I
A PROVEN
GOLD PRODUCER ›
ANNUAL REPORT 2015
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 CONTENTS
02 2015 Highlights
04 Chief Executive’s Review
06 Reserves and Resources
10 Production and Project Summary
12 Operations Overview
18 Development Overview
24 Exploration Overview
30 Corporate Responsibility
41 Financial Report
CORPORATE DIRECTORY
DIRECTORS
Chairman
PE Huston
Chief Executive Officer
JP Welborn
Non-Executive Director
PR Sullivan
Non-Executive Director
HTS Price
Non-Executive Director
MJ Botha
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
+ 61 8 9322 7597
Facsimile:
contact@rml.com.au
E-mail:
ABN 39 097 088 689
WEBSITE
Resolute 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
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”
ASX Listed Convertible Notes Code: “RSGG”
SECURITIES ON ISSUE (12/10/2015)
Ordinary Shares
Unlisted Options
Performance Rights
Convertible Notes
641,582,994
3,623,733
18,509,597
15,000,000
AUDITOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia 6000
BANKERS
Barclays Bank Plc
Level 42, 225 George Street
Sydney, New South Wales 2000
Investec Bank Plc
The Chifley Tower
Level 23, 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
01
MORE THAN 25 YEARS OF
CONTINUOUS PRODUCTION
GENERATING IN EXCESS OF
7 MILLION OUNCES OF GOLD
Resolute is a successful gold miner with more than 25 years of continuous production.
The Company is an experienced explorer, developer and operator, having operated nine gold
mines across Australia and Africa which have produced in excess of 7 million ounces of gold.
The Company currently operates two mines, the Syama gold mine in Africa and the Ravenswood gold
mine in Australia, and is one of the largest gold producers listed on the Australian Securities Exchange
with FY16 guidance of 315,000 ounces of gold production at a cash cost of $990/oz (US$760/oz).
Resolute’s flagship Syama gold mine in Mali is a robust long life asset benefiting from fully operational
parallel sulphide and oxide processing plants. The move to underground mining is expected to
continue the asset’s history of strong cash generation and extend the mine life to beyond 2028.
The Ravenswood gold mine in Queensland demonstrates Resolute’s significant underground expertise
in the ongoing success in mining the Mt Wright ore body. In Ghana, the Company is completing a
feasibility study on the Bibiani gold project focused on the development of an underground operation
requiring very low capital and using existing plant infrastructure. Resolute also controls an extensive
exploration footprint along the highly prospective Syama Shear and Greenstone Belts in Mali and
Cote d’Ivoire and is active in reviewing new opportunities to build shareholder value.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 02
HIGHLIGHTS 2015
READY FOR
RENEWED
GROWTH ›
OPERATIONS
CORPORATE
› Yielded in excess of 328,000 ounces of gold at a cash cost of
$845 per ounce, beating both production and cost guidance
› Record gold production at Syama for the year demonstrating its
value as a robust, long life, cash generator for Resolute
› Golden Pride Project Closure Handover to the Government of
Tanzania completed at a ceremony in December 2014
FINANCIAL
› Strong gross profit from continuing operations of $71m
› Net loss after tax attributable to members of $537m includes
non-cash asset impairment charges of $572m, primarily
triggered by a lower USD gold price and unrealised treasury
losses and fair value movements of $48m
› Robust operating cash inflow of $62m despite weaker gold
price environment
› Net investing cash outflows of $73m included $60m of
development expenditure, primarily for the Syama Oxide Circuit
and Syama Grid Connection Project, $33m of evaluation
expenditure, primarily for the Syama Underground Pre-
Feasibility Study and the Bibiani Scoping Study, and proceeds of
$23m from the sale of available for sale gold equity investments
› Conservative balance sheet maintained
› Total market value of group cash and bullion on hand of $54m at
30 June 2015
› Fully unhedged production with strong leverage to gold price
› Successful $15m Convertible Note raising
› Well positioned to consider investment and acquisition
opportunities
DEVELOPMENT
› New Syama Oxide Circuit completed within budget and ahead
of schedule
› Updated Underground Pre-Feasibility Study at Syama
completed, confirming the transition to a large scale Sub Level
Cave underground operation that will deliver strong economics
and cash margins until at least 2028, with mineralisation
remaining robust and open and further diamond drilling planned
in FY2016 to extend and upgrade the deposit
› Government approval of the Environmental and Social
Impact Study was received for the Syama Grid Connection
Project in Mali
› Positive Underground Scoping Study provided confidence to
proceed with a Feasibility Study at Bibiani in Ghana
EXPLORATION
› Regional and infill drill programs over the Syama belt in the
Finkolo licence outlined a number of robust gold anomalies
› Resource drilling on the Buck Reef West area was completed
and studies to maximise resource conversion, optimise pit
schedules and minimise capital requirements are ongoing
