- Title:
Half Year Financial Results and Accounts - Time:
07:00:14 - Date:
28 Aug 2020 - Category:
Results - ID:
4359X
28 August 2020
Resolute Mining Limited
(Resolute or the Company)
Appendix 4D
The reporting period is for the half year ended 30 June 2020 with the corresponding reporting period being for the six months ended 30 June 2019.
Results for Announcement to the Market
| |
30 June 2020 US$'000 |
30 June 2019 US$'000 |
Up / (Down) US$'000 |
% Increase / (Decrease) |
| Revenues from ordinary activities (including discontinued operations) |
305,291 |
228,803 |
76,488 |
33% |
| Earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDA) (including discontinued operations) |
101,110 |
54,742 |
46,368 |
85% |
| Profit after income tax (including discontinued operations) |
36,293 |
27,448 |
8,845 |
32% |
| Profit from ordinary activities after income tax attributable to members/net profit for the year (including discontinued operations) |
34,240 |
25,185 |
9,055 |
36% |
Dividend Information
| |
Amount per share $ |
Franked amount per share $ |
| Interim dividend for the half-year ended 30 June 2020 |
NA |
NA |
Net Tangible Assets
| |
30 June 2020 US$ |
31 December 2019 US$ |
| Net tangible assets per share |
0.70 |
0.62 |
This half year report should be read in conjunction with the most recent annual financial report for the year ended 31 December 2019. The consolidated entity has changed its reporting currency from Australian dollars (A$) to United States dollars (US$), effective 1 January 2020. Consequently, unless otherwise stated, all reference to dollars are to US$.
DirectorsNon-Executive Chairman Martin Botha Managing Director and CEO John Welborn Non-Executive Director Yasmin Broughton Non-Executive Director Mark Potts Non-Executive Director Sabina Shugg Non-Executive Director Peter Sullivan Company SecretaryAmber Stanton Registered Office and Business AddressLevel 2, Australia Place 15-17 William Street Perth, Western Australia 6000 PostalPO Box 7232 Cloisters Square Perth, Western Australia 6850 Telephone: + 61 8 9261 6100 Facsimile: + 61 8 9322 7597 Email: [email protected] ABN 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 (30/06/2020)Ordinary Shares 1,102,826,939 Performance Rights 10,984,313 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 [email protected]
|
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 2020 (H1 20).
Resolute Mining Limited ("Resolute" or "the Company") is a company limited by shares that is incorporated and domiciled in Australia.
The names of the Company's directors in office during the entire half year period and until the date of this report are as follows:
Martin Botha (Non-Executive Chairman)
John Welborn (Managing Director and CEO)
Yasmin Broughton (Non-Executive Director)
Mark Potts (Non-Executive Director)
Sabina Shugg (Non-Executive Director)
Peter Sullivan (Non-Executive Director)
Amber Stanton
Key highlights for half year ended 30 June 2020 include:
· Comprehensive response plan in place to the COVID 19 pandemic with no impact on H1 production
· Return of processing to full capacity
· Refinancing completed, successful equity raising and new low-cost flexible debt facility
· Ravenswood sale completed on 31 March 2020; total proceeds realisable of up to A$300m
· Acquisition of the existing Taurus royalty over Mako gold sales for US$12m
· Updated Life of Mine Plan for Mako delivers 39% more gold and two extra years of mine life
In H1 20, a total of 217,946 ounces (oz) of gold were produced (poured) at an All-In Sustaining Cost (AISC) of $1,020/oz with total gold sales of 212,668oz at an average realised price of $1,427/oz.
During H1 20, 1 million tonnes (Mt) of ore was milled at an average grade of 2.72 grams per tonne (g/t Au) for 226,752oz of gold recovered. An additional 9,241oz (excluding Ravenswood) was held in circuit at the end of H1 20 relative to 31 December 2019, taking the Group's gold in circuit balance to 82,506oz valued at $146m based on a gold price of $1,768 at 30 June 2020.
Production and Cost Summary for H1 20
| |
Units |
Syama Sulphide |
Syama Oxide |
Syama Total |
Mako |
Ravens-wood |
Group |
| UG Lateral Development |
M |
4,191 |
- |
4,191 |
- |
- |
4,191 |
| UG Vertical Development |
M |
87 |
- |
87 |
- |
- |
87 |
| Total UG Development |
M |
4,278 |
- |
4,278 |
- |
- |
4,278 |
| UG Ore Mined |
T |
1,012,762 |
- |
1,012,762 |
- |
- |
1,012,762 |
| UG Grade Mined |
g/t Au |
2.72 |
- |
2.72 |
- |
- |
2.72 |
| OP Operating Waste |
BCM |
- |
1,787,453 |
1,787,453 |
2,719,996 |
- |
4,507,449 |
| OP Ore Mined |
BCM |
- |
503,323 |
503,323 |
505,564 |
- |
1,008,887 |
| OP Grade Mined |
g/t Au |
- |
2.32 |
2.32 |
2.32 |
- |
2.32 |
| Total Ore Mined |
T |
1,012,762 |
1,069,800 |
2,082,562 |
1,404,125 |
- |
3,486,687 |
| Total Tonnes Processed |
T |
978,333 |
771,300 |
1,749,633 |
1,077,980 |
726,735 |
3,554,348 |
| Grade Processed |
g/t Au |
2.64 |
2.83 |
2.72 |
2.68 |
0.50 |
2.26 |
| Recovery |
% |
77.8% |
93.1% |
84.5% |
92.8% |
91.8% |
88.5% |
| Gold Recovered |
Oz |
64,603 |
65,309 |
129,912 |
86,229 |
10,611 |
226,752 |
| Gold in Circuit Drawdown/(Addition) |
Oz |
(7,924) |
(751) |
(8,675) |
(566) |
435 |
(8,806) |
| Gold Produced (Poured) |
Oz |
56,679 |
64,558 |
121,237 |
85,663 |
11,046 |
217,946 |
| Gold Bullion in Metal Account Movement (Increase)/Decrease |
Oz |
(1,221) |
1,055 |
(166) |
(3,123) |
(1,989) |
(5,278) |
| Gold Sold |
Oz |
55,458 |
65,613 |
121,071 |
82,540 |
9,057 |
212,668 |
| Achieved Gold Price |
$/oz |
- |
- |
- |
- |
- |
1,427 |
| Cost Summary |
|
||||||
| Mining |
$/oz |
893 |
378 |
618 |
324 |
215 |
482 |
| Processing |
$/oz |
457 |
227 |
335 |
266 |
910 |
337 |
| Site Administration |
$/oz |
187 |
144 |
164 |
83 |
226 |
136 |
| Stockpile Adjustments |
$/oz |
(85) |
(49) |
(66) |
(29) |
(18) |
(49) |
| Gold in Circuit Movement |
$/oz |
(207) |
(19) |
(107) |
(13) |
37 |
(63) |
| Cash Cost |
$/oz |
1,245 |
681 |
944 |
631 |
1,370 |
843 |
| Royalties |
$/oz |
80 |
78 |
79 |
96 |
59 |
86 |
| By-Product Credits |
$/oz |
(2) |
(1) |
(2) |
- |
(9) |
(1) |
| Sustaining Capital + Others |
$/oz |
98 |
- |
46 |
31 |
27 |
39 |
| Asset Reclamation & Remedies |
$/oz |
24 |
31 |
28 |
- |
11 |
16 |
| Admin Cost Recharged to Site & Corporate Overheads |
$/oz |
- |
- |
- |
- |
- |
37 |
| All-In Sustaining Cost (AISC) AISC is calculated on gold produced (poured) |
$/oz |
1,445 |
789 |
1,095 |
758 |
1,458 |
1,020 |
COVID-19
The challenges presented by COVID-19 continue to change on a daily basis. Resolute is continuously monitoring developments relating to the pandemic and adapting the Company's response accordingly. A comprehensive response plan is in place to manage the COVID-19 pandemic at all Company locations which includes, in addition to hygiene, PPE and social distancing measures, testing and mandatory isolation procedures for positive cases amongst the workforce. The implemented protocols prioritise the health and safety of the workforce and have enabled operational continuity with currently no negative impacts on gold production.
