REG - Resolute Mining Ltd - 2022 Half Year Financial Results and Accounts
25/08/2022 07:01
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RNS Number : 1968X Resolute Mining Limited 25 August 2022
25 August 2022
Appendix 4D
Half Year Report for the six months ended 30 June 2022
Reporting Period
The reporting period is for the half year ended 30 June 2022 with the
corresponding reporting period being for the six months ended 30 June 2021.
Results for Announcement to the Market
30 June 2022 30 June 2021 Up / (Down) % Increase / (Decrease)
$'000 $'000 $'000
Revenues from ordinary activities 317,658 261,311 56,347 22%
Earnings before interest, tax, depreciation, amortisation and fair value 78,416 77,720 (696) (1%)
adjustments (EBITDA)
Profit/(loss) after income tax (24,146) (219,790) 195,644 89%
Profit/(loss) from ordinary activities after income tax attributable to (24,286) (183,851) 159,565 87%
members/net profit for the year
Dividend Information
Amount per share Franked amount per share
$ $
Interim dividend for the half-year ended 30 June 2022 Nil Nil
Net Tangible Assets
30 June 2022 31 December 2021
$ $
Net tangible assets per share 0.35 0.38
This half year report should be read in conjunction with the most recent
annual financial report for the year ended
31 December 2021. All dollar figures are United States dollar ($) currency
unless otherwise stated.
Corporate Directory
Directors Share Registry
Non-Executive Chairman Martin Botha
Computershare Investor Services Pty Limited
Managing Director and CEO Terence Holohan Level 11, 172 St Georges Terrace
Non-Executive Director Simon Jackson Perth, Western Australia 6000
Home Exchange
Non-Executive Director Mark Potts
Australian Securities Exchange
Non-Executive Director Sabina Shugg Level 40, Central Park
Non-Executive Director Adrian Reynolds 152 St Georges Terrace
Company Secretary
Richard Steenhof Perth, Western Australia 6000
Registered Office
Level 2, Australia Place
15-17 William Street Quoted on the official lists of the
Perth, Western Australia 6000 Australian Securities Exchange (ASX) and London Stock Exchange (LSE)
PO Box 7232 Cloisters Square ASX/LSE Ordinary Share Code: "RSG"
Securities on Issue (30/06/2022)
Perth, Western Australia 6850
Ordinary Shares 1,104,219,369
Telephone: + 61 8 9261 6100 Performance Rights 12,633,074
Auditor
Facsimile: + 61 8 9322 7597
Ernst & Young
Email: contact@rml.com.au (mailto:contact@rml.com.au) Ernst & Young Building
Australian Business Number 11 Mounts Bay Rd
ABN 39 097 088 689 Perth, Western Australia 6000
Website
Resolute Mining Limited maintains a website where all announcements are
available: www.rml.com.au (http://www.rml.com.au)
Shareholders wishing to receive copies of Resolute's ASX announcements by
e-mail should register their interest by contacting the Company at
contact@rml.com.au (mailto:contact@rml.com.au)
Table of Contents
Directors' Report
4
Auditor's Independence Declaration 9
Consolidated Statement of Comprehensive Income 10
Consolidated Statement of Financial Position 12
Consolidated Statement of Changes in Equity 14
Consolidated Cash Flow
Statement 15
Notes to the Financial
Statements 16
Directors' Declaration
27
Independent Auditor's Review Report 28
Directors' Report
Your directors present their half year report on the consolidated entity
(referred to hereafter as the "Group" or "Resolute") consisting of Resolute
Mining Limited and the entities it controlled at the end of or during the half
year ended 30 June 2022 (H1 2022).
Corporate Information
Resolute Mining Limited ("Resolute" or "the Company") is a company limited by
shares that is incorporated and domiciled in Australia.
Directors
The names of the Company's directors in office during the entire half year
period and until the date of this report are set out below. Directors were in
office for this entire period unless otherwise stated.
Martin Botha (Non-Executive Chairman)
Terence Holohan (Managing Director and CEO) (appointed 23 May 2022)
Stuart Gale (Managing Director and CEO) (resigned 6 May 2022)
Simon Jackson (Non-Executive Director)
Mark Potts (Non-Executive Director)
Sabina Shugg (Non-Executive Director)
Adrian Reynolds (Non-Executive Director)
Company Secretary
Richard Steenhof
Key Highlights
Key highlights for half year ended 30 June 2022 include:
· Revenue for the period was $318 million from gold sales of 173,717oz
at an average realised price of $1,824/oz
· The Group's EBITDA for the period was $78 million, with reported net
loss after tax of $24 million
· Successful completion of Syama sulphide plant shutdown
· Sulphide operations milling record tonnes of 610kt in the June
quarter
· Successful extension of the Revolving Credit Facility for an
additional 12 months to March 2024
· Tabakoroni Mineral Resources estimate updated to 9.2 tonnes at 4.4
g/t for 1.3 million ounces of gold a 40% increase over the previous estimate
· Orca Gold Inc investment sale completed with total proceeds of $14
million.
Operations Review
In H1 2022, a total of 170,903 ounces (oz) of gold were produced (poured) at
an All-In Sustaining Cost (AISC) of $1,463/oz with total gold sales of
173,717oz at an average realised price of $1,824/oz.
During H1 2022, 2.8 million tonnes (Mt) of ore was milled at an average grade
of 2.07 grams per tonne (g/t Au) for 157,927oz of gold recovered. Group's gold
in circuit balance of 68,205oz valued at $123.9 million based on a gold price
of $1,817/oz at 30 June 2022.