› The Company greatly increased its presence in underexplored
Cote d’Ivoire with the signing of a new joint venture with ASX
listed Taruga Gold
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 03
AVERAGE CASH PRICE FOR GOLD SOLD (A$)
GOLD PRODUCTION (Oz)
1,600
1,400
1,200
1,000
800
600
400
200
0
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
11
12
13
14
15
11
12
13
14
15
CASH COST PER OUNCE (A$)
UNDERLYING PROFIT BEFORE IMPAIRMENT AND TREASURY (A$M)
1,600
1,400
1,200
1,000
800
600
400
200
0
200
150
100
50
0
11
12
13
14
15
11
12
13
14
15
REVENUE FROM SALES OF PRECIOUS METALS (A$M)
TOTAL PROJECT RESERVES AND RESOURCES (Moz)
650
550
450
350
250
150
50
0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0
11
12
13
14
15
11
12
13
14
15
RESERVE OUNCES
RESOURCE OUNCES
OPERATING CASHFLOW (A$M)
200
150
100
50
0
11
12
13
14
15
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 04
CHIEF EXECUTIVE’S REVIEW
TRANSFORMATIONAL
OPPORTUNITY TO DRIVE
SHAREHOLDER VALUE ›
The future for Resolute - and gold - is growth. Resolute has a proud history as a proven explorer,
developer and operator of gold mines in Australia and Africa. More than 25 years of continuous
operations across nine gold mines has resulted in the production of more than 7 million ounces of
gold. Resolute is consistently among the largest gold producers listed on the Australian Securities
Exchange and has developed industry leading expertise and skill in meeting the jurisdictional and
technical challenges in developing and operating profitable gold mines. Resolute’s large reserve and
resource base create an opportunity for new energy and a disciplined focus on organic growth to
leverage the Company’s strong operating experience to generate shareholder value.
Dear Fellow Shareholders,
I am delighted to have joined the team at Resolute at such
an exciting and challenging period in the Company’s proud
history. With the backdrop of volatile international markets and
increasing pressure on mining company’s margins, Resolute has
a transformational opportunity to reposition existing assets and
build on the Company’s proud history. Our strategy for the future
will hold true to Resolute’s core values and global experience -
exploration, development and operation of quality gold assets
– with the overall objective being to generate exceptional returns
for shareholders. Resolute is well positioned as a gold producer in
Australia and Africa, two vast and endowed regions, and has an
exciting future of growth opportunities which will be driven by value
generation from Syama and Ravenswood.
During the 2015 financial year, Resolute’s operations at the Syama
mine in Mali and at the Ravenswood mine in Queensland, yielded
in excess of 328,000 ounces of gold at a cash cost of A$845 per
ounce, outperforming both production and cost guidance. Despite a
weaker US$ gold price environment, the Company generated gross
profit from current operations of A$71m and had a total market
value of cash and bullion on hand of A$54m at 30 June 2015.
Resolute’s flagship project is the Syama mine in Mali where the
Company’s development strategy delivered record gold production
during the year. Resolute has invested heavily in Syama and the
future of the Company is underpinned by the demonstrated
potential for Syama to be a robust long-life tier one gold project.
Effectively two mines in one, Syama’s existing sulphide circuit and
the newly commissioned oxide circuit create important optionality in
gold production. Resolute intends to transition the main Syama open
pit into a long life low cost underground operation. This transition is in
fact a transformational opportunity to deliver a world class gold mine
that will be our priority during the coming financial year.
In Queensland at our Ravenswood operations, Resolute has
demonstrated our underground expertise with the ongoing
success in mining the Mt Wright ore body. Production and costs
are expected to remain steady during the coming financial year
as we work to successfully complete the current mine plan. The
strength in the A$ gold price creates an opportunity to revisit
the potential to reopen the Sarsfield open pit as one of several
options being explored to significantly extend the life of our mining
operations at Ravenswood.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 05
In Ghana, Resolute completed a Scoping Study for the Bibiani
gold project resulting in a decision to commence and complete
a Feasibility Study during the 2016 financial year, for a new
underground operation. A new resource was estimated following
the completion of the FY2015 drilling program resulting in a 60%
increase in Indicated ounces and a 12% increase in overall ounces
compared to the prior 2012 Coffey Model.
Developing and maintaining harmonious and mutually beneficial
relationships with local communities, governments and the
environment continues to be a fundamental principal of Resolute’s
operations. We are proud to be a part of the exciting, emerging
economic story of Africa. The Company takes great pride in
economic empowerment of local communities, a rewarding part of
what we do in Africa and in Australia.
