REG - Resolute Mining Ltd - Life of Mine Production Update

Resolute MiningAnnouncement

04/03/2022 07:00

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RNS Number : 6624D  Resolute Mining Limited  04 March 2022

4 March 2022

 

Resolute Mining Limited

(Resolute or the Company)

 

Life of Mine production update

 

Highlights

•    Life of Mine (LOM) plan updated to reflect an average annual
production of 370koz over the five years to 2026 at an average All-In
Sustaining Cost (AISC) of $1,191/oz

•    Total LOM total gold production 3.5 million ounces (Moz) at an
average AISC of $1,110/oz to 2033

•    Syama gold production:

o averages 243koz per annum at an average AISC of $993/oz over the current
twelve year mine life to 2033

o Syama Oxide production extended from 2023 until 2026 reflecting exploration
success increasing satellite resource by 90% 1 

o Tabakoroni Sulphides expected to commence in 2026 with an estimated gold
production of 664koz over an eight year mine life

•    Mako LOM gold production of 607koz, remains unchanged at an updated
average AISC of $1,071/oz over the remaining six-year mine life

•    Exploration continues to be a key focus at both Syama and Mako and
is expected to extend LOM production profiles at both operations

Note: All dollar figures are United States dollar (US$) currency unless
otherwise stated.

Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG) is pleased to
present its consolidated Life of Mine Plan for the Syama gold mine (Syama) in
Mali and the Mako gold mine (Mako) in Senegal.

Resolute's CEO, Mr Stuart Gale, commented: "Our latest LOM plan reflect an
improved production profile over the current 12-year mine life at Syama
incorporating the successful exploration campaigns which have extended oxide
production for an additional two years together with exceptional drilling
results at Tabakoroni. This allows us to defer the development of the
Tabakoroni Sulphide mine as we continue to assess and optimise the plan for
the development of this resource.

"Syama has a significant gold endowment and there is still a great deal of
exploration to be undertaken in this area. We remain very confident that the
Syama operations will continue developing and extending beyond what we have
published today.

"In addition, we remain focused on identifying further extension and
development opportunities at Mako in Senegal, where we also expect to extend
our mining activities beyond the current mine life."

Group LOM Production and AISC

The Resolute LOM plan has been updated to reflect an average annual production
of 370koz over the five years to 2026 (Fig 1) at an average AISC of $1,191/oz.
Over the LOM, Resolute is forecast to deliver total gold production of 3.5 Moz
at an average AISC of $1,110/oz through to 2033.

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

Figure 1: Resolute Group LOM gold production and AISC

Syama Life of Mine Plan

Syama is a large-scale operation currently comprising an underground mine and
open pit satellite mines providing ore to two separate processing circuits: a
2.4 million tonne per annum (Mtpa) sulphide processing circuit and a 1.5Mtpa
oxide processing circuit.

A pre-feasibility study for an underground mine at Tabakoroni was completed in
2020. It is intended that Tabakoroni Sulphides will sustain Syama's annual
production between 250-300koz until 2030, as oxide operations cease.
Exploration success at Tabakoroni has resulted in reserves increasing to 5.0Mt
at 4.7 grams per tonne for 0.77 Moz 2  while resources have increased by 40%
to 9.2 Mt at 4.4 grams per tonne for 1.35 Moz 3 .  In light of the ongoing
exploration success, Resolute continues to optimise plans for the development
of the Tabakoroni Sulphide.

The Syama LOM production and AISC profile are shown in the Figure 2 below:

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

Figure 2: Syama LOM gold production and AISC

The updated Syama LOM reflects:

•     Sulphide gold production has been revised to 145koz in 2022
(announced as part of Resolute's 2022 guidance released in January 2022) due
to the deferral of the planned sulphide circuit shutdown from late 2021 to
February 2022. Throughput and recovery improvements are expected following
this shutdown, together with a number of other initiatives, including the
installation of the cleaner cells and debottlenecking of the fluid bed
cyclone. As a result of these initiatives, forecast gold production is
expected to step up to an average 177koz between 2023 and 2030. Operation of
the underground mine, based on the current LOM, extends to 2033 and with
further exploration, is expected to continue beyond this timeframe.

•     LOM recoveries have been adjusted to 81% reflecting a marginal
improvement on current performance.

•     Exploration and resource conversion is likely to further extend
mine life further.

•     Syama oxide mining and processing has been extended to 2024 and
2026 respectively, reflecting a 90% increase in the Mineral Resource for the
Syama satellite deposits, published in the 2021 Ore Reserves and Mineral
Resource Statement. Open pit grades have marginally reduced annual production
to approximately 76koz per annum between 2022 and 2024. Resolute continues to
evaluate opportunities to extend open pit mining inventory at Syama.

•     Development of the Tabakoroni Sulphide mine at an estimated cost
of $80-100 million has been deferred to 2026, due to the extension of oxide
production. Based on the current schedule development is expected to commence
late in 2024 with Tabakoroni sustaining Syama sulphide production between
250,000oz to 300,000oz per annum from 2026. The Tabakoroni Sulphide mine is
currently expected to have an eight year life.

