TIDMRSG
RNS Number : 9694Q
Resolute Mining Limited
24 February 2023
24 February 2023
2022 Preliminary Financial Results
Highlights
-- Total Recordable Injury Frequency Rate (TRIFR) a record low of 0.41
-- Gold production of 353,069 ounces (oz) (2021: 319,271oz)
exceeding CY2022 guidance of 345,000/oz
-- Revenue of $651.1 million (2021: $549.2 million) from gold
sales of 357,447oz at an average realised price of $1,819/oz (2021:
316,464oz at $1,733/oz)
-- All-In Sustaining Cost (AISC) of $1,498/oz, up 9% from 2021,
due to inflationary pressures including higher fuel and consumables
costs
-- Earnings before interest, tax, depreciation, and amortisation
(EBITDA) of $148.2 million (2021: $129.9 million)
-- Underlying net profit after tax of $20.3 million (2021:
-$93.5 million), with reported net loss after tax of -$34.7 million
(2021: -$367.5 million)
-- Successful equity capital raising of A$164 million completed
prior to year-end, with participation from Tier 1 institutional
investors
-- Net debt decreased to $31.6 million (31 December 2021: $228.8
million) with cash and bullion at 31 December 2022 of $94.0
million
-- 2023 Group production and cost guidance: 350,00oz at an AISC of $1,480/oz
Note: Unless otherwise stated, all dollar figures are United
States dollars (US$).
Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG)
presents the Company's financial results for the year ended 31
December 2022.
Resolute's Chief Executive Officer, Mr Terry Holohan, commented:
"Resolute was focused on continuing to optimise the performance of
its gold mines during 2022, and was pleased to increase overall
production, which grew quarter-on-quarter throughout 2022. I am
particularly pleased with the continuous improvement of the Syama
sulphide operation, which achieved a 19% increase in gold
production over the prior year, despite the 5 week planned major
maintenance shutdown in Q1 2022, which has significantly enhanced
the operation.
"Increased gold sales, up 13%, and an improved gold price
underpinned a 19% year-on-year rise in Group revenue to $651.1
million, and a 14% increase in earnings before interest, tax,
depreciation and amortisation (EBITDA) to $148.2 million. An
underlying net profit after tax (NPAT) of $20.3 million, saw the
Company return to underlying profitability, before abnormal items
with a statutory reported net loss of $34.7 million.
"Resolute remains focused on further improvements to the Group's
production profile in 2023, and together with continuing
productivity enhancements and ongoing cost control efforts, this
should help in offsetting some of the industry-wide inflationary
pressures being felt.
"The Syama North project continues to exceed our expectations
with excellent results from the infill drilling program at Syama
over the second half of 2022. The drill rigs are still turning on
this contiguous strike discovery of over 6km. We now have 1.86Moz
in the Measured and Indicated categories for 19Mt at 3 g/t gold at
a 1 g/t gold cut-off. This mineralisation is close to the surface
and adjacent to the areas we are currently mining. We are nearing
completion of a pre-feasibility study into low capital options for
the expansion of the sulphide operations, with the results expected
in the middle of 2023."
Health and Safety
Resolute's TRIFR was a record low at 31 December 2022 of 0.41,
attributable to an ongoing focus on training and safety. ESG
ratings have also improved year on year, with 2022 sector ratings
by the S&P Dow Jones CSA and Moody's in the 83rd percentile and
82nd percentile respectively. Resolute has also significantly
aligned (88%) with the World Gold Council's Responsible Gold Mining
Principles (RGMPs) following a Year 2 external assurance process
and is on track for full compliance by mid-2023.
