Last checked at 24 Feb 2022 07:00
24 February 2022
Resolute Mining Limited
(Resolute or the Company)
Appendix 4E Preliminary Final Report
For the year ended 31 December 2021
Resolute Mining Limited (ASX/LSE: RSG) (Resolute or the Company) advises that its Appendix 4E Preliminary Final Report has been released to the Australian Securities Exchange.
Reporting Period
The reporting period is the year ended 31 December 2021 with the corresponding reporting period being for the year ended 31 December 2020.
Results for Announcement to the Market
12 months ended 31 December 2021
| 12 months ended 31 December 2020
| ||||||||||
$'000 | $'000 | ||||||||||
Revenue from ordinary activities (including discontinued operations) | down | 11% | to | 549,242 | 618,253 | ||||||
(Loss)/profit for the period (including discontinued operations) | up | N/A | to | (367,471) | 4,995 | ||||||
(Loss)/profit after tax attributable to members | up | N/A | to | (319,203) | 15,941 | ||||||
Amount per security | Franked amount | ||||||||||
Dividends | per security | ||||||||||
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 2021 | 12 months ended 31 December 2020 | ||
$'000 | $'000 | ||
Net tangible asset backing (per share) | 0.38 | 0.71 | |
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 2020. The Financial Report for the period ended 31 December 2021 is currently being audited by Ernst & Young and will be finalised for lodgement with ASX in March 2022.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
$'000 | Note | 2021
| 2020 (Restated)(1) |
Continuing operations | |||
Revenue from contracts with customers for gold and silver sales | 1 | 549,242 | 602,985 |
Costs of production relating to gold sales | 1 | (324,984) | (301,635) |
Gross profit before depreciation, amortisation and other operating costs | 224,258 | 301,350 | |
Depreciation and amortisation of mine assets |
1 |
(118,621) |
(172,606) |
Other operating costs relating to gold sales | 1 | (59,066) | (71,339) |
Gross profit from continuing operations | 46,571 | 57,405 | |
Interest income |
1 |
5,141 |
2,152 |
Other income | 1 | 3,248 | - |
Exploration and business development | 1 | (18,484) | (10,910) |
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 | (15,687) | (17,456) |
Share based payments expense | 1 | (1,122) | (1,178) |
Treasury - realised gains/(losses) | 1 | (185) | 867 |
Fair value movements and unrealised treasury transactions | 1 | (71,955) | 16,143 |
Share of associates' losses | 1 | (3,838) | (1,661) |
Depreciation of non-mine site assets | 1 | (2,372) | (2,725) |
Finance costs | 1 | (16,882) | (24,676) |
Other expenses | 1 | - | (88) |
Indirect tax expense | 1 | (24,760) | (24,308) |
(Loss) before tax from continuing operations | (327,789) | (6,435) | |
Tax expense |
1 |
(39,682) |
(30,045) |
(Loss) for the year from continuing operations | (367,471) | (36,480) | |
Discontinued operations |
- |
41,475 | |
Gain/(loss) for the year from discontinued operations (2) | |||
(Loss)/gain for the year | (367,471) | 4,995 | |
(Loss)/gain attributable to: | |||
Members of the parent | (319,203) | 15,941 | |
Non-controlling interest | (48,268) | (10,946) | |
(367,471) | 4,995 | ||
(1) Discontinued operations relates to the Group's Ravenswood gold mine
(2) A reclassification of net realisable value adjustments has been made in the 2020 comparatives above to present these movements below in Fair value movements and unrealised treasury transactions to ensure consistency with the presentation of these amounts in 2021.
