Resolute Mining Limited

Good day, ladies and gentlemen. This is Terry Houlihan, the CEO and MD of Resolute Mining. I am joined today by Chris Egger, our CFO, and we will take you through our Q3 24 activities, which you should be able to see on the webcam. If I jump forward, page two, that does have our guidance on there, which we have not at this stage changed. Then slide three just gives you the overview of the company. Remember, we are a multi-asset gold producer. We are operating in West Africa, and we're in the organic growth phase at this point in time. We have a mine in Mali, the Sayama Gold Mine, and the Mako Gold Mine in Senegal. And the exploration now we've extended. Last quarter, you'll remember, I said I'm hoping to put a fourth flag on the site. presentation and you can see the code of wire is now on there so we're really happy to say we're expanding now um organically on the exploration side we are listed on the asx and the lse and we've raised to now 1.2 billion dollar u.s market cap recently and we have if i go into a little bit of detail on the three main areas sayama remember it's got 10 million ounces of the in the ground majority by far the majority of that is sulfide We have all reserves of 4 million ounces there. We have an oxide plant at 1.6 million tonnes, which we're presently converting to a sulphide plant. And we have an existing sulphide plant, which we've perfected over the last two and a half years and is performing exceptionally well at 2.4 million tonnes per annum. We're expecting to produce somewhere between 2.5 and 2.15. I would suggest towards the higher end of the scale there at around about $1,500 an ounce this year from SIAMA, which is a lot better than the last couple of years. Mako, if you remember, that is coming to the end of its life. We've got about 12 months of mining left. We've got a mineral resource of 0.9 million ounces or reserves of 0.4, oxide plant capacity 2.1. We put out guidance saying 140,000 to 150,000 ounces. I'll come back to that in a moment, but our costs are definitely going to remain somewhere between $1,100 and $1,200 per ounce. And as I mentioned on exploration, now we are exploring on four fronts quite aggressively. We'll probably spend about $20 million this year on that. Mali, greatly underexplored across our 85 kilometers of greenstone belt. Senegal, we've made some significant progress with Tombrancota, which we'll go into shortly, which is a potential extension of the Mako mine. Guinea, we put out our first initial mineral resource recently. And the Ivory Coast, I hinted at that last time, we've signed a joint venture and we're expecting to start drilling in early 2025. And then just a quick reminder that we still do have a stake in the Longcore Project in the Democratic Republic of Congo, which has just recently started drilling again. So turning to slide four, if you look at the operations, we produced 85,000 ounces, a little bit lower than the previous quarter. As you know, it's the rainy season in West Africa. We expected to be slightly lower. We did have a little bit more rain impact at Mako, which we'll go into a little bit later, which has significantly impacted the operation there. And nowadays, now we're expecting to produce about 130,000 ounces from Mako this year. As a result of this, slightly lower than we expected production, our ASICs went up $14.52. Some of that is due to the MACO lower production, but also the sliding scale, higher royalties in Marley, where the gold price went significantly above $2,500 per ounce. As a result of the numbers to date on the three quarters, we are expecting our ASICs to be at the upper end of the guidance, mainly as a result of the higher royalty rates that we're experiencing because of the high gold price. If you look at cash flow, we think this is a big win. We're starting to generate significant amounts of cash now. Year-to-date, $188 million. The last two quarters have been particularly good because we were unhedged. and going forward were unhedged. And some of the capital was not spent this year. That doesn't mean to say we are not doing the jobs. We are getting the work done. That's the difference between the committed money and the actual spent money. That is the difference. So some of those monies are getting pushed forward to next year. It is worth mentioning on cash flow, we are in discussions with both governments in West Africa. We're going through audits on the historic operations, and there could be some adjustments later on, and Chris will actually talk to that a little bit later in his section. Okay, on the exploration front, we added significantly to Tomba and Koto ounces and to the Mansala project in Guinea, extra 900,000 ounces on the books over the last two quarters. This is quite a significant step, especially on the Tomba and Koto side, now where we had 85% conversion of our inferred to indicated over this last quarter. As I mentioned, this La Debo Gold project, we're quite excited about this. This has essentially