REG - Resolute Mining Ltd - March 2024 Quarterly Activities Report
30/04/2024 07:15
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RNS Number : 5651M Resolute Mining Limited 30 April 2024
30 April 2024
Quarterly Activities Report
For the Quarter ending 31 March 2024 ('Q1 2024', 'March Quarter' or 'the
Quarter')
Highlights: Resolute becomes fully unhedged
· Total Recordable Injury Frequency (TRIF) increased to 1.74 from 1.71
in the prior Quarter with five recordable injuries at Syama during the Quarter
· Gold poured of 76,351 ounces (oz) (Q4 2023: 80,307oz) in line with
expectations at both Mako and Syama given the scheduled fourteen-day shutdown
on the sulphide plant - representing approximately 7,000oz of gold production
· All-In Sustaining Cost (AISC) of $1,487/oz in Q1 2024 was similar to
Q4 2023 ($1,480/oz) despite the lower amount of gold poured during the Quarter
· Quarterly gold sales of 69,000oz at an average realised price of
$1,950/oz (Q4 2023: 79,480oz at $1,954/oz) as the last remaining hedges were
fulfilled. Gold sales were delayed by the Easter Weekend Bank Holidays
· Quarterly capital expenditure of $24.7m (Q4 2023: $16.5m) with
non-sustaining capital of $15.5m, sustaining capital expenditure of $9.2m and
exploration spend of $2.3m
· Final $25m repayment made on the Term Loan Facility leaving Resolute
fully unhedged
· Substantial cash generation of $34.7m before debt and interest
payments
· Net Cash of $33.9m (up from $14.0m in Q4 2023), including Cash and
Bullion of $80.7m
· Earthworks for the Syama Phase I Expansion commenced with the project
on track for ramp-up in Q2 2025
· Continued development of Mako mine extension with an initial Mineral
Resource Estimate (MRE) at the Tomboronkoto Prospect declared on 24 January
2024 of 10.7Mt grading 1.2g/t Au for 403,000oz estimated at a cut-off of
0.5g/t
· Resolute remains on track with 2024 guidance for production (345,000
- 365,000oz), AISC ($1,300-1,400/oz) and capital expenditure ($115 - 145m).
Gold production remains weighted towards H2
Note: Unless otherwise stated, all dollar figures are United States dollars
($).
Resolute Mining Limited (Resolute, the Company or the Group) (ASX/LSE: RSG),
is pleased to present its Quarterly Activities Report for the period ended 31
March 2024.
Terry Holohan, CEO and Managing Director, commented,
"It has been a promising start to 2024 for Resolute with all operations
performing in line with expectations. Gold production at Syama Sulphide in Q1
was 7,000 oz lower than capacity due to the scheduled fourteen-day maintenance
shutdown of the sulphide plant. Similarly, at Mako we expect grades, and
therefore production, to increase throughout the year as we start mining the
main ore zone of Stage 7.
It was another Quarter of solid positive free cash flow as a result of strong
production and further improved operating costs. The Company's operating cash
flow after working capital changes in Q1 was $61.7m versus $29.9m in the prior
Quarter.
We ended the Quarter with 76,351 oz of gold poured with an AISC of $1,487oz
which was pleasingly below our expectations despite the expected reduction in
gold production. This is demonstrative of our committed focus on sustainably
reducing costs across the group which picked up more momentum during the
Quarter.
By the end of Q1 we had fully repaid our senior financing facility and are now
completely unhedged leaving us able to take full advantage of the strong gold
price environment. During the Quarter the Group continued to generate healthy
cash flow pushing us further into net cash of $34m compared with $14m at the
end of December 2023. We anticipate further strengthening of the balance sheet
as production increases throughout the remainder of the year and we start to
fully benefit from the healthy gold price.