•     Minimal project capital is required over the remaining Syama LOM
aside from the capital required to establish Tabakoroni Sulphides. Between
2021 and 2029 Syama's average sustaining capital is expected to be
approximately $20 million per annum.

 

Updated Mako Life of Mine Plan

The Mako LOM production of 607koz remains largely unchanged from the April
2021 LOM. AISC/oz is expected to be approximately 12% higher over the LOM.
This increase reflects updated modelling of the cost base in the latter years
of the mine life, where mining extends deeper into the pit and the haulage
costs increase. In addition, the change in ore blend over time is expected to
lead to increased processing costs.

Resolute notes that the above AISC/oz assumes the Company is able to extend
the tax exoneration it has received since the commencement of mining, for the
remainder of the Mako LOM. As outlined in the Company's 4E Preliminary
Financial Statements (refer ASX release 24 February 2022), the Company is
currently in discussions with the Senegalese authorities regarding the
extension of the tax exoneration from five to seven years.

If the tax exoneration is not extended beyond five years, it is estimated that
the LOM AISC/oz would increase from $1,071/oz to $1,145/oz, resulting from of
the additional duties imposed. The Company is firmly of the view that it has
satisfied all relevant grounds for the exoneration extension to be granted,
specifically the two year extension to the mine life.

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

Figure 3: Mako LOM gold production and AISC

 

A full PDF version of the announcement is available from the Company's
website: link to announcement.
(https://clients3.weblink.com.au/pdf/RSG/02495491.pdf)

 

 

For further information, contact:
 Resolute                                                                   Public Relations

 Stuart Gale, Chief Executive Officer                                       Jos Simson, Tavistock

 James Virgo, GM Finance and Investor Relations                             resolute@tavistock.co.uk (mailto:resolute@tavistock.co.uk)

 contact@rml.com.au (mailto:contact@rml.com.au)                             +44 207 920 3150

 +61 8 9261 6100

                                                                            Oliver Lamb, Tavistock

                                                                            resolute@tavistock.co.uk (mailto:resolute@tavistock.co.uk)

 Media                                                                      +44 778 855 4035

 Cameron Morse, FTI Consulting

 cameron.morse@fticonsulting.com (mailto:cameron.morse@fticonsulting.com)   Corporate Broker

 +61 433 886 871                                                            Matthew Armitt, Berenberg

                                                                            Detlir Elezi, Berenberg

                                                                            +44 20 3207 7800

 

Competent Persons Statement

The information in this report that relates to the Exploration Results and
Mineral Resources is based on information compiled by Mr Bruce Mowat, a member
of The Australian Institute of Geoscientists. Mr Bruce Mowat has more than
five years' experience relevant to the styles of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person, as defined in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (the JORC Code). Mr Bruce Mowat is a full-time employee of the
Resolute Mining Limited Group and holds equity securities in the Company. He
has consented to the inclusion of the matters in this report based on his
information in the form and context in which it appears. This information was
prepared and disclosed under the JORC Code 2012 except where otherwise noted.

For details of the Ore Reserves used in this announcement, please refer to ASX
announcement dated 4 March 2022 titled "Ore Reserves and Mineral Resource
Statement". The Company is not aware of any new information or data that
materially affects the Ore Reserves as reported in this ASX announcement and
confirms that all material assumptions and technical parameters underpinning
the estimates in this ASX announcement continues to apply and have not
materially changed. The form and context in which the Competent Persons'
finding are presented have not been materially modified from this
announcement.

Cautionary Statement about Forward-Looking Statements

This announcement includes certain statements, estimates and projections with
respect to the future performances of Resolute. Such statements, estimates and
projections reflect various assumptions concerning anticipated results, which
assumptions may prove not to be correct. The projections are merely estimates
by Resolute, of the anticipated future performance of Resolute's business
based on interpretations of existing circumstances, and factual information
and certain assumptions of economic results, which may prove to be incorrect.
Such projections and estimates are not necessarily indicative of future
performance, which may be significantly less favourable than as reflected
herein. Accordingly, no representations are made as to the fairness, accuracy,
correctness or completeness of the information contained in this announcement
including estimates or projections and such statements, estimates and
projections should not be relied upon as indicative of future value, or as a
guarantee of value of future results.

This announcement does not constitute an offer, invitation or recommendation
to subscribe for or purchase securities in Resolute Mining Limited (ASX/LSE:
RSG).

 

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.

 

Authorised by Mr Stuart Gale, Chief Executive Officer

 

 1  Refer ASX announcement titled Ore Reserves and Mineral Resource Statement
as at 31 December 2021

 2  Refer ASX announcement titled Ore Reserves and Mineral Resource Statement
as at 31 December 2021

 3  Refer ASX announcement titled Tabakoroni Resource Increase 40%, dated 17
February 2022.

 

 

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