Last checked at 24 Feb 2023 07:00
Appendix 4E
Preliminary Final Report
For the year ended 31 December 2022
24 February 2023
Reporting Period
The reporting period is the year ended 31 December 2022 with the corresponding reporting period being for the year ended 31 December 2021. Unless otherwise stated, all dollar figures are United States dollars ($).
Results for Announcement to the Market
12 months ended 31 December 2022 | 12 months ended 31 December 2021 | |||||
| ||||||
$'000 | $'000 | |||||
Revenue from ordinary activities | Up | 19% | to | 651,129 | 549,242 | |
Loss for the period | Down | 91% | to | (34,665) | (367,471) | |
Loss after tax attributable to members | Down | 89% | to | (34,083) | (319,203) | |
Amount per security | Franked amount per security | |||||
Dividends | ||||||
Final dividend (per share) | N/A | N/A | ||||
Record date for determining entitlements to the final dividend | N/A | N/A | ||||
Payment date for the final dividend | N/A | N/A | ||||
Franking | 0% franked | |||||
12 months ended 31 December 2022 | 12 months ended 31 December 2021 | |
$'000 | $'000 | |
Net tangible assets backing (per share)1 | 0.22 | 0.38 |
1. Net tangible assets excludes right of use assets from the reported net assets in the statement of financial position.
This Appendix 4E - Preliminary final report has not been subject to audit and there is no audit report provided. This report should be read in conjunction with the Financial Report for the period ended 31 December 2021. The Financial Report for the period ended 31 December 2022 is currently being audited by Ernst & Young and will be finalised for lodgement with ASX in March 2023.
2022 Financial and operational overview
In 2022, a total of 353,609 ounces (oz) of gold were produced (poured) at an All-In Sustaining Cost (AISC) of $1,498/oz with total gold sales of 357,447oz at an average realised price of $1,819/oz.
Further details by operation are provided below.
Financial Performance
The Group's underlying net profit after tax (before abnormal items) was $20.3 million, with a reported net loss after tax of $34.7 million. The financial performance of Resolute for the year ended 31 December 2022 is summarised below:
Profit and Loss Analysis1($'000s) | 2022Group |
| 2021Group |
Revenue | 651,129 |
| 549,242 |
Cost of sales excluding depreciation and amortisation | (411,482) | (324,984) | |
Royalties and other operating expenses | (62,016) | (59,066) | |
Administration and other corporate expenses | (14,850) | (16,809) | |
Exploration and business development expenditure | (14,615) | (18,484) | |
EBITDA | 148,166 |
| 129,899 |
Depreciation and amortisation | (85,894) | (120,993) | |
Net interest and finance costs | (15,273) | (11,741) | |
Inventories NRV movements and obsolete consumables | (36,077) | (44,258) | |
Fair value movements and unrealised treasury transactions | (13,345) | (27,697) | |
Other | 1,767 | (3,481) | |
Impairment expense | - | (227,464) | |
Gain on disposal | - | 2,707 | |
Indirect tax expense | (13,449) | (24,760) | |
Net loss before tax | (14,105) |
| (327,789) |
Income tax expense | (20,560) | (39,682) | |
Reported net loss after tax | (34,665) |
| (367,471) |
Abnormal items2: |
| ||
+ Disputed Senegalese tax expense | 23,926 | 7,132 | |
+ Historical tax adjustments | 14,809 | 39,334 | |
+ Impairment of obsolete consumables | 16,249 | - | |
+ Impairment expense | - | 227,464 | |
Underlying net profit/(loss) after tax2 | 20,319 |
| (93,541) |
1. Amounts presented above are aggregate balances of certain line items presented in the Consolidated Statement of Comprehensive Income.
2. This financial performance indicator is a non-IFRS measure. It is used internally by management to assess the performance of the business
and is therefore considered relevant to readers of this document.
Group EBITDA of $148.2 million 2022 was a 14% improvement on the comparative period reflecting:
· Higher revenue of $651.1 million from gold sales of 357,447oz (up 13%) at an average realised price of $1,819/oz (up 5%). The higher ounces sold reflects increased gold production (up 19%) due to:
o improved Sulphide processing performance with gold recovered up 4% (gold poured up 19%);
o higher gold recovered from both Syama Oxide (up 8%) and Mako (up 2%); and
o significant drawdown from gold in circuit of 21,752oz (2021: 3,084oz).
· Higher cost of sales due to significant increases in fuel and consumables prices as well as the impact of non-cash adjustments for bullion and gold in circuit (as a result of the continued drawdown of material).