Financial Performance
The Group's underlying net profit after tax (before abnormal
items) was $20.3 million, with a reported net loss after tax of
$34.7 million. The financial performance of Resolute for the year
ended 31 December 2022 is summarised below:
Profit and Loss Analysis(1) 2022 2021
($'000s) Group Group
----------------------------------------------------------- ---------- ----------
Revenue 651,129 549,242
----------------------------------------------------------- ---------- ----------
Cost of sales excluding depreciation and amortisation (411,482) (324,984)
Royalties and other operating expenses (62,016) (59,066)
Administration and other corporate expenses (14,850) (16,809)
Exploration and business development expenditure (14,615) (18,484)
---------- ----------
EBITDA 148,166 129,899
----------------------------------------------------------- ---------- ----------
Depreciation and amortisation (85,894) (120,993)
Net interest and finance costs (15,273) (11,741)
Inventories NRV movements and obsolete consumables (36,077) (44,258)
Fair value movements and unrealised treasury transactions (13,345) (27,697)
Other 1,767 (3,481)
Impairment expense - (227,464)
Gain on disposal - 2,707
Indirect tax expense (13,449) (24,760)
Net loss before tax (14,105) (327,789)
----------------------------------------------------------- ---------- ----------
Income tax expense (20,560) (39,682)
Reported net loss after tax (34,665) (367,471)
----------------------------------------------------------- ---------- ----------
Abnormal items(2) :
+ Disputed Senegalese tax expense 23,926 7,132
+ Historical tax adjustments 14,809 39,334
+ Impairment of obsolete consumables 16,249 -
+ Impairment expense - 227,464
Underlying net profit/(loss) after tax(2) 20,319 (93,541)
=========================================================== ========== ==========
(1. Amounts presented above are aggregate balances of certain
line items presented in the CY22 Financial Statements.)
(2. This financial performance indicator is a non-IFRS measure.
It is used internally by management to assess the performance of
the business and is therefore considered relevant to readers of
this document.)
Group EBITDA of $148.2 million 2022 was a 14% improvement on the
comparative period reflecting:
-- Higher revenue of $651.1 million from gold sales of 357,447oz
(up 13%) at an average realised price of $1,819/oz (up 5%). The
higher ounces sold reflects increased gold production (up 19%) due
to:
o improved Sulphide processing performance with gold recovered
up 4% (gold poured up 19%);
o higher gold recovered from both Syama Oxide (up 8%) and Mako
(up 2%); and
o significant drawdown from gold in circuit of 21,752oz (2021:
3,084oz).
-- Higher cost of sales due to significant increases in fuel and
consumable prices as well as the impact of non-cash adjustments for
bullion and gold in circuit (as a result of the continued drawdown
of material).
-- Lower exploration and business development expenditure as a
result of prior year transaction costs associated with divestments
(sale of Bibiani and Cote D'Ivoire exploration assets).
The following abnormal items have been added back to the
reported net loss of -$34.7 million in arriving at the underlying
net profit of $20.3 million for the year ended 31 December
2022:
-- Disputed Senegalese tax expense ($23.9m), relates to an
ongoing dispute with the Senegalese tax authorities regarding PMC's
tax exoneration status;
-- Historical tax adjustments ($14.8m), included within this
amount is $3.0m expected to be cash settled, with the remainder
expected to be settled with VAT and other tax credits;
-- Provision for obsolete consumables ($16.2m), with $2m
pertaining to Mako and the remainder to Syama.
Balance Sheet
Net debt decreased by $197.2 million to $31.6 million at 31
December 2022 (31 December 2021:
$228.8 million). Total borrowings at 31 December 2022 were
$125.6 million comprising $80.0 million drawn on the Term Loan
Facility and RCF, and overdraft facilities in Mali and Senegal of
$45.6 million. Available liquidity of $189 million includes cash
and bullion of $94.0 million and $95.0 million of undrawn RCF. As
at the date of this release, the RCF has been fully repaid with
$100 million available to be redrawn.
Resolute continued to invest in the business in 2022 with
spending on development, property, plant, and equipment totalling
$63.0 million (2021: $56.9 million) including outlays for tailings
facilities across both sites, capitalised stripping costs and
project capital at Syama.
Cashflow
Movements in the cash and bullion balances are summarised in the
cashflow waterfall below:
Equity capital raise
On 10 November 2022 Resolute launched an institutional placement
(Placement) and 1-for-1.11 accelerated non-renounceable entitlement
offer (Entitlement Offer) to strengthen Resolute's balance sheet
and provide a financial platform for growth, including support for
the Company's Syama North expansion plans.
On successful completion, the Institutional Offer raised
approximately A$96 million at A$0.16 per new share, and the Retail
Entitlement Offer raised a total of approximately A$46 million at
the same offer price.
