Resolute Mining Retracts Anbessa-Chaka Scoping Study

It was announced on May 14, 2026, that Resolute Mining (ASX: RSG) has formally retracted the preliminary scoping study for its Anbessa-Chaka Gold Project in Ethiopia. The study, which had initially outlined a potential resource of 1.2 million ounces, was withdrawn following an internal review that identified material inconsistencies in the underlying geological and economic assumptions. This move halts further development and feasibility work on the project pending a comprehensive re-evaluation.

What Was in the Original Scoping Study?

The now-retracted scoping study presented an optimistic outlook for the Anbessa-Chaka project. It defined an inferred mineral resource of 1.2 million ounces of gold, positioning it as a significant future asset in Resolute's development pipeline. The study projected a mine life of approximately eight years based on a conventional open-pit mining operation.

Economically, the preliminary assessment suggested an All-In Sustaining Cost (AISC) of around $1,150 per ounce, which would have placed the project in a competitive cost position. The initial capital expenditure was estimated at $180 million. These figures were based on metallurgical test work showing gold recovery rates of 91% and assumptions about local infrastructure and labor costs.

Why Did Resolute Retract the Study?

Resolute Mining's decision to retract the study stemmed from a detailed internal audit that questioned the integrity of the initial geological model. The company stated that the resource estimate was overly dependent on a limited set of high-grade drill intercepts from its initial 15,000-meter drilling program. Subsequent modeling suggested that the gold mineralization was less continuous than first interpreted, casting doubt on the overall resource volume.

Beyond the geological concerns, revised economic inputs rendered the project's initial projections untenable. Rising costs for fuel, reagents, and labor in the region have pushed the projected AISC closer to $1,400 per ounce. At this level, the project's economic viability is marginal, prompting management to halt further spending until a more accurate resource and cost base can be established.

What Is the Financial Impact on Resolute?

The immediate financial impact involves the write-down of capitalized exploration and evaluation expenditures associated with the project. Resolute announced it will recognize a non-cash, pre-tax impairment charge of approximately $25 million in its upcoming quarterly financial statements. This charge reflects the costs incurred to date on a project whose future is now uncertain.

In response to the news, shares of Resolute Mining fell by over 7% in early trading on the Australian Securities Exchange. While the retraction is a setback for the company's long-term growth portfolio, it does not affect current production. A key counter-argument is that the company’s core producing assets, the Syama and Mako mines, remain on track to meet their annual production guidance of over 350,000 ounces of gold, providing stable cash flow.

What Are the Next Steps for the Project?

Resolute has outlined a plan to re-assess the Anbessa-Chaka project from the ground up. This will begin with a new, more extensive infill and extensional drilling program designed to create a more reliable geological model. This new program is expected to take between 18 and 24 months to complete and analyze.

The company will not proceed with a pre-feasibility study until this new data is collected and a new resource estimate is calculated under JORC code guidelines. The project's development timeline is now indefinitely delayed. This cautious approach reflects a broader industry trend toward stricter capital discipline among mining equities in an environment of volatile gold prices and rising operational costs.

Q: Does this affect Resolute's other mining operations?

A: No, the retraction is specific to the Anbessa-Chaka exploration project. The company's primary producing assets, such as the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal, continue to operate under their existing guidance. These established mines account for over 95% of the company's current revenue and are not impacted by this early-stage project review.

Q: What is a scoping study in mining?

A: A scoping study is a preliminary technical and economic assessment of a mineral resource's potential. It is the first step in evaluating whether a project is viable enough to proceed to more detailed Pre-Feasibility and Definitive Feasibility Studies. It typically includes inferred resource estimates and wide-ranging cost assumptions, often with an accuracy of +/- 35%.

Q: How does this compare to other industry setbacks?

A: Retracting a scoping study is a notable setback but not uncommon in the high-risk exploration sector. It is less severe than a major reserve downgrade at an operating mine, which can erase hundreds of millions in value. For perspective, this event impacts future growth potential, not current cash flow. The market's single-digit percentage stock drop reflects the early-stage nature of the written-off asset.

Bottom Line

Resolute Mining's retraction of the Anbessa-Chaka study signals a significant delay and costly re-evaluation of its future growth pipeline.

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