· Lower exploration and business development expenditure as a result of prior year transaction costs associated with divestments (sale of Bibiani and Cote D'Ivoire exploration assets).
The following abnormal items have been added back to the reported net loss in arriving at the underlying net profit of $20.3 million for the year ended 31 December 2022:
· Disputed Senegalese tax expense ($23.9m), relates to an ongoing dispute with the Senegalese tax authorities regarding PMC's tax exoneration status;
· Historical tax adjustments ($14.8m), included within this amount is $3.0m expected to be cash settled, with the remainder expected to be settled with VAT and other tax credits;
· Provision for obsolete consumables ($16.2m), with $2.3m pertaining to Mako and the remainder to Syama.
Financial Position
Net debt decreased by $197.2 million to $31.6 million at 31 December 2022 (31 December 2021:$228.8 million). Total borrowings at 31 December 2022 were $125.6 million comprising $80.0 million drawn on the Term Loan Facility and RCF, and overdraft facilities in Mali and Senegal of $45.6 million. Available liquidity of $189.0 million includes cash and bullion of $94.0 million and $95.0 million of undrawn RCF. As at the date of this release, the RCF has been fully repaid with $100 million available to be redrawn.
Resolute continued to invest in the business in 2022 with spending on development, property, plant, and equipment totalling $63.0 million (2021: $56.9 million) including outlays for tailings facilities across both sites, capitalised stripping costs and project capital at Syama.
Syama Gold Mine, Mali
2022 production from the Syama Sulphide circuit was 161,479oz at an AISC of $1,410/oz. A 19% increase in production at a steady AISC compared to the prior year ($1,406/oz). Ore mined increased from 2.2Mt to 2.3Mt while the roaster recorded its highest ever throughput, processing 175.2kt. The Syama sulphide operation is expected to continue to benefit from the successful planned maintenance shutdown which was completed in early April 2022.
Production from the Syama Oxide operations was 62,165oz at an AISC of $1,801/oz. The oxide operations continued lower grade mining at several satellite pits. Gold poured for the year increased 9%, with momentum picking up in the second half and the highest gold production occurring in the December quarter.
Mako Gold Mine, Senegal
2022 production from Mako was 129,425oz at an AISC of $1,318/oz. Tonnes processed steadily increased over the year reflecting increased plant uptime and modifications to the SAG Mill configuration. The increase in AISC reflected a higher volume of material mined, which impacted mining costs and continued pressure on consumables amid industry wide inflationary pressures.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
$'000 | Note | 2022
| 2021 |
Revenue from contracts with customers for gold and silver sales | 1 | 651,129 | 549,242 |
Costs of production relating to gold sales | 1 | (411,482) | (324,984) |
Gross profit before depreciation, amortisation and other operating costs | 239,647 | 224,258 | |
Depreciation and amortisation of mine assets |
1 |
(83,706) |
(118,621) |
Other operating costs relating to gold sales | 1 | (62,016) | (59,066) |
Gross profit from operations | 93,925 | 46,571 | |
Interest income | 1 | 5,513 | 5,141 |
Other income | 1 | 4,549 | 3,248 |
Exploration and business development | 1 | (14,615) | (18,484) |
Impairment of exploration and evaluation assets | 1 | - | (5,068) |
Impairment of mine properties and property, plant and equipment | 1 | - | (222,396) |
Administration and other corporate expenses | 1 | (14,393) | (15,687) |
Share based payments expense | 1 | (457) | (1,122) |
Treasury - realised losses | 1 | (1,477) | (185) |
Inventories net realisable value movements and obsolete consumables | 1 | (36,077) | (44,258) |
Fair value movements and unrealised treasury transactions | 1 | (13,345) | (27,697) |
Share of associates' losses | 1 | (1,305) | (3,838) |
Depreciation of non-mine site assets | 1 | (2,188) | (2,372) |
Finance costs | 1 | (20,786) | (16,882) |
Indirect tax expense | 1 | (13,449) | (24,760) |
Profit / (loss) before tax from operations | (14,105) | (327,789) | |
Tax expense |
1 |
(20,560) |
(39,682) |
Loss for the year from operations | (34,665) | (367,471) | |
