A proven gold producer
ANNUAL
RepoRt
CoNteNts
02 2013 Highlights
04 Chief Executive’s Review
06 Reserves and Resources
07 Production and Project Summary
08 Operations Overview
14 Development Overview
18 Exploration Overview
26 Corporate Responsibility
37 Financial Report
CoRpoRAte DiReCtoRy
Directors
Chairman
PE Huston
Chief Executive Officer
PR Sullivan
Non-Executive Director
TC Ford
Non-Executive Director
HTS Price
Secretary
GW Fitzgerald
Registered Office and
Business Address
The BGC Centre
4th Floor, 28 The Esplanade
Perth, Western Australia 6000
Postal
PO Box 7232 Cloisters Square
Perth, Western Australia 6850
Telephone: + 61 8 9261 6100
Facsimile: + 61 8 9322 7597
E-mail: contact@rml.com.au
ABN 39 097 088 689
Web Site
Resolute maintains a web site
where all announcements to the
ASX are available.
www.rml.com.au
Share Registry
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross, Western Australia 6153
Telephone: + 61 8 9315 2333
Facsimile: + 61 8 9315 2233
registrar@securitytransfer.com.au
Shareholders wishing to receive copies of Resolute Mining Limited ASX announcements by
e-mail should register their interest by contacting the Company at contact@rml.com.au
Resolute is one of the largest gold producers listed on
the ASX with three operating gold mines in Africa and
Australia that have full exposure to the gold price.
it continues to build shareholder value through its
proven track record as a successful developer and
operator of quality gold projects for well over 20 years.
its projects to date have yielded over 6.6 million
ounces of gold.
The Company is actively progressing its portfolio of
projects and assessing new opportunities to further
enhance shareholder value.
Home Exchange
legal Advisors
Bankers
Australian Securities
Exchange Limited
Exchange Plaza
2 The Esplanade
Perth, Western Australia 6000
Quoted on the official lists of the
Australian Securities Exchange
ASX Ordinary Share Code: “RSG”
Securities on Issue (14/10/2013)
Ordinary Shares
640,994,224
unlisted Options 4,680,065
Performance Rights 3,946,751
Hardy Bowen
Level 1, 28 Ord Street
West Perth,
Western Australia 6005
Auditors
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia 6000
Barclays Bank Plc
Level 42, 225 George Street
Sydney, New South Wales 2000
Investec Bank (Australia) Limited
The Chifley Tower
Level 31, 2 Chifley Square
Sydney, New South Wales 2000
Citibank Limited
Citigroup Centre
Level 23, 2 Park Street
Sydney, New South Wales 2000
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 01
opeRAtioNs
CoRpoRAte
■■ Yielded in excess of 435,000 ounces of gold at
a cash cost of $811 per ounce, both ahead of
guidance
■■ Revised Syama mining schedule ensures strong
positive cash flows for next 8 years
FiNANCiAL
■■ Strong net profit after tax attributable to
members of $85m
■■ Robust operating cash inflow of $154m
despite weaker gold price environment
■■ Net investing cash outflows of $235m
with accumulation of other financial assets,
expenditure on property, plant and equipment
and development
■■ Conservative balance sheet maintained
■■ Total market value of group cash, bullion and
liquid investments of $71m at 30 June 2013
■■ Fully unhedged production with strong leverage
to gold price
■■ Fund raising activities resulted in a revolving
secured loan facility of US$50m and an
increased unsecured overdraft limit of US$15m
■■ Acquisition of 19.67% equity interest in, as well
as completion of an $85m convertible note
finance, to Noble
■■ Dividend payments to Shareholders of $31.6m
■■ Share Buy-Back Program utilised $11.0m
■■ Strong cash flows to fund identified
optimisation and expansion pipeline
■■ Well positioned to consider investment and
acquisition opportunities
HiGHLiGHts
Average cash price for gold sold
Gold production
1650
1450
1250
1050
850
650
450
250
50
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
09 10 11 12 13
09 10 11 12 13
Cost per ounce
Net profit
1650
1450
1250
1050
850
650
450
250
50
09 10 11 12 13
02 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
120
100
80
60
40
20
0
-20
-40
-60
-80
09 10 11 12 13
DeVeLopMeNt
eXpLoRAtioN
■■ Syama Expansion Project reached 34%
completion with $89.2m of expenditure
■■ 13% increase in total reserve/resource base for
the year
■■ The Memorandum of Understanding signed
with the Government of Mali to progress the
High Voltage Grid Connection to Syama
■■ Continuing work on Sarsfield Expansion Project
including infill and extension diamond drilling,
updating resources and revised pit optimization
■■ Underground resource drilling below the
current base of the mine at Mt Wright
Underground returned significant results
■■ Further very encouraging resource drilling at
satellite oxide deposits near Syama
■■ Encouraging resource drilling at the Nyakafuru
Project in Tanzania
■■ Promising drilling at Cashew and Paysans
prospects in Mali
■■ Field work commences in Cote d’Ivoire
following licence approvals
■■ Re-evaluation of the Buck Reef West Project,
near Ravenswood, indicates potential for a near-
surface, low grade, bulk tonnage style deposit
total project reserves and resources
Revenue from sales of precious metals
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0
650
550
450
350
250
150
50
09 10 11 12 13
09 10 11 12 13
operating cashflow
200
180
160
140
120
100
80
60
40
20
0
09 10 11 12 13
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 03
The 2013 Financial Year was one of the finest years in Resolute’s 24
year history as a gold producer. Total production of 435,855 ounces and
an overall operating profit in excess of $105 million had been bettered
only once previously. it was also pleasing that each of the Company’s
three operations made significant contributions to this result.
Tempering this excellent performance was the decline in gold price
and more particularly for shareholders the shift in sentiment against
gold equities in the latter half of the financial year. As a result we
carried out a major review of our mine plans and stress tested the
operations for a lower gold price environment. importantly
this confirmed we have robust operations that remain
profitable and cash generating at lower prices.
CHieF eXeCUtiVe’s
ReView
Notwithstanding this, we maintain a
strong focus on cash and our overall
capital management ensuring we
retain a strong financial position.
The Syama operation in Mali, our
major asset, had its best year since
commissioning in 2009 and is now
operating at close to design throughput
and production levels. We continue to
work on optimising the performance
of the plant.
While we have proactively made
some adjustments and slowed the
expansion plans at Syama in response
to prevailing market conditions, a
number of advances were made during
the year. The major activities and
progress centred on installation of the
oxide circuit, which will add lower cost
production ounces from treatment of
the near-surface oxide ore along strike
of the main pit. The design and approval
process for connection of the site to
grid power is also virtually complete
and construction is ready to commence
once the power purchase agreement is
settled. in response to the lower gold
price environment we have revised
the open pit expansion and decided to
remove the stage 3 cut back from the
life of mine plan giving rise to both cash
flow and capital management benefits.
We are now assessing an alternative
underground opportunity that
incorporates the near on 3 million ounces
of resources below the planned open pit.
At Ravenswood in Queensland,
the performance of the Mt Wright
underground mine continues to be
outstanding. Production and costs
have been very steady. The decline is
fully developed to design depth and
development drilling to extend depth
of the ore body has been completed
and is being evaluated.
Further work on the re-opening of the
Sarsfield open pit has been undertaken,
which could deliver a new long term ore
source for the Ravenswood plant after Mt
Wright is completed. A number of areas
for both capital and operating cost savings
have been identified and the process to
obtain all regulatory approvals for this
mine is well advanced. in addition, work
is progressing on the Nolans East and
Buck Reef West projects, adjacent to the
Sarsfield pit, which may deliver additional
benefits to the Sarsfield plans.
Mining at our Golden Pride mine in
Tanzania has come to an end having
produced 2.2 million ounces of gold to
date. Treatment of stockpiles should
be finished by the end of the year. The
rehabilitation work that has been an
ongoing exercise since we commenced
there 15 years ago, is exceptional and
we are well advanced in our work to
04 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
meet the closure requirements to hand
the site over to the Government.
Drilling efforts at the Nyakafuru
project, located 120 kilometres from
Golden Pride, have continued to meet
with success. We continue to view this
project as a potential new development
option in Tanzania utilising a relocation
of the Golden Pride plant. Further
drilling is planned to expand the
recently announced 388,000 ounce
reserve and 900,000 ounce resource and
determine whether this will become a
new opportunity for us in Tanzania.
in line with moderating cash spend we
have reduced our exploration budget
for the coming year to $15 million.
The key focus of our activities will
be on expanding the oxide resources
along the Syama strike and testing
further the Tabakoroni project to the
south. in addition to further drilling
of the Nolans East and Buck Reef West
projects and at Nyakafuru, we plan to
continue the early stage work on the
recently granted Cote d’ivoire tenure.
During the year we made a strategic
investment in Noble Mineral Resources
Limited, primarily through convertible
notes. Noble’s main asset is the Bibiani
mine, an advanced gold project in
Ghana. Subsequent to year end in
September 2013 Noble entered Voluntary
Administration, which is likely to
see some form of rationalisation in
the ownership of the Bibiani project.
We consider Bibiani to be an asset
with significant potential and as a
key stakeholder we are committed to
working with the Administrator to
ensure a value driven outcome.
Resolute continues to maintain a
conservative balance sheet, thereby
ensuring we are able to pursue growth
initiatives. We can fully fund our capital
expenditure programmes and with
the significant decline in gold asset
valuations, we are well positioned to
consider new growth options.
Despite the setbacks in the gold sector
we are now very well placed to survive
and thrive. We have a very loyal and
skilled workforce and they continue
to work hard to get the best from our
assets with a view to delivering value for
shareholders. i would like to very much
thank the Board and shareholders for
their support in these challenging times
and look forward to the year ahead.
Peter Sullivan
Chief Executive Officer
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 05
ReseRVes AND ResoURCes stAteMeNt
At 30 June 2013
Gold Reserves
(includes stockpiles)
Reserves
Reserves (Proved)
Australia
Mt Wright (insitu) 3
Sarsfield (insitu) 2
Mali
Syama (insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Total (Proved)
Reserves (Probable)
Australia
Mt Wright Stockpiles 3
Sarsfield (insitu) 2
Mali
Syama (insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Nyakafuru JV (insitu) 2
Golden Pride(insitu)
Golden Pride Stockpiles
Total (Probable)
Total Reserves (Proved and Probable)
Gold Resources1
(includes stockpiles)
Resources 1
Resources (Measured)
Australia
Sarsfield (insitu) 2
Mali
Syama (insitu)
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Golden Pride (insitu)
Total (Measured)
Resources (Indicated)
Australia
Mt Wright (insitu) 3
Sarsfield (insitu) 2
Mali
Syama(insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Golden Pride(insitu)
Nyakafuru JV (insitu) 2
Total (Indicated)
Total (Measured and Indicated)
06 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
pRojeCt
toNNes
GoLD GRADe
(G/t)
pRojeCt CoNtAiNeD
oUNCes GoLD
ResoLUte GRoUp
sHARe
%
ResoLUte GRoUp
sHARe
oUNCes
3,271,000
28,450,000
11,191,000
249,000
3,122,000
1,335,000
47,618,000
60,000
18,640,000
3,439,000
2,199,000
4,986,000
1,821,000
7,360,000
480,000
1,264,000
40,249,000
87,867,000
16,185,000
14,769,000
1,051,000
996,000
3,786,000
36,787,000
604,000
20,384,000
19,285,000
3,774,000
4,840,000
2,674,000
6,744,000
19,067,000
77,372,000
114,159,000
2.8
0.8
3.0
2.6
2.2
3.1
1.6
2.9
0.7
2.6
1.9
2.1
2.8
1.6
2.0
0.9
1.4
1.5
0.8
2.6
1.6
2.7
2.0
1.7
3.2
0.7
2.6
1.3
1.9
2.6
1.8
1.1
1.5
1.6
290,000
747,000
1,077,000
21,000
224,530
133,000
2,492,530
6,000
423,000
288,000
136,000
337,000
163,000
388,000
30,000
37,000
1,808,000
4,300,530
100%
100%
80%
80%
80%
51%
100%
100%
80%
80%
80%
51%
98%
100%
100%
290,000
747,000
861,000
17,000
180,000
68,000
2,163,000
6,000
423,000
230,000
108,000
270,000
83,000
380,000
30,000
37,000
1,567,000
3,730,000
393,000
100%
393,000
1,256,000
56,000
87,000
238,000
2,030,000
63,000
444,000
1,595,000
164,000
288,000
224,000
401,000
672,000
3,851,000
5,881,000
80%
80%
60%
100%
100%
100%
80%
80%
80%
60%
100%
95%
1,005,000
45,000
52,000
238,000
1,733,000
63,000
444,000
1,276,000
131,000
231,000
134,000
401,000
638,000
3,318,000
5,051,000
Total Reserves (Proved and Probable)
At 30 June 2013
Gold Reserves
(includes stockpiles)
Reserves
Reserves (Proved)
Australia
Mt Wright (insitu) 3
Sarsfield (insitu) 2
Mali
Syama (insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Total (Proved)
Reserves (Probable)
Australia
Mt Wright Stockpiles 3
Sarsfield (insitu) 2
Mali
Syama (insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Nyakafuru JV (insitu) 2
Golden Pride(insitu)
Golden Pride Stockpiles
Total (Probable)
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Gold Resources1
(includes stockpiles)
Resources 1
Resources (Measured)
Australia
Sarsfield (insitu) 2
Mali
Syama (insitu)
Tanzania
Golden Pride (insitu)
Total (Measured)
Resources (Indicated)
Australia
Mt Wright (insitu) 3
Sarsfield (insitu) 2
Mali
Syama(insitu)
Stockpiles
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Golden Pride(insitu)
Nyakafuru JV (insitu) 2
Total (Indicated)
Total (Measured and Indicated)
pRojeCt
toNNes
GoLD GRADe
pRojeCt CoNtAiNeD
ResoLUte GRoUp
ResoLUte GRoUp
(G/t)
oUNCes GoLD
sHARe
%
sHARe
oUNCes
3,271,000
28,450,000
11,191,000
249,000
3,122,000
1,335,000
47,618,000
60,000
18,640,000
3,439,000
2,199,000
4,986,000
1,821,000
7,360,000
480,000
1,264,000
40,249,000
87,867,000
16,185,000
14,769,000
1,051,000
996,000
3,786,000
36,787,000
604,000
20,384,000
19,285,000
3,774,000
4,840,000
2,674,000
6,744,000
19,067,000
77,372,000
114,159,000
2.8
0.8
3.0
2.6
2.2
3.1
1.6
2.9
0.7
2.6
1.9
2.1
2.8
1.6
2.0
0.9
1.4
1.5
0.8
2.6
1.6
2.7
2.0
1.7
3.2
0.7
2.6
1.3
1.9
2.6
1.8
1.1
1.5
1.6
290,000
747,000
1,077,000
21,000
224,530
133,000
2,492,530
6,000
423,000
288,000
136,000
337,000
163,000
388,000
30,000
37,000
1,808,000
4,300,530
1,256,000
56,000
87,000
238,000
2,030,000
63,000
444,000
1,595,000
164,000
288,000
224,000
401,000
672,000
3,851,000
5,881,000
100%
100%
80%
80%
80%
51%
100%
100%
80%
80%
80%
51%
98%
100%
100%
80%
80%
60%
100%
100%
100%
80%
80%
80%
60%
100%
95%
290,000
747,000
861,000
17,000
180,000
68,000
2,163,000
6,000
423,000
230,000
108,000
270,000
83,000
380,000
30,000
37,000
1,567,000
3,730,000
1,005,000
45,000
52,000
238,000
1,733,000
63,000
444,000
1,276,000
131,000
231,000
134,000
401,000
638,000
3,318,000
5,051,000
393,000
100%
393,000
ReseRVes AND ResoURCes stAteMeNt
ReseRVes AND ResoURCes stAteMeNt Continued
At 30 June 2013
Gold Resources1 Continued
(includes stockpiles)
Resources (Inferred)
Australia
Mt Wright (insitu) 3
Sarsfield (insitu) 2
Welcome Breccia (insitu)
Mali
Syama(insitu)
Syama Satellites (insitu)
Finkolo-Etruscan JV (insitu)
Tanzania
Golden Pride(insitu)
Nyakafuru JV (insitu) 2
Total (Inferred)
Total Resources
pRojeCt
toNNes
GoLD GRADe
(G/t)
pRojeCt CoNtAiNeD
oUNCes GoLD
ResoLUte GRoUp
sHARe
%
ResoLUte GRoUp
sHARe
oUNCes
1,090,000
22,192,000
2,036,000
3,425,000
6,946,000
3,132,000
12,945,000
6,312,000
58,078,000
172,237,000
3.1
0.7
3.2
2.3
2.1
2.2
1.7
1.1
1.5
1.6
108,000
521,000
208,000
251,000
479,000
219,000
724,000
227,000
2,737,000
8,618,000
100%
100%
100%
80%
80%
60%
100%
90%
108,000
521,000
208,000
201,000
383,000
131,000
724,000
204,000
2,480,000
7,531,000
Notes:
1) Mineral resources are exclusive of the Reserves - differences may occur due to rounding.
2) All Resources and Reserves are reported above 1 g/t cut-off except Sarsfield above 0.4 g/t cut off and Nyakafuru above 0.5 g/t cut off.
3) Mt Wright Reserves are reported at 2.3 g/t cut off and Resources above 1.8 g/t cut off
The information in this report that relates to the Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Richard Bray who is a
Registered Professional Geologist with the Australian institute of Geoscientists and Mr Andrew Goode, a member of The Australian institute of Mining and Metallurgy.
Mr Richard Bray and Mr Andrew Goode both have more than 5 years’ experience relevant to the styles of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent Person, as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Richard Bray and Mr Andrew Goode are full time employees of Resolute Mining Limited Group and have consented to the inclusion of the
matters in this report based on their information in the form and context in which it appears.
Group production summary
oRe MiNeD
toNNes
oRe MiLLeD
toNNes
HeAD GRADe
G/t
ReCoVeRy
%
MiNe pRoDUCtioN
ozs
CAsH Cost
A$/oz
CAsH Cost
Us$/oz
Syama
Ravenswood
Golden Pride
Total
2,490,927
1,557,512
1,064,892
5,113,331
2,008,905
1,584,657
2,249,568
5,843,130
3.65
2.93
1.46
2.61
83
95
92
89
196,182
141,846
97,827
435,855
796
760
916
811
818
780
938
833
Group project summary
CoUNtRy
pRojeCt
GRANteD
AReA kM²
AppLiCAtioN
AReA kM²
CoMMoDity
LoCAtioN
Tanzania
Mali
Cote d’Ivoire
Ghana
Sub Total Africa
Australia
Sub Total Australia
Total Resolute Tenure
Bulanga
Golden Pride
GP West
Igunga
Isaka
Kahama
Matinje
Nyakafuru
Syama
Finkolo JV
Other Tenure
Various
Various
Ravenswood
16
266
51
58
188
45
122
275
1,021
201
303
824
1,328
498
498
229
229
3,076
991
991
4,067
0
97
159
136
229
44
101
127
893
0
230
601
831
3,073
3,073
0
0
4,797
1,173
1,173
5,970
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Gold
Africa
Gold
Africa
Gold
Queensland
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 07
opeRAtioNs
oVeRView
Resolute’s established operations produced a total of 435,855
ounces at an average cash cost of $811 per ounce.
in the coming financial year, Resolute’s mines at Syama in Mali,
Ravenswood in Queensland and Golden Pride in Tanzania are
together forecast to produce approximately 345,000 ounces of
gold at an average cash cost of around $890 per ounce.
08 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
syAMA
operations
The Syama Gold Project is located in the
south of Mali, West Africa approximately
30kms from the Côte d’ivoire border and
300km southeast of the capital Bamako.
Resolute has an 80% interest in the
project through its equity in Sociêtê
des Mines de Syama S.A. (SOMiSY).
The Malian Government holds a 20%
interest in SOMiSY.
During the 2013 financial year the plant
treated 2.01 million tonnes (2012: 1.67mt)
at an overall head grade of 3.65g/t Au
(2012: 3.25g/t Au) to produce 196,182
ounces (2012: 145,197oz) of gold at a cash
cost of $796 per ounce (2012: $784). The
main reason for the higher ounces was
increased treatment plant availability
87.30% (2012: 76.63%) and improved head
grade from the Syama open pit.
Crusher availability and performance
improved over the period due to an
increased focus on the operation and
maintenance aspects of the crushing
equipment.
Mill throughput was affected by
unplanned mechanical downtime
related to a failed gearbox on the
concentrate thickener and the
replacement of mill 1 pinion
during the year.
Ore for the Syama Operations is sourced
from the Syama open pit. Due to the
refractory nature of the ore it is treated
using conventional four-stage crushing,
ball-milling, sulphide flotation and
dewatering, desliming, roasting, calcine
leaching and elution at the design rate
of 2.4mtpa.
A continued focus on reliability and
operational consistency resulted in a
much improved availability, utilisation
and metallurgical performance of the
processing plant. Roaster availability
increased mainly due to shorter
maintenance shutdowns required after
replacing the top section of the stack.
Mining progress continued in
developing the pit to access the deeper
higher grade sulphide ore at the Syama
pit. Oxide ore was mined at the A21
satellite pit to provide a trial parcel of
oxide ore for mill processing during
a planned shutdown of the roasting
circuit in July 2013.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 09
improvements in the crushing and
milling circuit. Gold production will
be at a similar level with increased
throughput rates being offset by the
July maintenance shutdown.
The installation of a deslime circuit to
improve the quality of the concentrate
feed to the roaster will be completed
in the September quarter with an
expected improvement in roaster
throughput allowing drawdown of
concentrate stocks.
Cash costs are expected to marginally
reduce with a deepening open pit offset
by a low strip ratio in stage 1 of the
Syama pit and a modified mining plan
in response to the reduced gold price
and process plant efficiencies over the
coming year.
improved mining performance ensured
sufficient quantities of ore, at the required
grade, were delivered to the treatment plant.
operations overview
Total waste material moved for the
financial year was 11.5 million bank
cubic metres of material (2012: 2.8m
BCM). The marked increase in waste
movement was attributed to the
commencement of the staged cutback
of the Syama open pit to access the
deeper ore. By financial year’s end the
pit had reached the 200mRL. During
this period 928,906 bank cubic metres of
ore (2012: 760,998 BCM) was mined at a
grade of 3.10g/t Au (2012: 2.73g/t Au)
improved mining performance ensured
sufficient quantities of ore, at the
required grade, were delivered to the
treatment plant.
The mining contract was retendered
and awarded to African Mining Services
(AMS) who commenced mobilisation
in August 2012 with an increased
production schedule to include the
staged cutback of the open pit.
Dewatering of the open pit continued
using diesel powered high lift pumps
after the previous system was replaced
due to sequencing of the pit cutback.
By June 2013 the old open pit had been
successfully dewatered.
outlook
Ore mining will continue within
the main Syama pit at depth. Ore
delivered to the process plant will
match throughput requirements at a
similar grade over the current year.
The milling circuit is expected to
increase in throughput with ongoing
syama - operating performance at a glance
syama - ore Reserves as at 30 june 2013
13 12
CAteGoRy
toNNes
GRADe
oUNCes
Ore Mined
Million Tonnes
Ore Milled
Million Tonnes
Head Grade
g/t Au
Recovery Rate
Gold Produced
Cost Per Ounce
%
Oz
A$
Cost Per Ounce
US$
2.49
2.01
3.65
83.2
2.10
1.67
3.25
83.1
Proved (insitu)
Proved (stockpiled)
Probable (insitu)
Probable (stockpiled)
11,191,000
249,000
3,439,000
2,199,000
3.0
2.6
2.6
1.9
1,077,000
21,000
288,000
136,000
196,182
145,197
total
17,078,000
2.8
1,522,000
796
818
784
813
oxide - ore Reserves as at 30 june 2013
CAteGoRy
toNNes
GRADe
oUNCes
Proved (insitu)
Probable (insitu)
total
4,457,000
6,807,000
11,264,000
2.5
2.3
2.4
357,530
500,000
857,530
10 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
10 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
RAVeNswooD
The Ravenswood gold mine is located
approximately 95km south-west of
Townsville and 65km east of Charters
Towers in north-east Queensland.
Resolute has a 100% interest in the
mine through its subsidiary Carpentaria
Gold Pty Ltd.
Ore for the Ravenswood Operations
was primarily sourced from the Mt
Wright underground mine plus a minor
amount of remnant low grade stocks
from Nolan’s. The reconfigured process
plant is optimised for processing
1.5Mtpa of high grade underground
ore using single stage crushing, SAG
and ball milling and carbon-in-leach
processing with a gravity circuit for
recovery of free gold.
operations
During the 2013 financial year, the
operations produced 141,846 ounces
(2012: 137,965oz) of gold at a cash
cost of $760 per ounce (2012: $756).
The increase in ounces is directly
attributable to improved ore production
and grade from the Mt Wright
underground operation.
Ore production from the Mt Wright
underground mine increased to 1.56
million tonnes (2012: 1.46mt) @ 3.04g/t
Au (2012: 2.96g/t Au). Development
reduced in line with the mining
schedule, achieving 4,179m (2012:
4,685m). The Sub-Level Shrinkage with
Continuous Fill (SLS) mining method
continued to perform to expectation.
Targeted maintenance and operational
improvements resulted in the increased
production. A surface waste pass was
completed and the primary ventilation
network was upgraded during the year.
Diamond drilling during the year
remained focused on resources below
600RL. Mt Wright reserves are 3.33
million tonnes @ 2.79g/t Au, compared
to 4.87 million tonnes @ 2.68g/t Au at
June 2012.
Total material movement from low
grade stockpiles was 0.06 million tonnes
@ 0.58g/t Au (2012: 0.34mt @ 0.56g/t Au).
The processing plant treated 1.58 million
tonnes (2012: 1.92mt) at an average head
grade of 2.93g/t Au (2012: 2.41g/t Au).
The lower treatment tonnes and higher
head grade was due to the significant
reduction in processing of low grade
stocks. Ongoing improvements in the
process plant resulted in an increased
overall recovery rate of 94.9% (2012:
92.8%). Operational improvement
projects aimed at reducing cyanide
consumption, minimising raw water
requirements and sampling consistency
were successfully implemented during
the year.
outlook
The process plant will continue to treat
Mt Wright ore with the possibility for
some additional ad hoc treatment from
other low grade sources. The plant is
now considered to be highly optimised
with the emphasis being on continuous
improvement.
in the coming year Mt Wright ore
production will continue at similar
levels. The Mt Wright operation is
highly productive and efficient and
emphasis will remain on maintenance
and operational improvements as
opportunities arise to maintain
efficiencies as the mine deepens.
Gold production is expected to be
slightly less in the 2014 financial year
due to reduced grade as per the mining
schedule. Cash costs per ounce are
expected to increase due to the reduced
grade and increased mining depth.
Ravenswood - operating performance at a glance
Ravenswood - ore Reserves as at 30 june 2013
Ore Mined
Million Tonnes
Ore Milled
Million Tonnes
Head Grade
Recovery Rate
Gold Produced
Cost Per Ounce
g/t
%
Oz
A$
Cost Per Ounce
US$
13 12
CAteGoRy
toNNes
GRADe
oUNCes
1.56
1.58
2.93
94.9
1.46
1.92
2.41
92.8
Proved Mt Wright (insitu)
Proved Sarsfield (insitu)
3,271,000
28,450,000
Probable Mt Wright (insitu)
60,000
Probable Sarsfield (insitu)
18,640,000
141,846
137,965
total
50,421,000
2.8
0.8
2.9
0.7
0.9
290,000
747,000
6,000
423,000
1,466,000
760
780
756
783
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 11
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 11
outlook
Stockpile rehandle of low grade fresh
rock and oxide material will continue
to the ROM pad until depleted to ensure
mill feed stocks are maintained.
The upcoming 12 month period to
June 2014 will see the completion of
milling operations at Golden Pride in
early January 2014 following which the
Golden Pride Project will move into a
care and maintenance/rehabilitation
phase.
Plant throughput this year was 2.25
million tonnes (2012: 2.23mt). The
average head grade was 1.46g/t Au
(2012: 1.74g/t Au) whilst the recovery
rate achieved was 92.4% (2012: 92.6%).
Gold production decreased from the
previous year primarily due to the
reduction in head grade as a result of
the completion of all mining activities
in January 2013 and the resultant
depletion of high grade stocks. In March
2013 low grade fresh rock material was
introduced to the mill feed maintaining
normal throughput rates to the end
of the financial year. Blend ratios for
the year were 75% fresh rock and 25%
oxide. All low grade material was
rehandled from stockpiles.
The Golden Pride mine has now
produced almost 2.2 million ounces of
gold since commissioning in 1998.
operations overview
GoLDeN pRiDe
The Golden Pride mine is located in
Tanzania, East Africa, 750km north-
west of the port of Dar es Salaam and
200km south of Lake Victoria.
Resolute has a 100% interest in
the project through its Tanzanian
subsidiary, Resolute (Tanzania)
Limited.
Ore for the Golden Pride Operations
was sourced from the Golden Pride
open pit, Southern Oxides pit and Maji
pit until mining completion in late
January 2013. The remaining feed is
being reclaimed from on-site low-
grade oxide and fresh rock stockpiles.
The ore is treated using conventional
crushing, SAG and ball-milling with
carbon-in-pulp processing at the rate
of 2.2Mtpa.
operations
The 2013 financial year produced 97,827
ounces (2012: 115,289oz) of gold at a
cash cost of $916 per ounce (2012: $737).
Total material movement from the
combined open pits was 1.4 million
bank cubic metres (2012: 4.4m BCM) at
a lower strip ratio of 2.57:1 (2012: 5.1:1)
as all pits were completed to their final
elevation. The Southern Oxides pit was
completed in October 2012 and both the
south west cutback and Maji pits were
completed at the end of January 2013.
Golden pride - operating performance at a glance
Golden pride - ore Reserves as at 30 june 2013
Ore Mined
Million Tonnes
Ore Milled
Million Tonnes
Head Grade
Recovery Rate
Gold Produced
Cost Per Ounce
g/t
%
Oz
A$
Cost Per Ounce
US$
13 12
1.06
2.25
1.46
92.4
1.95
2.23
1.74
92.6
97,827
115,289
916
938
737
764
CAteGoRy
toNNes
GRADe
oUNCes
Probable (insitu)
Probable (stockpiled)
total
480,000
1,264,000
1,744,000
2.0
0.9
1.2
30,000
37,000
67,000
12 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
12 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
The Golden Pride mine has now produced
almost 2.2 million ounces of gold since
commissioning in 1998.
■ syAMA
■ GoLDeN pRiDe
■ RAVeNswooD
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 13
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 13
Resolute is well placed to pursue opportunities by using a
common sense approach firmly based on adding value for
shareholders. The broad approach is measured risk, cost-
effective addition to or acquisition of ounces.
DeVeLopMeNt
oVeRView
MALi
syama pit expansion and oxide
Circuit (Resolute 80%)
in June 2012 the Resolute Board of
Directors gave formal approval for the
Syama Expansion Project enabling work
activities to commence. Activity was able
to start immediately for final engineering
design work and in October 2013
construction works started at site. The
approved Project included installation
of a parallel 1Mtpa oxide plant,
removal of redundant plant equipment,
infrastructure upgrade to the sulphide
processing plant including modifications
to the crushing circuit and an upgraded
water supply pipeline. The Company
engaged GR Engineering Services to
provide the oxide-sulphide process design
and to manage the construction works.
By March 2013 the plant site demolition
work had been completed clearing the
area for construction of the new oxide
plant equipment. The new 24km water
pipeline to the Bagoe River had also been
installed and commissioned.
By the end of June 2013 construction
work on the Project had reached 34% of
completion with an incurred expenditure
of $92M. Planned expenditure for FY2014
has been focussed on establishing
an oxide tailings storage facility and
the completion of the oxide CiL tanks
which does not prejudice any future
optimisation and rationalisation
opportunities.
Later in the financial year a dramatic
change in market conditions prompted
a comprehensive review of the planned
capital expenditure program. it was
determined that components of the
project could be deferred for up to
18 months with no adverse effect on
the mine plan or long term revenue.
As a result of the review, the planned
capital expenditure was reduced to an
estimated uS$61m for FY2014 with
approximately uS$113m deferred.
This new schedule gave the Company
time to further evaluate the optimal
approach to mining and treatment of its
oxide and sulphide reserve inventory in
the most capital efficient manner whilst
delivering a positive cash flow.
in August 2013 the results of this review
were announced to the market. As a
result, the Company has modified its
Syama open pit mining plan and decided
to remove Stage 3 of the cutback from
the life of mine plan delivering both cash
flow and capital management benefits.
The removal of Stage 3 reduces the
requirement to mine an extensive volume
of pre-strip waste to gain access to deep
ore and ensures the Company maintains
solid positive cash flows during a period
of weaker commodity prices.
14 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
1 syAMA opeN pit
eXpANsioN
The outcome of the review is off
the back of a full evaluation of the
Syama project resource and reserve
inventory recently completed to
incorporate the FY2013 drilling
results. The evaluation was conducted
as part of an updated life of mine
plan for the Syama project that
included the main sulphide open pit
and nearby satellite deposits. All cost
inputs were reviewed in detail and pit
optimisation studies were completed
at a range of gold prices. Various open
pit mining scenarios were considered
for Syama along with the original
400m deep pit design.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 15
Development overview
The significant benefits in the
modification to the Syama open pit
mining plan include:
■■ Over 200Mt reduction in waste
stripping requirements, which
reduces mining costs particularly
for long-haul waste material at
depth in the open pit
■■ Significant improvement in the
waste to ore ratio from 9.0 to 6.4
■■ Optimisation of the mining fleet
and manpower, in line with a revised
material movement schedule
■■ improvements in the ore delivery
profile to the process plant through
the elimination of any delays
associated with mining of a large
pit cutback
■■ Overall reduction in pit depth
decreases the geotechnical risk
associated with mining
With removal of the Stage 3 east wall
cutback there is no requirement for
relocation of the sulphide crushing
circuit. As a consequence, this gives
rise to a material saving in the capital
expenditure associated with that
component of the Expansion Project.
An engineering review of the sulphide
circuit upgrade is underway to identify
potential capital expenditure savings.
The review is expected to be complete
in the upcoming December quarter.
With the revised mine plan, Resolute
has the opportunity to consider
alternatives to exploit the 2.9Moz of
Resources that lie beneath the
planned open pit.
A recent conceptual mining study
completed by Snowden Mining
Consultants indicated potential for an
underground operation using a sublevel
caving (SLC) mining method. Snowden
considered that the large, high grade (up
to 8,000oz per vertical metre) ore body
footprint, combined with an appropriate
underground mining method, presented
an opportunity for sustained delivery of
1.5-2.0Mtpa of ore over an initial period
exceeding 5 years. underground access
could be through a separate boxcut-and-
portal or an in-pit portal, which would
provide access directly into fresh rock
and potentially reduce underground
development requirements.
Resolute has commenced a
prefeasibility study (PFS) to determine
the preferred stoping method, mine
layout and production rate. This
PFS will take up to six months to
complete and will draw on the in-house
mining expertise from the Mt Wright
underground sub level caving operation
16 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
at Ravenswood. After completing the
PFS, Resolute expects to report new Ore
Reserves for this part of the ore body.
As part of a drive for incremental
improvements in process plant
gold recovery, specialised sulphide
metallurgical test work was completed
looking for short term opportunities
within the sulphide processing circuit.
The test work was particularly focussed
on a detailed assessment of the flotation
and roasting circuit. it was found that
the distribution and concentration of
organic carbon in different parts of
the circuit had an important influence
on gold recovery within the leach
circuit. The outcome of the test work
program provided the design elements
for a Concentrate Deslime Circuit to
assist with carbon reduction in the
sulphide concentrate. By the end of
June 2013, only six months from project
approval, site construction of the
Concentrate Deslime Circuit was largely
complete. initial wet commissioning
on concentrate stocks commenced in
July with fresh concentrate feed and an
associated ramp up to design throughput
occuring in the September quarter.
High Voltage Grid Connection to
syama (Resolute 80%)
The Minister of Energy has now signed
a Memorandum of understanding
(Mou) between the Government of Mali
and Resolute Mining’s 80% subsidiary
SOMiSY SA. The execution of the Mou
which defines the technical, financial
and legal conditions for the 72km High
Voltage Grid interconnection from the
town of Sikasso to the Syama Mine, is
a major step forward in the supply and
construction of the power line.
The Project development team will now
submit the necessary environmental
and social impact and infrastructure
construction studies for approval and
finalise the Power implementation
and Supply Agreements prior to
construction commencing.
These agreements are expected to
be completed during the first half of
FY2014. in the meantime, expenditure
on transmission line and substation
design will continue.
satellite Deposit Resource
evaluation (Resolute 80%)
Evaluation work on the nearby satellite
deposits continued in parallel with the
Expansion Project aiming to provide
the most cost effective gold production
profile. During the year further resource
drilling was conducted at both the A21
and BA01 deposits located along strike
to the north of Syama. in total 14,098m
of drilling was completed in 161 holes
dominated by infill resource and
extension reverse circulation drilling.
A small component of the drilling
comprised diamond core holes at
A21 used to supply metallurgical
test work samples.
Drilling results at BA01 identified short
strike length, but higher grade intercepts
compared with the broad moderate
grade zones typical of A21. This is clearly
demonstrated when comparing recent
drilling in BA01 drill hole BARC092
which returned 12m @ 10.84g/t Au in
contrast to the A21 intercept in drill hole
QVRC120 which returned 20m @ 5.29g/t
Au. Future drilling along this strike zone
is expected to deliver low cost, near-
surface oxide material which will further
boost the Project’s ore reserve inventory.
During the year metallurgical variability
test work was conducted on samples
of A21 oxide and sulphide material.