Directors' Report
Production and Cost Summary for H1 2022
Units Syama Sulphide Syama Oxide Syama Total Mako Group
Total
UG Lateral Development m 1,931 - 1,931 - 1,931
UG Vertical Development m - - - - -
Total UG Development m 1,931 - 1,931 - 1,931
UG Ore Mined t 1,097,480 - 1,097,480 - 1,097,480
UG Grade Mined g/t 2.45 - 2.45 - 2.45
OP Operating Waste BCM - 2,833,794 2,833,794 3,211,103 6,044,897
OP Ore Mined BCM - 440,253 440,253 478,350 918,603
OP Grade Mined g/t - 1.21 1.21 1.91 1.63
Total Ore Mined t 1,097,480 900,011 1,997,491 1,345,862 3,343,353
Total Tonnes Processed t 960,940 804,594 1,765,534 997,666 2,763,200
Grade Processed g/t 2.52 1.31 1.97 2.26 2.07
Recovery % 77.3 88.7 82.5 93.0 86.3
Gold Recovered oz 60,083 30,216 90,299 67,628 157,927
Gold in Circuit Drawdown/(Addition) oz 13,142 238 13,380 (404) 12,976
Gold Poured oz 73,225 30,454 103,679 67,224 170,903
Gold Bullion in Metal Account Movement (Increase)/Decrease oz 3,243 174 3,417 (603) 2,814
Gold Sold oz 76,468 30,628 107,096 66,621 173,717
Achieved Gold Price $/oz - - - - 1,824
Mining $/oz 486 672 541 527 535
Processing $/oz 503 612 535 345 460
Site Administration $/oz 139 293 185 125 161
Site Operating Costs $/oz 1,128 1,577 1,261 997 1,156
Royalties $/oz 107 127 113 91 106
By-Product Credits + Corp Admin $/oz (2) (2) (2) - 55
Total Cash Operating Costs $/oz 1,233 1,702 1,372 1,088 1,317
Sustaining Capital + Others $/oz 194 183 191 113 160
Total Cash Expenditure $/oz 1,427 1,885 1,563 1,201 1,477
Stockpile Adjustments $/oz (76) 36 (43) (47) (44)
Gold in Circuit Movement $/oz 50 (46) 22 (7) 10
Asset Reclamation & Remediation $/oz 13 13 13 31 20
Total Non-Cash Adjustments $/oz (13) 3 (8) (23) (14)
All-In Sustaining Cost (AISC) $/oz 1,414 1,888 1,555 1,178 1,463
AISC is calculated on gold poured
Directors' Report
Syama Gold Mine
At the Syama Gold Mine in Mali (Syama), gold production for 6 months to 30
June 2022 production was 103,679oz at an AISC of $1,555/oz.
Sulphide Operations
During the first half of 2022, gold production from the Syama sulphide circuit
was 73,225oz at an AISC of $1,414/oz. Gold production from the sulphide
circuit increased by 4% in H1 2022 compared to H1 2021 despite the major
shutdown occurring during 2022. The consistent improvement in H1 2022 gold
production is driven by record levels of processing and roaster throughput,
which have been achieved post the major maintenance shut down in February and
March 2022. In addition, there has been a significant increase in the recovery
of gold in circuit (GIC) from concentrate ponds and equipment cleanout.
Oxide Operations
During H1 2022, production was 30,454oz at an AISC of $1,888/oz. Oxide mining
continued at the Tabakoroni Splay pit and Syama North at Beta and BA04. The
focus for Q2 was on pre-stripping activity and preparation for the wet season.
During H1 2022, total tonnes processed from the Syama oxide circuit was 7%
higher compared to H1 2021 despite the 7 day planned shutdown for the Oxide
reline during 2022. Oxide AISC of $1,888/oz was impacted by higher diesel and
consumables costs, lower grades and higher pre-strip undertaken ahead of the
wet season.
Mining recommenced at Tabakoroni with the preparation work underway, this
orebody will be the principal ore source for oxide for the remainder of 2022.
Exploration
At Syama, drilling programs continued to evaluate the Sulphide resources
located below the historic Oxide open pits at Syama North, with drilling
planned for the remainder of 2022. The exploration drilling program at Syama
North, initiated in late 2021, recorded significant Oxide and Sulphide gold
mineralisation intersections in and around the originally mined out Oxide pits
of A21 and Beta/BA-01 located within 4-8 km of the main Syama mining and
processing complex.
Diamond and RC drilling recommenced in early 2022 at the A21 and Beta pits.
The drilling program targeted the down-dip extensions of the identified zones,
with most of the holes intersecting Sulphide mineralisation.
In Senegal, the focus was on near mine exploration to extend the mine life. RC
drilling continued at the Petowal West prospect with encouraging intersection
of 13m @ 1.4 g./t Au from 7m. The Group also recently signed a joint venture
on Laminia permit located 15km from Mako.
Mako Gold Mine
During H1 2022, production from the Mako Gold Mine was 67,224oz at an AISC of
$1,178/oz. During H1 2022, Mako continued to perform to plan, grade was 14%
higher in H1 2022 compared to H1 2021 after the completion of the planned
cut-back of the main pit that provided access to deeper sections of the
deposit in line with the updated Life of Mine Plan.