(Loss)/gain attributable to: | |||
Members of the parent | (34,083) | (319,203) | |
Non-controlling interest | (582) | (48,268) | |
(34,665) | (367,471) | ||
Consolidated Statement of Comprehensive Income (continued)
for the year ended 31 December 2022
$'000 | Note | 2022 | 2021 |
Loss for the year (brought forward) | (34,665) | (367,471) | |
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 | (17,298) | (16,106) | |
Items that may not be reclassified subsequently to profit or loss | |||
Exchange differences on translation of foreign operations: | |||
- Non-controlling interest | 4,507 | 4,960 | |
Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax |
(717) |
(12,981) | |
Other comprehensive loss for the year, net of tax | (13,508) | (24,127) | |
Total comprehensive loss for the year | (48,173) | (391,598) | |
Total comprehensive (loss)/gain attributable to: | |||
Members of the parent | (52,098) | (348,290) | |
Non-controlling interest | 3,925 | (43,308) | |
(48,173) | (391,598) | ||
Loss per share for net loss attributable for continuing operations to the ordinary equity holders of the parent: |
cents |
cents | |
Basic loss per share | 3 | (2.85) | (28.92) |
Diluted loss per share | 3 | (2.85) | (28.92) |
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
for the year ended 31 December 2022
$'000 | Note | 2022 | 2021 (Restated)(1) |
Current assets | |||
Cash | 4 | 80,873 | 67,607 |
Other financial assets - restricted cash | 1,406 | 9,443 | |
Receivables | 5 | 48,793 | 27,812 |
Inventories | 8 | 146,430 | 156,589 |
Financial assets at fair value through other comprehensive income | - | 20,828 | |
Prepayments and other assets | 11,141 | 12,868 | |
Asset sale receivable | - | 56,495 | |
Total current assets | 288,643 | 351,642 | |
Non current assets | |||
Income tax asset | 13 | 10,545 | 11,303 |
Inventories | 8 | 42,434 | 53,918 |
Investments in associates | - | 1,365 | |
Promissory notes receivable | 40,015 | 40,207 | |
Contingent consideration receivable | 13,636 | 14,524 | |
Exploration and evaluation | 3,211 | 2,909 | |
Development | 227,121 | 264,491 | |
Property, plant and equipment | 229,735 | 229,164 | |
Right of use assets | 13,453 | 7,708 | |
Total non current assets | 580,150 | 625,589 | |
Total assets | 868,793 | 977,231 | |
Current liabilities | |||
Payables | 63,700 | 91,542 | |
Financial derivative liabilities | 1,546 | - | |
Interest bearing liabilities | 6 | 95,634 | 92,726 |
Provisions | 9 | 100,377 | 57,165 |
Lease liabilities | 3,373 | 2,991 | |
Current tax liabilities | 19,107 | 7,137 | |
Total current liabilities | 283,737 | 251,561 | |
Non current liabilities | |||
Interest bearing liabilities | 6 | 29,482 | 223,979 |
Provisions | 9 | 71,544 | 73,424 |
Deferred tax liabilities | - | 1,591 | |
Lease liabilities | 12,536 | 8,086 | |
Total non current liabilities | 113,562 | 307,080 | |
Total liabilities | 397,299 | 558,641 | |
Net assets | 471,494 | 418,590 | |
Equity attributable to equity holders of the parent | |||
Contributed equity | 7 | 882,731 | 777,021 |
Reserves | (21,956) | (3,706) | |
Retained earnings | (317,341) | (283,258) | |
Total equity attributable to equity holders of the parent | 543,434 | 490,057 | |
Non-controlling interest | (71,940) | (71,467) | |
Total equity | 471,494 | 418,590 | |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
(1) Refer to restatement of comparative information Note 13
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
$'000 | 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/ (accumulated losses) (Restated)(1) | Non-controlling interest(1) | Non-controlling interest of disposal group held for sale | Total | |
| |||||||||||
At 1 January 2022 | 777,021 | (8,631) | 4,876 | (724) | 19,813 | (19,040) | (283,258) | (71,467) | - | 418,590 | |
Loss for the year | - | - | - | - | - | - | (34,083) | (582) | - | (34,665) | |
Other comprehensive (loss)/income, net of tax | - | (717) | - | - | - | (17,298) | - | 4,507 | - | (13,508) | |
Total comprehensive (loss) | - | (717) | - | - | - | (17,298) | (34,083) | 3,925 | - | (48,173) | |
/income for the year, net of tax | |||||||||||
Shares issued (net of cost) | 105,710 | - | - | - | - | - | - | - | - | 105,710 | |
Dividends paid | - | - | - | - | - | - | - | (4,398) | - | (4,398) | |
Share based payments expense | - | - | - | - | (235) | - | - | - | - | (235) | |