Early test work results provided good
support for previous test work conducted
on composite samples. The test work
confirmed that oxide ore typically
exhibits low reagent consumption,
has low to moderate work indices
and rapid leach kinetics. Separate
test work conducted on samples of
deeper sulphide material showed some
refractory characteristics similar to the
Syama sulphide. As such, A21 sulphide
would form part of the future feed
profile for the sulphide process plant.
During 2012, Resolute announced
that it would acquire the 40 per cent
interest of its partner, Endeavour Mining
Corporation, in the Finkolo Joint Venture.
The Finkolo permit extends south of
Syama and is contiguous with the Syama
mining permit. The change of ownership
provides an opportunity for Resolute to
fully utilise the strike potential of the
Syama mineralised trend.
At Tabakoroni, the work program
was reduced while the project’s change
of ownership was ratified by the
Government of Mali. in the coming
year it is proposed to refresh the pit
optimisation and open pit design for
the simplified ownership case. Drilling
has been planned to provide specialised
samples for metallurgical variability test
work to supplement previous work on the
oxide and the sulphide mineralisation.
Sulphide material at Tabakoroni has the
potential to deliver high grade ore feed
which will supplement the processing
operations at Syama.
■■ Tailings Storage Facility (TSF)
construction design review –
modifications to the construction
method for the TSF to reduce
both construction cost and
sustaining costs
Mt wright project (Resolute 100%)
At Mt Wright investigation work
seeking to extend the mining operation
below the current base of operations
at 600RL continued through the year.
underground diamond drilling to
investigate the down-dip continuation
of rhyolite hosted mineralisation was
undertaken as suitable drilling sites
became available. Drilling was initially
conducted from sites within the decline
which provided access for drilling targets
in a vertical interval extending 200
vertical metres below the bottom of
the mining operation.
An initial interpretation taken from the
drilling results showed some changes
in the mineralisation distribution
with depth. Changes in the tenor of
gold mineralisation combined with
additional rhyolite bodies identified
outside the main rhyolite breccia shape
require further evaluation. Preliminary
modelling and interpretation of the
upper zone from 600-500RL provided
encouraging results but identified
that detailed infill drilling within the
footprint of the proposed sublevel cave
was required ahead of mine evaluation.
Better drill sites became available within
the 625 and 600 level development at
the bottom of the mine allowing infill
drilling to continue through to the end of
the financial year. An updated resource
model and mining evaluation will be
conducted by the December quarter to
allow an extension of mining operations
to be planned and costed.
2 Mt wRiGHt MiNiNG stAtUs AND
pRoposeD DRiLLiNG eXteNsioN
AUstRALiA
sarsfield expansion project
in June 2012, GR Engineering Services
(GRES) completed the Feasibility Study
for the Sarsfield Expansion Project
which included a cutback of the
previous Sarsfield open pit combined
with a resumption of the 5Mtpa
processing rate through the Nolan’s
treatment plant. Despite producing a
positive outcome the project economics
did not meet the Company’s internal
investment hurdles and it was elected
to undertake additional studies which
would contribute to an improved
economic result.
The Company continued work on
the Project’s Environmental impact
Study (EiS) document which was
supervised and prepared by Coffey
Environmental. The document included
a series of comprehensive technical
studies and detailed evaluations by 27
sub-consultants. The document was
submitted to government and released
for public comment and review at the
end of 2012. Public and government
department enquiries in relation to
the EiS document were handled in
conjunction with Coffey Environment.
The project team is engaging with
government for the preparation
of a Supplementary EiS document
which will address any outstanding
concerns. The Company will continue
to work with government departments
to ensure the project meets all
appropriate requirements ahead of
the Supplementary EiS document
submission.
The earlier Feasibility Study completed
by GRES identified a number of areas
that may contribute to an improved
economic outcome. Work was underway
on various projects with an emphasis
on reducing operating costs to shorten
the payback period and improve the
project margin. The Company has
selected the following key areas for
further investigation:
■■ Resource drilling to expand the
ore reserve within the current pit
design – additional ore would lead
to a reduction in waste mining cost,
an increase in the ore inventory and
extend the project life
■■ improvements to processing
operations – identify areas for
reduced operating cost or improved
metallurgical recovery e.g. gravity
circuit, thickened tails
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 17
eXpLoRAtioN
oVeRView
Resolute is committed to
expanding its gold resources
and production base through
exploration. The main thrust
of exploration activities has
been on our tenure close to our
existing operations or strategic
joint ventures on ground that
has been identified through
regional studies.
18 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
Resolute continued a high level of
exploration, focused on growing
the Company’s resource base and
developing new targets across the
Australian and African continents, with
a strong ($20M) budget approved for
the 2012/13 year. This resulted in a 13%
increase (1.5Moz) in the total reserve/
resource base for the year.
in Mali, regional drill programs covered
large areas of prospective greenstones
in the Syama Formation. Air core
drilling north and south of the Syama
mine refined targets which were
subsequently reverse circulation drill
tested. Reverse circulation drilling at
Paysans continued to expand the near
surface oxide mineralisation to over
1,800m in strike length.
in Queensland, an extensive drilling
program at the Sarsfield pit at
Ravenswood increased the resource
to over 2.5Moz Au. A re-evaluation of
the Buck Reef West area 1km west of
Sarsfield identified excellent potential
for additional near surface open pit
accessible gold mineralisation which
could add significantly to the resources
available for the Expansion Project.
Two Research Permits were signed and
issued by the Directorate of Mines for
Cote d’ivoire providing permission to
continue exploration which commenced
in 2008. Exploration work commenced
immediately on both the Goumere and
Toumodi licenses with detailed geological
mapping, infill soil sampling and induced
polarisation surveying undertaken.
Resolute currently has 7 Research
Permit applications over large areas of
very prospective unexplored Birimian
greenstone units awaiting approval.
in Tanzania, Resolute continued to
progress the Nyakafuru Project to
a development decision stage with
a significant drilling budget in the
2012/13 year. Resolute (Tanzania)
Limited resumed management of the
Nyakafuru Joint Venture with African
Barrick Gold. This allowed extension
drilling on identified gold resources at
the Leeuwin and Grange prospects.
Additional resource targets are planned
to be tested in 2013/14 and will help
increase the viability of a stand-alone
project in the Nyakafuru project area.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 19
exploration overview
MALi
Exploration for oxide resources
within the Syama Greenstone Belt
was again the main focus for the
exploration department this year.
Air core drilling continued throughout
the Syama Formation to identify new
targets. Follow up reverse circulation
drilling was completed on a number
of prospects north and south of the
Syama mine.
syama permit (Resolute 80%)
Syama South
This year exploration in the Syama
South region concentrated on regional
air core drilling and reverse circulation
drilling on a number of existing and
newly delineated prospects.
Air core drilling was carried out
throughout the Syama Formation in
the vicinity of the Tuareg, Basso, Doni,
Day Dawn and Tellem West prospects
to further define the geochemical
anomalies.
3 MALi eXpLoRAtioN teNeMeNts,
Deposits AND siMpLiFieD GeoLoGy.
At Paysans a large reverse circulation
drill program totalling 4,647m was
completed to outline the full extent of
the mineralised system. The drilling
confirmed a shallow westerly dip of the
mineralisation which supports potential
for an oxide resource to be delineated.
Paysans has now been drilled on a
nominal 100m x 50m spacing over
a strike length of 1,800m with good
continuity. The potential to delineate
a significant new oxide resource at
Paysans remains excellent and follow
up detailed resource drilling is planned
for 2013/14.
At Cashew a reverse circulation
drilling program totalling 2,179m
was completed to further define the
limits and continuity of the previously
outlined mineralisation. Significant
assay results for the year included
14m @ 5.17g/t Au from 21m in CSRC015
and 10m @ 2.08g/t Au from 100m in
CSRC016. Further drilling is planned
in the upcoming period.
The Basso area which was the site of
small scale open pit oxide mining by
previous owners was re-evaluated
during the year. A program of 4,304m
Drilling at Paysans confirmed
a shallow westerly dip of the
mineralisation which supports
potential for an oxide resource
to be delineated.
20 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
of reverse circulation drilling was
carried out to test for extensions of the
known mineralisation and to follow
up on gold anomalism identified by air
core drilling also carried out this year.
Drilling intersected predominantly
basalt and dolerite, with lesser black
shale, greywacke and lamprophyre.
Mineralised zones display sulphides with
silicification, veining and brecciation.
Results have been returned for all the
drill holes with relatively low tenor
in most holes. Best results were 7m @
1.56g/t Au from 76m in BORC017 and
6m @ 3.20g/t Au from 7m in BORC021.
year. The 100m x 800m spaced regional
drilling was designed as a first pass over
the previously unexplored greenstones.
The drilling intersected a wide range
of lithologies including argillite,
greywacke, basalt, black shale,
lamprophyre and chert with alteration
seen in many holes. The shallow drilling
has delineated a zone of low grade gold
mineralisation over 5km of strike and
greater than 800m in width across the
faulted contact between mafic and
sedimentary sequences. infill definition
drilling is planned for the 2013/14 year.
N’Gokoli endeavour Mining jV
(Resolute acquiring 100%)
An air core drilling program was
completed over the Syama Formation
greenstones within the N’Gokoli Joint
Venture ground during the reporting
Syama north
First pass air core drilling was
undertaken over a number of
geochemical and geophysical targets
within the SOMiSY licence north of
the Syama mine site.
A low order gold anomaly was seen
in the western arm of the Syama
formation which will be followed
up with infill drilling.
N’Golopene - Robex Resources jV
(Resolute earning 70%)
Air core drilling over the eastern
arm of the Syama Formation to test
a number of targets in the N’Golopene
project was completed during the
December 2012 quarter. A total of 77
drill holes for 3,250m were completed.
Drilling intersected mostly unaltered
basalts, greywacke and argillite, with
only rare quartz veining. The results
were disappointing, with only minor
Au and As anomalism.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 21
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 21
exploration overview
tANzANiA
Nyakafuru District
Resource drilling is now complete in
this area and an updated project wide
resource calculation is planned in
2013/14.
Drilling is continuing at Leeuwin
and Grange with an updated resource
estimate planned to be completed in
2013/14.
kanegele (Resolute 100%)
Resolute acquired the remaining 35%
minority interest from local JV partner
Yellowstone over the Kanegele Project
area during the year.
Reverse circulation and diamond
drilling continued on the Voyager-
Mentelle, Vasse and Cullen gold
systems to both increase the current
resources and upgrade known
resources from inferred to indicated
for optimisation work.
At the Voyager-Mentelle system some
of the better intervals returned include
17m @ 2.28g/t Au from 122m and 3m @
59.72g/t Au from 160m in VMDD0012
and 4m @ 17.03g/t Au from 69m,
15m @ 3.41g/t Au from 104m in hole
VMDD0013. The results from the Cullen
drilling were also very encouraging
with many holes recording multiple
intersections. Standout holes include
CuRC021 with 9m @ 5.81g/t Au from
7m, CuRC013 with 15m @ 3.41g/t Au
from 104m and CuRC025 with 19m @
2.23g/t Au from 44m.
Nyakafuru joint Venture (Resolute
49% African Barrick Gold 51%)
Resolute resumed management of the
Nyakafuru Joint Venture with African
Barrick Gold late in the year. Extension
drilling was planned to build on the
currently identified gold resources at the
Leeuwin and Grange prospects. Further
resources will further enhance the
viability for a stand-alone project in the
Nyakafuru area.
Drilling commenced on the JV ground
at the Leeuwin and Grange prospects
in April 2013 with the program still
in progress. A total of 127 reverse
circulation drill holes for 9,453m and
10 diamond drill holes for 1,096m
have been completed to the end of the
financial year.
Results to date have confirmed the
down plunge and strike extensions
of the gold mineralisation. Better
intersections from the drilling include
14m @ 11.94g/t Au from 20m in
LGRC0025 and 23m @ 3.92g/t Au from
18m in LGRC0062.
Drilling is also planned for a number
of other mineralised areas previously
delineated within the JV ground
including the Nyakasaluma and
Redgate prospects.
Golden pride west joint Venture
(Resolute 70%)
Reverse circulation and diamond
drilling was undertaken on the
Mwaguguli Prospect, on the Golden
Pride West – African Barrick JV,
during the financial year. The drilling
encountered Banded iron Formation
(BiF) hosted gold mineralisation which
produced encouraging intercepts
with a number of significant results
including 27m @ 2.48g/t Au from 27m in
MGRC0054 and 16m @ 7.87g/t Au from
24m in MGRC0058. With the completion
of this work, Resolute earned 70%
equity in the Golden Pride West JV.
Additional BiF hosted Au mineralisation
will be targeted in upcoming months
to build a resource base at the GP West
Project.
4 NyAkAFURU eXpLoRAtioN teNeMeNts,
Deposits AND siMpLiFieD GeoLoGy
22 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
AUstRALiA
sarsfield project (Resolute 100%)
A program of deep diamond drilling
totalling 9,257m was undertaken at
the Sarsfield gold deposit to target
extensions of the current resource
and to improve the project economics.
The program was designed to explore
for extensions outside of the planned
expansion pit shell as well as convert
inferred mineralisation within the pit
shell which does not contribute to the
current optimisation.
A number of significant results were
returned including 7m @ 17.09g/t Au
from 232m in SFD518, 12m @ 9.43g/t
from 358m in SFD514 and 12m @ 8.02g/t
Au from 273m and 27m @ 2.80g/t Au
from 240m in SFD512.
Scope still exists to extend the Sarsfield
resource towards the north, east and
at depth and to extend the Nolan’s
resource to the east.
The drilling resulted in a 47% increase
in resources to 105.9Mt @ 0.8g/t for
2.5Moz Au. These additional ounces will
be utilised by the development team
in their reassessment of the Sarsfield
Expansion Project model in
the upcoming year.
Buck Reef west project
(Resolute 100%)
Buck Reef West is a satellite ore system
at Ravenswood comprising several
distinct lodes which coincide with the
western extension of the mineralised
Buck Reef Fault. The same structure is
also mineralised and passes through
the northern side of the Sarsfield pit
approximately 600m further east.
Several high-grade lodes in the Buck
Reef West area were worked historically
(prior to World War 1) with more recent
open pit and underground mining
occurring intermittently between
1987 and 2003. The mining leases over
the area are still current and held by
the Company. During the year a re-
evaluation of the area indicated the
potential for a near-surface, low-grade,
bulk tonnage style deposit between the
previously mined higher grade lodes.
Considering the ongoing evaluation of
the Sarsfield Expansion Project and the
short distance from the Ravenswood
treatment plant, drilling at Buck Reef
West will be a priority drill target in the
coming year.
Scope still exists to extend the Sarsfield
resource towards the north, east and at
depth and to extend the Nolan’s resource
to the east.
5 RAVeNswooD teNeMeNts, MAjoR GoLD Deposits
AND CURReNt tARGet AReAs
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 23
exploration overview
Mt success project (Resolute 100%)
Mt Douglas Prospect (70km nW of
Ravenswood)
Limited access was obtained from the
Department of Defence to continue
exploration at the Mt Douglas prospect
and six diamond core holes were drilled
for a total of 2,784m during the year.
Three holes, drilled on the eastern
side of the hill encountered zones
of strong alteration and occasional
quartz plus base-metal sulphide
veining. unfortunately gold assays were
disappointing, with the best result of
1m @ 2.87g/t Au from 151m in MDD006.
Golden Valley / Mt Success
(55km nW of Ravenswood)
The results for three diamond drill holes
reported in the 2012 Annual Report
were obtained during the financial year.
Although several broad zones of quartz-
sulphide veining were encountered, Au
mineralisation was generally low, with
best results of 2m @ 6.95g/t Au from
557m in GVDD001 and 2m @ 5.14g/t Au
from 515m in GVDD002.
6 RAVeNswooD DistRiCt GeoLoGy
AND pRospeCts
24 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
CÔte D’iVoiRe
Progress was made with the Resolute
tenement applications in Cote d’ivoire
after many years stalled in the
approvals process with the granting
of two licences in 2013. The Research
Permits for Toumodi and Goumere were
signed and issued by the Directorate
of Mines for Cote d’ivoire allowing
Resolute to recommence exploration.
Field crews mobilised to the field camp at
Yamoussoukro with initial community
work undertaken in March 2013 to gain
access to the Toumodi permit area. infill
soil sampling was undertaken on the
Toumodi licence with 2,740 samples
collected during the year.
Detailed geological mapping was
carried out over the Goumere and
Toumodi licences during the June
quarter. This mapping highlighted
the high prospectivity of the Goumere
licence with greenstone units
identified throughout the tenement.
A gravity array induced polarisation
survey has been planned to test the
3km x 3km Au-As-Sb soil anomaly at
the southern end of the Goumere
licence, with the survey commencing
in late July 2013.
Resolute currently has 7 Research
Permit applications over large areas of
very prospective unexplored Birimian
greenstone units awaiting approval.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 25
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 25
CoRpoRAte
RespoNsiBiLity
Resolute is mindful its activities may potentially have an
impact on the environment and a broad range of people.
These people all, in one way or another, contribute to our
ability to sustain our activities in a harmonious manner
within the community and environment.
26 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
The Company is committed to
building relationships through
well-targeted social, safety and
environmental programs. Resolute
aims to support the local communities
by assisting with programs and
projects that deliver lasting benefits.
The taxes that Resolute pays as a
Company, those it collects from
employees on behalf of the government
and those of suppliers’ dependent on
the Company’s presence, are important
contributors to the creation of wealth
and well-being in host countries.
Over $86 million (last year $78m) was
paid directly to governments in taxes in
2012/13. These taxes include Company
taxes, employer taxes, royalties and
other licencing and statutory levies
as follows:
AUstRALiA
$
tANzANiA
$
MALi
$
otHeR
$
totAL
$
Royalties
Employer Taxes
Company Taxes
11.1m
11.6m
7.7m
6.6m
-
20.3m
Licencing & Statutory Taxes
0.6m
0.9m
15.5m
7.9m
3.8m
0.1m
23.3m
35.5m
27.3m
-
-
-
0.1m
0.1m
34.3m
26.1m
24.1m
1.7m
86.2m
During the year, Resolute was awarded
a Certificate of Merit by the Tanzanian
Revenue Authority in recognition of
being the most compliant taxpayer in
the mining sector in Tanzania.
The Resolute Mining Limited Group
operates under a strict Code of
Conduct that underpins, guides and
enhances the conduct and behaviour of
directors, employees and contractors in
performing their everyday roles.
The Code specifically emphasises
integrity and honesty and recognises
that the Group will not make any bribes
or corrupt payments to government
officials to obtain any improper or
illegitimate benefit or advantage. The
Code encourages and fosters a culture
of integrity and responsibility with the
focus of augmenting our reputation as a
valued employer, business partner and
corporate citizen in all our relationships.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 27
Corporate Responsiblity
eNViRoNMeNt
Resolute strives to balance
environmental protection in a
financially sound manner over the
phases of exploration, to operations and
then closure activities.
The Resolute Environmental Policy
provides for an environmental
management program as it undertakes
to:
■■ comply with and, where appropriate,
exceed the requirements of
applicable legislation, regulations
and other policies, codes and
standards to which we subscribe
■■ progressively develop and maintain
environmental management
systems that are consistent with
internationally recognised standards
■■ integrate environmental processes
throughout all aspects of our
activities
■■ identify and assess the potential
environmental effects of our
activities and manage environmental
risk accordingly
■■ continually improve and regularly
monitor, audit and review our
environmental performance,
including the reduction and
prevention of impacts and more
efficient use of resources
■■ promote environmental
awareness among our personnel
and contractors to increase the
understanding of their roles and
responsibilities in environmental
management
■■ develop our people and
provide resources to meet our
environmental objectives
■■ promote our environmental progress
and performance through liaison
with and public reporting to the
Government and community
Golden pride Mine – tanzania
Environmental performance at
Golden Pride continues to improve
and highlights include:
■■ Golden Pride tree nursery production
continued along with the program
of purchasing trees from local
community nurseries
■■ Completion of earthworks and
rehabilitation for capping and
drainage paths to establish the
closure landform over Tailings
Storage Facility (TSF) #2
■■ Rehabilitation of minor areas that
had remained open in prior years to
bring to completion the rehabilitation
of larger landforms
During the period mining ceased from
the main pit at Golden Pride and the
Maji satellite pit. After successful trials
it was determined viable to recover
and process ore from a mineralised
waste low grade stockpile. To access
this material, broken rock/overburden
was removed and used in raising the
embankment of TSF #1.
■■ Government approval for and
Water Management
commissioning of the re-diversion of
Bundomo Creek into the open pit for
water storage after mine closure
■■ Progress towards receiving
Government approval to mine
the satellite ore body known as
“Far East”
Statutory Mine Closure Plan
Golden Pride continued rehabilitation
and closure activities in line with
the commitments made in its
Statutory Mine Closure Plan. Regular
stakeholder updates were held with
staff, community and regulators about
impending closure. Further planning
was undertaken for relinquishment of
the site to the Tanzanian Government.
Rehabilitation
The closure capping, vegetation and
installation of drainage structures on
the TSF #2 surface occurred in the
2012/13 season. in addition, minor areas
on the low grade waste rock dump, west
waste rock dump and pit perimeter
were also rehabilitated. Surface water
runoff from the TSF #2 and most of the
waste rock dumps now reports into
the pit void as per the Statutory Mine
Closure Plan.
62.3ha of land were prepared for the
2012/13 planting season with 78,000
seedlings planted on these areas.
Seedlings of endemic plants were
established on these land forms and
other rehabilitation areas. Of the total
plantings, about 28,000 seedlings were
purchased from the community-run
nurseries in order to support these
small local businesses.
Closure and rehabilitation activities
included the cleanup of workshop
yards and storage areas following the
demobilization of the mining contractor
and equipment. Area cleanup activities
have begun.
Throughout the year regular monitoring
of surface and groundwater continued.
Drainage of rainfall runoff also
continues from final closure faces of
waste rock dumps towards the open pit
for development of the open pit water
storage facility at the end of mining.
it is envisaged the lake in the open pit
will become a water storage of value to
nearby communities for irrigation and
stock watering. After the open pit fills,
water will then re-enter the ibole River
and continue downstream away from
the closure site.
in turn, Golden Pride will evaluate the
restocking of the open pit water body
with fingerlings to support subsistence
fishing or more organised aquaculture.
Emissions to Air
Monitoring showed only isolated
high dust levels which related to lift
off from the main site access road or
bare areas offsite.
tailings Management
TSF #1 became the nominal “on-line
facility” and continued to be operated
efficiently with adherence to procedures
and no major issues with structural
stability.
TSF #2 was decommissioned during the
reporting period and closure capping
commenced on this facility. The design
will allow rainfall runoff to be directed
off the landform being rehabilitated and
then be settled in the open pit.
Compliance and Risk Management
Minor seepage through the perimeter
embankment of TSF #1 was noticed
in the latter part of the period. it has
been notified to Government and is
being intercepted and monitored to
ensure that it does not impact the
environment.
28 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 29
Corporate Responsiblity
A total of 18 environmental incidents
were recorded during the reporting
period and included only 2 animal
fatalities with the other events being
related to water quality samples.
The main challenge for compliance
continues to be levels of sulphate in
ground water, suspended solids and
iron levels in runoff water.
Future rehabilitation work, as the
operation approaches closure, will
address the periodic measurements of
non-conformance against prescribed
levels for dissolved salts, iron, sulfate
and pH. The catchment landscape
around the site is disturbed by
agriculture and clearing.
Recommendations from the Tanzanian
Government made in the previous
reporting period have now been
addressed. in groundwater near TSF #1
higher sulphate levels are a signature of
the TSF operation. The groundwater is
being pumped back to TSF #1 although
it remains suitable for livestock
watering or crop irrigation. Recent
monitoring indicated the sulphate
levels have stabilised.
A key risk for environmental
management at Golden Pride may
be an interruption to the transition
of the operation into mine closure.
The objectives for closure are set and
approved by Government. Controls
include the extensive communication
with Government, community leaders
and employees as planning for hand
over in post closure land use. The
schedule of rehabilitation work is
being kept on track.
syama Mine – Mali
During the review period the
monitoring of groundwater, surface
water and air quality continued
according to permit conditions.
Development of the environmental
database and geographical information
system has continued and helps to
clarify land management planning
and changes.
Environmental and Social impact
Studies have been completed, or are in
the process thereof, to support the High
Voltage Grid Connection and ongoing
mine development. These studies are
discussed in detail in the Development
section of this report.
30 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
The collection of grass and tree seeds for the
propagation of more than 6,500 tree seedlings
for rehabilitation activities continued.
Rehabilitation
The collection of grass and tree seeds
for the propagation of more than
6,500 tree seedlings for rehabilitation
activities continued. Planting of
seedlings was undertaken along a
pipeline corridor in preparation for the
top of the southern waste rock dump.
Background studies have been
completed for a management plan
for waste rock dumping to coordinate
operations, progressive rehabilitation
and monitoring activities. The
management plan will link to the
overall mine closure plan for the site.
Water Management
Monitoring the quality of surface
water and groundwater continues
to show that it is generally within
acceptable values. Elevated values of
total suspended sediment and total iron
concentration were also noted during
the wet season and are common to
water bodies in the area. Total dissolved
salt levels are higher than background
levels in groundwater down gradient
from the landform of Tailings Storage
Facilities (TSF).
A water balance model, to encompass
all of the operations, was completed
during the review period. The water
pipeline from the Bagoe River was
upgraded and the pumping system
refurbished. At the end of the reporting
period an interconnection of the water
scheme to satellite open pits was
being implemented. These services
will support the water security and
flexibility of the site during operation
and may be a positive legacy for the
community post closure.
A drainage plan was prepared and
improvements began for the airstrip
and mining contractor’s facilities.
installation of more rainfall gauges will
improve the understanding of storm
intensities and planning of drainage
and water storage design.
tailings Management
A detailed water balance model was
developed to monitor and control
water being transferred between the
Syama treatment plant and the TSF
landform. it is updated and reported
daily with measurements compared to
model predictions of tailings discharge
rates, water and weather. improvement
measures from this work include the
use of the daily report to:
■■ check water levels and pumped
volumes to optimise the reuse of
water in the treatment plant circuit
and for dust suppression
■■ manage frequent changeover of
spigots so that excess water can be
evaporated from recently wetted
and active tailings beaches
Waste Management
A landfill was established on site with
individual cells for segregation of waste
types. The composting of green and
food waste began and will be used for
soil amendment in rehabilitation. The
recovery and reuse of containers or
recycling of materials offsite by nearby
communities was ongoing. Scrap metal
was also recovered from site and the
proceeds of sale for recycling were
donated to the community.
Permitting discussions with the
Queensland Government continued
for this matter with the undertaking
of substantial earthworks to divert
clean rainfall runoff away from
recovered groundwater and the
interception of groundwater seepage.
The shedding of rainfall runoff from
the Nolan’s TSF and the vegetation of
its “store and release cover” will further
improve groundwater conditions as
seepage abates.
A key risk for environmental
management at the Ravenswood
Mine is the success of revegetation
and closure of the Nolan’s TSF. This
landform was shaped according to
models for surface drainage and the
type of soil and vegetation that would
develop in it. Erosion of this surface
has not been problematic through two
prolonged wet seasons so far and water
is flowing across the surface according
to the design. Water leaving site will
also improve over time.
Air Quality
Rehabilitation
A network of monitors for air quality is
located on site and at villages near the
mine to measure and transmit weather,
dust and sulfur dioxide data to the
site office in “real time”. At Fourou and
Bananso the monitors are operational,
with Fourou station reporting in “real
time”. At N'Golopene and Tambéléni, the
monitoring sites have been constructed
and are awaiting monitor setup.
Electrical generators at the villages will
supply power for the monitors and also
to nearby medical clinics. The weather
and air quality data are being used to
improve the accuracy of a model to
predict dispersion of roaster emissions
and in turn guide roaster operation.
Compliance and Risk Management
A total of 37 environmental incidents
were recorded during the reporting
period. Only two incidents of animal
fatalities were recorded. 25 minor
spillages of hydrocarbons, mostly
related to mining equipment, were
recorded. Failures to follow instruction
for vegetation clearance also occurred
and were rectified and two water
quality incidents were recorded.
A key risk for environmental
management at Syama continues in
model predictions of air quality. Levels
of sulfur dioxide continue to generally
show the model is over predicting levels.
As monitoring data accumulates it will
be used to recalibrate the model and its
correlation to actual measured values.
Ravenswood Mine – Australia
Work continued on the Safety, Health
and Environmental (SHE) Management
System. Site environmental
management focused on:
■■ detailed monthly environmental
monitoring and reporting
■■ waste management procedures
■■ monthly inspections for safety,
health, environment and training
During the reporting period
supplementary evaluations and
responses to feedback occurred on
an Environmental and Social impact
Assessment for the feasibility study to
restart mining at Sarsfield. Details on
this study are reported elsewhere in
this report.
The storm water diversion drain was
reconfigured during the period to better
manage any rainfall events from the
Nolan’s TSF spillway. Planting of native
tube stock was conducted at Buck Reef
to assist in the rehabilitation process
by stabilising the battered slopes on the
waste rock dump. This has progressed
well with good coverage and in the
current weather cycle has proved to be
sustainable. The topsoil capping and
seeding for rehabilitation of some of
the landforms located at Sandy Creek
was completed. Progress to date is good
considering the limited rain during
the year.
Water Management
Sulphate levels in surface and ground
waters near the operation are above
background values. Biological studies
completed during the review period
showed that the stream water quality
has not adversely impacted aquatic
flora and fauna. Civil works for drainage
of surface waters near the mill and
rehabilitated tailings area along with
seepage water pumping were completed
in the reporting period. These are
working in accordance with directions
from the Queensland Government.
Emissions
Further to the review of Energy
Efficiency Opportunities at Ravenswood,
the planned improvements for
the Nolan’s Mill are complete. Site
investigations and measurements were
carried out in this reporting period
for the Mt Wright underground Mine.
At the time of preparing this report,
the evaluation of Energy Efficiency
Opportunities for Mt Wright was
in progress. Other energy use and
emissions reporting was completed
according to regulatory requirements.
Compliance and Risk Management
A total of 15 environmental incidents
were recorded during the reporting
period and this included only 2 animal
fatalities with the other events being
related to water quality samples, minor
spills of oil, fuel or process materials. The
main challenge for compliance remains
to be sulphate levels in ground waters.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 31
Corporate Responsiblity
32 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
CoMMUNity ReLAtioNs
Golden pride Mine – tanzania
Building Projects
Resolute recognises the need
to consult proactively and help
manage community issues near
its operations. Fostering long term
relationships and partnerships with
communities is envisaged to develop
mutual understanding, cooperation,
and respect. Our social investment
initiatives aim to deliver significant
and lasting benefits to employees,
communities and key stakeholders.
The Policy commits Resolute to:
■■ recognise and respect the value
of cultural heritage and cultural
diversity
■■ establish enduring relationships with
communities based on honesty and
mutual trust
■■ support the development and
implementation of sustainable social
and economic initiatives within the
communities through cooperation
and participation
■■ provide management systems to
identify, assess, monitor and control
existing and potential impacts on
communities
■■ maintain an ‘open door’ policy
whereby the traditional local leaders
and community leaders have access
at reasonable times to the Company’s
management
■■ ensure that employees are aware of
and understand the requirements of
this policy
The Golden Pride Project maintained
its commitment to sustainable
development around Nzega, particularly
to the communities near the mine
site. Resolute supported both new and
long running community development
programs to improve infrastructure,
education, health and the environment.
The overall aim is to help these
communities improve their standard
of living and capabilities through
Participatory Rural Appraisal. Major
focus for this reporting period has been
on improving income generation.
For calendar year 2012, The Golden
Pride Project was winner of the
Presidential Awards to Extractive
industry for Large Scale Mineral
Projects for Corporate Social
Responsibility and Empowerment. The
award was organised by the Ministry
of Energy and Minerals in collaboration
with the Extractive inter Stakeholders
Forum and signed by the President
of the united Republic of Tanzania
and Minister of Energy and Minerals.
This is the second time the Golden
Pride Project has been awarded this
prestigious honour.
Resolute continued its commitment to
the wellbeing of the nation of Tanzania,
as well as to the local communities of
the mine site, through donations to
pediatric oncology and sponsorships
for corrective surgeries and to the
environment through support of
marine turtle conservation.
During the reporting period the
Company handed over the following
projects to Government:
■■ Refurbishment of the uchama
treatment plant for potable water
in Nzega
■■ At Lusu (Hamza Aziz) Secondary
School
- Fully furnished student
dormitories and
- Three room science laboratory
complex (physics, chemistry
and biology)
■■ A two science laboratory room
(chemistry and biology)
at undomo Secondary School
■■ Two wards and an operating theatre
at the Lusu dispensary
Golden Pride also constructed an office
at isanga village for the community
organisation and two classrooms at
Mwamalulu Primary School.
Water
Water harvest local dams were
constructed at the villages of Bujulu,
isanga and Nhele. The dams have a
capacity to store enough water for
domestic use and livestock watering.
Livestock keeping is one of the major
economic activities of the people.
Provision of water will improve
animal health.
Golden Pride is planning to construct
dams at Ndoba and Mwanyagula
villages in the coming year.
Household Economic Development
This year local farmers had an excellent
harvest following the distribution of
hybridised maize seeds through Golden
Pride.
Golden Pride installed a maize milling
machine at Ndoba connected to the
Golden Pride power line. The aim is to
enhance a community based milling
complex managed by the local villagers.
The overall aim is to help communities improve
their standard of living and capabilities through
Participatory Rural Appraisal.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 33
Corporate Responsiblity
syama Mine – Mali
Education Support
The Syama Mine Community
Consultative Committee (SMCCC) held
regular meetings for community and
environmental issues. Community
representatives were briefed on the
progress of mine development. Most
questions raised by the communities
were discussed during these meetings
and where possible immediate solutions
were implemented.
Community Communication of needs
From a social forum (Community
Communication Workshop) held in the
previous reporting period, stakeholders
identified and prioritised their needs
for support.
During the review period a Participatory
Rural Appraisal (PRA) report was
compiled – “Assistance Program for the
Economic and Social Promotion of the
Populations of Fourou Local District.”
This is being used to guide improvement
programs through the SMCCC.
Community Health
The Manager of Occupation and
Community Health provided medical
equipment and supplies to the five
medical centres of Fourou Commune
and the District Hospital during the
reporting period. Training in diagnostics
equipment was provided to the
local medical staff. An HiV fighting
program has been initiated with the
support of the National HiV program
regional team. it included training of
medical staff, peer-educator training,
counselling, testing, and provision of
antiretroviral drugs.
Regular awareness sessions on local
community radio have been presented
as a program support activity.
Larviciding is being conducted near
villages in proximity to and at the mine
site. indoor walls of houses are being
sprayed with residual insecticide and
mosquito nets are being distributed in
the community. All of these measures
are helping to achieve improvement in
malaria cases.
in conjunction with other mining
companies in Mali, the Company made
a financial contribution to the neglected
tropical disease program to support its
good work managing these diseases.
34 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
Construction of buildings for the high
school at Fourou were substantially
completed. Learning materials were
supplied and year end exams supported
in some primary schools within the
Fourou Rural Commune.
Small Business Projects
Support for women’s groups in
villages near the mine site achieved
encouraging levels of participation from
both women initially and then men.
Different projects have started in each
of the villages. Projects include a range
of activities from which income can
be generated. These include collection
of honey from bee keeping, growing
of vegetables, batik fabric dying and
making of shea butter from tree nut oil.
Mine site catering is purchasing produce
from local communities. improved crop
seeds and fertilizers were also provided
to local women farmers.
Ravenswood Mine – Australia
The Ravenswood Gold Mine is located
nearby the historic gold mining town
of Ravenswood. The Company worked
to maintain a positive relationship
with, and inform the community about
proposed changes to the operations
through:
■■ routine community meetings,
particularly on the potential to
restart open pit mining
■■ strengthened community contact by
liaison with stakeholders both face to
face and through regular newsletters
■■ support of the Ravenswood
Restoration and Preservation
Association in management of
heritage listed buildings within
the town and maintenance of the
community garden
■■ assisting the Ravenswood State
School with sporting carnivals and
educational events such as National
Tree Day and National Water Week
■■ support of the Ravenswood Rural
Fire Brigade
■■ providing 24-hour emergency medical
support to the community through
the onsite clinic and occupational
health nurses. On a monthly basis
they also organised visits from the
Royal Flying Doctor Service
■■ assisting in keeping the Ravenswood
swimming pool open for community
members by providing trained staff
to supervise the pool during the
swimming season
HeALtH AND sAFety
Resolute is committed to creating
and maintaining a safe and healthy
workplace through its Occupational
Health, Safety and Security Policy
which commits the Company to
manage programs that:
■■ seek continuous improvement in
its Occupational Health, Safety and
Security performance taking into
account evolving scientific knowledge
and technology, management
practices and community expectations
■■ comply with the applicable laws,
regulations and standards of the
countries in which it has workplaces
■■ train and ensure individual
employees and contractors
understand their obligations
and are held accountable for
their area of responsibility
■■ improve and regularly monitor, audit
and review our Occupational Health,
Safety and Security performance
■■ communicate and consult openly
with employees, contractors,
government and the community
on Occupational Health, Safety and
Security issues
■■ develop risk management systems to
identify, assess, monitor and control
hazards in the workplace
The Resolute Safety, Health and
Environmental Management System
continued to apply across each of
the operations. A template is now
used for safety incidents or injuries,
major business interruption, security
breaches, community complaints or
environmental incidents.
The operations report against key
performance indicators.
Golden pride Mine – tanzania
During the year Golden Pride continued
to prompt the workforce to focus
on safe work practices and accident
prevention. This was underpinned by
safety meetings, close supervision and
emphasising precaution over non-
routine work practices.