Resolute currently has three Feasibility Studies underway, at Syama,
at Bibiani and at Ravenswood, which in each case are expected to
deliver positive development opportunities. The Company is well
placed to pursue organic growth opportunities by using a disciplined
approach firmly based on delivering value for shareholders.
Our growth strategy is underpinned by the commitment to driving
costs down and increasing efficiency at our operations so that we
can build positive operating margins to ensure we produce gold
profitably in any prevailing gold price environment on a sustainable
and ongoing basis.
The financial year ahead will be an extremely exciting period for
Resolute. Resolute is a proven, long term operator in Australia
and Africa with an experienced and highly skilled management
team. We have the expertise to drive operational innovation and
performance excellence to create wealth for shareholders. I take
this opportunity to thank the Board, shareholders, and the Resolute
team for their support and I look forward to sharing success with
you in the financial year ahead.
John Welborn
Managing Director and Chief Executive Officer
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 06
RESERVES AND RESOURCES STATEMENT
GOLD RESERVES
(includes stockpiles)
RESERVES
Reserves (Proved)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Mali
Syama Pit (insitu)
Syama Stockpiles (Sulphide)
Syama Oxide Satellites (insitu)
Syama Oxide Satellites Stockpiles
Tabakoroni (insitu)
Total (Proved)
Reserves (Probable)
Australia
Mt Wright (insitu)3
Mt Wright Stockpiles3
Sarsfield (insitu)2
Mali
Syama Pit (insitu)
Syama Underground (insitu)5
Stockpiles (Sulphide)
Syama Oxide Satellites (insitu)
Syama Oxide Satellites Stockpiles
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Total (Probable)
Proved and Probable
GOLD RESOURCES1
(includes stockpiles)
RESOURCES 1
Resources (Measured)
Australia
Mt Wright (insitu)3
Stockpiles (Mt Wright)
Sarsfield (insitu)2
Buck Reef West (insitu)2
Mali
Syama (insitu)
Syama Satellites (insitu)
Tabakoroni (insitu)
Tanzania
Golden Pride (insitu)
Total (Measured)
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
COMMENTS ON DIFFERENCES
AS AT 30 JUNE 2015
AS AT 30 JUNE 2014
1,644,000
28,450,000
0
897,000
3,084,000
179,000
1,335,000
35,589,000
411,000
91,000
18,640,000
0
25,500,000
5,313,000
4,432,000
412,000
1,821,000
7,360,000
63,980,000
99,569,000
144,000
0
16,185,000
17,857,000
0
1,051,000
996,000
0
36,233,000
2.7
0.8
0.0
4.4
2.2
2.6
3.1
1.2
1.8
2.4
0.7
0.0
2.8
1.6
2.1
1.2
2.8
1.6
1.9
1.6
3.9
0.0
0.8
1.1
0.0
1.7
2.7
0.0
1.0
144,000
747,000
0
126,000
221,000
15,000
133,000
100%
100%
80%
80%
80%
80%
85%
144,000
747,000
0
101,000
177,000
12,000
113,000
1,386,000
1,294,000
44,784,000
2,206,000
1,966,000
Underground
23,000
7,000
423,000
0
2,291,000
265,000
303,000
16,000
163,000
100%
100%
100%
80%
80%
80%
80%
80%
85%
23,000
7,000
423,000
0
1,833,000
212,000
242,000
13,000
139,000
388,000
98%
380,000
388,000
98%
380,000
No change
3,879,000
5,265,000
3,272,000
4,566,000
18,000
0
393,000
598,000
0
56,000
87,000
0
100%
100%
100%
100%
80%
80%
85%
0%
18,000
0
393,000
598,000
0
45,000
74,000
0
1,152,000
1,128,000
2,655,000
28,450,000
9,026,000
196,000
3,122,000
0
1,335,000
626,000
9,000
18,640,000
2,955,000
14,296,000
2,627,000
4,986,000
0
1,821,000
7,360,000
53,320,000
98,104,000
281,000
42,000
16,185,000
17,857,000
6,900,000
1,051,000
996,000
3,786,000
47,098,000
226,000
747,000
856,000
20,000
224,000
0
133,000
37,000
1,000
423,000
243,000
1,103,000
157,000
337,000
0
163,000
2,852,000
5,058,000
26,000
3,000
393,000
598,000
525,000
56,000
87,000
2.7
0.8
2.9
3.2
2.2
0.0
3.1
1.5
1.8
2.5
0.7
2.6
2.4
1.9
2.1
0.0
2.8
1.6
1.7
1.6
2.9
2.1
0.8
1.1
2.4
1.7
2.7
2.0
1.3
100%
100%
80%
80%
80%
80%
85%
100%
100%
100%
80%
80%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
85%
226,000
747,000
Depletion due to annual production offset by
mine extension
No change - JORC code 2004
685,000
Underground
Depletion due to annual production and transition to
