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Appendix 4D
Half Year Report for the six months ended 30 June 2023
Reporting Period
The reporting period is for the half year ended 30 June 2023 with the corresponding reporting period being for the six months ended 30 June 2022.
Results for Announcement to the Market
|
| 30 June 2023 $'000 | 30 June 2022 $'000 | Increase $'000 | Increase % |
| Revenues from ordinary activities | 329,499 | 317,658 | 11,841 | 4% |
| Earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDA) | 101,378 | 78,416 | 22,962 | 29% |
| Profit/(loss) after income tax | 87,679 | (24,146) | 111,825 | 463% |
| Profit/(loss) from ordinary activities after income tax attributable to members/net profit for the year | 73,842 | (24,286) | 98,128 | 404% |
Dividend Information
|
| Amount per share $ | Franked amount per share $ |
| Interim dividend for the half-year ended 30 June 2023 | Nil | Nil |
Net Tangible Assets
|
| 30 June 2023 $ | 31 December 2022 $ |
| Net tangible assets per share | 0.25 | 0.22 |
This half year report should be read in conjunction with the most recent annual financial report for the year ended
31 December 2022. All dollar figures are United States dollar ($) currency unless otherwise stated.
Corporate Directory
DirectorsNon-Executive Chairman Martin Botha Managing Director & CEO Terence Holohan Non-Executive Director Simon Jackson Non-Executive Director Mark Potts Non-Executive Director Sabina Shugg Non-Executive Director Adrian Reynolds Non-Executive Director Keith Marshall Company SecretaryRichard Steenhof Registered OfficeLevel 2, Australia Place 15-17 William Street Perth, Western Australia 6000
PO Box 7232 Cloisters Square Perth, Western Australia 6850 Telephone: + 61 8 9261 6100 Facsimile: + 61 8 9322 7597 Email: contact@rml.com.au Australian Business NumberABN 39 097 088 689 WebsiteResolute Mining Limited maintains a website where all announcements are available: www.rml.com.au
| Share RegistryComputershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, Western Australia 6000 Home ExchangeAustralian Securities Exchange Level 40, Central Park 152 St Georges Terrace Perth, Western Australia 6000
Quoted on the official lists of the Australian Securities Exchange (ASX) and London Stock Exchange (LSE)
ASX/LSE Ordinary Share Code: "RSG" Securities on Issue (30/06/2023)Ordinary Shares 2,129,006,569 Performance Rights 23,795,006 AuditorErnst & Young Ernst & Young Building 11 Mounts Bay Rd Perth, Western Australia 6000
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
|
Table of Contents
Auditor's Independence Declaration 9
Consolidated Statement of Comprehensive Income 10
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
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 2023 (H1 2023).
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)
Simon Jackson (Non-Executive Director)
Mark Potts (Non-Executive Director)
Sabina Shugg (Non-Executive Director)
Adrian Reynolds (Non-Executive Director)
Keith Marshall (Non-Executive Director) (appointed 19 June 2023)
Company Secretary
Richard Steenhof
Key Highlights
Key highlights for half year ended 30 June 2023 include:
· Production (gold poured) for H1 of 176,629 ounces (oz) compared to 170,903oz in H1 2022.
· All-In Sustaining Cost (AISC) of $1,469/oz for the first half of the year, which is stable compared H1 2022.
· H1 gold sales of 173,058oz at an average realised gold price of $1,906/oz compared to 173,717oz at an average realised gold price of $1,824/oz in H1 2022.
· Cash generation of $17.3 million excluding interest payments and working capital movements.H1 capital expenditure of $36.7 million with non-sustaining capital of $18.6 million, sustaining capital expenditure of $15.6 million, and exploration spend of $2.5 million.
· Net Debt of $17.2 million (down 14% from $19.9 million in Q1-2023), including Cash and Bullion of $85.7 million. Available liquidity (Cash, Bullion and undrawn Revolving Credit Facility (RCF)) of $165.7 million.
Operations Review
In H1 2023, a total of 176,630oz of gold was produced (poured) at an All-In Sustaining Cost (AISC) of $1,469/oz with total gold sales of 173,058oz at an average realised price of $1,906/oz.
During H1 2023, 2.9 million tonnes (Mt) of ore was milled at an average grade of 2.25 grams per tonne (g/t Au) for 178,795oz of gold recovered.
