Resolute Mining Ltd (ASX: RSG) shares are rising on Monday morning.
In morning trade, the ASX gold stock is down 2% to $1.08.
Image source: Getty Images
Why is this ASX gold stock falling?
Investors have been selling the gold miner's shares following the release of a major update on the Doropo Gold Project in Côte d'Ivoire.
According to the release, an updated definitive feasibility study (DFS) confirms a significantly larger, longer-life, and more valuable project than previously outlined.
The updated DFS expands the Doropo project's scale materially, increasing ore reserves by approximately 55% and the expected mine life from 10 years to 13 years. Average annual gold production is now forecast at around 170,000 ounces per year, with total life-of-mine production of approximately 2.2 million ounces
The updated study also points to stronger financial outcomes. At a conservative gold price assumption of US$3,000 per ounce, the project is expected to generate a post-tax net present value (NPV) of US$1.46 billion and an internal rate of return (IRR) of 49%.
Importantly, the first five years are expected to be particularly strong, with average annual production of roughly 204,000 ounces and a projected payback period of less than two years
At current gold prices, which are well above the DFS base case, the economics improve further. The ASX gold stock notes that at a gold price of around US$4,200 per ounce, the project's post-tax NPV could rise to approximately US$2.8 billion, with the IRR lifting to around 77% and a payback period of close to one year.
One negative, though, which could be weighing on its share price today is that upfront capital costs have increased to US$516 million. This is due to the larger project scope and updated cost assumptions.
What else?
Resolute also reaffirmed its broader growth ambitions, highlighting that Doropo strengthens its pathway toward becoming a diversified African gold producer targeting annual output of more than 500,000 ounces from 2028.
With permitting expected in early 2026 and construction targeted to begin in the first half of next year, the updated DFS as a meaningful step forward for Resolute and its long-term growth strategy.
The ASX gold stock's managing director and CEO, Chris Eger, commented:
This update confirms the outstanding economics of the Doropo Gold Project which is poised to become another high-quality gold mine in West Africa. Doropo is a high-margin, long-life gold mine that will significantly strengthen Resolute's operating portfolio, increasing group production to over 500koz per annum from 2028 and adding another jurisdiction to our production profile.
Doropo will produce approximately 170koz per annum for over 13 years at a competitive average AISC of US$1,406/oz, delivering a post-tax NPV5% of US$1.46bn and IRR of 49%. The average annual gold production of over 200koz in the first five years means the updated construction capital cost of US$516M will be paid back in under two years at a US$3,000/oz gold price.