16,000
179,000
Movement in operating stockpiles
Depletion due to annual production
0
Movement in operating stockpiles
113,000
No change - JORC code 2004
Decrease in Proven Reserves mainly due to MTW
& Syama annual production and transition to
37,000
1,000
Depletion due to annual production offset by
mine extension
Movement in operating stockpiles
423,000
No change - JORC code 2004
194,000
Underground
Depletion due to annual production and transition to
Additional reserves from Updated Underground Pre-
Feasibility
882,000
126,000
270,000
Movement in operating stockpiles
Depletion due to annual production
0
Movement in operating stockpiles
139,000
No change - JORC code 2004
2,452,000
Underground and MTW
Increase in Probable Reserves mainly from Syama
4,418,000
production depletion
Increase in Reserves exceeds the 390 koz. 2014/15
26,000
3,000
393,000
598,000
420,000
45,000
74,000
Resources adjusted by mine extension
Depletion of operating stockpiles
No change - JORC code 2004
No change
Resources converted to Reserves
No change
No change - JORC code 2004
238,000
100%
238,000
Relinquished project
1,926,000
1,797,000
conversion to Reserves
Decrease in Measured Resources mainly due to
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
RESERVES AND RESOURCES STATEMENT
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
COMMENTS ON DIFFERENCES
AS AT 30 JUNE 2015
AS AT 30 JUNE 2014
07
2,655,000
28,450,000
9,026,000
196,000
3,122,000
0
1,335,000
35,589,000
1,386,000
1,294,000
44,784,000
626,000
9,000
18,640,000
2,955,000
14,296,000
2,627,000
4,986,000
0
1,821,000
7,360,000
53,320,000
98,104,000
281,000
42,000
16,185,000
17,857,000
6,900,000
1,051,000
996,000
3,786,000
47,098,000
2.7
0.8
2.9
3.2
2.2
0.0
3.1
1.5
1.8
2.5
0.7
2.6
2.4
1.9
2.1
0.0
2.8
1.6
1.7
1.6
2.9
2.1
0.8
1.1
2.4
1.7
2.7
2.0
1.3
226,000
747,000
856,000
20,000
224,000
0
133,000
100%
100%
80%
80%
80%
80%
85%
226,000
747,000
685,000
16,000
179,000
Depletion due to annual production offset by
mine extension
No change - JORC code 2004
Depletion due to annual production and transition to
Underground
Movement in operating stockpiles
Depletion due to annual production
0
Movement in operating stockpiles
113,000
No change - JORC code 2004
2,206,000
1,966,000
Decrease in Proven Reserves mainly due to MTW
& Syama annual production and transition to
Underground
37,000
1,000
423,000
243,000
1,103,000
157,000
337,000
0
163,000
100%
100%
100%
80%
80%
80%
80%
80%
85%
37,000
1,000
Depletion due to annual production offset by
mine extension
Movement in operating stockpiles
423,000
No change - JORC code 2004
194,000
882,000
126,000
270,000
Depletion due to annual production and transition to
Underground
Additional reserves from Updated Underground Pre-
Feasibility
Movement in operating stockpiles
Depletion due to annual production
0
Movement in operating stockpiles
139,000
No change - JORC code 2004
388,000
98%
380,000
No change
2,852,000
5,058,000
2,452,000
4,418,000
Increase in Probable Reserves mainly from Syama
Underground and MTW
Increase in Reserves exceeds the 390 koz. 2014/15
production depletion
26,000
3,000
393,000
598,000
525,000
56,000
87,000
100%
100%
100%
100%
80%
80%
85%
26,000
3,000
393,000
598,000
420,000
45,000
74,000
Resources adjusted by mine extension
Depletion of operating stockpiles
No change - JORC code 2004
No change
Resources converted to Reserves
No change
No change - JORC code 2004
238,000
100%
238,000
Relinquished project
1,926,000
1,797,000
Decrease in Measured Resources mainly due to
conversion to Reserves
Syama Stockpiles (Sulphide)
Syama Oxide Satellites (insitu)
Syama Oxide Satellites Stockpiles
Tabakoroni (insitu)
GOLD RESERVES
(includes stockpiles)
RESERVES
Reserves (Proved)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Mali
Syama Pit (insitu)
Total (Proved)
Reserves (Probable)
Australia
Mt Wright (insitu)3
Mt Wright Stockpiles3
Sarsfield (insitu)2
Mali
Syama Pit (insitu)
Syama Underground (insitu)5
Stockpiles (Sulphide)
Syama Oxide Satellites (insitu)