walk-up and drill targets, given that it has an NI43-101 inferred resource of about 400,000 ounces. And this is a project that we tried to get involved in three or four years ago, but we didn't have the wherewithal at the time to take it on. So in terms of balance sheet, we think it's extremely positive. We added almost $50 million to net cash. And that was helped by receiving the second tranche from Ravenswood, as we expected. And we've also secured an external debt facility with NetBank and Citibank for M&A projects. But at this stage, we don't have any use of that as yet. And Chris will go into that again in a little bit more detail. In terms of ESG, we believe we're still hitting our targets there. We're still in LTI-free, and that represents SIAMA, five and a half years. MACO, three and a half years. These are significant timeframes now to be LTI-free. But also with the focus on safety, our injury frequency rate has significantly dropped over this quarter to 1.37 from 2.1, and that's against an industry average of about 2.6. So as you know, we're doing lots of audits against the World Gold Council, responsible mining principles, ISO, etc., and continuously improving our numbers, our matrices on ESG. Moving on to slide five, you've seen this slide before. We just need to update it now to add the code of war. But the oxide plant is still on track for middle of next year to convert to sulfides. That, if you remember, will be replacing 1.3 gram a ton oxides with 2.6 gram a ton sulfides. That's going to have a significant boost to the operation over the next 30 years, we believe. given the size of the deposit there. And we're also looking at the SIAMA phase two growth, which is the original 400,000-ounce project that we were talking about from day one. We are presently in our budgeting phase as we speak at the moment, and we'll give a little bit more color on these over the next quarter. So if I go into the operational overview, taking me to slide seven, let's just focus a bit on SIAMA. The CRMS sulfide operation, we believe, is operating exceptionally well. We did have heavy rains, as I mentioned, as the rest of Africa has suffered, especially Central and Northern Africa has suffered recently with heavy rains. And if you look at the ore mined on the sulphide, you can see we had some stoppages there. We didn't mine as much tonnes there, or the grade at 2.5 gram a tonne. But if you remember in the last quarter, I did say we've stockpiled some high-grade materials for this situation, and we managed to treat... 622,000 tonnes of 2.63 gram a tonne material through the plant. That was our target to get it above 2.6 and to push those tonnages. And as you'll see, we are systematically increasing the operation on the tonnages through the sulphide plant due to all the work we did previously the end of last year and early this year on the crushing plant. So we're now starting to make those mills operate well. The oxide plant, we had a few problems again with the rain in the oxides, but we swung a lot across the stockpiles. So therefore the process grade is only one gram a ton there. However, I will mention that since the rains are stopping now in Siama, we're getting back into the higher grade materials and we should have a stronger quarter at the Q4 here, which will catch up a lot of this metal that we're presently behind. And as I mentioned, we've spent a little less capital, but we've dispelled about 22.6 million capital, a lot of that on the SSCP. Moving over to slide eight, if we talk about the oxide plant conversion, you can see the diagram there showing the infrastructure that we've put in place now. If you remember, I reported last quarter that we managed to finish all the concrete work before it started raining. and we haven't put all the high steel work in place while it was raining, so from a safety point of view, we've had no accidents or LTIs on those areas, and the project is progressing well. All the long lead items are now ordered, and we're waiting for those. The mill has virtually arrived now in various boxes, so we'll start assembling that in Q4. As I mentioned, the project is on track to commission in mid-2025, when we're going to see higher-grade sulfides replacing the lower-grade oxides. Moving on to slide 9, as I mentioned, MAKO. During the month of September, we had a one-in-a-thousand-year rainstorm, which had a significant impact on our pit. If you remember, we're in the last two years of mining this pit, so we're down at the bottom. And we had, what a one in 1,000 year rainstorm means, we had about 250 odd millimetres of rain on a couple of days. But if you look at the graph on the left there, you can see that even though we haven't finished the year yet, we're well over the 1.1 metre of rain that we normally get in a year. In fact, over the month of September, we got 569 millimetres. Now, mines of these types, you always design in for one in 100 years. A one in 1,000 years is exactly double what you actually have designed in for. So the