At time of writing, shares of Resolute Mining Limited [ASX:RSG] are down 9.5%, trading at $1.045 apiece.
This is a 27.4% drop from its one year high of $1.44.
Resolute Mining operates two mines, one in Queensland and another in Mali. It has plans to develop a third mine in Ghana.
If you’re interested in which ASX mining stocks are worth keeping an eye on, check out our analyst Jason Stevenson’s free report here.
Resolute’s share price tied to gold price
Despite a production update which reaffirms 2019 production guidance of 300,000 ounces at an all in sustaining cost of $1280, gold’s price has slipped over the past two days.
This has driven Resolute’s share price down as investor’s price in lowered revenues for the company.
Gold has been trading downwards for the year as seen below.
Resolute’s production down for now
As the production update notes, ‘Production and cost performance during the September Quarter was, as expected, reduced due to the scheduled biennial roaster shutdown at Syama.’
A roaster is a gold processing device which extracts gold from ore.
Additionally, heavy rainfall this quarter also impeded Resolute Mining’s ability to process ore.
Going forward however, Resolute Mining’s Managing Director and CEO John Welborn believes:
‘Resolute is now poised to enter a new era which will be defined by the success of the Syama Underground Mine, the world’s first customised fully automated underground mine.’
The hope is that with improvements at the Syama mine, Resolute can reverse its drop in earnings.
For Market & Money
PS: Get a great list of 10 mining stocks that our resource analyst Jason Stevenson thinks are set for a great year. It’s available for free here.