Syama Oxide Satellites Stockpiles
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Total (Probable)
Proved and Probable
GOLD RESOURCES1
(includes stockpiles)
RESOURCES 1
Resources (Measured)
Australia
Mt Wright (insitu)3
Stockpiles (Mt Wright)
Sarsfield (insitu)2
Buck Reef West (insitu)2
Mali
Syama (insitu)
Syama Satellites (insitu)
Tabakoroni (insitu)
Tanzania
Golden Pride (insitu)
1,644,000
28,450,000
0
897,000
3,084,000
179,000
1,335,000
411,000
91,000
18,640,000
0
25,500,000
5,313,000
4,432,000
412,000
1,821,000
7,360,000
63,980,000
99,569,000
144,000
16,185,000
17,857,000
1,051,000
996,000
0
0
0
144,000
747,000
0
126,000
221,000
15,000
133,000
23,000
7,000
423,000
0
2,291,000
265,000
303,000
16,000
163,000
3,879,000
5,265,000
18,000
393,000
598,000
56,000
87,000
0
0
0
2.7
0.8
0.0
4.4
2.2
2.6
3.1
1.2
1.8
2.4
0.7
0.0
2.8
1.6
2.1
1.2
2.8
1.6
1.9
1.6
3.9
0.0
0.8
1.1
0.0
1.7
2.7
0.0
1.0
100%
100%
80%
80%
80%
80%
85%
100%
100%
100%
80%
80%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
85%
0%
144,000
747,000
0
101,000
177,000
12,000
113,000
23,000
7,000
423,000
0
1,833,000
212,000
242,000
13,000
139,000
3,272,000
4,566,000
18,000
393,000
598,000
45,000
74,000
0
0
0
388,000
98%
380,000
Total (Measured)
36,233,000
1,152,000
1,128,000
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
08
RESERVES AND RESOURCES STATEMENT
CONTINUED
GOLD RESOURCES
(includes stockpiles)
Resources (Indicated)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Buck Reef West (insitu)2
Mali
Syama (insitu)
Syama Stockpiles (Sulphides)
Syama Satellites (insitu)
Syama Oxides Stockpiles
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Golden Pride (insitu)
Ghana
Bibiani (insitu)4
Total (Indicated)
Measured and Indicated
Resources (Inferred)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Buck Reef West (insitu)2
Welcome Breccia (insitu)
Mali
Syama (insitu)
Syama Satellites (insitu)
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Golden Pride (insitu)
Ghana
Bibiani (insitu)4
Total (Inferred)
Total Resources
Note:
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
COMMENTS ON DIFFERENCES
AS AT 30 JUNE 2015
AS AT 30 JUNE 2014
287,000
20,384,000
11,582,000
16,994,000
1,619,000
4,840,000
244,000
2,674,000
19,067,000
0
11,225,000
88,916,000
125,149,000
1,079,000
22,192,000
12,360,000
2,036,000
3,048,000
6,946,000
3,132,000
6,312,000
0
4,485,000
61,590,000
186,739,000
3.3
0.7
0.9
2.9
1.5
1.9
1.3
2.6
1.1
0.0
3.5
1.7
1.5
3.1
0.7
0.9
3.2
2.2
2.1
2.2
1.1
0.0
4.1
1.5
1.5
31,000
444,000
323,000
1,563,000
77,000
288,000
10,000
224,000
672,000
0
100%
100%
100%
80%
80%
80%
80%
85%
95%
100%
31,000
444,000
323,000
1,250,000
62,000
230,000
8,000
190,000
638,000
0
1,270,000
90%
1,143,000
7,629,000
834,000
90%
751,000
updated model
4,902,000
6,054,000
107,000
521,000
356,000
208,000
211,000
479,000
219,000
227,000
0
4,319,000
5,447,000
107,000
521,000
356,000
208,000
169,000
383,000
186,000
204,000
0
100%
100%
100%
100%
80%
80%
85%
90%
100%
591,000
90%
532,000
2,919,000
8,973,000
2,666,000
8,113,000
290,000
20,384,000
11,582,000
12,482,000
4,069,000
4,840,000
0
2,674,000
19,067,000
6,744,000
89,761,000
136,859,000
967,000
22,192,000
12,360,000
2,036,000
3,403,000
6,946,000
3,132,000
6,312,000
12,945,000
7,667,000
77,960,000
214,819,000
2.8
0.7
0.9
2.9
1.4
1.9
0.0
2.6
1.1
1.8
3.4
1.6
1.5
3.1
0.7
0.9
3.2
2.3
2.1
2.2
1.1
1.7
3.5
1.6
1.5
26,000
444,000
323,000
1,153,000
177,000
288,000
0
224,000
672,000
401,000
4,542,000
6,468,000
95,000
521,000
356,000
208,000
249,000
479,000
219,000
227,000
724,000
3,944,000
10,412,000
100%
100%
100%
80%
80%
80%
80%
85%
95%
100%
100%
100%
100%
100%
80%
80%
85%
90%
100%
26,000
444,000
Resources adjusted by mine extension
No change - JORC code 2004
323,000
No change
Increase in Resource as Reserve changed / increased
922,000
142,000
Movement in operating stockpiles
230,000
No change
0
Movement in operating stockpiles
190,000
No change - JORC code 2004
638,000
No change
401,000
Relinquished project
Increase in Resources due to more drilling and