two pumps that the contractor had to pump water out just could not cope. To get additional pumps normally takes you six months, but we managed to find pumps from other mines, and we managed to get those on site during September. So we believe, as we sit now, during October, we've recovered most of that position. And it's also worth noting that given that we'll be finishing mining in mid next year, this will be the last rainy season this pit actually has to handle. But the big lesson here, not only for us, but the mining industry, is we need to focus on one in 1,000 year rainstorms going forward. so we don't hit these issues again. Moving to slide 10, if you remember last quarter, I said I expected to be putting two gram a ton through the mill, and you can see we didn't quite make that. And that was a combination of not being able to mine the bottoms of the pit there, which are the higher grade sections, but also we found that some of the material coming out of the sides of the pits was 15% lower in grade than we expected. And when I say expected, this compared to the resource model that we did in 2021. Our grade control is showing us about 15% lower. So as a result of this, we managed to use a lot of our stockpile material to put through the plant. So we didn't lose out on tonnage. We lost a bit on grade, but we didn't lose on recovery. But obviously, we were slightly down on gold poured. Given the slightly lower grade material, and we're back in the bottom of the pit now, we are saying that we think we are going to, this 15% lower grade could continue. So we're forecasting at this stage lower than expected guidance for Mako. If you remember, we said we thought Mako could originally produce about 145,000 ounces. We're conservatively saying now 130,000 ounces. So if we add the 130,000 ounces to the SIAM as 215, this takes us to our guidance level of 345. It is the lower end of the guidance level, but we think we're comfortable of meeting that at this stage. Given the $145,000, we think that this will put a little bit of pressure on our costs. We think we'll be at the higher end of the costs, the ASICs, and this is essentially because of a new headwind there, which is the extra royalty that we're paying in Marley, given that our gold price now has increased above the $2,500 an ounce. There is good news, however, still on the capital side, we think we're going to be well under on our capital because of the deferral of capital for next year. So we think it's going to be a good year all in and good from a cash flow point of view. Moving on to slide 11, the exploration update. As I mentioned, this is getting very exciting now. The Marley Extension Project, that is our number one exploration project, as you all know. The Mako Pit, as I mentioned, is finishing up in the middle of next year on the mining. We have two and a half years of stockpile, and the plan is to turn this Tomber and Koto project into a mine. The challenge is obviously to turn that pit to account before we finish the stockpile. And I'm really excited about the progress we've made. We've declared a resource there of 571,000 ounces. This is a mine. If I look at the strip ratios there, they are low, less than 3 to 1. It's reasonable grades. The material is friable, so it doesn't need a lot of energy to break it down in the mill. And we've only drilled at this stage down to about 150 metres depth. We know it's extending and we're drilling it as we speak now to below 200 metres to actually increase this resource. We are bringing this project to a decision-making point, an investment decision, hopefully by Q1, because we are running the engineering in parallel with the drilling. So we've actually started our geotech drilling already on this project. In Mali, we're still doing a lot of exploration there. We're looking both for further oxide, for looking for upgrading a lot of our sulfides, and this all really to underpin the new Phase 2 project that we've talked about for 400,000 ounces, which I still believe is on the cards later on in this decade. And then at Guinea, exciting work there, found this resource of 343,000 ounces. We have stopped work there really to focus on Tombrancoto. However, we will be gearing up in the new year to extend that. And we believe that's a really exciting frontier for us to move into. Looking at slide 12, this is the Ivory Coast project, the Ladebo project. This is a private company. As I mentioned, we've always been very keen on this project, and we've managed to put a deal together. Very excited about this. It's in the right part of the world. It's on the barium sediments, and they do have an inferred mineral resource of 400,000 ounces. They also have a lot of upside potential that we recognised several years ago, so we're very excited to be moving into this one next year. And at the next meeting, I will be reporting on the progress that we will be making on the Code of Wire. Thank you. And with that, I will hand over to Chris, who will take you through the financials.