Directors' Report
Production and Cost Summary for H1 2023
|
| Units | Syama sulphide | Syama oxide | Syama Total | Mako | Group | |
| UG Lateral Development | m | 2,191 | - | 2,191 | - | 2,191 | |
| UG Vertical Development | m | 20 | - | 20 | - | 20 | |
| Total UG Development | m | 2,211 | - | 2,211 | - | 2,211 | |
| UG Ore Mined | t | 1,153,689 | - | 1,153,689 | - | 1,153,689 | |
| UG Grade Mined | g/t | 2.87 | - | 2.87 | - | 2.87 | |
| OP Operating Waste | BCM | - | 3,932,837 | 3,932,837 | 3,765,640 | 7,698,477 | |
| OP Ore Mined | BCM | - | 470,994 | 470,994 | 472,184 | 943,178 | |
| OP Grade Mined | g/t | - | 1.69 | 1.69 | 1.91 | 1.80 | |
| Total Ore Mined | t | 1,153,689 | 972,309 | 2,125,998 | 1,334,922 | 3,460,920 | |
| Total Tonnes Processed | t | 1,074,980 | 809,849 | 1,884,829 | 1,047,790 | 2,932,619 | |
| Grade Processed | g/t | 2.94 | 1.55 | 2.34 | 2.09 | 2.25 | |
| Recovery | % | 79.2 | 82.9 | 80.7 | 92.0 | 84.8 | |
| Gold Recovered | oz | 80,505 | 33,327 | 113,832 | 64,963 | 178,795 | |
| Gold in Circuit Drawdown/(Addition) | oz | (775) | (271) | (1,046) | (1,120) | (2,166) | |
| Gold Poured | oz | 79,730 | 33,056 | 112,786 | 63,843 | 176,629 | |
| Gold Bullion in Metal Account Movement (Increase)/Decrease | oz | (1,909) | (986) | (2,895) | (677) | (3,572) | |
| Gold Sold | oz | 77,822 | 32,070 | 109,892 | 63,166 | 173,058 | |
| Achieved Gold Price | $/oz | - | - | - | - | 1,906 | |
| Mining | $/oz | 489 | 561 | 510 | 719 | 586 | |
| Processing | $/oz | 517 | 602 | 542 | 396 | 489 | |
| Site Administration | $/oz | 155 | 297 | 197 | 119 | 169 | |
| Site Operating Costs | $/oz | 1,161 | 1,460 | 1,249 | 1,234 | 1,244 | |
| Royalties | $/oz | 111 | 109 | 110 | 95 | 107 | |
| By-Product Credits + Corp Admin | $/oz | (3) | (3) | (3) | - | 38 | |
| Total Cash Operating Costs | $/oz | 1,269 | 1,566 | 1,356 | 1,329 | 1,389 | |
| Sustaining Capital | $/oz | 103 | 218 | 137 | 3 | 88 | |
| Non-cash adjustments | $/oz | 9 | (17) | 1 | (24) | (8) | |
| All-In Sustaining Cost (AISC) | $/oz | 1,381 | 1,767 | 1,494 | 1,308 | 1,469 |
Directors' Report
Syama Gold Mine
At the Syama Gold Mine in Mali (Syama), gold production for 6 months to 30 June 2023 was 112,787oz at an AISC of $1,494/oz.
Sulphide Operations
During the six months ending 30 June 2023, gold production from the Syama sulphide circuit was 79,731oz at an AISC of $1,381/oz. Gold production increased by 9% in H1 2023 compared to H1 2022 despite maintenance carried out on the tertiary crusher which has been scheduled for replacement in H2 2023. The improved performance was due to higher grades milled and higher plant throughput achieved prior to the crusher breakdown. Syama sulphide AISC per ounce poured decreased by 2% due to steps being taken to sustainably reduce cost at the operations.
Oxide Operations
During the first half of 2023, production was 33,056oz at an AISC of $1,767/oz. Ore tonnes continued to be sourced from the Tabakoroni Splay pit and Syama North at Paysans and Folona. Preparatory activities involving stripping and grade control were stepped up during the first half of the year in readiness to mine the A21 pit.
During H1 2023, total tonnes processed from the Syama oxide circuit was 9% higher compared to H1 2022 despite the lower recovery rate on account of the higher organic carbon content in the mill feed during the second quarter of the year - the mining of this ore was immediately curtailed.