Decrease in Indicated Resources mainly due to
upgrading to Reserves and relinquishment of
4,067,000
Golden Pride
5,864,000
Reserves
Decrease in Resources mainly due to upgrading to
Resources adjusted by mine extension
No change - JORC code 2004
95,000
521,000
356,000
208,000
No change
No change
Decrease in Resource as Reserve changed /
199,000
increased
383,000
No change
186,000
No change - JORC code 2004
204,000
No change
724,000
Relinquished project
866,000
90%
779,000
updated model
Upgrade of Resources due to more drilling and
3,655,000
relinquishment of Golden Pride
Decrease in Inferred Resources due to upgrading and
9,519,000
relinquishment of Golden Pride
Decrease in Resources due to upgrading and
1) Mineral resources are exclusive of the Reserves - differences may occur due to rounding.
2) All Resources and Reserves are reported above 1.0 g/t cut-off except Nyakafuru and Buck Reef West above 0.5 g/t cut off and Sarsfield above 0.4 g/t cut off.
3) Mt Wright Reserves are reported above 2.3 g/t cut off and Resources above 1.8 g/t cut off.
4) Bibiani Resources quoted above a 2.0 g/t cut off.
5) Syama Underground Reserves quoted above a 1.8 g/t cut off.
Competent Persons Statement:
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 Australasian 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 2012 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 each hold equity securities in the Company. They have consented to the inclusion of the matters in this report based on their
information in the form and context in which it appears. This information was prepared and disclosed under the JORC code 2012 except where otherwise noted. Particularly Reserves and
Resources remain 2004 JORC compliant and not updated to JORC code 2012 on the basis that information has not materially changed since it was last reported.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
PROJECT
TONNES
GOLD
GRADE
(G/T)
PROJECT
CONTAINED
OUNCES
GROUP
SHARE
%
GROUP
SHARE
OUNCES
COMMENTS ON DIFFERENCES
AS AT 30 JUNE 2015
AS AT 30 JUNE 2014
09
GOLD RESOURCES
(includes stockpiles)
Resources (Indicated)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Buck Reef West (insitu)2
Mali
Syama (insitu)
Syama Stockpiles (Sulphides)
Syama Satellites (insitu)
Syama Oxides Stockpiles
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Golden Pride (insitu)
Ghana
Bibiani (insitu)4
Total (Indicated)
Measured and Indicated
Resources (Inferred)
Australia
Mt Wright (insitu)3
Sarsfield (insitu)2
Buck Reef West (insitu)2
Welcome Breccia (insitu)
Mali
Syama (insitu)
Syama Satellites (insitu)
Tabakoroni (insitu)
Tanzania
Nyakafuru JV (insitu)2
Golden Pride (insitu)
Ghana
Bibiani (insitu)4
Total (Inferred)
Total Resources
Note:
11,225,000
1,270,000
90%
1,143,000
287,000
20,384,000
11,582,000
16,994,000
1,619,000
4,840,000
244,000
2,674,000
19,067,000
0
88,916,000
125,149,000
1,079,000
22,192,000
12,360,000
2,036,000
3,048,000
6,946,000
3,132,000
6,312,000
0
4,485,000
61,590,000
186,739,000
3.3
0.7
0.9
2.9
1.5
1.9
1.3
2.6
1.1
0.0
3.5
1.7
1.5
3.1
0.7
0.9
3.2
2.2
2.1
2.2
1.1
0.0
4.1
1.5
1.5
31,000
444,000
323,000
1,563,000
77,000
288,000
10,000
224,000
672,000
0
4,902,000
6,054,000
107,000
521,000
356,000
208,000
211,000
479,000
219,000
227,000
0
2,919,000
8,973,000
100%
100%
100%
80%
80%
80%
80%
85%
95%
100%
100%
100%
100%
100%
80%
80%
85%
90%
100%
31,000
444,000
323,000
1,250,000
62,000
230,000
8,000
190,000
638,000
0
4,319,000
5,447,000
107,000
521,000
356,000
208,000
169,000
383,000
186,000
204,000
0
2,666,000
8,113,000
591,000
90%
532,000
290,000
20,384,000
11,582,000
12,482,000
4,069,000
4,840,000
0
2,674,000
19,067,000
6,744,000
7,629,000
89,761,000
136,859,000
967,000
22,192,000
12,360,000
2,036,000
3,403,000
6,946,000
3,132,000
6,312,000
12,945,000
7,667,000
77,960,000
214,819,000
2.8
0.7
0.9
2.9
1.4
1.9
0.0
2.6
1.1
1.8
3.4
1.6
1.5
3.1
0.7
0.9
3.2
2.3
2.1
2.2
1.1
1.7
3.5
1.6
1.5
1) Mineral resources are exclusive of the Reserves - differences may occur due to rounding.