At 31 December 2022 | 882,731 | (9,348) | 4,876 | (724) | 19,578 | (36,285) | (317,341) | (71,940) | - | 471,494 | |
| |||||||||||
At 1 January 2021 | 777,021 | 4,350 | 4,876 | (724) | 18,607 | (2,934) | 35,945 | (22,023) | (6,981) | 808,137 | |
Loss for the year | - | - | - | - | - | - | (319,203) | (47,929) | (339) | (367,471) | |
Other comprehensive (loss)/income, net of tax | - | (12,981) | - | - | - | (16,106) | - | 4,960 | - | (24,127) | |
Total comprehensive (loss) | - | (12,981) | - | - | - | (16,106) | (319,203) | (42,969) | (339) | (391,598) | |
/income for the year, net of tax | |||||||||||
Dividends paid | - | - | - | - | - | - | - | (6,475) | - | (6,475) | |
Share based payments expense | - | - | - | - | 1,206 | - | - | - | - | 1,206 | |
Disposal of assets held for sale | - | - | - | - | - | - | - | - | 7,320 | 7,320 | |
At 31 December 2021 | 777,021 | (8,631) | 4,876 | (724) | 19,813 | (19,040) | (283,258) | (71,467) | - | 418,590 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
(1) Refer to restatement of comparative information Note 13
Consolidated Cash Flow Statement
for the year ended 31 December 2022
$'000 | Note | 2022 | 2021 |
Cash flows from operating activities | |||
Receipts from customers | 650,591 | 549,013 | |
Payments to suppliers, employees and others | (524,706) | (451,554) | |
Exploration expenditure | (10,745) | (13,643) | |
Interest paid | (16,619) | (14,874) | |
Interest received | 214 | - | |
Indirect tax receipts/ (payments) | 164 | (14,853) | |
Income tax paid | (7,994) | (3,531) | |
Net cash flows from operating activities | 90,905 | 50,558 | |
Cash flows used in investing activities | |||
Payments for property, plant & equipment | (35,811) | (30,387) | |
Payments for development activities | (27,602) | (22,908) | |
Payments for evaluation activities | (4,372) | (2,926) | |
Proceeds from sale of asset | 60,000 | 30,740 | |
Payments relating to asset held for sale | - | (5,445) | |
Proceeds from sale of investment in associate | 4,534 | - | |
Proceeds from sale of financial assets at fair value through other comprehensive income | 19,148 | 2,289 | |
Payments for sale of financial assets at fair value through other comprehensive income | - | (1,179) | |
Other investing activities | (725) | (697) | |
Net cash flows from/(used in) investing activities | 15,172 | (30,513) | |
Cash flows from financing activities | |||
Repayment of borrowings | (195,000) | (79,811) | |
Proceeds from finance facilities | - | 50,000 | |
Proceeds from issuing ordinary shares | 110,289 | - | |
Payments for share issue costs | (4,579) | - | |
Dividends paid to non-controlling interest | (5,089) | (5,858) | |
Repayment of principal portion of lease liability | (3,457) | (13,823) | |
Net cash flows (used in)/from financing activities | (97,837) | (49,492) | |
Net increase/(decrease) in cash and cash equivalents | 8,240 | (29,447) | |
Cash and cash equivalents at the beginning of the year | 25,237 | 55,226 | |
Exchange rate adjustment | 1,982 | (542) | |
Cash and cash equivalents at the end of the year | 35,459 | 25,237 | |
Cash and cash equivalents comprise the following: | |||
Cash at bank and on hand | 4 | 80,873 | 67,607 |
Bank overdraft | 4 | (45,414) | (42,370) |
Cash and cash equivalents at the end of the year | 35,459 | 25,237 | |
The above consolidated cash flow statement should be read in conjunction with the accompanying notes
Notes to the Preliminary Final Report
for the year ended 31 December 2022
About this Report
The preliminary final report of Resolute Mining Limited and its subsidiaries ("Resolute" or the "Group") for the year ended 31 December 2022 was authorised for issue in accordance with a resolution of directors.
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.
Basis of Preparation
This report is based on accounts that are in the process of being audited.
This report does not include all of the notes normally included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the financial report for the year ended 31 December 2021 and any public announcements made by RML during the reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
Rounding of Amounts
The Financial Report has been prepared in United States dollars and all values are rounded to the nearest thousand dollars ($'000) unless otherwise stated.
