TIDMRSG
RNS Number : 7938R
Resolute Mining Limited
31 October 2023
31 October 2023
Quarterly Activities Report
For the Quarter ending 30 September 2023 ('Q3 2023', 'September
Quarter' or 'the Quarter')
Highlights
-- Total Recordable Injury Frequency Rate (TRIFR) increased to
1.55 from 0.79 in Q2 2023 as a result of eight recordable injuries
during the quarter.
-- Quarterly production (gold poured) of 74,056 ounces (oz) (Q2
2023: 84,372oz) driven by a weak quarter from Syama Oxide due to
issues stemming from the high-carbon pocket of Tabakoroni ore. Mako
and Syama Sulphide performed in line with expectations.
-- All-In Sustaining Cost (AISC) of $1,459/oz in Q3 2023, a 2%
decrease from June Quarter mainly due to the realisation of the
ongoing cost reduction initiatives which was offset by the
reduction in gold poured in the Quarter.
-- Quarterly gold sales of 76,524oz at an average realised gold
price of $1,917/oz (Q2 2023: 84,907oz at an average realised gold
price of $1,922/oz).
-- Cash generation of $8.6 million excluding debt and interest
payments and working capital movements.
-- Quarterly capital expenditure of $16.3 million (Q2 2023:
$18.6 million) with non-sustaining capital of $8.9 million,
sustaining capital expenditure of $4.6 million and exploration
spend of $2.8 million.
-- Net Cash of $2.2 million (up from a Net Debt position of
$17.2 million in June Quarter), including Cash and Bullion of $78.0
million. Available liquidity (Cash, Bullion and undrawn RCF) of
$158.0 million.
-- Full-year guidance has been revised down to 330,000 -
340,000oz from our initial guidance of 350,000oz due to mining
lower grades at Syama Oxide which has impacted yearly
production.
-- AISC guidance has been maintained at $1,480/oz.
-- Capital Expenditure guidance has been reduced to $70 million,
excluding Phase 1 Expansion capital, from the original guidance of
$88 million.
-- Syama North's Measured and Indicated Resources increased by
47% to 2.7 Moz grading 3.0g/t, from 1.86 Moz grading 3.0g/t,
following the infill diamond and RC drilling campaign conducted in
the first half of 2023. A Reserve Update is expected in the
December Quarter.
-- Released three-year production and cost forecast for Syama
and Mako operations showing total group gold production from 2024
to 2026 exceeding 1 Moz and group AISC reducing by over
$200/oz.
Note: Unless otherwise stated, all dollar figures are United
States dollars ($).
Resolute Mining Limited (Resolute, the Company or the Group)
(ASX/LSE: RSG), is pleased to present its Quarterly Activities
Report for the period ended 30 September 2023.
Terry Holohan, CEO and Managing Director, commented,
"It has been a tougher than expected Quarter for Resolute at the
Syama Oxide operation as a shift in mine plan due to the
high-carbon pocket of Tabakoroni ore encountered in Q2 continued to
affect the operation. Mako and Syama Sulphide performed in line as
expected for the quarter . In Q4 we expect an improvement at both
Syama operations and a similar performance at Mako. This has been
reflected in our revised guidance of 330,000 - 340,000oz which we
released along with our three-year forecast.
We ended the Quarter with 74,056 oz of gold poured and an AISC
of $1,459/oz which was in line with our expectations and
pleasingly, despite the reduction in gold production, a decrease
from the prior Quarter ($1,489/oz). This is demonstrative of our
committed focus on sustainably reducing costs across the group
started to pick up momentum.
The release of our three-year forecast during the Quarter shows
the Company's exciting organic growth path to increase ounces and
improve margins across the Group. The Syama North Phase I Expansion
project should enable stable gold production in excess of 260,000oz
per year with the flexibility of having two reliable sources of
ore. At Mako, we have two extremely strong years ahead of us with
production around 135,000oz per year at very healthy margins.
Despite the tough Quarter the company continued to generate
healthy cash flow as net debt improved by $19.4 million bringing us
as predicted into a positive net cash position. This speaks to the
realization of the cost reduction activities and robustness of our
operations.