Syama Gold Mine
At the Syama Gold Mine in Mali (Syama), H1 20 production was 121,237oz at an AISC of $1,095/oz.
Sulphide Operations
During H1 20, production from the Syama sulphide circuit was 56,679oz at an AISC of $1,445/oz. Gold production from the sulphide circuit increased by 58% in H1 20 compared to H1 19. The consistent improvement in H1 gold production and overall recovery rates is driven by the completion of repairs to the roaster in December 2019. Plant throughput increased as a result of extensive optimisation and modification of work on the crushing and milling circuits, while recoveries reflected a similar process of optimisation in the operation of the flotation and leach circuits.
Overall sulphide circuit recovery was 78% compared to 69% in FY19. Recoveries of 80% were achieved during the June quarter and are expected to be above 80% for the remainder of 2020 as the Company pursues further incremental improvement toward the long-term target of 85% total recoveries.
Oxide Operations
During H1 20, production was 64,558oz at an AISC of $789/oz. Mining was completed at Tabakoroni at the end of May 2020 with the excavation of the Splay pit located north-east of the main Namakan pit. A new satellite open pit operation at the Cashew prospect is expected to be established towards the end of the 3rd quarter FY20.
Exploration
Exploration continues to identify opportunities for further open pit operation to augment the existing stockpiles.
Mako Gold Mine
During H1 20, production from the Mako Gold Mine was 85,663oz at an AISC of $758/oz. During the H1, work was undertaken to develop an updated Life of Mine Plan (LOM) for Mako which was completed in July 2020 (see ASX Announcement 20 July 2020). The updated LOM has generated a 39% increase in total production and a mine life extension of two further years. Mako is now expected to have a total mine life of nine years and produce a total of 1.24 million ounces (Moz) of gold. Including 2020, Resolute plans to mine a further 900,000oz of gold from Mako until early 2027 at an average AISC over this period of $900/oz.
Ravenswood Gold Mine
On 31 March 2020, Resolute successfully completed the sale of Ravenswood Gold Mine to a consortium comprising private equity manager EMR Capital and leading energy and mining company Golden Energy and Resources. Resolute has received A$100m of initial proceeds consisting of A$50m in cash up front and A$50m in promissory notes which will earn interest at a rate of 6 per cent per annum. In addition, Resolute retains significant upside exposure to Ravenswood with up to A$200m in potential payments contingent on future gold prices, future gold production from Ravenswood and the investment outcomes from Ravenswood for EMR Capital.
Bibiani Gold Mine
Resolute is progressing a strategic review of the Bibiani Gold Mine in Ghana designed to evaluate plans to recommission the mine, assess capital requirements, evaluate funding alternatives and investigate expressions of interest from third parties seeking to acquire the assets. The strategic review is ongoing with the Company continuing to engage with third parties despite COVID-19 restricting the ability to travel to site.
Financial Overview
| Profit and Loss Analysis |
Continuing Operations |
|
Discontinuing Operations |
|
HY20 |
|
HY19 (Restated) |
| Revenue |
290,023 |
|
15,268 |
|
305,291 |
|
228,803 |
| Cost of sales excluding depreciation and amortisation |
(140,139) |
|
(13,069) |
|
(153,208) |
|
(142,737) |
| Other operating costs relating to gold sales |
(32,916) |
|
(2,131) |
|
(35,047) |
|
(17,352) |
| Administration and other corporate expenses |
(11,157) |
|
(172) |
|
(11,329) |
|
(9,649) |
| Exploration and business development expenditure |
(4,418) |
|
(179) |
|
(4,597) |
|
(4,323) |
| EBITDA |
101,393 |
|
(283) |
|
101,110 |
|
54,742 |
| Non-recurring items: |
|
|
|
|
|
|
|
| + COVID 19 costs |
1,227 |
|
- |
|
1,227 |
|
- |
| + Legal costs |
4,852 |
|
- |
|
4,852 |
|
- |
| Underlying EBITDA |
107,472 |
|
(283) |
|
107,189 |
|
54,742 |
| Depreciation and amortisation |
(92,665) |
|
(47) |
|
(92,712) |
|
(20,316) |
| Net finance costs |
(13,479) |
|
(80) |
|
(13,559) |
|
(7,964) |
| Other |
15,557 |
|
41,885 |
|
57,442 |
|
769 |
| Non-recurring items: |
|
|
|
|
|
|
|
| + Non-recurring high cost interest |
8,840 |
|
- |
|
8,840 |
|
- |
| Underlying net profit before tax |
25,725 |
|
41,475 |
|
67,200 |
|
27,231 |
| Current Income tax (expense) |
(5,895) |
|
- |
|
(5,895) |
|
(9,706) |
| Underlying net profit after tax |
19,830 |
|
41,475 |
|
61,305 |
|
17,525 |
| Deferred Income tax (expense)/benefit |
(10,093) |
|
- |
|
(10,093) |
|
9,923 |
| - Adjustments made to EBITDA |
(14,919) |
|
- |
|
(14,919) |
|
- |
| Net (loss)/profit after tax reported |
(5,182) |
|
41,475 |
|
36,293 |
|
27,448 |
Financial Performance
Revenue for H1 20 was $305m, inclusive of discontinued operations, from gold sales of 212,668oz at an average realised price of $1,427/oz compared to the average spot price over the period of $1,636/oz.
Gross Profit from Operations was $26m after depreciation and amortisation of $91m. Resolute reported a Net Profit After Tax of $36m (including discontinuing operations). Resolute continued to invest heavily in the business in H1 20 with capital expenditures on development, property, plant and equipment totalling $49m and exploration and evaluation expenditure of $4m.
Financial Position
As at 30 June 2020, Resolute has cash ($62m), bullion (14,259oz of gold valued at $25m), additional liquid assets ($35m) and a Promissory note valued at $35m (A$50m). The Group's borrowings inclusive of the Facility and its Bank du Mali (BDM) overdraft facility was $308m at 30 June 2020. Resolute also held receivables of $57m associated with Malian VAT paid and refundable.
Gold Forward Contracts
Resolute maintains a policy of undertaking discretionary short-dated hedging to take advantage of periods of elevated gold prices to comply with funding obligations, which require a minimum of 30% of the next 18 months of forecast production to be hedged. Resolute's hedge book at 30 June 2020 totalled 198,000oz committed to monthly deliveries out to December 2021. This commitment consists of between 5,000oz to 20,000oz per month, forward sold at prices between $1,576/oz and $1,670/oz.
On 2 July 2020, Resolute drew down a further $20m on the Revolving Loan Facility and used these funds to repay a portion of its BDM overdraft facilities. There was no change to the Groups total debt position with total interest payable on debt reducing as a result of this transaction. The balance of the Syndicated loan facility that remains undrawn at the date of this report is $25m.
Resolute is monitoring the political situation in Mali following the resignation of the President and the dissolution of the government on 19 August 2020. The Company's operations in Mali are continuing as normal with no impact to production or to the safety and security of employees and contractors.
No other significant events have occurred since balance date on 30 June 2020 up to the date of this report.
Refer to page 10 for a copy of the Auditor's Independence Declaration to the Directors of Resolute Mining Limited.
Resolute is a company of the kind specified in Australian Securities and Investments Commission Corporations (Rounding in Financial Directors' Reports) Instrument 2016/191. In accordance with that Instrument, amounts in the financial report and the Directors' Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.