Resolute is pleased with the progress being made in Senegal across three
prospects aimed to extend the life of our Mako operation. In January we were
very pleased to announce the initial Inferred Mineral Resource at Tomboronkoto
where drilling will continue through the year with an updated Mineral Resource
expected to be published in Q3 2024. During the Quarter surface exploration
commenced on the Bantaco Joint Venture with drilling programs planned to
commence in Q2 2024.
In Guinea, drilling continued at the Mansala Prospect throughout the Quarter.
These drilling programs are planned to conclude in Q2 2024, and an initial
resource estimate will be completed with results expected to be released
during H2 2024.
Lastly, our focus for the year remains on increased gold production with
continued sustainable reduction in costs across the Resolute Group."
Webcast and Conference Call
Resolute will host a conference call for investors, analysts, and media on
Tuesday, 30 April 2024, to discuss the Company's Quarterly Activities Report
for the period ending 31 March 2024. This call will conclude with a
question-and-answer session.
Conference Call: 6:00pm (AEST, Sydney) / 9:00am (BST, London)
Webcast registration link: https://brrmedia.news/RSG_QR
Those wishing to ask questions as part of the Q&A should use the
conference call facility (please join 5 mins prior to the start time)
Conference call details:
Dial in number(s) USA: +1 786 697 3501
Sydney: +61 2 8014 9383
South Africa Toll Free: 0 800 980 512
UK-Wide: +44 33 0551 0200
Password (if prompted) Quote Resolute Mining when prompted by the operator
A presentation, to accompany the call, will be available for download on the
Company's website: https://www.rml.com.au/investors/presentations/
(https://www.rml.com.au/investors/presentations/) .
Operations Overview
Group Summary Units March December Change March
2024
2023
2023
Quarter
Quarter
Quarter
Mining
Ore Mined t 1,355,074 1,735,284 (22%) 1,901,682
Mined Grade g/t 2.16 2.02 7% 2.24
Processing
Ore Processed t 1,453,986 1,566,619 (7%) 1,471,547
Processed Grade g/t 1.94 1.87 4% 2.33
Recovery % 86 85 1% 85
Gold Poured oz 76,351 80,307 (5%) 92,259
Sales
Gold Sold oz 69,000 79,480 (13%) 88,151
Average Realised Price $/oz 1,950 1,954 (0%) 1,890
Financials
Total Capital Expenditure $m 24.7 16.5 50% 18.1
Net (Cash)/Debt $m (33.9) (14.0) 142% 19.9
AISC $/oz 1,487 1,480 0% 1,453
Table 1: Resolute Group Operational Performance Summary
Environmental Social Governance
Resolute's TRIF as of 31 March 2024 was 1.74, a slight increase compared to
the previous Quarter with five recordable injuries, all first aid cases, in
the Quarter at Syama. At quarter-end, the Group had operated 2.6 years
LTI-Free - this being 933 days at Mako; with Syama operating 1,880 days
LTI-Free. Resolute recorded no significant environmental incidents, regulatory
non-compliances, or grievances in Q1 2024. We are currently undergoing our
annual audits against the LBMA's Responsible Gold Guidance at both sites.
Syama, Mali
Syama gold production for the Quarter was 48,459oz at an AISC of $1,418/oz.
The operational performance is set out in the table below.
Summary Units March December Change March
2024
2023
2023
Quarter
Quarter
Quarter
Mining Sulphide
Ore Mined t 646,959 668,663 (3%) 630,445
Mined Grade g/t 2.57 2.45 5% 2.86
Oxide
Ore Mined t 180,343 526,993 (66%) 495,293
Mined Grade g/t 1.71 1.59 7% 1.83
Processing Sulphide
Ore Processed t 511,290 603,297 (15%) 549,072
Processed Grade g/t 2.65 2.39 11% 2.99
Recovery % 79 77 3% 79
Gold Poured oz 34,707 36,720 (5%) 41,142
Gold Sold oz 29,348 36,300 (19%) 40,226
Oxide
Ore Processed t 377,326 429,283 (12%) 421,203
Processed Grade g/t 1.31 1.29 1% 1.56
Recovery % 85 87 (3%) 85
Gold Poured oz 13,752 15,170 (9%) 17,513
Gold Sold oz 13,752 15,170 (9%) 17,454
Cost Syama Combined
Total Capital Expenditure $m 19.0 8.3 128% 11.6
AISC $/oz 1,418 1,415 0% 1,469
Table 2: Syama Production and Cost Summary
At Syama the combined ore tonnes mined decreased by 31% to 827kt. This
reduction in mined tonnes was mainly from the oxide operation which was lower
than expected by approximately 100,000 tonnes due to mining delays at the
Paysans Central Pit; we expect to mine this material by the end of Q2.
