Resolute Mining Limited

Good morning, ladies and gentlemen. This is Terry Houlihan. I have on the line with me Chris Egger, our CFO. And we'd like to take you through our quarterly results for Q2 and obviously H1 of 2024. We do have a presentation online. It's as of 29 July 2024. It's loaded up on our website so you can follow that. And I'll be talking to the slides as I click forward so you can follow me. Just moving on to slide two there, we've got the normal disclaimer, which does have our guidance for the year, which is unchanged at this stage. Looking forward to slide three, just a reminder for everybody, we are a West African gold company. We operate at the Syama Gold Mine in Mali and the Mako Gold Mine in Senegal. But we've also got exploration projects on both of these operations and in Guinea. And all three are in an exciting phase at this point in time. We have quite a large resource and reserve, and this is growing because of the work we've been doing over the last three years. And as I said, our guidance, we are maintaining this at somewhere between 345 and 365,000 ounces at a cost of $1,300 to $1,400 an ounce. And we'll go into that in a little bit more detail shortly. Going forward to slide four, if you look at the quarter highlights, we had a very good operational quarter. Almost 91,000 ounces. This was a good clean run for all operations. This following on from in Q1, if you remember, we did stop the Sayama operation, the sulfide circuit for two weeks. And now we're at 167,000 ounces for the half year, which is exactly where we expect it to be. And that's why we're restating our guidance. We've always said that the first half of the year will be a bit shy because of the stoppage at the Siama plant in Q1. And we expect to have a good run now in the second half of the year. One of the very exciting point is our group ASICs of $14.02 an ounce. If you remember not too long ago, it was up at $15.00. Over the last couple of years, we brought this down aggressively. And in June, actually, we broke through comfortably the $1,400 an ounce level. And going forward, that's why we're really comfortable stating that we think we're going to be in the $1,300 to $1,400 an ounce for the calendar year. Cash flow, if you remember, we finished our syndicated debt in Q1, and we've got cash flow from operations of $47 million, which is quite an aggressive number now. Obviously, gold price is helping, but also all our work on the operating costs is coming exactly at the right time. Exploration, as I've mentioned, we are still pursuing the Tombrancoto project in Mali. We've got some really good drill hits coming through as we speak, and we expect to give you an upgrade on that in Q3. And also on the Guinea, where we're just about putting together our first mineral resource estimate. So as a result of all the operations in this half year, our net cash has now jumped to 97 million at the end of June. It also helped by the deal at Ravenswood, where they hit their targets of 500,000 ounces, and they gave us a first tranche of 30 million Australian, about 20 million US, with the next payment coming in this quarter, which will total altogether about 50 million Australian dollars. So as a result, at the end of June, we had a very healthy balance sheet with cash and bullion at 143 million. And you'd have to go a few years back to see that on our balance sheet. We've essentially come through now what I consider three years of turnaround. And now we can really focus on growth, especially the organic growth that we've got in front of us over the next two years. In terms of ESG, we're still ticking boxes there. LTIs, SIAMA's over five and a half years LTI-free. MACO is at 2.8 years LTI-free. We did have some recordable injuries, but these are minor injuries, cuts to hands, sprains, et cetera. Nothing majorly that we should be concerned about, but obviously we're certainly pushing hard on the safety. We move on to slide five. We still are comfortable with our growth. We're just restating this now. Again, if you remember, we've been talking like this for quite a while. We can see this year our guidance we're comfortable with. I think the important thing, our costs are coming back down. You can see where we've been recently. We are pushing hard now with the Sea Armour. sulfide conversion plant. If you remember, that project will take us on Siyama up to 4 million tons of sulfide. Essentially, it's going to replace the 1.6 million tons of oxide that we're treating at the moment on an average of about 1.3 gram a ton with sulfides that are going to be about 2.9 gram a ton. So that should comfortably take us from the middle of the next year up to 250,000 hours per year production levels. As I mentioned at Mako, we've now got five drill rigs there. We've got three potential satellite deposits that we're focusing on. Tombo is storming ahead. We've got some, as I mentioned, some really good drill results coming through. We'll put out a separate announcement later this month, this quarter, give you a full update, not only on Tombo, but on the other sides as well. Phase two expansion at Siyama. If you remember, we've always said this is a tier one mine in waiting. We've started the scoping study and we'll actually give you some updates later this year. And then, as I mentioned, the Guinea exploration. We've got some exciting prospects out there. We will issue a first mineral resource estimate sometime this quarter. Move jump forward to slide seven. Let's go into a bit of