The Directors have elected to change the Group's presentation currency from Australian dollars to United States (US) dollars effective 1 January 2020. All reference to dollars, cents, US$ or $ in this document are to US currency, unless otherwise stated.
Signed in accordance with a resolution of the directors.
[Electronically signed]
J.P. Welborn
Managing Director & CEO
Perth, Western Australia
28 August 2020
AUDITOR'S INDEPENDENCE DECLARATION
Please see report in the full version of the announcement at www.rml.com.au
| |
Note |
For the half year ended 30-Jun-20 US$'000
|
For the half year ended 30-Jun-19 US$'000 (Restated) |
|
| Continuing operations |
|
|
|
|
| Revenue from contracts with customers for gold and silver sales |
4 |
290,023 |
193,551 |
|
| Costs of production relating to gold sales |
4 |
(140,139) |
(104,287) |
|
| Gross profit before depreciation, amortisation and other operating costs |
|
149,884 |
89,264 |
|
| |
|
|
|
|
| Depreciation and amortisation relating to gold sales |
4 |
(90,841) |
(19,579) |
|
| Other operating costs relating to gold sales |
4 |
(32,916) |
(15,571) |
|
| Gross profit from continuing operations |
|
26,127 |
54,114 |
|
| |
|
|
|
|
| Interest income |
4 |
1,005 |
81 |
|
| Other income |
4 |
(88) |
- |
|
| Exploration and business development expenditure |
4 |
(4,418) |
(3,757) |
|
| Administration and other corporate expenses |
4 |
(10,260) |
(8,191) |
|
| Share-based payments expense |
4 |
(897) |
(444) |
|
| Treasury - realised gains/(losses) |
4 |
(187) |
981 |
|
| Fair value movements and unrealised treasury transactions |
4 |
16,179 |
(1,074) |
|
| Share of associates' losses |
4 |
(347) |
(374) |
|
| Depreciation of non-mine site assets |
4 |
(1,824) |
(223) |
|
| Finance costs |
4 |
(14,484) |
(7,685) |
|
| |
|
|
|
|
| Profit before tax from continuing operations |
|
10,806 |
33,428 |
|
| |
|
|
|
|
| Income tax expense/(benefit) |
4&7 |
(15,988) |
217 |
|
| (Loss)/ profit for the period from continuing operations |
|
(5,182) |
33,645 |
|
| |
|
|
|
|
| Discontinued operations |
|
|
|
|
| Gain/(losses) for the period from discontinued operations |
13 |
41,475 |
(6,197) |
|
| Profit for the period |
|
36,293 |
27,448 |
|
| |
|
|
|
|
| Profit attributable to: |
|
|
|
|
| Members of the parent |
|
34,240 |
24,728 |
|
| Non-controlling interest |
|
2,053 |
2,720 |
|
| |
|
36,293 |
27,448 |
|
| Profit for the period (brought forward) |
|
36,293 |
27,448 |
|
| |
|
|
|
|
| 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 |
|
(2,590) |
(935) |
|
| |
|
|
|
|
| Items that may not be reclassified subsequently to profit or loss |
|
|
|
|
| |
|
|
|
|
| Exchange differences on translation of foreign operations: |
|
|
|
|
| - Non-controlling interest |
|
20 |
41 |
|
| Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax |
|
7,474 |
(6,623) |
|
| |
|
|
|
|
| Other comprehensive income/ (loss) for the period, net of tax |
|
4,904 |
(7,517) |
|
| |
|
|
|
|
| Total comprehensive income for the period |
|
41,197 |
19,931 |
|
| |
|
|
|
|
| Total comprehensive income attributable to: |
|
|
|
|
| Members of the parent |
|
39,124 |
17,170 |
|
| Non-controlling interest |
|
2,073 |
2,761 |
|
| |
|
41,197 |
19,931 |
|
| |
|
|
|
|
| Earnings per share for net profit attributable to the ordinary equity holders of the parent: |
|
|
|
|
| Basic earnings per share |
|
3.27 cents |
3.32 cents |
|
| Diluted earnings per share |
|
3.27 cents |
3.32 cents |
|
| |
|
|
|
|
| (Loss) /earnings per share for net profit attributable to continuing operations to the ordinary equity holders of the parent: |
|
|
|
|
| Basic (loss)/ earnings per share |
|
(0.69) cents |
4.14 cents |
|
| Diluted (loss)/ earnings per share |
|
(0.69) cents |
4.14 cents |
|
| |
|
|
|
|
| |
Note |
30-Jun-20
|
31-Dec-19 |
| Current assets |
|
|
|
| Cash and cash equivalents |
|
62,273 |
87,305 |
| Other financial assets - restricted cash |
|
2,745 |
2,745 |
| Receivables |
8 |
71,711 |
49,713 |
| Inventories |
9 |
174,780 |
133,171 |
| Financial assets at fair value through other comprehensive income |
17 |
20,849 |
12,704 |
| Asset held for sale |
|
- |
66,637 |
| Current tax asset |
|
14,254 |
15,139 |
| Prepayments and other assets |
|
10,398 |
5,632 |
| Total current assets |
|
357,010 |
373,046 |
| Non current assets |
|
|
|
| Prepayment |
|
2,987 |
- |
| Inventories |
9 |
50,998 |
44,318 |
| Investments in associates |
|
4,255 |
4,314 |
| Promissory note receivable |
13 |
34,888 |
- |
| Contingent consideration receivable |
13 |
13,754 |
- |
| Deferred tax assets |
|
9,229 |
19,486 |
| Exploration and evaluation |
|
60,487 |
57,798 |
| Mine Properties |
10 |
487,677 |
535,829 |
| Property, plant and equipment |
|
311,750 |
309,759 |
| Right-of-use assets |
|
34,052 |
40,778 |
| Total non current assets |
|
1,010,077 |
1,012,282 |
| Total assets |
|
1,367,087 |
1,385,328 |
| Current liabilities |
|
|
|
| Payables |
|
76,767 |
104,141 |
| Financial derivative liabilities |
17 |
- |
3,193 |
| Interest bearing liabilities |
11 |
54,862 |
238,622 |
| Provisions |
12 |
52,633 |
48,957 |
| Current tax liabilities
|
|
21,458 |
21,127 |
| Lease liabilities |
|
13,615 |
15,480 |
| Liabilities associated with the assets held for sale |
|
- |
39,492 |
| Total current liabilities |
|
219,335 |
471,012 |
| Non current liabilities |
|
|
|
| Interest bearing liabilities |
11 |
253,282 |
187,392 |
| Provisions |
12 |
67,759 |
65,630 |
| Financial derivative liabilities |
17 |
- |
9,004 |
| Deferred tax liabilities |
|
2,152 |
2,152 |
| Lease liabilities |
|
21,050 |
26,043 |
| Total non current liabilities |
|
344,243 |
290,221 |
| Total liabilities |
|
563,578 |
761,233 |
| Net assets |
|
803,509 |
624,095 |
| Equity attributable to equity holders of the parent |
|
|
|
| Contributed equity |
15 |
777,021 |
639,859 |
| Reserves |
|
(40,502) |
(46,441) |
| Retained earnings |
|
59,689 |
25,449 |
| Total equity attributable to equity holders of the parent |
|
796,208 |
618,867 |
| Non-controlling interest |
|
7,301 |
5,228 |
| Total equity |
|
803,509 |
624,095 |
| |
Contributed equity |
Net unrealised gain/(loss) reserve |
Convertible notes / Share options equity reserve |
Non-controlling interests reserve |
Employee equity benefits reserve |
Foreign currency translation reserve |