Thank you, Terry. And now moving on to slide 14. Look, we're really excited about the operational performance of the business and thus the financial results of the company. For Q3, we sold 95,000 ounces of gold, an increase of 10,000 ounces versus what we actually produce. The reason we sold more gold than what we produced is because at the end of Q2, we're staying on about 10,000 ounces of stock because in Q2, the quarter ended on a weekend and therefore we were not able to sell all the gold that we had made. But more importantly, looking at the full year numbers, we think we're going to produce and sell about 345,000 ounces of gold, which is at the very bottom end of the guidance. But we're still very pleased with this performance because the difference is really due to MACO as a result of the rains in Q3. When looking at our cost, ASIC and Q3 was at $1,452, an increase over Q2. But also, as Terry highlighted, a big driver is the increase in ASIC as a result of the higher royalty rates that we're seeing in Mali as a result of the higher gold price. But then when looking at the four-year guidance, we're likely also to be at the very upper end of the guidance for ASIC at around $1,400, which is in line with expectations due to higher royalty rates. When looking at CapEx for the quarter, we spent $26.6 million, an increase over Q2. But again, when thinking about the full-year numbers, we're likely to be at the very bottom end of the range at around $115 million of total CapEx spend or even $110 million. On the exploration side of the equation, we spend a little bit less in Q3 versus Q2, $6.3 million versus $7.6 million. But we do expect on exploration, spend will be $20 million, then slightly higher than the guidance for the year. So moving over to slide 15, we'd like to talk to you about some of the substantial free cash flow generation of the business. Near to date, we've generated $188 million of operating free cash flow. This is a substantial increase versus last year, where at the same time we had only generated $105 million. This increase was driven predominantly by the gold price environment, but we are working hard to reduce our costs across the business. Notwithstanding today's environment, we are paying higher royalty rates as a result of the higher gold price environment. So if you look at the cash flow waterfall chart on the top right, moving from left to right, I spoke about the operating cash flows. As you can see, CapEx today is at $71 million, a substantial increase over last year. But again, this is a result of the increase in CapEx related to the expansion project at SIAMA. And as I mentioned before in the previous page, we do expect full-year CapEx to be around $110 million. Exploration, year-to-date, 16.2. But like I said, for the full year, we're expecting that number to be about $20 million. On the working capital side of the equation, you can see a positive working capital number of $16.5 million for the year-to-date number. And this reflects a lot of hard work that we've been putting through the business in reducing our inventory levels and increasing accounts payables to industry standards. However, one very negative impact to the business, which is reflective in all of these numbers, relates to tax leakage that we're seeing across the company as a result of the increased fiscal pressures that we see both unfortunately in Mali and in Senegal. Both countries are economically struggling and therefore have been slow in returning our VAT refunds and we've seen increased numbers of tax audits across the board. When looking at banks and repayments of debts and also receipt of payments for the Ravenswood sale, we've generated substantial cash across all these elements. So we paid back our financing facilities in Q1 and then we worked hard with EMR to get $50 million Australian dollars into the business in order to settle the Ravenswood payments. So at this stage, when we look at our cash balance, we're sitting today at $188 million of gross cash on our balance sheet. So what does this all mean? When looking at the net cash progression on the bottom right, you can see that since the beginning of the year, the business has generated well over $110 million of cash since the beginning of this year. So today, with our gross cash of $188 million, and our availability in our financing facilities, the company is sitting with excess liquidity of over $250 million, which gets us very excited in being able to attract both organic and inorganic growth opportunities. So with this, I'll hand it back over to Terry for some concluding remarks.

Thank you, Chris. And in summary, I think this is going to be a great year for us. We've had three and a half years of tough decision making and we've actually got through and we're in the position where we can truly benefit now from the gold prize. We are fully focused on the organic growth of this business, as we've outlined here, and that's all about the Sayama expansion, the Mako extension, and the increased jurisdictions for exploration. And I certainly believe that we've got the team in place now that can deliver on all these major objectives for us. Thank you.