REG - Resolute Mining Ltd - 2022 Half Year Financial Results Summary

Resolute MiningAnnouncement

25/08/2022 07:01

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RNS Number : 1969X  Resolute Mining Limited  25 August 2022

25 August 2022

Resolute Mining Limited

(Resolute or the Company)

 

2022 Half Year Financial Results

·    Total Recordable Injury Frequency Rate (TRIFR) of 0.89, the lowest
for 12 months

·    Gold production of 170,903 ounces (oz) (H1 2021: 163,118oz)
reflecting improvements in production across all operations

·   Revenue of $317.7 million (H1 2021: $261.3 million) from gold sales of
173,717oz at an average realised price of $1,824/oz (H1 2021: 151,503oz at
$1,723/oz)

·  Earnings before interest, tax, depreciation, and amortisation (EBITDA) of
$78.5 million (H1 2021: $77.7 million)

·    Underlying net profit after tax of $3.6 million, with statutory net
loss after tax of $24.1 million (H1 2021: loss of $219.8 million), including
adjustment for non-cash foreign exchange revaluations of $23.3 million and
historical tax asset write-off of $4.5 million

·    All-In Sustaining Cost (AISC) of $1,463/oz, up 15% from H1 2021, due
to higher fuel and consumables costs; increased waste material moved; higher
sustaining capital spend on tailings facilities; and adverse non-cash
adjustments

·    Debt repayments of $55.0 million, including $30.0 million voluntary
early debt repayment on Revolving Credit Facility (RCF)

·    Net debt decreased to $182.8 million (31 December 2021: $228.8
million) with cash and bullion at 30 June 2022 of $81.8 million

·    Successful extension of the RCF for an additional 12 months to March
2024

·    Successful completion of planned Syama Sulphide plant shutdown with
enhanced throughput to 2.4 Mtpa

·    Terry Holohan appointed CEO and Managing Director

·    Full year 2022 production and cost guidance maintained at 345,000oz
at an AISC of $1,425/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 half year financial results for the half year ended 30 June 2022 (H1
2022).

Resolute's Chief Executive Officer, Mr Terry Holohan, commented: "I am pleased
with the ongoing continuous improvement of the Syama sulphide operation, which
achieved 4% more gold produced on the comparable period including the planned
major maintenance shutdown in H1 2022.

Resolute remains focused on further improvements to the Group's production
profile over the balance of 2022. Together with ongoing cost control efforts,
this should offset some of the inflationary pressures being felt.

Our exploration programme has been active with some very promising drill
results at Syama that have the potential to add significant sulphide resources
below the historic Oxide open pits at Syama North. An updated mineral resource
is expected to be announced in the September quarter, while drilling will
continue throughout 2022. We have also recently commenced a pre-feasibility
study into low capital expansion options for the sulphide operations with the
results expected in early 2023."

 

Corporate

Bibiani sale proceeds

On 24 August 2022, Resolute agreed with Asante Gold Corporation (Asante) a
deferred payment arrangement for the final tranche of $30.0 million (plus $2.7
million in respect of an environmental bond) previously due on 22 August 2022.
The revised payment terms are as follows:

·    payment of $10.0 million on or before 19 September 2022

·    payment of $10.0 million on or before 19 October 2022

·    payment of $12.7 million and all interest payable on or before 18
November 2022

The terms of the revised pay arrangements under the Share Sale Agreement
include payment by Asante of interest on outstanding amounts at commercial
rates. Upon receipt of these amounts, $30.0 million will be applied to the
Company's Revolving Credit Facility (RCF) as a mandatory prepayment (see
announcement dated 10 March 2022 for further details).

Officer appointment

On 24 August 2022 the Company appointed Mr Geoff Montgomery as Chief Operating
Officer (COO). Mr Montgomery is a highly experienced mining executive who was
most recently employed at Resolute as the General Manager of Technical
Services. Since joining Resolute Mr Montgomery supervised the major Sulphide
Circuit shutdown at Syama, which has resulted in improved performance of the
Sulphide processing circuit.

Mr Montgomery has over 35 years of experience in operations management,
engineering design, projects, and corporate management in precious and base
metal mining in Africa and other emerging economies.

Health and Safety

Resolute's TRIFR at 30 June 2022 was 0.89, the lowest reported in the last 12
months. Pleasingly, the strict protocols implemented by the Company to manage
COVID-19 have ensured a low COVID-19 incident level. The focus now also
includes Malaria prevention as the Group's operations head into the wet
season. Resolute's employees' and contractors' health, safety, and well-being
remain its top priority.

Operations

Syama Gold Mine, Mali

H1 2022 production from the Syama Sulphide circuit was 73,225oz at an AISC of
$1,414/oz. The improvement in H1 gold production, up 4% on the prior
corresponding H1 2021 driven by record levels of roaster throughput and
increased mill availability following the shutdown in February/March, together
with an increase in the recovery of gold in circuit. In addition, the Sulphide
ore grade has increased, reflecting improvement in cave management and flow
modelling.

Production from the Syama Oxide operations was 30,454oz at an AISC of
$1,888/oz, an increase of 5% from H1 2021. Oxide ore mining continued at the
Beta pit north of Syama and Tabakoroni Splay, and commenced at Tabakoroni
North, with a 40% increase in ore mined. Recent operations in May and June
focused on preparation work for the second half of 2022 with significant
pre-stripping activity and material movement ahead of the wet season.

 

Mako Gold Mine, Senegal

H1 2022, production from Mako was 67,224oz at an AISC of $1,178/oz. Mako
continued to perform to plan, with production 6% above H1 2021. Following the
completion of the cut-back in the main pit, an increase in ore mined enabled a
build-up of stockpiles allowing higher grade ore to be processed compared to
H1 2021.