Retained earnings |
Non-controlling interest |
Total |
| |
|
|
|
|
|
|
|
|
|
| At 1 January 2020 |
639,859 |
(12,287) |
4,876 |
(724) |
17,077 |
(55,383) |
25,449 |
5,228 |
624,095 |
| |
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
34,240 |
2,053 |
36,293 |
| Other comprehensive (loss)/income, net of tax |
- |
7,474 |
- |
- |
- |
(2,590) |
- |
20 |
4,904 |
| Total comprehensive (loss)/income for the period, net of tax |
- |
7,474 |
- |
- |
- |
(2,590) |
34,240 |
2,073 |
41,197 |
| |
|
|
|
|
|
|
|
|
|
| Shares issued |
137,162 |
- |
- |
- |
- |
- |
- |
- |
137,162 |
| Share-based payments to employees |
- |
- |
- |
- |
1,055 |
- |
- |
- |
1,055 |
| At 30 June 2020 |
777,021 |
(4,813) |
4,876 |
(724) |
18,132 |
(57,973) |
59,689 |
7,301 |
803,509 |
| |
|
|
|
|
|
|
|
|
|
| At 1 January 2019 (Restated) |
456,833 |
(4,793) |
4,876 |
(724) |
15,322 |
(60,858) |
93,224 |
(9,706) |
494,174 |
| |
|
|
|
|
|
|
|
|
|
| Profit for the period |
- |
- |
- |
- |
- |
- |
24,728 |
2,720 |
27,448 |
| Other comprehensive (loss)/income, net of tax |
- |
(6,623) |
- |
- |
- |
(935) |
- |
41 |
(7,517) |
| Total comprehensive (loss)/income for the period, net of tax |
- |
(6,623) |
- |
- |
- |
(935) |
24,728 |
2,761 |
19,931 |
| Shares issued |
482 |
- |
- |
- |
- |
- |
- |
- |
482 |
| Share-based payments to employees |
- |
- |
- |
- |
571 |
- |
- |
- |
571 |
| At 30 June 2019 (Restated) |
457,315 |
(11,416) |
4,876 |
(724) |
15,893 |
(61,793) |
117,952 |
(6,945) |
515,158 |
| |
|
|
|
|
|
|
|
|
|
| |
For the half year ended 30-Jun-20 US$'000
|
For the half year ended 30-Jun-19 US$'000 (Restated) |
| Cash flows from operating activities |
|
|
| Receipts from customers |
303,582 |
222,729 |
| Payments to suppliers, employees and others |
(299,754) |
(143,193) |
| Exploration expenditure |
(1,286) |
(4,604) |
| Interest paid |
(9,180) |
(5,763) |
| Interest received |
58 |
89 |
| Income tax paid |
(4,622) |
(2,501) |
| Net cash inflows (outflows) from operating activities |
(11,202) |
66,757 |
| |
|
|
| Cash flows used in investing activities |
|
|
| Payments for property, plant & equipment |
(36,065) |
(27,347) |
| Payments for development activities |
(12,443) |
(66,729) |
| Payments for evaluation activities |
(2,534) |
(11,916) |
| Payments for other financial assets |
- |
(176) |
| Other investing activities |
(337) |
(387) |
| Payments for acquisition of investment in associate |
(310) |
- |
| Proceeds from sale of assets held for sale |
29,916 |
- |
| Net cash flows used in investing activities |
(21,773) |
(106,555) |
| |
|
|
| Cash flows from/(used in) financing activities |
|
|
| Repayment of borrowings |
(195,393) |
- |
| Proceeds from issuing ordinary shares |
137,428 |
- |
| Costs of issuing ordinary shares |
(266) |
- |
| Repayment of loan from unrelated parties |
- |
2,009 |
| Proceeds from drawdown of finance facilities |
72,482 |
24,865 |
| Repayment of lease liability |
(8,807) |
(2,199) |
| Net cash flows from/(used in) financing activities |
5,444 |
24,675 |
| |
|
|
| Net decrease in cash and cash equivalents |
(27,531) |
(15,123) |
| |
|
|
| Cash and cash equivalents at the beginning of the period |
48,237 |
(20,157) |
| Exchange rate adjustment |
995 |
510 |
| Cash and cash equivalents at the end of the period |
21,701 |
(34,770) |
| |
|
|
| Cash and cash equivalents comprise the following: |
|
|
| Cash at bank and on hand |
62,273 |
9,848 |
| Bank overdraft |
(40,572) |
(44,618) |
| |
21,701 |
(34,770) |
The financial report of Resolute Mining Limited and its controlled entities ("Resolute", the "Group" or "consolidated entity") for the half year ended 30 June 2020 was authorised for issue in accordance with a resolution of directors on 28 August 2020.
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.
a) Basis of Preparation
This interim financial report for the half year ended 30 June 2020 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 2019 and considered together with any public announcements made by Resolute Mining Limited during the half year ended 30 June 2020 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 ("US$") rounded to the nearest thousand dollars, unless otherwise stated.
The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report except for those disclosed in Note 3 below.
Contingent consideration in respect of sale of Ravenswood Gold mine
A contingent consideration is the right to consideration in exchange for non-financial assets transferred to the buyer. If the Group performs by transferring the non-financial assets to the buyer before the buyer pays consideration or before payment is due, an asset is recognised for the earned consideration that is conditional. The gold price and upside sharing contingent consideration represents variable considerations within the scope of AASB 15. The variable consideration measured at contract inception and at each reporting date is constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.
The Directors have elected to change the Group's presentation currency from Australian dollars (A$) to United States (US) dollars effective 1 January 2020. The change in presentation currency is a voluntary change which is accounted for retrospectively. All other accounting policies are consistent with those adopted in the annual financial report from the year ended 31 December 2019. The financial report has been restated to US dollars using the procedures outlined below:
1. Income statement and Statement of Cash Flow have been translated into US dollars using average foreign currency rates prevailing from the relevant period. For material income statement items the spot rate at the date of transaction was used.
2. Assets and liabilities in the Statement of Financial Position have been translated into US dollars at the closing foreign currency rate on the relevant balance sheet dates.
3. The equity section of the Statement of Financial Position, including foreign currency translation reserve, retained earnings, share capital and other reserves, has been translated into US dollars on the basis that the Group had always reported in US dollars.
4. Earnings per share and dividend disclosure have also been restated to US dollars to reflect the change in presentation currency.