detail. Siama, if you remember this last year, we've been ramping up the mine to get it up to 2.4 million tons. It was originally designed on 2.1. As we were ramping up last year, remember we had a few wobbles with the grade. You can see now the grades have settled down. We're comfortably at those sort of levels. And if you look at the sulphide ore process, you can see that this last quarter we started stepping that up. And this is because of all the work that we've taken on the crushers, replacing all the crushers out systematically over the last nine months, which has now allowed us to push more through the mill. And the big exciting thing there, as I mentioned, is the grade. If you look at the grades, we're getting back to where we think we should be. And even with the increased throughput on the sulphide plant, you can see we're holding the gold recovery numbers. So the sulphide circuit is really operating well. And then the oxide plant also operating well. We are now in a mixture of materials coming from mines, around about 1.56 grams a tonne, and we're using lots of stockpiles which we've built up over the years, which these days with one gram a tonne is worth $75 a tonne. So it's certainly worth processing it and making money from it. So the SIAMA operations we're excited with, we're expecting a run free H2, so we should see some good performance out of SIAMA over the next six months. I'll talk about this conversion project. As I mentioned, this is the oxide plant that we're looking at on slide eight with the photographs there. You can just see the oxide mill in the left-hand picture on the right. The large slab of concrete next to it, that's the mill foundations. That's usually the critical path on an expansion project with a mill. They are almost complete as we speak now. These photographs are a few days old. And then you can see the flotation section foundations in the foreground on that picture. This is all going ahead to plan. The mill parts are starting to arrive on site and we're on track for commissioning in first half of next year. So by Q3 next year, we should be putting through that mill and the mill next to it. That's going to be put there shortly. We're going to be putting 2.9 gram a tonne material through that mill. instead of the on average about 1.3 that we're putting at the moment so this is really exciting for the future of this operation this should take it comfortably up to the 250 000 ounce per year considering we're about 210 000 pounds per year at the moment from sayama then moving on to slide nine which is mako mako as we we've been alluding to for quite some time We did that huge strip last year, $25 million, which we finished off in Q1. And this has allowed us now to get access to higher grade ores. We have been mining slightly larger tonnages of ores for two reasons. First of all, so we, as you know, we've got a rainy season coming up. We want to make sure we've got plenty of material on the ground so we don't have to slow down in the mill and also it gives it a better chance of being putting the higher grade materials through the mill. What we'll also note is the recoveries are maintaining at 93%. This is based on due to our oxygen plant that we put in place last year still performing exceptionally well and is also adding to the reduction in the costs of the plant. Our operating costs at Mako have come down to $1,100 an ounce and as we expected And we expect to maintain this now going forward. As I mentioned, we will have a slightly softer Q3 in terms of mining. We're anticipating being able to maintain the production through the plant. And then Q4 should be a bit more solid, a bit more like this quarter. As I mentioned, group exploration, we will give you an update shortly. Senegal, Tombo and Bantaco, we're operating on two of our three satellite areas now. Starting to the Tombo numbers, as I say, we're going to be looking at adding numbers to the mineral resource there, 400,000 houses. with some infill and some extensional drilling so that's going to increase and we're just starting to hit the mineralization of the bantaco that took us a bit of time to get in there we're actually on site now and we're just starting to see mineralization coming out of the ground so we're getting quite excited about the potential extension of the the macro operation In Mali, we're also doing some work again on the Siama North. We're now going to restate that resource shortly. We're also getting excited about some underground chutes that we're picking up from that Siama North area. There's several chutes coming off that large three million ounce ore body. um and they are higher grade higher than the three gram a ton so they look like they will be economically mined from underground at some stage in the future it's just exploratory at this stage but we'll give some color on that later in the quarter And we're also looking at some other prospects south of the main Siama complex that we picked up on our geophysical work over the last three years. And we're looking again, we think we might be able to find some more oxides going forward. This is the excitement about Siama. We'll have that oxide plant having the ability to treat either oxides or sulfides, depending on the margins that they will give us. And then, as I mentioned, the Mansala project, we're actually modelling that at the moment and we will release a mineral resource shortly. And with that, I'll now hand over to Chris so he can take us through the financials and the bottom line.

