Resolute Mining (LSE: RSG; ASX: RSG) is seeking legal advice after its mining lease for the Bibiani gold mine in Ghana was terminated and the company was told to cease all activities and operations at the mine site.
In a press release today, Resolute said that the action on behalf of the Minister of Lands and Natural Resources was unexpected, and that the company is seeking clarification from the Minister's office.
The miner announced in December that it was selling the gold mine to China's Chifeng Jilong Gold Mining for US$105 million in cash.
Resolute acquired Bibiani in 2004 but placed the mine on care and maintenance shortly afterwards, to allow exploration activities to develop the asset into a large-scale operation.
Resolute changed course in January 2020, launching a review of the mine to determine whether to keep it or sell it to a company "in [a] better place" to keep the gold mine running.
A 2018 feasibility study estimated a Bibiani restart could produce about 100,000 oz. gold a year over a ten-year mine life, at a total capital cost of around US$115 million.
The project is estimated to host 13.3 million tonnes grading 3.5 grams gold per tonne for 1.49 million oz. in the measured resource category and another 8.44 million tonnes grading 3.7 grams gold per tonne for 1.01 million inferred ounces.
Shares of Resolute listed on the London Stock Exchange fell 25% on the news to finish the day at ?27.48 per share.