At the sulphide operation, tonnes mined was in line with expectation and
grades were slightly higher than expected. Moving into Q2 we expect a similar
mining performance for sulphides as in Q4 2023.
Total gold production was 7% lower than the prior Quarter. Oxide production
was lower as a result of lower tonnes delivered to the plant due to less
production from the open pits being supplemented by stockpile material of
lower grades. Moving into Q2, as planned, stockpiles continue to form part of
the oxide mill blend and we expect a similar performance to Q1 in terms of
tonnes milled, head grades and recovery.
In the sulphide operation, a scheduled fourteen-day shutdown in January for
maintenance of the plant contributed to the lower gold production for Q1 with
approximately 7,000 oz of forgone production. In Q2 we expect sulphide gold
production to increase due to higher milled tonnes at a marginally lower head
grade and recovery than Q1 2024.
Capital expenditure was $19.0 million for the Quarter split $9.1 million and
$9.9 million between sustaining and non-sustaining respectively. The bulk of
the expenditure in the Quarter is attributed to supply of underground mobile
equipment, mid-life changeout for mobile equipment, critical spares change out
for the Sulphide circuit shutdown as well as $3.7 million of waste stripping
cost. During the Quarter, earthworks for the Phase I Expansion started with
the Project remaining on track in terms of timing and budget.
AISC remained flat at $1,418/oz despite the 7% decrease in gold production as
operating costs further reduced due to ongoing initiatives and sustaining
capital expenditure was lower than expected.
Mako, Senegal
Mako gold production for the Quarter was 27,892oz at an AISC of $1,451/oz. The
operational performance for Mako is set out in the table below.
Summary Units March December Change March
2024
2023
2023
Quarter
Quarter
Quarter
Mining
Ore Mined t 527,772 539,628 (2%) 775,944
Mined Grade g/t 1.80 1.89 (5%) 1.99
Processing
Ore Processed t 565,370 534,039 6% 501,272
Processed Grade g/t 1.73 1.74 (1%) 2.26
Recovery % 93 93 (0%) 92
Gold Poured oz 27,892 28,417 (2%) 33,604
Gold Sold oz 25,900 28,010 (8%) 30,471
Financials
Total Capital Expenditure $m 5.8 8.2 (29%) 6.5
AISC $/oz 1,451 1,483 (2%) 1,307
Table 3: Mako Production and Cost Summary
Ore mined decreased by 2% in the quarter from 539 kt to 528 kt and in line
with expectation as the last portion of the scheduled Stage 7 stripping was
completed. The difference from Q1 2023 is driven by mining sequence; during Q1
2023 mining was in the main ore zone at Stage 6 with Stage 7 being in the
waste stripping phase. Mining of the main Stage 7 ore producing benches has
commenced resulting in a reduction in strip ratios and consistent production
of higher tonnes of high-grade ore for the subsequent quarters. As a result of
this, we expect mined grades and head grades to increase to, and remain above,
2.3g/t for the remainder of 2024.
Gold production decreased by 2% compared to prior quarter despite an 6%
increase in ore tonnes processed as head-grade and recovery remained flat. The
reduction in gold production was due to the higher feed grade distribution
towards the end of the quarter which consequently increased gold in circuit
(over 1.3koz - expected to be recovered in Q2).