1 Segment revenues and expenses
| Unallocated (b) |
| ||||||
31 December 2022 $'000 | Mako (Senegal) | Syama (Mali) | Corporate/ Other |
Total |
| |||
Revenue | ||||||||
Gold and silver sales at spot to external customers (a) | 236,760 | 414,369 | - | 651,129 | ||||
Total segment gold and silver sales revenue | 236,760 | 414,369 | - | 651,129 | ||||
Costs of production | (129,967) | (259,386) | - | (389,353) | ||||
Gold in circuit inventories movement | (336) | (21,793) | - | (22,129) | ||||
Costs of production relating to gold sales | (130,303) | (281,179) | - | (411,482) | ||||
Royalty expense | (11,838) | (27,736) | - | (39,574) | ||||
Operational support costs | (17,714) | (4,728) | - | (22,442) | ||||
Other operating costs relating to gold sales | (29,552) | (32,464) | - | (62,016) | ||||
Administration and other corporate expenses | (4,777) | (1,160) | (8,456) | (14,393) | ||||
Share-based payments expense | - | - | (457) | (457) | ||||
Exploration, business development and impairment of investments | (4,018) | (9,578) | (1,019) | (14,615) | ||||
Earnings/(loss) before interest, tax, depreciation and amortisation | 68,110 | 89,988 | (9,932) | 148,166 | ||||
Amortisation of evaluation, development and rehabilitation costs | (30,496) | (25,520) | - | (56,016) | ||||
Depreciation of mine site properties, plant and equipment | (12,002) | (15,688) | - | (27,690) | ||||
Depreciation and amortisation relating to gold sales | (42,498) | (41,208) | - | (83,706) | ||||
Segment operating result before treasury, other income/ (expenses) and tax | 25,612 | 48,780 | (9,932) | 64,460 | ||||
Interest income | 7 | 24 | 5,482 | 5,513 | ||||
Other income | - | 14 | 4,535 | 4,549 | ||||
Interest and fees | (442) | (4,121) | (14,871) | (19,434) | ||||
Rehabilitation and restoration provision accretion | (397) | (955) | - | (1,352) | ||||
Finance costs | (839) | (5,076) | (14,871) | (20,786) | ||||
Realised foreign exchange (loss)/gain | 853 | 879 | (3,209) | (1,477) | ||||
Treasury - realised gains/(losses) | 853 | 879 | (3,209) | (1,477) | ||||
Inventories net realisable value movements and obsolete consumables | (7,004) | (29,073) | - | (36,077) | ||||
Unrealised foreign exchange (loss)/ gain | (1,016) | - | (14,025) | (15,041) | ||||
Unrealised foreign exchange loss on intercompany balances | - | - | 1,696 | 1,696 | ||||
Fair value movements and unrealised treasury transactions | (1,016) | - | (12,329) | (13,345) | ||||
Share of associates' losses | - | - | (1,305) | (1,305) | ||||
Depreciation of non-mine site assets | (175) | - | (2,013) | (2,188) | ||||
Indirect tax expense | - | (13,387) | (62) | (13,449) | ||||
Income tax expense | (13,411) | (4,178) | (2,971) | (20,560) | ||||
Profit/(Loss) for the 12 months to 31 December 2022 | 4,027 | (2,017) | (36,675) | (34,665) | ||||
1 Segment revenues and expenses (continued)
Unallocated (b) | |||||
31 December 2021 $'000 |
| Mako (Senegal) | Syama (Mali) | Corporate/ Other |
Total |
Revenue | |||||
Gold and silver sales at spot to external customers (a) | 221,478 | 327,764 | - | 549,242 | |
Total segment gold and silver sales revenue | 221,478 | 327,764 | - | 549,242 | |
Costs of production | (87,541) | (245,920) | - | (333,461) | |
Gold in circuit inventories movement | 583 | 7,894 | - | 8,477 | |
Costs of production relating to gold sales | (86,958) | (238,026) | - | (324,984) | |
Royalty expense | (11,074) | (21,863) | - | (32,937) | |
Operational support costs | (17,528) | (5,344) | (3,257) | (26,129) | |
Other operating costs relating to gold sales | (28,602) | (27,207) | (3,257) | (59,066) | |
Administration and other corporate expenses | (5,060) | (1,617) | (9,010) | (15,687) | |
Share-based payments expense | - | - | (1,122) | (1,122) | |
Exploration, business development and impairment of investments | (3,512) | (4,802) | (10,170) | (18,484) | |
Earnings/(loss) before interest, tax, depreciation and amortisation | 97,346 | 56,112 | (23,559) | 129,899 | |
Amortisation of evaluation, development and rehabilitation costs | (15,600) | (25,894) | - | (41,494) | |
Depreciation of mine site properties, plant and equipment | (40,262) | (36,865) | - | (77,127) | |
Depreciation and amortisation relating to gold sales | (55,862) | (62,759) | - | (118,621) | |
Segment operating result before treasury, other income/ (expenses) and tax | 41,484 | (6,647) | (23,559) | 11,278 | |
Interest income | 69 | - | 5,072 | 5,141 | |
Other income | - | - | 3,248 | 3,248 | |