Exploration
Total exploration expenditure for the first half of 2023 was $9.0 million (made up of $2.5 million of capital and $6.5 million of exploration expenditure) with the majority of the focus on Syama North.
An updated Mineral Resource estimate for Syama North was announced on 19 January 2023 with an increase to 34 million tonnes at 2.9g/t Au for 3.18 million ounces.
The infill drilling program at Syama North, which commenced in early 2023, has continued throughout the year with the strategy of converting inferred resources to indicated category. This program was completed in late June and after the return of analytical results, the Mineral Resource Estimate will be updated. Resolute is expected to provide an updated Mineral Resource model for Syama North during Q3 2023 which will further feed and optimise the Syama Phase I Expansion study.
Diamond drilling continues at Syama North with the focus now on expanding the Mineral Resource, given the recent completion of the in-fill drilling for Ore Reserves, as the deposit remains open along strike and down dip.
Oxide Mineral Resources exploration has been ongoing throughout 2023 in Syama with Reverse Circulation drilling on several newly identified targets. This program will continue for the remainder of 2023.
Exploration activities continued in Senegal with drilling programs carried out on the Petowal Mining Lease and the Laminia Joint Venture which is located 10km east of Petowal.
In Guinea, surface exploration programs undertaken in the past two years have identified a strong gold anomaly in the western portion of the Niagassola Research Permit which is now named the Mansala prospect. Reverse Circulation (RC) drilling at the Mansala Prospect has intersected encouraging gold mineralisation. Drilling continues, and a more detailed report will be announced in Q3 2023.
Mako Gold Mine
During H1 2023, production from the Mako Gold Mine was 63,843oz at an AISC of $1,308/oz. During H1 2023, production decreased by 5% due to the planned focus on mining the medium grade sections of the ore body while the scheduled waste stripping continued to expose higher grade ore to be mined later in the year.
Directors' Report
Financial Overview
| Profit and Loss Analysis | H1 2023 | H1 2022 |
| Revenue | 329,499 | 317,658 |
| Cost of sales excluding depreciation and amortisation | (182,551) | (193,116) |
| Royalties and other operating expenses | (29,777) | (30,030) |
| Administration and other corporate expenses | (9,081) | (7,562) |
| Share-Based payments expense | (344) | (291) |
| Exploration and business development expenditure | (6,368) | (8,187) |
| EBITDA | 101,378 | 78,472 |
| Depreciation and amortisation | (47,459) | (43,566) |
| Net interest and finance costs | (7,121) | (5,725) |
| NRV inventory movements and unrealised treasury transactions | 37,924 | (35,440) |
| Other | 352 | 3,702 |
| Indirect tax expense | (5,273) | (5,451) |
| Net profit/ (loss) before tax | 79,801 | (8,008) |
| Income tax benefit/ (expense) | 7,878 | (16,138) |
| Net income/ (loss) after tax | 87,679 | (24,146) |
Financial Performance
Revenue for H1 2023 was $329.5 million, from gold sales of 173,058oz at an average realised price of $1,906/oz. Earnings before interest, tax, depreciation, and amortisation (EBITDA) was $101.4 million. In H1 2023 the Group reversed historic provisions related to the tax exoneration in Senegal totalling $26.1 million. This resulted in an increase of $16.4 million to EBITDA relating to the reversal of operating costs. Resolute reported a Net Profit After Tax of $87.7 million. Resolute continued to invest in the business in H1 2023 with capital expenditures on development, property, plant and equipment totalling $36.7 million, and exploration and evaluation expenditure of $4.6 million.
Directors' Report
Financial Position
As at 30 June 2023, Resolute had cash of $65.8 million and bullion with a market value of $20.0 million. In addition at 30 June 2023 the Company had listed investments with a market value of $8.5 million and Promissory notes and contingent consideration receivable carried at $53.4 million. The Group's net debt inclusive of the syndicated facilities and in-country overdraft facilities was $17.2 million at 30 June 2023. Resolute also held receivables of $17.6 million associated with Malian VAT paid and refundable.
Significant Events After Balance Date
Since the end of the period and to the date of this report, no matter or circumstance has arisen that has significantly affected, or may significantly affect, the operations of the Group, the results of operation or the state of affairs of the consolidated group in subsequent periods.
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.
