THE WEST AUSTRALIAN
Wednesday, 28 November 2012 09:55
Resolute Mining doesn't expect a quick turnaround from its investment in Noble Mineral Resources, with CEO Peter Sullivan warning it will take significant effort to turn around Noble Mineral Resources' Bibiani operations in Ghana.
Resolute won a battle with China's Zhongrun Mining Investment earlier this month over a strategic investment in Noble, with the prize the opportunity to revive the troubled 2.8 million ounce project.
Speaking at the company's annual meeting yesterday Mr Sullivan said Resolute would provide technical support to Noble in addition to underwriting an $85 million convertible note rescue package, but warned Resolute shareholders a turnaround at Bibiani was no easy feat.
"It's had a troubled history for Noble, it hasn't performed as expected. They are undercapitalised for what needs to be done there, and so really we've taken an opportunity to take a position with this asset through a financing package and a shareholding," he said.
"We do believe in the long-term future of that project but it does need quite a lot of effort to get it viable. So that is the task in front of us - it's not going to be a two or three-month turnaround exercise, it's going to take quite a bit of effort to get Bibiani firing. So we have a significant position there and we'll see how it unfolds over the next 12 months."
Resolute chairman Peter Huston said it was still on the lookout for other acquisitions but would take a cautious approach to new investments. While its Syama operation in Mali was undergoing an expansion, mining at the 115,000 ounce a year Golden Pride mine in Tanzania was expected to end by the middle of next year. Resolute shares ended up 1¢ to $1.92 yesterday.
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