you terry um moving over to slide 12 and looking at our financial results as terry highlighted we had a very strong quarter and we're very pleased with our financial results uh starting first with gold sales we sold 88 000 ounces just shy of what we actually produced again at the end of q2 the quarter ended on a weekend and therefore the actual timing of the sales were impacted versus the production, but we expected those ounces to get sold in July, which they did. I think what's really important to note here is at this stage, we're fully unhedged and we remain unhedged and we intend to continue to be unhedged. Also, as Terry highlighted, the costs have come down very nicely and so are ASIC. was at $1,402 per ounce, and we expect the ASIC to continue to decrease over the coming quarters. Our capital expenditures were just shy of $20 million for the quarter, slightly less than Q1, but we are expecting CapEx to increase in the second half of the year as the spend for this YEMA project is really going to ramp up, and that's going to be happening in Q3 and in Q4. Our EBITDA for the half year, which is unaudited, is coming in at $160 million, which is an increase over last year whereby we produced $101 million of EBITDA. I'm expecting the EBITDA for the second half of the year to be substantially higher than the first half. This is really because of the fact that we'll be producing more ounces and we're also in a much higher price environment than we were in Q1. And like I said, CapEx for the first half of the year is at $44 million, which was an increase over last year. But most importantly, we expect CapEx to really ramp up in the second half of the year. And we're still very much comfortable that CapEx will come in within the guidance that we have illustrated at the beginning of the year. Moving over to page 13, when we look at cash, and cash is king these days, we're very excited about the cash flow generation of the business. Our operating cash flow was up substantially in this first half of the year versus last year at 127 million dollars, and we expect that to continue in H2. I spoke about CapEx already and the impact to the business. And look, exploration was around $10 million for the first half of the year. And we are expecting our exploration expense to be at least $10 million in the second half, if not more. This is above our initial guidances of $15 to $18 million for exploration. The reason for this is that we're very excited with what we're seeing. In Senegal, we anticipate to spend as much as we can in order to really lock in the extension of the macro mine. So look for the exploration spend to continue to increase throughout the year. Working capital was a positive impact for the first half of just shy of $2 million. One of the key issues that we are facing though in the business is not receiving our VAT refunds on time. In Q2, this was negatively impacted our business by about $15 million. We are getting VAT refunds, but they're coming in slow. Historically, we were able to get them quite quickly. And with the changing governments that we're seeing both in Senegal and in Mali, we're seeing an impact on our VAT refunds, which is negatively impacting the business overall. As Terry highlighted in the quarter, we received 30 million Australian dollars due to the sale of Ravenswood, which had a very nice positive impact to the business, and we're expecting that remaining 20 Australian dollars to come in by the end of September. We made our final debt payments for our syndicated senior facility at the end of Q1. That's the $26.3 million that you see on the graph. So we ended the quarter with a very strong cash balance, cash and bullying, I should say, of $143 million. and that related into a net cash position of $96.6 million. We consistently maintain overdraft facilities in both of the countries that we operate. We try and keep those levels pretty consistent, just shy of $50 million. Those provide good working capital sort of efficiencies for us, and we'll be looking to do that in the future. So again, to summarize, a very strong quarter, and we expect cash to continue to build throughout the year.

um and with that i will turn it back over to terry uh for some closing remarks good thanks chris and just in conclusion i think you can see from the numbers there that we've we've been working smart over the last three years and we've also managed to put stocks in place just in case from the from the mine in front of the plant just in case we do hit problems with the rainy season the rains have started we've had 150 millimeter storms already happening and in a few hours and we're managing that quite comfortably at this stage but I say we do have stocks in place which will assist if we have any further storms like that but what we've got if we we are still focused on the operation we are still pushing the continuous improvement there's lots of items that we have still got on order that are going to come in to enhance the operations here and there just on the mills on the on the the the roasters etc. So we are still focused on the continuing improvement and the big plus for us right now is that we are unhedged going forward and we've paid all our debt off so we can enjoy the prices that we are seeing going forward. So if you look at what we're focused on, the three things that we're focused on is productivities, cost improvement and organic growth. It's as simple as that. So we should see some systematic improvements further over the next two years. Thanks very much. And with that, Chris and I will now take your questions.