The Ghanaian government has terminated Resolute Mining’s mining lease for the Bibiani Gold Mine.

Located in the west of Ghana, the Bibiani underground mine is owned by Mensin Gold Bibiani (MGBL), a wholly owned subsidiary of Resolute Mining.

The Ghanaian government owns the right to a 10% free carried interest in the gold mine.

The Australian miner said it had received a letter from the Ghanaian Minerals Commission that the Ghanaian Minister of Lands and Natural Resources had advised the termination of the mining lease, without disclosing reasons.

The firm has been advised to cease activities and operations at the Bibiani Gold Mine.

Resolute said that the action is “unexpected” and would pursue clarification for terminating the mining lease from the Minister’s office.

In a press statement, the company said: “As a result of this notice Resolute is currently seeking legal advice on the validity of the notice, its rights of appeal and potential recourse while considering the impact of the notice on the sale agreement with Chifeng Jilong Gold Mining Co. Ltd for the sale of the Bibiani Gold Mine.”

In late 2020, Resolute Mining agreed to divest the Bibiani Gold Mine to Chijin International (HK), a fully-owned subsidiary of Chifeng in a deal worth $105m.

Subject to various approvals and conditions, the sale was expected to be closed in March this year.