Resolute Mining announced on March 20 that it will transition to underground mining at its Syama gold mine in Mali, rather than develop a previously planned Stage 2 of its open-pit operations.

In November 2014, Resolute announced that mining of the Stage 2 cutback at the Syama sulphide pit was to be deferred while a review of the optimal cutover point between open pit and underground was completed.

“The review has demonstrated that commencing the underground operations earlier will result in a significantly smoother cash flow profile over the next few years compared with mining the Stage 2 pit, which required extensive pre-strip waste movement to gain access to the deeper ore. In the current gold price environment, this generates a substantially better return on capital invested,” the Resolute announcement said.

Resource modeling of all ore below the Stage 1 pit is under way and will provide the basis of an update to a previous underground prefeasibility study, which is slated for completion by midyear 2015.
Work also has begun on a detailed underground feasibility study, which is due for completion in the early 2016.

Portal and decline development is expected to begin in early 2016 from within the Stage 1 pit, allowing early access to underground ore for development of initial production stopes. This decline will be extended to the surface for long-term access to the underground.

As part of the change to the mine plan, Resolute has accelerated mining of the Stage 1 open pit, with mining of all ore and utilization of open-pit mining equipment expected to be largely complete by the end of June. Mill feed will be maintained from Stage 1 ore, sulphide ore from satellite pits, underground development ore, and existing lower grade stocks until full production stoping from underground mining is ramped up in Resolute’s 2017 fiscal year.

The Syama mine produced 86,965 oz of gold at cash costs of $807/oz in the six months ended December 30, 2014.