The Resolute Mining Limited (ASX: RSG) share price is on course to end the week on a disappointing note.
In morning trade the gold miner's shares are down 4% to 73.5 cents.
This latest decline means the Resolute share price is now down over 50% from its 52-week high.
Why is the Resolute share price dropping lower?
Investors have been selling the company's shares this morning following the release of a market update.
According to the release, Resolute recorded gold production of 89,888 ounces during the three months ended 31 December. This comprised production of 35,747 ounces from Syama Sulphide, 10,754 ounces from Syama Oxide, and 43,387 ounces from Mako.
This led to the company's total gold production during calendar year 2020 coming in at 395,136 ounces with an all-in sustaining cost (AISC) of US$1,074 an ounce.
While this means its costs just scraped in at the high end of its guidance range, its production fell short of its downgraded guidance of 400,000 ounces.
Management blamed issues at the Syama Gold Mine in Mali for the guidance miss. It notes that open pit operations experienced mining equipment availability and process plant material handling issues.
At the end of the period, Resolute had cash and bullion of US$106 million.
What about 2021?
For the 12 months to 31 December 2021, management is forecasting a decline in total gold production to 350,000 ounces to 375,000 ounces.
It is also expecting its costs to increase to an AISC of between US$1,200 an ounce and US$1,275 an ounce.
The main drag on its performance in 2021 will be its Mako operation. While gold production is expected to lift at Syama, management is forecasting a sizeable production decline and an increase in costs at Mako.
Management advised that this is due to a cut-back of the main pit being undertaken, which will provide access to deeper sections of the deposit and increase the life of mine.
Non-sustaining capital expenditure is forecast to be US$29 million. This is inclusive of the Mako cut back of US$13 million and capitalised exploration expenditure of US$6 million. Sustaining capital expenditure of US$49 million is included in its AISC.
