potential for future upside as well as removing the requirement of a large near-term capital investment."
"The divestment has strong strategic merit for Resolute. 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," he added.