Terence Holohan
Managing Director & CEO
Perth, Western Australia
22 August 2023
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 2023 $'000 | For the half year ended 30 June 2022 $'000 |
|
|
|
|
|
| Revenue from contracts with customers for gold and silver sales | 3 | 329,499 | 317,658 |
| Costs of production relating to gold sales | 3 | (182,551) | (193,116) |
| Gross profit before depreciation, amortisation and other operating costs |
| 146,948 | 124,542 |
| | | | |
| Depreciation and amortisation relating to gold sales | 3 | (46,538) | (42,411) |
| Other operating costs relating to gold sales | 3 | (29,777) | (30,030) |
| Gross profit from operations |
| 70,633 | 52,101 |
| | | | |
| Interest income | 3 | 1,411 | 3,743 |
| Other income/ (expense) | 3 | (104) | 4,549 |
| Exploration and business development expenditure | 3 | (6,368) | (8,187) |
| Administration and other corporate expenses | 3 | (9,081) | (7,562) |
| Share-based payments expense | 3 | (344) | (291) |
| Treasury - realised gains | 3 | 456 | 51 |
| NRV inventory movements and unrealised treasury transactions | 3 | 37,924 | (35,440) |
| Share of associates' losses | 3 | - | (898) |
| Depreciation of non-mine site assets | 3 | (921) | (1,155) |
| Finance costs | 3 | (8,532) | (9,468) |
| Indirect tax expense | 3 | (5,273) | (5,451) |
| Profit/(loss) before tax |
| 79,801 | (8,008) |
| | | | |
| Tax benefit/(expense) | 3&5 | 7,878 | (16,138) |
| Profit/(loss) for the period | | 87,679 | (24,146) |
| | | | |
| Profit/(Loss) attributable to: | | | |
| Members of the parent | | 73,842 | (24,286) |
| Non-controlling interest | | 13,837 | 140 |
| Profit/(loss) for the period | | 87,679 | (24,146) |
Consolidated Statement of Comprehensive Income (continued)
| | Note | For the half year ended 30 June 2023 $'000 | For the half year ended 30 June 2022 $'000 |
| Profit/(loss) for the period (brought forward) |
| 87,679 | (24,146) |
| | | | |
| 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 |
| (23,623) | (6,363) |
| | | | |
| Items that may not be reclassified subsequently to profit or loss | | | |
|
| | | |
| Exchange differences on translation of foreign operations: | | | |
| - Non-controlling interest | | (1,226) | 6,362 |
| - Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax | | - | (1,045) |
| | | | |
| Other comprehensive loss for the period, net of tax |
| (24,849) | (1,046) |
| | | | |
| Total comprehensive income/(loss) for the period |
| 62,830 | (25,192) |
|
|
| | |
| Total comprehensive income/(loss) attributable to: |
| | |
| Members of the parent | | 50,219 | (31,694) |
| Non-controlling interest | | 12,611 | 6,502 |
| Total comprehensive income/(loss) for the period | | 62,830 | (25,192) |
| | | | |
| Profit/(loss) per share for net loss attributable for operations to the ordinary equity holders of the parent: |
| | |
| Basic earnings/(loss) per share | | 4.31 cents | (2.20) cents |
| Diluted earnings/(loss) per share | | 4.31 cents | (2.20) cents |
| | | | |
| Profit/(loss) per share for net loss attributable for continuing operations to the ordinary equity holders of the parent: | | | |
| Basic earnings/(loss) per share | | 4.31 cents | (2.20) cents |
| Diluted earnings/(loss) per share | | 4.31 cents | (2.20) cents |
| | | | |
Consolidated Statement of Financial Position
| | Note | 30 June 2023 | 31 December 2022 |
| Current assets | | | |
| Cash and cash equivalents | | 65,777 | 80,873 |
| Other financial assets - restricted cash | | 1,406 | 1,406 |
| Receivables | 6 | 4,044 | 48,793 |
| Inventories | 7 | 157,456 | 146,430 |
| Prepayments and other assets | | 13,430 | 11,141 |
| Asset sale receivable | | 2,500 | - |
| Total current assets | | 244,613 | 288,643 |
| Non current assets | | | |
| Income tax asset | | 6,092 | 10,545 |
| Receivable | 6 | 13,795 | - |
| Inventories | 7 | 51,268 | 42,434 |
| Promissory note receivable | | 40,123 | 40,015 |
| Contingent consideration receivable | | 13,280 | 13,636 |
| Exploration and evaluation | | 3,901 | 3,211 |
| Mine properties | 8 | 205,103 | 222,395 |
