Resolute Mining said it is seeking legal advice after its mining lease for the Bibiani gold mine in Ghana was terminated.
The miner has been ordered to cease all activities and operations at the mine site.
Resolute said the action on behalf of the Minister of Lands and Natural Resources had been unexpected, and that the company was seeking clarification from the Minister’s office.
Resolute announced in December that it had agreed to sell the gold mine to China’s Chifeng Jilong Gold Mining for $105 million cash.
The company acquired Bibiani in 2004 but placed the mine on care and maintenance shortly after to allow exploration activities to develop the asset into a large-scale operation.
Resolute changed tune in January 2020, launching a review of the mine to determine whether to keep it or sell it to a company “in better place” to keep the gold mine running.
A 2018 feasibility study into a Bibiani restart estimated that the project could produce some 100,000 ounces per year over a ten-year mine life, at a total capital cost of around $115 million.
The project is currently estimated to host some 21.7-million tonnes, grading 3.6 g/t gold for 2.5-million ounces of contained gold.
By the close on Wednesday, Resolute’s stock was down 24.7% on the London Stock Exchange hitting a record low since listing in the late 1990s. The company has a $420 million market capitalization.