Exploration continues at Mako to extend the mine's life - which
we are increasingly confident of being able to do. Lastly, our
focus for the remainder of 2023 is on continued sustainable
reduction in costs across the Resolute Group and an increased gold
production in the final Quarter."
Investor and analyst conference call
Resolute will host a conference call for investors, analysts,
and media on Tuesday, 31 October 2023, to discuss the Company's
Quarterly Activities Report for the period ending 30 September
2023. This call will conclude with a question-and-answer
session.
Conference Call (pre-registration required)
Conference Call: 8:00pm (AEST, Sydney) / 9:00am (GMT,
London)
Pre-Registration Link:
https://www.netroadshow.com/events/login?show=d0dfc841&confId=57253
Participants will receive a calendar invite with dial-in details
once the pre-registration process is complete.
A presentation, to accompany the call, will be available for
download on the Company's website:
https://www.rml.com.au/investors/presentations/ .
Operations Overview
Refer to the Appendix for Resolute's production and costs for
the September 2023 Quarter.
Environmental Social Governance
Resolute's TRIFR as at 30 September 2023 was 1.55, an increase
compared to the previous Quarter due to eight recordable injuries
during the quarter. Resolute recorded no significant environmental
incidents, regulatory non-compliances, or grievances in Q3 2023. We
were successfully audited as compliant with the Responsible Gold
Mining Principles at both Mako and Syama in Q3. Group-wide climate
change and human rights risk assessments are ongoing at both sites,
and we are actively engaging with ESG Rating agencies to improve
the Company's ratings over 2023.
Syama, Mali
Syama Sulphide
Syama sulphide gold production for the Quarter was 34,805oz at
an AISC of $1,401/oz. The operational performance is set out in the
table below.
Ore volumes mined increased by 10% to 575kt while the mined
grade decreased to 2.32g/t from 2.88g/t. This was in line with
expectation as the focus on development during the Quarter was
predominantly on hanging wall slots to open additional draw points
amenable to the optimal transverse mining. As a result of this
development, over Q4 we expect to have access to higher grades
areas as well as higher tonnages.
Ore processed was 586kt at a head grade of 2.39g/t which was an
11% increase in tonnes processed and 18% decrease in head grade
processed compared to Q2. Despite the increase in throughput, gold
production was 10% lower than previous quarter due to lower grades
mined and delivered to the plant. In Q4 we expect increased head
grades as higher grade stopes are accessed.
Capital expenditure was $6.5 million for the Quarter, a decrease
of $2.5 million from the previous Quarter. The expenditure in the
Quarter was made up of $3.4 million of capital items, namely the
Fluoseal Return Duct replacement on the Roaster Plant, ongoing
replacement parts for the sulphide plant crushers and other
mechanical parts. Additionally, the sulphide operation incurred
$2.4 million of capitalised waste and $0.7 million of exploration
costs .
AISC increased from $1,373/oz to $1,401/oz due to lower grade
mined and milled despite increased plant throughput and stable
plant recovery. The lower grade mined was due to the scheduled
focus on low-grade zones to provide access to better area for
mining in the last quarter of the year.
Syama Oxide
Syama Oxide gold production for the Quarter was 11,664oz at an
AISC of $1,478/oz. The operational performance is set out in the
table below.
Ore tonnes mined decreased due to reduced equipment utilisation
caused by bogging due to the clayey nature of the pits and the
suspension of mining from the Tabakoroni pit due to the high carbon
content. Ore tonnes were mainly sourced from the A21 and Paysans
pits. Recoveries improved as the processing of high-carbon ore was
precluded. The December Quarter is expected to have higher mined
tonnages albeit at a lower grade.
The oxide operations produced 11,664oz, a decrease of 25%
compared to the prior Quarter a combination of lower grade
materials and the expected seasonal reduction in tonnages treated
due to the wet season. We are expecting a stronger December Quarter
with a higher tonnage and head grade.
Capital expenditure at $0.7 million decreased significantly in
comparison to the prior Quarter and was made up entirely of
capitalised waste. AISC decreased by 22% from $1,892/oz to
$1,478/oz mainly due lower sustaining capital expenditure, as well
as the realisation of the ongoing cost reduction initiatives.