Interest and fees | (434) | (2,854) | (13,312) | (16,600) | |
Gain on remeasurement for refinancing | - | - | 316 | 316 | |
Rehabilitation and restoration provision accretion | (165) | (433) | - | (598) | |
Finance costs | (599) | (3,287) | (12,996) | (16,882) | |
Realised foreign exchange (loss)/gain | (1,431) | 387 | 859 | (185) | |
Treasury - realised gains/(losses) | (1,431) | 387 | 859 | (185) | |
Inventories net realisable value movements and obsolete consumables | (53,188) | 8,930 | - | (44,258) | |
Unrealised foreign exchange (loss)/ gain | 635 | - | (17,120) | (16,485) | |
Unrealised foreign exchange loss on intercompany balances | - | - | (11,212) | (11,212) | |
Fair value movements and unrealised treasury transactions | 635 | - | (28,332) | (27,697) | |
Share of associates' losses | - | - | (3,838) | (3,838) | |
Depreciation of non-mine site assets | (151) | - | (2,221) | (2,372) | |
Impairment of exploration and evaluation assets | (4,808) | - | (260) | (5,068) | |
Impairment of mine properties and property, plant and equipment | (55,023) | (167,373) | - | (222,396) | |
Indirect tax expense | (9,026) | (9,874) | (5,860) | (24,760) | |
Income tax expense | (1,413) | (34,424) | (3,845) | (39,682) | |
Profit/(Loss) for the 12 months to 31 December 2021 | (83,451) | (212,288) | (71,732) | (367,471) | |
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, however this information is analysed in this format by the Chief Operating Decision maker, and forms part of the reconciliation of the results and positions of the operating segments to the financial statements.
2 Dividends paid or proposed
The company's dividend policy is, subject to board discretion, to pay a minimum of 2% of gold sales revenue as a dividend. A dividend has not been declared for the year ended 31 December 2022.
3 Earnings/(loss) per share
$'000 | 31 December 2022 | 31 December 2021 |
Basic (loss)/earnings per share | ||
(Loss)/profit attributable to ordinary equity holders for operation of the parent for basic loss per share ($'000) | (34,083) | (319,203) |
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic and diluted EPS | 1,196,856,518 |
1,103,896,747 |
cents | cents | |
Basic (loss)/earnings per share from operations (cents per share) | (2.85) | (28.92) |
Diluted (loss)/earnings per share from operations (cents per share)(1) | (2.85) | (28.92) |
Basic loss per share - continuing operations | ||
Loss attributable to ordinary equity holders for continuing operations of the parent for basic loss per share ($'000) | (34,083) |
(319,203) |
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS | 1,196,856,518 | 1,103,896,747 |
cents | cents | |
Basic loss per share from continuing operations (cents per share) | (2.85) | (28.92) |
Diluted loss per share from continuing operations (cents per share)(2) | (2.85) | (28.92) |
¹ Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for 31 December 2022 and 31 December 2021 because the result for the year was a loss.
2 Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for continuing operations for 31 December 2022 and 31 December 2021 because the result for the year was a loss.
4 Cash
31 December 2022 | 31 December 2021 | |
$'000 | $'000 | |
Cash at bank and on hand | 80,873 | 67,607 |
Reconciliation to cash flow statement | ||
For the purpose of the cash flow statement, cash and cash equivalents comprise the following at the end of each year: | ||
Cash at bank and on hand | 80,873 | 67,607 |
Bank overdraft (Note 6) | (45,414) | (42,370) |
Cash and cash equivalents at the end of the year | 35,459 | 25,237 |
5 Receivables
31 December 2022 | 31 December 2021 | |
$'000 | $'000 | |
Trade and other receivables | 37 | 441 |
Taxation receivables | 48,756 | 27,371 |
Total receivables | 48,793 | 27,812 |
The Taxation receivables balance comprises a receivable of $12.1 million (2021: $9.0 million) in relation to VAT paid by the Syama operation. Also included in the Taxation receivables is a VAT receivable of $34.9 million (2021: $10.1 million) relating to the Mako operation ("Mako VAT"). The Mako VAT represents the VAT which would be payable (and then refundable) in the event the Company is unsuccessful in extending the tax exoneration by an additional two years to July 2023. The remainder of the balance relates to Australian Goods and services tax (GST) amounts. Resolute continues to work with its legal and tax advisors to contest the position taken by the Senegalese and Malian Authorities. Refer to Note 9.
