Resolute’s next move
BEING a former investment banker, it's fair to guess John Welborn has a touch of the
inveterate deal maker about him.
Michael Quinn
|
08 September 2016
|
9:43
And having already overseen a huge turnaround in the market fortunes of Resolute, he now has
ammunition to get active on a corporate hunt.
Typically, Welborn like any other investment banker or corporate executive isn’t going to give anything
meaningful away publicly.
He told the Africa Down Under conference in Perth this week Resolute is keen partner up with small
companies holding promising exploration ground.
And on this score the company has already been walking the walk with investments in Kilo and Manas.
In addition Resolute has been promoting its own decent exploration budget.
So all pretty stock standard stuff for a gold market where many companies have enjoyed strong price
rises and CEOs talk about a lack of corporate value (aside from their own respective companies of
course!), and hence a strategy to focus on organic growth as the best way to grow shareholder value.
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Interestingly though, when Welborn closed his presentation at the Africa Down Under conference this
week by telling juniors with good exploration projects to contact Resolute, he also threw in the line “if
you are a large gold miner, we are coming after you too”.
It was said with a smile and as such seemed throwaway in nature.
But nonetheless it’s interesting to speculate just how Welborn might guide Resolute from here.
Whether he can wring much more value out of Resolute’s shares with the current portfolio is arguable
without a significant increase in the gold price or a big exploration discovery.
Debt has been cleared and even dividends are being paid.
The share price is up eight-fold since the start of 2016, with the company capitalised this week at over
$A1.35 billion.
A big corporate deal might the next foundation needed if ambitions for strong growth from here are
held.
While the possibilities are wide when speculation of this nature is involved, fellow ASX-listed West
African miner Perseus Mining might be one to consider.
Perseus has had its issues, and as such has been out of market favor.
Thus in contrast to Resolute its shares have only doubled since the start of the year.
Perseus had a capitalisation this week of about $A435 million.
As a “child of the (last) boom”, and a company that fell further and harder than most in the aftermath,
Perseus managing director Jeff Quartermaine readily concedes the company has had work to do to
convince investors it is back in form.
But Quartermaine is adamant the flagship Edikan project in Ghana is moving back onto a much sounder
footing, while Sissingue is into development in Cote d’Ivoire – and into production late next year – and
the big Yaoure project (also in Cote d’Ivoire) is in feasibility.
As is similarly the case with Resolute, Perseus’ ambition is for production of about 500,000oz by the end
of the decade.
Voila … a million ounce producer!
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