| Property, plant and equipment | | 240,308 | 234,461 |
| Right-of-use assets | | 11,720 | 13,453 |
| Total non current assets | | 585,590 | 580,150 |
| Total assets | | 830,203 | 868,793 |
| Current liabilities | | | |
| Payables | | 55,750 | 63,700 |
| Financial derivative liabilities | | 1,730 | 1,546 |
| Interest bearing liabilities | 9 | 105,259 | 95,634 |
| Provisions | 10 | 50,463 | 100,377 |
| Current tax liability | | 2,028 | 19,107 |
| Lease liabilities | | 3,298 | 3,373 |
| Total current liabilities | | 218,528 | 283,737 |
| Non current liabilities | | | |
| Interest bearing liabilities | 9 | - | 29,482 |
| Provisions | 10 | 65,960 | 71,544 |
| Lease liabilities | | 10,988 | 12,536 |
| Total non current liabilities | | 76,948 | 113,562 |
| Total liabilities | | 295,476 | 397,299 |
| Net assets | | 534,727 | 471,494 |
Consolidated Statement of Financial Position (continued)
| | Note | 30 June 2023 | 31 December 2022 |
| Equity attributable to equity holders of the parent | |
|
|
| Contributed equity | 11 | 882,731 | 882,731 |
| Reserves | | (45,176) | (21,956) |
| Retained earnings/(accumulated losses) | | (243,499) | (317,341) |
| Total equity attributable to equity holders of the parent | | 594,056 | 543,434 |
| Non-controlling interest | | (59,329) | (71,940) |
| Total equity |
| 534,727 | 471,494 |
Consolidated Statement of Changes in Equity
|
| Contributed equity | Net unrealised gain/(loss) reserve | Employee equity benefits reserve | Other reserves | Foreign currency translation reserve | Retained earnings/ accumulated losses | Non-controlling interest | Total | |||||
| At 1 January 2023 | 882,731 | (9,348) | 20,447 | 4,152 | (37,207) | (317,341) | (71,940) | 471,494 | |||||
| |
|
|
|
|
|
|
| | |||||
| Profit for the period | - | - | - | - | - | 73,842 | 13,837 | 87,679 | |||||
| Other comprehensive (loss)/income, net of tax | - | - | - | - | (23,623) | - | (1,226) | (24,849) | |||||
| Total comprehensive (loss)/income for the period, net of tax | - | - | - | - | (23,623) | 73,842 | 12,611 | 62,830 | |||||
| |
|
|
|
|
|
|
| | |||||
| Dividend paid | - | - | - | - | - | - | - | - | |||||
| Share-based payments to employees | - | - | 403 | - | - | - | - | 403 | |||||
| At 30 June 2023 | 882,731 | (9,348) | 20,850 | 4,152 | (60,830) | (243,499) | (59,329) | 534,727 | |||||
|
| Contributed equity | Net unrealised gain/(loss) reserve | Employee equity benefits reserve | Other reserves | Foreign currency translation reserve | Retained earnings/ accumulated losses | Non-controlling interest | Total |
| ||||
| At 1 January 2022 | 777,021 | (8,631) | 19,813 | 4,152 | (19,040) | (277,682) | (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 | 4,152 | (25,403) | (301,968) | (67,969) | 395,518 |
| ||||
Consolidated Cash Flow Statement
| | For the half year ended 30 June 2023 $'000 | For the half year ended 30 June 2022 $'000 |
| Cash flows from operating activities | | |
| Receipts from customers | 330,209 | 317,200 |
| Payments to suppliers, employees, and others | (266,974) | (249,904) |
| Exploration expenditure | (4,446) | (7,268) |
| Net interest paid | (5,756) | (7,834) |
| Indirect tax payment | (4,787) | (4,896) |
| Income tax payment | (3,261) | (2,549) |
| Net cash inflows from operating activities | 44,985 | 44,749 |
| |
|
|
| Cash flows used in investing activities |
|
|
| Payments for property, plant & equipment | (13,526) | (20,866) |
| Payments for development activities | (22,557) | (14,895) |
| Payments for evaluation activities | (1,047) | (1,305) |
| Proceeds from sale of property, plant & equipment | 297 | 18,121 |
| | | |
| Proceeds from sale of assets | - | (356) |
| Other investing activities | (382) | - |
| Proceeds from investment in associate | 1,000 | 30,000 |
| Net cash flows From/(used in) investing activities | (36,215) | 10,699 |
| | | |
| Cash flows from/(used in) financing activities | | |
| Repayment of borrowings | (30,000) | (55,000) |
| fcr | | |
| Subsidiary dividend paid to non-controlling interest | - | (3,069) |
| Dividend paid | (1,430) | - |