2) All Resources and Reserves are reported above 1.0 g/t cut-off except Nyakafuru and Buck Reef West above 0.5 g/t cut off and Sarsfield above 0.4 g/t cut off.
3) Mt Wright Reserves are reported above 2.3 g/t cut off and Resources above 1.8 g/t cut off.
4) Bibiani Resources quoted above a 2.0 g/t cut off.
5) Syama Underground Reserves quoted above a 1.8 g/t cut off.
Competent Persons Statement:
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 Australasian 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 2012 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 each hold equity securities in the Company. They have consented to the inclusion of the matters in this report based on their
information in the form and context in which it appears. This information was prepared and disclosed under the JORC code 2012 except where otherwise noted. Particularly Reserves and
Resources remain 2004 JORC compliant and not updated to JORC code 2012 on the basis that information has not materially changed since it was last reported.
26,000
444,000
323,000
1,153,000
177,000
288,000
0
224,000
672,000
401,000
100%
100%
100%
80%
80%
80%
80%
85%
95%
100%
26,000
444,000
Resources adjusted by mine extension
No change - JORC code 2004
323,000
No change
922,000
142,000
Increase in Resource as Reserve changed / increased
Movement in operating stockpiles
230,000
No change
0
Movement in operating stockpiles
190,000
No change - JORC code 2004
638,000
No change
401,000
Relinquished project
834,000
90%
751,000
4,542,000
6,468,000
95,000
521,000
356,000
208,000
249,000
479,000
219,000
227,000
724,000
100%
100%
100%
100%
80%
80%
85%
90%
100%
Increase in Resources due to more drilling and
updated model
Decrease in Indicated Resources mainly due to
upgrading to Reserves and relinquishment of
Golden Pride
Decrease in Resources mainly due to upgrading to
Reserves
Resources adjusted by mine extension
No change - JORC code 2004
No change
No change
4,067,000
5,864,000
95,000
521,000
356,000
208,000
199,000
Decrease in Resource as Reserve changed /
increased
383,000
No change
186,000
No change - JORC code 2004
204,000
No change
724,000
Relinquished project
866,000
90%
779,000
3,944,000
10,412,000
3,655,000
9,519,000
Upgrade of Resources due to more drilling and
updated model
Decrease in Inferred Resources due to upgrading and
relinquishment of Golden Pride
Decrease in Resources due to upgrading and
relinquishment of Golden Pride
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
10
GROUP PRODUCTION SUMMARY
ORE
MINED
TONNES
ORE
MILLED
TONNES
HEAD
GRADE
G/T
RECOVERY
%
MINE
PRODUCTION
OZS
CASH
COST
A$/OZ
ALL IN
SUSTAINING COST
A$/OZ
Syama Sulphide
3,213,520
1,945,645
Syama Oxide
873,227
580,195
Syama sub-total
4,086,747
2,525,840
Ravenswood
TOTAL
1,481,435
1,439,822
5,568,182
3,965,662
3.77
2.72
3.53
2.37
3.11
76
91
78
95
83
178,995
45,916
830
675
224,911
800 (US$663)
103,773
940 (US$778)
328,684
845 (US$707)
1,029
1,180
1,094
GROUP PROJECT SUMMARY
COUNTRY
Tanzania
Mali
Cote d'Ivoire
Ghana
Sub Total Africa
Australia
Sub Total Australia
Total Resolute Tenure
PROJECT
Bulanga
Golden Pride
GP West
Matinje
Nyakafuru
Syama
Finkolo
Pitiangoma JV
Other Tenure
Taruga JV
Other tenure
Bibiani
Other Tenure
Ravenswood
GRANTED
AREA
KM²
APPLICATION
AREA
KM²
COMMODIT Y
LOCATION
53
101
116
129
426
825
201
148
106
913
1,368
692
1,278
1,970
98
229
327
4,490
3,846
3,846
8,336
0
0
0
23
9
32
0
0
0
481
481
398
1,580
1,978
0
0
0
2,491
0
0
2,491
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Africa
Gold
Queensland
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
11
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 12
OPERATIONS OVERVIEW
SOLID AND
IMPROVING
PERFORMANCE ›
Resolute’s established operations produced a total of 328,684 ounces
at an average cash cost of $845 (US$707) per ounce.
