Resolute Mining : December 2021 Quarterly Results and CY22 Guidance

RSG.AX

For personal use only

for the period ended 31 December 2021

20 January 2022

Highlights

Note: All dollar figures are United States dollars ($) unless otherwise stated

Resolute Mining Limited (Resolute or the Company) (ASX/LSE: RSG) is pleased to present its Quarterly Activities Report for the period ended 31 December 2021, together with production and cost guidance for 2022.

Gold poured during the quarter was 79,816oz, a 5% improvement over the September quarter, reflecting improved performance for both Syama Oxide and Mako, which produced 15% and 17% more gold than the prior quarter. Sulphide production was 10% lower than the September quarter, affected by mechanical downtime and a 7-day planned shutdown of the milling circuit.

Pleasingly, production achieved during the month of December was at its highest level for 2021 at each of Resolute's three operations. At Syama, production benefited from high plant availability and improved processed grades for both Sulphide (2.77g/t) and Oxide (1.98g/t). At Mako, operations benefited from improved grades as the cutback concluded with process grades of 2.38g/t, along with improved ore tonnes processing from the installation of the Mill Slicer in the September quarter.

Group production for CY21 was 319,271oz, within the CY21 production guidance of 315,000 to 340,000oz. AISC for CY21 of US$1,370/oz was marginally above the cost guidance range of $1,290/oz to $1,365/oz.

2022 Guidance has been set at 345,000oz at an AISC of $1,425/oz inclusive of corporate overheads. This reflects the impact of the planned 35-day Sulphide shutdown in February 2022 and the conclusion of the Mako cutback. Resolute will release updated Life of Mine (LOM) plans at the end of February 2022 to coincide with the release of the Group's annual Ore Reserves and Mineral Resources estimate. Overall, LOM production and cost are expected to be similar to the April 2021 update.

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Resolute's group performance compared to the previous quarter and prior comparable quarter is set out in the table below:

Group Summary

Units

December

September

Change

December

2021 Quarter

2021 Quarter

2020 Quarter

Mining

Ore Mined

t

1,641,922

1,427,109

15%

1,506,731

Mined Grade

g/t

1.95

1.91

2%

2.35

Processing

Ore Processed

t

1,382,308

1,416,368

(2%)

1,377,158

Processed Grade

g/t

2.10

1.91

10%

2.37

Recovery

%

85.1

86.1

(1%)

86.4

Gold Recovered

oz

79,415

74,066

7%

90,755

Gold Poured

oz

79,816

76,336

5%

89,888

Sales

Gold Sold

oz

75,636

89,326

(15%)

91,607

Average Realised Price

$/oz

1,749

1,738

1%

1,719

Cost

AISC

$/oz

1,437

1,499

4%

1,002

Table 1: Resolute Group Operational Performance Summary

Refer to the Appendix for a complete summary of Resolute's production and costs in the December 2021 quarter.

Health and Safety

Resolute's TRIFR at 31 December 2021 was 1.25, consistent with the prior quarter of 1.26. Resolute's focus remains on its COVID-19 vaccination program at both sites, with a total of 1,980 employees and contractors (52% of the workforce) having received a double dose. This represents a 10% increase over the prior quarter, with a further 200 people receiving a single dose.

Resolute continues to maintain strict COVID-19 protocols across the Group to protect the health, safety and wellbeing of our people and has not experienced any ongoing disruption to operations as a result.

Mali update

Resolute continues to monitor developments in Mali following the imposition of sanctions by ECOWAS (Economic Community of West African States) on the State of Mali on 9 January 2022.

Operations at Syama continue as normal with no current impact on production, supply, or employees and contractors' safety and security. Resolute will continue to monitor and provide updates as appropriate.

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Syama, Mali

The Syama Sulphide operations produced 30,731oz at an AISC of $1,609/oz, while the Oxide operations produced 15,009oz at an AISC of $1,568/oz. Further details of these two operations are set out below.

Syama Sulphide

Mining

Processing

Costs

Quarter

Ore

Grade

Ore

Grade

Recovery

Gold

AISC

Poured

(t)

(g/t)

(t)

(g/t)

(%)

($/oz)

(oz)

March 2021

570,377

2.47

535,706

2.61

78.0

37,218

1,274

June 2021

700,369

2.33

557,755

2.43

77.7

33,463

1,339

September 2021

504,602

2.46

545,029

2.46

79.5

34,206

1,431

December 2021

468,339

2.43

479,279

2.49

76.9

30,731

1,609

YTD

2,243,687

2.42

2,117,769

2.50

78.0

135,618

1,406

Table 2: Sulphide Production and Cost Summary

Sulphide gold production was affected by unplanned maintenance on the crushing and milling circuits, power outages and a planned 7-day shutdown at the end of October, resulting in lower quarterly gold production. Importantly, December's monthly production was the highest in 2021, reflecting debottlenecking of the crushing and milling circuits, improved run of mine grades of 2.71g/t and processing grades of 2.77g/t generating 14,791oz.

