Resolute Mining Q2 Earnings Call Highlights

Resolute Mining LON: RSG said its second-quarter operations performed strongly in Senegal, Côte d’Ivoire and Guinea, while continued logistical, security and regulatory challenges in Mali affected its Syama operation.

The gold producer reported quarterly gold production of more than 45,000 ounces and group all-in sustaining costs of $2,484 per ounce. Revenue totaled $247 million from the sale of 55,000 ounces at an average realized gold price of $4,526 per ounce. The company said it remains unhedged and sells its gold at spot prices.

Chief Executive Officer Chris Eger said the company generated about $130 million of EBITDA and $78 million of operating cash flow during the quarter. Resolute ended the period with net cash of $317 million, including $47 million of unsold bullion that was sold shortly after quarter-end.

Mali Challenges Continue at Syama

Chief Operating Officer Gavin Harris said Syama in Mali faced operational and logistical disruption during the quarter. A security incident early in the period, in which Mali’s defense minister was assassinated, subsequently affected supplier activity, transportation and contractor mobilization, according to Harris.

He said the disruption affected contractors scheduled to support a plant and roaster shutdown, as well as mining equipment intended for the A21 open-pit operation. Resolute also continues to manage requirements related to Mali’s mining code and strict local-content compliance.

Despite those conditions, Syama produced 29,881 ounces during the quarter. Harris cited all-in sustaining costs of $2,054 per ounce for the operation. The company used lower-grade underground sulfide stockpiles and processed oxide ore that had been planned for later in the year, while also conducting maintenance work at the sulfide plant.

Resolute said the Syama Sulphide Conversion Project remains on schedule and within budget, with commissioning expected in the fourth quarter. Construction activities included work on the secondary crushing circuit, ball mill civil and structural work, and an electrostatic precipitator for the roaster.

During the question-and-answer session, management said Syama could still meet its guidance range if conditions remain stable. Eger said the company needs continued access to explosives, equipment and development activity to support increased grades and throughput. Resolute is also building a bulk explosives manufacturing plant at Syama, which it expects to have operating toward the end of the third quarter or early in the fourth quarter.

Mako Meets Expectations; Life Extension Work Advances

At the Mako mine in Senegal, Resolute produced 15,311 ounces of gold in the second quarter at all-in sustaining costs of $1,538 per ounce. First-half all-in sustaining costs were $1,605 per ounce, at the lower end of the company’s guidance range, despite higher fuel prices and royalties associated with the higher gold-price environment.

Harris said Mako’s production remains on track to meet annual production and cost guidance, although stockpile variability was observed during the first half.

The company also continued advancing the Mako Life Extension Project, which could extend the mine’s life by up to seven years through development of the Tomboronkoto and Bantako satellite deposits, located about 20 kilometers from the existing operation.

During the quarter, Resolute progressed technical studies and permitting. Environmental and social impact assessments for the deposits have been pre-validated by Senegalese government technical services and are proceeding to public hearings. The company plans to submit an exploitation permit application for Tomboronkoto, complete further permitting steps for Bantako and advance village-relocation studies at Tomboronkoto.

Doropo Construction and ABC Exploration Expand Côte d’Ivoire Focus

Resolute said construction at its Doropo project in Côte d’Ivoire is on time and on budget following final investment approval and permit approvals earlier this year. The company spent more than $37 million on Doropo during the quarter.

Eger said more than 450 people were working at the site, where 74 hectares of land had been cleared, more than 20 kilometers of access roads had been built and over 40 pieces of heavy equipment were in place. The company has ordered long-lead processing equipment including a SAG mill, ball mill, jaw crusher, high-grade thickeners, carbon-in-leach tanks, agitators and an oxygen plant.

Concrete work for the carbon-in-leach ring beam, milling area and crushing area is scheduled to begin in late August and early September, alongside power and water infrastructure work. Management told analysts that the majority of major long-lead-item costs are fixed and that the company has not experienced material delays or cost escalation.

Separately, Resolute updated the mineral resource estimate for its ABC exploration project in Côte d’Ivoire, reporting a resource of more than 3 million ounces at a grade of 0.71 grams per tonne. The company completed 31,000 meters of drilling at ABC during the second quarter and plans at least 80,000 meters during the second half, using seven drilling rigs currently and increasing to 11 rigs in coming months.

Resolute is targeting a mining application for ABC in 2027 and has begun environmental, social and feasibility-study work. Eger said the company views ABC as a potential fourth operating asset.

Financing and Production Targets

Chief Financial Officer Dave Jackson said capital expenditures and exploration spending totaled $63 million during the quarter, including $16 million at Syama, $2 million for Mako’s life-extension work, $10 million across exploration and $37 million at Doropo. The company maintained full-year capital expenditure and exploration guidance of $310 million to $360 million.

Resolute received $54 million from the settlement of a vendor financing note by Ravenswood. It also secured $155 million in credit facilities from local banks in Côte d’Ivoire after quarter-end and expects to arrange a further $105 million in the third quarter. Management said the facilities have interest rates ranging from 6.5% to 7.4%, two-year drawdown periods and three-year repayment terms.

The company said it had nearly $100 million of available overdraft facilities in Mali and Senegal, bringing available liquidity to $426 million at quarter-end. Resolute said the financing, cash balance and anticipated operating cash flow provide sufficient liquidity to fund Doropo under current market and regulatory conditions.

Looking ahead, Eger reiterated Resolute’s target of producing more than 500,000 ounces annually from 2028 as Doropo enters production. The company is targeting annual output of 700,000 to 750,000 ounces several years later if the ABC project advances as anticipated.

About Resolute Mining (LON:RSG)

Resolute is an African-focused gold miner with more than 30 years of experience as an explorer, developer and operator. Throughout its history the Company has produced more than 9 million ounces of gold from ten gold mines. The Company is now entering a growth phase through the development of the Doropo project in Côte d'Ivoire which will supplement the existing production from the Syama mine in Mali and Mako mine in Senegal. The Company trades on the Australian Securities Exchange (ASX) and the London Stock Exchange (LSE) under the ticker RSG.

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