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
$'000 | Note | 2021 | 2020 |
(Loss)/gain for the year (brought forward) | (367,471) | 4,995 | |
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 | (16,106) | 45,915 | |
Items that may not be reclassified subsequently to profit or loss | |||
Exchange differences on translation of foreign operations: | |||
- Non-controlling interest | 4,960 | (5,651) | |
Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax |
(12,981) |
16,638 | |
Other comprehensive (loss)/gain for the year, net of tax | (24,127) | 56,902 | |
Total comprehensive (loss)/gain for the year | (391,598) | 61,897 | |
Total comprehensive (loss)/gain attributable to: | |||
Members of the parent | (348,290) | 78,494 | |
Non-controlling interest | (43,308) | (16,597) | |
(391,598) | 61,897 | ||
Earnings (loss) per share for net income (loss) attributable for operations to the ordinary equity holders of the parent: |
cents |
cents | |
Basic (loss)/gain per share | 3 | (28.92) | 1.62 |
Diluted (loss)/gain per share | 3 | (28.92) | 1.62 |
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 | (28.92) | (2.60) |
Diluted (loss) per share | 3 | (28.92) | (2.60) |
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 2021
$'000 | Note | 2021 | 2020 |
Current assets | |||
Cash | 4 | 67,607 | 88,591 |
Other financial assets - restricted cash | 9 | 9,443 | - |
Receivables | 5 | 27,812 | 78,852 |
Inventories | 8 | 156,589 | 158,929 |
Financial assets at fair value through other comprehensive income | 9 | 20,828 | 36,004 |
Assets held for sale | - | 80,608 | |
Prepayments and other assets | 12,868 | 8,785 | |
Asset sale receivable | 10 | 56,495 | - |
Current income tax asset | - | 17,911 | |
Total current assets | 351,642 | 469,680 | |
Non current assets | |||
Income tax asset | 18,273 | - | |
Inventories | 8 | 53,918 | 67,923 |
Investments in associates | 12 | 1,365 | 4,649 |
Promissory notes receivable | 40,207 | 40,262 | |
Contingent consideration receivable | 14,524 | 15,417 | |
Deferred tax assets | - | 10,081 | |
Exploration and evaluation | 1,699 | 6,469 | |
Development | 265,701 | 495,281 | |
Property, plant and equipment | 229,164 | 292,678 | |
Right of use assets | 7,708 | 22,518 | |
Total non current assets | 632,559 | 955,278 | |
Total assets | 984,201 | 1,424,958 | |
Current liabilities | |||
Payables | 91,542 | 83,832 | |
Financial derivative liabilities | 11 | - | 415 |
Interest bearing liabilities | 6 | 92,726 | 62,558 |
Provisions | 11 | 62,854 | 75,720 |
Lease liabilities | 2,991 | 11,249 | |
Liabilities associated with the assets held for sale | - | 8,821 | |
Total current liabilities | 250,113 | 242,595 | |
Non current liabilities | |||
Interest bearing liabilities | 6 | 223,979 | 273,613 |
Provisions | 11 | 74,872 | 71,863 |
Deferred tax liabilities | 1,591 | 9,422 | |
Lease liabilities | 8,086 | 12,358 | |
Total non current liabilities | 308,528 | 367,256 | |
Total liabilities | 558,641 | 609,851 | |
Net assets | 425,560 | 815,107 | |
Equity attributable to equity holders of the parent | |||
Contributed equity | 7 | 777,021 | 777,021 |
Reserves | (3,706) | 24,175 | |
Retained earnings | (277,682) | 41,521 | |
Total equity attributable to equity holders of the parent | 495,633 | 842,717 | |
Non-controlling interest | (70,073) | (20,629) | |
Non-controlling interest of disposal group held for sale | - | (6,981) | |
Total equity | 425,560 | 815,107 | |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
$'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) | Non-controlling interest | Non-controlling interest of disposal group held for sale | Total | |
At 1 January 2021 | 777,021 | 4,350 | 4,876 | (724) | 18,607 | (2,934) | 41,521 | (20,629) | (6,981) | 815,107 | |
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) | |
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) | (277,682) | (70,073) | - | 425,560 | |
At 1 January 2020 | 639,859 | (12,288) | 4,876 | (724) | 17,077 | (48,849) | 25,580 | (1,436) | - | 624,095 | |
Gain/(loss) for the year | - | - | - | - | - | - | 15,941 | (10,946) | - | 4,995 | |
