TIDMRSG
RNS Number : 9970J
Resolute Mining Limited
27 August 2021
27 August 2021
Resolute Mining Limited
(Resolute or the Company)
2021 Half Year Financial Results
-- Total Recordable Injury Frequency Rate (TRIFR) at 30 June 2021 of 1.24
-- Gold production of 163,118 ounces (oz) (H1 20: 217,946oz)
reflecting improvements in production at Syama sulphide operations,
offset by lower Syama oxide production and the open pit cutback at
Mako
-- Revenue of $261.3 million (m) (H1 20: $305.3m) with gold
sales of 151,503oz at an average gold price received of $1,723/oz
(H1 20: 212,668oz at $1,427/oz)
-- Earnings before interest, tax, depreciation, and amortisation
(EBITDA) of $77.7m (H1 20: $101.1m)
-- Net loss after tax of $219.8m inclusive of non-cash charges
including asset impairment of $172.4m, foreign exchange and fair
value movement expense of $26.3m and tax provisions and charges of
$28.6m
-- All-In Sustaining Cost (AISC) of $1,277/oz reflecting lower
production volumes in the H1 21 (H1 20: $1,020/oz)
-- Debt repayments of $29.7m including $20.0m voluntary early
debt repayment on Revolving Credit Facility
-- Net debt decreased to $219.8m (31 Dec 20: $230.4m) with cash
and bullion of $88.8m at 30 June 2021
-- New Board member and key management appointments including CEO, COO and CFO
-- 2021 production and cost guidance of 315,000oz to 340,000oz
at AISC of $1,290/oz to $1,365/oz.
Note: Amounts are presented in United States dollars ($) unless
otherwise stated. All production and financial results for H1 20
include contributions from Ravenswood, which was sold in March
2020.
Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG)
presents the Company's half year financial results for the half
year ended 30 June 2021 (H1 21).
Resolute's Chief Executive Officer, Mr Stuart Gale commented:
"Our organisation has been through significant change during the
first half of 2021 which has seen renewed enthusiasm and focus.
Operational performance over this period is reflective of this as
the Syama underground mine achieved record production in the June
quarter which was matched by throughput at both the Syama sulphide
and oxide processing circuits. Unfortunately, this performance was
offset by lower mined grades at the Syama sulphide and oxide
operations. The team at Mako continue to deliver in line with
expectations as they undertake a cut-back of the main pit to extend
the mine life."
"We remain focussed on capitalising on our investments,
unlocking the significant value within our operations to generate
cash and strengthen the balance sheet. With a number of key
initiatives progressed during the half and the implementation of
significant changes to people, processes and systems, we expect to
see improvements to both our operating and financial results."
Environmental, Social and Governance (ESG)
Resolute's vaccination programs have vaccinated 1,114 employees
at Syama and Mako and continue to support the ongoing health and
wellbeing of the workforce and sustainability of operations.
COVID-19 education efforts remain ongoing in the local host
communities.
TRIFR at 30 June 2021 increased to 1.24 from 0.87 at 31 December
2020, reflecting several minor recordable injuries. All affected
employees have now returned to full duties. Resolute continues its
implementation of critical hazard management standards to improve
compliance with the Company's safe systems of work.
Operations
Syama Gold Mine, Mali
During H1 21, production from the Syama sulphide circuit was
70,680oz at an AISC of $1,307/oz. Gold production from the sulphide
circuit increased by 25% in H1 21 compared to H1 20. The
improvement in H1 gold production is driven by record levels of
processing and roaster throughput achieved in the year to date.
This was offset by lower processed grade coinciding with an
increase in ore mined (drawn) from the sub-level cave. The grade
reduction is expected to be temporary and reflect the location of
the current draw points.
During H1 21, production from the Syama oxide operations was
28,932oz at an AISC of $1,379/oz. Oxide ore mining continued at the
Cashew open pit south of Syama with ore supplied being a
combination of run of mine material from Cashew and low-grade
stockpiles.
Mining commenced towards the end of the half at Tabakoroni where
an extension to the previously mined Splay pit is now underway and
will be the principal ore source for the remainder of 2021.
Mako Gold Mine, Senegal
During H1 21, production from Mako was 63,506oz at an AISC of
$1,064/oz. Mako continued to perform to plan, with production lower
in accordance with expectations as a cut-back of the main pit is
currently being undertaken. This will provide access to deeper
sections of the deposit in line with the updated Life of Mine
Plan.
Financial Performance
The financial performance of Resolute for H1 21 is summarised
below:
Profit and Loss Analysis H1 21 H1 20
($'000s) Group Group
----------------------------------------------------------- ---------- ----------
Revenue 261,311 305,291
Cost of sales excluding depreciation and amortisation (132,689) (153,208)
Royalties and other operating expenses (30,173) (35,047)
Administration and other corporate expenses (9,035) (11,329)
Exploration and business development expenditure (11,694) (4,597)
---------- ----------
EBITDA 77,720 101,110
----------------------------------------------------------- ---------- ----------
Depreciation and amortisation (60,626) (92,712)
Net interest and finance costs (7,222) (13,558)
Fair value movements and unrealised treasury transactions (26,282) 15,661
Other (2,281) 305
Impairment expense (172,460) -
Gain on disposal - 41,475
----------------------------------------------------------- ---------- ----------
Net profit/(loss) before tax (191,151) 52,281
----------------------------------------------------------- ---------- ----------
Indirect tax expense (13,101) -
Income tax expense (15,538) (15,988)
Net profit/(loss) after tax (219,790) 36,293
----------------------------------------------------------- ---------- ----------
Revenue for H1 21 was $261.3m from gold sales of 151,503oz at an
average realised price of $1,723/oz compared to the average spot
price over the period of $1,803/oz. Gross Profit from Operations
was $39.0m after depreciation and amortisation of $59.4m.
