REG - Resolute Mining Ltd - 2022 Preliminary Financial Results

Resolute MiningAnnouncement

24/02/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230224:nRSX9694Qa&default-theme=true

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
(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/
(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
(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
(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/
(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
(http://www.openbriefing.com/OB/5090.aspx)

 

 

For further information, 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

 Australian Media                                                           Corporate Broker

 Cameron Morse, FTI Consulting                                              Jennifer Lee, Berenberg

 cameron.morse@fticonsulting.com (mailto:cameron.morse@fticonsulting.com)   +44 20 3753 3040

 +61 433 886 871

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

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  FR SESSILEDSEDE