Other comprehensive (loss)/income, net of tax | - | 16,638 | - | - | - | 45,915 | - | (5,651) | - | 56,902 | |
Total comprehensive (loss) | - | 16,638 | - | - | - | 45,915 | 15,941 | (16,597) | - | 61,897 | |
/income for the year, net of tax | |||||||||||
Shares issued (net of cost) | 137,162 | - | - | - | - | - | - | - | - | 137,162 | |
Dividends paid | - | - | - | - | - | - | - | (9,577) | - | (9,577) | |
Share based payments expense | - | - | - | - | 1,530 | - | - | - | - | 1,530 | |
Disposal of assets held for sale | 6,981 | (6,981) | - | ||||||||
At 31 December 2021 | 777,021 | 4,350 | 4,876 | (724) | 18,607 | (2,934) | 41,521 | (20,629) | (6,981) | 815,107 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Cash Flow Statement
for the year ended 31 December 2021
$'000 | Note | 2021 | 2020 |
Cash flows from operating activities | |||
Receipts from customers | 549,013 | 617,218 | |
Payments to suppliers, employees and others | (456,999) | (496,999) | |
Exploration expenditure | (13,643) | (6,052) | |
Interest paid | (14,874) | (20,221) | |
Interest received | - | 616 | |
Indirect tax payments | (9,026) | - | |
Income tax paid | (9,358) | (32,610) | |
Settlement of Taurus royalty | - | (12,000) | |
Net cash flows from operating activities | 45,113 | 49,952 | |
Cash flows used in investing activities | |||
Payments for property, plant & equipment | (30,387) | (49,724) | |
Payments for development activities | (22,908) | (35,455) | |
Payments for evaluation activities | (2,926) | (5,799) | |
Proceeds from sale of asset | 30,740 | 29,916 | |
Proceeds/ (repayments) relating to assets held for sale | - | 5,445 | |
Proceeds from sale of financial assets at fair value through other comprehensive income | 2,289 | 1,145 | |
Payments for sale of financial assets at fair value through other comprehensive income | (1,179) | (5,603) | |
Other investing activities | (697) | (418) | |
Net cash flows used in investing activities | (25,068) | (60,493) | |
Cash flows from financing activities | |||
Repayment of borrowings | (29,811) | (202,963) | |
Proceeds from finance facilities | - | 110,000 | |
Proceeds from issuing ordinary shares | - | 137,428 | |
Payments for share issue | - | (266) | |
Dividends paid to non-controlling interest | (5,858) | (9,577) | |
Repayment of lease liability | (13,823) | (18,012) | |
Net cash flows from financing activities | (49,492) | 16,610 | |
Net (decrease)/increase in cash and cash equivalents | (29,447) | 6,069 | |
Cash and cash equivalents at the beginning of the year | 55,226 | 48,237 | |
Exchange rate adjustment | (542) | 920 | |
Cash and cash equivalents at the end of the year | 25,237 | 55,226 | |
Cash and cash equivalents comprise the following: | |||
Cash at bank and on hand | 4 | 67,607 | 88,591 |
Bank overdraft | 4 | (42,370) | (33,365) |
Cash and cash equivalents at the end of the year | 25,237 | 55,226 | |
The above consolidated cash flow statement should be read in conjunction with the accompanying notes
The Group had non-cash offset of VAT credits receivable from the Mali Tax Authorities against previously recognised provision for the tax years ended 31 December 2015 to 2020 amounting to $56.6m.
Notes to the Preliminary Final Report
For the year ended 31 December 2021
About this Report
The preliminary final report of Resolute Mining Limited and its subsidiaries ("Resolute" or the "Group") for the year ended 31 December 2021 was authorised for issue in accordance with a resolution of directors.
Resolute Mining Limited (the parent) is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange and the London Stock Exchange.
Basis of Preparation
This report is based on accounts that are in the process of being audited.
This report does not include all of the notes normally included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the financial report for the year ended 31 December 2020 and any public announcements made by RML during the reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
Rounding of Amounts
The Financial Report has been prepared in United States dollars and all values are rounded to the nearest thousand dollars ($'000) unless otherwise stated.