With most controls in place for risks
associated with routine tasks, training
days for emergency responders to tackle
potential losses were emphasised.
During the reporting period recordable
injury frequency rates continued at low
levels:
■■ Lost Time injury Frequency Rate
(LTiFR) maintained at 1.94 (1.86)
■■ Restricted Work injury Frequency
Rate (RWiFR) maintained at 0
■■ Medically Treated injury Frequency
Rate (MTiFR), rising slightly from
2.79 to 3.10
Significant improvement in recordable injury
frequency rates were seen at Ravenswood.
R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013 35
Corporate Responsiblity
One employee was receiving further
treatment for a foot injury at
the end of the reporting period.
Close attention to inspection of cyanide
transport, storage and use has resulted
in continuation of sound conformance
and control of risks associated with this
product. The focus of employees to safe
work practices will be a significant risk
as the operation approaches closure.
Open communication and feedback with
the workforce will be important control
measures for this risk.
syama Mine – Mali
During the review period a major
focus of the Occupational Health and
Safety Program was employee training.
Courses for many employees included:
■■ incident investigation and cause
analysis
■■ hazard identification and risk
assessment
■■ job safety and environmental
analysis
■■ basic fire training
■■ senior first aid/basic first-aid training
■■ materials safety data.
A weekly air charter service began
during the review period, greatly
reducing the risk to personnel of
road commute.
Site medical and clinic capabilities were
independently reviewed during the
reporting period with recommendations
to be implemented in the coming year.
Occupation health monitoring
programs were expanded to include
potential exposures by employees to
dust, noise and gases. Pre-employment
and annual medicals were further
developed to measure the effectiveness
of the monitoring program.
Site competencies and training were
tested in a scenario for Crisis and
Emergency Preparedness. Minor
improvement opportunities were
determined for implementation.
During the reporting period recordable
injury frequency rates continued at low
levels:
■■ Lost Time injury Frequency Rate
(LTiFR) maintained at 0.84 (0.40)
■■ Restricted Work injury Frequency
Rate (RWiFR) also maintained at
0.84 (0.40)
■■ Medically Treated injury Frequency
Rate (MTiFR) unchanged at 2.81
■■ cardio-pulmonary resuscitation
and use of the automated external
defibrillator
At the end of the reporting period no
employees were receiving treatment for
workplace injuries.
Ravenswood Mine – Australia
During the review period drivers of
continual improvement in safety and
training included:
■■ behavioural culture change
■■ development and roll out of training
modules
■■ defining task demands of all key
positions
■■ updating the version of document
control software
The top five targets in the plan to
improve the safety culture at the
operation were completed in the
review period. This was supported
by a sustained commitment to safety
training of employees, the visible
interaction of leaders and managers in
the workplace and a complete review of
the site safety management standards.
Ravenswood hosted a Safety Summit
with Emergency Response Teams from
across Queensland attending.
improvements in recordable injury
frequency rates were made during the
year as follows:
■■ Lost Time injury Frequency Rate
(LTiFR) improving substantially from
6.54 to 1.36
■■ Restricted Work injury Frequency
Rate (RWiFR) falling from 18.31 to
14.93
■■ Medically Treated injury Frequency
Rate (MTiFR) maintained at 10.86
(10.46)
These frequency rates continue to
reflect the occurrence of sprain and
strain injuries in a relatively small
workforce. Accordingly these employees
are able to recover quickly. Only one
employee was on restricted work duties
at the end of the reporting period.
Ravenswood hosted a Safety Summit
with Emergency Response Teams from
across Queensland attending.
36 R ESOLuTE Mi NiNG Li MiTED AnnuAl REPORt 2013
CONTENTS
38 Corporate Directory
39 Directors’ Report
53 Corporate Governance Statement
57 Auditor’s Independence Declaration
58 Consolidated Statement of Comprehensive Income
59 Consolidated Statement of Financial Position
60 Consolidated Statement of Changes in Equity
62 Consolidated Cash Flow Statement
63 Notes to the Financial Statements
121 Directors’ Declaration
122 Independent Auditor’s Report to the Members
124 Shareholder Information
FINANCIAL
REPORT
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 37
CORPORATE DIRECTORY
DIRECTORS
Chairman
Chief Executive Officer – PR Sullivan
Non-Executive Director – TC Ford
Non-Executive Director – HTS Price
– PE Huston
SECRETARY
GW Fitzgerald
REGISTERED OFFICE AND BUSINESS ADDRESS
4th Floor, The BGC Centre
28 The Esplanade
Perth, Western Australia 6000
Postal
PO Box 7232 Cloisters Square
Perth, Western Australia 6850
Telephone: + 61 8 9261 6100
Facsimile: + 61 8 9322 7597
Email: contact@rml.com.au
ABN 39 097 088 689
WEBSITE
Resolute Mining Limited maintains a web site where all major
announcements to the ASX are available: www.rml.com.au
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross, Western Australia 6153
Telephone: + 61 8 9315 2333
Facsimile: + 61 8 9315 2233
Email: registrar@securitytransfer.com.au
HOME EXCHANGE
Australian Securities Exchange Limited
Exchange Plaza
2 The Esplanade
Perth, Western Australia 6000
Quoted on the official lists of the Australian Securities
Exchange ASX Ordinary Share Code: “RSG”
SECURITIES ON ISSUE (30/06/2013)
Ordinary Shares
Unlisted Options
Unlisted Performance Rights
640,994,224
4,680,065
1,586,978
LEGAL ADVISOR
Hardy Bowen
Level 1, 28 Ord Street
West Perth, Western Australia 6005
AUDITOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Rd
Perth, Western Australia 6000
BANKERS
Barclays Bank Plc
Level 42
225 George Street
Sydney, New South Wales 2000
Investec Bank (Australia) Limited
Level 31,
The Chifley Tower
2 Chifley Square
Sydney, New South Wales 2000
Citibank Limited
Level 23, Citigroup Centre
2 Park Street
Sydney, New South Wales 2000
Shareholders wishing to receive copies of Resolute Mining
Limited ASX announcements by e-mail should register their
interest by contacting the Company at contact@rml.com.au
38 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity
(referred to hereafter as the “Group” or “Resolute”) consisting of
Resolute Mining Limited and the entities it controlled at the end
of or during the year ended 30 June 2013.
CORPORATE INFORMATION
Resolute Mining Limited (“RML” or “the Company”) is a company
limited by shares that is incorporated and domiciled in Australia.
DIRECTORS
The names and details of the directors of Resolute Mining
Limited in office during the financial year and until the date of
this report are as follows. Directors were in office for this entire
period.
Names, qualifications, experience and special
responsibilities
Peter Ernest Huston (Non-Executive Chairman)
B. Juris, LLB (Hons), B.Com., LLM
Mr Peter Huston was appointed Chairman in 2000. After
gaining admission in Western Australia as a Barrister and
Solicitor, Mr Huston initially practised in the area of corporate
and revenue law. Subsequently, he moved into the area of
public listings, reconstructions, equity raisings, mergers
and acquisitions and advised on a number of major public
company floats, takeovers and reconstructions. Mr Huston is
admitted to appear before the Supreme Court, Federal Court
and High Court of Australia. Mr Huston was a partner of the
international law firm now known as “Deacons” until 1993
when he retired to establish the boutique investment bank and
corporate advisory firm known as “Troika Securities Limited”.
Mr Ford is a member of the Audit Committee and the
Remuneration and Nomination Committee.
Henry Thomas Stuart (Bill) Price (Non-Executive
Director)
B.Com., FCA, MAICD
Mr Bill Price is a non-executive director and was appointed to
the board in 2003. Mr Price is a Chartered Accountant with
over 35 years of experience in the accounting profession. Mr
Price has extensive taxation and accounting experience in the
corporate and mining sector. In addition to his professional
qualifications, Mr Price is a member of the Australian Institute
of Company Directors, a registered tax agent and registered
company auditor. Mr Price is also a director and treasurer of
Tennis West.
Mr Price is the Chairman of the Audit Committee and a
member of the Remuneration and Nomination Committee.
Company Secretary
Greg William Fitzgerald
B.Bus., C.A.
Mr Greg Fitzgerald is a Chartered Accountant with over
25 years of resources related financial experience and has
extensive commercial experience in managing finance and
administrative matters for listed companies. Mr Fitzgerald is
also the General Manager – Finance & Administration and has
been Company Secretary since 1996. Prior to his involvement
with the Group, Mr Fitzgerald worked with an international
accounting firm in Australia.
Mr Fitzgerald is a member of the Financial Risk Management
Committee.
Mr Huston is a member of the Audit Committee and Chairman
of the Remuneration and Nomination Committee.
Interests in the shares and options of Resolute Mining
Limited and related bodies corporate
Peter Ross Sullivan (Chief Executive Officer)
B.E., MBA
Mr Peter Sullivan was appointed Chief Executive Officer of the
Company in 2001 and has been involved with the Group since
1999. Mr Sullivan is an engineer and has been involved in the
management and strategic development of resource companies
and projects for over 20 years. Mr Sullivan is also a director
of GME Resources Limited (appointed 1996), Zeta Resources
Limited (listed on the ASX in June 2013) and Kumarina
Resources Limited (appointed 2011 and company de-listed
from the ASX following a Scheme of Arrangement with Zeta
Resources Limited).
Mr Sullivan is a member of the Environment and Community
Development Committee, the Safety, Security and Occupational
Health Committee, and the Financial Risk Management
Committee.
Thomas Cummings Ford (Non-Executive Director)
FAICD
Mr Tom Ford is a non-executive director and was appointed to
the board in 2001. Mr Ford is an investment banker and financial
consultant with over 30 years of experience in the finance
industry. He retired as an executive director of a successful and
well regarded Australian investment bank in 1991 and is also
Chairman of RESIMAC Limited (appointed 1985).
As at the date of this report, the interests of the directors in
shares, options and performance rights of Resolute Mining
Limited and related bodies corporate were:
P. Huston
P. Sullivan
T. Ford
H. Price
FULLY PAID
ORDINARY
SHARES
OPTIONS OVER
ORDINARY
SHARES
PERFORMANCE
RIGHTS
428,182
-
-
3,007,448
2,000,000
546,875
464,648
194,745
-
-
-
-
4,095,023
2,000,000
546,875
NATURE OF OPERATIONS AND PRINCIPAL
ACTIVITIES
The principal activities of entities within the consolidated
entity during the year were:
■■ Gold mining; and,
■■ prospecting and exploration for minerals.
There has been no significant change in the nature of those
activities during the year.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 39
for the year ended 30 June 2013 FINANCIAL POSITION AND PERFORMANCE
■■ Revenue from gold sales increased by 7% to $619m (2012:
$577m).
■■ Average cash cost1 per ounce of gold produced during the year
was $811/oz (2012: $761/oz).
■■ Reported net profit after tax attributable to members of
$84.9m (2012: $105.1m), including $79.3m of impairment
charges and fair value adjustments primarily related to the
market value of investments in Noble Mineral Resources
Limited (“Noble”) and other gold equity investments, and a
$40.5m unrealised foreign currency gain on intercompany
loans with subsidiaries (presented within Treasury –
unrealised gains/(losses)).
■■ Net operating cash inflows during the year were $154.5m
(2012: $179.2m) and included:
Ravenswood mine in Queensland, Australia, produced 141,846
ounces (2012: 137,965) of gold at a cash cost of $760/oz (2012:
$756/oz).
Golden Pride mine in Tanzania, Africa, produced 97,827 ounces
(2012: 115,289) of gold at a cash cost of $916/oz (or US$938/oz)
(2012: $737/oz or US$764/oz).
All in sustaining costs2 (“AISC”) for the year were Syama –
$1,217/oz, Ravenswood – $1,079/oz, Golden Pride – $1,007/oz
and for the Group – $1,131/oz. Syama’s AISC included $43.4m of
waste stripping expenditure capitalised during the year.
All in costs2 (“AIC”) for the year were Syama – $1,712/oz,
Ravenswood – $1,122/oz, Golden Pride – $1,067/oz and for the
Group – $1,375/oz. Syama’s AIC included $96.1m of expansion
and development expenditure during the year.
- Receipts from customers of $618.6m, which increased
Development
against 2012 due to the 395,181 ounces of gold sold during
the year (2012: 353,321 ounces), albeit at a lower average
cash price of $1,562/oz (2012: $1,627/oz).
Interest payments of $1.7m are significantly lower than
the prior year as 2012 interest payments included interest
payments made to Resolute convertible note holders.
Inventories have increased significantly mainly due to a
build-up in gold in circuit at the Syama gold mine.
-
-
■■ Net investing cash outflows of $234.7m (2012: $93.3m)
included $85.4m accumulation of other financial assets
(primarily for the subscription for Noble Convertible
Notes), and $113.3m of development expenditure mostly
for the Syama Expansion Project. Subsequent to the Noble
Convertible Notes acquisition a fair value adjustment of
$20.0m was recognised against those convertible notes
resulting in an accounting value of $64.8m.
■■ Other financial assets – restricted cash on hand at 30 June
2012 was converted into available for sale financial assets,
some of which were subsequently sold.
■■ Net financing inflows of $8.2m (2012: $45.1m outflow) included
$51.5m received from borrowings, $11.0m spent on share buy-
backs and a $31.6m dividend payment.
Mali
■■ At 30 June 2013 work on the Syama Expansion Project
(excluding the Grid Connection) reached 34% completion with
US$82.9m expenditure.
■■ Memorandum of Understanding signed with Government of
Mali to progress the High Voltage Grid Connection to Syama.
■■ Very encouraging reverse circulation drilling intersections
were received from further resource drilling along the BA01 -
A21 deposit trends increasing near plant oxide resources.
Queensland
■■ At Ravenswood, significant intercepts were received from
recent resource drilling below the 600mRL at Mt Wright,
which included 12m @ 12.86g/t Au, 23m @ 6.42g/t Au, 40m @
4.67g/t Au, 17m @ 5.02g/t Au and 21m @ 4.12g/t Au.
■■ An infill and extension diamond drilling campaign was
completed at the Sarsfield gold deposit. An updated resource
calculation is being carried out and used to revise the pit
optimisation for the Sarsfield expansion project. Work
continued on the Environmental Impact Statement.
DIVIDENDS
Exploration
A $31.6m dividend payment was made on 16 November 2012
with respect to the 5 cent dividend declared on 28 August 2012.
No additional dividend was declared.
Exploration drilling was carried out in Mali, Tanzania and
Queensland while target definition work continued in Cote
d’Ivoire.
REVIEW OF OPERATIONS
Production
The Group gold production for the year was 435,855 ounces (2012:
398,451) at an average cash cost of $811/oz (2012: $761/oz).
Syama mine in Mali, Africa, produced 196,182 ounces (2012:
145,197) of gold at a cash cost of $796/oz (or US$818/oz) (2012:
$784/oz or US$813/oz).
Tanzania
■■ Resource drilling commenced on the Leeuwin and Grange
prospects at the Nyakafuru project. Significant intercepts
included 14m @ 11.94g/t Au from 20m, and 23m @ 3.92g/t Au
from 18m. Drilling is continuing.
■■ Reverse circulation drilling was carried out on the Mwaguguli
prospect located in the GP West JV with African Barrick. Better
results included 16m @ 7.87g/t Au from 24m, and 7m @ 9.17g/t
Au from 13m.
1 – Cash cost per ounce of gold produced is calculated as costs of production relating to gold sales excluding gold in circuit inventory movements
divided by gold ounces produced.
2 – AISC and AIC per ounce of gold produced is calculated in accordance with World Gold Council guidelines.
These measures are included to assist investors to better understand the performance of the business. Cash cost per ounce of gold produced, AISC,
and AIC are non‐International Financial Reporting Standards financial information and where included in this Directors’ Report have not been subject
to review by the Group’s external auditors.
40 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT ■■ The resource drilling program on the Voyager, Mentelle and
Cullen gold systems was completed and a new resource
estimate will be completed in due course. Significant results
from Voyager-Mentelle included 3m @ 59.72g/t Au from 160m,
and 4m @ 17.03g/t Au from 69m. Results from Cullen were
also very encouraging with many holes recording multiple
intersections including 9m @ 5.81g/t Au from 7m.
Mali
■■ Reverse circulation drilling results from Cashew were
encouraging with best intervals including 9m@ 7.50g/t Au
from 21m.
■■ At Paysans, results received from diamond drilling carried out
at the end of the prior year were very positive with best results
of 5m @ 12.85g/t Au from 164m, and 4m @ 7.25g/t Au from
90m.
Queensland
■■ As part of the ongoing Sarsfield assessment, a re-evaluation
of the Buck Reef West area commenced. The Buck Reef West
shear zone and associated high grade quartz vein lodes have
the potential to add significantly to the open pit resources in
the area.
Cote D’Ivoire
■■ Field work has commenced at the Toumodi and Goumere
Research Permit areas following licence approvals.
Corporate
■■ Market value of Group cash, bullion and investments at 30
June 2013 was $156m (30 June 2012: $139m). Included in the
year-end balance is 29,046oz of gold bullion on hand with a
market value of $37.9m, and investments with a market value
of $115.5m. The 29,046oz of gold bullion on hand is recorded
on the Consolidated Statement of Financial Position within
Inventories at its production cost of $30.7m.
■■ At 30 June 2013, the face value of Resolute’s total borrowings
was $92.2m (2012: $11.0m). As at year end, the weighted
average interest rate payable on the borrowings was 5.4%.
■■ Acquisition of 19.99% equity interest in Noble as well as
completion of $85m convertible note finance offer to Noble.
■■ A new US$50m revolving secured loan facility jointly provided
by Barclays Bank Plc and Investec Bank (Australia) Limited
was drawn-down to facilitate completion of the Noble
financing.
■■ Bank du Mali increased the size of its unsecured bank
overdraft facility to Societe des Mines de Syama SA (an
80% owned Resolute subsidiary that owns the Syama gold
mine) from CFA 7.5b (approximately US$15m) to CFA 15b
(approximately US$30m). The other terms and conditions of
this facility remain unchanged.
■■ A 5 cent per share interim dividend was paid during the year,
totalling $31.6m.
■■ $11.0m was utilised pursuant to the on market Share Buyback
Program, with 9.4m shares bought back and cancelled.
Outlook
Operations
■■ Group gold production is forecast to be 345,000 ounces in
FY2014 year following Golden Pride reaching the end of its
mine life. Cash costs for FY2014 are forecasted to be $890/oz
(based on an assumed exchange rate of 1 A$ = US$0.93).
Development and Exploration
■■ The Company will continue with a comprehensive review
of the US$266m Syama expansion in light of the prevailing
market conditions particularly impacting the gold sector.
US$113m has already been identified for immediate deferral,
with no adverse effect on the mine plan or longer term
revenue.
■■ Further reduction in capital spend and improved operating
costs expected at Syama as pit revised to two stage expansion.
Modified mine plan to deliver capital management benefits
and robust cash flows.
■■ The project development team for the Syama High
Voltage Grid Connection will now submit the necessary
environmental-social impact and infrastructure engineering
studies for approval, and finalise the Power Implementation
and Supply Agreements prior to construction commencing.
These agreements are expected to be completed during the
first half of FY2014.
■■ At Mt Wright, infill drilling has commenced from the 600RL
level testing targets down to 550RL. Drilling is expected to
continue over the next three months. It is planned to update
the resource block model and undertake a mining evaluation
for the zone below 600RL in the coming months.
■■ At Sarsfield, the Environmental Impact Study is due to be
submitted to the Queensland Department of Environment
and Heritage Protection during the first half of FY2014.
Additionally, investigations are continuing towards a revised
feasibility study which hopes to deliver improved project
economics through operating cost and capital expenditure
reductions, as well as mining inventory increases.
■■ Exploration will continue around Syama in Mali, Ravenswood
in Queensland and at the Nyakafuru project in Tanzania.
Total exploration of $15m is budgeted for the 2014 financial
year.
Corporate
■■ As previously announced, Resolute continues to critically
review all operating costs and mine plans with a view to
reducing the cash cost base. In support of this disciplined
cash management approach, a pay freeze has also been
implemented for all senior management positions.
■■ The Company continues to monitor and assess the
deployment of its capital across its existing growth projects,
new projects, and overall capital management program
ensuring the Company remains in a strong and flexible
financial position.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of
the Company other than those listed above.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 41
for the year ended 30 June 2013DIRECTORS’ REPORT SIGNIFICANT EVENTS AFTER REPORTING DATE
(ii) Executives
On 1 July 2013, 2,359,773 performance rights were granted and
issued vesting over 3 years with a strike price of $nil. A further
1,225,455 performance rights were granted to P. Sullivan on 1
July 2013 subject to shareholder approval, which have a strike
price of $nil.
G. Fitzgerald
P. Beilby
P. Venn
General Manager - Finance & Administration
and Company Secretary
General Manager - Operations
General Manager - Business Development
(b) Compensation of key management personnel
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The likely developments in the operations of the consolidated
entity and the expected results of those operations in the
coming financial year are as follows:
(i) The continued production of gold from the Ravenswood
and Syama mines for the full year, and from Golden Pride
for approximately half of the 2013/14 financial year;
(ii) The continued expansion activities at the Syama gold
mine;
(iii) mineral exploration will continue; and,
(iv) the Group will seek to expand its gold production activities
by advancing its existing projects or where appropriate,
by direct acquisition of projects or investments in other
resource based companies.
ENVIRONMENTAL REGULATION PERFORMANCE
The consolidated entity holds licences and abides by Acts and
Regulations issued by the relevant mining and environmental
protection authorities of the various countries in which the
Group operates. These licences, Acts and Regulations specify
limits and regulate the management of discharges to the
air, surface waters and groundwater associated with the
mining operations as well as the storage and use of hazardous
materials.
There have been no significant known breaches of the
consolidated entity’s licence conditions or of the relevant Acts
and Regulations.
REMUNERATION REPORT
This report outlines the remuneration arrangements in place
for directors and executives of RML.
RML Remuneration Policy
The Board spent considerable time last year focusing on
its remuneration framework and policy, reflecting on past
feedback, the current strategic direction of the Company and
how the remuneration framework can best support the future
needs of the various stakeholders of the Company. During
the 2012 year, the board undertook a comprehensive review
of remuneration practices, and commissioned a review of our
remuneration framework by external advisors PwC. The review
resulted in significant changes to Resolute’s remuneration
framework, with the new remuneration structure implemented
from 1 July 2012. The key initiatives implemented following
this review were the design and implementation of a new cash
based short-term incentive (“STI”) plan and the design and
implementation of a new equity based long-term incentive
(“LTI”) plan.
The Board recognises that the performance of the Company
depends upon the quality of its directors and executives. To
achieve its financial and operating objectives, the Company
must attract, motivate and retain highly skilled directors and
executives.
The Company embodies the following principles in its
remuneration framework:
■■ Provides competitive rewards to attract high calibre
executives;
■■ structures remuneration at a level that reflects the executive’s
duties and accountabilities and is competitive within
Australia;
■■ benchmarks remuneration against appropriate groups at
The following information has been audited.
approximately the third quartile; and,
This remuneration report outlines the director and executive
remuneration arrangements of the Company and the Group
in accordance with the requirements of the Corporations Act
2001 and its Regulations. For the purposes of this report, key
management personnel (“KMP”) of the Group are defined as
those persons having authority and responsibility for planning,
directing and controlling the major activities of the Company
and the Group, including any director (whether executive
or otherwise) of the parent company, and includes the
executives in the Company and the Group receiving the highest
remuneration.
(a) Key management personnel
(i) Directors
P. Huston
P. Sullivan
T. Ford
H. Price
Non-Executive Chairman
Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
■■ aligns executive incentive rewards with the creation of value
for shareholders.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee is responsible
for determining and reviewing the compensation arrangements
for the directors themselves, the Chief Executive Officer and
the executive team.
Executive remuneration is reviewed annually having regard
to individual and business performance, relevant comparative
information and internal and independent external
information.
In accordance with best practice governance the Remuneration
and Nomination Committee is comprised solely of non-
executive directors.
42 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT Remuneration Structure
In accordance with best practice governance, the structure of
non-executive director and senior executive remuneration is
separate and distinct.
The proportion of fixed remuneration and variable
remuneration (potential short term and long term incentives)
is established for each executive by the Remuneration and
Nomination Committee and is as follows:
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which
provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost which is
acceptable to shareholders.
Structure
The Company’s constitution and the ASX Listing Rules
specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general
meeting. An amount not exceeding the amount determined
is then divided between the directors as agreed. The latest
determination was at the Annual General Meeting held on 30
November 2010 when the shareholders approved an aggregate
remuneration of $600,000 per year.
The amount of aggregate remuneration sought to be approved
by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The board considers
fees paid to non-executive directors of comparable companies
when undertaking the annual review process. Each non-
executive director receives a fee for being a director of the
Company and for sitting on relevant board committees. The fee
size is commensurate with the workload and responsibilities
undertaken.
CEO
Fixed Remuneration
(45%)
Target STI
(22%) (50%
of fixed)
Target LTI
(33%) (75%
of fixed)
Other
Executives
Fixed Remuneration
(50%)
Target STI
(25%) (50%
of fixed)
Target LTI
(25%) (50%
of fixed)
Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base
level of remuneration which is both appropriate to the position
and is competitive in the market.
Fixed remuneration is reviewed annually by the Remuneration
and Nomination Committee. The process consists of a review
of individual performance, relevant experience, and relevant
comparable remuneration in the mining industry.
Structure
Executives are given the opportunity to receive their fixed
remuneration in a variety of forms including cash and fringe
benefits such as motor vehicles and expense payment plans. It
is intended that the manner of payment chosen will be optimal
for the recipient without creating undue cost to the Company.
Variable Remuneration – Short Term Incentive (“STI”)
Chief Executive Officer and Senior Executive
Remuneration
Objective
Objective
The Company aims to reward executives with a level and
mix of remuneration commensurate with their position and
responsibilities within the Company and so as to ensure total
remuneration is competitive by market standards.
Structure
In determining the level and make up of executive
remuneration, the Remuneration and Nomination Committee
uses an external consultant’s Remuneration Report to
determine market levels of remuneration for comparable
executive roles in the mining industry. An external advisor was
used in 2012 to assist in the design and implementation of a
Remuneration Framework that is in line with industry practice.
It is the Remuneration and Nomination Committee’s policy
that employment contracts are entered into with the Chief
Executive Officer and the executive employees. Details of these
contracts are outlined later in this report.
Remuneration consists of the following key elements:
■■ Fixed remuneration
■■ Variable remuneration
- Short term incentives (STI); and,
- Long term incentives (LTI).
The objective of the STI is to provide a greater alignment
between performance and remuneration levels.
Structure
The STI is an annual “at risk” component of remuneration
for KMP. It is payable based on performance against key
performance indicators (KPIs) set at the beginning of the
financial year. STI’s are structured to remunerate KMP for
achieving annual Company targets and their own individual
performance targets. The net amount of any STI after allowing
for applicable taxation, is payable in cash.
KPIs require the achievement of strategic, operational or
financial measures and in most cases are linked to the drivers
of business performance. For each KPI there are defined
“threshold”, “target” and “stretch” measures which are capable
of objective assessment.
Target performance represents challenging but achievable
levels of performance. Stretch performance requires significant
performance above and beyond normal expectations and if
achieved is anticipated to result in a substantial improvement
in key strategic outcomes, operational or financial results, and/
or the business performance of the Company.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 43
for the year ended 30 June 2013DIRECTORS’ REPORT The Remuneration Committee is responsible for recommending
to the Board KPIs for each KMP and then later assessing the
extent to which the KPIs of the KMP have been achieved, and
the amount to be paid to each KMP. To assist in making this
assessment, the Committee receives detailed reports and
presentations on the performance of the business from the
CEO, Company Secretary and independent remuneration
consultants as required.
The LTI dollar value that KMP are entitled to receive is set at
a fixed percentage of their fixed remuneration and equates to
75% of fixed remuneration for the Chief Executive Officer and
50% of fixed remuneration for the other KMP. This level of LTI is
in line with current market practice.
The number of Performance Rights to be granted is determined
by dividing the LTI dollar value of the award by the fair value of
a Performance Right on the allocation date.
The Company STI measures comprise:
■■ Improved safety performance – measured in the form of a
specified reduction in the Total Recordable Injury Frequency
Rate in comparison to prior years;
■■ The achievement of defined targets relative to budget relating
to:
- Operating cash flow;
- gold production; and,
- cost per tonne milled.
C) PERFORMANCE CONDITIONS
Performance conditions have been selected that reward KMP
for creating shareholder value as determined via the change in
the Company’s share price and via reserves/resources growth
over a 3 year period.
The LTI performance is structured as follows:
Performance Rights will vest subject to meeting service and
performance conditions as defined below:
These measures have been selected as they can be reliably
measured, are key drivers of value for shareholders and
encourage behaviours in line with the Company’s core values.
■■ 75% of the Rights will be performance tested against the
relative total shareholder return (“TSR”) measure over a 3 year
period; and
The individual performance measures vary according to
the individual KMP’s position, and reflect value accretive
and/or risk mitigation achievements for the benefit of the
Company within each KMP’s respective areas of responsibility.
They also include a discretionary factor determined by the
Board designed to take into account unexpected events and
achievements during the year.
The aggregate of annual STI payments available for executives
across the Company is subject to the approval of the
Remuneration and Nomination Committee. Payments are
delivered as a cash bonus and/or in the form of superannuation.
Variable Remuneration – Long Term Incentive (“LTI”)
Objective
The objective of the LTI plan is to reward executives in a
manner, which aligns this element of remuneration with the
creation of shareholder wealth.
As such LTIs are made to executives who are able to influence
the generation of shareholder wealth and thus have an impact
on the Company’s performance against the relevant long-term
performance hurdles.
Overview of the Company’s approach to Long Term
Incentives
A) SELECTING THE RIGHT PLAN VEHICLE
To provide an effective tool to reward, retain and motivate KMP,
following receipt of external advice, the Board decided that the
most appropriate LTI plan would be a Performance Rights Plan.
Under a Performance Rights Plan, KMP are granted a right to
be issued a share in the future subject to performance based
vesting conditions being met.
B) GRANT FREQUENCY AND LTI QUANTUM
KMP receive a new grant of Performance Rights every year
and the LTI forms a key component of KMP Total Annual
Remuneration.
■■ 25% of the Rights will be performance tested against the
reserve/resource growth over a 3 year period.
Reflecting on market practice the Board has decided that the
most appropriate performance measure to track share price
performance is via a relative TSR measure.
The Company’s TSR is updated each year and is measured
against a customised peer group comprising the following
companies:
■■ Alacer Gold Corporation
■■ Perseus Mining Ltd
■■ Beadell Resources Ltd
■■ Ramelius Resources Ltd
■■ Endeavour Mining Corporation
■■ Regis Resources Ltd
■■ Evolution Mining Ltd
■■ Saracen Mining Ltd
■■ Gold One International Ltd
■■ Silver Lake Resources Ltd
■■ Kingsgate Consolidated Ltd
■■ St Barbara Ltd
■■ Medusa Mining Ltd
■■ Teranga Gold Corporation
■■ OceanaGold Corporation
No Performance Rights (relating to TSR) will vest unless the
percentile ranking of the Company’s TSR for the relevant
performance year, as compared to the TSR’s for the peer group
companies for that year, is at or above the 50th percentile.
The following table sets out the vesting outcome based on the
company’s relative TSR performance:
RELATIVE TSR PERFORMANCE
PERFORMANCE VESTING OUTCOMES
Less than 50th percentile
0% vesting
At the 50th percentile
50% vesting
Between 50th and 75th
percentile
For each percentile over the
50th, an additional 2% of the
performance rights will vest
At or above 75th percentile
100% vesting
44 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT Although there are no specific performance hurdles in place for
the Employee Share Option Plan, these general performance
categories which the executives are evaluated against were
chosen to enhance accountability of the executives across
several areas critical to good management of the Group, and
the board believes the annual appraisal process conducted in
light of these categories provides an accurate and adequate
measurement of their performance.
The Company prohibits directors or executives from entering
into arrangements to protect the value of unvested Resolute
Mining Limited shares, options or performance rights that the
director or executive may become entitled to as part of his/her
remuneration package. This includes entering into contracts to
hedge their exposure to RML rights, options or shares that may
vest to him/her in the future.
The second performance condition is reserve/resource growth
net of depletion over a 3 year period. Broadly, the quantum of
the increase in reserves/resources will determine the number
of Performance Rights to vest.
The following table sets out the vesting outcome based on the
company’s reserve/resource growth performance:
RESERVES AND RESOURCE GROWTH
PERFORMANCE
PERFORMANCE VESTING OUTCOMES
R&R depleted
R&R maintained
R&R grown by up to 30%
0% vesting
50% vesting
For each percentile over the
50th, an additional 2% of the
performance rights will vest
R&R grown by 30% or more
100% vesting
D) PERFORMANCE PERIOD
Grants under the LTI need to serve a number of different
purposes:
i) Act as a key retention tool; and,
ii) focus on future shareholder value generation.
Therefore, the awards under the LTI relate to a 3 year
period and provide a structure that is focused on long term
sustainable shareholder value generation.
Up until January 2012, LTI grants to executives were delivered
in the form of employee share options. These options were
previously issued with an exercise price at a 10% premium to
the RML ordinary share price at the date the Remuneration and
Nomination Committee decided to invite the eligible persons
to apply for the option. These employee share options vest over
a 30 month period. This option plan has been replaced by the
new Performance Rights Plan. All existing options issued under
the employee share option plan will continue to vest, however
it is the current intention that no further options will be issued
in the future.
Options granted in prior periods are vested in accordance
with the Resolute Mining Limited Employee Share Option Plan
following a review by the relevant supervisor of the executive’s
performance. If a satisfactory performance level is achieved,
the relevant portions of the options vests to the executive. In
order for the executive’s options to vest, the executive must
successfully meet the deliverables set out in their employment
contract specific to their role. The assessment of whether the
executive’s role has been successfully performed (therefore
allowing the options to vest) is done by way of a formal annual
appraisal of the key management personnel’s individual
performance. Assessments of performance generally exclude
factors external to the Company.
The performance of the Chief Executive Officer is assessed by
the Chairman, and the performance of the other executives
is assessed by the Chief Executive Officer. The annual
performance appraisal assesses each executive’s performance
against the following categories:
(a) Professional and technical competence;
(b) teamwork and administrative skills;
(c) self-development and communication skills; and,
(d) developing people.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 45
for the year ended 30 June 2013DIRECTORS’ REPORT
Details of remuneration provided to key management personnel are as follows:
13
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
12
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
BASE REMUNERATION
NON MONETARY BENEFITS (I)
CASH BONUS (II) (IV)
ANNUAL LEAVE PROVISION
MOVEMENT (III)
SUPERANNUATION
MOVEMENT (III)
OPTIONS
PERFORMANCE RIGHTS
LONG SERVICE LEAVE PROVISION
SHORT TERM BENEFITS
POST EMPLOYMENT BENEFITS
LONG TERM BENEFITS
SHARE BASED PAYMENTS
PERFORMANCE RELATED
CASH BONUS, OPTIONS AND
PERFORMANCE RIGHTS
$
175,000
671,080
82,569
69,687
356,237
414,999
307,868
162,500
664,443
38,633
29,633
388,748
437,248
331,898
$
-
4,910
-
-
4,723
-
2,674
-
58,611
-
-
3,765
-
6,107
$
-
$
-
227,194
16,346
38,398
182,876
266,602
48.54
-
-
126,114
145,449
108,731
-
74,000
-
-
30,000
40,000
30,000
-
-
(150)
1,768
(15,776)
-
10,772
-
-
(19,168)
5,323
5,532
(4,984)
4,499
8,897
31,665
38,649
31,665
97,754
111,719
85,059
$
-
25,000
7,431
20,313
25,000
25,000
25,000
-
50,000
40,742
49,742
34,987
50,252
30,228
$
-
-
-
-
-
-
$
-
-
-
-
-
-
57,723
482,225
14,682
8,503
21,196
56,211
72,170
56,211
$
-
-
-
-
-
-
-
-
-
-
%
-
-
-
39.84
40.11
41.35
39.79
-
-
-
16.93
18.28
17.92
(i) Non monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits
and all other benefits received by the executive.
(ii) The Short Term Incentives were paid in cash on 14 September 2013 for the year ended 30 June 2013 and were based on the performance metrics
outlined in the “Variable Remuneration – Short Term Incentive” section of this Remuneration Report.
(iii) The following cash payments were made to Key Management Personnel during the year ended 30 June 2013 relating to the payout of annual
and long service leave entitlements accrued in prior years - Peter Sullivan ($233,370), Greg Fitzgerald ($28,121), Peter Beilby ($2,847) and
Peter Venn ($24,283).
(iv) The cash bonus was paid to P Sullivan on 15 January 2012, and to all other Key Management Personnel on 15 December 2011.
46 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT 13
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
12
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
$
175,000
671,080
82,569
69,687
356,237
414,999
307,868
162,500
664,443
38,633
29,633
388,748
437,248
331,898
$
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
4,910
227,194
16,346
4,723
2,674
126,114
145,449
108,731
(150)
1,768
(15,776)
58,611
74,000
10,772
3,765
6,107
30,000
40,000
30,000
(19,168)
5,323
5,532
$
-
-
-
-
-
-
(i) Non monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits
and all other benefits received by the executive.
(ii) The Short Term Incentives were paid in cash on 14 September 2013 for the year ended 30 June 2013 and were based on the performance metrics
outlined in the “Variable Remuneration – Short Term Incentive” section of this Remuneration Report.
(iii) The following cash payments were made to Key Management Personnel during the year ended 30 June 2013 relating to the payout of annual
and long service leave entitlements accrued in prior years - Peter Sullivan ($233,370), Greg Fitzgerald ($28,121), Peter Beilby ($2,847) and
Peter Venn ($24,283).