Directors' Report
Financial Overview
Profit and Loss Analysis H1 2022 H1 2021
($'000s)
Group
Group
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)
Net loss before tax (8,008) (204,252)
Income tax expense (16,138) (15,538)
Net loss after tax (24,146) (219,790)
Financial Performance
Revenue for H1 2022 was $318 million, from gold sales of 173,717oz at an
average realised price of $1,824/oz. Earnings before interest tax and
depreciation and amortisation (EBITDA) was $78 million. Resolute reported a
Net Loss After Tax of $24 million. Resolute continued to invest in the
business in H1 2022 with capital expenditures on development, property, plant
and equipment totalling $36 million and exploration and evaluation expenditure
of
$9 million.
Directors' Report
Financial Position
As at 30 June 2022, Resolute had cash of $66 million and bullion of $16
million. In addition at 30 June 2022 the Company had listed investments valued
at $16 million and Promissory notes and asset sale receivables valued at $69
million. The Group's net debt inclusive of the syndicated facilities
in-country overdraft facilities was $183 million at 30 June 2022. Resolute
also held receivables of $10 million associated with Malian VAT paid and
refundable.
Significant Events After Balance Date
On 24 August 2022, Resolute agreed with Asante Gold Corporation (Asante) a
deferred payment arrangement for the final tranche of $30 million (plus $2.7
million in respect of an environmental bond) previously due on 22 August 2022.
The revised payment terms as follows:
• payment of $10 million on or before 19 September 2022
• payment of $10 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 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).
Other than as disclosed above, no matter or circumstance has occurred
subsequent to half-year end that has significantly affected, or may
significantly affect, the operations of the Group, the results of those
operations or the state of affairs of the Group or economic entity in
subsequent financial period.
Auditor's Independence
Refer to page 9 for a copy of the Auditor's Independence Declaration to the
Directors of Resolute Mining Limited.
Rounding
Resolute is a company of the kind specified in Australian Securities and
Investments Commission Corporations (Rounding in Financial Directors' Reports)
Instrument 2016/191. In accordance with that Instrument, amounts in the
financial report and the Directors' Report have been rounded to the nearest
thousand dollars unless specifically stated to be otherwise.
Signed in accordance with a resolution of the directors.
Signed version available at Resolute website: www.rml.com.au
Terence Holohan
Managing Director & CEO
Perth, Western Australia
25 August 2022
AUDITOR'S INDEPENDENCE DECLARATION
Declaration available on full report at www.rml.com.au
Consolidated Statement of Comprehensive Income
Note For the half year ended 30 June 2022 For the half year ended 30 June 2021
$'000 $'000
Revenue from contracts with customers for gold and silver sales 3 317,658 261,311
Costs of production relating to gold sales 3 (193,116) (132,689)
Gross profit before depreciation, amortisation and other operating costs 124,542 128,622
Depreciation and amortisation relating to gold sales 3 (42,411) (59,421)
Other operating costs relating to gold sales 3 (30,030) (30,173)
Gross profit from operations 52,101 39,028
Interest income 3 3,743 1,186
Other income 3 4,549 264
Exploration and business development expenditure 3 (8,187) (11,694)
Impairment of exploration and evaluation assets 3 - (5,087)
Impairment of mine properties and property, plant and equipment 3 - (167,373)
Administration and other corporate expenses 3 (7,562) (8,511)
Share-based payments expense 3 (291) (524)
Treasury - realised gains 3 51 (1,333)
Fair value movements and unrealised treasury transactions 3 (35,440) (26,282)
Share of associates' losses 3 (898) (1,212)
Depreciation of non-mine site assets 3 (1,155) (1,205)
Finance costs 3 (9,468) (8,408)
Indirect tax expense 3 (5,451) (13,101)
Loss before tax (8,008) (204,252)
Tax expense 3&5 (16,138) (15,538)
Loss for the period (24,146) (219,790)
Profit/(Loss) attributable to:
Members of the parent (24,286) (183,851)
Non-controlling interest 140 (35,939)
Loss for the period (24,146) (219,790)
Consolidated Statement of Comprehensive Income (continued)
Note For the half year ended 30 June 2022 For the half year ended 30 June 2021
$'000 $'000
Loss for the period (brought forward) (24,146) (219,790)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Members of the parent (6,363) (9,143)
Items that may not be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Non-controlling interest 6,362 1,829
Changes in the fair value/realisation of financial assets at fair value (1,045) (10,981)
through other comprehensive income, net of tax
Other comprehensive loss for the period, net of tax (1,046) (18,295)
Total comprehensive loss for the period (25,192) (238,085)
Total comprehensive income/ (loss) attributable to:
Members of the parent (31,694) (203,975)
Non-controlling interest 6,502 (34,110)
Total comprehensive loss for the period (25,192) (238,085)
Loss per share for net loss attributable for operations to the ordinary equity
holders of the parent:
Basic loss per share (2.20) cents (16.65) cents
Diluted loss per share (2.20) cents (16.65) cents
Loss per share for net loss attributable for continuing operations to the
ordinary equity holders of the parent:
Basic earnings/(loss) per share (2.20) cents (16.65) cents
Diluted earnings/(loss) per share (2.20) cents (16.65) cents
Consolidated Statement of Financial Position
Note 30 June 2022 31 December 2021
$'000
$'000
Current assets
Cash and cash equivalents 65,613 67,607