| |
|
|
Unallocated (b) |
|
|
| For the half year ended 30 June 2020 |
Mako (Senegal) US$'000 |
Syama (Mali) US$'000 |
Other US$'000 |
Total US$'000 |
|
| Revenue |
|
|
|
|
|
| Gold and silver sales to external customers |
131,335 |
158,688 |
- |
290,023 |
|
| Total segment gold and silver sales revenue |
131,335 |
158,688 |
- |
290,023 |
|
| Costs of production |
(28,575) |
(123,878) |
- |
(152,453) |
|
| Movement in gold bullion |
(533) |
12,847 |
- |
12,314 |
|
| Costs of production relating to gold sales |
(29,108) |
(111,031) |
- |
(140,139) |
|
| Royalty expense |
(6,651) |
(11,334) |
- |
(17,985) |
|
| Operational support costs |
(8,721) |
(5,568) |
(642) |
(14,931) |
|
| Other operating costs relating to gold sales |
(15,372) |
(16,902) |
(642) |
(32,916) |
|
| Administration and other corporate expenses |
(952) |
(787) |
(8,521) |
(10,260) |
|
| Share-based payments expense |
- |
- |
(897) |
(897) |
|
| Exploration and business development expenditure |
(560) |
(953) |
(2,905) |
(4,418) |
|
| Earnings/(loss) before interest, tax, depreciation and amortisation |
85,343 |
29,015 |
(12,965) |
101,393 |
|
| Amortisation of evaluation, development and rehabilitation costs |
(10,900) |
(12,548) |
- |
(23,448) |
|
| Depreciation of mine site properties, plant and equipment |
(39,338) |
(27,451) |
(604) |
(67,393) |
|
| Depreciation and amortisation relating to gold sales |
(50,238) |
(39,999) |
(604) |
(90,841) |
|
| Segment operating result before treasury, other income/(expenses) and tax |
35,105 |
(10,984) |
(13,569) |
10,552 |
|
| Segment operating result before treasury, other income/(expenses) and tax (brought forward) |
35,105 |
(10,984) |
(13,569) |
10,552 |
|
| Interest income |
87 |
918 |
- |
1,005 |
|
| Other Income |
- |
- |
(88) |
(88) |
|
| Interest and fees |
(2,674) |
- |
(6,957) |
(9,631) |
|
| Loss on remeasurement for refinancing |
- |
- |
(4,711) |
(4,711) |
|
| Rehabilitation and restoration provision accretion |
(142) |
- |
- |
(142) |
|
| Finance costs |
(2,816) |
- |
(11,668) |
(14,484) |
|
| Realised foreign exchange gain |
21 |
693 |
(288) |
426 |
|
| Realised gain on fair value movement |
(613) |
- |
- |
(613) |
|
| Treasury - realised gains |
(592) |
693 |
(288) |
(187) |
|
| Inventories net realisable value movements and obsolete consumables |
1,775 |
6,789 |
- |
8,564 |
|
| Unrealised foreign exchange gain |
653 |
338 |
103 |
1,094 |
|
| Unrealised foreign exchange gain on intercompany balances |
- |
6,521 |
- |
6,521 |
|
| Fair value movements and unrealised treasury transactions |
2,428 |
13,648 |
103 |
16,179 |
|
| Share of associates' losses |
- |
- |
(347) |
(347) |
|
| Depreciation of non-mine site assets |
(91) |
- |
(1,733) |
(1,824) |
|
| Income tax (expense)/benefit
|
(9) |
(5,886) |
(10,093) |
(15,988) |
|
| (Loss)/profit for the period |
34,112 |
(1,611) |
(37,683) |
(5,182) |
| |
|
Unallocated (b) |
|
|
| For the half year ended 30 June 2019 (Restated) |
Syama (Mali) US$'000 |
Other US$'000 |
Total US$'000 |
|
| Revenue |
|
|
|
|
| Gold and silver sales to external customers |
193,551 |
- |
193,551 |
|
| Total segment gold and silver sales revenue |
193,551 |
- |
193,551 |
|
| Costs of production |
(106,470) |
- |
(106,470) |
|
| Movement in gold bullion |
2,183 |
- |
2,183 |
|
| Costs of production relating to gold sales |
(104,287) |
- |
(104,287) |
|
| Royalty expense |
(12,818)
|
- |
(12,818)
|
|
| Operational support costs |
(2,753) |
- |
(2,753) |
|
| Other operating costs relating to gold sales |
(15,571) |
- |
(15,571) |
|
| Administration and other corporate expenses |
(1,668) |
(6,523) |
(8,191) |
|
| Share-based payments expense |
- |
(444) |
(444) |
|
| Exploration and business development expenditure |
(2,591) |
(1,166) |
(3,757) |
|
| Earnings/(loss) before interest, tax, depreciation and amortisation |
69,434 |
(8,133) |
61,301 |
|
| Amortisation of evaluation, development and rehabilitation costs |
(9,131) |
- |
(9,131) |
|
| Depreciation of mine site properties, plant and equipment |
(10,448) |
- |
(10,448) |
|
| Depreciation and amortisation relating to gold sales |
(19,579) |
- |
(19,579) |
|
| Segment operating result before treasury, other income/(expenses) and tax |
49,855 |
(8,133) |
41,722 |
|
| |
|
Unallocated (b) |
|
|
| For the half year ended 30 June 2019 (Restated) |
Syama (Mali) US$'000 |
Other US$'000 |
Total US$'000 |
|
| Segment operating result before treasury, other income/(expenses) and tax (brought forward) |
49,855 |
(8,133) |
41,722 |
|
| Interest income |
- |
81 |
81 |
|
| Interest and fees |
(2,914) |
(4,469) |
(7,383) |
|
| Rehabilitation and restoration provision accretion |
(302) |
- |
(302) |
|
| Finance costs |
(3,216) |
(4,469) |
(7,685) |
|
| Realised foreign exchange gain |
- |
981 |
981 |
|
| Treasury - realised gains |
- |
981 |
981 |
|
| Inventories net realisable value movements and obsolete consumables |
8,257 |
- |
8,257 |
|
| Unrealised foreign exchange loss |
- |
(3,185) |
(3,185) |
|
| Unrealised loss on gold forward sales contracts |
- |
(3,461) |
(3,461) |
|
| Unrealised foreign exchange loss on intercompany balances |
- |
(2,685) |
(2,685) |
|
| Fair value movements and unrealised treasury transactions |
8,257 |
(9,331) |
(1,074) |
|
| Share of associates' losses |
- |
(374) |
(374) |
|
| Depreciation of non-mine site assets |
- |
(223) |
(223) |
|
| Income tax (expense)/benefit
|
(9,728) |
9,945 |
217 |
|
| (Loss)/profit for the period |
45,168 |
(11,523) |
33,645 |
(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 and forms part of the reconciliation of the results and positions of the operating segments to the financial statements.
(c) The discrete financial information for Bibiani (Ghana) is no longer regularly reviewed by the Chief Operating Decision Maker on a standalone basis and now forms part of the reconciliation of the results and positions of the operating segments to the financial statements. As such, Bibiani is no longer presented as a reported segment. The comparative information have also been restated to reflect this.
| |
|
|
Unallocated (a) |
|
|
| For the half year ended 30 June 2020 |
Mako (Senegal) US$'000 |
Syama (Mali) US$'000 |
Other US$'000 |
Total US$'000 |
|
| Cash flow by segment, including gold bullion, and gold shipped but unsold and held in metal accounts |
|
|
|
|
|
| Reconciliation of cash flow by segment to the cash flow statement: |
58,888 |
(29,641) |
(102,766) |
(73,519) |
|
| Movement in gold shipped but unsold and held in metal accounts |
|
|
|
7,448 |
|
| Mark to market movement in gold unsold |
|
|
|
(22) |
|
| Movement in bank overdraft, including foreign exchange movements |
|
|
|
4,874 |
|
| Exchange rate adjustment in cash on hand |
|
|
|
(393) |
|
| Cash flows from discontinued operations |
|
|
|
34,080 |
|
| Movement in cash and cash equivalents per consolidated cash flow statement |
|
|
|
(27,532) |
|
| Segment balance sheet items: |
|
|
|
|
|
| Capital expenditure |
4,624 |
29,392 |
5,584 |
39,600 |
|
| |
|
|
|
|
|
| Segment assets |
380,329 |
788,850 |
197,908 |
1,367,087 |
|
| Segment liabilities |
58,352 |
248,090 |
257,136 |
563,578 |
|
| Cash flow by segment, including gold bullion, and gold shipped but unsold and held in metal accounts |
|
|
|
||
| Reconciliation of cash flow by segment to the cash flow statement: |
(571) |
(1,701) |
(2,272) |
||
| Movement in gold shipped but unsold and held in metal accounts |
|
|
(3,101) |
||
| Mark to market movement in gold unsold |
|
|
63 |
||
| Movement in bank overdraft, including foreign exchange movements |
|
|
2,616 |
||
| Exchange rate adjustment in cash on hand |
|
|
(129) |
||
| Cash flows from discontinued operations |
|
|
(12,299) |
||
| Movement in cash and cash equivalents per consolidated cash flow statement |
|
|
(15,122) |
||
| |
|
|
|
||
| Capital expenditure |
74,252 |
10,488 |
84,740 |
||
| |
|
|
|
||
| Segment assets |
660,230 |
152,607 |
812,837 |
||
| Segment liabilities |
212,812 |
112,009 |
324,821 |
||
(a) This information does not represent an operating segment as defined by AASB 8 and forms part of the reconciliation of the results and positions of the operating segments to the financial statements.