(iv) The cash bonus was paid to P Sullivan on 15 January 2012, and to all other Key Management Personnel on 15 December 2011.
Details of remuneration provided to key management personnel are as follows:
BASE REMUNERATION
NON MONETARY BENEFITS (I)
CASH BONUS (II) (IV)
MOVEMENT (III)
ANNUAL LEAVE PROVISION
SUPERANNUATION
LONG SERVICE LEAVE PROVISION
MOVEMENT (III)
OPTIONS
PERFORMANCE RIGHTS
SHORT TERM BENEFITS
POST EMPLOYMENT BENEFITS
LONG TERM BENEFITS
SHARE BASED PAYMENTS
PERFORMANCE RELATED
CASH BONUS, OPTIONS AND
PERFORMANCE RIGHTS
$
-
25,000
7,431
20,313
25,000
25,000
25,000
-
50,000
40,742
49,742
34,987
50,252
30,228
$
-
$
-
$
-
38,398
182,876
266,602
-
-
(4,984)
4,499
8,897
-
57,723
-
-
14,682
8,503
21,196
-
-
31,665
38,649
31,665
-
482,225
-
-
56,211
72,170
56,211
-
-
97,754
111,719
85,059
-
-
-
-
-
-
-
%
-
48.54
-
-
39.84
40.11
41.35
-
39.79
-
-
16.93
18.28
17.92
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 47
for the year ended 30 June 2013DIRECTORS’ REPORT Details of option holdings of key management personnel are as follows:
BALANCE AT
THE START OF
THE YEAR
GRANTED
DURING THE
YEAR AS
COMPENSATION
(VII)
FAIR VALUE OF
OPTIONS AT
GRANT DATE
TOTAL FAIR
VALUE OF
OPTIONS AT
GRANT DATE
GRANT DATE
OPTIONS TYPE
FIRST
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
YEAR
EXPIRY & LAST
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
YEAR
13
DIRECTORS
P. Sullivan
OFFICERS
G. Fitzgerald (i)
P. Beilby
P. Venn
12
DIRECTORS
P. Huston (iv)
P. Sullivan
P. Sullivan (v)
T. Ford (v)
H. Price (vi)
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
P. Venn
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
475,000
250,000
475,000
Listed
26,761
Unlisted
2,000,000
133,333
133,333
67,554
Listed
Listed
Listed
Unlisted
Unlisted
Unlisted
Listed
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
415,000
60,000
27 Jan 2012
190,000
60,000
27 Jan 2012
415,000
60,000
27 Jan 2012
5,000
-
-
0.98
0.98
0.98
-
58,800
27 Jul 2012
26 Jan 2017
58,800
27 Jul 2012
26 Jan 2017
58,800
27 Jul 2012
26 Jan 2017
-
-
-
EXERCISE PRICE
OF OPTIONS
GRANTED
DURING THE
YEAR
$
EXERCISED
ACQUIRED
BALANCE AT
GRANTED &
DURING THE
LAPSED DURING
DURING THE
THE END OF THE
VESTED DURING
VESTED AND EXERCISABLE AT THE
YEAR
THE YEAR (II)
YEAR
YEAR
THE YEAR
END OF THE YEAR
NO.
NO.
%
-
-
-
(150,000)
(75,000)
(24,000)
2,000,000
666,667
33.33
176,667
176,667
377,667
70.67
70.67
83.74
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
$
-
-
-
217,500
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
451,000
-
-
-
-
475,000
250,000
475,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
666,667
33.33
-
-
-
-
318,333
93,333
318,333
-
-
-
-
-
67.02
37.33
67.02
-
28,099
-
140,000
140,000
70,932
-
-
-
5,250
-
-
-
-
-
-
-
-
-
1.85
1.85
1.85
-
(26,761)
-
(133,333)
(133,333)
(67,554)
-
-
-
(5,000)
-
-
-
-
-
-
-
-
-
-
-
48 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT EXERCISED
DURING THE
YEAR
LAPSED DURING
THE YEAR (II)
ACQUIRED
DURING THE
YEAR
BALANCE AT
THE END OF THE
YEAR
GRANTED &
VESTED DURING
THE YEAR
VESTED AND EXERCISABLE AT THE
END OF THE YEAR
NO.
NO.
%
Details of option holdings of key management personnel are as follows:
BALANCE AT
THE START OF
COMPENSATION
GRANTED
DURING THE
YEAR AS
OPTIONS TYPE
THE YEAR
(VII)
GRANT DATE
FAIR VALUE OF
OPTIONS AT
GRANT DATE
TOTAL FAIR
VALUE OF
OPTIONS AT
GRANT DATE
FIRST
EXPIRY & LAST
EXERCISE
DATE OF
OPTIONS
GRANTED
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
DURING THE
YEAR
YEAR
EXERCISE PRICE
OF OPTIONS
GRANTED
DURING THE
YEAR
$
-
-
-
-
-
-
-
-
-
1.85
1.85
1.85
-
13
DIRECTORS
P. Sullivan
OFFICERS
G. Fitzgerald (i)
P. Beilby
P. Venn
12
DIRECTORS
P. Huston (iv)
P. Sullivan
P. Sullivan (v)
T. Ford (v)
H. Price (vi)
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
P. Venn
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
475,000
250,000
475,000
Listed
26,761
Unlisted
2,000,000
133,333
133,333
67,554
Listed
Listed
Listed
Unlisted
Unlisted
Unlisted
Listed
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
415,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
190,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
415,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
5,000
-
-
-
-
-
0.98
0.98
0.98
-
-
-
(150,000)
(75,000)
-
-
-
(24,000)
(26,761)
-
(133,333)
(133,333)
(67,554)
-
-
-
(5,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
250,000
250,000
451,000
-
2,000,000
-
-
-
475,000
250,000
475,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
$
-
666,667
33.33
176,667
176,667
377,667
70.67
70.67
83.74
217,500
-
-
-
-
28,099
666,667
33.33
-
-
-
318,333
93,333
318,333
-
-
-
-
67.02
37.33
67.02
-
-
140,000
140,000
70,932
-
-
-
5,250
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 49
for the year ended 30 June 2013DIRECTORS’ REPORT Details of performance rights holdings of key management personnel are as follows:
BALANCE AT
THE START OF
THE YEAR
GRANTED
DURING THE
YEAR AS
COMPENSATION
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT
GRANT DATE
(III)
TOTAL FAIR
VALUE OF
PERFORMANCE
RIGHTS AT
GRANT DATE
$
$
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE
PRICE OF
PERFORMANCE
RIGHTS
GRANTED
DURING THE
YEAR
$
BALANCE AT
THE END OF THE
YEAR
-
546,875 27 Nov 2012
1.46
266,602 30 Jun 2015 27 Nov 2017
$nil
546,875
-
-
-
200,521 27 Nov 2012
229,167 27 Nov 2012
174,479 27 Nov 2012
1.46
1.46
1.46
97,754 30 Jun 2015 27 Nov 2017
111,719 30 Jun 2015 27 Nov 2017
85,059 30 Jun 2015 27 Nov 2017
$nil
$nil
$nil
200,521
229,167
174,479
13
DIRECTORS
P. Sullivan
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
12
There were no performance rights in place for the year ended 30 June 2012.
(i) On 17 October 2012, 150,000 unlisted options were exercised at a price of $0.42 per option. In each instance of exercising options,
one ordinary share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through
the exercise of options.
(ii) The value of options at the date of lapse was nil.
(iii) Performance rights vest over a 3 year period. On the date of calculating the number of performance rights to be allocated to KMP, the fair value
of a performance right was $0.96. By the time the performance rights were granted on 27 November 2012, the fair value of the performance
rights had increased to $1.4625 each resulting in an LTI expense that is higher than that anticipated on the allocation date.
(iv) On 31 December 2011, 26,761 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary
share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise
of options.
(v) On 31 December 2011, 133,333 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary
share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise
of options.
(vi) On 31 December 2011, 67,554 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary
share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise
of options.
(vii) Options granted vest in accordance with the Resolute Mining Limited Employee Share Option Plan following the review by the relevant
supervisor of the key management personnel’s performance. For details on the valuation of the options, including models and assumptions
used, refer to Note 29(b). The percentage of options granted during the financial year that also vested during the financial year is nil (2012: nil).
None of these options were forfeited during the financial year.
(viii) Performance rights vest in accordance with the Resolute Mining Limited Remuneration Policy which outlines the key performance indicators
that need to be satisfied. For details on the valuation of the performance rights, including models and assumptions used, refer to Note 29(c).
The percentage of performance rights granted during the financial year that also vested during the financial year is nil. No performance
rights were forfeited during the financial year.
50 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT Employment Contracts
The CEO, Mr Sullivan, is employed under contract. His current employment contract commenced on 14 February 2004 and there is
no termination date. Under the terms of the contract:
■■ Mr Sullivan may resign from his position and thus terminate this contract by giving 6 months written notice.
■■ The Company may terminate this employment agreement by providing 12 months written notice or provide payment in lieu of the
notice period (based on the fixed component of Mr Sullivan’s remuneration).
■■ Mr Sullivan accrues 5 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 7 years.
Mr Fitzgerald (General Manager – Finance and Administration) is also employed under contract. This contract has no termination
date and under the terms of the contract:
■■ Mr Fitzgerald may resign from his position and thus terminate his contract by giving 3 months written notice.
■■ The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the
notice period (based on the fixed component of Mr Fitzgerald’s remuneration).
■■ Mr Fitzgerald accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.
Mr Venn (General Manager – Business Development) is also employed under contract. This contract has no termination date and
under the terms of the contract:
■■ Mr Venn may resign from his position and thus terminate his contract by giving 3 months written notice.
■■ The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the
notice period (based on the fixed component of Mr Venn’s remuneration).
■■ Mr Venn accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.
Mr Beilby (General Manager – Operations) is also employed under contract. This contract has no termination date and under the
terms of the contract:
■■ Mr Beilby may resign from his position and thus terminate his contract by giving 3 months written notice.
■■ The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the
notice period (based on the fixed component of Mr Beilby’s remuneration).
■■ Mr Beilby accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.
Company Performance
The table below shows the performance of the Consolidated Entity over the last 5 years:
Net profit/(loss) after tax
$’000
105,443
101,859
Basic earnings/(loss) per share
cents/share
13.29
18.62
42,930
13.42
(56,571)
(9.90)
30,676
10.30
30 JUNE 2013
30 JUNE 2012
30 JUNE 2011
30 JUNE 2010
30 JUNE 2009
This is the end of the audited information.
SHARES UNDER OPTIONS
Unissued ordinary shares of Resolute Mining Limited under option at the date of this report are as follows:
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER ON ISSUE
29/08/08
20/01/09
15/02/10
16/07/10
16/11/10
5/01/11
25/01/11
30/06/11
4/01/12
29/08/13
31/01/14
14/02/15
15/07/15
15/11/15
4/01/16
24/01/16
15/07/16
26/01/17
$1.62
$0.42
$1.09
$1.21
$1.43
$1.36
$1.43
$1.18
$1.85
51,000
194,999
450,000
39,000
135,000
2,000,000
915,666
130,000
764,400
4,680,065
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 51
for the year ended 30 June 2013DIRECTORS’ REPORT Shares issued as a result of the exercise of options:
From 1 July 2013 up until the date of this report, no options have been exercised.
Performance rights at the date of this report are as follows:
GRANT DATE
VESTING DATE
EXERCISE PRICE
NUMBER ON ISSUE
27/11/12
1/07/13
30/06/15
30/06/16
-
-
1,586,978
2,359,773
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
RML maintains an insurance policy for its directors and officers against certain liabilities arising as a result of work performed
in the capacity as directors and officers. The company has paid an insurance premium for the policy. The contract of insurance
prohibits disclosure of the amount of the premium and the nature of the liabilities insured.
DIRECTORS’ MEETINGS
The number of meetings and resolutions of directors (including meetings of committees of directors) held during the year and the
number of meetings (or resolutions) attended by each director were as follows:
FULL BOARD
AUDIT
ENVIRONMENT
& COMMUNITY
DEVELOPMENT
REMUNERATION &
NOMINATION
SAFETY, SECURITY
& OCCUPATIONAL
HEALTH
FINANCIAL RISK
MANAGEMENT
P. Huston
P. Sullivan
T. Ford
H. Price
Number of meetings (or
resolutions) held
15
15
15
15
15
2
n/a
2
2
2
n/a
4
n/a
n/a
4
4
n/a
4
4
4
n/a
4
n/a
n/a
4
n/a
22
n/a
n/a
22
The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.
ROUNDING
RML is a Company of the kind specified in Australian Securities and Investments Commission Class Order 98/0100. In accordance
with that class order, amounts in the financial report and the Directors’ Report have been rounded to the nearest thousand dollars
unless specifically stated to be otherwise.
AUDITOR INDEPENDENCE
Refer to page 57 for the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.
NON-AUDIT SERVICES
Non-audit services were provided by the entity’s auditor, Ernst & Young. The directors are satisfied that the provision of non-audit
services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature
and scope of each type of non-audit service provided means that auditor independence was not compromised.
Ernst & Young Australia received or are due to receive $118,896 for the provision of taxation planning and review services in the
year ended 30 June 2013.
Signed in accordance with a resolution of the directors.
P.R. Sullivan
Director
Perth, Western Australia
24 September 2013
52 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013DIRECTORS’ REPORT CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Resolute Mining Limited (“RML” or “the Company”) is responsible for the corporate governance of the
consolidated entity (the “Group”). The Board guides and monitors the business and affairs of RML on behalf of the shareholders by
whom they are elected and to whom they are accountable.
The Board has adopted the “Corporate Governance Principles and Recommendations” established by the ASX Corporate
Governance Council and published by the ASX in August 2007 with the amendments made in 2010. There is a corporate
governance section on the Company’s website which sets out the various policies, charters and codes of conduct which have been
adopted to ensure compliance with the “best practice recommendations” referred to above.
A description of the Company’s main corporate governance practices is set out below. All practices, unless otherwise stated, were
in place for the entire year.
1. THE BOARD OF DIRECTORS
The Board have established a “Statement of Matters Reserved to the Board” which is available on the Company website. This
outlines the functions reserved to the Board and those delegated to management, and demonstrates that the responsibilities and
functions of the Board are distinct from management.
The key responsibilities of the Board include:
■■ Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer (“CEO”) and senior management;
■■ Development of corporate objectives and strategy with management and approving plans, new investments, major capital and
operating expenditures and major funding activities proposed by management;
■■ Monitoring actual performance against defined performance expectations and reviewing operating information to understand at
all times the state of the health of the Company;
■■ Overseeing the management of business risks, safety and occupational health, environmental issues and community development;
■■ Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial
performance of the Company for the period under review;
■■ Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational,
financial, compliance, risk management and internal control processes are in place and functioning appropriately. Further,
approving and monitoring financial and other reporting;
■■ Assuring itself that appropriate audit arrangements are in place;
■■ Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of
Business Ethics and that the Company practice is consistent with that Code; and
■■ Reporting to and advising shareholders.
The Board is comprised of 3 non-executive Directors including the Chairman and one executive director being the CEO.
The table below sets out the detail of the tenure of each director at the date of this report.
DIRECTOR
ROLE OF DIRECTOR
FIRST APPOINTED (A)
NON-EXECUTIVE
INDEPENDENT
GENDER
Peter Ernest Huston
Non-executive chairman
Peter Ross Sullivan
CEO
Thomas Cummings Ford
Non-executive director
June 2001
June 2001
June 2001
Henry Thomas Stuart Price
Non-executive director
November 2003
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Male
Male
Male
Male
(a) RML was incorporated on 8 June 2001.
Details of the members of the Board including their experience, expertise and qualifications are set out in the Directors’ Report
under the heading “Directors”.
2. DIRECTOR INDEPENDENCE
Directors are expected to contribute independent views to the Board.
The Board has adopted specific principles in relation to the Directors’ independence. These state that to be deemed independent, a
director must be a non-executive and:
■■ Not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of
the Company.
■■ Within the last three years has not been employed in an executive capacity by the Company or another group member, or been a
director after ceasing to hold any such employment.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 53
for the year ended 30 June 2013 CORPORATE GOVERNANCE STATEMENT
■■ Within the last three years has not been a principal of a
material professional advisor or a material consultant to
the Company or another group member, or an employee
materially associated with the service provided.
■■ Not a material supplier or customer of the Company or
other group member, or an officer of or otherwise associated
directly or indirectly with a material supplier or customer.
■■ Must have no material contractual relationship with the
Company or another group member other than as a director of
the Company.
■■ Not served on the Board for a period which could, or could
reasonably be perceived to, materially interfere with the
director’s ability to act in the best interests of the Company.
appropriateness of the size of the Board relative to its various
responsibilities. Recommendations are made to the Board
on these matters. Further roles and responsibilities of this
Committee, including a description of the procedure for the
selection, appointment and re-election of incumbents, can
be found in the Committee’s charter which is posted on the
Company website.
A performance evaluation of senior executives took place
during the financial year and was conducted in accordance
with the procedures outlined by the Remuneration and
Nomination Committee.
Diversity
■■ Is free from any interest and any business or other
relationship which could, or could reasonably be perceived to,
materially interfere with the director’s ability to act in the best
interests of the Company.
In accordance with best governance practice a diversity policy
has been established which includes the review of diversity
within RML by considering board composition, executive
composition and employee composition by gender.
Materiality for these purposes is based on both quantitative
and qualitative bases. An amount of over 5% of annual turnover
of the Company or Group or 5% of the individual Directors net
worth is considered material for these purposes. In addition,
a transaction of any amount or a relationship is deemed
to be material if knowledge of it impacts the shareholders’
understanding of the director’s performance.
Resolute’s Diversity Policy applies to all Resolute employees
and includes the recruitment and selection process, terms
and conditions of employment including pay, promotion,
work assignment, training and other aspects of employment.
Details of the policy are set out under the “About Us – Corporate
Governance – Resolute Mining Diversity Policy” section of
Resolute’s website at www.rml.com.au
The Board has reviewed and considered the positions and
associations of each of the 4 Directors in office at the date
of this report, and considers that 3 of the directors are
independent. Mr Peter Sullivan (CEO) is not considered to be
independent. As such it is clear that the majority of the Board
are independent and the Chairman is an independent director.
The roles of the Chairman and the CEO are not exercised by
the same individual. The Chairman is responsible for leading
the Board, ensuring that Board activities are organised and
efficiently conducted and for ensuring Directors are properly
briefed for meetings. The Board has delegated responsibility
for the day-to-day activities to the CEO and the Executive
Committee. The Remuneration and Nomination Committee
ensure that the Board members are appropriately qualified
and experienced to discharge their responsibilities and has in
place procedures to assess the performance of the CEO and
the Executive Committee. The CEO is accountable to the Board
for all authority delegated to that position and the Executive
Committee.
Directors and Board Committees have the right, in connection
with their duties and responsibilities, to seek independent
professional advice at the Company’s expense.
In relation to the term of office, the Company’s constitution
specifies that one third of all Directors (with the exception of
the CEO) must retire from office annually and are eligible for
re-election.
3. REMUNERATION AND NOMINATION COMMITTEE
The Remuneration and Nomination Committee consists of the
following non-executive Directors, Mr P.Huston (Chairman),
Mr T.Ford and Mr H.Price. The attendance record in the current
year of members at the Committee meetings is noted in the
Directors’ Report under the heading “Directors’ Meetings”.
The Remuneration and Nomination Committee is responsible
for determining and reviewing the compensation arrangements
for the Directors themselves, the CEO, the executive team and
employees. In addition, they are responsible for reviewing the
The Diversity Policy includes a goal to contribute positively to
the success of the Company by promoting a high performance
culture that draws on the diverse and relevant experience, skills,
expertise, perspectives and the unique personal attributes of
its board members and employees. In accordance with this
Charter, the directors have set measurable objectives towards
establishing this goal. Details of these objectives and the
progress towards achieving them are provided in the table below.
MEASURABLE OBJECTIVE
ACTIVITY DURING YEAR
To include in the
Remuneration & Nomination
Committee Charter
responsibility for diversity,
including an annual review
and report to the board on the:
Charter updated in November
2012 and this now includes
responsibilities for diversity,
including the introduction of this
new Annual Review and Report to
the board on gender diversity.
a.
b.
progress towards
achieving these
measurable objectives
and overall effectiveness
of the policy;
The measurable objectives are
being progressed and the overall
effectiveness of the policy will
be ascertained in the coming
reporting periods.
proportion of women
and men in the Resolute
workforce at three levels
in the organisation (board
level, senior management
and the whole
organisation), including
benchmarking this data
against relevant industry
standards where possible;
and,
The proportion of women in the
entire Resolute workforce are as
follows:
Category
As at 30/6/13
Board Level*
Senior
Management
Whole
organisation
0%
0%
9%
c.
remuneration by gender
together with any
recommendations to the
board
*This excludes a female director
on the board of certain Resolute
subsidiaries.
This information has been collated
and provided in the annual review
and report to the board.
54 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013 CORPORATE GOVERNANCE STATEMENT
MEASURABLE OBJECTIVE
ACTIVITY DURING YEAR
To engage consultants that
support and promote the
Company’s diversity policy
To ensure that candidate
lists for permanent employee
positions are suitably
qualified and where possible
recognisably diverse by age,
sex or ethnicity
To consider diversity when
reviewing board succession
plans with the aim to have
gender representation and
diversity
Resolute continues to engage
consultants that are encouraged
to put forward a diverse range of
applicants for a vacant position.
Resolute’s main recruitment
objective continues to be focussed
on offering jobs to the best
qualified applicant, regardless
of their age, sex or ethnicity.
To achieve this, it continues
to compile a diverse range of
candidates on its shortlists.
This is cognisant of the fact that
different types of applicants will
be more likely to over or under sell
themselves in a Résumé.
No new board appointments were
made during the year.
4. ETHICAL STANDARDS AND CODE OF CONDUCT
The Board acknowledges the need for the highest standards
of corporate governance and ethical conduct by all Directors
and employees of the consolidated entity. As such, the
Company has developed a Code of Conduct which has been
fully endorsed by the Board and applies to all Directors and
employees. This Code of Conduct is regularly reviewed and
updated as necessary to ensure that it reflects the highest
standards of behaviour and professionalism and the practices
necessary to maintain confidence in the Group’s integrity.
A fundamental theme is that all business affairs are
conducted legally, ethically and with strict observance of the
highest standards of integrity and propriety. The Directors
and management have the responsibility to carry out their
functions with a view to maximising financial performance of
the consolidated entity. This concerns the propriety of decision
making in conflict of interest situations and quality decision
making for the benefit of shareholders.
Refer to the Company website for specific codes of conduct,
including the policy for reporting and investigating unethical
practices.
5. SECURITIES TRADING
■■ Subject to clause 2.5 of the RML Securities Trading Policy,
trading in the securities of the Company one week before the
release of the Company’s Quarterly, Half yearly or Preliminary
Final Report to the ASX is prohibited.
Furthermore, the Company prohibits directors or executives
from entering into arrangements to protect the value of unvested
Resolute Mining Limited securities that the Director or executive
may become entitled to as part of his/her remuneration package.
This includes entering into contracts to hedge their exposure to
securities that may vest to him/her in the future.
6. CORPORATE REPORTING
The CEO and General Manager - Finance & Administration
have made the following certifications to the Board:
■■ That the Company’s financial reports are complete and
present a true and fair view as required by Accounting
Standards, in all material respects, of the financial condition
and operational results of the Company and Group; and,
■■ That the above statement is founded on a sound system of
internal control and risk management which implements the
policies adopted by the Board and that the Company’s risk
management and internal control is operating efficiently in all
material respects.
7. AUDIT COMMITTEE
The Audit Committee consists of the following non-executive
Directors; Mr H. Price (Chairman), Mr P. Huston and Mr T. Ford.
The attendance record in the current year of members at the
Committee meetings is noted in the Directors’ Report under
the heading “Directors’ Meetings”.
Details of the members of the Board including their experience,
expertise and qualifications are set out in the Directors’ Report
under the heading “Directors”.
The Committee operates under a charter approved by the
Board which is posted to the corporate governance section
of the website. It is the Board’s responsibility to ensure that
an effective internal control framework exists within the
entity. This includes internal controls to deal with both the
effectiveness and efficiency of significant business processes.
This includes the safeguarding of assets, the maintenance
of proper accounting records, and the reliability of financial
information as well as non-financial considerations. The
Committee also provides the Board with additional assurance
regarding the reliability of the financial information for
inclusion in the financial reports.
The Board has adopted the “Dealings in Resolute Mining
Limited Securities Trading Policy” (refer website) (which is
driven by Corporations Act 2001 requirements) that applies to all
Directors, officers and employees of the Company. Under this
policy and the Corporations Act 2001, it is illegal for Directors,
officers or employees who have price sensitive information
relating to the Group which has not been published or which is
not otherwise “generally available” to:
The Audit Committee is also responsible for:
■■ Ensuring compliance with statutory responsibilities relating to
accounting policy and disclosure;
■■ Liaising with, discussing and resolving relevant issues with
the auditors;
■■ Assessing the adequacy of accounting, financial and operating
controls; and,
■■ Buy, sell or otherwise deal in the Company’s securities;
■■ Reviewing half-year and annual financial statements before
■■ Advise, procure or encourage another person (for example, a
family member, a friend, a family Company or trust) to buy or
sell Company securities; or
submission to the Board.
8. EXTERNAL AUDITORS
■■ Pass on information to any other person, if one knows or ought
to reasonably know that the person may use the information
to buy or sell (or procure another person to buy or sell)
Company securities.
The Company’s current external auditors are Ernst & Young.
As noted in the Audit Committee charter, the performance
and independence of the auditors is reviewed by the Audit
Committee.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 55
for the year ended 30 June 2013 CORPORATE GOVERNANCE STATEMENT
Ernst & Young’s existing policy requires that its audit team
provide a statement as to their independence. This statement was
received by the Audit Committee for the current financial year.
Ernst & Young and the Corporations Act 2001 has a policy for
the rotation of the lead audit partner.
9. CONTINUOUS DISCLOSURE
In accordance with ASX Principle 5, the Board has an
established disclosure policy which is available on the
Company website.
The CEO and General Manager - Finance & Administration will
inform the Board annually in writing that:
■■ The sign off given on the financial statements is founded on
a sound system of risk management and internal control
compliance which implements the policies adopted by the
Board.
■■ The Company’s risk management and internal compliance
and control systems is operating effectively and efficiently in
all material respects.
The Board has established the following Sub Committees to
assist in internal control and business risk management:
The Company is committed to:
■■ Audit Committee
■■ Ensuring that stakeholders have the opportunity to access
externally available information issued by the Company;
■■ Providing full and timely information to the market about the
Company’s activities; and,
■■ Complying with the obligations contained in the ASX Listing
Rules and the Corporations Act 2001 relating to continuous
disclosure.
The CEO and the Company Secretary have been nominated
as the people responsible for communication with the ASX.
This involves complying with the continuous disclosure
requirements outlined in the ASX Listing Rules, ensuring that
disclosure with the ASX is co-ordinated and being responsible
for administering and implementing the policy.
10. SHAREHOLDER COMMUNICATION
The Board has established a communications strategy which is
available on the Company website.
■■ Remuneration and Nomination Committee
■■ Environment and Community Development Committee
■■ Safety, Security and Occupational Health Committee
■■ Financial Risk Management Committee
The function of the Audit Committee and the Remuneration
and Nomination Committee are outlined above. The function of
the other Committees noted above are as follows:
Environment and Community Development Committee
The main responsibility of this Committee is to monitor and
review RML’s environmental performance and compliance with
relevant legislation and oversee Community Relations.
Information on compliance with significant environmental
regulations is set out in the Directors’ Report.
Safety, Security and Occupational Health Committee
The Board aims to ensure that the shareholders, on behalf
of whom they act, are informed of all information necessary
and kept informed of all major developments affecting the
Company in a timely and effective manner. Information is
communicated to the market and shareholders through:
The main functions of this Committee are to oversee an
employee education program designed to increase employee
awareness of safety, security and health issues in the workplace
and monitor safety statistics and report to the Board on the
results of incident investigations.
■■ The annual report which is distributed to all shareholders.
■■ Half yearly, quarterly reports and all ASX announcements
which are posted on the entity’s website.
■■ The annual general meeting and other meetings so called to
obtain approval for Board action as appropriate.
■■ Continuous disclosure announcements made to the
Australian Securities Exchange.
Further, it is a legal requirement that the auditor of the
Company attends the annual general meeting. This provides
shareholders the opportunity to question the auditor
concerning the conduct of the audit and the preparation and
content of the Auditor’s Report.
11. RISK MANAGEMENT
The Board recognises the importance of identifying and
controlling risks to ensure that they do not have a negative
impact on the Company.
In accordance with the ASX Principle 7, the Board has an
established Risk Management policy which is available on the
Company website which is designed to safeguard the assets
and interests of the Company and to ensure the integrity of
reporting.
Financial Risk Management Committee
The main responsibility of this Committee is to oversee risk
management strategies in relation to gold hedging, currency
hedging, debt management, capital management, cash
management, insurance, tax risk management, and other items
as they arise from time to time.
The Board members and their attendance at meetings
is outlined in the Directors’ Report. Senior members of
management who specialise in each area also form part of the
respective Committees.
12. REMUNERATION POLICIES
This policy governs the operations of the Remuneration
and Nomination Committee. The Committee reviews and
reassesses the policy at least annually and obtains the approval
of the Board.
The Remuneration and Nomination Committee are responsible
for developing measurable objectives and evaluating progress
against these objectives.
The details of the Directors’ and Officers’ remuneration policies
are provided in the Directors’ Report under the heading
“Remuneration Report”.
56 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013 AUDITOR INDEPENDENCE DECLARATION
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 57
A member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:028 Liability limited by a scheme approved under Professional Standards Legislation Auditor’s Independence Declaration to the Directors of Resolute Mining Limited In relation to our audit of the financial report of Resolute Mining Limited for the financial year ended 30 June 2013, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young Peter McIver Partner 24 September 2013 Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auA member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auA member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/au CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Continuing Operations
Revenue from gold and silver sales
Costs of production relating to gold sales
Gross profit before depreciation, amortisation and other operating costs
Depreciation and amortisation relating to gold sales
Other operating costs relating to gold sales
Gross profit
Other revenue
Other income
Exploration and business development expenditure
Share of associates' losses
Impairment of gold equity investments
Impairment of accounts receivable
Fair value movement on convertible notes held in associate
Administration and other corporate expenses
Treasury - realised gains/(losses)
Treasury - unrealised gains/(losses)
Profit before interest and tax
Finance costs
Profit before tax
Tax expense
Profit for the year
Profit/(loss) attributable to:
Members of the parent
Non-controlling interest
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
- Non-controlling interest
Changes in the fair value of available for sale financial assets, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income/(loss) attributable to:
Members of the parent
Non-controlling interest
NOTE
CONSOLIDATED
13
$’000
618,602
(315,692)
302,910
(63,860)
(40,222)
12
$’000
576,710
(262,173)
314,537
(73,221)
(35,076)
198,828
206,240
3,204
3,798
(20,617)
(21,379)
(31,794)
(6,127)
(20,000)
(6,546)
483
32,763
132,613
(4,130)
1,504
345
(15,877)
(1,285)
(1,584)
(1,201)
-
(8,373)
(175)
(43,194)
136,400
(11,970)
2(a)
2(b)
2(c)
2(d)
2(e)
2(f)
2(g)
2(g)
2(g)
2(g)
2(h)
2(i)
2(j)
2(k)
128,483
124,430
3
(23,040)
(22,571)
105,443
101,859
84,878
20,565
105,443
105,103
(3,244)
101,859
29,748
(1,803)
252
28,197
15,604
3,028
(364)
18,268
133,640
120,127
114,878
18,762
120,343
(216)
133,640
120,127
Earnings per share for net profit attributable to the ordinary equity holders of the parent:
Basic earnings per share
Diluted earnings per share
31
31
13.29
13.26
18.62
16.13
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
58 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Current assets
Cash
Other financial assets - restricted cash
Receivables
Inventories
Available for sale financial assets
Financial derivative assets
Tax receivable
Other
Total current assets
Non current assets
Other financial assets
Receivables
Exploration and evaluation expenditure
Development expenditure
Property, plant and equipment
Investment in associates
Total non current assets
Total assets
Current liabilities
Payables
Interest bearing liabilities
Tax liabilities
Provisions
Total current liabilities
Non current liabilities
Interest bearing liabilities
Provisions
Deferred tax liabilities
Total non current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings
Parent interest
Non-controlling interest
Total equity
NOTE
CONSOLIDATED
13
$’000
12
$’000
5
6
7
8
9
10
11
6
7
12
13
14
15
16
17
18
17
18
19
20
21
3,040
-
9,147
202,913
28,909
-
-
4,156
48,404
42,267
5,957
141,901
374
2,364
621
4,567
248,165
246,455
64,788
1,875
11,539
395,914
181,734
604
-
2,143
9,522
236,772
167,388
2,223
656,454
418,048
904,619
664,503
71,329
34,941
2,266
26,126
42,948
7,878
-
21,573
134,662
72,399
56,384
54,970
-
111,354
246,016
3,142
45,483
486
49,111
121,510
658,603
542,993
380,225
33,816
259,139
368,047
2,424
205,861
673,180
576,332
(14,577)
(33,339)
658,603
542,993
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 59
for the year ended 30 June 2013 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONTRIBUTED EQUITY
NET UNREALISED GAIN/
(LOSS) RESERVE
CONVERTIBLE NOTES EQUITY
RESERVE
SHARE OPTIONS EQUITY
RESERVE
EMPLOYEE EQUITY BENEFITS
FOREIGN CURRENCY
RESERVE
TRANSLATION RESERVE
RETAINED EARNINGS NON-CONTROLLING INTEREST
$'000
$'000
$’000
$'000
$'000
$'000
$'000
$'000
At 1 July 2012
Profit for the period
Other comprehensive income/(loss),
net of tax
Total comprehensive income for the
period, net of tax
Transactions with owners
Shares issued
Share issue costs
Share buy-backs
Dividend paid
Share-based payments to employees
At 30 June 2013
368,047
-
-
-
23,210
(44)
(10,988)
-
-
380,225
At 1 July 2011
287,125
Profit/(loss) for the period
Other comprehensive (loss)/income,
net of tax
Total comprehensive (loss)/income for
the period, net of tax
Transactions with owners
Shares issued
Share issue costs
Share buy-backs
Equity portion of compound
financial instruments, net of tax and
transaction costs
Share-based payments to employees
-
-
-
112,235
(41)
(31,272)
-
-
(252)
-
252
252
-
-
-
-
-
-
112
-
(364)
(364)
-
-
-
-
-
At 30 June 2012
368,047
(252)
-
-
-
-
-
-
-
-
-
-
5,987
4,626
-
-
-
-
-
-
-
-
5,987
21,811
259,139
(14,577)
13,764
5,987
3,236
(23,541)
-
-
-
-
-
-
(13,764)
-
-
-
-
-
-
-
-
-
-
5,987
(7,937)
205,861
(33,339)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,392
6,018
1,390
4,626
(7,937)
-
29,748
29,748
-
-
-
-
-
-
-
-
-
-
-
15,604
15,604
15,604
205,861
84,878
84,878
(31,600)
100,758
105,103
105,103
105,103
-
-
-
-
-
-
-
-
-
-
-
(33,339)
20,565
(1,803)
18,762
(33,123)
(3,244)
3,028
(216)
(216)
-
-
-
-
-
-
-
-
-
-
TOTAL
$'000
542,993
105,443
28,197
133,640
23,210
(44)
(10,988)
(31,600)
1,392
658,603
354,318
101,859
18,268
120,127
120,127
112,235
(41)
(31,272)
(13,764)
1,390
542,993
60 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013 CONTRIBUTED EQUITY
(LOSS) RESERVE
$'000
$'000
RESERVE
$’000
NET UNREALISED GAIN/
CONVERTIBLE NOTES EQUITY
SHARE OPTIONS EQUITY
EMPLOYEE EQUITY BENEFITS
RESERVE
FOREIGN CURRENCY
TRANSLATION RESERVE
RETAINED EARNINGS NON-CONTROLLING INTEREST
$'000
$'000
$'000
$'000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
4,626
-
-
-
-
-
-
-
1,392
6,018
3,236
-
-
-
-
-
-
-
-
1,390
4,626
(7,937)
-
29,748
29,748
-
-
-
-
-
21,811
(23,541)
-
15,604
15,604
15,604
-
-
-
-
-
205,861
84,878
-
84,878
-
-
-
(31,600)
-
259,139
100,758
105,103
-
105,103
105,103
-
-
-
-
-
(33,339)
20,565
(1,803)
18,762
-
-
-
-
-
(14,577)
(33,123)
(3,244)
3,028
(216)
(216)
-
-
-
-
-
(7,937)
205,861
(33,339)
At 1 July 2012
Profit for the period
Other comprehensive income/(loss),
net of tax
Total comprehensive income for the
period, net of tax
Transactions with owners
Shares issued
Share issue costs
Share buy-backs
Dividend paid
Share-based payments to employees
Profit/(loss) for the period
Other comprehensive (loss)/income,
net of tax
Total comprehensive (loss)/income for
the period, net of tax
Transactions with owners
Shares issued
Share issue costs
Share buy-backs
Equity portion of compound
financial instruments, net of tax and
transaction costs
Share-based payments to employees
368,047
23,210
(44)
(10,988)
112,235
(41)
(31,272)
-
-
-
-
-
-
-
-
-
-
(252)
-
252
252
-
-
-
-
-
-
-
-
-
-
-
112
-
(364)
(364)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,764)
RESERVE
$'000
5,987
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
At 30 June 2013
380,225
5,987
At 1 July 2011
287,125
13,764
5,987
At 30 June 2012
368,047
(252)
5,987
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
TOTAL
$'000
542,993
105,443
28,197
133,640
23,210
(44)
(10,988)
(31,600)
1,392
658,603
354,318
101,859
18,268
120,127
120,127
112,235
(41)
(31,272)
(13,764)
1,390
542,993
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 61
for the year ended 30 June 2013 CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating activities
Receipts from customers
Payments to suppliers, employees and others
Income tax paid
Exploration expenditure
Interest paid
Interest received
NOTE
CONSOLIDATED
13
$’000
618,602
(430,278)
(16,273)
(16,763)
(1,742)
937
12
$’000
591,175
(362,597)
(23,425)
(15,881)
(11,604)
1,504
Net cash flows from operating activities
26
154,483
179,172
Cash flows from investing activities
Payments for property, plant & equipment
Proceeds from sale of available for sale financial assets
Payments for acquisition of available for sale financial assets
Payments for other financial assets
Payments for development activities
Payments for evaluation activities
Loan to associate
Repayment of loan by associate
Other
Net cash flows from investing activities
Cash flows from financing activities
Dividends paid
Proceeds from issuing ordinary shares
Costs of issuing ordinary shares
Payments for share buy backs
Repayment of borrowings
Repayment of lease liability
Proceeds from finance facilities
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Exchange rate adjustment
Cash and cash equivalents at the end of the period
Cash and cash equivalents comprise the following:
Cash
Bank overdraft
(23,417)
5,989
(13,427)
(85,363)
(113,306)
(3,932)
(14,376)
14,535
(1,441)
(234,738)
(31,600)
2,562
(44)
(10,988)
-
(3,213)
51,530
8,247
(72,008)
43,142
723
(28,143)
3,040
(31,183)
(28,143)
(24,412)
-
-
(43,103)
(24,818)
-
-
-
(990)
(93,323)
-
31,911
(41)
(31,272)
(43,959)
(3,760)
1,974
(45,147)
40,702
3,671
(1,231)
43,142
48,404
(5,262)
43,142
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
62 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
for the year ended 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS
CORPORATE INFORMATION
The financial report of Resolute Mining Limited (“consolidated
entity” or the “Group”) for the year ended 30 June 2013 was
authorised for issue in accordance with a resolution of the
Directors on 20 September 2013.