| Repayment of lease liability | (1,988) | (1,960) |
| Net cash flows used in financing activities | (33,418) | (60,029) |
| | | |
| Net decrease in cash and cash equivalents | (24,648) | (4,581) |
| | | |
| Cash and cash equivalents at the beginning of the period | 35,460 | 25,237 |
| Exchange rate adjustment | 1,967 | 381 |
| Cash and cash equivalents at the end of the period | 12,779 | 21,038 |
|
| | |
| Cash and cash equivalents comprise the following: | | |
| Cash at bank and on hand | 65,776 | 65,613 |
| Bank overdraft | (52,997) | (44,575) |
| Cash and cash equivalents at the end of the period | 12,779 | 21,038 |
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 2023 was authorised for issue in accordance with a resolution of directors on 22 August 2023.
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 2023 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 2022 and considered together with any public announcements made by Resolute Mining Limited during the half year ended 30 June 2023 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.
Notes to the Financial Statements
Note 3 (a): Segment revenue and expenses
| For the half year ended 30 June 2023 | Mako (Senegal) $'000 | Syama (Mali) $'000 | Corp/Other $'000 | Total $'000 | |
| Revenue | | | |
| |
| Gold and silver sales at spot to external customers (a) | 121,910 | 207,589 | - | 329,499 | |
| Total segment gold and silver sales revenue | 121,910 | 207,589 | - | 329,499 | |
| Costs of production | (48,989)1 | (139,937) | - | (188,926) | |
| Gold in circuit inventories movement | 1,162 | 5,213 | - | 6,375 | |
| Costs of production relating to gold sales | (47,827) | (134,724) | - | (182,551) | |
| Royalty expense | (6,096) | (14,164) | - | (20,260) | |
| Operational support costs | (8,518) | (999) | - | (9,517) | |
| Other operating costs relating to gold sales | (14,614) | (15,163) | - | (29,777) | |
| Administration and other corporate expenses | - | - | (9,081) | (9,081) | |
| Share-based payments expense | - | - | (344) | (344) | |
| Exploration and business development expenditure | (2,016) | (4,352) | - | (6,368)
| |
| Earnings/(loss) before interest, tax, depreciation and amortisation | 57,453 | 53,350 | (9,425) | 101,378 | |
| Amortisation of evaluation, development and rehabilitation costs | (16,998) | (13,479) | - | (30,477) | |
| Depreciation of mine site properties, plant and equipment | (7,273) | (8,788) | - | (16,061) | |
| Depreciation and amortisation relating to gold sales | (24,271) | (22,267) | - | (46,538) | |
| Segment operating result before treasury, other income/(expenses) and tax | 33,182 | 31,083 | (9,425) | 54,840 | |
| Interest income | 4 | - | 1,407 | 1,411 | |
| Other income/ (expense) | - | (135) | 31 | (104) | |
| Interest and fees | (370) | (2,719) | (3,981) | (7,070) | |
| Rehabilitation and restoration provision accretion | (526) | (936) | - | (1,462) | |
| Finance costs | (896) | (3,655) | (3,981) | (8,532) | |
| Realised foreign exchange gain/(loss) | (846) | 379 | 923 | 456 | |
| Treasury - realised gains/(loss) | (846) | 379 | 923 | 456 | |
| Inventories net realisable value movements and obsolete consumables | 928 | 7,615 | - | 8,543 | |
| Unrealised foreign exchange (loss) | (691) | - | (1,499) | (2,190) | |
| Unrealised foreign exchange gain on intercompany balances | - | - | 31,571 | 31,571 | |
| NRV inventory movements and unrealised treasury transactions | 237 | 7,615 | 30,072 | 37,924 | |
| Depreciation of non-mine site assets | (69) | - | (852) | (921) | |
| Indirect tax (expense)/benefit | (5,000) 1 | (273) | - | (5,273) | |
| Income tax (expense)/benefit
| 14,463 1 | (4,608) | (1,977) | 7,878 | |
| (Loss)/profit for the period | 41,075 | 30,406 | 16,198 | 87,679 |
1 - The Group has settled the Mako tax exoneration and fully extended the exoneration period from 5 to 7 years. The prior year recognised provision has been reversed in the current period. For the half year ended 30 June 2023, cost of production and income tax expense has reversed by $16.4 million and $14.5 million, respectively.
