Resolute Mining sign power supply agreement with Aggreko PLC

Resolute Mining (ASX: RSG) have updated the market on Wednesday on a deal involving a power supply agreement.

On Monday, Resolute Mining told the market that they had appointed a new Chief Financial Officer in the figure of Stuart Gale. The appointment will become active from January 20, 2020.

Gale will be joining from Australian iron ore company Fortescue Metals Group (Ltd ASX: FMG) where he was group manager for Corporate Finance for nine years since 2010.

Today, the firm has given another update to shareholders that it has signed a power supply agreement for a new power station at the Syama gold mine in Mali.

The agreement was made with FTSE 250 listed Aggreko PLC (LON: AGK), and in this deal it seems that Resolute have backing off a serious firm in their industry.

Resolute announced the plans at the end of November, when it saw announced heads of terms being signed with Aggreko.

The plans come into action following an ensured effort to lower operating costs for Resolute, and the new plans will help reduce power costs by around 40%.

Resolute Chief Executive John Welborn said: “Aggreko is the right partner to support our power ambitions at Syama. I am delighted work has commenced and that we will deliver the power cost savings we have promised at Syama.

“A key component of our cost reduction strategies at Syama is the provision of lower cost power. We can now look forward to significantly lower energy costs, in line with our life-of-mine feasibility study expectations, as we focus on maximising the efficiencies of our new automated underground mine. Together, these initiatives, will allow us to deliver lower unit costs as well as providing an environmentally friendly, capital efficient expandable power solution for Syama.”

The initial phase of the power station is expected to be worked on and completed in 2020.

Stage two is dependent on when existing tailing storage facilities at Syama is decommissioned which could take up to three or four years.

Shares in Resolute Mining trade at AUD1.12 (-0.44%). 18/12/19 17:48BST.

Previous articleUnited Oil and Gas give update on Rockhopper Egyptian operations
Next articleFedEx shares drop over 10% on timid Wednesday outlook