Resolute Mining Limited (the parent entity) is a for profit
company limited by shares incorporated and domiciled in
Australia whose shares are publicly traded on the Australian
Securities Exchange.
The principal activities of entities within the consolidated
entity during the year were:
■■ Gold mining; and,
■■ prospecting and exploration for minerals.
There has been no significant change in the nature of those
activities during the year.
NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation
of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated. The financial report includes financial
information for Resolute Mining Limited (“RML”) as an
individual entity and the consolidated entity consisting of
RML and its subsidiaries. Where appropriate, comparative
information has been reclassified.
(a) Basis of Preparation
This general purpose financial report has been prepared in
accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting
Board and the Corporations Act 2001.
Compliance statement
The financial report complies with Australian Accounting
Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board.
With the exception of those new accounting standards and
interpretations outlined at note 1(ad), and the change in the
accounting policy for waste removal costs outlined below,
accounting policies adopted are consistent with those of the
previous year.
Historical cost convention
These financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
certain financial assets and liabilities (including derivative
instruments) at fair value through profit and loss.
Change in accounting policy – Waste removal costs
Resolute has elected to early adopt the new accounting
standard IFRIC 20 Stripping Costs in the Production Phase of a
Surface Mine effective from 1 July 2012. The new accounting
standard has a compulsory start date of 1 July 2013 but early
adopters can commence a year earlier.
The new accounting standard has the effect of recognising the
Syama pit in its separate stages, rather than treating it as one
single stage (per current industry standards). The recognition
of a staged pit (of which we are currently operating in stages 1
and 2 only) has had the effect of lowering the total strip ratio
of the current operating areas, and hence a greater proportion
of recent waste removal has been capitalised as a life-to-date
adjustment into this year’s results. This is a timing difference
only, and mining future stages in later years will be charged
at higher costs, which is commensurate with the real cost of
mining deeper in the pit where stripping ratios will be higher.
The impact of this change on the comparative period has been
assessed and no adjustment was required.
The section below outlines the impact the early adoption of
IFRIC 20 had on the current period (year ended 30 June 2013)
rather than what would have been recognised using the life of
mine strip ratio approach under the old accounting policy.
FINANCIAL STATEMENT LINE
Costs of production relating to
gold sales
Development - Stripping
Activity Asset
Inventories
Reserves
Profit before tax
Profit after tax
Basic earnings per share
(cents per share)
Diluted earnings per share
(cents per share)
Total assets
Net assets
Total equity
STATEMENT OF
COMPREHENSIVE
INCOME INCREASE /
(DECREASE)
STATEMENT OF
FINANCIAL POSTION
INCREASE /
(DECREASE)
$’000
$’000
(19,255)
-
-
-
-
19,255
19,255
3.02
3.01
-
-
-
25,897
(4,246)
2,396
-
-
-
-
21,651
21,651
21,651
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of RML as at 30 June 2013 and
the results of all subsidiaries for the year then ended. RML
and its subsidiaries together are referred to in this financial
report as the “Group” or the “consolidated entity”. Interests
in associates are equity accounted and are not part of the
consolidated Group.
Subsidiaries are all those entities (including special purpose
entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a
shareholding of more than one-half of the voting rights.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated
from the date that control ceases.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 63
for the year ended 30 June 2013 (d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the
Group’s entities are measured using the currency of the
primary economic environment in which the entity operates
(the ‘functional currency’). The consolidated financial
statements are presented in Australian dollars, which is
Resolute Mining Limited’s functional and presentation
currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from
the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised
in the consolidated statement of comprehensive income, except
when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges.
Translation differences on non-monetary items, such as
equities held at fair value through profit or loss, are reported
as part of the fair value gain or loss. Translation differences on
non-monetary items, such as equities classified as available-
for-sale financial assets, are included in the fair value reserve
in equity.
(iii) Group companies
The results and financial position of all the Group entities (none
of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
■■ Assets and liabilities for each consolidated statement of
financial position presented are translated at the closing rate
at the date of that consolidated statement of financial position;
■■ income and expenses for each consolidated statement of
comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at
the dates of the transactions); and,
■■ all resulting exchange differences are recognised as a separate
component of equity.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities, and
of borrowings and other currency instruments designated
as hedges of such investments, are taken to shareholders’
equity. When a foreign operation is sold or borrowings repaid,
a proportionate share of such exchange differences are
recognised in the consolidated statement of comprehensive
income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(b) Principles of consolidation (continued)
(i) Subsidiaries (continued)
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. The acquisition method of
accounting involves recognising at acquisition date, separately
from goodwill, the identifiable assets acquired, the liabilities
assumed and any non-controlling interest in the acquiree. The
identifiable assets acquired and the liabilities assumed are
measured at their acquisition date fair values.
The difference between the above items and the fair value of
the consideration (including the fair value of any pre-existing
investment in the acquiree) is goodwill or a discount on
acquisition.
Intercompany transactions, balances and unrealised gains
on transactions between Group entities are eliminated where
applicable. Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the asset
transferred.
Accounting policies of subsidiaries have been changed were
necessary to ensure consistency with the policies adopted by
the Group.
(ii) Joint Ventures
Jointly controlled assets
The proportionate interests in the assets, liabilities and
expenses of a joint venture activity have been incorporated in
the financial statements under the appropriate headings.
(c) Segment reporting
An operating segment is a component of an entity that engages
in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to
transactions with other components of the same entity), whose
operating results are regularly reviewed by the entity’s chief
operating decision maker to make decisions about resources
to be allocated to the segment and assess its performance
and for which discrete financial information is available. This
includes start-up operations which are yet to earn revenues.
Management will also consider other factors in determining
operating segments such as the level of segment information
presented to the board of directors.
Operating segments have been identified based on the
information provided to the chief operating decision maker –
being the executive management team.
Operating segments that meet the quantitative criteria as
prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the
quantitative criteria is still reported separately where
information about the segment would be useful to users of the
financial statements.
Information about other business activities and operating
segments that are below the quantitative criteria are combined
and disclosed in a separate category.
64 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(e) Revenue recognition
(i) Gold sales
Revenue is recognised when the risk and reward of ownership
has passed from the Group to an external party and the selling
price can be determined with reasonable accuracy. Sales revenue
represents gross proceeds receivable from the customer.
Revenue from the sale of by-products such as silver is included
in sales revenue.
(ii) Interest
■■ except where the deferred income tax asset relating to the
deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction,
affects neither the accounting nor taxable profit or loss; and,
■■ in respect of deductible temporary differences associated with
investments in subsidiaries and interests in joint ventures,
deferred tax assets are only recognised to the extent that it
is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed
at each consolidated statement of financial position date and
reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Revenue is recognised as interest accrues using the effective
interest method.
Tax consolidation legislation
(f) Borrowing costs
Borrowing costs incurred for the construction of any qualifying
asset are capitalised during the period of time that is required
to complete and prepare the asset for its intended use or sale.
Other borrowing costs are expensed and are included in profit
or loss as part of borrowing costs.
The capitalisation rate used to determine the amount of
borrowing costs to be capitalised is the weighted average
interest rate applicable to the entity’s outstanding borrowings
during the period.
RML and its wholly-owned Australian controlled entities
implemented the tax consolidation legislation as of 1 July 2002.
Goods and Services Tax
Revenues, expenses and assets are recognised net of the
amount of GST except:
■■ Where the GST incurred on the purchase of goods and
services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as
applicable; and,
■■ receivables and payables are stated with the amount of GST
(g) Income tax
included.
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on
the national income tax rate for each jurisdiction adjusted
by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements, and by unused tax losses (if appropriate).
Deferred income tax is provided on all temporary differences at
the consolidated statement of financial position date between
the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences:
■■ except where the deferred income tax liability arises from
the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the
transaction, affects neither the accounting nor taxable profit
or loss; and,
■■ in respect of taxable temporary differences associated with
investments in subsidiaries and interests in joint ventures,
except where the timing of the reversal of the temporary
differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible
temporary differences, and the carry-forward of unused tax
assets and unused tax losses, to the extent it is probable that
taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax
assets and unused tax losses can be utilised:
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the consolidated statement of financial position.
Cash flows are included in the Cash Flow Statement on a
gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from,
or payable to, the taxation authority are classified as operating
cash flows.
(h) Earnings per share (“EPS”)
Basic EPS is calculated as net profit attributable to members,
adjusted to exclude costs of servicing equity (other than
dividends) and preference share dividends, divided by the
weighted average number of ordinary shares, adjusted for any
bonus element.
Diluted EPS is calculated as the net profit attributable to
members, adjusted for:
■■ costs of servicing equity (other than dividends) and;
■■ the after tax effect of dividends and interest associated with
dilutive potential ordinary shares that have been recognised
as expenses; and,
■■ other non-discretionary changes in revenues or expenses
during the period that would result from the dilution of
potential ordinary shares.
Divided by the weighted average number of ordinary shares
and dilutive potential ordinary shares, adjusted for any bonus
element.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 65
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(i) Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits
held at financial institutions at call. Bank overdrafts are shown
within borrowings in current liabilities on the consolidated
statement of financial position.
(j) Receivables
Trade receivables are initially recognised at fair value and
subsequently at amortised cost less a provision for any
uncollectible debts. Trade receivables are due for settlement no
more than 30 days from the date of recognition. Collectability
of trade receivables is reviewed on an ongoing basis. Debts
which are known to be uncollectible are written off. A provision
for doubtful receivables is established when there is objective
evidence that the Group will not be able to collect all amounts
due according to the original terms of the transaction.
Significant financial difficulties of the debtor, probability that
the debtor will enter bankruptcy or financial reorganisation,
and default are considered indicators that the trade receivable
is impaired. The amount of the provision is the difference
between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the effective
interest rate. The amount of the provision is recognised in the
consolidated statement of comprehensive income.
Receivables from related parties are recognised and carried at
the nominal amount due. Where interest is charged it is taken
up as income in profit and loss and included in other income.
(k) Inventories
Finished goods (bullion), gold in circuit and stockpiles of
unprocessed ore are stated at the lower of cost and estimated
net realisable value. Cost comprises direct materials, direct
labour and an appropriate proportion of variable and fixed
overhead expenditure, the latter being allocated on the basis of
normal operating capacity. Costs are assigned to ore stockpiles
and gold in circuit items of inventory on the basis of weighted
average costs. Net realisable value is the estimated selling price
in the ordinary course of business (excluding derivatives) less
the estimated costs of completion and the estimated costs
necessary to make the sale.
Consumables have been valued at cost less an appropriate
provision for obsolescence. Cost is determined on a first-in-first-
out basis.
(l) Investments and other financial assets
The Group classifies its investments in the following categories:
financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments, and available-for-
sale financial assets. The classification depends on the purpose
for which the investments were acquired. Management
determines the classification of its investments at initial
recognition and re-evaluates this designation at each reporting
date.
(i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held
for trading, and those designated at fair value through profit
or loss on initial recognition. A financial asset is classified in
this category if acquired principally for the purpose of selling
in the short term. The policy of management is to designate
a financial asset if there exists the possibility it will be sold in
the short term and the asset is subject to frequent changes in
fair value. Derivatives are also categorised as held for trading
unless they are designated as hedges. Assets in this category
are classified as current assets if they are either held for
trading or are expected to be realised within 12 months of the
consolidated statement of financial position date.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides money, goods or
services directly to a debtor with no intention of selling the
receivable. They are included in current assets, except for those
with maturities greater than 12 months after the consolidated
statement of financial position date which are classified as
non-current assets. Loans and receivables are included in
receivables in the consolidated statement of financial position.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial
assets with fixed or determinable payments and fixed
maturities that the Group’s management has the positive
intention and ability to hold to maturity.
(iv) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally
marketable equity securities, are non derivatives that are either
designated in this category or not classified in any of the other
categories. They are included in non-current assets unless
management intends to dispose of the investment within 12
months of the consolidated statement of financial position date.
Purchases and sales of investments are recognised on trade-
date - the date on which the Group commits to purchase or sell
the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets are derecognised when
the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair
value through profit and loss are subsequently carried at fair
value. Loans and receivables and held-to-maturity investments
are carried at amortised cost using the effective interest
method. Realised and unrealised gains and losses arising from
changes in the fair value of the ‘financial assets at fair value
through profit or loss’ category are included in the consolidated
statement of comprehensive income in the period in which
they arise. Unrealised gains and losses arising from changes in
the fair value of non-monetary securities classified as available-
for-sale are recognised in equity in the available-for-sale
investments revaluation reserve. When securities classified as
available-for-sale are sold or impaired, the accumulated fair
value adjustments are included in the consolidated statement
of comprehensive income as gains and losses from investment
securities.
66 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(l) Investments and other financial assets (continued)
(iv)
Available-for-sale financial assets (continued)
The fair values of quoted investments are based on current
bid prices. If the market for a financial asset is not active (and
for unlisted securities), the Group establishes fair value by
using valuation techniques. These include reference to the fair
values of recent arm’s length transactions, involving the same
instruments or other instruments that are substantially the
same, discounted cash flow analysis, and option pricing models
refined to reflect the issuer’s specific circumstances.
The Group assesses at each reporting date whether there is
objective evidence that a financial asset or group of financial
assets is impaired. In the case of equity securities classified as
available for sale, a significant or prolonged decline in the fair
value of a security below its cost is considered in determining
whether the security is impaired. If any such evidence exists
for available-for-sale financial assets, the cumulative loss
- measured as the difference between the acquisition cost
and the current fair value, less any impairment loss on that
financial asset previously recognised in profit and loss - is
removed from equity and recognised in the consolidated
statement of comprehensive income. Impairment losses
recognised in the consolidated statement of comprehensive
income on equity instruments are not reversed through the
consolidated statement of comprehensive income.
(m) Investments in associates
The Group’s investment in associates is accounted for using
the equity method of accounting in the consolidated financial
statements. An associate is an entity over which the Group has
significant influence and that are neither subsidiaries nor joint
ventures.
The Group generally deems they have significant influence if
they have over 20% of voting rights.
Under the equity method, investments in associates are carried
in the consolidated statement of financial position at cost plus
post-acquisition changes in the Group’s share of net assets of
the associates. Goodwill relating to an associate is included in
the carrying amount of the investment and is not amortised.
After application of the equity method, the Group determines
whether it is necessary to recognise any impairment loss with
respect to the Group’s net investment in associates. Goodwill
included in the carrying amount of the investment in associate
is not tested separately, rather the entire carrying amount of
the investment is tested for impairment as a single asset. If an
impairment is recognised, the amount is not allocated to the
goodwill of the associate.
The Group’s share of its associates’ post-acquisition profits or
losses is recognised in the statement of comprehensive income,
and its share of post-acquisition movements in reserves is
recognised in reserves. The cumulative post-acquisition
movements are adjusted against the carrying amount of
the investment. Dividends receivable from associates are
recognised in the parent entity’s statement of comprehensive
income as a component of other income.
When the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any unsecured
long-term receivables and loans, the Group does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associate.
The Group makes any adjustments to the performance and
position of the associate where appropriate in order to allow for
differences in the accounting policies of the Group and those of
the associate.
(n) Derivatives
The Group uses from time to time derivative financial
instruments such as gold options, gold forward contracts,
contracts for difference, and interest rate swaps to manage the
risks associated with market fluctuations.
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
measured to their fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the
item being hedged. The Group designates certain derivatives
as either; (1) hedges of the fair value of recognised assets or
liabilities or a firm commitment (fair value hedge); or (2) hedges
of highly probable forecast transactions (cash flow hedges).
The fair value of derivative financial instruments that are
traded on an active market is based on quoted market prices at
the consolidated statement of financial position date. The fair
value of financial instruments not traded on an active market
is determined using appropriate valuation techniques.
At the inception of a transaction that may qualify for hedge
accounting, the Group documents the relationship between
hedge instruments and hedged items, as well as its risk
management objective and strategy for undertaking various
hedge transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether
the derivatives that are used in hedging transactions have been
and will continue to be highly effective in offsetting changes in
fair values or cash flows of hedged items.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and
qualify as fair value hedges are recorded in the consolidated
statement of comprehensive income, together with any
changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is
recognised in equity in the hedging reserve. The gain or loss
relating to the ineffective portion is recognised immediately in
the consolidated statement of comprehensive income.
Amounts accumulated in equity are recycled in the
consolidated statement of comprehensive income in the periods
when the hedged item will affect profit or loss (for instance
when the forecast sale that is hedged takes place). However,
when the forecast transaction that is hedged results in the
recognition of a non financial asset (for example, inventory) or a
non-financial liability, the gains and losses previously deferred
in equity are transferred from equity and included in the
measurement of the initial cost or carrying amount of the asset
or liability.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 67
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Furthermore, judgements and estimates are also used to apply
the units of production method in determining the depreciable
lives of the stripping activity asset(s).
(n) Derivatives (continued)
(p) Mineral exploration and evaluation interests
Exploration expenditure is expensed to the consolidated
statement of comprehensive income as and when it is incurred
and included as part of cash flows from operating activities.
Exploration costs are only capitalised to the consolidated
statement of financial position if they result from an
acquisition.
Evaluation expenditure is capitalised to the consolidated
statement of financial position. Evaluation is deemed to be
activities undertaken from the beginning of the pre-feasibility
study conducted to assess the technical and commercial
viability of extracting a mineral resource before moving
into the Development phase (see note 1(q) Development
expenditure). The criteria for carrying forward the costs are:
■■ Such costs are expected to be recouped through successful
development and exploitation of the area of interest, or
alternatively by its sale; or
■■ evaluation activities in the area of interest which has not yet
reached a state which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the
area are continuing.
Costs carried forward in respect of an area of interest
which is abandoned are written off in the year in which the
abandonment decision is made.
(q) Development expenditure
(i) Areas in Development
Areas in development represent the costs incurred in
preparing mines for production including the required plant
infrastructure. The costs are carried forward to the extent that
these costs are expected to be recouped through the successful
exploitation of the Company’s mining leases.
(ii) Areas in Production
Areas in production represent the accumulation of all acquired
exploration, evaluation and development expenditure incurred
by or on behalf of the entity in relation to areas of interest in
which economic mining of a mineral reserve has commenced.
Amortisation of costs is provided on the unit-of-production
method, with separate calculations being made for each
mineral resource. The unit-of-production basis results in
an amortisation charge proportional to the depletion of the
economically recoverable mineral reserves.
The net carrying value of each mine property is reviewed
regularly and, to the extent to which this value exceeds its
recoverable amount, that excess is fully provided against in the
financial year in which this is determined.
(ii) Cash flow hedge (continued)
When a hedging instrument expires or is sold or terminated,
or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity
at that time remains in equity and is recognised when
the forecast transaction is ultimately recognised in the
consolidated statement of comprehensive income. When
a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was reported in equity is
immediately transferred to the consolidated statement of
comprehensive income.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are
recognised immediately in the consolidated statement of
comprehensive income.
(o) Stripping activity asset
The Group incurs waste removal costs (stripping costs) during
the development and production phases of its surface mining
operations. During the production phase, stripping costs
(production stripping costs) can be incurred both in relation
to the production of inventory in that period, and the creation
of improved access and mining flexibility in relation to ore to
be mined in the future. The former are included as part of the
costs of inventory, while the latter are capitalised as a stripping
activity asset, where certain criteria are met. Significant
judgement is required to distinguish between development
stripping and production stripping and to distinguish between
the production stripping which relates to the extraction of
inventory and that which relates to the creation of a stripping
activity asset.
Once the Group has identified its production stripping for
each surface mining operation, it identifies the separate
components for the ore bodies in each of its mining operations.
An identifiable component is a specific volume of the ore
body that is made more accessible by the stripping activity.
Significant judgement is required to identify and define these
components, and also to determine the expected volumes (e.g.
tonnes) of waste to be stripped and ore to be mined in each
of these components. These assessments are undertaken for
each individual mining operation based on the information
available in the mine plan. The mine plans, and therefore the
identification of components, will vary between mines for a
number of reasons. These include, but are not limited to, the
geological characteristics of the ore body, the geographical
location and/or financial considerations.
Judgement is also required to identify a suitable production
measure to be used to allocate production stripping costs
between inventory and any stripping activity asset(s) for each
component. The Group considers that the ratio of the expected
volume of waste to be stripped for an expected volume of ore
to be mined for a specific component of the ore body, to be the
most suitable production measure.
68 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(r) Property, plant and equipment
(i) Cost and Valuation
Property, plant and equipment are stated at cost less any
accumulated depreciation and any impairment losses.
The cost of an item of property, plant and equipment
comprises:
■■ Its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates;
■■ Any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of
operating in the manner intended by management; and,
■■ The initial estimate of the costs of dismantling and removing
the item and restoring the site on which it is located.
(ii) Depreciation
Depreciation is provided on a straight-line basis on all property
plant and equipment other than land. Major depreciation
periods are:
LIFE
METHOD
Motor vehicles
Office equipment
3 years
3 years
Straight line
Straight line
Plant and equipment
Life of mine years
Straight line
(iii) Impairment
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable.
For an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the assets or cash-
generating units are written down to their recoverable amount.
The recoverable amount of plant and equipment is the greater
of the fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and
the risks specific to the asset.
(s) Leases
Finance leases, which effectively transfer to the consolidated
entity all of the risks and benefits incidental to ownership
of the leased item, are capitalised at the present value of the
minimum lease payments, disclosed as leased property, plant
and equipment, and amortised over the period the consolidated
entity is expected to benefit from the use of the leased assets.
Lease payments are allocated between interest expense and
reduction in the lease liability.
Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability.
Finance charges are charges directly against income.
Leases where the lessor retains substantially all the risks and
benefits of ownership of the asset are classified as operating
leases. Initial direct costs incurred in negotiation of an
operating lease are added to the carrying amount of the leased
asset and recognised over the lease term on the same bases as
the lease income.
Operating lease payments are recognised as an expense in the
consolidated statement of comprehensive income over the lease
term.
(t) Business combinations
Business combinations are accounted for using the acquisition
method. The consideration transferred in a business combination
shall be measured at fair value, which shall be calculated as the
sum of the acquisition date fair values of the assets transferred
by the acquirer, the liabilities incurred by the acquirer to former
owners of the acquiree and the equity issued by the acquirer,
and the amount of any non-controlling interest in the acquiree.
For each business combination, the acquirer measures the
non-controlling interest in the acquiree either at fair value or at
the proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic conditions, the Group’s operating or accounting
policies and other pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in
host contracts by the acquiree.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured at fair value as at
the acquisition date through profit or loss.
Any contingent consideration to be transferred by the
acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability will
be recognised in accordance with AASB 139 either in profit
or loss or in other comprehensive income. If the contingent
consideration is classified as equity, it shall not be remeasured.
(u) Recoverable amount of assets
At each reporting date, the Group assesses whether there is any
indication that an asset may be impaired.
Where an indicator of impairment exists, the Group makes a
formal estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset
is considered impaired and is written down to is recoverable
amount.
Recoverable amount is the greater of fair value less costs to
sell and value in use. It is determined for an individual asset,
unless the asset’s value in use cannot be estimated to be close
to its fair value less costs to sell and it does not generate cash
inflows that are largely independent of those from other assets
or groups of assets, in which case, the recoverable amount is
determined for the cash-generating unit to which it belongs.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 69
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date.
(u) Recoverable amount of assets (continued)
(x) Provisions
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to that asset.
(v) Payables
Liabilities for trade creditors and other amounts are carried at
amortised cost which is the amount initially recognised, minus
repayments whether or not billed to the consolidated entity.
Payables to related parties are carried at the principal amount.
Interest, when charged by the lender, is recognised as an
expense on an accruals basis.
(w) Interest-bearing liabilities
All loans and borrowings are initially recognised at cost, being
the fair value of the consideration received net of issue costs
associated with the borrowing.
After initial recognition, interest bearing liabilities are
subsequently measured at amortised cost using the effective
interest method. Amortised cost is calculated by taking into
account any issue costs, and any discount or premium on
settlement.
Gains and losses are recognised in the consolidated statement
of comprehensive income when the liabilities are derecognised
and as well as through the amortisation process. Treatment of
borrowing costs is outlined in note 1(f).
The component of convertible notes that exhibit characteristics
of a liability are recognised as a liability in the consolidated
statement of financial position, net of transaction costs.
On issuance of the convertible notes, the fair value of the
liability component is determined using a market rate for an
equivalent non-convertible bond and that amount is carried
as a long-term liability on an amortised cost basis until
extinguished on conversion or redemption. The accretion of the
liability due to the passage of time is recognised as a finance
cost.
Compound financial instruments
The remainder of the proceeds received from the issue of
the convertible notes are allocated to the conversion option
that is recognised and included in shareholders’ equity, net
of transaction costs. The carrying amount of the conversion
option is not re-measured in subsequent periods.
Interest on the liability component of the instruments is
recognised as an expense in the consolidated statement of
comprehensive income except for when the borrowing costs are
associated with a qualifying asset, in which case the borrowing
costs are capitalised and amortised over the useful life of the
qualifying asset.
Transaction costs relating to the convertible note issues are
apportioned between the liability and equity components of
the convertible notes, based on the allocation of proceeds to the
liability and equity components when the instruments are first
recognised.
Provisions are recognised when the Group has a present
obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks
specific to the liability.
Where discounting is used, the increase in the provision due to
the passage of time is recognised as a borrowing cost.
The consolidated entity records the present value of the
estimated cost of legal and constructive obligations (such as
those under the consolidated entity’s Environmental Policy) to
restore operating locations in the period in which the obligation
is incurred. The nature of restoration activities includes
dismantling and removing structures, rehabilitating mines,
dismantling operating facilities, closure of plant and waste sites
and restoration, reclamation and revegetation of affected areas.
Typically the obligation arises when the asset is installed at the
production location. When the liability is initially recorded, the
estimated cost is capitalised by increasing the carrying amount
of the related mining assets. Over time, the liability is increased
for the change in the present value based on the discount rates
that reflect the current market assessments and the risks
specific to the liability. Additional disturbances or changes in
rehabilitation costs will be recognised as additions or changes
to the corresponding asset and rehabilitation liability when
incurred.
(y) Employee benefits
(i) Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary
benefits and annual leave are recognised in other creditors in
respect of employees’ services up to the reporting date and
are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non accumulating sick leave
are recognised when the leave is taken and measured at the
rates paid or payable.
(ii) Long service leave
The liability for long service leave expected to be settled within
12 months of the reporting date is recognised in the provision
for employee benefits and is measured in accordance with (i)
above. The liability for long service leave expected to be settled
more than 12 months from the reporting date is recognised
in the provision for employee benefits and measured as the
present value of expected future payments to be made in
respect of services provided by employees up to the reporting
date. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods
of service. Expected future payments are discounted using
market yields at the reporting date on national government
bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
70 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(y) Employee benefits (continued)
(iii) Termination Gratuity and Relocation
Liabilities for Termination Gratuity and Relocation payments
are recognised and are measured as the present value of
expected future payments to be made in respect of employees
up to the reporting date.
(iv) Share based payments
Equity-based compensation benefits are provided to employees
via the Group’s share option plan and performance rights plan.
The Group determines the fair value of securities issued to
directors, executives and members of staff as remuneration
and recognises that amount as an expense in the consolidated
statement of comprehensive income over the vesting period
with a corresponding increase in equity.
The fair value at grant date is independently determined using
a Black Scholes pricing model or Monte Carlo simulation that
takes into account the exercise price, the term of the option or
performance right, the vesting and performance criteria, the
impact of dilution, the non-tradeable nature of the option or
performance right, the share price at grant date and expected
price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the option or
performance right.
The fair value of the options granted excludes the impact of
any non-market vesting conditions (for example, profitability
and sales growth targets). Non-market vesting conditions are
included in assumptions about the number of options that
are expected to become exercisable. At each consolidated
statement of financial position date, the entity revises its
estimate of the number of options that are expected to become
exercisable. The employee benefit expense recognised each
period takes into account the most recent estimate.
(v) Superannuation
Contributions made by the Group to employee superannuation
funds are charged to the consolidated statement of
comprehensive income in the period employees’ services are
provided.
(z) Contributed equity
Issued and paid up capital is recognised at the fair value of the
consideration received by the Company.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
(aa) Financial Guarantees
Financial guarantee contracts are recognised as a financial
liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the
higher of the amount determined in accordance with AASB
137 Provisions, Contingent Liabilities and Contingent Assets and the
amount initially recognised less cumulative amortisation,
where appropriate.
(ab) Significant accounting judgements
In the process of applying the Group’s accounting policies,
management has made the following judgements, apart from
those involving estimations, which have the most significant
effect on the amounts recognised in the financial statements:
(i) Determination of mineral resources and ore
reserves
The determination of reserves impacts the accounting for
asset carrying values, depreciation and amortisation rates,
deferred stripping costs and provisions for decommissioning
and restoration. The information in this report as it relates to
ore reserves, mineral resources or mineralisation is reported
in accordance with the Aus.IMM “Australian Code for reporting
of Identified Mineral Resources and Ore Reserves”. The
information has been prepared by or under supervision of
competent persons as identified by the Code.
There are numerous uncertainties inherent in estimating
mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when
new information becomes available.
Changes in the forecast prices of commodities, exchange rates,
production costs or recovery rates may change the economic
status of reserves and may, ultimately, result in the reserves
being restated.
(ac) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are
often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of certain assets and liabilities within the next annual
reporting period are:
(i)
Impairment of mine properties, plant and
equipment
The future recoverability of capitalised mine properties and
plant and equipment is dependent on a number of key factors
including; gold price, pre-tax discount rates used in determining
the estimated discounted cash flows of Cash Generating
Units (“CGUs”), foreign exchange rates, the level of proved and
probable reserves and measured, indicated and inferred mineral
resources, the estimated value of unmined inferred mineral
properties included in the determination of fair value less cost
to sell (‘Fair Value’), future technological changes which could
impact the cost of mining, and future legal changes (including
changes to environmental restoration obligations).
Impairment is recognised when the carrying amount of the
CGU exceeds its recoverable amount. The recoverable amount
of each CGU has been determined on its fair value less cost
to sell (‘Fair Value’). The costs to sell have been estimated by
management based on prevailing market conditions.
Fair Value is estimated based on discounted cash flows using
market based commodity price and exchange assumptions,
estimated quantities of recoverable minerals, production levels,
operating costs and capital requirements, based on CGU life-of-
mine (‘LOM’) plans.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 71
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(ac) Significant accounting estimates and assumptions
(continued)
When LOM plans do not fully utilise existing mineral properties
for a CGU, and options exist for the future extraction and
processing of all or part of those resources, an estimate of the
value of mineral properties is included in the determination of
Fair Value. The Group considers this valuation approach to be
consistent with the approach taken by market participants.
Estimates of quantities of recoverable minerals, production
levels, operating costs and capital requirements are sourced
from the Group’s planning process documents, including
LOM plans, external expert reports where appropriate and
operational budgets.
Significant judgements and assumptions are required in
making estimates of Fair Value. This is particularly so in the
assessment of long life assets. CGU valuations are subject to
variability in key assumptions including, but not limited to,
long-term gold prices, currency exchange rates, discount rates,
and production and operating costs. An adverse change in one
or more of the assumptions used to estimate Fair Value could
result in a reduction in a CGU’s Fair Value.
Unmined resources (including the value of certain mineral
properties) may not be included in a CGU’s particular life-
of-mine plan for a number of reasons, including the need to
constantly re-assess the economic returns on and timing
of specific production options in the current economic
environment. The Group has estimated its unmined resource
values based on a dollar margin per gold equivalent ounce basis
individually for each CGU, taking into account a range of factors
including the physical specifications of the ore, probability of
conversion, estimated capital and operating costs, and length
of mine life. The value of unmined resources as a proportion
of the assessed Fair Value is a significant judgement which
requires an estimate of the quantity and value of the unmined
resources. The group considers this approach to be consistent
with the approach adopted by market participants.
In determining the Fair Value of CGUs, future cash flows were
discounted using rates based on the Group’s estimated before
tax weighted average cost of capital. When it is considered
appropriate to do so, an additional premium is applied with
regard to the geographic location and nature of the CGU.
Life-of-mine operating and capital cost assumptions are based
on the Group’s latest budget and LOM plans. Operating cost
assumptions reflect the expectation that costs will, over the
long term, have a degree of positive correlation to the prevailing
commodity price and exchange rate assumptions.
After assessing the Fair Value of each CGU against its carrying
value, no impairment charges were recognised for the current
financial year.
Any variation in the key assumptions used to determine Fair
Value would result in a change of the assessed Fair Value. If the
variation in assumption had a negative impact on Fair Value,
it could indicate a requirement for impairment to non-current
assets.
To the extent that capitalised mine properties, plant and
equipment is determined not to be recoverable in the future,
this will reduce profits and net assets in the period in which
this determination is made.
72 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
(ii) Life-of-mine stripping ratio
The Group has adopted a policy of deferring production stage
stripping costs and amortising them on a units-of-production
basis. Significant judgement is required in determining the
contained ore units for each mine. Factors that are considered
include:
■■ Any proposed changes in the design of the mine;
■■ estimates of the quantities of ore reserves and mineral
resources for which there is a high degree of confidence of
economic extraction;
■■ future production levels;
■■ future commodity prices; and,
■■ future cash costs of production and capital expenditure.
(iii) Provisions for decommissioning and restoration
costs
Decommissioning and restoration costs are a normal
consequence of mining, and the majority of this expenditure
is incurred at the end of a mine’s life. In determining an
appropriate level of provision consideration is given to the
expected future costs to be incurred, the timing of these
expected future costs (largely dependent on the life of the
mine), and the estimated future level of inflation. The discount
rate used in the calculation of these provisions is consistent
with the risk free rate.
The ultimate cost of decommissioning and restoration is
uncertain and costs can vary in response to many factors
including changes to the relevant legal requirements, the
emergence of new restoration techniques or experience at
other mine-sites. The expected timing of expenditure can also
change, for example in response to changes in reserves or to
production rates.
Changes to any of the estimates could result in significant
changes to the level of provisioning required, which would in
turn impact future financial results.
(iv) Recoverability of potential deferred income tax
assets
The Group recognises deferred income tax assets in respect
of tax losses and temporary differences to the extent that
it is probable that the future utilisation of these losses and
temporary differences is considered probable. Assessing the
future utilisation of these losses and temporary differences
requires the Group to make significant estimates related to
expectations of future taxable income. Estimates of future
taxable income are based on forecast cash flows from
operations and the application of existing tax laws. To the
extent that future cash flows and taxable income differ
significantly from estimates, this could result in significant
changes to the deferred income tax assets recognised, which
would in turn impact future financial results.
(v) Share based payments
The Group measures the cost of equity settled transactions
with employees by reference to the fair value at the grant
date using a Black Scholes formula or Monte Carlo simulation
taking into account the terms and conditions upon which the
instruments were granted, as discussed in Note 29(b).
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ac) Significant accounting estimates and assumptions (continued)
(vi) Fair value of derivative financial instruments
The Group assesses the fair value of its financial derivatives in accordance with the accounting policy stated in Note 1(n). Fair
values have been determined based on well established valuation models and market conditions existing at the reporting date.
These calculations require the use of estimates and assumptions. Changes in assumptions concerning interest rates, gold prices
and volatilities could have significant impact on the fair valuation attributed to the Group’s financial derivatives. When these
assumptions change or become known in the future, such differences will impact asset and liability carrying values in the period
in which they change or become known.
(vii) Significant estimate in determining the beginning of production
Considerations are made in the determination of the point at which development ceases and production commences for a mine
development project. This point determines the cut-off between pre-production and production accounting.