Notes to the Financial Statements
Note 3 (a): Segment revenue and expenses (continued)
| For the half year ended 30 June 2022 | Mako (Senegal) $'000 | Syama (Mali) $'000 | Corp/Other $'000 | Total $'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) | |
| NRV inventory 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 (a): 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 'Operating Segments' and forms part of the reconciliation of the results and positions of the operating segments to the financial statements.
Note 3 (b): Segment assets and liabilities
| For the half year ended 30 June 2023 | Mako (Senegal) $'000 | Syama (Mali) $'000 | Corp/Other $'000 | Total $'000 | |
| Segment balance sheet items | | | |
| |
| Segment assets | 220,904 | 512,185 | 97,114 | 830,203 | |
| Segment liabilities | 65,088 | 166,003 | 64,385 | 295,476 |
(a) This information does not represent an operating segment as defined by AASB 8 'Operating Segments' 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 2022: $nil).
Note 5: Taxes
At 30 June 2023, the Group recognised an income tax benefit of $7.9 million (30 June 2022: tax expense of $16.1 million). A $14.5 million reduction in the income tax expense in Senegal relating to the finalisation of the tax exoneration extension was offset by a $4.6 million income tax expense for local statutory purposes.
Note 6: Receivables
Receivables of $17.8 million at 30 June 2023 (31 December 2022: $48.8 million) primarily relate to indirect taxes owing to the Group by the Republic of Mali and Senegal. Significant movement for the year relates to the reversal of $34.9 million of VAT provision raised in relation with the Senegalese tax authority as the exoneration was settled.
Notes to the Financial Statements
Note 7: Inventories
| |
30 June 2023 |
31 December 2022 |
| | $'000 | $'000 |
| Current | | |
| Ore stockpiles - at cost | 30,041 | 27,223 |
| Ore stockpiles - at net realisable value | 31,767 | 28,286 |
| Gold in circuit - at cost | 5,739 | 4,186 |
| Gold in circuit - at net realisable value | 1,687 | 373 |
| Gold bullion on hand - at cost | 15,308 | 10,276 |
| Consumables at net realisable value | 72,914 | 76,086 |
| Total Inventory (current) | 157,456 | 146,430 |
| Non current |
|
|
| Ore stockpiles - at cost | 3,142 | 1,959 |
| Ore stockpiles - at net realisable value | 4,189 | 3,279 |
| Gold in circuit - at net realisable value | 43,937 | 37,196 |
| Total Inventory (non current) | 51,268 | 42,434 |
Note 8: Mine properties
At 30 June 2023, the Group's mine properties amount to $205.1 million (31 December 2022: $222.4 million). During the six-month period to 30 June 2023, further additions for development activities were made of $22.6 million, fully offset by amortisation recognition on production assets.