There were no interim dividends paid or provided for during the half year end up to the date of this report (half year ended 30 June 2019: $nil).
At 30 June 2020, the Group has an income tax expense of $16m (30 June 2019: $0.2m). The Income tax expense comprises current income tax of $6m for the Mali operations and $10m of deferred tax expense in relation to the sale of the Ravenswood mine.
Current receivables at 30 June 2020 primarily relate to indirect taxes owing to the Group by the Republic of Mali.
| |
30-Jun-20 |
31-Dec-19 |
| |
US$'000 |
US$'000 (Restated) |
| Current |
|
|
| Ore stockpiles - at cost |
64,575 |
38,256 |
| Ore stockpiles - at net realisable value |
19,102 |
28,353 |
| Total ore stockpiles |
83,677 |
66,609 |
| |
|
|
| Gold in circuit - at cost |
7,879 |
5,549 |
| Gold in circuit - at net realisable value |
23,361 |
12,555 |
| Gold bullion on hand - at cost |
15,680 |
10,468 |
| |
|
|
| Consumables at cost |
44,183 |
37,990 |
| |
174,780 |
133,171 |
| Non Current |
|
|
| Ore stockpiles - at cost |
1,418 |
- |
| Ore stockpiles - at net realisable value |
2,532 |
- |
| Gold in circuit - at cost |
47,048 |
- |
| Gold in circuit - at net realisable value |
- |
44,318 |
| |
50,998 |
44,318 |
At 30 June 2020, the Group's mine properties amounts to $488m (31 December 2019: $536m). During the six-month period to 30 June 2020, further payments for development activities were made of $15m, partially offset by amortisation recognised on production assets.
| |
30-Jun-20 |
31-Dec-19 |
| US$'000 |
US$'000 (Restated) |
|
| Interest bearing liabilities (current) |
|
|
| Bank overdraft |
40,572 |
39,068 |
| Insurance premium funding |
2,525 |
281 |
| Borrowings |
11,765 |
199,273 |
| |
54,862 |
238,622 |
| Interest bearing liabilities (non current) |
|
|
| Borrowings |
253,282 |
187,392 |
| |
253,282 |
187,392 |
| |
|
|
| |
308,144 |
426,014 |
Syndicated facilities
As part of the process of syndication of the Syndicated Facility Agreement (the "SFA"), the facility limit of Facility C was expanded to a term loan amounting to $150m with 6 banks maturing on 26 March 2023 with the option to extend for 1 year. Under the facility expansion, the $150m Facility A was also rolled into the SFA with the new maturity of 26 March 2023. The expanded facility was signed 25 March 2020.
Other than the security disclosed in the annual financial report for year ended 31 December 2019, the updated SFA and hedging facilities, additionally provided the lenders or their affiliates the following security:
(i) Security Agreement granted by Resolute Treasury UK Limited over all current and future assets including bank accounts and assignment of all Hedging contracts,
(ii) Specific Security Deed granted by Resolute over all its share in Resolute (Finkolo) Pty Ltd and a featherweight security over its assets not secured under a Security Document,
(iii) Share Pledge Agreement granted by Toro Gold Limited over all its share in Bambuk Mineral Limited; and,
(iv) Mortgage of Contractual Rights granted by Resolute (Bibiani) Pty Ltd over loans provided to Drilling and Mining Services Limited, Noble Mining Ghana Limited and Mensin Gold Bibiani Limited.
Neither the covenants nor the negative pledges has been breached at any time during the reporting period.
| |
30-Jun-20 |
31-Dec-19 |
| |
US$'000 |
US$'000 (Restated) |
| Current |
|
|
| Site restoration |
22 |
22 |
| Employee entitlements |
4,960 |
4,521 |
| Dividend payable |
93 |
95 |
| Withholding taxes |
211 |
217 |
| Provision for Mali indirect taxes1 |
43,308 |
40,258 |
| Other provision |
4,039 |
3,844 |
| |
52,633 |
48,957 |
| |
|
|
| Non Current |
|
|
| Site restoration |
67,530 |
65,165 |
| Employee entitlements |
229 |
465 |
| |
67,759 |
65,630 |
(1) Resolute's subsidiary SOMISY, has received demands for payment to the Mali Tax Authorities in relation to Income Tax and Value Added Tax (VAT) for the tax years ended 31 December 2015, 2016, 2017 and 2018. Based on the facts and circumstances available at the date of this report and in line with requirements of the accounting standards the Group has provided for the VAT demands as at 30 June 2020 amounting to $43m. The factual basis and validity of these demands are being strongly disputed by Resolute due to fundamental misinterpretations of the application of certain tax laws to SOMISY with reference to the provisions of SOMISY's Establishment Convention. 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. Refer to Note 18.
On 15 January 2020, Resolute signed a definitive agreement for the sale of the Ravenswood Gold Mine in Queensland to a consortium comprising of a fund managed by private equity manager EMR Capital and energy and mining company Golden Energy and Resources Limited. The consideration for the sale comprised A$50m of cash up front, A$50m promissory note and up to A$200m potential payments. The potential payments are contingent on future gold prices and future gold production from the Ravenswood Gold Mine as well as the investment outcomes from the Ravenswood Gold Mine for EMR Capital. The sale was completed 31 March 2020.
Transaction consideration comprises total cash payments to Resolute of up to A$300m as follows:
- A$100m of immediate value represented by
o A$50m of cash; and
o A$50m in Promissory Note;
- Up to A$50m via a Gold Price Contingent Payment instrument; and
- Up to A$150m via an Upside Sharing Payment instrument
The consideration received from EMR is being accounted for under AASB 15: Revenue from Contract with Customers.
Promissory Note
A A$50m promissory note with an annual coupon rate of 6% to be paid in cash to Resolute at maturity. The receivable matures at the earlier of liquidity date or maximum term of seven years.
The Promissory Note is initially valued at net present value of A$50m ($31m) and subsequently measured at amortised cost under AASB 9 of A$51m ($35m) as at 30 June 2020.
The carrying amount of the promissory note at 30 June 2020 approximates its fair value.
Gold Price Contingent Payment Instrument
A Gold Price Contingent Payment is payable to Resolute for years following Financial Close based on the following bands:
- A$10m if the average gold price is greater than A$1,900/oz,
- A$20m if the average gold price is greater than A$1,975/oz,
- A$30m if the average gold price is greater than A$2,050/oz,
- A$40m if the average gold price is greater than A$2,075/oz, and
- A$50m if the average gold price is greater than A$2,100/oz.
Payment of the Gold Price Contingent Payment is subject to the cumulative ounces produced from Ravenswood exceeding 500,000oz of gold over the four-year period and is subject to adjustment if the production adopted by the buyer is reduced or lower than expected.
For the Gold Price Contingent Payment Instrument, we have assessed the likelihood of the production target being met as well as the likely weighted average gold price to be achieved over the 4-year period. We have used the following assumptions in the determination of this variable consideration:
- Resolute assumed that the 500,000oz of gold production over the four year period will be met.
- Resolute used forecast gold prices submitted by reputable banks and brokerage firms and forecast out to a period of up to 5 years.
- Resolute assessed that the occurrence of a liquidity event within the 4-year period to be unlikely.
The Gold Price Contingent Payment Instrument is valued at a net present value of A$20m ($14m) at 30 June 2020, based on the most likely amount method.
