Interesting Resolute/Mali side noteINTERVIEW-Australia miners see more gold in Africa
* Australia's Resolute sees more Africa gold opportunities* Australian deposits harder to claim as gold price rises(Repeats item first sent Dec 7 to additional subscribers)By James ReganSYDNEY, Dec 7 (Reuters) - Australia's third largest goldminer, Resolute Mining <RSG.AX>, wants to dig deeper intoAfrica's gold mining sector after spending $186 million on anew project in Mali, as expansion opportunities at home turnscarce, its chief executive said on Monday.Rising bullion prices have ignited a rush to mine more goldacross Australia, making it harder to peg new outback deposits,according to the executive, Peter Sullivan.This year, Australia will become the world's second largestgold producer behind China, with one-time top producer SouthAfrica in fourth place, according to sector consultantsSurbiton Associates."Growing a junior gold mining company in Australia is toughwork," Sullivan told Reuters in an interview."In contrast, parts of Africa, including Cote d'Ivoire,Mali Burkina Faso and Ghana are very under explored," Sullivansaid.Australia's second largest listed gold miner Lihir Gold<LGL.AX>, this year closed one of its Australian mines,redirecting more spending to Ivory Coast -- better known forits cocoa -- where it says mining opportunities are greater.SHED JUNIOR IMAGEResolute mined 127,000 ounces of gold in Tanzania lastyear, worth $150 million at current bullion prices. By 2011, itexpects production from its new Syama mine in southern Mali toyield more than a quarter-million ounces annually afterspending $186 million to rebuild an ore processing plant.This compares with 152,000 ounces produced at the company'sRavenswood mine in eastern Australia last year.Resolute is capitalised at around $A382 million ($330million). It's first African mine, in Ghana, ran dry in 2003after yielding 730,000 ounces."Where others might not be comfortable in Africa, we are,"said Sullivan. "We've got a good history there."Sullivan said he wants to turn Resolute into a 400,000-to-half-million-ounce-per-year gold producer, enabling the companyto shed its junior status and attract a wider shareholding.But even at its current size, Sullivan said there waslittle difficulty raising more than $100 million to get itsMali mine running thanks to strong bullion prices."It wasn't a big ask," he said.British funds manager M&G Investments recently bought a10.5 percent stake in Resolute, making it the company's secondlargest shareholder behind Alliance Life Common Fund with 24.5percent.Political instability and abnormally high royalties -- at 6percent Mali's government royalty rate is more than doubleAustralia's -- can add to the risk of mining in Africa.Also, Mali is one of the world's poorest nations. Sinceindependence from France in 1960 it has suffered droughts,rebellions, a coup and 23 years of military dictatorship.Since 1992, when its first democratically elected presidenttook power, Mali has had a civilian government.Opportunities in Africa outweigh the negatives, Sullivansaid."Australia is relatively mature from the amount ofexploration that's been conducted over the key areas, reducingthe chances of finding gold," Sullivan said."But in Africa, a lot of the gold-bearing geology has hadno modern exploration whatsoever. So, when we look at where tospend our exploration dollars, its going to be in an area wherethere's a high chance of finding gold and no one else has evenlooked."Bullion is set to end the year on a high note. Februarygold futures in New York on Monday settled down $5.50 at $1,164an ounce on the COMEX, still not far from record highs above$1,200 an ounce even after their biggest two-session percentageloss since October 2008."All the trends which have seen the price of gold skyrocketover the past year are set to continue into 2010," onlinebroker CMC Markets gold analyst David Taylor said.($1=1.091 Australian dollar)(Editing by David Gregorio)2009-12-08 03:02:37