Resolute reported a Net Loss After Tax of $219.8m after taking
into account non-cash adjustments for impairment expense, foreign
exchange revaluations, inventory adjustments and taxes.
At 30 June 2021 a non-cash impairment expense of $172.5m was
recognised with $167.4m relating to Syama reflecting:
-- Lower assumed gold prices reflecting a 5-10% reduction in the
short to medium term compared to the assessment carried out in
December 2020.
-- An increase in the risk-free rate which underpins the
applicable weighted average cost of capital used in the impairment
assessment.
-- Holding current cost, processing and recovery assumptions
constant, without including expected improvements over the life of
mine, in line with applicable accounting standards.
-- A revision to the CY21 production and cost guidance impacting
Syama (refer to ASX announcement titled "June 2021 Quarterly
Activities Statement" dated 29 July 2021).
This charge has no impact to Resolute's mine plans, gold
reserves and resources, and existing debt covenants. The Group's
carrying value of net assets at 30 June 2021 is $577.6m (31 Dec
2020: $815.1m).
Cashflow
Movements in the cash and bullion balances are summarised in the
cashflow waterfall available in the full version at
www.rml.com.au.
Balance Sheet
At 30 June 2021, Resolute had cash of $52.8m, 20,475oz of
bullion on hand valued at $36.1m, additional liquid investment
assets of $53.3m and a promissory note valued at $40.4m. Resolute
also held receivables of $77.5m associated with Malian VAT paid and
refundable.
Total borrowings at 30 June 2021 were $308.6m comprising $280.0m
drawn on the Company's Term Loan ($150.0m) and Revolving Credit
Facility ($150.0m), overdraft facilities with the Bank of Mali of
$26.1m and asset finance facilities of $2.5m. Resolute retains
$20.0m of undrawn Revolving Credit Facility capacity at the end of
June 2021.
Net debt position, after taking into account cash and bullion
balances at 30 June 2021 was $219.8m.
Resolute continued to invest in the business in H1 21 with
capital cash outlays on development, property, plant and equipment
totalling $31.3m (H1 20: $48.5m) largely for the Mako cutback and
project capital at Syama.
CY21 Guidance
Resolute's gold production and cost guidance for 2021 was
recently updated to reflect first half performance together with
expectations for the remainder of the year (refer to ASX
announcement titled "June 2021 Quarterly Activities Statement"
dated 29 July 2021).
That guidance remains unchanged with total gold production for
2021 expected to be within the range of 315,000oz to 340,000oz at
an AISC/oz of between $1,290/oz and $1,365/oz inclusive of
corporate overheads.
Investor and Analyst Conference Calls
Resolute advises Managing Director and CEO, Mr Stuart Gale, will
host two Conference Calls for investors, analysts and media on
Friday, 27 August 2021, to discuss the Company's Half Year
Financial Results for the period ending 30 June 2021. Both calls
will conclude with a question and answer session.
Please click on the links provided below and follow the prompts
to pre-register for either call. Participants will receive a
calendar invite with dial-in details once the pre-registration
process is complete.
Conference Call 1 (pre-registration required)
Conference Call 1: 09:00 (AWST, Perth) / 11:00 (AEST,
Sydney)
Pre-Registration Link:
https://s1.c-conf.com/diamondpass/10016151-e73vxg.html
Participants will receive a calendar invite with dial-in details
once the pre-registration process is complete.
Conference Call 1 will also be streamed live online at
http://www.openbriefing.com/OB/4418.aspx
Conference Call 2 (via MS Teams Live Event)
Conference Call 2: (MS Teams) 09:00 (BST, London) / 16:00 (AWST,
Perth)
Attendee Link: RSG MS Teams Live Event link
Contact Information
Resolute Berenberg (UK Corporate Broker)
Stuart Gale, Managing Director & CEO Matthew Armitt / Detlir Elezi
Telephone: +61 8 9261 6100 Telephone: +44 20 3207 7800
Email: contact@rml.com.au
Web: www.rml.com.au Tavistock (UK and African media)
Jos Simson
Telephone: +44 207 920 3150 / +44 778 855 4035
Email: resolute@tavistock.co.uk
FTI Consulting (Australian media)
Cameron Morse / James Tranter
Telephone: +61 433 886 871
Email: cameron.morse@fticonsulting.com
Competent Persons Statement
For the purposes of ASX Listing Rule 5.23, Resolute confirms
that it is not aware of any new information or data that materially
affects the information included in the original market
announcements relating to exploration results or estimates of
Mineral Resources or Ore Reserves referred to in this announcement
and, in the case of Mineral Resources and Ore Reserves, that all
material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and
have not materially changed. Resolute confirms that the form and
context in which the Competent Person's findings are presented have
not been materially modified from the original market
announcement.
Authorised by Mr Stuart Gale, Managing Director & CEO
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 which
forms part of UK law pursuant to the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via a
Regulatory Information Service (RIS), this inside information is
now considered to be in the public domain.
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END
DOCEASPXAEEFEEA
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August 27, 2021 02:00 ET (06:00 GMT)
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