Other financial assets - restricted cash 1,406 9,443
Receivables 6 36,528 27,812
Inventories 7 158,925 156,589
Financial assets at fair value through other comprehensive income 5,429 20,828
Prepayments and other assets 17,342 12,868
Asset sale receivable 14 29,431 56,495
Total current assets 314,674 351,642
Non current assets
Income tax asset 16,870 18,273
Inventories 7 50,425 53,918
Investments in associates 416 1,365
Promissory note receivable 14 39,288 40,207
Contingent consideration receivable 14 13,784 14,524
Exploration and evaluation 2,646 2,909
Mine Properties 8 243,776 264,491
Property, plant and equipment 221,327 229,164
Right-of-use assets 5,712 7,708
Total non current assets 594,244 632,559
Total assets 908,918 984,201
Current liabilities
Payables 79,919 91,542
Interest bearing liabilities 9 167,601 92,726
Provisions 10 70,640 55,717
Current tax liability 18,219 7,137
Lease liabilities 1,815 2,991
Total current liabilities 338,194 250,113
Non current liabilities
Interest bearing liabilities 9 99,256 223,979
Provisions 10 68,617 74,872
Deferred tax liabilities 383 1,591
Lease liabilities 6,950 8,086
Total non current liabilities 175,206 308,528
Total liabilities 513,400 558,641
Net assets 395,518 425,560
Consolidated Statement of Financial Position (continued)
Note 30 June 2022 31 December 2021
$'000
$'000
Equity attributable to equity holders of the parent
Contributed equity 11 777,021 777,021
Reserves (11,566) (3,706)
Retained earnings/(accumulated losses) (301,968) (277,682)
Total equity attributable to equity holders of the parent 463,487 495,633
Non-controlling interest (67,969) (70,073)
Total equity 395,518 425,560
Consolidated Statement of Changes in Equity
Contributed equity Net unrealised gain/(loss) reserve Employee equity benefits reserve Foreign currency translation reserve Retained earnings/ accumulated losses Non-controlling interest Non-controlling interest of disposal group held for sale Total
At 1 January 2022 777,021 (8,631) 19,813 (19,040) (273,530) (70,073) - 425,560
Profit/(Loss) for the period - - - - (24,286) 140 - (24,146)
Other comprehensive (loss)/income, net of tax - (1,045) - (6,363) - 6,362 - (1,046)
Total comprehensive (loss)/income for the period, net of tax - (1,045) - (6,363) (24,286) 6,502 - (25,192)
Dividend paid - - - - - (4,398) - (4,398)
Share-based payments to employees - - (452) - - - - (452)
At 30 June 2022 777,021 (9,676) 19,361 (25,403) (297,816) (67,969) - 395,518
Contributed equity Net unrealised gain/(loss) reserve Employee equity benefits reserve Foreign currency translation reserve Retained earnings/ accumulated losses Non-controlling interest Non-controlling interest of disposal group held for sale Total
At 1 January 2021 777,021 4,350 18,607 (2,934) 45,673 (20,629) (6,981) 815,107
Loss for the period - - - - (183,851) (35,667) (272) (219,790)
Other comprehensive (loss)/income, net of tax - (10,981) - (9,143) - 1,829 - (18,295)
Total comprehensive (loss)/income for the period, net of tax - (10,981) - (9,143) (183,851) (33,838) (272) (238,085)
Share-based payments to employees - - 561 - - - - 561
At 30 June 2021 777,021 (6,631) 19,168 (12,077) (138,178) (54,467) (7,253) 577,583
Consolidated Cash Flow Statement
For the half year ended 30 June 2022 For the half year ended 30 June 2021
$'000 $'000
Cash flows from operating activities
Receipts from customers 317,200 261,224
Payments to suppliers, employees and others (249,904) (204,504)
Exploration and business development expenditure (7,268) (8,632)
Net Interest (7,834) (8,106)
Indirect tax paid (4,896) -
Income tax paid (2,549) -
Net cash inflows from operating activities 44,749 39,984
Cash flows used in investing activities
Payments for property, plant & equipment (20,866) (15,645)
Payments for development activities (14,895) (15,688)
Payments for evaluation activities (1,305) (2,999)
Proceeds from disposal of financial assets at fair value through other 18,121 1,686
comprehensive income
Payments for financial assets at fair value through other comprehensive income - (1,210)
Other investing activities (356) (461)
Refund of deposit relating to assets held for sale - (5,445)
Proceeds from sale of assets held for sale 30,000 1,000
Net cash flows From/(used in) investing activities 10,699 (38,762)
Cash flows from/(used in) financing activities
Repayment of borrowings (55,000) (23,462)
Proceeds from drawdown of finance facilities -
Subsidiary dividend paid to non-controlling interest (3,069) -
Repayment of lease liability (1,960) (6,115)
Net cash flows used in financing activities (60,029) (29,577)
Net decrease in cash and cash equivalents (4,581) (28,355)
Cash and cash equivalents at the beginning of the period 25,237 55,226
Exchange rate adjustment 381 (284)
Cash and cash equivalents at the end of the period 21,038 26,587
Cash and cash equivalents comprise the following:
Cash at bank and on hand 65,613 52,732
Bank overdraft (44,575) (26,145)
Cash and cash equivalents at the end of the period 21,038 26,587
Notes to the Financial Statements
Note 1: Corporate Information
The financial report of Resolute Mining Limited and its controlled entities
("Resolute", the "Group" or "consolidated entity") for the half year ended 30
June 2022 was authorised for issue in accordance with a resolution of
directors on 25 August 2022.
Resolute Mining Limited (the parent) is a for profit company limited by shares
incorporated and domiciled in Australia whose shares are publicly traded on
the Australian Securities Exchange and the London Stock Exchange.
The principal activities of entities within the consolidated entity during the
half year were:
• gold mining; and,
• prospecting and exploration for minerals.
There has been no significant change in the nature of those activities during
the half year.