The Group ceases capitalising pre-production costs and begins depreciation and amortisation of mine assets at the point
commercial production commences. This is based on the specific circumstances of the project, and considers when the mine’s
plant becomes ‘available for use’ as intended by management. Determining when the production start date is achieved is an
assessment made by management and includes the following factors:
■■ the level of redevelopment expenditure compared to project cost estimates;
■■ completion of a reasonable period of testing of the mine plant and equipment;
■■ mineral recoveries, availability and throughput levels at or near expected/budgeted levels;
■■ the ability to produce gold into a saleable form (where more than an insignificant amount is produced); and,
■■ the achievement of continuous production.
Any revenues occurring during the pre-production period are capitalised and offset the capitalised development costs.
(ad)
New accounting standards and UIG interpretations
(i)
From 1 July 2012 the Group has adopted all new and revised Australian Accounting Standards and
Interpretations mandatory for reporting periods beginning on or after 1 July 2012, including:
REFERENCE
TITLE
AASB 2011-9
Amendments to Australian Accounting Standards -Presentation of Other
Comprehensive Income
APPLICATION DATE
APPLICATION DATE
OF STANDARD
FOR GROUP*
1 July 2012
1 July 2012
[AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]
This standard requires entities to group items presented in other comprehensive
income on the basis of whether they might be reclassified subsequently to profit
or loss and those that will not.
Interpretation 20
Stripping Costs in the Production Phase of a Surface Mine
1 January 2013
1 July 2011**
This interpretation applies to stripping costs incurred during the production
phase of a surface mine. Production stripping costs are to be capitalised as part of
an asset, if an entity can demonstrate that it is probable future economic benefits
will be realised, the costs can be reliably measured and the entity can identify the
component of an ore body for which access has been improved. This asset is to be
called the “stripping activity asset”.
The stripping activity asset shall be depreciated or amortised on a systematic
basis, over the expected useful life of the identified component of the ore body
that becomes more accessible as a result of the stripping activity. The units of
production method shall be applied unless another method is more appropriate.
Consequential amendments were also made to other standards via AASB 2011-12.
* With the exception of IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine, the new and revised accounting standards
have no impact on the Group’s financial report.
** The impact of the early adoption of IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine has been outlined in note 1(a).
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 73
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ad)
New accounting standards and UIG interpretations (continued)
(ii) The following new accounting standards have been issued or amended but are not yet effective.
These standards have not been adopted by the Group for the period ended 30 June 2013:
REFERENCE
TITLE
SUMMARY
AASB 10
Consolidated
Financial
Statements
AASB 10 establishes a new control model that applies to
all entities. It replaces parts of AASB 127 Consolidated and
Separate Financial Statements dealing with the accounting for
consolidated financial statements and UIG-112 Consolidation -
Special Purpose Entities.
The new control model broadens the situations when an
entity is considered to be controlled by another entity and
includes new guidance for applying the model to specific
situations, including when acting as a manager may give
control, the impact of potential voting rights and when
holding less than a majority voting rights may give control.
Consequential amendments were also made to this and
other standards via AASB 2011-7 and AASB 2012-10.
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
1 Jan 2013
1 July 2013
AASB 11
Joint Arrangements AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-
1 January 2013
1 July 2013
AASB 12
Disclosure of
Interests in Other
Entities
AASB 13
Fair Value
Measurement
113 Jointly- controlled Entities - Non-monetary Contributions
by Ventures.
AASB 11 uses the principle of control in AASB 10 to define
joint control, and therefore the determination of whether
joint control exists may change. In addition it removes the
option to account for jointly controlled entities (JCEs) using
proportionate consolidation. Instead, accounting for a joint
arrangement is dependent on the nature of the rights and
obligations arising from the arrangement. Joint operations
that give the venturers a right to the underlying assets and
obligations themselves is accounted for by recognising the
share of those assets and obligations. Joint ventures that give
the venturers a right to the net assets is accounted for using
the equity method.
Consequential amendments were also made to this
and other standards via AASB 2011-7, AASB 2010-10 and
amendments to AASB 128.
AASB 12 includes all disclosures relating to an entity’s
interests in subsidiaries, joint arrangements, associates and
structured entities. New disclosures have been introduced
about the judgments made by management to determine
whether control exists, and to require summarised
information about joint arrangements, associates,
structured entities and subsidiaries with non-controlling
interests.
AASB 13 establishes a single source of guidance for
determining the fair value of assets and liabilities. AASB 13
does not change when an entity is required to use fair value,
but rather, provides guidance on how to determine fair
value when fair value is required or permitted. Application
of this definition may result in different fair values being
determined for the relevant assets.
AASB 13 also expands the disclosure requirements for
all assets or liabilities carried at fair value. This includes
information about the assumptions made and the
qualitative impact of those assumptions on the fair value
determined.
Consequential amendments were also made to other
standards via AASB 2011-8.
1 January 2013
1 July 2013
1 January 2013
1 July 2013
74 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ad)
New accounting standards and UIG interpretations (continued)
REFERENCE
TITLE
SUMMARY
AASB 119
Employee Benefits
AASB 2012-2
AASB 2012-5
AASB 2012-9
AASB 2011-4
Amendments
to Australian
Accounting
Standards -
Disclosures
- Offsetting
Financial Assets
and Financial
Liabilities
Amendments
to Australian
Accounting
Standards arising
from Annual
Improvements
2009-2011 Cycle
Amendment
to AASB 1048
arising from
the withdrawal
of Australian
Interpretation 1039
Amendments
to Australian
Accounting
Standards to
Remove Individual
Key Management
Personnel
Disclosure
Requirements
[AASB 124]
The main change introduced by this standard is to revise
the accounting for defined benefit plans. The amendment
removes the options for accounting for the liability, and
requires that the liabilities arising from such plans is
recognised in full with actuarial gains and losses being
recognised in other comprehensive income. It also revised
the method of calculating the return on plan assets.
The revised standard changes the definition of short-term
employee benefits. The distinction between short-term and
other long-term employee benefits is now based on whether
the benefits are expected to be settled wholly within 12
months after the reporting date.
Consequential amendments were also made to other
standards via AASB 2011-10.
AASB 2012-2 principally amends AASB 7 Financial Instruments:
Disclosures to require disclosure of the effect or potential
effect of netting arrangements, including rights of set-off
associated with the entity’s recognised financial assets
and recognised financial liabilities, on the entity’s financial
position, when all the offsetting criteria of AASB 132 are not
met.
AASB 2012-5 makes amendments resulting from the 2009-
2011 Annual Improvements Cycle. The standard addresses a
range of improvements, including the following:
■ Repeat application of AASB 1 is permitted (AASB 1)
■
Clarification of the comparative information
requirements when an entity provides a third balance
sheet (AASB 101 Presentation of Financial Statements).
AASB 2012-9 amends AASB 1048 Interpretation of Standards
to evidence the withdrawal of Australian Interpretation
1039 Substantive Enactment of Major Tax Bills in Australia.
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
1 January 2013
1 July 2013
1 January 2013
1 July 2013
1 January 2013
1 July 2013
1 January 2013
1 July 2013
This amendment deletes from AASB 124 individual key
management personnel disclosure requirements for
disclosing entities that are not companies. It also removes
the individual KMP disclosure requirements for all disclosing
entities in relation to equity holdings, loans and other
related party transactions.
1 July 2013
1 July 2013
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 75
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ad)
New accounting standards and UIG interpretations (continued)
REFERENCE
TITLE
SUMMARY
AASB 1053
Application of
Tiers of Australian
Accounting
Standards
This standard establishes a differential financial reporting
framework consisting of two tiers of reporting requirements
for preparing general purpose financial statements:
(a) Tier 1: Australian Accounting Standards
(b)
Tier 2: Australian Accounting Standards - Reduced
Disclosure Requirements
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
1 July 2013
1 July 2013
Tier 2 comprises the recognition, measurement and
presentation requirements of Tier 1 and substantially reduced
disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing
general purpose financial statements:
(a)
(b)
For-profit entities in the private sector that have public
accountability (as defined in this standard)
The Australian Government and State, Territory and
Local governments
The following entities apply either Tier 2 or Tier 1
requirements in preparing general purpose financial
statements:
(a)
For-profit private sector entities that do not have public
accountability
(b) All not-for-profit private sector entities
(c)
Public sector entities other than the Australian
Government and State, Territory and Local governments.
Consequential amendments to other standards to implement
the regime were introduced by AASB 2010-2, 2011-2, 2011-6,
2011-11, 2012-1, 2012-7 and 2012-11.
AASB 2012-3 adds application guidance to AASB 132 Financial
Instruments: Presentation to address inconsistencies identified
in applying some of the offsetting criteria of AASB 132,
including clarifying the meaning of “currently has a legally
enforceable right of set-off” and that some gross settlement
systems may be considered equivalent to net settlement.
1 January 2014
1 July 2014
AASB 2012-3
Amendments
to Australian
Accounting
Standards
- Offsetting
Financial Assets
and Financial
Liabilities
Interpretation 21
Levies
This Interpretation confirms that a liability to pay a levy is
only recognised when the activity that triggers the payment
occurs. Applying the going concern assumption does not
create a constructive obligation.
1 January 2014
1 July 2014
76 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ad)
New accounting standards and UIG interpretations (continued)
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
1 Jan 2015
1 July 2015
REFERENCE
TITLE
SUMMARY
AASB 9
Financial
Instruments
AASB 9 includes requirements for the classification and
measurement of financial assets. It was further amended
by AASB 2010-7 to reflect amendments to the accounting for
financial liabilities.
These requirements improve and simplify the approach for
classification and measurement of financial assets compared
with the requirements of AASB 139. The main changes are
described below.
(a)
(b)
(c)
Financial assets that are debt instruments will be
classified based on (1) the objective of the entity’s
business model for managing the financial assets; (2) the
characteristics of the contractual cash flows.
Allows an irrevocable election on initial recognition
to present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income. Dividends in respect of these
investments that are a return on investment can be
recognised in profit or loss and there is no impairment or
recycling on disposal of the instrument.
Financial assets can be designated and measured at fair
value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement
or recognition inconsistency that would arise from
measuring assets or liabilities, or recognising the gains
and losses on them, on different bases.
(d)
Where the fair value option is used for financial liabilities
the change in fair value is to be accounted for as follows:
■ The change attributable to changes in credit risk are
presented in other comprehensive income (OCI)
■ The remaining change is presented in profit or loss
If this approach creates or enlarges an accounting mismatch
in the profit or loss, the effect of the changes in credit risk are
also presented in profit or loss.
Further amendments were made by AASB 2012-6 which
amends the mandatory effective date to annual reporting
periods beginning on or after 1 January 2015. AASB 2012-6 also
modifies the relief from restating prior periods by amending
AASB 7 to require additional disclosures on transition to AASB
9 in some circumstances.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB 2009-11
and superseded by AASB 2010-7 and 2010-10.
* The impact of the adoption of these new and revised standards and interpretations have been considered in an initial review
and are not considered to be a significant change to the financial statements of the Group. Final consideration of the changes is
currently underway.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 77
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 2: PROFIT FROM CONTINUING OPERATIONS
CONSOLIDATED
13
$’000
12
$’000
(a) Revenue from gold and silver sales
Gold and silver sales
618,602
576,710
353,569
(37,877)
315,692
36,910
26,950
63,860
33,965
6,257
-
40,222
303,104
(40,931)
262,173
36,342
36,879
73,221
28,676
4,284
2,116
35,076
3,204
1,504
-
1,957
1,775
66
3,798
21,379
31,794
6,127
20,000
79,300
258
-
-
87
345
1,285
1,584
1,201
-
4,070
(b) Costs of production relating to gold sales
Costs of production (excluding gold in circuit inventories movement)
Gold in circuit inventories movement
(c) Depreciation and amortisation relating to gold sales
Amortisation of evaluation, development and rehabilitation costs
Depreciation of mine site properties, plant and equipment
(d) Other operating costs relating to gold sales
Royalty expense
Operational support costs
Write-off of obsolete spares and consumables
(e) Other revenue
Interest income
(f) Other income
Rehabilitation and restoration provision adjustment from non operating mine sites
Profit on sale of non operating mine sites
Profit on sale of shares
Other
(g) Share of associates' losses, asset impairment expenses and fair value
movement on convertible notes
Share of associates' losses (i)
Impairment of gold equity investments (ii)
Impairment of accounts receivable
Fair value movement on convertible notes held in associate (iii)
(i)
(ii)
The share of associates’ losses includes a share of the loss of Noble Mineral Resources
Limited (“Noble)” for the year ended 30 June 2013 of $20.648m.
The lower gold price has impacted the market value of the gold equity investments
held by Resolute. Due to the sustained period of lower prices for these gold equity
investments, a non-cash impairment charge of $31.794m has been recorded against the
investment in gold equity investments. These gold equity investments are recorded on
the Statement of Financial Position at their respective quoted market values as at 30 June
2013. This impairment charge represents the market value movement amounts which
had been previously recognised in the Unrealised Gain/(Loss) Reserve, but now have been
transferred to the Statement of Comprehensive Income.
(iii)
A fair value adjustment of $20.000m has been recorded in the statement of comprehensive
income against the carrying value of convertible notes held in Noble.
78 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 2: PROFIT FROM CONTINUING OPERATIONS (CONTINUED)
(h) Administration and other corporate expenses
Other management and administration expenses
Non mine site insurance costs
Operating lease expenses
Share based payments expense
Rehabilitation and restoration provision adjustment from non operating mine sites
Depreciation of non mine site assets
Loss on sale of property, plant and equipment
Other
(i) Treasury - realised gains/(losses)
Realised foreign exchange gain
Realised loss on gold put options
(j) Treasury - unrealised gains/(losses)
Unrealised gain on gold put options
Unrealised (loss)/gain on financial derivative assets
Unrealised foreign exchange loss
Unrealised foreign exchange gain/(loss) on intercompany balances (i)
(i)
Due to an accounting standard requirement the unrealised gains and losses on
intercompany balances between entities in the Group are taken directly to the Group’s
profit or loss.
(k) Finance costs
Interest and fees
Rehabilitation and restoration provision accretion
(l) Employee benefits
Salaries
Superannuation
Share based payments expense
CONSOLIDATED
13
$’000
12
$’000
3,892
297
829
1,179
61
104
-
184
6,546
483
-
483
-
(2,364)
(5,333)
40,460
32,763
2,735
1,395
4,130
74,155
2,874
1,391
78,420
4,979
619
821
1,390
-
196
196
172
8,373
3,839
(4,014)
(175)
4,002
2,364
(4,622)
(44,938)
(43,194)
10,445
1,525
11,970
65,802
2,866
1,390
70,058
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 79
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 3: INCOME TAX
(a) Income tax expense attributable to continuing operations
Current tax expense
Deferred tax (benefit)/expense
Income tax expense attributable to profit from continuing operations
Witholding tax
Total tax expense
(b) Numerical reconciliation of income tax expense to prima facie tax expense
Profit from continuing operations before income tax expense
Withholding tax
Profit from continuing operations including withholding tax before income tax expense
Prima facie income tax expense at 30% (2012: 30%)
Add/(deduct):
- tax losses and other temporary differences recognised to offset deferred tax liabilities
- effect of share based payments expense not deductible
- prior year under/(over) provision
- other
Income tax expense attributable to net profit
(c) Amounts recognised directly in equity
Amounts credited directly to equity
(d) Tax losses (tax effected)
- Revenue losses
Australia
Tanzania
Mali*
Other
- Capital losses
Australia
Total tax losses not used against deferred tax liabilities for which no deferred tax asset
has been recognised (potential tax benefit at the prevailing tax rates of the respective
jurisdictions)
CONSOLIDATED
13
$’000
12
$’000
18,037
(476)
17,561
5,479
23,040
128,483
(5,479)
123,004
36,901
(21,886)
185
1,773
588
17,561
19,355
1,251
20,606
1,965
22,571
124,430
(1,965)
122,465
36,739
(14,921)
417
(2,160)
531
20,606
-
(1,942)
55,361
4,534
70,509
536
67,052
632
50,611
534
130,940
118,829
38,833
38,872
169,773
157,701
* Pursuant to the Establishment Convention between the State of Mali and Societe des Mines de Syama S.A. (owner of the Syama
gold mine), there is an income tax holiday for 5 years post the declaration of “first commercial production” at Syama, which
commenced on 1 January 2012.
A deferred income tax asset has not been recognised for these amounts at reporting date as realisation of the benefit is not
regarded as probable. The future benefit will only be obtained if:
(i)
future assessable income is derived of a nature and an amount sufficient to enable the benefit to be realised;
(ii) the conditions for deductibility imposed by tax legislation continue to be complied with; and,
(iii) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
80 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 3: INCOME TAX (CONTINUED)
(e) Unrecognised temporary differences
As at 30 June 2013, aggregate unrecognised temporary differences of $6.543m (2012: $2.381m)
are in respect of investments in foreign controlled entities for which no deferred tax assets (2012:
deferred tax liabilities) have been recognised for amounts which arise upon translation of their
financial statements.
(f) Movements in the deferred tax assets balance
Balance at the beginning of the year
Credited to equity
Charged to the income statement
Balance as at the end of the year
The deferred tax assets balance comprises temporary differences attributable to:
Receivables
Other financial assets
Available for sale financial assets
Other financial assets
Property, plant and equipment
Payables
Interest bearing liabilities
Provisions
Other
Tax losses recognised (i)
Temporary differences not recognised
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax assets
(i)
This amount includes tax losses recognised against deferred tax liabilities in foreign
entities of $0.238m (2012: $1.353m).
(g) Movements in the deferred tax liabilities balance
Balance at the beginning of the year
Credited to the income statement
Foreign exchange
Balance as at the end of the year
The deferred tax liabilities balance comprises temporary differences attributable to:
Receivables
Mineral exploration and development interests
Property, plant and equipment
Financial derivative assets
Payables
Interest bearing liabilties
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax liabilities
CONSOLIDATED
13
$’000
12
$’000
-
-
-
-
40,667
-
9,552
12,646
132
658
29,101
19,131
-
239
(90,549)
21,577
(21,577)
-
486
(476)
(10)
-
-
20,175
276
-
1,126
-
21,577
(21,577)
-
-
1,942
(1,942)
-
6,902
238
1,178
-
1,170
-
47,693
14,412
18
10,850
(42,804)
39,657
(39,657)
-
1,125
(696)
57
486
7,181
25,816
919
709
140
5,378
40,143
(39,657)
486
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 81
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 CONSOLIDATED
13
$’000
12
$’000
2,568
28
2,596
2,568
28
2,596
NOTE 3: INCOME TAX (CONTINUED)
(h) The equity balance comprises temporary differences attributable to:
Option equity reserve
Other
Net temporary differences in equity
(i) Tax consolidation
Resolute Mining Limited and its wholly owned Australian controlled entities implemented
the tax consolidation legislation on 1 July 2002. On adoption of the tax consolidation
legislation, the entities in the tax consolidated group entered into a tax sharing agreement,
which limits the joint and several liability of the wholly owned entities in the case of a
default by the head entity, Resolute Mining Limited.
The entities have also entered into a tax funding agreement under which the wholly owned
entities fully compensate Resolute Mining Limited for any current tax payable assumed and
are compensated by Resolute Mining Limited for any current tax receivable. The funding
amounts are determined by reference to the amounts recognised in the wholly owned
entities’ financial statements. The head entity and controlled entities in the tax consolidated
group continue to account for their own current and deferred tax amounts. The Group has
applied the group allocation approach in determining the appropriate amount of current
taxes and deferred taxes to allocate to members of the tax consolidated group.
The amount receivable/payable under the tax funding agreement are due upon receipt of
the funding advice from the head entity, which is issued as soon as practicable after the
end of each financial year. The head entity may also require payment of interim funding
amounts to assist with its obligations to pay tax instalments. The tax funding agreement
requires payments to/from the head entity to be recognised via an inter-entity receivable/
payable which is at call.
NOTE 4: DIVIDENDS PAID OR PROVIDED FOR
The final dividend of $31.600m that was declared on 28 August 2012 was paid on 16
November 2012. No additional dividend has been declared.
Franking Credits
The amount of franking credits available for subsequent financial years is as follows.
The amount has been determined using a tax rate of 30%.
103
7,417
NOTE 5: CASH
Cash at bank and on hand
Short-term deposits
Cash at bank earns interest at floating rates based on bank deposit rates.
3,040
-
3,040
8,404
40,000
48,404
82 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 5: CASH (CONTINUED)
Reconciliation to cash flow statement
For the purpose of the cash flow statement, cash and cash equivalents comprise the following at
30 June:
Cash at bank and on hand
Short-term deposits
Bank overdraft (Note 17)
Short-term deposits are made for varying periods depending on the immediate cash
requirements of the Group, and earn interest at the respective short term deposit rates.
The fair value of cash and cash equivalents is equal to their book value.
NOTE 6: OTHER FINANCIAL ASSETS
Current
Restricted cash (note 34)
Restricted cash was held as security against a liquid investment.
Non Current
CONSOLIDATED
13
$’000
12
$’000
3,040
-
(31,183)
(28,143)
8,404
40,000
(5,262)
43,142
-
42.267
Convertible notes held in Noble Mineral Resources Limited
64,788
-
The 706,568,933 convertible notes held by the Resolute group have a face value of 12 cents per note and were recorded at a total
cost of $84.788m prior to a $20.000m fair value adjustment made on 30 June 2013. The convertible notes earn interest at 8% per
annum over a 3 year term that commenced on 1 March 2013 with interest owing on 1 September 2013 and 1 March 2014 to be
capitalised.
The notes are convertible to shares on a one for one basis at no cost at the election of the holder. The notes are carried at fair
value with adjustments to fair value recorded as profit or loss in accordance with Note 1(l)(i).
On 12 September 2013, Noble entered Voluntary Administration. The Company’s investment in Noble primarily takes the form of
the convertible notes which make up the majority of Noble’s expected outstanding debts. The appointment of the Administrator
is likely to see some form of rationalisation in the ownership of Noble’s key asset, the Bibiani gold project (“Bibiani”) in Ghana and
as a key stakeholder, Resolute intends to remain engaged in the ongoing Administration. Resolute also notes the market update
announcement by Noble on 12 September 2013 whereby it has advised that estimated additional funding in the order of US$40
million will be required to support Bibiani during a planned Feasibility Study and care and maintenance phase. Failure to raise the
required funding could significantly compromise the value of the convertible notes held by Resolute. To facilitate further funding,
Noble has announced it proposes to restructure the debts of certain Ghanaian subsidiaries by way of Schemes of Arrangement.
Resolute’s Convertible Notes are with the parent company of the Noble Group and accordingly that debt is not part of the proposed
creditor Schemes. The investment in Noble was carefully considered by Resolute and it continues to believe in the underlying
value and significant future potential of Noble’s key asset, the Bibiani gold project. In addition, as a key stakeholder, Resolute will
be pleased to work with the Administrator to ensure an outcome that best realises value for Noble and Bibiani.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 83
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 7: RECEIVABLES
Current
Sundry debtors (a)
Allowance for impairment loss
Non Current
Sundry debtors
Allowance for impairment loss
a)
Current sundry debtors are non interest bearing and are generally on 30-60 day terms. A
provision for doubtful debt is recognised when there is objective evidence that the Group may
not be able to collect all amounts due according to original terms of the transaction.
Receivables past due but not considered impaired are $3.292m (2012: $4.852m). Payment terms
on these amounts have not been re-negotiated, however the Group maintains direct contact
with the relevant debtor and is satisfied that net receivables will be collected in full.
Movements in the allowance for impairment losses
At start of year
Charge for the year
Foreign exchange translation
At end of year
As at 30 June, the aging analysis of current and non current sundry debtors is as follows:
0-30 days
31-60 days
61-90 days (Past due but not impaired)
Less than 91 days (Considered impaired)
+91 days (Past due but not impaired)
+91 days (Considered impaired)
Total
CONSOLIDATED
13
$’000
12
$’000
10,048
(901)
9,147
13,844
(11,969)
1,875
(5,868)
(6,127)
(875)
(12,870)
6,170
1,560
1,698
5,179
1,594
7,691
23,892
6,794
(837)
5,957
7,174
(5,031)
2,143
(4,638)
(1,201)
(29)
(5,868)
3,006
242
136
-
4,716
5,868
13,968
84 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 8: INVENTORIES
Gold in circuit and gold bullion
-At cost
Consumables at cost
Ore stockpiles
-At cost
-At net realisable value
Total ore stockpiles
CONSOLIDATED
13
$’000
12
$’000
120,642
57,229
10,654
14,388
25,042
69,593
43,834
22,194
6,280
28,474
202,913
141,901
Inventory recognised as an expense within costs of gold production for the year ended
30 June 2013 totalled $90.543m (2012: $61.849m) for the Group.
NOTE 9: AVAILABLE FOR SALE FINANCIAL ASSETS
Shares at fair value - listed
28,909
374
Available for sale financial assets consist of investments in ordinary shares, and
therefore have no maturity date or coupon rate. Refer to Note 34(f) for information on
the determination of fair value.
NOTE 10: FINANCIAL DERIVATIVE ASSETS
Current
Financial derivative assets (Note 34)
-
2,364
NOTE 11: OTHER ASSETS
Current
Prepayments
4,156
4,567
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 85
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 12: EXPLORATION (ACQUIRED) AND EVALUATION EXPENDITURE
The consolidated entity has the following gold mineral exploration and evaluation expenditure carried forward in respect of areas
of interest:
Areas in exploration and evaluation (at cost)
Balance at the beginning of the year
- Expenditure during the year
- Impaired during the year
- Foreign currency translation
Balance at the end of the year
Ultimate recoupment of costs carried forward, in respect of areas of interest in the
exploration and evaluation phase, is dependent upon the successful development and
commercial exploitation, or alternatively the sale of the respective areas at an amount
at least equivalent to the carrying value. For areas which do not meet the criteria of the
accounting policy per Note 1(p), those amounts are charged to the consolidated statement
of comprehensive income.
NOTE 13: DEVELOPMENT EXPENDITURE
Areas in production (at cost)
Mine property development
Balance at the beginning of the year
- Additions
- Transfers to income statement
- Transfer to other monetary assets and liabilities
- Amounts charged to amortisation and finance costs
- Adjustments to rehabilitation and restoration obligations
- Foreign currency translation
Balance at the end of the year
Stripping activity asset
Balance at the beginning of the year
- Additions
- Amounts amortised to costs of production relating to gold sales
- Foreign currency translation
Balance at the end of the year
Areas in development (at cost)
Stripping activity asset (Stage 2 Syama)
Balance at the beginning of the year
- Additions
- Foreign currency translation
Balance at the end of the year
Total development expenditure
CONSOLIDATED
13
$’000
12
$’000
9,522
1,062
-
955
11,539
9,045
271
(45)
251
9,522
208,543
118,502
-
-
(37,708)
5,850
27,256
322,443
28,229
16,562
(19,298)
1,835
27,328
-
41,035
5,108
46,143
219,329
28,036
(119)
(1,437)
(38,023)
11,973
(11,216)
208,543
20,585
46,028
(36,510)
(1,874)
28,229
-
-
-
-
395,914
236,772
Refer to note 1(a) for information on the impacts of the early adoption of IFRIC 20 Stripping Cost in the Production Phase of a Surface Mine.
86 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 14: PROPERTY, PLANT & EQUIPMENT
BUILDINGS
$'000
PLANT &
EQUIPMENT
$'000
MOTOR VEHICLES
$'000
OFFICE
EQUIPMENT
$'000
PLANT AND
EQUIPMENT
UNDER LEASE
$'000
CONSOLIDATED
13
At 1 July 2012 net of accumulated
depreciation
Additions
Disposals
Depreciation expense
Foreign currency translation
At 30 June 2013 net of
accumulated depreciation
Cost
Accumulated depreciation
Net carrying amount
12
At 1 July 2011 net of accumulated
depreciation
Additions
Disposals
Depreciation expense
Foreign currency translation
At 30 June 2012 net of accumulated
depreciation
Cost
Accumulated depreciation
Net carrying amount
3,864
2,256
-
(1,141)
351
153,689
17,484
-
(21,156)
16,573
5,330
166,590
13,440
(8,110)
5,330
337,471
(170,881)
166,590
5,206
11
-
(1,126)
(227)
172,658
21,907
(191)
(30,467)
(10,218)
3,864
153,689
10,246
(6,382)
3,864
290,741
(137,052)
153,689
1,324
221
-
(793)
65
817
6,028
(5,211)
817
2,433
83
-
(1,099)
(93)
1,324
5,083
(3,759)
1,324
1,460
607
-
(1,036)
59
1,090
5,531
(4,441)
1,090
2,235
436
(5)
(1,113)
(93)
1,460
4,495
(3,035)
1,460
TOTAL
$'000
167,388
24,358
(6)
(27,054)
17,048
7,051
3,790
(6)
(2,928)
-
7,907
181,734
25,112
(17,205)
7,907
387,582
(205,848)
181,734
8,346
1,975
-
(3,270)
-
190,878
24,412
(196)
(37,075)
(10,631)
7,051
167,388
21,343
(14,292)
7,051
331,908
(164,520)
167,388
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 87
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 15: INVESTMENT IN ASSOCIATES
13 12 13 12
$’000
$’000
$’000
$’000
(a) Investment Details
VIKING ASHANTI LIMITED
NOBLE MINERAL RESOURCES LIMITED
Listed
Shares held in associates
Percentage of ownership (%)
604
2,223
-
28,750,000
23,000,000
131,099,300
31.89%
33.25%
19.67%
(b) Movements in the carrying amount of the Group's
investment in associates
At 1 July
Purchase of investment
Share of loss after income tax*
Impairment of investment
At 30 June
(c) Fair value of investment in listed associates
2,223
575
(731)
(1,463)
604
5,092
-
(1,285)
(1,584)
2,223
-
20,648
(20,648)
-
-
-
-
-
-
-
-
-
-
Market value of the Group's investment as at 30 June
604
2,760
1,180
-
(d) Summarised financial information
The following table illustrates summarised financial information
relating to the Group's associates:
Extract from the associates' statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Share of associates' net assets
Extract from the associates' statement of comprehensive income:
Revenue
Total comprehensive loss
256
3,014
3,270
142
-
142
3,128
1,099
653
6,419
7,072
477
-
477
6,595
2,193
32,197
98,756
130,953
45,600
79,360
124,960
5,993
1,180
-
-
-
(4,925)
(3,741)
(131,115)
-
-
-
-
-
-
-
-
-
-
* The unrecognised share of Noble’s total comprehensive loss is $5.142m. The loss is unrecognised because the carrying value of
the investment in Noble has reduced to zero.
88 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 16: PAYABLES
Current
Trade creditors and accruals (a)
(a) Payables are non-interest bearing and generally settled on 30-90 day terms. Due to the
short term nature of these payables, their carrying value is assumed to approximate their
fair value.
NOTE 17: INTEREST BEARING LIABILITIES
Current
Lease liabilities (a)
Bank overdraft (b)
Non Current
Lease liabilities (a)
Borrowings (c)
CONSOLIDATED
13
$’000
12
$’000
71,329
42,948
3,758
31,183
34,941
2,577
53,807
56,384
2,616
5,262
7,878
3,142
-
3,142
(a) Carpentaria Gold Pty Ltd (“CGPL”), a wholly owned subsidiary of RML, has entered into hire purchase agreements with Esanda
Finance Corporation Limited, Atlas Copco Customer Finance Pty Ltd and the Commonwealth Bank of Australia for the purchase
of mining equipment which is being used at Mt Wright, Ravenswood. Monthly instalments are required under the terms of the
contracts which expire between July 2013 and January 2016. RML has provided an unsecured parent entity guarantee to these
financiers in relation to some of these finance facilities.
(b) This facility is in place and is subject to an annual revision in approximately June 2014, and has an interest rate of 8% per annum
on the basis of usage. The maximum limit of this facility is $32.580m (AUD equivalent), and as at reporting date $1.149m (AUD
equivalent) of the facility was unused.
(c) On 28 February 2013, RML entered into a new Syndicated Facilities Agreement with Barclays Bank Plc and Investec Bank
(Australia) Limited. The facilities comprise a US$50m senior secured Cash Advance Facility and a A$4.5m Environmental
Performance Bond Facility. The facilities are revolving with a 3 year term and expire on 28 February 2016. The facilities are
secured by the following:
(i)
Cross Guarantee and Indemnity given by RML, Carpentaria Gold Pty Ltd, Resolute (Somisy) Limited, Resolute (Treasury) Pty
Ltd and Resolute Pty Ltd;
(ii) Share Mortgage granted by Resolute Pty Ltd over all of its shares in Resolute (Tanzania) Limited;
(iii) Share Mortgage granted by RML (“the Borrower”) over all of its shares in Carpentaria Gold Pty Ltd;
(iv) Share Mortgage granted by the Borrower over all of its shares in Resolute (Somisy) Limited;
(v)
Fixed and Floating Charge granted by Resolute (Treasury) Pty Ltd over all its current and future assets including bank
accounts and an assignment of all Hedging Contracts;
(vi)
Mining Mortgage and Fixed and Floating Charge granted by Carpentaria Gold Pty Ltd, including mining mortgage over key
Carpentaria Gold Pty Ltd mining tenements and charge over all the current and future assets of Carpentaria Gold Pty Ltd
including bank accounts and an assignment of all Hedging Contracts;
(vii) Mortgage of Contractual Rights granted by Resolute Mining Limited in favour of the Security Trustee over a loan provided to
Sociêtê des Mines de Syama SA to fund the development of the Syama Gold project in Mali; and,
(viii) Mortgage of Convertible Notes granted by Resolute (Treasury) Pty Ltd in favour of the Security Trustee over convertible notes
issued by Noble Mineral Resources Limited.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 89
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 17: INTEREST BEARING LIABILITIES (CONTINUED)
Pursuant to the Syndicated Facilities Agreement, the following ratios are required:
(i)
(Interest Cover Ratio): the ratio of EBITDA to Net Interest Expense will be greater than 5.00 times;
(ii)
(Net Debt to EBITDA): the ratio of Net Debt to EBITDA will be less than 2.00 times;
(iii) (Consolidated Gearing): the ratio of Net Debt to Equity will be less than 1.00 times;
(iv)
(Loan Life Cover Ratio): will be equal to or greater than 1.50:1; and,
(v)
(Reserve Tail Ratio): will exceed 30%.
There have been no breaches of these ratios.
(b) The total assets of the entities over which security exists amounts to $879.995m. $181.321m of these assets relate to property
plant and equipment.
(e) Refer to Note 34(b) for details of average interest rates.
NOTE 18: PROVISIONS
Current
Site restoration (a)
Employee entitlements
Dividend payable
Withholding taxes
Other provisions
Non Current
Site restoration (a)
Employee entitlements
(a) Site restoration
Balance at the beginning of the year
Rehabilitation and restoration provision accretion
Change in scope of restoration provision
Utilised during the year
Extinguished through business divestment
Foreign exchange translation
Balance at the end of the year
CONSOLIDATED
13
$’000
12
$’000
3,591
17,258
83
3,949
1,245
26,126
54,033
937
54,970
49,901
1,395
5,911
(2,658)
(355)
3,430
57,624
5,174
11,662
68
3,575
1,094
21,573
44,727
756
45,483
42,577
1,525
11,709
(5,407)
-
(503)
49,901
The nature of restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating
facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas.
Typically the obligation arises when the asset is installed at the production location. When the liability is initially recorded, the
estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the liability is increased
for the change in present value based on the discount rates that reflect the current market assessments and the risks specific
to the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the
corresponding asset and rehabilitation liability when incurred.
90 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 19: CONTRIBUTED EQUITY
(a) Contributed equity
Ordinary share capital:
640,994,224 ordinary fully paid shares (2012: 635,928,623)
(b) Movements in contributed equity, net of issuing costs
CONSOLIDATED
13
$’000
12
$’000
380,225
368,047
Balance at the beginning of the year
368,047
287,125
Exercise of 322,334 unlisted options at $0.42 per share
Exercise of 106,000 unlisted options at $1.09 per share
Exercise of 42,000 unlisted options at $1.21 per share
Exercise of 70,334 unlisted options at $1.43 per share
Exercise of 3,000,000 unlisted options at $0.74 per share
Issue of 10,924,933 shares to Noble Mineral Resources Limited at $1.89 per share
On market buy-back of 9,400,000 shares at an average price of $1.01 per share
Transfer convertible note equity reserves to share capital
Exercise of 50,962,416 listed options at $0.60 per share
Exercise of 163,334 unlisted options at $0.42 per share
Exercise of 138,334 unlisted options at $1.09 per share
Exercise of 18,000 unlisted options at $1.21 per share
Exercise of 125,000 unlisted options at $1.32 per share
Exercise of 40,001 unlisted options at $1.43 per share
Exercise of 500,000 unlisted options at $0.74 per share
Exercise of 500,000 unlisted options at $1.00 per share
Conversion of 136,670,429 convertible notes to shares at $0.50 per share
On market buy-back of 20,827,839 shares at an average price of $1.50 per share
133
112
42
98
2,158
20,623
(10,988)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,346
30,577
69
153
22
165
55
370
500
70,937
(31,272)
Balance at the end of the year
380,225
368,047
(c) Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and in the event of winding up the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares
entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(d) Employee share options
Refer to Note 29 for details of the Employee Share Option Plan. Each option entitles the holder to purchase one share. The names
of all persons who currently hold employee share options, granted at any time, are entered into the register kept by the Company,
pursuant to Section 215 of the Corporations Act 2001. Persons entitled to exercise these options have no right, by virtue of the
options, to participate in any share issue by the parent entity or any other body corporate.