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 | (52,553) | 8,930 | (28,332) | (71,955) | |
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) | |
Loss for the 12 months to 31 December 2021 | (83,451) | (212,288) | (71,732) | (367,471) | |
1 Segment revenues and expenses (continued)
Unallocated (b) | ||||
31 December 2020 (Restated) $'000 | Mako (Senegal) | Syama (Mali) | Corporate/ Other |
Total |
Revenue | ||||
Gold and silver sales at spot to external customers (a) | 274,400 | 328,585 | - | 602,985 |
Total segment gold and silver sales revenue | 274,400 | 328,585 | - | 602,985 |
Costs of production | (59,019) | (236,519) | - | (295,538) |
Gold in circuit inventories movement | (5,578) | (519) | - | (6,097) |
Costs of production relating to gold sales | (64,597) | (237,038) | - | (301,635) |
Royalty expense | (13,720) | (23,365) | - | (37,085) |
Operational support costs | (18,470) | (12,304) | (3,480) | (34,254) |
Other operating costs relating to gold sales | (32,190) | (35,669) | (3,480) | (71,339) |
Administration and other corporate expenses | (3,717) | (3,266) | (10,473) | (17,456) |
Share-based payments expense | - | - | (1,178) | (1,178) |
Exploration, business development and impairment of investments | (1,624) | (2,512) | (6,774) | (10,910) |
Earnings/(loss) before interest, tax, depreciation and amortisation | 172,272 | 50,100 | (21,905) | 200,467 |
Amortisation of evaluation, development and rehabilitation costs | (20,012) | (20,116) | - | (40,128) |
Depreciation of mine site properties, plant and equipment | (67,853) | (63,335) | (1,290) | (132,478) |
Depreciation and amortisation relating to gold sales | (87,865) | (83,451) | (1,290) | (172,606) |
Segment operating result before treasury, other income/(expenses) and tax |
84,407 |
(33,351) |
(23,195) |
27,861 |
Interest income | 431 | 300 | 1,421 | 2,152 |
Interest and fees | (3,459) | (1,493) | (14,235) | (19,187) |
Loss on remeasurement for refinancing | - | - | (4,711) | (4,711) |
Rehabilitation and restoration provision accretion | (386) | (392) | - | (778) |
Finance costs | (3,845) | (1,885) | (18,946) | (24,676) |
Realised foreign exchange (loss)/gain | 912 | (381) | 336 | 867 |
Treasury - realised gains/(losses) | 912 | (381) | 336 | 867 |
Inventories net realisable value movements and obsolete consumables | (5,304) | 5,192 | 287 | 175 |
Unrealised foreign exchange (loss)/ gain | (1,650) | 5 | 33,133 | 31,488 |
Unrealised loss on derivative financial liability | (1,167) | - | - | (1,167) |
Unrealised foreign exchange loss on intercompany balances | - | - | (14,353) | (14,353) |
Fair value movements and unrealised treasury transactions | (8,121) | 5,197 | 19,067 | 16,143 |
Other expenses | - | - | (88) | (88) |
Share of associates' losses | - | - | (1,661) | (1,661) |
Depreciation of non-mine site assets | (133) | - | (2,592) | (2,725) |
Indirect tax expense | - | (24,308) | - | (24,308) |
Income tax (expense)/benefit | (15,768) | (4,184) | (10,093) | (30,045) |
Profit/(loss) for the 12 months to 31 December 2020 | 57,883 | (58,612) | (35,751) | (36,480) |
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.
c) Segment note references continuing operations
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 2021.
3 Earnings/(loss) per share
$'000 | 31 December 2021 | 31 December 2020 |
Basic (loss)/earnings per share | ||
(Loss)/profit attributable to ordinary equity holders for operation of the parent for basic loss per share ($'000) | (319,203) | 15,941 |
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic and diluted EPS |
1,103,896,747 | 981,553,095 |
cents | cents | |
Basic (loss)/earnings per share from operations (cents per share) | (28.92) | 1.62 |
Diluted (loss)/earnings per share from operations (cents per share)(1) | (28.92) | 1.62 |
Basic loss per share - continuing operations | ||
Loss attributable to ordinary equity holders for continuing operations of the parent for basic loss per share ($'000) |
(319,203) |
(25,534) |
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS |
1,103,896,747 |
981,553,095 |
cents | cents | |
Basic loss per share from continuing operations (cents per share) | (28.92) | (2.60) |
Diluted loss per share from continuing operations (cents per share)(2) | (28.92) | (2.60) |
1 Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for 31 December 2021 because the result for the year was a loss. For 31 December 2020, the performance rights outstanding are not dilutive as performance conditions were not met at 31 December 2020.
2 Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for continuing operations for 31 December 2021 and 31 December 2020 because the result for the year was a loss.
4 Cash
31 December 2021 | 31 December 2020 | |
$'000 | $'000 | |
Cash at bank and on hand | 67,607 | 88,591 |
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 | 67,607 | 88,591 |
Bank overdraft (Note 6) | (42,370) | (33,365) |
Cash and cash equivalents at the end of the year | 25,237 | 55,226 |
5 Receivables
31 December 2021 | 31 December 2020 | |
$'000 | $'000 | |
Trade and other receivables | 441 | 258 |
Taxation receivables | 27,371 | 78,594 |
Total receivables | 27,812 | 78,852 |
During the year Resolute's subsidiary SOMISY, has received a letter from the Mali Tax Authorities notifying the company that they have offset VAT credits against previously recognised provision for the tax years ended 31 December 2015 to 2020 amounting to $56.6m. As at 31 December 2021 this notification of offset has been reflected in the above amounts in line with the requirements of the accounting standards. Resolute continues to work with its legal and tax advisors to contest the position taken by the Authorities. Additionally, at 31 December 2021, Resolute has recognised $10.1m of VAT assets for the Mako operations due to the reduction in the tax exoneration period to 5 years. Refer to Note 10.