6 Interest bearing liabilities
31 December 2022 $'000 | 31 December 2021 $'000 | |
Interest bearing liabilities (current) | ||
Bank overdraft (Note 4) | 45,414 | 42,370 |
Insurance premium funding | - | 109 |
Bank borrowings | 50,220 | 50,247 |
Total Interest bearing liabilities (current) | 95,634 | 92,726 |
Interest bearing liabilities (non current) Bank borrowings |
29,482 |
223,979 |
Total Interest bearing liabilities (non current) | 29,482 | 223,979 |
7 Contributed Equity
31 December 2022 | 31 December 2021 | |
$'000 | $'000 | |
Ordinary share capital: | ||
2,129,006,569 ordinary fully paid shares (2021: 1,103,931,520) | 883,306 | 777,021 |
Movements in contributed equity, net of issuing costs: | ||
Balance at the beginning of the year | 777,021 | 777,021 |
Placement of shares to institutional and retail investors | 110,289 | - |
Share issue costs | (4,579) | - |
Balance at the end of the year | 882,731 | 777,021 |
8 Inventories
31 December 2022 | 31 December 2021 | |
$'000 | $'000 | |
Current | ||
Ore stockpiles | ||
- At cost | 27,223 | 47,054 |
- At net realisable value | 28,286 | 6,381 |
Total current ore stockpiles | 55,509 | 53,435 |
Gold in circuit - at cost | 4,186 | 22,353 |
Gold in circuit - at net realisable value | 373 | 1,503 |
Gold bullion on hand - at cost | 10,276 | 15,697 |
Gold bullion on hand - at net realisable value | - | 1,722 |
Consumables at net realisable value | 76,086 | 61,879 |
Total inventory (current) | 146,430 | 156,589 |
Non Current | ||
Ore stockpiles - at cost | 1,959 | 1,935 |
Ore stockpiles - at net realisable value | 3,279 | 6,559 |
Gold in circuit - at net realisable value | 37,196 | 45,424 |
Total inventory (non current) | 42,434 | 53,918 |
9 Provisions
31 December 2022 | 31 December 2021 | |
$'000 | $'000 | |
Current | ||
Site restoration | 1,220 | 1,795 |
Employee entitlements | 4,336 | 2,511 |
Dividend payable | 136 | 150 |
Provision for indirect taxes | 92,936 | 50,381 |
Other provisions | 1,749 | 2,328 |
Total provisions (current) | 100,377 | 57,165 |
Non Current | ||
Site restoration | 70,874 | 72,172 |
Employee entitlements | 670 | 1,252 |
Total provisions (non current) | 71,544 | 73,424 |
Resolute's subsidiaries SOMISY(Mali) and PMC(Senegal), have received demands for payment to the Local Tax Authorities in relation to Income Tax and indirect tax for the years ended 31 December 2015 to 2022.
At 31 December 2022 the total provision for indirect taxes has increased from $50.4 million to $92.9 million.
This increase is as a result of an additional $37.6 million due to the potential reduction in the Mako tax exoneration period to 5 years. This amount relates to provisions for customs duties and VAT. Whilst these amounts are recognised as provisions. Resolute is firmly of the view that it has complied with all the requirements for the extension of the tax exoneration to 7 years and will continue to work with the Senegalese authorities to resolve this matter.
The remainder of the increase relates to an additional $4.6 million of indirect tax provisions in Mali based on government demands received, with a provision recognised in line with the requirements of relevant accounting standards. Resolute continues to challenge the factual basis and validity of these demands which are strongly disputed due to fundamental misinterpretations of the application of certain taxes. Resolute continues to work with its legal and tax advisors to contest the positions taken by the Authorities.
10 Subsequent events
On 19 January 2023, the Group announced that the Syama North Resource estimate increased to 34.0 million tonnes at 2.9g/t for 3.2 million ounces of gold.
11 Impairment testing
Impairment indicator assessment
At 31 December 2022, Resolute's quoted market capitalisation was lower than its net asset carrying value. Further, Resolute noted that the impact of inflationary pressures on costs and increase in risk free rate that underpins the applicable discount rate. These factors were considered as indicators of impairment. As a result, an impairment test was performed to determine the recoverable amounts for all CGU's of the Group, being the Syama Gold Mine and the Mako Gold Mine using the fair value less cost to sell (FVLCD) method.