Capital expenditure of $5.8 million in the Quarter primarily consisting of
$0.2 million and $5.6 million of sustaining and non-sustaining respectively.
Within this $4.7 million of capitalised waste was incurred due to the end of
the waste stripping campaign at the Stage 7 phase of the pit. In addition to
this, $0.8 million was spent in relation to the final Tailings Storage
Facility raise. We expect capital expenditures to decrease throughout the year
as the last part of waste stripping is completed in Q2.
AISC decreased to $1,451/oz from $1,483/oz in the previous Quarter due to
lower sustaining capital as well as lower unit processing cost due to a higher
proportion of softer felsic material being processed.
Exploration
Total exploration expenditure in Q1 was $2.3 million, with drilling programs
continuing in Senegal and Guinea throughout the Quarter. This was made up of
$0.5 million of capital mainly focused on drilling at Tomboronkoto and
Laminia, and $1.8 million of exploration expense which was mainly spent in
Guinea on the Mansala Prospect ($0.9 million) and in Mali on Syama North
Oxides ($0.6 million).
Senegal Exploration
Following the announcement of the initial Mineral Resource Estimate (MRE) at
the Tomboronkoto Prospect on 24 January 2024 drilling continued to infill and
expand the mineralisation footprint.
The existing Mineral Resource, standing at 10.4 million tonnes with an average
grade of 1.2g/t, amounting to 403,000 ounces, remains open in all directions
and falls within the Inferred category. Throughout the first quarter of 2024,
Reverse Circulation (RC) and Diamond drilling programs were ongoing. To
intensify efforts to both broaden the Mineral Resource and enhance its
classification, drilling operations were ramped up with three (1 diamond and 2
RC) rigs operating around the clock.
This drilling will continue through the year with an updated Mineral Resource
expected to be published in H2 2024.
Mining studies are being carried out on the current Mineral Resource with a
view to support an open pit mining operation at Tomboronkoto.
Surface exploration commenced on the Bantaco Joint Venture which was signed by
Resolute recently. Drilling programs are planned to commence at Bantaco in
Q2 2024 to test the extensive historic workings and widespread gold
mineralisation.
Syama Exploration
Exploration continued at Syama North with drilling focussing on expanding the
high-grade gold mineralisation which lies below the currently planned open pit
design. These high-grade shoots have higher grades than the open pit resource
and could be suitable for underground mining.
Drilling programs concentrating on oxide mineralisation continue on the Syama
and Finkolo exploitation permits continued in Q1. The first phase of follow
up RC drilling was completed at the Djigui prospect which was identified in
late 2023 and first reported last quarter. Results to date are encouraging
and further drilling is planned in Q2.
Two phases of RC drilling have been completed at the Zozani prospect located
north of Tabakoroni on the Finkolo exploitation permit. Drilling to date has
outlined a low-grade oxide Mineral Resource which may be exploited if the gold
price remains high.
Guinea Exploration
Diamond and Reverse Circulation (RC) drilling continued at the Mansala
Prospect in Guinea throughout Q1 2024. The diamond drilling was undertaken to
increase the geological knowledge on the mineralisation style and geometry to
support a robust geological model.
A program of RC drilling was carried out in conjunction with the diamond
drilling in order to create sufficient drill density to undertake an initial
Mineral Resource Estimation on the Mansala prospect.
These drilling programs are planned to conclude in Q2 2024 following which a
MRE will be completed. The results of the MRE are expected to be released
during the second half of the year.
Corporate
Quarterly Cash and Bullion Movements and Balance Sheet
(*Included in Operating Cash flows are $3.1 million of royalties, $4.6 million
of VAT and taxes, and movements in Bullion.)
Chart 1: Quarterly Cash and Bullion Movements
The average realised gold price achieved for the Quarter was $1,950/oz (Q4:
2023 $1954/oz) which includes the delivery into the final remaining hedges
resulting in a lower realised gold price.
