The Resolute Mining Limited (ASX: RSG) share price has been an exceptionally strong performer on Wednesday.
In morning trade, the gold miner’s shares rocketed as much as 20% higher to 56.5 cents.
At the time of writing, the Resolute share price has eased back a touch, but remains up 16% to 54.5 cents.
Why is the Resolute share price rocketing higher?
Investors have been buying Resolute’s shares on Wednesday following the release of an update on its Bibiani Gold Mine operation in Ghana.
Last month investors were heading to the exits in their droves after the Ghanaian government cancelled its mining lease, forcing the immediate termination of activities.
This was a big blow given that the asset was due to be sold to Chifeng Jilong Gold Mining in the very near future.
What’s the latest?
The good news for shareholders is that this morning the company revealed that the mining lease for the Bibiani Gold Mine has been restored by the Ghanaian Honourable Minister for Lands and Natural Resources, Hon. Samuel A Jinapor, MP.
The release explains that the Minister made the decision to maintain investor confidence globally and in particular maintain Ghana’s reputation as the preferred destination for mining investment in Africa.
However, the reinstatement isn’t as straightforward as it might first seem. Resolute advised that the Ghanaian Government does not recognise the purported sale or transfer of the Bibiani Gold Mine to Chifeng Jilong Gold Mining. It will also only allow a sale to proceed to a company with the express prior approval of the Government.
Resolute advised that it intends to comply with the conditions imposed by the Minister in relation to the restoration of the Mining Lease. This brings to an end the sale process.
Resolute’s Interim CEO, Stuart Gale, commented: “We are very pleased to have come to a quick and amicable resolution which provides clarity and confirmation of MGBL’s Mining Lease at the Bibiani Gold Mine. I would like to thank the Minister for his leadership and cooperation on this matter and we look forward to working with him and the Minerals Commission to identify a development option at Bibiani which sees the mine resuming production as quickly as possible for the benefit of all stakeholders.”
“I would also like to thank Chifeng for their patience during this process and we look forward to continuing the working relationship which has been developed since announcing the sale in December. We remain committed to the development of Bibiani and will consider all options available to achieve this.”