Financial Performance

The Group recorded a net loss after tax of $24.1 million with an underlying
net profit after tax of

$3.6 million. The underlying result includes adjustments for: the impact of
unrealised foreign exchange losses of $23.3 million and the write-down of an
historical tax asset of $4.5 million.

Group EBITDA of $78.5 million for H1 2022 was in line with the comparative
period reflecting:

·      Higher revenue of $317.7 million from gold sales of 173,717oz (up
15%) at an average realised price of $1,824/oz (up 6%) compared to the
comparative period. The higher ounces sold compared to the prior period is due
to the drawdown of gold in circuit and bullion on hand (with associated costs)
as noted below and improved Sulphide processing performance.

·      Higher cost of sales due to increases in fuel and consumables
costs as well as the impact of non-cash adjustments for bullion and gold in
circuit (as a result of the continued drawdown of material over the course of
H1 2022).

·      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 financial performance of Resolute for H1 2022 is summarised below:

 Profit and Loss Analysis ($'000s)                          H1 2022    H1 2021
 Revenue                                                    317,658    261,311
 Cost of sales excluding depreciation and amortisation      (193,116)  (132,689)
 Royalties and other operating expenses                     (30,030)   (30,173)
 Administration and other corporate expenses                (7,853)    (9,035)
 Exploration and business development expenditure           (8,187)    (11,694)
 EBITDA                                                     78,472     77,720
 Depreciation and amortisation                              (43,566)   (60,626)
 Net interest and finance costs                             (5,725)    (7,222)
 Fair value movements and unrealised treasury transactions  (35,440)   (26,282)
 Other                                                      3,702      (2,281)
 Impairment expense                                         -          (172,460)
 Indirect tax expense                                       (5,451)    (13,101)
 Abnormal items:
 + Fair value movements on loans                            23,261     1,715
 + Historical tax adjustments                               4,505      -
 + Impairment expense                                       -          172,460
 Underlying net profit/(loss) before tax                    19,758     (30,077)
 Income tax expense                                         (16,138)   (15,538)
 Underlying net profit/(loss) after tax                     3,620      (45,615)
 -Add back of abnormal adjustments                          (27,766)   (174,175)
 Reported net loss after tax                                (24,146)   (219,790)

Table 1: Half year Profit and Loss

Cashflow

Movements in the cash and bullion balances are summarised in the cashflow
waterfall below:

Please see image in the full version of the announcement at www.rml.com.au
(http://www.rml.com.au/)

Figure 1: Half year cash flow

 

Balance Sheet

Net debt decreased by $46.0 million to $182.8 million at 30 June 2022 (31
December 2021:

$228.8 million) including cash and bullion of $81.8 million. Total borrowings
at 30 June 2022 were $264.6 million comprising $220.0 million drawn on the
Term Loan Facility ($100.0 million) and RCF ($120.0 million), and overdraft
facilities in Mali and Senegal of $44.6 million. Resolute also held liquid
investment assets of $15.9 million and a promissory note valued at $39.3
million from the prior sale of the Ravenswood gold mine.

Resolute continued to invest in the business in H1 2022 with spending on
development, property, plant, and equipment totalling $35.2 million (H1 2021:
$31.3 million) including outlays for tailings facilities across both sites,
capitalised stripping costs and project capital at Syama.

 

CY22 Guidance

Resolute maintains its full year 2022 production guidance of 345,000oz, noting
the strong performance at the Syama Sulphide and Mako operations which are
expected to offset Syama Oxide's lower production for the year.

The higher production at Syama Sulphide and Mako is expected to assist in
mitigating inflationary pressures including elevated fuel and consumable
prices experienced during the first half of 2022. As a result, Resolute
maintains its cost guidance at an AISC of $1,425/oz however, notes that unit
costs may be adversely affected if input costs continue to rise.

 

Investor and Analyst Conference Calls

Resolute advises that MD and CEO, Mr Terry Holohan, will host two Conference
Calls for investors, analysts and media on Thursday, 25 August 2022, to
discuss the Company's Half Year Financial Results for the period ending 30
June 2022. 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: 9:00am (AWST, Perth) / 11:00am (AEST, Sydney)

Pre-Registration Link: https://registrations.events/direct/ID60130
(https://registrations.events/direct/ID60130)

Participants will receive an 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/4873.aspx
(http://www.openbriefing.com/OB/4873.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
(https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZmVmY2EyN2ItMjUxYi00NWU4LThjNmEtODBkZWFmMWFkYTI5%40thread.v2/0?context=%7B%22Tid%22%3A%2286b8d6e0-b316-429c-b704-47112106bbd0%22%2C%22Oid%22%3A%22795c270e-b0d7-417f-86a1-d6fc22179f9a%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a)

 

Contact

 Resolute                                                                   Public Relations

 James Virgo, GM Finance, and Investor Relations                            Jos Simson / Emily Moss, Tavistock

 contact@rml.com.au (mailto:contact@rml.com.au)                             resolute@tavistock.co.uk (mailto:resolute@tavistock.co.uk)

 +61 8 9261 6100                                                            +44 207 920 3150 / +44 7788 554 035

 Media                                                                      Corporate Broker

 Cameron Morse, FTI Consulting                                              Matthew Armitt/ Jennifer Lee, Berenberg

 cameron.morse@fticonsulting.com (mailto:cameron.morse@fticonsulting.com)   +44 20 3207 7800

 +61 433 886 871

 

Authorised by Mr Terry Holohan, Managing Director and Chief Executive Officer

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