During the Quarter the remaining $25 million principal payment was made on the
Term Loan facility. Gold sales of 69,000oz were lower than the prior quarter
due the timing of Easter and impact on bank holidays.
The Company's operating cash flow in Q1 was $52.8 million (Q4 2023: $38.9
million) due to the positive impact of ongoing cost reduction across the
Group.
Net cash at 31 March 2024 of $33.9 million increasing from $14.0 million net
cash position at 31 December 2023. Available liquidity of $80.7 million
($165.2 million in prior Quarter) including cash of $45.7 million and bullion
of $34.9 million. Total borrowings at 31 March 2024 were $46.7 million which
are from in-Country overdraft facilities in Mali.
About Resolute
Resolute Mining (ASX/LSE: RSG) is an African gold miner, developer, and
explorer with more than 30 years of experience across Australia and Africa. To
date the Company has produced over nine million ounces of gold. It currently
operates the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal.
Resolute's gold production and cost guidance for 2024 is 345,000-365,000oz at
an AISC of $1,300-1,400/oz.
Through all its activities, sustainability is the core value at Resolute. This
means that protecting the environment, providing a safe and productive working
environment for employees, uplifting host communities, and practicing good
corporate governance are non-negotiable priorities. Resolute's commitment to
sustainability and good corporate citizenship has been cemented through its
adoption of and adherence to the Responsible Gold Mining Principles (RGMPs).
This framework, which sets out clear expectations for consumers, investors,
and the gold supply chain as to what constitutes responsible gold mining, is
an initiative of the World Gold Council of which Resolute has been a full
member since 2017. The Company was audited as conformant with these RGMPs in
2023.
Appendix
March 2024 Quarter Production and Costs (unaudited)
March 2024 Quarter Units Syama Sulphide Syama Oxide Syama Mako Group
Total
UG Lateral Development m 1,426 - 1,426 - 1,426
UG Vertical Development m - - - - -
Total UG Development m 1,426 - 1,426 - 1,426
UG Ore Mined t 646,959 - 646,959 - 646,959
UG Grade Mined g/t 2.57 - 2.57 - 2.57
OP Operating Waste BCM - 98,294 98,294 1,666,507 1,764,801
OP Ore Mined BCM - 574,016 574,016 190,708 764,724
OP Grade Mined g/t - 1.71 1.71 1.80 1.73
Total Ore Mined t 646,959 180,343 827,302 527,772 1,355,074
Total Tonnes Processed t 511,290 377,326 888,616 565,370 1,453,986
Grade Processed g/t 2.65 1.31 2.08 1.73 1.95
Recovery % 79 85 82 93 86
Gold Recovered oz 34,622 13,453 48,075 29,239 77,314
Gold in Circuit Drawdown/(Addition) oz 85 299 384 (1,347) (963)
Gold Produced (Poured) oz 34,707 13,752 48,459 27,892 76,351
Gold Bullion in Metal Account Movement (Increase)/Decrease oz (5,359) - (5,359) (1,992) (7,351)
Gold Sold oz 29,348 13,752 43,100 25,900 69,000
Achieved Gold Price $/oz - - - - 1,950
Cost Summary
Mining $/oz 567 354 507 663 564
Processing $/oz 540 727 593 415 528
Site Administration $/oz 143 261 176 162 171
Site Operating Costs $/oz 1,250 1,342 1,276 1,240 1,263
Royalties $/oz 103 109 105 90 99
By-Product Credits + Corp Admin $/oz (2) (2) (2) - 56
Total Cash Operating Costs $/oz 1,351 1,449 1,379 1,330 1,418
Sustaining Capital + Others $/oz 210 129.00 187 7 121
Inventory Adjustments $/oz (203) (8) (148) 114 (52)
All-In Sustaining Cost (AISC) $/oz 1,358 1,570 1,418 1,451 1,487
AISC is calculated on gold produced (poured)
ASX Listing Rule 5.23 Mineral Resources
This announcement contains estimates of Resolute's mineral resources. The
information in this Quarterly that relates to the mineral resources of
Resolute has been extracted from reports entitled 'Ore Reserves and Mineral
Resource Statement' announced on 8 March 2024 and is available to view on
Resolute's website (www.rml.com.au) and www.asx.com (Resolute Announcement).