Note 2: Basis of Preparation and Summary of Significant Accounting Practices
a) Basis of Preparation
This interim financial report for the half year ended 30 June 2022 has been
prepared in accordance with AASB 134 Interim Financial Reporting and the
Corporations Act 2001.
The half year financial report does not include all notes of the type normally
included within the annual financial report and therefore cannot be expected
to provide as full an understanding of the financial performance, financial
position and financing and investing activities of the Group as the full
financial report.
It is recommended that the half year financial report be read in conjunction
with the Annual Report for the year ended 31 December 2021 and considered
together with any public announcements made by Resolute Mining Limited during
the half year ended 30 June 2022 in accordance with the continuous disclosure
obligations of the Australian Securities Exchange listing rules and London
Stock Exchange rules. The consolidated financial report is presented in United
States dollars ("$") rounded to the nearest thousand dollars, unless otherwise
stated.
The accounting policies and methods of computation are the same as those
adopted in the most recent annual financial report.
At 30 June 2022, Resolute has total current assets of $315 million and total
current liabilities of $338 million representing a net current liability
position of $24 million. The Group generated cash inflow of $45 million from
operating activities for the half-year ended 30 June 2022 and forecasts to
continue generating positive operating cash inflows for the remainder of the
financial year. At 30 June 2022, the Group had cash on hand of $66 million and
available undrawn funds of $30 million on its Revolving Credit Facility.
Considering the available cash, undrawn facility and forecast positive
operating cash flows the Group expects to fund this net current asset
shortfall.
Notes to the Financial Statements
Note 3: Segment revenue and expenses
For the half year ended 30 June 2022 Mako (Senegal) Syama (Mali) Unallocated (b) Corp/Other Total
$'000 $'000 $'000 $'000
Revenue
Gold and silver sales at spot to external customers (a) 122,746 194,912 - 317,658
Total segment gold and silver sales revenue 122,746 194,912 - 317,658
Costs of production (58,976) (124,190) - (183,166)
Gold in circuit inventories movement 342 (10,292) - (9,950)
Costs of production relating to gold sales (58,634) (134,482) - (193,116)
Royalty expense (6,137) (12,865) - (19,002)
Operational support costs (8,986) (2,042) - (11,028)
Other operating costs relating to gold sales (15,123) (14,907) - (30,030)
Administration and other corporate expenses (2,543) (748) (4,271) (7,562)
Share-based payments expense - - (291) (291)
Exploration and business development expenditure (2,928) (5,075) (184) (8,187)
Earnings/(loss) before interest, tax, depreciation and amortisation 43,518 39,700 (4,746) 78,472
Amortisation of evaluation, development and rehabilitation costs (15,228) (12,459) - (27,687)
Depreciation of mine site properties, plant and equipment (6,017) (8,707) - (14,724)
Depreciation and amortisation relating to gold sales (21,245) (21,166) - (42,411)
Segment operating result before treasury, other income/(expenses) and tax 22,273 18,534 (4,746) 36,061
Interest income - - 3,743 3,743
Other Income - 15 4,534 4,549
Interest and fees (47) (1,619) (7,170) (8,836)
Rehabilitation and restoration provision accretion (199) (433) - (632)
Finance costs (246) (2,052) (7,170) (9,468)
Realised foreign exchange gain (loss) 660 1,393 (2,002) 51
Treasury - realised gains (loss) 660 1,393 (2,002) 51
Inventories net realisable value movements and obsolete consumables (1,638) (155) - (1,793)
Unrealised foreign exchange gain/(loss) (2,252) - (8,134) (10,386)
Unrealised foreign exchange loss on intercompany balances - - (23,261) (23,261)
Fair value movements and unrealised treasury transactions (3,890) (155) (31,395) (35,440)
Share of associates' losses - - (898) (898)
Depreciation of non-mine site assets (78) - (1,077) (1,155)
Indirect tax expense - (5,389) (62) (5,451)
Income tax (expense)/benefit (11,388) (2,057) (2,693) (16,138)
(Loss)/profit for the period 7,331 10,289 (41,766) (24,146)
Notes to the Financial Statements
Note 3: Segment revenue and expenses (continued)
For the half year ended 30 June 2021 Mako (Senegal) Syama (Mali) Unallocated (b) Corp/Other Total
$'000 $'000 $'000 $'000
Revenue
Gold and silver sales at spot to external customers (a) 103,292 158,019 - 261,311
Total segment gold and silver sales revenue 103,292 158,019 - 261,311
Costs of production (30,652) (122,023) - (152,675)
Gold in circuit inventories movement 1,411 18,575 - 19,986
Costs of production relating to gold sales (29,241) (103,448) - (132,689)
Royalty expense (5,165) (10,591) - (15,756)
Operational support costs (8,749) (2,932) (2,736) (14,417)
Other operating costs relating to gold sales (13,914) (13,523) (2,736) (30,173)
Administration and other corporate expenses (2,286) (774) (5,451) (8,511)
Share-based payments expense - - (524) (524)
Exploration and business development expenditure (1,525) (1,811) (8,358) (11,694)
Earnings/(loss) before interest, tax, depreciation and amortisation 56,326 38,463 (17,069) 77,720
Amortisation of evaluation, development and rehabilitation costs (7,199) (3,035) - (10,234)
Depreciation of mine site properties, plant and equipment (21,741) (27,446) - (49,187)
Depreciation and amortisation relating to gold sales (28,940) (30,481) - (59,421)
Segment operating result before treasury, other income/(expenses) and tax 27,386 7,982 (17,069) 18,299
Interest income - - 1,186 1,186
Other Income - - 264 264
Interest and fees (314) (1,283) (6,882) (8,479)
Gain on remeasurement for debt modification - - 316 316
Rehabilitation and restoration provision accretion (82) (163) - (245)
Finance costs (396) (1,446) (6,566) (8,408)
Realised foreign exchange gain (878) (193) (262) (1,333)
Realised gain on fair value movement - - - -
Treasury - realised gains (878) (193) (262) (1,333)
Inventories net realisable value movements and obsolete consumables (19,036) (705) - (19,741)
Unrealised foreign exchange gain/ (loss) 1,163 (3) (5,986) (4,826)
Unrealised foreign exchange loss on intercompany balances - - (1,715) (1,715)
Fair value movements and unrealised treasury transactions (17,873) (708) (7,701) (26,282)
Share of associates' losses - - (1,212) (1,212)
Depreciation of non-mine site assets (72) - (1,133) (1,205)
Impairment of exploration and evaluation assets (4,827) - (260) (5,087)
Impairment of mine properties and property, plant and equipment - (167,373) - (167,373)
Indirect tax expense (7,000) (5,586) (515) (13,101)
Income tax (expense)/benefit (230) (11,462) (3,846) (15,538)
Loss for the period (3,890) (178,786) (37,114) (219,790)
Notes to the Financial Statements
Note 3: Segment revenue and expenses (continued)
(a) Revenue from external sales for each reportable segment is
derived from several customers.