(e) Performance rights
Refer to Note 29 for details of the Performance Rights Plan. The vesting of performance rights is conditional upon specific
performance criteria being met by holders and entitles the holder to one share. The names of all persons who currently hold
performance rights, granted at any time, are entered into the register kept by the Company, pursuant to Section 215 of the
Corporations Act 2001. Holders have no right, by virtue of the performance rights, to participate in any share issue by the parent
entity or any other body corporate.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 91
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 19: CONTRIBUTED EQUITY (CONTINUED)
(f) Capital management
The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern,
so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital
structure that is appropriate for the Group’s current and/or projected financial position.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders (if any),
return capital to shareholders, buy back its shares, issue new shares, borrow from financiers or sell assets to reduce debt.
The Group monitors the adequacy of capital by analysing cash flow forecasts over the term of the Life of Mine for each of its
projects. To a lesser extent, gearing ratios are also used to monitor capital. Appropriate capital levels are maintained to ensure that
all approved expenditure programs are adequately funded. This funding is derived from an appropriate combination of debt and
equity.
The gearing ratio is calculated as net debt divided by total capital. Net debt is defined as interest bearing liabilities less cash and
cash equivalents. Total capital is calculated as ‘equity’ as shown in the Consolidated Statement of Financial Position (including
non-controlling interest) plus net debt.
Gearing ratio
The Group is not subject to any externally imposed capital requirements.
NOTE 20: RESERVES
(a) Movements in reserves
CONSOLIDATED
13
12
13%
nil
FOREIGN
CURRENCY
TRANSLATION
RESERVE
NET UNREALISED
GAIN/(LOSS)
RESERVE
EMPLOYEE EQUITY
BENEFITS RESERVE
CONVERTIBLE
NOTES EQUITY
RESERVE
SHARE OPTIONS
RESERVE
3,236
13,764
5,987
112
-
(364)
-
-
-
-
1,390
-
-
-
-
(13,764)
(252)
4,626
-
252
-
-
-
-
1,392
6,018
-
-
-
-
-
-
-
-
-
5,987
-
-
-
5,987
As at 30 June 2011
Currency translation differences
Unrealised gain/(loss) reserve, net
of tax
Share based payments to
employees
Equity portion of compound
financial instruments, net of tax
and transaction costs
As at 30 June 2012
Currency translation differences
Unrealised gain/(loss) reserve, net
of tax
Share based payments to
employees
(23,541)
15,604
-
-
-
(7,937)
29,748
-
-
As at 30 June 2013
21,811
92 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
TOTAL
(442)
15,604
(364)
1,390
(13,764)
2,424
29,748
252
1,392
33,816
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 20: RESERVES (CONTINUED)
(b) Nature and purpose of reserves
(i) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation
reserve, refer Note 1(d)(ii).
(ii) Net unrealised gain/(loss) reserve
This reserve records fair value changes on available for sale investments, refer Note 1(l)(iv).
(iii) Employee equity benefits reserve
The share based payments reserve is used to recognise the fair value of options and performance rights granted over the
vesting period of the securities, refer Note 1(y)(iv).
(iv) Convertible notes equity reserve
This reserve records the value of the equity portion (conversion rights) of the convertible notes.
(v) Share options equity reserve
The equity reserve records transactions between owners as owners.
NOTE 21: RETAINED EARNINGS
Retained profits at the beginning of the year
Net profit attributable to members of the parent
Dividend paid
Retained profits at the end of the financial year
CONSOLIDATED
13
$’000
205,861
84,878
(31,600)
259,139
12
$’000
100,758
105,103
-
205,861
NOTE 22: EXPLORATION AND DEVELOPMENT COMMITMENTS
Exploration commitments:
Due to the nature of the consolidated entity’s operations in exploring and evaluating areas of interest, it is very difficult to
accurately forecast the nature or amount of future expenditure, although it will be necessary to incur expenditure in order to
retain present interests in mineral tenements. Expenditure commitments on mineral tenure for the parent entity and consolidated
entity can be reduced by selective relinquishment of exploration tenure or by the renegotiation of expenditure commitments.
The approximate level of exploration expenditure expected in the year ending 30 June 2013 for the consolidated entity is
approximately $15.114m (2012: $21.679m). This includes the minimum amounts required to retain tenure. There are no material
exploration commitments further out than one year.
The remaining interest in the Finkolo Joint Venture is expected to be acquired during the year ended 30 June 2014 by way of a
US$20.000m payment to Endeavour Mining Corporation.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 93
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 23: LEASE COMMITMENTS
(a) Finance Leases
Lease expenditure contracted and provided for:
Due within one year
Due between one and five years
Total minimum lease payments
Less finance charges
Present value of minimum lease payments
Reconciled to:
Current liability (Note 17)
Non current liability (Note 17)
Add: Leases that commenced after 30 June 2013 up until the date of this report
(b) Operating leases (non-cancellable)
Due within one year
Due between one and five years
Aggregate lease expenditure contracted for at balance date but not provided for
The operating lease expenditure mainly relates to the rental of office premises and is fixed.
CONSOLIDATED
13
$’000
12
$’000
5,156
5,574
10,730
(652)
10,078
3,758
2,577
3,743
10,078
619
635
1,254
3,019
3,244
6,263
(505)
5,758
2,616
3,142
-
5,758
786
1,254
2,040
94 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 24: RELATED PARTY TRANSACTIONS
(i) Refer to Note 32 for directors’ direct and indirect interests in securities.
(ii) RML is the ultimate Australian holding company and there is no controlling entity of RML at 30 June 2013.
(ii) During the year RML provided a US$15.000m unsecured loan to an associate, Noble Mineral Resources Limited at an interest
rate of 8% p.a. This loan and interest of $0.339m (AUD equivalent) was fully repaid by Noble during the year. RML holds a 19.67%
interest in Noble’s shares on issue.
(iv) During the year RML acted as underwriter to an $85.000m financing transaction undertaken by Noble. The financing transaction
resulted in RML purchasing 706,568,933 convertible notes ($84.788m) in Noble with a face value of $0.12 per note, a coupon rate
of 8% and a term of 3 years. The convertible notes have been recorded within other financial assets in the statement of financial
position. $2.267m in interest has been accrued to 30 June 2013.
(v) On 1 March 2013, P Beilby who is a member of Resolute’s Key Management Personnel was appointed as a Non-Executive Director
on the Board of Noble Mineral Resources Limited. A fee of $40,000 plus superannuation p.a. is paid directly to P Beilby in his
capacity as a Director.
NOTE 25: INTERESTS IN JOINT VENTURES
The consolidated entity has an interest in the following material joint ventures, whose principal activities are to explore for gold.
The Group’s interests in the assets employed in the joint venture are included in the Consolidated Statement of Financial Position,
in accordance with the accounting policy as described in Note 1(b)(ii).
There are no commitments relating to the joint ventures (2012: nil).
Jointly controlled assets
ENTITY HOLDING INTEREST
OTHER PARTICIPANT/JOINT VENTURE
PERCENTAGE OF INTEREST HELD
Mabangu Mining Limited
Sub Sahara Resources (Tanzania) Limited/Nyakafuru JV
Mabangu Mining Limited
Yellowstone Limited /Mega JV
Mabangu Mining Limited
Yellowstone Limited/Kanegele JV
Resolute Pty Ltd
Etruscan Resources Bermuda Ltd/Finkolo JV
Resolute (Tanzania) Limited
Sub Sahara Resources (Tanzania) Limited/Kahama JV
Resolute (Tanzania) Limited
ABG Exploration Limited/GP West JV
13
%
12
%
49%
0%
100%
60%
49%
70%
49%
49%
65%
60%
49%
0%
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 95
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 26: NOTES TO THE CASH FLOW STATEMENTS
(a) Reconciliation of net profit from continuing operations after income tax to the net operating cash flows:
CONSOLIDATED
13
$’000
12
$’000
105,443
101,859
1,392
21,379
-
(1,775)
(1,957)
31,794
1,395
61
27,054
36,910
(32,763)
-
6,127
-
(2,658)
20,000
-
-
748
2,870
(2,015)
(37,806)
411
(39,881)
14,431
1,797
(478)
2,004
1,390
1,285
196
-
-
1,584
1,525
(258)
37,075
36,342
43,194
4,014
1,201
2,116
(5,407)
-
(2,157)
45
4,785
589
14,702
(49,337)
(1,297)
(9,101)
(7,415)
(3,346)
1,176
4,412
154,483
179,172
Net profit from ordinary activities after income tax
Add/(deduct):
Share based payments including employee long term incentives costs
Share of associates' losses
Loss on sale of property, plant and equipment
Profit on sale of shares
Profit on sale of non-operating mine sites
Impairment of gold equity investments
Rehabilitation and restoration provision accretion
Rehabilitation and restoration provision adjustment from non operating mine sites
Depreciation and amortisation of property, plant and equipment
Amortisation of evaluation, development and rehabilitation costs
Foreign exchange (gains)/losses
Non-cash realised loss on gold put options
Impairment of accounts receivable
Write-off of obsolete spares and consumables
Rehabilitation and restoration cash expenditure
Fair value movement on convertible notes held in associate
Realised foreign exchange gain on repayments of Senior Debt Facility
Impairment of acquired exploration and evaluation expenditure
Non cash finance costs
Business development costs
Changes in operating assets and liabilities:
(Increase)/decrease in receivables
Increase in inventories
Increase in prepayments
Increase in stripping activity asset
Increase/(decrease) in payables
Change in current tax balances
Change in deferred tax balances
Increase in operating provisions
Net operating cash flows
(b) Finance Leases
Refer to Note 17(a) for additions to finance leases and for terms and conditions.
96 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 26: NOTES TO THE CASH FLOW STATEMENTS (CONTINUED)
(c) Non cash investing and financing activities
2013
On 17 January 2013, RML sold Broken Hill Metals Pty Ltd to Bullseye Mining Limited. Proceeds included a non-cash component of
1,500,000 fully paid shares in Bullseye Resources Limited valued at $0.300m.
During the year RML issued 10,924,933 ordinary shares to the shareholders of Noble Mineral Resources Limited as consideration
for the purchase of 131,099,300 shares in Noble.
On 22 November 2012, RML sold its Bullabulling tenement M15/552 for non-cash consideration of 13,500,000 Bullabulling Gold
Limited shares valued at $1.053m.
2012
136,670,429 convertible notes were converted into ordinary shares resulting in a reduction in convertible note debt of $64.663m.
This amount was transferred into contributed equity, along with the associated equity reserves of $13.764m.
NOTE 27: CONTROLLED ENTITIES
The following were controlled entities during the year and have been included in the consolidated accounts. All entities in the
consolidated entity carry on business in their place of incorporation.
NAME OF CONTROLLED ENTITY AND COUNTRY OF
INCORPORATION
CONSOLIDATED ENTITY COMPANY HOLDING THE
INVESTMENT
PERCENTAGE OF SHARES HELD BY
CONSOLIDATED ENTITY
Amber Gold Cote d’Ivoire SARL (a)
Resolute (CDI Holdings) Limited
Broken Hill Metals Pty Ltd, Aust. (b),(d)
Resolute (Treasury) Pty Ltd
Carpentaria Gold Pty Ltd, Aust.
Resolute Mining Limited
Excalibur Cote d’Ivoire SARL (c)
Resolute (CDI Holdings) Limited
Goudhurst Pty Ltd, Aust. (d)
Resolute (Treasury) Pty Ltd
Mabangu Exploration Limited, Tanzania
Resolute (Tanzania) Limited
Mabangu Mining Limited, Tanzania
Resolute (Tanzania) Limited
Resolute (CDI Holdings) Limited, Jersey (d)
Resolute Mining Limited
Resolute CI SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Resolute (Finkolo) Limited, Jersey (d)
Resolute Mining Limited
Resolute (Ghana) Limited, Ghana
Resolute Mining Limited
Resolute Mali S.A.,Mali
Resolute (Somisy) Limited
Resolute (Somisy) Limited, Jersey (d)
Resolute Mining Limited
Resolute (Tanzania) Limited, Tanzania
Resolute Pty Ltd
Resolute (Treasury) Pty Ltd, Aust. (d)
Resolute Mining Limited
Resolute Pty Ltd, Aust.
Resolute Mining Limited
Resolute Resources Pty Ltd, Aust. (d)
Resolute Pty Ltd
Societe des Mines de Syama S.A., Mali
Resolute (Somisy) Limited
Resolute Exploration SARL, Mali
Resolute (Finkolo) Limited
Societe des Mines de Finkolo SA, Mali (e)
Resolute (Finkolo) Limited
(a) Amber Gold Cote d’Ivoire SARL was incorporated on 16 April 2012.
(b) Broken Hill Metals Pty Ltd was sold on 4 February 2013.
(c) Excalibur Cote d’Ivoire SARL was incorporated on 16 April 2012.
13
%
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
12
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
-
(d) These entities are not required to be separately audited. An audit of the entity’s results and position is performed for the purpose
of inclusion in the consolidated entity’s accounts.
(e) Societe des Mines de Finkolo SA was incorporated on 24 October 2012.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 97
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 28: AUDITOR REMUNERATION
Auditing (i)
Taxation planning advice and review
(i)
Included in the current year is $6,319 (2012: $5,175) pertaining to additional work
performed in relation to the audit of the prior year.
Amounts received or due and receivable by a related overseas office of Ernst & Young, from entities
in the consolidated entity or related entities:
Auditing (Ernst & Young, Ghana and Tanzania)
Tax Advice (Ernst & Young, Ghana and Tanzania)
CONSOLIDATED
13
$
318,319
118,896
437,215
12
$
308,615
155,715
464,330
12,888
-
12,888
5,175
989
6,164
Total amounts received or due and receivable by Ernst & Young globally
450,103
470,494
Amounts received or due and receivable by non Ernst & Young firms for auditing
28,809
35,137
NOTE 29: EMPLOYEE BENEFITS
(a) Employee entitlements
The aggregate employee entitlement liability is comprised of:
Provisions (current) (Note 18)
Provisions (non current) (Note 18)
(b) Employee share option plan
CONSOLIDATED
13
$’000
17,258
937
18,195
12
$’000
11,662
756
12,418
Up until January 2012, LTI grants to executives and employees were delivered in the form of employee share options. The options
over the ordinary shares of RML, issued for nil consideration, are issued in accordance with the terms and conditions of the
shareholder approved RML Employee Share Option Plan and performance guidelines established by the directors of RML. This
option plan has been replaced by a Performance Rights Plan (refer to note 29(c)).
The maximum number of options that can be issued under the Employee Share Option Plan is capped at 5% of the ordinary
shares on issue. The options do not provide any dividend or voting rights. The options are not quoted on the ASX. One third of the
options issued pursuant to the Plan are able to be exercised 6 months after issue, a further one third 18 months after issue and the
remaining one third 30 months after issue. The only exception to these exercise periods is for Options G (see below).
During the year the remaining 195,000 of Options E lapsed. These options were granted on 23 May 2008 with an exercise price of
$2.13 and an expiry date of 22 May 2013. Pursuant to the rights issues in the years ended 30 June 2008 and 30 June 2009, the strike
price reduced by 1 cent per option to $2.12 in accordance with the RML Share Option Plan.
Outstanding at reporting date are 51,000 options (Options F). There was no change in the balance during the year. These options
were issued on 29 August 2008 with an exercise price of $1.63. Pursuant to the rights issues in the year ended 30 June 2009, the
strike price reduced by 1 cent per option in accordance with the RML Share Option Plan. The strike price is now $1.62. The options
were comprised of the opening balance of 51,000.
Also outstanding at reporting date are 194,999 options (Options G) which are comprised of the opening balance of 517,333 less
322,334 options exercised during the year. These options were issued on 31 January 2009 with an exercise price of $0.42 and an
expiry date of 31 January 2014. One third of the options were able to be exercised 12 months after issue, a further one third 18
months after issue and the remaining one third 30 months after issue.
98 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 29: EMPLOYEE BENEFITS (CONTINUED)
(b) Employee share option plan (continued)
Also outstanding at reporting date are 450,000 options (Options H) which are comprised of the opening balance of 556,000, less
106,000 options exercised during the year. These options were comprised of 1,237,000 options issued on 15 February 2010 with an
exercise price of $1.09 and an expiry date of 14 February 2015.
Also outstanding at reporting date are 39,000 options (Options I) which are comprised of the opening balance of 81,000 options less
42,000 options which were exercised during the year. These options were granted under the employee share option plan on 30 June
2010 and subsequently issued on 16 July 2010. These options were comprised of 179,000 options with an exercise price of $1.21 and
an expiry date of 15 July 2015.
Also outstanding at reporting date are 135,000 options (Options J). There was no change in the balance outstanding during
the year. These options were granted under the employee share option plan on 27 October 2010 and subsequently issued on
16 November 2010. These options were comprised of 135,000 options with an exercise price of $1.43 and an expiry date of 15
November 2015.
Also outstanding at reporting date are 2,000,000 options (Options K) which were granted under the employee share option plan
on 2 December 2010 and subsequently issued on 5 January 2011. There was no change in the balance outstanding during the year.
These options were comprised of 2,000,000 options with an exercise price of $1.36 and an expiry date of 4 January 2016.
Also outstanding at reporting date are 915,666 options (Options L) which are comprised of the opening balance of 996,000 options
less 70,334 options which were exercised during the year and 10,000 options which lapsed during the year. These options were
granted under the employee share option plan on 23 December 2010 and subsequently issued on 25 January 2011. These options
were comprised of 1,366,000 options with an exercise price of $1.43 and an expiry date of 24 January 2016.
Also outstanding at reporting date are 130,000 options (Options M). There was no change in the balance outstanding during the
year. These options were granted under the employee share option plan on 29 June 2011 and subsequently issued on 30 June 2011.
These options were comprised of 130,000 options with an exercise price of $1.18 and an expiry date of 15 July 2016.
Also outstanding at reporting date are 764,400 options (Options N). The balance of these options is comprised of the opening
balance of 782,400 options less 18,000 options which lapsed during the year. The options were granted under the employee share
option plan on 4 January 2012 and subsequently issued on 27 January 2012. These options comprised of 823,300 options with an
exercise price of $1.85 and an expiry date of 26 January 2017.
Employees will only be able to exercise the options allocated to them if they meet certain performance criteria. Details of the
employee share option plan for the consolidated entity are as follows:
2013
2012
NUMBER OF
EMPLOYEE OPTIONS
WEIGHTED AVERAGE
EXERCISE PRICE
NUMBER OF
EMPLOYEE OPTIONS
WEIGHTED AVERAGE
EXERCISE PRICE
Balance at the beginning of the year
- granted
- exercised
- lapsed
Balance at end of year (i)
Vested and exercisable at the end of the year
5,443,733
-
(540,668)
(223,000)
4,680,065
3,155,243
1.35
-
0.74
2.07
1.39
1.32
5,335,667
823,200
(484,669)
(230,465)
5,443,733
2,320,000
1.22
1.85
0.96
1.78
1.35
1.18
(i) The weighted average remaining contractual life for the share options outstanding as at 30 June 2013 is 2.51 years (2012: 3.29
years).
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 99
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 29: EMPLOYEE BENEFITS (CONTINUED)
(b) Employee share option plan (continued)
The following tables summarises information about options exercised by employees during the year:
13
NUMBER OF
OPTIONS
GRANT DATE
EXERCISE DATE
EXPIRY DATE
WEIGHTED
AVERAGE
EXERCISE PRICE
PROCEEDS FROM
SHARES ISSUED
NUMBER OF
SHARES ISSUED
ISSUE DATE OF
THE SHARES
FAIR VALUE OF
SHARES ISSUED
300,000
31 Jan 09
17 Oct 12
31 Jan 14
31 Jan 09
17 Dec 12
31 Jan 14
15 Feb 10
20 Sep 12
14 Feb 15
15 Feb 10
17 Dec 12
14 Feb 15
16 Jul 10
20 Sep 12
15 Jul 15
16 Jul 10
17 Oct 12
15 Jul 15
25 Jan 11
20 Sep 12
24 Jan 16
25 Jan 11
17 Oct 12
24 Jan 16
25 Jan 11
17 Dec 12
24 Jan 16
22,334
51,000
55,000
6,000
36,000
18,667
31,667
20,000
540,668
12
75,000
25 Oct 06
12 Sep 11
24 Oct 11
50,000
25 Oct 06
20 Oct 11
24 Oct 11
118,334
31 Jan 09
4 Aug 11
31 Jan 14
25,000
20,000
16,000
6,000
8,000
55,000
53,334
31 Jan 09
19 Aug 11
31 Jan 14
31 Jan 09
20 Oct 11
31 Jan 14
15 Feb 10
19 Aug 11
14 Feb 15
15 Feb 10
12 Sep 11
14 Feb 15
15 Feb 10
20 Oct 11
14 Feb 15
15 Feb 10
23 Nov 11
14 Feb 15
15 Feb 10
24 Feb 12
14 Feb 15
6,000
16 Jul 10
20 Oct 11
15 Jul 15
12,000
16 Jul 10
23 Nov 11
15 Jul 15
6,000
4,667
6,667
25 Jan 11
12 Sep 11
24 Jan 16
25 Jan 11
20 Oct 11
24 Jan 16
25 Jan 11
23 Nov 11
24 Jan 16
22,667
25 Jan 11
24 Feb 12
24 Jan 16
484,669
$
$
0.42
0.42
1.09
1.09
1.21
1.21
1.43
1.43
1.43
0.74
1.32
1.32
0.42
0.42
0.42
1.09
1.09
1.09
1.09
1.09
1.21
1.21
1.43
1.43
1.43
1.43
0.96
126,000
300,000
17 Oct 12
9,380
55,590
59,950
7,260
43,560
26,694
45,284
28,600
22,334
17 Dec 12
51,000
20 Sep 12
55,000
17 Dec 12
6,000
20 Sep 12
36,000
17 Oct 12
18,667
20 Sep 12
31,667
17 Oct 12
20,000
17 Dec 12
402,318
540,668
99,000
66,000
49,700
10,500
8,400
17,440
6,540
8,720
59,950
58,134
7,260
14,520
8,580
6,674
9,534
75,000
12 Sep 11
50,000
20 Oct 11
118,334
4 Aug 11
25,000
19 Aug 11
20,000
20 Oct 11
16,000
19 Aug 11
6,000
8,000
12 Sep 11
20 Oct 11
55,000
23 Nov 11
53,334
24 Feb 12
6,000
20 Oct 11
12,000
23 Nov 11
6,000
4,667
6,667
12 Sep 11
20 Oct 11
23 Nov 11
32,414
22,667
24 Feb 12
463,366
484,669
$
1.87
1.68
1.89
1.68
1.89
1.87
1.89
1.87
1.68
1.84
1.74
1.67
1.37
1.38
1.67
1.38
1.74
1.67
1.92
2.00
1.67
1.92
1.74
1.67
1.92
2.00
1.67
Fair value of the shares issued is estimated to be the market price of the shares of Resolute Mining Limited on the ASX as at close
of trading on their respective issue dates.
100 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 29: EMPLOYEE BENEFITS (CONTINUED)
(b) Employee share option plan (continued)
The following table lists the key variables used in the option valuation:
OPTIONS F
OPTIONS G
OPTIONS H
OPTIONS I
OPTIONS J
OPTIONS K
OPTIONS L
OPTIONS M
OPTIONS N
Number of options
at year end
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of options
(years)
Original option exercise
price ($)
Share price at grant
date ($)
Value per option at grant
date ($)
51,000
194,999
450,000
39,000
135,000
2,000,000
915,666
130,000
764,400
0.00%
40%
7.00%
5
1.63
1.48
0.64
0.00%
50%
7.00%
5
0.42
0.38
0.20
0.00%
50%
7.00%
5
1.09
0.99
0.49
0.00%
64%
6.25%
5
1.21
1.08
0.61
0.00%
63%
6.25%
5
1.43
1.28
0.73
0.00%
63%
6.25%
5
1.36
1.22
0.70
0.00%
63%
6.25%
5
1.43
1.27
0.72
0.00%
63%
6.25%
5
1.18
1.13
0.66
0.00%
65%
3.50%
5
1.85
1.75
0.98
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.
The fair value of the options is measured at the grant date using the Black and Scholes option pricing model taking into account
the terms and conditions upon which the instruments were granted. The services received and liabilities to pay for those services
are recognised over the expected vesting period.
No options were granted during the year ended 30 June 2013. The weighted average fair value of options granted in the prior year
ended 30 June 2012 was $0.98 per option.
(c) Performance rights plan
A Performance Rights Plan was approved by shareholders and implemented in 2012. Details of the plan are outlined below:
Variable Remuneration – Long Term Incentive (LTI)
The objective of the LTI plan is to reward executives in a manner, which aligns this element of remuneration with the creation of
shareholder wealth. As such LTIs are made to executives who are able to influence the generation of shareholder wealth and thus
have an impact on the Company’s performance against the relevant long-term performance hurdles.
Overview of the Company’s approach to Long Term Incentives
(i) Grant Frequency and LTI quantum
KMP receive a new grant of Performance Rights every year and the LTI forms a key component of KMP Total Annual
Remuneration. The LTI dollar value that KMP are entitled to receive is set at a fixed percentage of their fixed remuneration and
equates to 75% of fixed remuneration for the Chief Executive Officer and 50% of fixed remuneration for the other KMP. This level
of LTI is in line with current market practice. The number of Performance Rights to be granted is determined by dividing the LTI
dollar value of the award by the fair value of a Performance Right on the allocation date.
(ii) Performance Conditions
Performance conditions have been selected that reward KMP for creating shareholder value as determined via the change in the
Company’s share price and via reserves/resources growth over a 3 year period.
The LTI performance is structured as follows:
Performance Rights will vest subject to meeting service and performance conditions as defined below:
■■ 75% of the Rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and
■■ 25% of the Rights will be performance tested against the reserve/resource growth over a 3 year period.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 101
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 29: EMPLOYEE BENEFITS (CONTINUED)
(c) Performance rights plan (continued)
(iii) Performance period
Grants under the LTI need to serve a number of different purposes:
(i) Act as a key retention tool; and,
(ii) focus on future shareholder value generation.
Therefore, the awards under the LTI relate to a 3 year period and provide a structure that is focused on long term sustainable
shareholder value generation.
The following table lists the key variables used in the valuation of performance rights:
PERFORMANCE HURDLE
Number of performance rights at year end
Underlying share price ($)
Exercise price ($)
Risk free rate
Volatility factor
Dividend yield
Period of the rights from grant date (years)
Effect of performance hurdles
RESERVE AND
RESOURCES RIGHTS
(25% OF TOTAL)
TSR RIGHTS
(75% OF TOTAL)
TOTAL
396,745
1.92
-
2.74%
50.00%
2.50%
2.59
1,190,233
1,586,978
1.92
-
2.74%
50.00%
2.50%
2.59
1.92
-
2.74%
50.00%
2.50%
2.59
Not reflected in
valuation due to non-
market condition
Reflected in valuation
through Monte Carlo
simulation
Value of performance right at grant date
$1.80
$1.35
$1.4625
No performance rights were issued or outstanding in the year ended 30 June 2012.
NOTE 30: CONTINGENT LIABILITIES & COMMITMENTS
Contingent Liabilities
(a) Native Title Claims
Native title determination applications have been lodged with the National Native Title Tribunal established under the Native
Title Act 1993 over areas of interest currently leased by the consolidated entity. Some of those claims have been accepted by the
Tribunal. Acceptance of an application by the Tribunal is merely a preliminary step in the procedure established by the Native
Title Act to determine whether or not native title exists. The final effect of these claims is not known and the claims are not
currently affecting the mining and exploration projects of the consolidated entity.
(b) Tanzanian Tax Authorities
(i) General
The operations and earnings of the Group continue, from time to time, to be affected to varying degrees by fiscal, legislative,
regulatory and political developments, including those relating to environmental protection, in the countries in which the Group
operates.
The industry in which the Group is engaged is also subject to physical risks of various types. The nature and frequency of these
developments and events, not all of which are covered by insurance, as well as their effect on future operations and earnings, are
unpredictable.
102 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 30: CONTINGENT LIABILITIES &
COMMITMENTS (CONTINUED)
Contingent Liabilities (continued)
(b) Tanzanian Tax Authorities (continued)
(ii)
Indirect Taxes
1) As reported in prior periods, in February 2009 and again
in April 2011, Mabangu Mining Limited (“MML”) received
an assessment for US$4.700m from the Tanzanian Revenue
Authority (“TRA”) who claim that MML has entered into a tax
avoidance scheme by not following through with its initial
intention of liquidating MML in 2006. The TRA claim that MML
ceased the liquidation of MML to avoid paying withholding
tax that they believe would have been payable if MML had
been liquidated and its retained profits distributed to Resolute
(Tanzania) Limited (“RTL”) in the form of a dividend. In
MML’s opinion, the TRA assessment is fundamentally flawed
and has no substance or foundation in fact. MML strongly
disputes the validity of the assessment and believes there
is no amount of withholding tax owing by MML to the TRA.
MML has received professional advice confirming that even
if MML were liquidated and its profits were distributed to
RTL, no withholding tax is payable on dividends paid by one
Tanzanian entity to another. MML will vigorously defend its
position and has applied for a waiver of any deposit payable
to the TRA ordinarily required to defend the claim. A letter of
objection was sent to the TRA in March 2009 and again in April
2011 and a request to the Commissioner General for a waiver
of the one third tax deposit was submitted. A response to this
request is yet to be received. In May 2011, a hearing before the
Tax Revenue Appeals Board was successful in barring the TRA
taking any recovery measures while the issue is before the
court.
In October 2011 the Tax Revenue Appeals Board decided in
MML’s favour and ordered the TRA to determine our waiver
application. However on appeal in August 2013 the Tax
Tribunal decided, on a technicality, in favour of the TRA that
they did not have to determine our deposit waiver application.
In relation to this case MML successfully won appeals to both
the Tax Revenue Appeals Board and the Tax Tribunal against
agency orders issued by the TRA for collection of the US$4.7M
and a TRA appeal to the Appeal Court is currently pending.
Various further legal appeal options are being considered.
2) The TRA has changed its interpretation on the tax legislation
relating to the fuel levy and fuel excise and duties (“fuel taxes”).
The amount paid by RTL when it purchases fuel includes fuel
taxes. The fuel supplier remits the fuel tax to the TRA, and as
in a similar manner as is done with a Goods and Services Tax
or a Value Added Tax, RTL then lodges a claim to claim back
from the TRA the fuel taxes it has paid to the supplier.
Up until December 2005, the TRA refunded all of the fuel taxes
paid by RTL. From January 2006 onwards, the TRA has changed
its interpretation and has denied further refunding of fuel taxes
if the fuel is used by a sub-contractor.
The TRA had previously refunded 9.100b Tanzanian Shillings
(“Tsh”) (or US$5.917m) of fuel taxes to RTL during the period
from 1999 to 2005, but due to their new interpretation are now
arguing they should not have. As a result, they demanded
that the refunded amount be returned by RTL to the TRA by 3
October 2008, which did not occur.
RTL strongly disagrees with the TRA revised interpretation and
it will continue to vigorously defend its position. The majority of
the amounts sought by the TRA are “time barred” and can only
be claimed from RTL if RTL has acted in a fraudulent manner.
RTL has acted in accordance with the law. In addition, further
protection is provided to RTL by its Mining Development
Agreement, which limits the amount of fuel taxes to be paid by
RTL.
In October 2008, RTL lodged an appeal against this demand and
was ordered to pay a deposit equal to one third of the amount
in dispute for the case to be heard by the Tax Revenue Appeals
Board (expected to be in 2013/14). Up until 30 June 2013, RTL has
paid 3.030b Tsh (or US$1.970m) as a deposit to have its appeal
heard. These deposits are treated as a non-current receivable.
3) A Tsh 9.327b (US$6.081m) payment certificate was issued by
TRA to RTL in July 2012 comprising Tsh 3.935b of alleged under
remittance of withholding tax over the 2003 to 2010 period
and Tsh 5.392b of related penalties / interest. In accordance
with Tanzanian tax law, RTL withheld tax at the rate of 3%
for payments made to offshore companies of a technical and
managerial nature whilst the TRA has the view these services
were “professional” in nature and hence attract the higher 15%
or 20% rate. RTL strongly disputes the validity of the payment
certificate and believes there is no amount of withholding
tax owing by RTL to the TRA. RTL has received professional
advice confirming the position taken by RTL is compliant with
Tanzanian tax law. RTL will vigorously defend its position.
An appeal against a payment certificate does not require
payment of a deposit.
4) A Tsh 2.968b (US$1.935m) payment certificate was issued
by the TRA to RTL in July 2012 comprising Tsh 2.181b of PAYE
allegedly owing and Tsh 0.787b of penalties / interest. The
dispute relates to the amount of PAYE remitted by RTL on the
employment contracts for its expatriates working in Tanzania.
The TRA alleges that the PAYE remitted by RTL on expatriate
salaries is a fringe benefit and should also be taxed. RTL grosses
up the expatriates’ net salaries to arrive at the correct gross
salary and calculates the PAYE to be remitted to the TRA on the
grossed up salary. The TRA’s position effectively double taxes
a portion of the expatriates’ salaries. RTL strongly disputes
the validity of the payment certificate and believes there is
no amount of tax owing by RTL to the TRA. RTL has received
professional advice confirming the position taken by RTL is
compliant with Tanzanian tax law. RTL will vigorously defend
its position. An appeal against a payment certificate does not
require payment of a deposit and the initial preliminary hearing
before the Tax Revenue Appeals Board took place in August 2013.
5) In January and February 2013, the TRA issued RTL with tax
assessments in value of US$36.820m (A$40.258m) relating to
income tax and interest allegedly owing from the 1998 to 2010
financial years. The assessments purport to deny/disallow
deductions claimed in the past income tax returns. RTL and
its advisor strongly disagree with the TRA’s interpretations
in all aspects and have submitted a response to the TRA’s
assessment explaining why the amounts are not payable. RTL
is in the process of lodging a US$5.900m deposit (in the form
of VAT offsets of a minimum of US$2.400m and cash of a
maximum of US$3.500m paid in equal monthly instalments
between May and October 2013) to have its appeal against this
assessment heard. The balance of the assessed amount has
not been provided for in the June 2013 accounts. A date for the
appeal to be heard is yet to be set.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 103
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 30: CONTINGENT LIABILITIES & COMMITMENTS (CONTINUED)
Contingent Liabilities (continued)
(c) Tanesco Electricity Supply Contract
Tanesco (the Tanzanian national electricity provider) provides electricity to RTL pursuant to an Electricity Supply Agreement. The
Agreement refers to an annual price escalation formula containing escalation factors that are open to interpretation. Pursuant
to Tanesco’s interpretation of the escalation formula, 4.700b Tsh (USD$3.064m) relating to amounts in excess of the general
Tanzanian public rate covering the period from 1 January 2008 to 30 June 2008 was invoiced to RTL. The rates charged by Tanesco
in their invoice were significantly higher than the general Tanzanian public rate. The amount recognised by RTL reflected the
amounts payable to Tanesco by RTL if it had terminated the Agreement and elected to receive and pay for electricity under the
general Tanzanian public rate.
Since 1 July 2008, RTL has continued to pay (or accrue) the electricity costs at the general Tanzanian public rate, as both Tanesco
and RTL have agreed that while rate negotiations are ongoing, RTL will continue to pay the general Tanzanian public rate. The
difference between the billed rate and the general Tanzanian public rate for electricity used by RTL between 1 July 2008 to 30 June
2009, which has not been accrued for or paid, is approximately 3.800b Tsh (or US$2.478m), bringing the total unrecognised amount
in dispute to 8.500b Tsh (US$5.542m).
Commitments
(a) Randgold/Syama Royalty
Pursuant to the terms of the Syama Sale and Purchase agreement, Randgold Resources Limited will receive a royalty on Syama
production, where the gold price exceeds US$350 per ounce, of US$10 per ounce on the first million ounces of gold production
attributable to Resolute Mining Limited (“RML”) and US$5 per ounce on the next three million attributable ounces of gold
production.
(b) Nyakafuru Royalty
Resolute will be required to pay a royalty of US$10 per ounce for each additional resource ounce, attributable to the former
Iamgold 34% interest that is proven up on the project, up to a total cap of US$3.75m.
NOTE 31: EARNINGS PER SHARE (EPS)
CONSOLIDATED
13
12
Basic earnings per share
Profit attributable to ordinary equity holders of the parent for basic earnings per share ($'000)
84,878
105,103
Weighted average number of ordinary shares outstanding during the period used in the calculation
of basic EPS
638,425,204
564,360,652
Basic EPS (cents per share)
Diluted earnings per share
13.29
18.62
Profit used in calculation of basic earnings per share ($'000)
84,878
105,103
Weighted average number of ordinary shares outstanding during the period used in the calculation
of basic EPS
638,425,204
564,360,652
Weighted average number of notional shares used in determining diluted EPS
1,805,281
87,044,675
Weighted average number of ordinary shares outstanding during the period used in the calculation
of diluted EPS
640,230,485
651,405,327
Number of potential ordinary shares that are not dilutive and hence not included in calculation of
diluted EPS
Diluted EPS (cents per share)
1,866,066
13.26
977,400
16.13
104 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 31: EARNINGS PER SHARE (EPS) (CONTINUED)
Between the reporting date and the date of completion of these financial statements there have been the following transactions
involving ordinary shares or potential ordinary shares:
(a) On 1 July 2013, 2,359,773 performance rights were granted and issued vesting over 3 years with a strike price of $nil. A further
1,225,455 performance rights were granted to P. Sullivan on 1 July 2013 subject to shareholder approval, which have a strike price
of $nil.
Information on the classification of securities
(i) Options
Options granted to employees (including KMP) as described in Note 29 are considered to be potential ordinary shares and have
been included in the determination of diluted earnings per share to the extent they are dilutive. These options have not been
included in the determination of basic earnings per share.