The quarterly AISC of $1,609/oz reflects the impact of the lower production and processing of higher- cost stockpiles in the quarter.

Improvements in December production have continued into January 2022, ahead of the Sulphide shutdown, which is expected to deliver improved plant availability and operational performance.

Process system improvements have been made with installing the OSA and Flotation Cleaner Cells during the quarter, both of which are expected to be commissioned in Q1 of 2022. It is expected that the benefits from these projects will be fully seen once the major planned Sulphide shutdown has been complete.

Syama Oxide

Mining

Processing

Costs

Quarter

Ore

Grade

Ore

Grade

Recovery

Gold

AISC

Poured

(t)

(g/t)

(t)

(g/t)

(%)

($/oz)

(oz)

March 2021

339,550

2.08

339,625

1.58

86.5

15,508

1,302

June 2021

302,408

1.87

413,041

1.31

86.3

13,424

1,464

September 2021

289,026

1.82

332,707

1.19

88.0

13,095

1,690

December 2021

419,307

1.60

354,643

1.51

88.6

15,009

1,568

YTD

1,350,291

1.83

1,440,016

1.39

87.3

57,036

1,501

Table 3: Oxide Production and Cost Summary

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Mining during the quarter focused on the commencement of the Beta pit north of Syama with continued mining of Tabakoroni Splay. The Oxide operations mined 45% more ore than the previous quarter, notwithstanding a prolonged wet season, impacting pit access and haulage at the beginning of the quarter. Ore processed was 354kt at an improved average head grade of 1.51g/t and improved recoveries of 88.6%, resulting in a 15% increase in gold poured compared to the September quarter.

The AISC of $1,568 was 7% lower than the September quarter, reflecting the increased gold poured. This was partially offset by costs incurred as a result of accelerated grade control drilling and stripping costs at Beta.

Mako, Senegal

Mining

Processing

Costs

Quarter

Ore

Grade

Ore

Grade

Recovery

Gold

AISC

Poured

(t)

(g/t)

(t)

(g/t)

(%)

($/oz)

(oz)

March 2021

655,445

2.23

495,746

2.26

93.0

32,943

1,036

June 2021

551,321

1.72

486,126

2.09

93.2

30,563

1,094

September 2021

633,481

1.51

538,632

1.80

91.6

29,035

1,355

December 2021

754,276

1.85

548,385

2.15

91.2

34,076

1,099

YTD

2,594,523

1.83

2,068,889

2.07

92.2

126,617

1,139

Table 4: Mako Production and Cost Summary

During the December quarter, mining and processing tonnages at Mako were the highest for 2021. Mined grade increased by 23%, with higher-grade ore available due to the completion of the most recent pit cutback. Gold poured was up 17% compared to the preceding quarter, reflecting the highest quarterly throughput for the year and improved head grades of 2.15g/t.

AISC for the quarter was similar to the first half of the year and 19% lower than the September quarter, reflecting the higher production volumes.

Commissioning of the Mill Slicer system, which optimises mill throughput, has improved grinding media and power draw.

Exploration

Total exploration expenditure for the December quarter was $4.4 million, with exploration programs continuing in Mali, Senegal, and Guinea.

In Mali, diamond drilling at Tabakoroni underground was paused in October after completing an infill drilling program designed to increase the confidence of the Mineral Resource and convert Inferred Resources to the Indicated category. An updated Mineral Resource Estimation was undertaken in December 2021 on the Tabakoroni Underground deposit and will be published as part of Resolute's annual Reserves and Resources Statement to be released at the end of February.

Near mine exploration for additional Oxide resources continued at Syama, reflecting positive results from these programs; this led to the restart of open-pit Oxide mining at Beta South in the December quarter.

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Corporate

Cash, Bullion and Liquid Assets

Description

December 2021 Quarter ($m)

September 2021 Quarter ($m)

Cash

67.6

28.8

Bullion

21.0

12.8

Cash and Bullion

88.6

41.6

Listed Investments

47.2

38.5

Total Cash, Bullion and Liquid Assets

135.8

80.1

Table 5: Total Cash, Bullion and Liquid Assets

The average realised gold price achieved for the quarter was $1,749/oz compared to the average spot price of $1,796/oz. The key movements in cash and market value of bullion balances during the quarter are summarised in Figure 1 below.

Figure 1: Quarterly Cash and Bullion Movements in US dollars

Balance sheet

The balance of cash and bullion on 31 December 2021 was $88.6 million, with movements in this balance during the quarter set out in Figure 1 above.

Key one-off cash outflows occurring during the quarter included:

Net debt has increased by $15.9 million to $228.8 million at 31 December 2021. Total borrowings at 31 December 2021 were $317.4 million comprising $275.0 million drawn on the Term Loan Facility and Revolving Credit Facility, overdraft facilities with Bank of Mali of $36.7 million and overdraft facilities with Orabank in Senegal of $5.7 million.

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Disclaimer

Resolute Mining Limited published this content on 19 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2022 21:55:17 UTC.