The Resolute Mining Limited (ASX: RSG) share price is on course to finish the week with a bang.
In late morning trade the gold miner's shares are up 10% to $1.32.
Why is the Resolute share price charging higher?
Investors have been buying Resolute's shares this morning following the release of an update on its Syama Gold Mine.
Two weeks ago, Resolute took its roaster offline after detecting a crack in the main external shell. The roaster is a key component of the sulphide processing circuit at the mine.
This morning the company revealed that it has completed its investigations. According to the update, management expects the sulphide roaster to be repaired and fully operational in approximately six weeks' time.
The company intends to install a secondary steel shell to the defective area where the crack has occurred. This will require the construction of a platform to access the area and the removal of a limited amount of internal refractory insulation material.
Whilst six weeks may seem like a lot of time for such activities, it is required to allow for an independent QA/QC sign-off prior to a re-heating period and a return to full roaster service.
What impact will this have?
It looks unlikely to have a material impact on Resolute's performance.
Resolute estimates the total cost of the roaster repairs to be US$5 million. This amount is expected to be offset by operational cost savings from not operating the roaster during the repair period.
In respect to production, the roaster downtime will result in lost gold production from the sulphide circuit. However, Resolute intends to offset this by processing oxide material through the Syama sulphide circuit carbon in leach (CIL) infrastructure.
In addition to this, production is expected to be improved further by above budget performances from the Syama oxide circuit, the Ravenswood Gold Mine in Queensland, and Resolute's new Mako Gold Mine in Senegal.
As a result, management has not made any changes to its FY 2019 gold production guidance. It continues to expect production of 400,000 ounces for the twelve months to December 31.
Elsewhere in the sector today, the Newcrest Mining Limited (ASX: NCM) and the Northern Star Resources Ltd (ASX: NST) share price have charged higher thanks to a rise in the gold price overnight.