Upside Sharing Payment Instrument
The Upside Sharing Payment is designed to align Resolute with investment outcomes of EMR Fund. This is determined by reference to the gross money multiple to EMR Fund which is the gross proceeds (before the payment of the Upside Sharing Payment) divided by the capital invested in the acquisition, development and operation of Ravenswood by EMR Fund. Resolute will receive the Upside Sharing Payment from EMR based on the amount by which the gross money multiple exceeds a minimum threshold up to a cap of A$150m as follows:
- A$7.5m for each 0.1 that the gross money multiple is above 2.5 up to 4.0; and
- A$5.0m for each 0.1 that the gross money multiple is above 4.0.
Resolute has not recognised an amount for the variable consideration for the Upside Sharing Payment instrument due to the fact that a significant risk of reversal of any amount recognised is considered highly probable.
Results of the disposal group held for sale asset:
| |
For the half year ended 30-Jun-20 |
For the half year ended 30-Jun-19 |
| US$'000 |
US$'000 (Restated) |
|
| Revenue |
15,268 |
35,252 |
| Cost of production relating to gold sales |
(13,069) |
(38,450) |
| Other operating costs relating to gold sales |
(2,131) |
(1,781) |
| Administration and other corporate expenses |
(172) |
(547) |
| Exploration and business development expenditure |
(179) |
(566) |
| Depreciation and amortisation |
(47) |
(514) |
| Finance cost |
(80) |
(360) |
| Fair value movements and unrealised treasury transactions |
(47) |
769 |
| Loss before tax for the period |
(457) |
(6,197) |
| Tax expense |
- |
- |
| Loss for the period |
(457) |
(6,197) |
| |
|
|
| Gain on disposal of discontinued operation (net of tax expense) |
41,932 |
- |
| Total profit/(loss) after tax from discontinued operations |
41,475 |
(6,197) |
| Earnings/ (loss) per share |
|
|
| Basic earnings/(loss) per share of discontinued operation |
3.96 cents |
(0.82) cents |
| Diluted earnings/(loss) per share of discontinued operation |
3.96 cents |
(0.82) cents |
Carrying value of net assets at date of disposal:
| |
At 31 March 2020 |
| US$'000 |
|
| Assets |
|
| Other assets |
335 |
| Inventories |
8,850 |
| Property, plant and equipment |
50,222 |
| Development |
2,354 |
| Total assets |
61,761 |
| |
|
| Liabilities |
|
| Payables |
(5,706) |
| Provisions |
(2,873) |
| Site restoration |
(21,728) |
| Total liabilities |
(30,307) |
| Net Assets held for sale |
31,454 |
| |
|
| Consideration received in cash and cash equivalents |
31,154 |
| Consideration receivable as a promissory note |
31,154 |
| Contingent consideration receivable |
12,365 |
| Working capital adjustments |
271 |
| Cost of Disposal |
(1,558) |
| Gain on disposal |
41,932 |
Cash flow information for disposal group:
| |
For the half year ended 30-Jun-20 US$'000
|
For the half year ended 30-Jun-19 US$'000 (Restated) |
| Operating cash flows |
(2,611) |
7,796 |
| Investing cash flows |
28,758 |
(8,179) |
| Financing cash flows |
- |
- |
| Net cash flow |
26,147 |
(383) |
On 31 July 2019, Resolute (through its wholly owned subsidiary, Resolute UK 2 Limited) signed a binding agreement to acquire all the shares of Toro Gold. When Resolute issued its 31 December 2019 financial statements, the measurement of the acquired assets and liabilities was provisional. In the 31 December 2019 financial statements, Resolute had recognised a deferred tax liability on acquisition of $9m and mine properties and development of $257m . During the period ended 30 June 2020:
· the valuation of the deferred tax liability was finalised and updated to $2m following further clarification on operation of tax regime in Senegal.
· The valuation of mine properties and development was finalised and updated to $250m
Adjustment in the 31 December 2019 financial statements:
In accordance with accounting standards, Resolute has made retrospective adjustments by restating the 31 December 2019 financial information in accounting for the finalisation of the business combination as detailed below:
· the carrying amount of the deferred tax liability at 31 December 2019 decreased by $7m.
· the carrying amount of mine properties and development at 31 December 2019 decreased by $7m.
| |
Total Number |
Number Quoted |
US$'000 |
| At 1 January 2020 |
903,153,734 |
903,153,734 |
639,859 |
| Changes during current period, net of issue costs: |
|
|
|
| Placement of shares to institutional investors (net of costs) |
199,673,205 |
199,673,205 |
137,162 |
| At 30 June 2020 |
1,102,826,939 |
1,102,826,939 |
777,021 |
| |
Issue Date |
Total Number |
Fair Value per Right at Grant Date |
Vesting Date |
| Performance rights on issue |
|
|
|
|
| Band A0 |
29/11/2016 |
1,000,000 |
$1.18 |
30/06/2020 |
| Band A1 to A2 |
17/10/2017 |
838,135 |
$0.81 |
30/06/2020 |
| Band A0 |
28/11/2017 |
587,500 |
$0.74 |
30/06/2020 |
| Band A1 to A2 |
07/03/2018 |
270,469 |
$0.85 |
30/06/2020 |
| Band A1 to A2 |
26/10/2018 |
423,098 |
$0.92 |
30/06/2021 |
| Band A0 |
26/10/2018 |
277,559 |
$0.77 |
30/06/2021 |
| Band A0 |
21/05/2019 |
698,690 |
$0.79 |
31/12/2021 |
| Band A1 to A2 |
21/05/2019 |
913,736 |
$0.93 |
31/12/2021 |
| Band A0 |
21/11/2019 |
1,000,000 |
$0.72 |
30/06/2021 |
| Band A0 |
21/11/2019 |
1,000,000 |
$0.71 |
30/06/2022 |
| Band A0 |
21/11/2019 |
1,000,000 |
$0.70 |
30/06/2023 |
| Band A1 to A2 |
21/05/2020 |
43,668 |
$0.93 |
31/12/2021 |
| Band A1 to A2 |
21/05/2020 |
500,000 |
$0.49 |
31/12/2021 |
| Band A0 |
21/05/2020 |
699,668 |
$0.56 |
31/12/2022 |
| Band A1 to A2 |
21/05/2020 |
1,731,790 |
$0.85 |
31/12/2022 |
| As at 30 June 2020 |
|
10,984,313 |
|
|
| |
Date of Change |
Total Number |
Fair Value per Right at Grant Date |
Vesting Date |
| Opening number of performance rights |
|
8,657,154 |
|
|
| Decrease through lapsing of performance rights (Band A1 to A2) |
20/02/2020 |
(160,201) |
$0.81 |
30/06/2020 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
31/03/2020 |
(6,349) |
$0.81 |
30/06/2020 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
20/02/2020 |
(75,685) |
$0.92 |
30/06/2021 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
31/03/2020 |
(15,028) |
$0.92 |
30/06/2021 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
22/05/2020 |
(69,231) |
$0.92 |
30/06/2021 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
20/02/2020 |
(167,896) |
$0.93 |
31/12/2021 |
| Decrease through lapsing of performance rights (Band A1 to A2) |
22/05/2020 |
(153,577) |
$0.93 |
31/12/2021 |
| Increase through issue of performance rights to eligible employees (Band A1 to A2) |
21/05/2020 |
43,668 |
$0.93 |
31/12/2021 |
| Increase through issue of performance rights to eligible employees (Band A0) |
21/05/2020 |
699,668 |
$0.56 |
31/12/2022 |
| Increase through issue of performance rights to eligible employees (Band A1 to A2) |
21/05/2020 |
1,731,790 |
$0.85 |
31/12/2022 |
| Increase through issue of performance rights to eligible employees (Band A1 to A2) |
21/05/2020 |
500,000 |
$0.49 |
31/12/2021 |
| Closing number of performance rights |
|
10,984,313 |
|
|
*The terms and conditions of the Remuneration Framework are consistent with those disclosed in the Annual Report for the year ended 31 December 2019 and the Notice of Annual General Meeting sent to shareholders on 20 April 2020.