Note 9: Interest bearing liabilities
|
|
30 June 2023 |
31 December 2022 |
| $'000 | $'000 | |
| Interest bearing liabilities (current) | | |
| Bank overdraft | 52,996 | 45,414 |
| Insurance premium funding | 2,395 | - |
| Borrowings | 49,868 | 50,220 |
| Total Interest bearing liabilities (current) | 105,259 | 95,634 |
| Interest bearing liabilities (non current) | | |
| Borrowings | - | 29,482 |
| Total Interest bearing liabilities (non current) | - | 29,482 |
| | | |
| Total | 105,259 | 125,116 |
Notes to the Financial Statements
Note 10: Provisions
| |
30 June 2023 |
31 December 2022 |
| | $'000 | $'000 |
| Current | | |
| Site restoration | 3,139 | 1,220 |
| Employee entitlements | 3,373 | 4,336 |
| Provision for direct and indirect taxes1 | 42,011 | 92,936 |
| Other provision | 1,940 | 1,885 |
| Total provisions (current) | 50,463 | 100,377 |
| |
|
|
| Non Current |
|
|
| Site restoration | 65,028 | 70,874 |
| Employee entitlements | 932 | 670 |
| Total provisions (non current) | 65,960 | 71,544 |
1. Based on the facts and circumstances at 30 June 2023 and in line with requirements of the accounting standards, the Group has reversed $66.7 million (comprised of $34.9 million VAT, $17.3 million indirect taxes, and $14.5 million income tax) of the tax claim by the Senegalese tax authority as the exoneration dispute was settled for an amount of $5 million. The factual basis and validity of the remaining demands (primarily in Mali) are being strongly disputed by Resolute due to fundamental misinterpretations of the application of certain tax law. 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 | $'000 |
| At 1 January 2023 | 2,129,006,569 | 2,129,006,569 | 882,731 |
| Changes during current period, net of issue costs: | - | - | - |
| At 30 June 2023 | 2,129,006,569 | 2,129,006,569 | 882,731 |
| | Issue Date | Total Number | Fair Value per Right at Grant Date (A$) | Vesting Date | ||
| Performance rights on issue | | | | | ||
| Band A1 and A2 | 26/10/2018 | 13,550 | $0.92 | 30/06/2021 | ||
| Band A1 and A2 | 21/05/2019 | 73,377 | $0.93 | 31/12/2021 | ||
| Band A1 and A2 | 22/05/2020 | 121,130 | $0.85 | 31/12/2022 | ||
| Band A0 | 14/07/2021 | 443,716 | $0.43 | 31/12/2023 | ||
| Band A1, A2 and B1 | 14/07/2021 | 1,398,849 | $0.57 | 31/12/2023 | ||
| Band A1 and A2 | 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 | 22/06/2022 | 1,958,147 | $0.19 | 31/12/2024 | ||
| Band A1, A2 and B1 | 22/06/2022 | 5,275,334 | $0.19 | 31/12/2024 | ||
| Band A0 | 30/06/2023 | 1,000,000 | $0.23 | 30/06/2025 | ||
| Band A0 | 30/06/2023 | 3,548,554 | $0.34 | 31/12/2025 | ||
| Band A1, A2 and B1 | 30/06/2023 | 9,266,960 | $0.35 | 31/12/2025 | ||
| As at 30 June 2023 |
| 23,795,006 |
|
| ||
| | Date of Change | Total Number | Fair Value per Right at Grant Date (A$) | Vesting Date |
| |
| Opening number of performance rights | | 10,916,506 | | |
| |
| Decrease through lapsing of performance rights (Band A0) | 30/06/2023 | (194,352) | $0.56 | 31/12/2022 |
| |
| Decrease through lapsing of performance rights (Band A1 to A2) | 30/06/2023 | (742,662) | $0.85 | 31/12/2022 |
| |
| Increase through issue of performance rights to eligible employees (Band A0) | 30/06/2023 | 1,000,000 | $0.23 | 30/06/2025 |
| |
| Increase through issue of performance rights to eligible employees (Band A0) | 30/06/2023 | 3,548,554 | $0.34 | 31/12/2025 |
| |
| Increase through issue of performance rights to eligible employees (Band A1, A2 and B1) | 30/06/2023 | 9,266,960 | $0.35 | 31/12/2025 |
| |
| Closing number of performance rights | | 23,795,006 | | |
| |
\* The terms and conditions of the Remuneration Framework are consistent with those disclosed in the Annual Report for the year ended 31 December 2022 and the Notice of Annual General Meeting sent to shareholders on 18 April 2023.
Notes to the Financial Statements
Note 12: Gold forward contracts
As part of its risk management policy, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated sales of gold.
Gold forward contracts commitment at 30 June 2023 (not recorded as derivatives):
| | Average Contracted Gold Sale Price per oz ($) | Gold for Physical Delivery oz | Value of Committed sales $'000 |
| 30 June 2023 | | | |
| Within one year | 1,929 | 162,500 | 313,462 |
| Total |
| 162,500 | 313,462 |
Note 13: Events Occurring after Balance Date
Since the end of the period and to the date of this report, no matter or circumstance has arisen that has significantly affected, or may significantly affect, the operations of the Group, the results of operation or the state of affairs of the consolidated group in subsequent periods.
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 2023 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.
Terence Holohan
Managing Director & CEO
Perth, Western Australia
22 August 2023
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