Syama CGU - 31 December 2022
Syama indicator assessment
Whilst Syama's 2022 forecast production remain in line with budget, as a result of the general indicators of impairment noted above, a formal impairment test was performed to determine the recoverable amount for the Syama CGU.
Key Assumptions used to determine recoverable amount
The table below summarises the key assumptions used in determining the recoverable amount:
| 31 December 2022 | 31 December 2021 |
Gold price ($/oz) | 1,735-1,534 | 1,777-1,467 |
Discount rate (post tax real) | 14.8% | 14.0% |
Unmined resources ($/oz) | $20-$58 | $20-$54 |
Gold prices are estimated with reference to external market forecasts based on a consensus view of market experts.
Discount rateIn determining the recoverable amount of assets, the future cash flows were discounted using rates based on the CGU's estimated real weighted average cost of capital, with an additional premium applied having regard to the CGU's risk profile.
Unmined resources
Unmined resources which are not included in the life‐of‐mine plan as result of the current assessment of economic returns, timing of specific production alternatives and the prevailing economic environment have been valued and included in the assessed fair value.
Operating and capital costs
Life‐of‐mine operating and capital cost assumptions are based on the Group's latest budget and life‐of mine plans. Operating cost assumptions reflect an assumption of maintaining current cost, over the long term, without including expected improvements over the life of mine.
Recognition
As a result of the analysis performed, there is no impairment loss recognised for the Syama CGU for the period ended 31 December 2022.
11 Impairment of non current assets (continued)
Mako CGU - 31 December 2022
Mako indicator assessment
Whilst Mako's 2021 forecast production and cost remain in line with budget, as a result of the general indicators of impairment noted above and the reduction in the tax exoneration period to 5 years (refer to Note 5), a formal impairment test was performed to determine the recoverable amount for the Mako CGU.
Key AssumptionsThe table below summarises the key assumptions used in the determining the recoverable amount:
| 31 December 2022 | 31 December 2021 |
Gold price ($/oz) | 1,735-1,534 | 1,777-1,467 |
Discount rate (post tax real) | 10.5% | 10.5% |
Unmined resources ($/oz) | $48 | $44 |
Gold prices are estimated with reference to external market forecasts based on a consensus view of market experts.
Discount rateIn determining the recoverable amount of assets, the future cash flows were discounted using rates based on the CGU's estimated real discount rate, with an additional premium applied having regard to the CGU's risk profile.
Unmined resourcesUnmined resources which are not included in a CGU's life‐of‐mine plan as result of the current assessment of economic returns, timing of specific production alternatives and the prevailing economic environment have been valued and included in the assessed fair value.
Operating and capital costsLife‐of‐mine operating and capital cost assumptions are based on the Group's latest budget and life‐of mine plans. Operating cost assumptions reflect an assumption of maintaining current cost, over the long term, without including expected improvements over the life of mine.
RecognitionAs a result of the analysis performed, there is no impairment loss recognised for the Mako CGU for the period ended 31 December 2022.
12 Investment in associates
The Group has 23.3% investment in Loncor Resources Inc, with a carrying value of nil as at 31 December 2022 (31 December 2021:$1.2 million).
13 Restatement of comparative information
During 2022, the Group identified information that resulted in a restatement to the prior periods. The impact on previously reported amounts is summarised in the tables below, with the restatement only affecting amounts presented in the Consolidated Statement of Financial Position.
$'000 | 31 December 2021 As Reported | Restatement | 31 December 2021 Restated |
Total current assets | 351,642 | - | 351,642 |
Non current assets | |||
Income tax asset | 18,273 | (6,970) | 11,303 |
Total non current assets | 632,559 | (6,970) | 625,589 |
Total assets | 984,201 | (6,970) | 977,231 |
Total liabilities | 558,641 | - | 558,641 |
Net assets | 425,560 | (6,970) | 418,590 |
Equity attributable to equity holders of the parent | |||
Contributed equity | 777,021 | - | 777,021 |
Reserves | (3,706) | - | (3,706) |
Retained earnings | (277,682) | (5,576) | (284,448) |
Total equity attributable to equity holders of the parent | 495,633 | (5,576) | 488,867 |
Non-controlling interest | (70,073) | (1,394) | (71,765) |
Total equity | 425,560 | (6,970) | 417,102 |