(b) This information does not represent an operating segment as
defined by AASB 8 and forms part of the reconciliation of the results and
positions of the operating segments to the financial statements.
Note 4: Dividend
There were no interim dividends paid or provided for Resolute Mining Limited
during the half year end up to the date of this report (half year ended 30
June 2021: $nil).
Note 5: Taxes
At 30 June 2022, the Group recognised an income tax expense of $16 million (30
June 2021: $16 million). The Income tax expense comprises current income tax
of $15 million and $1 million of deferred tax expense.
Note 6: Receivables
Current receivables of $37 million at 30 June 2022 (31 December 2021: $28
million) primarily relate to indirect taxes owing to the Group by the Republic
of Mali and Senegal.
Note 7: Inventories
30 June 2022 31 December 2021
$'000 $'000
Current
Ore stockpiles - at cost 31,391 47,054
Ore stockpiles - at net realisable value 27,841 6,381
Gold in circuit - at cost 11,949 22,353
Gold in circuit - at net realisable value 3,626 1,503
Gold bullion on hand - at cost 10,992 15,697
Gold bullion on hand - at net realisable value 1,472 1,722
Consumables at cost 71,654 61,879
Total Inventory (current) 158,925 156,589
Non Current
Ore stockpiles - at cost 3,136 1,935
Ore stockpiles - at net realisable value 4,153 6,559
Gold in circuit - at cost 43,136 45,424
Total Inventory (non current) 50,425 53,918
Note 8: Mine properties
At 30 June 2022, the Group's mine properties amount to $244 million (31
December 2021: $264 million). During the six-month period to 30 June 2022,
further payments for development activities were made of $15 million.
Notes to the Financial Statements
Note 9: Interest bearing liabilities
30 June 2022 31 December 2021
$'000 $'000
Interest bearing liabilities (current)
Bank overdraft 44,575 42,370
Insurance premium funding 2,869 109
Borrowings 120,157 50,247
Total Interest bearing liabilities (current) 167,601 92,726
Interest bearing liabilities (non current)
Borrowings 99,256 223,979
Total Interest bearing liabilities (non current) 99,256 223,979
Total 266,857 316,705
On 28 March 2022, the Group extended the due date of the Revolving Credit
Facility (RCF). Details of the revised repayment terms of the RCF are as
follows:
• $30.0 million in August 2022 upon receipt of the third tranche of
the Bibiani sale consideration*
• $20.0 million in January 2023
• $20.0 million in March 2023 in line with the original RCF maturity
date
• the final $80.0 million in March 2024.
*The $30.0 million August 2022 payment is only payable if Resolute receives
the third payment instalment under the sale agreement between it and Asante
Gold Corporation in respect of the sale of the Bibiani Gold Mine. Should this
not be received, the Group will instead be required to make three $10.0
million repayment instalments in June 2023, September 2023 and December 2023.
The interest rate under the SFA has also been amended so that reference to the
Screen Rate for Facility A (currently, LIBOR) is changed to Secured Overnight
Financing Rate ("SOFR").
There are no changes to the repayment schedule of the $150 million Term Loan
Facility, with amortisation remaining in line with the previous biannual
repayment schedule (each March and September).
In the six months to 30 June 2022, the Group made voluntary repayment of the
RCF of $30 million.
Note 10: Provisions
30 June 2022 31 December 2021
$'000 $'000
Current
Site restoration 2,244 1,795
Employee entitlements 3,769 2,511
Provision for indirect taxes(1) 62,800 50,381
Other provision 1,827 2,478
Total provisions (current) 70,640 57,165
Non Current
Site restoration 67,712 72,172
Employee entitlements 905 1,252
Total provisions (non current) 68,617 73,424
1. Based on the facts and circumstances at 30 June 2022 and in line with
requirements of the accounting standards, the Group has provided an additional
$6 million in respect of a withholding tax claim by the Senegalese tax
authority. The factual basis and validity of these demands are being strongly
disputed by Resolute due to fundamental misinterpretations of the application
of certain tax. Resolute continues to work with its legal and tax advisors to
contest the demand and will resist any efforts to enforce payment. The demand
for Income Tax has been disclosed as a contingent liability.
