Why the Resolute Mining (ASX:RSG) share price is racing 6% higher today

This gold miner is on form on Thursday…

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The Resolute Mining Limited (ASX: RSG) share price is charging higher today.

In morning trade, the embattled gold miner’s shares are up 6% to 58.7 cents.

Despite this gain, the Resolute Mining share price is still down 30% since the start of the year.

Why is the Resolute Mining share price charging higher?

Investors have been bidding the Resolute Mining share price higher today following the release of a positive announcement.

According to the release, the company has signed an agreement to sell its interest in the troubled Bibiani Gold Mine to Asante Gold Corporation. The sale will be for a total cash consideration of US$90 million. This comprises a US$30 million deposit, US$30 million on or before six months from completion, and US$30 million on or before 12 months from completion.

Positively, this agreement has received Ministerial Consent, having been approved by the Ghanaian Honourable Minister of Lands and Natural Resources. Earlier this year the Minister had blocked the sale of the asset to China’s Chifeng Jilong for ~$105 million.

The completion of the transaction is expected within 10 days, pending no material adverse changes over this period.

Resolute Mining’s Managing Director and Chief Executive Officer, Stuart Gale, commented: “Resolute has made a commitment to deliver sustainable and enduring value to shareholders and to the communities in which we operate. Resolute is proud of its contribution to Ghana and particularly proud to have the opportunity to transfer ownership in Bibiani to a highly regarded team with strong ties to Ghana.”

“The transaction is consistent with our strategic focus on our core operating assets and strengthening the balance sheet, with the initial cash receipt of US$30 million to be applied to the voluntary repayment of debt. We do not expect there to be any material tax implications following the completion of this transaction,” he added.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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