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(Alliance News) - Australia's Resolute Mining Ltd on Friday reported a steep rise in revenue and profit in what was a busy year for the company.
The company has also decided against paying a dividend for 2019, with the need to strengthen the balance sheet a priority. Shares were 15% lower Friday at midday in London at 48.78 pence each.
Resolute joined the London Stock Exchange in June 2019, and shortly after purchased the Mako gold mine in Senegal via the USD274 million purchase of Toro Gold Ltd.
This took its portfolio of producing assets to three: Mako, Syama in Mali, and Ravenswood in Queensland. Since then, the AUD300 million sale of Ravenswood has been agreed, while Bibiani, an exploration asset in Ghana, is under strategic review.
The company is also currently carrying out an AUD196 million fundraise. It has completed the AUD146 million first tranche, and on Wednesday this week said part two, an AUD23.3 million share purchase plan, has also been completed.
Revenue in 2019 was AUD770.3 million, sharply higher, by 65%, than the AUD465.7 million the year before. Resolute posted a pretax loss of AUD33.9 million, from a loss of AUD3.7 million the year before, due to a sharp rise in expenses.
Resolute announced production for 2019 in January. Output was 384,731 ounces, missing guidance of 400,000 ounces. Guidance for 2020 is for 500,000 ounces, though this does not taken into the account the proposed sale of Ravenswood.
Resolute is not paying a dividend for 2019, having last paid one for the year to June 2018. The decision not to pay one for 2019 is due to the recent equity raise and a need to strengthen the balance sheet.
"Resolute's financial performance was negatively impacted in 2019 by the ramp-up of the Syama underground mine and the structural repairs required to the Syama roaster. These operational issues, combined with various accounting treatments relating to inventory valuations and the acquisition of Toro Gold, resulted in the company recording a net loss for the period," said Chief Executive & Managing Director John Welborn.
"This disappointment is balanced by the optimism within our team for a much stronger performance in 2020, our commitment to meet current guidance, and Syama and Mako's ability to generate strong ongoing free cash flow based on the investments we have made in both assets in 2019."
By George Collard; georgecollard@alliancenews.com
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