Notes to the Financial Statements
Note 11: Contributed Equity
Total Number Number Quoted $'000
At 1 January 2022 1,103,931,520 1,103,931,520 777,021
Changes during current period, net of issue costs:
Issue of shares to employees upon vesting of performance rights 287,849 287,849 -
At 30 June 2022 1,104,219,369 1,104,219,369 777,021
( )
Issue Date Total Number Fair Value per Right at Grant Date Vesting Date
Performance rights on issue
Band A1 and A2 26/10/2018 25,853 $0.92 30/06/2021
Band A1 and A2 21/05/2019 111,509 $0.93 31/12/2021
Band A1 and A2 22/05/2020 942,280 $0.85 31/12/2022
Band A0 22/05/2020 194,352 $0.56 31/12/2022
Band A1 and A2 14/07/2021 443,716 $0.43 31/12/2023
Band A1, A2 and B1 14/07/2021 1,703,599 $0.57 31/12/2023
Band B1 06/12/2021 211,276 $0.37 31/12/2023
Band B1 06/12/2021 219,942 $0.31 31/12/2023
Band A1 and A2 06/12/2021 264,171 $0.32 31/12/2023
Band A0, A1, A2 and B1 22/06/2022 8,516,376 $0.26 31/12/2024
As at 30 June 2022 12,633,074
Date of Change Total Number Fair Value per Right at Grant Date Vesting Date
Opening number of performance rights 7,742,733
Decrease through lapsing of performance rights (Band A1 to A2) 28/06/2022 (9,708) $0.92 30/06/2021
Decrease through lapsing of performance rights (Band A0) 09/05/2022 (320,233) $0.88 31/12/2021
Decrease through conversion of shares upon vesting of performance rights (Band 28/06/2022 (106,744) $0.88 31/12/2021
A0)
Decrease through lapsing of performance rights (Band A1 to A2) 09/05/2022 (440,967) $0.93 31/12/2021
Decrease through conversion of shares upon vesting of performance rights (Band 28/06/2022 (35,480) $0.93 31/12/2021
A1 to A2)
Decrease through lapsing of performance rights (Band A0) 09/05/2022 (375,000) $0.49 31/12/2021
Decrease through conversion of shares upon vesting of performance rights (Band 28/06/2022 (125,000) $0.49 31/12/2021
A0)
Decrease through lapsing of performance rights (Band A1 to A2) 09/05/2022 (32,751) $0.78 31/12/2021
Decrease through conversion of shares upon vesting of performance rights (Band 28/06/2022 (10,917) $0.78 31/12/2021
A1 to A2)
Decrease through lapsing of performance rights (Band A1 to A2) 06/05/2022 (264,343) $0.85 31/12/2022
Decrease through lapsing of performance rights (Band A0) 06/05/2022 (904,892) $0.57 31/12/2023
Decrease through lapsing of performance rights (Band A0) 06/05/2022 (1,000,000) $0.48 31/03/2024
Increase through issue of performance rights to eligible employees (Band A0, 22/06/2022 8,516,376 $0.26 31/12/2024
A1, A2 and B1)
Closing number of performance rights 12,633,074
*The terms and conditions of the Remuneration Framework are consistent with
those disclosed in the Annual Report for the year ended 31 December 2021 and
the Notice of Annual General Meeting sent to shareholders on 14 April 2022.
Notes to the Financial Statements
Note 12: Gold forward contracts
As part of its risk management policy, the Group enters into gold forward
contracts to manage the gold price of a proportion of anticipated sales of
gold. Average Contracted Gold Sale Price per oz ($)
Gold forward contracts commitment at 30 June 2022 (not recorded as
derivatives):
Average Contracted Gold Sale Price per oz ($) Gold for Physical Delivery oz Value of Committed sales
$'000
30 June 2022
Within one year 1,856 175,000 324,725
Within one and two years 1,931 55,000 106,230
Total 230,000 430,955
Note 13: Events Occurring after Balance Date
On 24 August 2022, Resolute agreed with Asante Gold Corporation (Asante) a
deferred payment arrangement for the final tranche of $30 million (plus $2.7
million in respect of an environmental bond) previously due on 22 August 2022.
The revised payment terms are over 90 days from the original payment date as
follows:
• payment of $10 million on or before 19 September 2022
• payment of $10 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 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).
Other than as disclosed above, no matter or circumstance has occurred
subsequent to half-year end that has significantly affected, or may
significantly affect, the operations of the Group, the results of those
operations or the state of affairs of the Group or economic entity in
subsequent financial period.
Note 14: Asset sale receivable and Contingent consideration
At 30 June 2022, the Group's current asset sale receivable relates to the
discounted amount for final $30 million from the Bibiani disposal. The Group's
non-current promissory note receivable and contingent consideration amounting
to $39 million and $14 million (31 December 2021: $40 million and $15 million)
pertains to the proceeds from the Ravenswood disposal.
Notes to the Financial Statements
Note 15: Impairment testing
In accordance with the Group's accounting policies, each asset or
cash-generating unit (CGU) is evaluated to determine whether there are any
indications of impairment. If any such indications of impairment exist, a
formal estimate of the recoverable amount is performed.
