The Resolute Mining Limited (ASX: RSG) share price is pushing higher in morning trade.
At the time of writing the gold miner's shares are up almost 1% to $1.20.
Why is the Resolute share price pushing higher?
As well as getting a boost from a lift in the gold price, investors have been buying Resolute's shares following the release of an update on its gold hedge book.
According to the release, Resolute has forward sold an additional 37,200 ounces of gold at an average price of US$1,562 an ounce. This compares to the current spot gold price of US$1,560 an ounce.
This arrangement comprises scheduled monthly deliveries of 1,200 ounces between July 2020 and December 2020 and scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
Management made the move after deciding to take advantage of market volatility and the current gold price strength to incrementally extend its US dollar denominated gold hedge position.
It notes that the hedging will secure price certainty for a portion of its US dollar revenues generated from its African gold mines: the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.
Today's deal is on top of its existing US dollar forward gold sales program. That existing program consists of 77,800 ounces of gold forward sold at an average price of US$1,522 an ounce in scheduled monthly deliveries through to December 2020
Resolute's managing director and CEO, John Welborn, was pleased to continue the company's success in maximising gold sales revenue through responsible hedging strategies.
He said: "Incremental expansion of our US dollar hedging position at current levels which are significantly above our budgeted gold price, protects and supports Resolute's revenue and cash flow."
"As we seek to expand our existing low-cost senior revolving syndicated loan facility, our hedging program has strong support from our syndicate banks as our modest hedge book protects the Company's balance sheet and supports a portion of our future revenue and cash flows."
"With long mine lives, large gold inventories, and an industry leading production growth profile, Resolute remains strongly leveraged to future upside in gold prices," he concluded.
Elsewhere in the industry today, Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) shares are pushing higher following the aforementioned rise in the gold price.
