The Resolute Mining Limited (ASX: RSG) share price is the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday by some distance.
In early trade the gold miner's shares were down as much as 8.5% to 85.5 cents.
At the time of writing, the Resolute share price has recovered a touch but is still down 7% to 87 cents.
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Why is the Resolute share price sinking lower?
Investors have been selling the company's shares following the release of its third quarter update this morning.
According to the release, for the three months ended 30 September, Resolute achieved total gold production of 87,303 ounces. This was a 19% reduction compared to the June quarter and driven largely by industrial action at its Syama operation.
Another disappointment was its All-In Sustaining Cost (AISC), which came in at US$1,284 per ounce. This was up from US$1,033 per ounce in the previous quarter and lifted its year to date AISC to US$1,095 per ounce.
Nevertheless, thanks to the strong gold price, Resolute still has profitable operations.
The company revealed that it commanded a realised gold price of US$1,694 per ounce for the quarter. This compares to the average spot price of US$1,913 per ounce.
As a result, the company ended the period with cash and bullion of US$106.4 million, up from US$87.5 million three months earlier.
Outlook.
Looking ahead, management has warned that its production in FY 2020 is expected to be at the lower end of the guidance range of 400,000 ounces to 430,000 ounces.
Unfortunately, this is expected to lead to its costs hitting the higher end of its guidance range of US$980 per ounce to US$1,080 per ounce.
Management advised that this guidance reflects the negative impact of the industrial relations dispute in the September quarter and other uncertainties relating to the potential impacts of the coronavirus pandemic and ECOWAS sanctions.