Mako, Senegal
Mako gold production for the Quarter was 27,587oz at an AISC of
$1,407/oz. The operational performance for Mako is set out in the
table below.
Ore mined at Mako was as expected, less than the June Quarter as
the mining area was changed due to access. In Q4, we expect a lower
mined tonnage at a higher grade given the successful completion of
the Stage 7 cut-back.
Ore processed decreased by 2% in the Quarter to 536kt from 546kt
but in line with expectation. The scheduled mill relining shutdown
which was expected at the end of the Quarter has now been deferred
to the next Quarter. As expected, the head grade decreased to
1.75g/t from 1.91g/t in Q2 2023 due to the blending of lower-grade
stockpile on account of decreased tonnes mined. In Q4 we expect
lower tonnes to be processed due to the re-line which will be
offset by a return to higher head-grades.
Capital expenditure of $7.1 million in the Quarter increased
over the previous Quarter. The spend in the Quarter was mainly due
to $5.8 million in capitalised waste incurred due to waste
stripping campaign at the Stage 7 phase of the pit. In addition to
this, $1.3 million was spent in relation to the newly commissioned
Oxygen plant and sparging system for the CIL as well as
modifications to the power station which was acquired at the
beginning of the year.
AISC increased to $1,407/oz from $1,311/oz in the previous
Quarter due to the volume effect of reduction in production.
Exploration
Total exploration expenditure year to date was $13.7 million,
with drilling programs continuing in Mali and Senegal throughout
the Quarter. Total exploration spend for the September Quarter was
$4.6 million. This was made up of $2.8 million of capital mainly
focused on drilling at Syama North, and $1.8 million of exploration
expense which was evenly split between exploration targets in
Guinea and near-mine targets in Senegal.
Syama Exploration
A report on mineral exploration results and an updated Mineral
Resource Estimate (MRE) for Syama North was announced on 4
September 2023.
Since the Syama North MRE update ASX announcement on 19 January
this year, diamond and RC drilling has continued throughout with
two drill rigs concentrating on converting the large proportion of
inferred resources to indicated category.
The majority of the drilling focussed on achieving a nominal 50
x 50m pattern required for Indicated classification on areas of the
resource which optimised during initial open pit engineering
studies. As part of the drilling program additional deeper diamond
drillholes were also completed to extend the three north plunging
mineralised shoots. Results from this drilling campaign were in
line with expectations with ore grade intervals seen in most
holes.
The wide zone of gold mineralisation located in the centre of
the A21 area which has been previously described in ASX
announcements 30 August 2022 and 19 January 2023 was consolidated
with infill drilling this Quarter. Excellent wide intersections
continued down plunge to the north and drill lines were added to
extend this zone of mineralisation.
Drilling from the Quartz Vein Hill area continued to return high
grade intersections which would likely be of sufficient tenor for
underground mining following the initial open pit operation.
The Syama North gold deposit remains open down-dip over the
entire 6km strike length. Diamond drilling is ongoing and expected
to continue throughout the remainder of 2023 to extend and increase
Mineral Resource confidence in the deposit.
Syama North Mineral Resource Estimate
The Syama North Mineral Resource Estimation was updated in
August 2023 using wireframe constrained Ordinary Kriged estimation
methodology, with identical parameters to the previous estimate
published in January 2023.
The Global Mineral Resources at Syama North is now estimated at
37.9 million tonnes at 2.9g/t Au for 3.5 million ounces at a
cut-off grade of 1g/t Au. Resource classification is shown below in
Table 5.
The strategy of converting Inferred to Indicated Mineral
Resources was very successful with now 28.3Mt containing 2.7Moz in
the Measured and Indicated Category a 47% increase over the
previous MRE released in January 2023.
The total Mineral Resource has increased by 11.3% over the
previous estimate driven entirely by an increase in volume of gold
mineralisation.