As part of its risk management policy, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated sales of gold.
Gold forward contracts commitment at 30 June 2020 (not recorded as derivatives):
| |
Gold for Physical Delivery oz |
Average Contracted Gold Sale Price per oz (US$) |
Value of Committed sales US$'000 |
| 30 June 2020 |
|
|
|
| Within one year |
165,000 |
1,599 |
263,792 |
| After one year but not more than two years |
33,000 |
1,668 |
55,045 |
| |
198,000 |
1,610 |
318,837 |
Note 17: Financial Instruments
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
Disclosure of fair value measurements is by level of the following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices or indirectly (derived from prices) (Level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
At June 2020, the Group does not have any Level 3 financial instruments.
The following table presents the fair value measurement hierarchy of the Group's financial assets and liabilities carried at fair value at 30 June 2020 and 31 December 2019.
| Consolidated entity - at 30 June 2020 |
Level 1 US$'000 |
Level 2 US$'000 |
Level 3 US$'000 |
Total US$'000 |
| Assets |
|
|
|
|
| Financial instruments through other comprehensive income ("OCI"): |
|
|
|
|
| - Equity securities |
20,849 |
- |
- |
20,849 |
| Total Assets |
20,849 |
- |
- |
20,849 |
| Consolidated entity - at 31 December 2019 |
Level 1 US$'000 |
Level 2 US$'000 |
Level 3 US$'000 |
Total US$'000 |
| Assets |
|
|
|
|
| Financial instruments through OCI: |
|
|
|
|
| - Equity securities |
12,704 |
- |
- |
12,704 |
| Total Assets |
12,704 |
- |
- |
12,704 |
| Liabilities |
|
|
|
|
| Financial liabilities for which fair values are disclosed: |
|
|
|
|
| - Royalty payable to Taurus |
- |
- |
12,197 |
12,197 |
| Total Liabilities |
- |
- |
12,197 |
12,197 |
(i) There is an active market for the Group's listed equity investments.
The carrying value of other financial assets and liabilities approximate fair value.
In June 2014, Mensin Gold Bibiani Limited, Drilling and Mining Services Limited and Noble Mining Ghana Limited (collectively referred to as the "Companies") entered into court approved Schemes of Arrangement ("Scheme") with their creditors and employees ("Scheme Creditors"). The Scheme enabled Resolute to secure with the endorsement of the Ghanaian government, ultimate ownership of the Bibiani Gold Mine with protection from those liabilities which had been incurred at a time when the mine was under the control of the prior owner (Noble Mineral Resources Limited). The Scheme set out the timing and amounts of payments that were to be made by the Companies to a Scheme Fund and to a Future Fund, from which funds, payments are to be made to the Scheme Creditors. The Scheme Creditors arise from transactions that occurred prior to the Companies becoming part of the Group. The Scheme Fund and the Future Fund are effectively administered by representatives of KPMG.
Subject to the issue discussed below regarding two Ghanaian creditors, the implementation of the Scheme had the effect of removing from the Companies' balance sheets all historical liabilities relating to amounts payable to Scheme Creditors and replacing those liabilities with an obligation to fund the Scheme Fund and Future Fund, as and when necessary. The unconditional obligations to make payments to the Scheme Fund were paid in 2014. In addition to those unconditional obligations to pay into the Scheme Fund, the Scheme imposed following contingent liabilities to provide funding to the Scheme Fund and Future Fund:
1) Payment to the Scheme Fund of $3.6m if, following receipt of the Feasibility Study, the Board of Resolute, in its absolute discretion, made a decision to proceed with the development of the Bibiani Gold Mine; and;
2) Payment to a Future Fund of up to $8.4m conditional upon the generation of free cashflow from Bibiani mine operations for the period of 5 years from the date that Commercial Production is declared ("Future Cashflow Payment"). Free Cashflow means 25% of effectively, Project Revenue for that period less Permitted Payments for that period, which Permitted Payments include:
a. operational expenses and capital costs paid in connection with the mining operations; and
b. repayment of principal and interest relating to funds advanced by Resolute up to the commencement of mining operations.
The Scheme provided that if Commercial Production had not been achieved by June 2019, then the Bibiani Gold Mine had to be sold and the proceeds applied in the manner set out in the Scheme. On the basis that, in late 2018 it became clear that Commercial Production would not be achieved by June 2019, and in order to avoid the need to sell the Bibiani Gold Mine, an Amended Scheme was proposed to Scheme Creditors, which effectively allowed additional time to commence mining at Bibiani.
In consideration for the Scheme Creditors agreeing to the extended timeframe to commence mining, the Amended Scheme provided that upon the Amended Scheme becoming operative, the payment of $3.6m referred to 1 above would be immediately payable (i.e. it would not be dependent upon the decision of the board of Resolute to proceed with the development of Bibiani). At the meetings of Scheme Creditors to consider the Amended Scheme in April 2019, the Scheme Creditors approved the Amended Scheme, it was subsequently approved by the Court and became operative in May 2019. As a consequence, in mid-2019 Resolute paid the sum of $3.6m under the Amended Scheme. The obligation to make the Future Cashflow Payment in the circumstances described at 2 above remains in place under the Amended Scheme.
Notwithstanding the Scheme's approval by the Ghanaian High Court, the Scheme Creditors, and the Ghanaian Minister of Mines, two Ghanaian creditors have sought to circumvent the operation of the Scheme (and Amended Scheme) and are seeking to enforce a winding up order against Mensin, on the basis of debts incurred prior to implementation of the Scheme. Resolute is defending Mensin's right to unencumbered debt free ownership of the Bibiani Gold Mine, which was a key element of the Scheme supported by both Resolute and the Ghanaian government.
On 27 February 2020 Resolute's subsidiary, SOMISY, received a demand for payment of VAT for the tax years ended 31 December 2015, 2016, 2017 and 2018) and Income taxes for the tax years ended 31 December 2015, 2016 and 2017 from the Mali Tax Authorities. The demand for payment for VAT was provided for at 31 December 2019 (refer to Note 13 for details). The demand for income tax of $10.3m has not been provided for at 30 June 2020 as the Group refute the validity and factual basis of this part of the demand.
In country tax and legal advice has been sought with a formal response submitted to the Mali Tax Authorities on 19 June 2020. The formal response outlined SOMISY's objections to the income tax demands and the calculations on the VAT withholding demand. SOMISY is expecting a formal response from the Mali Tax Authorities by the end of August 2020.
The Group had non-cash additions to property, plant and equipment of $8m for the period ended 30 June 2020 (30 June 2019: nil) purchased through asset finance facilities, the cash outflows for which will be reflected as repayment of borrowings when those asset finance facilities are repaid.
On 2 July 2020, Resolute drew down a further $20m on the Revolving Loan Facility and used these funds to repay a portion of its BDM overdraft facilities. There was no change to the Groups total debt position with total interest payable on debt reducing as a result of this transaction. The balance of the Syndicated loan facility that remains undrawn at the date of this report is $25m.
Resolute is monitoring the political situation in Mali following the resignation of the President and the dissolution of the government on 19 August 2020. The Company's operations in Mali are continuing as normal with no impact to production or to the safety and security of employees and contractors.
No other significant events have occurred since balance date on 30 June 2020 up to the date of this report.
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 2020 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.
[Electronically signed]
J.P. Welborn
Managing Director & CEO
Perth, Western Australia
28 August 2020
INDEPENDENT AUDITOR'S REVIEW REPORT
Please see report in the full version of the announcement at www.rml.com.au
Half Year Financial Results and Accounts07:00:1428 Aug 2020Results4359X