For the purposes of ASX Listing Rule 5.23, Resolute confirms that it is not
aware of any new information or data that materially affects the information
included in the Resolute Announcement and, in relation to the estimates of
Resolute's ore reserves and mineral resources, that all material assumptions
and technical parameters underpinning the estimates in the Resolute
Announcement continue to apply and have not materially changed. Resolute
confirms that the form and context in which the Competent Person's findings
are presented have not been materially modified from that announcement.
ASX Listing Rule 5.19 Production Targets
The information in this announcement that relates to production targets of
Resolute has been extracted from the report entitled 'December 2023 Quarterly
Activities Report and 2024 Guidance' announced on 31 January 2024 and are
available to view on the Company's website (www.rml.com.au) and www.asx.com
(Resolute Production Announcement).
For the purposes of ASX Listing Rule 5.19, Resolute confirms that all material
assumptions underpinning the production target, or the forecast financial
information derived from the production target, in the Resolute Production
Announcement continue to apply and have not materially changed.
Cautionary Statement about Forward-Looking Statements
This announcement contains certain "forward-looking statements" including
statements regarding our intent, belief, or current expectations with respect
to Resolute's business and operations, market conditions, results of
operations and financial condition, and risk management practices. The words
"likely", "expect", "aim", "should", "could", "may", "anticipate", "predict",
"believe", "plan", "forecast" and other similar expressions are intended to
identify forward-looking statements. Indications of, and guidance on, future
earnings, anticipated production, life of mine and financial position and
performance are also forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause Resolute's actual results, performance and achievements or
industry results to differ materially from any future results, performance or
achievements, or industry results, expressed or implied by these
forward-looking statements. Relevant factors may include (but are not limited
to) changes in commodity prices, foreign exchange fluctuations and general
economic conditions, increased costs and demand for production inputs, the
speculative nature of exploration and project development, including the risks
of obtaining necessary licences and permits and diminishing quantities or
grades of reserves, political and social risks, changes to the regulatory
framework within which Resolute operates or may in the future operate,
environmental conditions including extreme weather conditions, recruitment and
retention of personnel, industrial relations issues and litigation.
Forward-looking statements are based on Resolute's good faith assumptions as
to the financial, market, regulatory and other relevant environments that will
exist and affect Resolute's business and operations in the future. Resolute
does not give any assurance that the assumptions will prove to be correct.
There may be other factors that could cause actual results or events not to be
as anticipated, and many events are beyond the reasonable control of Resolute.
Readers are cautioned not to place undue reliance on forward-looking
statements, particularly in the significantly volatile and uncertain current
economic climate. Forward-looking statements in this document speak only at
the date of issue. Except as required by applicable laws or regulations,
Resolute does not undertake any obligation to publicly update or revise any of
the forward-looking statements or to advise of any change in assumptions on
which any such statement is based. Except for statutory liability which cannot
be excluded, each of Resolute, its officers, employees and advisors expressly
disclaim any responsibility for the accuracy or completeness of the material
contained in these forward-looking statements and excludes all liability
whatsoever (including in negligence) for any loss or damage which may be
suffered by any person as a consequence of any information in forward-looking
statements or any error or omission.
Authorised by Mr Terry Holohan, Managing Director and Chief Executive Officer
Contact
Resolute Public Relations
Matthias O'Toole Howes, Jos Simson, Tavistock
Corporate Development and Investor Relations Manager resolute@tavistock.co.uk
Matthias.otoolehowes@resolutemining.com +44 207 920 3150
+44 203 3017 620
Corporate Brokers
Jennifer Lee, Berenberg
+44 20 3753 3040
Tom Rider, BMO Capital Markets
+44 20 7236 1010
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