We are expecting a Syama North Reserve update during the
December Quarter
Senegal Exploration
Exploration activities continued in Senegal with drilling
programs carried out on the Tomboronkoto Joint Venture and the
Laminia Joint Venture both of which are located within 10km of the
Petowal processing complex. Results from the drilling at
Tomboronkoto are encouraging with a detailed report expected to be
announced during the December Quarter.
Guinea Exploration
During the first half of 2023 exploration RC drilling at the
Mansala Prospect intersected encouraging gold mineralisation in
several holes over a strike length of one kilometre. Follow up RC
drilling is expected to commence in Q4 2023 after the cessation of
the rainy season.
Three-Year Forecast
During the Quarter the Company provided operational forecast for
the Syama mine and Mako mine for the three years of 2024 to
2026.
Over the next three-years we are expected to see strong growth
from the Syama Sulphide operations, with the mine exceeding
260,000oz per year by 2026 as the underground Sub-Level Cave
performance further improves and the Phase I Expansion project
ramps up.
At Mako, following the successful cut-back completion over 2023,
both 2024 and 2025 will increase profitability with production
between 130,000-140,000oz per year at an AISC reducing to
US$1,100-1,200/oz from approximately $1,450/oz.
Revised 2023 Guidance
During the September Quarter, the Company also updated the
market of its 2023 Guidance. Mako and Syama sulphide operations
continue to perform according to their respective schedules,
however the Syama oxide operations have not performed to plan as a
result of mining lower grade ores therefore impacting production.
This has resulted in overall gold production being revised down
from our target of 350,000oz to a range of 330,000-340,000oz for
the year.
Group AISC guidance for 2023 remains unchanged at US$1,480/oz,
due to the implementation of sustainable cost reduction initiatives
put in place over 2023 across all aspects of the Group. Capital
expenditures for 2023 are expected to be approximately US$70
million, excluding the Phase 1 Expansion capital, down from the
previous guidance of US$88 million.
Syama Phase I Expansion
During the Quarter, the production mix, mine design and mine
schedule were optimised to maximise cash flow over the project
life. Capital cost estimates were finalised, and early procurement
of long lead items commenced.
Corporate
Quarterly Cash and Bullion Movements and Balance Sheet
(*Included in Operating Cash flows are $3.4 million of
royalties, $4.2 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
$1,917/oz which was below the average spot price of $1,928/oz.
During the September Quarter a scheduled $25 million principal
repayment was made on the Term Loan Facility reducing the
outstanding balance to $25 million.
Net debt at 30 June 2023 of $17.2 million decreased by $19.4
million to a Net Cash position of $2.2 million at 30 September
2023. Available liquidity of $158.0 million ($165.7 million in
prior Quarter) including cash of $63.5 million, bullion of $14.5
million, and undrawn RCF of $80.0 million. Total borrowings at 30
September 2023 were $75.8 million, comprising $25.0 million on the
Term Loan Facility and $50.8 million on the overdraft facilities in
Mali.
Hedging
At 30 September 2023, Resolute's forward sales commitments
were:
As well as the above, the Company has in place 12,000oz of zero
cost collars maturing in the March 2024 Quarter. These comprise put
options at an average strike price of $1,600/oz and call options
with an average strike price of $1,873/oz.
Resolute maintains a policy of discretionary hedging in
compliance with its funding obligations, requiring a minimum of 30%
of the next six months of forecast production to be hedged.
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 2023 is 330,000-340,000oz at an
AISC of $1,480/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 is on track to reach full compliance with these RGMPs
in 2023.
Appendix
September 2023 Quarter Production and Costs (unaudited)
Year-to-date 2023 Production and Costs (unaudited)
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 'Over Three Moz Mineral Resource at Syama North' announced
on 19 January 2023 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
'Group Three-Year Forecast and Update to 2023 Guidance' announced
on 13 October 2023 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 / Emily Moss, Tavistock
Corporate Development and Investor resolute@tavistock.co.uk
Relations Manager +44 207 920 3150 / +44 7788
Matthias.otoolehowes@resolutemining.com 554 035
+44 203 3017 620
Corporate Broker
Jennifer Lee, Berenberg
+44 20 3753 3040
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END
MSCUAAAROVURORA
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