6 Interest bearing liabilities
31 December 2021 $'000 | 31 December 2020 $'000 | |
Interest bearing liabilities (current)
Bank overdraft (Note 4) Insurance premium funding Bank borrowings |
42,370 109 50,247 |
33,365 483 28,710 |
Total Interest bearing liabilities (current) | 92,726 | 62,558 |
Interest bearing liabilities (non current) Bank borrowings |
223,979 |
273,613 |
Total Interest bearing liabilities (non current) | 223,979 | 273,613 |
7 Contributed Equity
31 December 2021 | 31 December 2020 | |
$'000 | $'000 | |
Ordinary share capital: | ||
1,103,931,520 ordinary fully paid shares (2020: 1,103,892,706) | 777,021 | 777,021 |
Movements in contributed equity, net of issuing costs: | ||
Balance at the beginning of the year | 777,021 | 639,859 |
Placement of shares to institutional investors | - | 137,428 |
Share issue costs | - | (266) |
Balance at the end of the year | 777,021 | 777,021 |
8 Inventories
31 December 2021 | 31 December 2020 | |
$'000 | $'000 | |
Current | ||
Ore stockpiles | ||
- At cost | 47,054 | 71,082 |
- At net realisable value | 6,381 | 4,237 |
Total current ore stockpiles | 53,435 | 75,319 |
Gold in circuit - at cost | 22,353 | 23,038 |
Gold in circuit - at net realisable value | 1,503 | 2,745 |
Gold bullion on hand - at cost | 15,697 | 9,887 |
Gold bullion on hand - at net realisable value | 1,722 | - |
Consumables at cost | 61,879 | 47,940 |
Total inventory (current) | 156,589 | 158,929 |
Non Current | ||
Ore stockpiles - at cost | 1,935 | 2,803 |
Ore stockpiles - at net realisable value | 6,559 | 26,695 |
Gold in circuit - at net realisable value | 45,424 | 38,425 |
Total inventory (non current) | 53,918 | 67,923 |
9 Other financial assets
31 December 2021 $'000 | 31 December 2020 $'000 | |
Financial assets at fair value through other comprehensive income (current) |
| |
Shares at fair value- listed | 20,828 | 36,004 |
Other financial assets - restricted cash (current) |
| |
Environmental bond - restricted cash (face value approximates fair value) | 518 | - |
Restricted cash1 | 8,925 | - |
Total other financial assets - restricted cash (current) | 9,443 | - |
1) this balance relates to an overpayment received on a gold sale at 31 December 2021. The amount was returned immediately post year end.
10 Asset sale receivable
This balance represents the outstanding amounts receivable from the sale of the Bibiani gold mine amounting to $56.5m. This balance was initially recognised at fair value less transaction costs and subsequently at amortised cost. The balance of the consideration is receivable in two equal instalments of $30.0m on or before six and twelve months following completion.
11 Provisions
31 December 2021 | 31 December 2020 | |
$'000 | $'000 | |
Current | ||
Site restoration | 347 | 352 |
Employee entitlements | 2,511 | 4,922 |
Dividend payable | 150 | 104 |
Withholding taxes | - | 237 |
Provision for indirect taxes | 50,381 | 68,533 |
Provision for direct taxes | 7,137 | - |
Other provisions | 2,327 | 1,572 |
Total provisions (current) | 62,854 | 75,720 |
Non Current | ||
Site restoration | 73,620 | 71,335 |
Employee entitlements | 1,252 | 528 |
Total provisions (non current) | 74,872 | 75,863 |
Resolute's subsidiaries SOMISY and PMC, have received demands for payment to the Local Tax Authorities in relation to Income Tax and Value Added Tax (VAT) for the tax years ended 31 December 2015 to 2020.
At 31 December 2021 the company has recognised an additional $30.9m of indirect tax provisions in Mali in line with the correspondences received during the financial year along with the requirements of the accounting standards. As noted above, the Group has recorded approximately $56.6m of demands offsets against carried forward VAT receivables. 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.
Due to the reduction in the Mako tax exoneration period to 5 years, Resolute has recognised tax provisions comprising $10.1m relating to the VAT receivable (refer Note 5) and $8.2m in tax provisions for income tax and duties. These amounts are recognised as provisions, however Resolute is firmly of the view that it has complied with all the requirements for the extension of the tax exoneration and will continue to work with the Senegalese authorities to resolve this matter.