In assessing whether an impairment is required, the carrying value of the
asset or CGU is compared with its recoverable amount. The recoverable amount
is the higher of the CGU's fair value less costs of disposal (FVLCD) and value
in use (VIU). Recoverable amount has been determined based on FVLCD. Given the
nature of the Group's activities, information on the fair value of an asset is
usually difficult to obtain unless negotiations with potential purchasers or
similar transactions are taking place. Consequently, the FVLCD for each CGU is
estimated based on discounted future estimated cash flows (expressed in real
terms) expected to be generated from the continued use of the CGUs using
market-based gold price assumptions, the level of proved and probable reserves
and measured, indicated and inferred mineral resources, estimated quantities
of recoverable gold, production levels, operating costs and capital
requirements, including any expansion projects, and its eventual disposal,
based on the CGU latest life of mine (LOM) plans. These cash flows are
discounted using a real post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the CGU. When
LOM plans do not fully utilise existing mineral properties for a CGU, and
options exist for the future extraction and processing of all or part of those
resources, an estimate of the value of mineral properties is included in the
determination of fair value.
The determination of FVLCD for each CGU are considered to be Level 3 fair
value measurements, as they are derived from valuation techniques that include
inputs that are not based on observable market data. The Group considers the
inputs and the valuation approach to be consistent with the approach taken by
market participants.
Impairment indicator assessment
At 30 June 2022, Resolute's quoted market capitalisation was lower than its
net asset carrying value. This represents an indicators of impairment. As a
result, an impairment test was performed to determine the recoverable amounts
for all CGU's of the Group, being the Syama Gold Mine and the Mako Gold Mine
using the FVLCD method.
Syama CGU
Syama indicator assessment
Whilst Syama's H1 2022 forecast production and cost remain in line with
budget, as a result of the general indicator of impairment noted above, a
formal impairment test was performed to determine the recoverable amount for
the Syama CGU.
Key Assumptions used to determine recoverable amount
The table below summarises the key assumptions used in the carrying value
assessment:
30 June 2022 31 December 2021
Gold price ($/oz) 1,867-1,511 1,777-1,467
Discount rate (post tax real) 14.5% 14.0%
Unmined resources ($/oz) $20-$54 $20-$54
Notes to the Financial Statements
Note 15: Impairment testing (continued)
Gold prices
Gold prices are estimated with reference to external market forecasts based on
a consensus view of market experts.
Unmined resources
Unmined resources which are not included in the life‐of‐mine plan as
result of the current assessment of economic returns, timing of specific
production alternatives and the prevailing economic environment have been
valued and included in the assessed fair value.
Operating costs
Life‐of‐mine operating cost assumptions are based on the Group's latest
budget and life‐of mine plans. Operating cost assumptions reflect an
assumption of maintaining current cost, over the long term, without including
expected improvements over the life of mine.
Recognition
As a result of the analysis performed, there is no impairment loss recognised
for Syama CGU for H1 2022.
Syama Sensitivity Analysis
It was estimated that reasonable possible changes in key assumptions, in
isolation, would have had the following approximate impact on the (impairment
loss) or reversal of impairment recognised for the Syama CGU as at 30 June
2022.
Increase in key assumption Decrease in key assumption
$'000 $'000
10% change in gold price ($ per oz) 187,951 (110,939)
10% change in value of unmined resources 65,977 -
10% change in operating cost (49,225) 127,605
Notes to the Financial Statements
Note 15: Impairment testing (continued)
Mako CGU
Mako indicator assessment
Whilst Mako's 2022 forecast production and cost remain in line with budget, as
a result of the general indicator of impairment noted above, a formal
impairment test was performed to determine the recoverable amount for the Mako
CGU.
Key Assumptions
The table below summarises the key assumptions used in the carrying value
assessment:
30 June 2022 31 December 2021
Gold price ($/oz) 1,867-1,511 1,777-1,467
Discount rate (post tax real) 12.7% 10.5%
Unmined resources ($/oz) $44 $44
Gold prices
Gold prices are estimated with reference to external market forecasts based on
a consensus view of market experts.
Discount rate
In determining the recoverable amount of assets, the future cash flows were
discounted using rates based on the CGU's estimated real weighted average cost
of capital, with an additional premium applied having regard to the CGU's risk
profile.
Operating costs
Life‐of‐mine operating cost assumptions are based on the Group's latest
budget and life‐of mine plans. Operating cost assumptions reflect an
assumption of maintaining current cost, over the long term, without including
expected improvements over the life of mine.
Recognition
As a result of the analysis performed, there is no impairment loss recognised
for Mako CGU for H1 2022.
Mako Sensitivity Analysis
It was estimated that reasonable possible changes in key assumptions, in
isolation, would have had the following approximate impact on the (impairment
loss) or reversal of impairment recognised for the Mako CGU as at 30 June
2022.
Increase in key assumption Decrease in key assumption
$'000 $'000
10% change in gold price ($ per oz) 60,937 (61,277)
2% change in discount rate (6,491) 6,718
10% change in operating cost (36,697) 36,393
Directors' Declaration
In the opinion of the directors:
a) the financial statements and notes are in accordance with the
Corporations Act 2001, including:
(i) complying with Accounting Standard AASB 134 Interim Financial
Reporting, the Corporations Regulations 2001; and
(ii) giving a true and fair view of the Group's financial position as at
30 June 2022 and of its performance, as required by Accounting Standards, for
the half year ended on that date.
b) there are reasonable grounds to believe that the Group will be able to
pay its debts as and when they become due and payable.
This declaration has been made in accordance with a resolution of the
directors.
Signed version available at Resolute website: www.rml.com.au
Terence Holohan
Managing Director & CEO
Perth, Western Australia
25 August 2022
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