(ii) Performance rights
Performance rights granted to employees (including KMP) as described in Note 29, are considered to be potential ordinary shares
and have been included in the determination of diluted earnings per share. The performance rights have not been included in the
determination of basic earnings per share.
(iii) Convertible notes
Convertible notes are considered to be potential ordinary shares and have been included in the determination of diluted earnings
per share. The convertible notes have not been included in the determination of basic earnings per share.
NOTE 32: KEY MANAGEMENT PERSONNEL
(a) Key management personnel
(i) Directors
P. Huston
Non-Executive Chairman
P. Sullivan
Director and Chief Executive Officer
T. Ford
Non-Executive Director
H. Price
Non-Executive Director
(ii) Executives
G. Fitzgerald
General Manager - Finance & Administration and Company Secretary
P. Beilby
General Manager - Operations
P. Venn
General Manager - Business Development
(b) Compensation of key management personnel
Details of remuneration provided to key management personnel are as follows:
Short-term employee benefits
Post-employment benefits
Long-term employment benefits
Share-based payments
CONSOLIDATED
13
$
12
$
2,699,423
2,298,045
127,744
46,810
845,989
255,951
102,104
666,817
3,719,966
3,322,917
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 105
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013
NOTE 32: KEY MANAGEMENT PERSONNEL (CONTINUED)
(a) Details of option holdings of key management personnel are as follows
BALANCE AT
THE START OF
THE YEAR
GRANTED
DURING THE
YEAR AS
COMPENSATION
(VII)
FAIR VALUE OF
OPTIONS AT
GRANT DATE
TOTAL FAIR
VALUE OF
OPTIONS AT
GRANT DATE
GRANT DATE
OPTIONS TYPE
FIRST
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
YEAR
EXPIRY & LAST
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
YEAR
13
DIRECTORS
P. Sullivan
OFFICERS
G. Fitzgerald (i)
P. Beilby
P. Venn
12
DIRECTORS
P. Huston (iv)
P. Sullivan
P. Sullivan (v)
T. Ford (v)
H. Price (vi)
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
P. Venn
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
475,000
250,000
475,000
Listed
26,761
Unlisted
2,000,000
133,333
133,333
67,554
Listed
Listed
Listed
Unlisted
Unlisted
Unlisted
Listed
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
415,000
60,000
27 Jan 2012
190,000
60,000
27 Jan 2012
415,000
60,000
27 Jan 2012
5,000
-
-
0.98
0.98
0.98
-
58,800
27 Jul 2012
26 Jan 2017
58,800
27 Jul 2012
26 Jan 2017
58,800
27 Jul 2012
26 Jan 2017
-
-
-
EXERCISE PRICE
OF OPTIONS
GRANTED
DURING THE
YEAR
$
EXERCISED
ACQUIRED
BALANCE AT
GRANTED &
DURING THE
LAPSED DURING
DURING THE
THE END OF THE
VESTED DURING
VESTED AND EXERCISABLE AT THE
YEAR
THE YEAR (II)
YEAR
YEAR
THE YEAR
END OF THE YEAR
NO.
NO.
%
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
$
-
-
-
217,500
-
-
-
(150,000)
(75,000)
(24,000)
2,000,000
666,667
33.33
176,667
176,667
377,667
70.67
70.67
83.74
-
-
-
-
-
-
-
-
-
1.85
1.85
1.85
-
(26,761)
-
(133,333)
(133,333)
(67,554)
-
-
-
(5,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
451,000
-
-
-
-
475,000
250,000
475,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
666,667
33.33
-
-
-
-
318,333
93,333
318,333
-
-
-
-
-
67.02
37.33
67.02
-
28,099
-
140,000
140,000
70,932
-
-
-
5,250
106 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 32: KEY MANAGEMENT PERSONNEL (CONTINUED)
(a) Details of option holdings of key management personnel are as follows
BALANCE AT
THE START OF
COMPENSATION
GRANTED
DURING THE
YEAR AS
OPTIONS TYPE
THE YEAR
(VII)
GRANT DATE
FAIR VALUE OF
OPTIONS AT
GRANT DATE
TOTAL FAIR
VALUE OF
OPTIONS AT
GRANT DATE
FIRST
EXPIRY & LAST
EXERCISE
DATE OF
OPTIONS
GRANTED
EXERCISE
DATE OF
OPTIONS
GRANTED
DURING THE
DURING THE
YEAR
YEAR
EXERCISE PRICE
OF OPTIONS
GRANTED
DURING THE
YEAR
$
-
-
-
-
-
-
-
-
-
1.85
1.85
1.85
-
13
DIRECTORS
P. Sullivan
OFFICERS
G. Fitzgerald (i)
P. Beilby
P. Venn
12
DIRECTORS
P. Huston (iv)
P. Sullivan
P. Sullivan (v)
T. Ford (v)
H. Price (vi)
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
P. Venn
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
475,000
250,000
475,000
Listed
26,761
Unlisted
2,000,000
133,333
133,333
67,554
Listed
Listed
Listed
Unlisted
Unlisted
Unlisted
Listed
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
415,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
190,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
415,000
60,000
27 Jan 2012
58,800
27 Jul 2012
26 Jan 2017
5,000
-
-
-
-
-
0.98
0.98
0.98
-
EXERCISED
DURING THE
YEAR
LAPSED DURING
THE YEAR (II)
ACQUIRED
DURING THE
YEAR
BALANCE AT
THE END OF THE
YEAR
GRANTED &
VESTED DURING
THE YEAR
VESTED AND EXERCISABLE AT THE
END OF THE YEAR
NO.
NO.
%
-
-
(150,000)
(75,000)
-
-
-
(24,000)
(26,761)
-
(133,333)
(133,333)
(67,554)
-
-
-
(5,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
250,000
250,000
451,000
-
2,000,000
-
-
-
475,000
250,000
475,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
$
-
666,667
33.33
176,667
176,667
377,667
70.67
70.67
83.74
217,500
-
-
-
-
28,099
666,667
33.33
-
-
-
318,333
93,333
318,333
-
-
-
-
67.02
37.33
67.02
-
-
140,000
140,000
70,932
-
-
-
5,250
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 107
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 32: KEY MANAGEMENT PERSONNEL (CONTINUED)
Details of performance rights holdings of key management personnel are as follows:
GRANTED
DURING THE
YEAR AS
COMPENSATION
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT
GRANT DATE (III)
TOTAL FAIR
VALUE OF
PERFORMANCE
RIGHTS AT
GRANT DATE
$
$
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE
PRICE OF
PERFORMANCE
RIGHTS
GRANTED
DURING THE
YEAR
$
BALANCE AT
THE END OF THE
YEAR
13
DIRECTORS
P. Sullivan
546,875
27 Nov 2012
1.46
266,602
30 Jun 2015
27 Nov 2017
$nil
546,875
OFFICERS
G. Fitzgerald
200,521
27 Nov 2012
229,167
27 Nov 2012
174,479
27 Nov 2012
P. Beilby
P. Venn
12
1.46
1.46
1.46
97,754
30 Jun 2015
27 Nov 2017
111,719
30 Jun 2015
27 Nov 2017
85,059
30 Jun 2015
27 Nov 2017
$nil
$nil
$nil
200,521
229,167
174,479
There were no performance rights in place for the year ended 30 June 2012.
(i) On 17 October 2012, 150,000 unlisted options were exercised at a price of $0.42 per option. In each instance of exercising options, one ordinary
share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of
options.
(ii) The value of options at the date of lapse was $nil.
(iii) Performance rights vest over a 3 year period. On the date of calculating the number of performance rights to be allocated to KMP, the fair value of a
performance right was $0.96. By the time the performance rights were granted on 27 November 2012, the fair value of the performance rights had
increased to $1.4625 each resulting in an LTI expense that is higher than that anticipated on the allocation date.
(iv) On 31 December 2011, 26,761 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share
was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.
(v) On 31 December 2011, 133,333 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share
was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.
(vi) On 31 December 2011, 67,554 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share
was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.
(vii) Options granted vest in accordance with the Resolute Mining Limited Employee Share Option Plan following the review by the relevant supervisor
of the key management personnel’s performance. For details on the valuation of the options, including models and assumptions used, refer to Note
29(b). The percentage of options granted during the financial year that also vested during the financial year is nil (2012: nil). None of these options
were forfeited during the financial year.
(viii) Performance rights vest in accordance with the Resolute Mining Limited Remuneration Policy and Equity Incentive Plan which outline the key
performance indicators that need to be satisfied. For details on the valuation of the performance rights, including models and assumptions used,
refer to Note 29(c). The percentage of performance rights granted during the financial year that also vested during the financial year is nil. No
performance rights were forfeited during the financial year.
108 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 32: KEY MANAGEMENT PERSONNEL (CONTINUED)
(f) Details of share holdings of key management personnel are as follows:
13
DIRECTORS
P. Huston
P. Sullivan (i)
T. Ford
H. Price
OFFICERS
G. Fitzgerald (ii)
P. Beilby
P. Venn
12
DIRECTORS
P. Huston
P. Sullivan (iii)
T. Ford (iii)
H. Price (iii)
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
BALANCE AT THE
START OF THE YEAR
RECEIVED DURING
THE YEAR ON THE
EXERCISE OF OPTIONS
OTHER CHANGES
DURING THE YEAR
BALANCE AT THE END
OF THE YEAR
428,182
3,507,448
464,648
194,745
-
-
-
-
-
(500,000)
-
-
-
150,000
(150,000)
20,000
5,000
401,421
3,174,115
131,315
27,191
-
8,000
-
-
-
-
-
-
-
-
-
-
-
-
26,761
333,333
333,333
167,554
-
12,000
5,000
428,182
3,007,448
464,648
194,745
-
20,000
5,000
428,182
3,507,448
464,648
194,745
-
20,000
5,000
(i)
Shares were disposed of during the year at the prevailing market price. No amounts remain unpaid as at 30 June 2013.
(ii) Shares were acquired from the exercise of options, and were sold at the prevailing market price. No amounts remain unpaid as at 30 June 2013.
(iii) In the year ended 30 June 2012, the directors were issued the following shares as a result of the conversion of convertible notes and/or the exercise
of listed options. The convertible notes had a face value of $0.50 each, and were convertible on a 1 for 1 basis. The listed options had a strike price of
$0.60 each.
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
CONVERSION OF
CONVERTIBLE NOTES
EXERCISE OF LISTED
OPTIONS
-
200,000
200,000
100,000
500,000
26,761
133,333
133,333
67,554
360,981
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 109
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 32: KEY MANAGEMENT PERSONNEL (CONTINUED)
(c) Details of convertibles note holdings of key management personnel were as follows:
12
DIRECTORS
P. Huston
P. Sullivan
T. Ford
H. Price
OFFICERS
G. Fitzgerald
P. Beilby
P. Venn
BALANCE AT THE
START OF THE YEAR
ACQUIRED DURING
THE YEAR
CONVERSIONS
DURING THE YEAR
BALANCE AT THE END
OF THE YEAR
-
200,000
200,000
100,000
-
-
-
-
-
-
-
-
-
-
-
(200,000)
(200,000)
(100,000)
-
-
-
-
-
-
-
-
-
-
The convertible notes were acquired through participation in a capital raising. No convertible notes are held by key management
personnel as at 30 June 2013.
NOTE 33: OPERATING SEGMENTS
The Group has identified three operating segments based on the internal reports that are reviewed and used by the chief executive
officer and his management team (the chief operating decision maker) in assessing performance and in determining the allocation
of resources.
The operating segments are identified by management as being operating mine sites. Each of the mine sites are managed
separately and they operate in different regulatory and economic environments.
The principal activities of each operating segment are gold mining and prospecting and exploration for minerals.
Information regarding the operations of each reportable segment is included below. Performance is measured based on gold sold
and cost of production per ounce. Management believe that such information is the most relevant in evaluating the results of
certain segments relative to other entities that operate within the gold mining industry.
The accounting policies used by the Group in reporting segments are the same as those used in the preparation of financial
statements.
Inter-entity gold sales are recognised based on the prevailing spot price. The price is aimed to reflect what the segment would have
achieved if it sold its gold to external parties at arm’s length.
Income tax expense is calculated based on the segment operating net profit using a notional charge of the respective tax
jurisdiction. No effect is given for taxable or deductible temporary differences.
The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of
the core operations of any segment:
■■ Realised and unrealised treasury transactions, including derivative contract transactions;
■■ Finance costs - including adjustments on provisions due to discounting; and,
■■ Net gains/losses on disposal of available-for-sale investments.
110 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 Other operating costs (including gold in
circuit movement)
Other corporate/admin costs
Segment operating result before treasury,
other income/(expenses) and tax
Exploration and business development
expenditure
Finance costs
Share of associates' losses, asset
impairment expenses and fair value
movement on convertible notes
Segment operating result before treasury
and tax
Treasury - realised gains
Treasury - unrealised gains
Tax expense
NOTE 33: OPERATING SEGMENTS (CONTINUED)
13
Revenue
RAVENSWOOD
(AUSTRALIA)
GOLDEN PRIDE
(TANZANIA)
$’000
$’000
SYAMA
(MALI)
$’000
UNALLOCATED (B)
CORP/OTHER
TREASURY
TOTAL
$’000
$’000
$’000
Gold and silver sales at spot to external
customers (a)
221,867
145,381
251,043
Total segment gold sales revenue
221,867
145,381
251,043
Cash costs
(107,870)
(89,585)
(156,114)
Depreciation and amortisation
(36,172)
(6,537)
(21,151)
-
-
-
-
311
311
-
-
-
-
618,602
618,602
(353,569)
(63,860)
(6,786)
(2,106)
(11,875)
(68)
4,015
-
3,175
-
(2,101)
(2,038)
Other income
17
-
-
3,781
3,205
7,003
65,882
53,274
76,953
(4,139)
311
192,281
(5,553)
(5,651)
(4,210)
(5,203)
-
-
(4,130)
(20,617)
(4,130)
-
-
-
-
-
-
(79,300)
-
(79,300)
60,346
47,623
72,743
(84,861)
-
-
-
-
-
(17,561)
30,062
-
-
-
-
(614)
483
32,763
95,237
483
32,763
(3,756)
(1,723)
-
(23,040)
68,987
(86,584)
32,632
105,443
Profit/(loss) for the period
60,346
Cash flow by segment, including gold
bullion, and gold shipped but unsold and
held in metal accounts
Reconciliation of cash flow by segment to
the cash flow statement:
Movement in gold shipped but unsold and
held in metal accounts
Mark to market movement in gold unsold
Prior period Other Financial Assets -
Restricted Cash used to acquire
Available For Sale Financial Assets
Movement in bank overdraft
Exchange rate adjustment
Movement in cash and cash equivalents
per consolidated cash flow statement
Capital expenditure
Segment assets
Segment liabilities
63,971
54,236
(88,720)
(149,023)
26,009
(93,527)
1,438
3,967
42,758
(25,921)
(723)
(72,008)
143,925
904,619
30,187
1,159
112,274
305
126,185
70,687
593,166
114,581
-
-
46,503
33,421
98,380
6,706
61,006
246,016
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 111
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 33: OPERATING SEGMENTS (CONTINUED)
12
Revenue
RAVENSWOOD
(AUSTRALIA)
GOLDEN PRIDE
(TANZANIA)
$’000
$’000
SYAMA
(MALI)
$’000
UNALLOCATED (B)
CORP/OTHER
TREASURY
TOTAL
$’000
$’000
$’000
Gold and silver sales at spot to external
customers (a)
225,056
155,281
196,373
Total segment gold sales revenue
225,056
155,281
196,373
Cash costs
(104,292)
(84,953)
(113,859)
Depreciation and amortisation
(29,637)
(5,945)
(37,639)
-
-
-
-
Other operating costs (including gold in
circuit movement)
Other corporate/admin costs
Segment operating result before treasury,
other income/(expenses) and tax
(14,829)
8,089
-
-
9,958
-
(1,174)
(4,304)
76,298
72,472
54,833
(5,478)
-
-
-
-
-
-
-
576,710
576,710
(303,104)
(73,221)
2,044
(4,304)
198,125
Other income
-
-
-
87
1,504
1,591
Exploration and business development
expenditure
Finance costs
Share of associates' losses, asset
impairment expenses
Segment operating result before treasury
and tax
Treasury - realised losses
Treasury - unrealised losses
Income tax (expense)/benefit
(4,630)
(3,971)
(4,846)
(2,430)
-
-
(11,970)
(15,877)
(11,970)
-
-
-
-
-
-
(4,070)
-
(4,070)
71,668
68,501
49,987
(11,891)
(10,466)
167,799
-
-
-
-
-
(22,661)
45,840
-
-
-
-
-
90
(175)
(43,194)
-
(175)
(43,194)
(22,571)
49,987
(11,801)
(53,835)
101,859
Profit/(loss) for the year
71,668
Cash flow by segment, including receivables
- gold bullion sales, and gold shipped but
unsold and held in metal accounts
Reconciliation of cash flow by segment to
the cash flow statement:
Movement in receivables - gold bullion sales
Movement in bank overdraft
Movement in gold shipped but unsold and
held in metal accounts
Transfer to restricted cash and included in
Other Financial Assets
Mark to market movement in unsold gold
Exchange rate adjustment
Movement in cash and cash equivalents
per consolidated cash flow statement
Capital expenditure
Segment assets
Segment liabilities
72,613
54,043
46,236
(5,387)
(59,212)
108,293
14,465
2,280
(44,456)
(42,267)
1,156
1,231
40,702
52,719
664,503
27,488
426
24,585
220
124,776
73,418
358,645
107,660
-
4
38,467
29,677
44,653
2,952
5,761
121,510
(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.
112 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including gold price risk, diesel fuel price risk,
currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on
the unpredictability of financial markets and seeks, where considered appropriate, to minimise potential adverse effects on the
financial performance of the Group. The Group may use derivative financial instruments to manage certain risk exposures.
Derivatives have been used exclusively for managing financial risks, and not as trading or other speculative instruments.
Risk management is carried out by the Group’s Financial Risk Management Committee under policies approved by the Board of
Directors. The Financial Risk Management Committee identifies, evaluates and manages financial risks as deemed appropriate.
The Board provides guidance for overall risk management, including guidance on specific areas, such as mitigating commodity
price, foreign exchange, interest rate and credit risks, and derivative financial instrument risk.
(a) Market risk
Use of derivative instruments to assist in managing gold price risk
The Group is exposed to movements in the gold price. As part of the risk management policy of the Group and in compliance with
the conditions required by the Group’s financiers, a variety of financial instruments (such as gold forward sales contracts, gold call
options and gold put options) may be used from time to time to reduce exposure to unpredictable fluctuations in the project life
revenue streams. Within this context, the programs undertaken are structured with the objective of retaining as much upside to
the gold price as possible, but in any event, by limiting derivative commitments to no more than 50% of the Group’s gold reserves.
The value of these financial instruments at any given point in time, will in times of volatile market conditions, show substantial
variation over the short term. The facilities provided by the Group’s various counterparties do not contain margin calls. The Group
does not hedge account for these instruments. No such instruments were in existence at reporting date.
No gold was delivered into forward sales contracts during the year or in the prior year.
Gold forwards and put options
2013
There were no gold forward or gold put option contracts outstanding as at 30 June 2013 (2012: nil).
Movements in fair value are accounted for through the consolidated statement of comprehensive income. From 1 July 2007, no
contracts satisfied the criteria for hedge accounting.
Diesel fuel price risk
The Group is exposed to movements in the diesel fuel price. The costs incurred purchasing diesel fuel for use by the Group’s
operations is significant. The Group’s Financial Risk Management Committee continues to manage and monitor diesel fuel price
risk. At present, the Group does not specifically hedge its exposure to diesel fuel price movements.
Foreign exchange currency risk
The Group receives multiple currency proceeds on the sale of its gold production and significant costs for the Syama Gold Project
and the Golden Pride Project are denominated in AUD, USD and the local currencies of those operations, and as such movements
within these currencies expose the Group to exchange rate risk.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency
that is not the entity’s functional currency. The risk can be measured by performing a sensitivity analysis that quantifies the
impact of different assumed exchange rates on the Group’s forecast cash flows.
The Group’s Financial Risk Management Committee continues to manage and monitor foreign exchange currency risk. At present,
the Group does not specifically hedge its exposure to foreign currency exchange rate movements.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 113
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
The Group’s exposure to foreign exchange currency risk at the reporting date was as follows:
13
Financial Assets
Cash
Receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities (i)
12
Financial Assets
Cash
Other financial assets - restricted
cash
Receivables
Available for sale financial assets
Financial derivative assets
UNITED STATES
DOLLARS
AUSTRALIAN
DOLLARS
TANZANIAN
SHILLINGS
$’000
$’000
$’000
POUNDS
STIRLING
$’000
OTHER
$’000
NO FOREIGN
CURRENCY
RISK
$’000
92
1,914
-
-
2,006
1,241
53,807
55,048
36
13
-
-
49
143
4,722
-
-
-
-
27,892
-
4,865
27,892
9,980
2,585
-
-
9,980
2,585
-
-
-
39
-
-
-
39
723
-
723
2,730
4,373
1,017
64,788
72,908
56,800
37,518
94,318
TOTAL
$’000
3,040
11,022
28,909
64,788
107,759
71,329
91,325
162,654
2,641
184
114
-
46
45,419
48,404
-
-
-
-
-
12
-
-
-
42,267
4,247
-
-
-
-
2,364
-
-
-
-
-
42,267
3,841
374
-
8,100
374
2,364
2,641
196
4,361
44,631
46
49,634
101,059
Financial Liabilities
Payables
4,675
3,043
Interest bearing liabilities (i)
-
-
4,675
3,043
16
-
16
-
-
-
2,251
-
2,251
32,963
11,020
43,983
42,948
11,020
53,968
(i)
Several of the intercompany balances between Group entities create foreign exchange differences which have historically been material and are
not eliminated from the Group’s consolidated statement of comprehensive income (Refer to note 2(j)). Those intercompany balances are not shown
here as they are eliminated from the Group’s consolidated statement of financial position. Refer to the table below for the significant intercompany
balances outstanding at 30 June 2013.
FACILITY CURRENCY
DENOMINATION
FUNCTIONAL
CURRENCY OF
THE BORROWER
AUD EQUIVALENT
Resolute Mining Limited (beneficiary)/Resolute (Somisy)
Limited
Resolute (Tanzania) Limited and its controlled entities
(beneficiary)/Resolute Pty Ltd
Resolute Treasury Pty Ltd and its controlled entity
AUD
USD
GBP
13
$’000
12
$’000
Central African
Francs
456,502
407,594
AUD
GBP
200,209
56,001
712,712
159,162
-
566,756
114 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Interest rate risk
The Group’s main interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest rate risk. For the 2013 and 2012 financial years, the majority of the Group’s borrowings have been denominated in
USD, Central African Francs, and AUD.
The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to the potential renewals of
existing positions, alternative financing, alternative hedging positions and the mix of fixed and variable interest rates. There is no
intention at this stage to enter into any interest rate swaps.
The following tables summarises the financial assets and liabilities of the Group, together with effective interest rates as at
reporting date.
13
Financial Assets
Cash
Receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities
12
Financial Assets
Cash
Receivables
Available for sale financial assets
Financial derivative assets
Other financial assets - restricted
cash
Financial Liabilities
Payables
Interest bearing liabilities
(c) Credit risk exposure
FLOATING
INTEREST
RATE
FIXED INTEREST RATE MATURING IN
NON
INTEREST
BEARING
TOTAL
AVERAGE INTEREST RATE
< 1 YEAR
1 TO 5 YEARS
> 5 YEARS
FLOATING
FIXED
$’000
$’000
$’000
$’000
$’000
$’000
3,040
-
-
-
3,040
-
-
-
-
-
-
-
-
-
-
-
-
64,788
64,788
-
34,941
56,384
34,941
56,384
8,404
40,000
-
-
-
-
-
-
-
-
8,404
40,000
-
-
-
-
7,878
7,878
-
-
-
-
-
-
-
3,142
3,142
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,040
1.4%
11,022
11,022
28,909
28,909
-
64,788
39,931
107,759
71,329
71,329
-
91,325
71,329
162,654
-
-
-
-
-
-
-
-
8%
-
5.7%
-
48,404
2.0%
5.4%
8,100
374
2,364
8,100
374
2,364
42,267
42,267
53,105
101,509
42,948
42,948
-
11,020
42,948
53,968
-
-
-
-
-
-
-
-
-
-
-
8.0%
The Group’s exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the
carrying amount of the financial assets.
Credit risk is managed on a Group basis. Credit risk predominately arises from cash, cash equivalents, gold bullion held in
metal accounts, derivative financial instruments, deposits with banks and financial institutions and receivables from statutory
authorities. For derivative financial instruments, management mitigates some credit risk by using a number of different hedging
counterparties.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 115
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Credit risk exposure (continued)
Credit risk further arises in relation to financial guarantees given to certain parties. Such guarantees are only provided in
exceptional circumstances and are subject to Financial Risk Management Committee approval. With the exception of those items
disclosed in note 17, no guarantees have been provided to third parties as at reporting date.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings
(if available) or to historical information about counterparty default rates:
Cash at bank & short term deposits
Counterparties with external credit ratings
A
BBB
Counterparties without external credit ratings
No rating
Total cash at bank & short term deposits
Trade receivables
Counterparties with external credit ratings
AA+
AA
B-
Counterparties without external credit ratings *
Group 1
Group 2
Total trade receivables
Other financial assets - restricted cash
Counterparties with external credit ratings
BBB-
Financial derivative assets
Counterparties with external credit ratings
BBB-
Total financial derivative assets
CONSOLIDATED
13
$’000
12
$’000
2,173
618
249
3,040
1,064
-
568
5,567
16,694
23,893
-
-
-
48,180
-
224
48,404
1,067
343
497
2,524
9,537
13,968
42,267
2,364
2,364
* Group 1 refers to existing counterparties with no defaults in the past. Group 2 refers to existing counterparties where difficulty in
recovering these debts in the past has been experienced.
(d) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, or having the availability of
funding through an adequate amount of undrawn committed credit facilities.
As at 30 June 2013, the Group had $1.149m (AUD equivalent) (2012: $4.783m (AUD equivalent)) unused financing facilities.
116 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(d) Liquidity risk (continued)
The remaining contractual maturities of the Group’s financial liabilities, including future finance costs, are:
Liquidity analysis
13
Payables
Interest bearing liabilities
12
Payables
Interest bearing liabilities
LESS THAN 3 MONTHS
3 TO 12 MONTHS
1 TO 5 YEARS
LESS FINANCE
CHARGES
TOTAL
71,329
32,642
103,971
42,948
6,238
49,186
-
4,625
4,625
-
2,043
2,043
-
59,890
59,890
-
(5,832)
(5,832)
71,329
91,325
162,654
-
3,244
3,244
-
(505)
(505)
42,948
11,020
53,968
(e) Instruments recognised at amounts other than fair value
The fair value of all the Group’s financial instruments recognised in the financial statements approximates or equals their
carrying amounts.
(f) Fair values for instruments recognised at fair value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
■■ Level 1 - the fair value is calculated using quoted prices in active markets.
■■ Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices).
■■ Level 3 - the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table
below.
AS AT 30 JUNE 2013
VALUATION
TECHNIQUE -
NON MARKET
OBSERVABLE
INPUTS (LEVEL 3)
QUOTED MARKET
PRICE (LEVEL 1)
$’000
$’000
Financial assets*
Available for sale financial assets
28,909
Financial derivative assets
Other financial assets
-
-
28,909
-
-
64,788
64,788
AS AT 30 JUNE 2012
VALUATION
TECHNIQUE
- MARKET
OBSERVABLE
INPUTS (LEVEL 2)
QUOTED MARKET
PRICE (LEVEL 1)
$’000
$’000
374
-
-
-
2,364
-
374
2,364
TOTAL
$’000
28,909
-
64,788
93,697
TOTAL
$’000
374
2,364
-
2,738
* The above table only includes financial instruments that require one of the abovementioned valuation techniques to determine
fair value.
Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date
without any deduction for transaction costs. The fair value of the listed equity investments are based on quoted market prices.
For financial instruments not quoted in active markets, the Group uses a valuation technique such as present value techniques,
comparison to similar instruments for which market observable prices exist and other relevant models used by market
participants. These valuation techniques use both observable and unobservable market inputs.
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 117
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 34: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
The fair value of other debt and equity securities, as well as other investments that do not have an active market, are based on
valuation techniques using market data that is not observable. Where the impact of credit risk on the fair value of a derivative is
significant, and the inputs on credit risk are not observable, the derivative would be classified as based on non observable market
inputs (Level 3).
The consolidated financial statements include holdings of convertible notes in Noble Mineral Resources Limited which are
measured at fair value (refer to Note 6). Fair value is estimated using a discounted cash flow model which includes some
assumptions that are not supportable by observable market prices for rates. The key judgemental assumptions used in the
discounted cash flow model are gold price and pre-tax discount rate. A significant change in these key assumptions, particularly
gold price, would cause a significant change in the estimated discounted cash flows used in determining the fair value of this
asset.
(g) Transfer between categories
There were no transfers between Level 1 and Level 2 during the year.
(h) Sensitivity analysis
The following table summarises the post tax effect of the sensitivity of the Group’s financial assets and financial liabilities on
profit and equity at reporting date to interest rate risk, foreign exchange currency risk and gold price risk.
The sensitivity analysis below is based on movements that are reasonably possible in interest rates, foreign exchange currency
rates and the gold price based on historical information and future expectations.
13
Financial Assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities
Total increase/(decrease)
12
Financial Assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Financial derivative assets
Other financial assets - restricted cash
Financial Liabilities
Payables
Interest bearing liabilities
Total increase/(decrease)
CARRYING AMOUNT
$’000
-1%
PROFIT
$’000
EQUITY
$’000
+1%
PROFIT
$’000
EQUITY
$’000
+10%
PROFIT
$’000
-10%
PROFIT
$’000
EQUITY
$’000
+10%
PROFIT
$’000
EQUITY
$’000
INTEREST RATE RISK
FOREIGN EXCHANGE RISK
GOLD PRICE RISK
3,040
11,022
28,909
64,788
71,329
91,325
48,404
8,100
374
2,364
42,267
42,948
11,020
(15)
(15)
15
15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(15)
(15)
15
15
(1,952)
(1,952)
1,952
1,952
(313)
(313)
313
313
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(313)
(313)
313
313
3,063
3,063
(2,504)
(2,504)
(2,959)
(2,959)
2,959
2,959
-10%
PROFIT
$’000
24
368
2,169
-
(888)
(4,252)
(2,579)
216
331
-
184
3,052
(720)
-
EQUITY
$’000
24
368
2,169
-
(888)
(4,252)
(2,579)
216
331
-
184
3,052
(720)
-
EQUITY
$’000
(19)
(301)
(1,775)
-
876
3,479
2,260
(176)
(271)
-
(150)
(2,497)
590
-
(19)
(301)
(1,775)
-
876
3,479
2,260
(176)
(271)
-
(150)
(2,497)
590
-
(1,952)
(1,952)
1,952
1,952
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,959)
(2,959)
2,959
2,959
118 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 13
Financial Assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities
Total increase/(decrease)
12
Financial Assets
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Financial derivative assets
Other financial assets - restricted cash
Financial Liabilities
Payables
Interest bearing liabilities
Total increase/(decrease)
CARRYING AMOUNT
$’000
-1%
PROFIT
$’000
EQUITY
$’000
+1%
PROFIT
$’000
EQUITY
$’000
(15)
(15)
15
15
3,040
11,022
28,909
64,788
71,329
91,325
48,404
8,100
374
2,364
42,267
42,948
11,020
(15)
(15)
15
15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(313)
(313)
313
313
INTEREST RATE RISK
FOREIGN EXCHANGE RISK
GOLD PRICE RISK
-10%
PROFIT
$’000
24
368
2,169
-
(888)
(4,252)
(2,579)
216
331
-
184
3,052
(720)
-
EQUITY
$’000
24
368
2,169
-
(888)
(4,252)
(2,579)
216
331
-
184
3,052
(720)
-
+10%
PROFIT
$’000
(19)
(301)
(1,775)
-
876
3,479
2,260
(176)
(271)
-
(150)
(2,497)
590
-
EQUITY
$’000
(19)
(301)
(1,775)
-
876
3,479
2,260
(176)
(271)
-
(150)
(2,497)
590
-
-10%
PROFIT
$’000
EQUITY
$’000
+10%
PROFIT
$’000
EQUITY
$’000
-
-
-
-
-
-
-
-
(1,952)
(1,952)
1,952
1,952
-
-
-
-
-
-
-
-
-
-
-
-
(1,952)
(1,952)
1,952
1,952
-
-
-
-
-
-
-
-
-
-
-
-
(2,959)
(2,959)
2,959
2,959
-
-
-
-
-
-
-
-
-
-
-
-
(313)
(313)
313
313
3,063
3,063
(2,504)
(2,504)
(2,959)
(2,959)
2,959
2,959
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 119
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 NOTE 35: SUBSEQUENT EVENTS
On 1 July 2013, 2,359,773 performance rights were granted and issued vesting over 3 years with a strike price of $nil. A further
1,225,455 performance rights were granted to P. Sullivan on 1 July 2013 subject to shareholder approval, which have a strike price
of $nil.
NOTE 36: PARENT ENTITY INFORMATION
Information relating to Resolute Mining Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Share option equity reserve
Employee equity benefits reserve
Total shareholders equity
Profit/(loss) of Resolute Mining Limited
Total comprehensive profit/(loss) of Resolute Mining Limited
CONSOLIDATED
13
$’000
926
515,131
556
55,230
380,225
67,657
5,987
6,018
12
$’000
103
413,006
455
460
368,047
33,874
5,987
4,626
459,887
412,534
65,383
65,383
(21,521)
(21,521)
Refer to Note 30 for the contingent liabilities and commitments of Resolute Mining Limited.
The parent company guarantee provided by the Resolute Mining Limited as outlined in Note 17(a) has a nil written down value as
at 30 June 2013 (30 June 2012: $nil).
120 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2013 DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Resolute Mining Limited, I state that:
In the opinion of the directors:
(a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the
year ended on that date; and,
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1(a);
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
and,
(d) this declaration has been made after receiving the declarations required to be made to the directors in accordance with section
295A of the Corporations Act 2001 for the financial year ended 30 June 2013.
On behalf of the Board
P.R. Sullivan
Director
Perth, Western Australia
24 September 2013
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 121
for the year ended 30 June 2013
INDEPENDENT AUDIT REPORT
122 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
A member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Independent auditor's report to the members of Resolute Mining Ltd Report on the financial report We have audited the accompanying financial report of Resolute Mining Ltd, which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year. Directors' responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auA member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auA member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/au INDEPENDENT AUDIT REPORT
R ESOLUTE MINING LIMITED ANNUAL REPORT 2013 123
A member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auA member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Independence In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. We confirm that the Auditor’s Independence Declaration would be in the same terms if given to the directors as at the time of this auditor’s report. Opinion In our opinion: a.the financial report of Resolute Mining Ltd is in accordance with the Corporations Act 2001, including: igiving a true and fair view of the consolidated entity's financial position as at 30 June 2013 and of its performance for the year ended on that date; and ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and b.the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a). Report on the remuneration report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2013. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of Resolute Mining Ltd for the year ended 30 June 2013, complies with section 300A of the Corporations Act 2001. Ernst & Young Peter McIver Partner Perth 24 September 2013 A member firm of Ernst & Young Global Limited PM:PS:RESOLUTE:027 Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/au SHAREHOLDER INFORMATION
SUBSTANTIAL SHAREHOLDERS AT 24 SEPTEMBER 2013
ORDINARY SHARES
NUMBER HELD
PERCENTAGE
ICM Limited (formerly Alliance Life Common Fund Ltd)
212,328,610
33.1%
DISTRIBUTION OF EQUITY SECURITIES AS AT 1 OCTOBER 2013
SIZE OF HOLDING
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total equity security holders
Number of equity security holders with less than a marketable parcel
VOTING RIGHTS
(a) Ordinary shares
ORDINARY SHARES
1,223
2,022
894
1,115
132
5,386
951
Under the Company’s Constitution, all ordinary shares issued by the Company carry one vote per share without restriction.
TWENTY LARGEST SHAREHOLDERS AS AT 1 OCTOBER 2013
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P Morgan Nominees Australia Limited
HSBC Custody Nominees Australia Limited
National Nominees Limited
Citicorp Nominees Pty Ltd
J P Morgan Nominees Australia Limited
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees Australia Limited
NEFCO Nominees Pty Ltd
HSBC Custody Nominees Australia Limited
CS Fourth Nominees Pty Ltd
AMP Life Limited
HSBC Custody Nominees Australia Limited
Hardrock Capital Pty Ltd
Interstate Investments Pty Ltd
QIC Limited
Share Direct Nominees Pty Ltd
Avanteos Investments Limited
Merrill Lynch Australia Nominees Pty Ltd
Citicorp Nominees Pty Ltd (Colonial First State)
Woodross Nominees Pty Ltd
124 R ESOLUTE MINING LIMITED ANNUAL REPORT 2013
NUMBER OF
ORDINARY SHARES
% OF ISSUED
CAPITAL
204,431,809
172,570,626
77,283,287
39,797,714
27,577,773
7,643,593
5,529,429
3,978,200
3,410,299
2,788,783
2,631,092
2,416,043
2,282,000
1,800,000
1,781,157
1,729,508
1,651,886
1,642,240
1,416,852
1,365,277
31.89%
26.92%
12.06%
6.21%
4.30%
1.19%
0.86%
0.62%
0.53%
0.44%
0.41%
0.38%
0.36%
0.28%
0.28%
0.27%
0.26%
0.26%
0.22%
0.21%
563,727,568
87.95%
for the year ended 30 June 2013 www.rml.com.au
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