12 Investments in associates
31 December 2021 31 December 2020 31 December 2021 31 December 2020
Continuing Operations Turaco Gold Ltd
(formally Manas Resources Ltd) Loncor Gold Inc
Shares held in associates (No. of shares) |
68,248,471 |
682,484,709 |
31,450,000 |
29,650,000 |
Percentage of ownership (%) | 16.01%(a) | 24.73% | 23.61% | 26.42% |
$'000 | $'000 | $'000 | $'000 | |
Carrying Value | - | 1,038 | 1,180 | 3,097 |
(a) Resolute holds a position on the board of directors and has significant influence over Turaco Gold Ltd.
13 Subsequent events
On 31 January 2022, the Group completed the sale of its shares in Orca Gold Inc (Orca) to Perseus Mining Limited for total consideration of $13.7 million.
On 17 February 2022, the Group announced that the Tabakoroni Measured and Indicated Mineral Resource estimate increased to 9.2 million tonnes at 4.4g/t for 1.3 million ounces of gold a 40% increase over previous estimate.
On 22 February 2022, the Group received $30 million for the sale of the Bibiani Gold Mine, the final $30 million is receivable in August 2022.
14 Impairment testing
Impairment indicator assessment
At 30 June 2021, Resolute's quoted market capitalisation was lower than its net asset carrying value. Further, Resolute noted that there was a reduction in gold prices and increase in risk free rate that underpins the applicable discount rate. These factors were considered as indicators of impairment. As a result, an impairment test was performed to determine the recoverable amounts for all CGU's of the Group, being the Syama Gold Mine and the Mako Gold Mine using the fair value less cost to sell (FVLCD) method.
At 31 December 2021, indictors of impairment were again identified for the Group as Resolute's quoted market capitalisation was lower than its net asset carrying value at 31 December. As a result, an impairment test was performed to determine the recoverable amounts for all CGU's, the results at 31 December 2021 are outline below.
Syama CGU - 30 June 2021
Syama indicator assessment
At 30 June 2021, in addition to the impairment indicators noted above, Resolute also revised its CY21 production and cost guideline for Syama. These factors collectively were considered to be indicators of impairment and as such a formal impairment test was performed to determine the recoverable amount for the Syama CGU.
Key Assumptions used to determine recoverable amount
The table below summarises the key assumptions used in the carrying value assessment:
30 June 2021 | |
Gold price ($/oz) | 1,798-1,465 |
Discount rate (post tax real) | 13% |
Unmined resources ($/oz) | $20-$54 |
Gold prices
Gold prices are estimated with reference to external market forecasts based on a consensus view of market experts.
Discount rate
In 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
An impairment loss of $167.373 million was allocated to the Syama CGU at 30 June 2021.
Syama indicator assessment
At 31 December 2021, in addition to the impairment indicators noted above, Resolute also revised its CY21 production and cost guideline for Syama. These factors collectively were considered to be indicators of impairment and as such a formal impairment test was performed to determine the recoverable amount for the Syama CGU.
Key Assumptions used to determine recoverable amount
The table below summarises the key assumptions used in the carrying value assessment:
31 December 2021 | |
Gold price ($/oz) | 1,777-1,467 |
Discount rate (post tax real) | 14.5% |
Unmined resources ($/oz) | $20-$54 |
Recognition
As a result of the impairment test performed, no further impairment loss was recognised at 31 December 2021, above the $167.373 million at 30 June 2021.
Mako CGU - 31 December 2021
Mako indicator assessment
Whilst Mako's 2021 forecast production and cost remain in line with budget, as a result of the general indicators of impairment noted above and the reduction in the tax exoneration period to 5 years (refer to Note 5), a formal impairment test was performed to determine the recoverable amount for the Mako CGU.
Key Assumptions
The table below summarises the key assumptions used in the carrying value assessment:
31 December 2021 | |
Gold price ($/oz) | 1,777-1,467 |
Discount rate (post tax real) | 11% |
Unmined resources ($/oz) | $48 |
Gold prices
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 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
The impairment loss of $55.024 million has been allocated to the Mako CGU at 31 December 2021.
A full PDF version of the announcement is available from the Company's website: link to announcement.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 which forms part of UK law pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.
Authorised by Mr Stuart Gale, Chief Executive Officer