Operations
Syama Gold Mine, Mali
2022 production from the Syama Sulphide circuit was 161,479oz at
an AISC of $1,410/oz, a 19% increase in production at a steady AISC
compared to the prior year ($1,406/oz). Ore mined increased from
2.2Mt to 2.3Mt while the roaster recorded its highest ever
throughput, processing 175.2kt. The Syama sulphide operation is
expected to continue to benefit from the successful planned
maintenance shutdown which was completed in early April 2022.
Production from the Syama Oxide operations was 62,165oz at an
AISC of $1,801/oz. The oxide operations continued lower grade
mining at several satellite pits. Gold poured for the year
increased 9%, with momentum picking up in the second half and the
highest gold production occurring in the December quarter.
Mako Gold Mine, Senegal
2022 production from Mako was 129,425oz at an AISC of $1,318/oz.
Tonnes processed steadily increased over the year reflecting
increased plant uptime and modifications to the SAG Mill
configuration. The increase in AISC reflected a higher volume of
material mined, which impacted mining costs and continued pressure
on consumables amid industry wide inflationary pressures.
CY23 Guidance
As recently announced, Resolute is forecasting total gold
production for 2023 of 350,000oz at an AISC of $1,480/oz as
follows:
Syama
2023 Sulphide production is forecast to be 160,000oz (2022:
161,479oz) at an AISC of $1,400/oz (2022: $1,410/oz). Production is
forecast to principally come from increased run of mine production,
with a significant reduction in the recovery of material from gold
in circuit ponds.
Production for Oxide in 2023 is forecast to be 73,000oz (2022:
62,165oz) at an AISC of $1,365/oz (2022: $1,801/oz). The increase
in forecast production reflects higher grades. Extensive grade
control drilling was conducted in 2022 to provide greater
confidence in the mined grade for 2023. AISC is forecast to reduce,
due to both the decrease in volume mined and a reduction in haulage
distance, combined with this increase in gold produced.
Mako
Production at Mako for 2023 is forecast to be 117,000oz (2022:
129,425 oz) at an AISC of $1,470/oz. Production guidance is lower
than 2022 due to a focus on completing the lower grade Stage 6
allowing for in-pit dumping of waste in 2024. The increase in AISC
in 2023 to $1,470/oz (2022: $1,318/oz) is partially due to the
expiry of the tax exoneration from July 2023, whereby Mako will
incur additional duty costs.
For further information relating to the 2023 guidance, refer to
ASX announcement 31 January 2023.
Investor and Analyst Conference Calls
Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG)
advises that CEO, Mr Terry Holohan, will host two Conference Calls
for investors, analysts and media on Friday, 24 February 2023 , to
discuss the Company's Preliminary Financial Results for the year
ending 31 December 2022. Both calls will conclude with a question
and answer session.
Details of each call and access links are provided below.
Conference Call 1 (pre-registration required)
Conference Call 1: 08:30 (AWST, Perth) / 11:30 (AEDT,
Sydney)
Pre-Registration Link:
https://s1.c-conf.com/diamondpass/10029123-urye7fg.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:
https://webcast.openbriefing.com/rsg-hyr-240223/
An archive of the call will be available at the following link
after the event: http://www.openbriefing.com/OB/5089.aspx
Conference Call 2 (pre-registration required)
Conference Call 2: 09:00 (GMT, London) / 17:00 (AWST, Perth)
Pre-Registration Link:
https://s1.c-conf.com/diamondpass/10029125-5124gh.html
Participants will receive a calendar invite with dial-in details
once the pre-registration process is complete.
Conference Call 2 will also be streamed live online at:
https://webcast.openbriefing.com/rsg-hyr-240223-uk/
An archive of the call will be available at the following link
after the event: http://www.openbriefing.com/OB/5090.aspx
For further information, contact:
Resolute Public Relations
James Virgo, GM Finance and Investor Jos Simson / Emily Moss, Tavistock
Relations resolute@tavistock.co.uk
contact@rml.com.au +44 207 920 3150 / +44 7788
+61 8 9261 6100 554 035
Australian Media Corporate Broker
Cameron Morse, FTI Consulting Jennifer Lee, Berenberg
cameron.morse@fticonsulting.com +44 20 3753 3040
+61 433 886 871
Authorised by Mr Terry Holohan , Managing Director and Chief
Executive Officer
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