In the coming financial year, Resolute’s mines at Syama in Mali and
Ravenswood in Queensland are together forecast to produce approximately
315,000 ounces of gold at an average cash cost of around $990 (US$760)
per ounce and All-In-Sustaining Cost of $1,280 (US$985) per ounce.
SYAMA
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.
OPERATIONS
SULPHIDE
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.
The Syama Gold Project benefits from two fully operational
processing plants: a 2.1mtpa Sulphide processing circuit side by
side with the new fully operational 1.3mtpa Oxide processing circuit.
Ore for the Sulphide circuit is sourced from the Syama open pit,
whilst the newly developed satellite A21 pit supplies oxide ore to
the newly constructed Oxide circuit. Due to the refractory nature
of the sulphide ore it is treated using conventional four-stage
crushing, ball-milling, sulphide flotation and dewatering, roasting,
calcine leaching and elution. The new Oxide processing circuit is a
conventional crushing, SAG milling, and leaching circuit.
During the 2015 financial year the sulphide processing plant treated
1.95 million tonnes (2014: 1.78mt) of ore at an overall head grade of
3.77g/t Au (2014: 3.73g/t Au) to produce 178,995 ounces (2014:
165,494oz) of gold at a cash cost of $830 per ounce (2014: $1,006).
Mill throughput of the sulphide processing plant was higher than
last year and will be further improved by the installation of a new
primary crusher, removal of the secondary crusher and installation
of a new screen deck in the second half of calendar 2015. Plant
availability was a much improved 89.4% (2014: 77.8%). The impact
of fine organic carbon, although largely offset by a full year of
deslime circuit operation, still impacted recoveries during the year,
achieving 75.8% (2014 77.7%). Further optimisation of this circuit
will occur in the coming year.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 13
Roaster reliability and operational performance further improved
and was aided by the continued successful operation of the flotation
concentrate deslime circuit. The deslime circuit has significantly
improved roaster throughput and will continue to facilitate a material
reduction of the accumulated concentrate inventory.
Mining progress continued to concurrently develop Stage 1 and
Stage 2 of the Syama open pit to access the deeper higher grade
sulphide ore. An economic review of the open pit undertaken and
concluded in the December 2014 quarter confirmed however that
mining of the deeper ore within the Stage 2 pit is best achieved by
underground rather than open pit mining. As a result, open pit mining
activity ceased in Stage 2. Ore mining in Stage 1 continued at an
accelerated rate, with the design base of the pit at the 120mRL,
completed by May, just prior to the onset of the wet season.
This was the main ore supply for the sulphide processing plant.
The change to the open pit mining plan through the cessation of
Stage 2 and the acceleration of Stage 1, significantly reduced the
annual target volumes from 6.7m bank cubic metres (“BCM”) to
3.2m BCM with total waste material mined reduced to 2.1m BCM of
material (2014: 4.0m BCM). During this period of accelerated mining,
1.1m BCM of ore (2014: 0.8m BCM) was mined at a grade of 3.31g/t
Au (2014: 3.24g/t Au). Due to the acceleration in Stage 1 mining
operations, sulphide and oxide ore stockpiles at year end were in
the order of 6.2m tonnes at a grade of 2.0g/t. These ore stockpiles
will be the primary ore source for the sulphide processing plant
over the next two years whilst the development of the Syama
Underground is undertaken.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 14
14
OXIDE
OUTLOOK
The new oxide processing circuit was commissioned in January
almost three months ahead of schedule and treated 0.58 million
tonnes at an overall head grade of 2.72g/t Au to produce 45,916
ounces at a cash cost of $675 per ounce.
The oxide processing plant availability was 89.2% with a recovery
rate of 90.6% achieved. Both creditable performances due to early
commissioning and ramp up activities.
During the financial year, mining commenced at the new oxide
satellite pits located approximately 6.5km to the north of the
Syama operations. Mining from two pits named A21_20 and A21_10
North provided oxide ore supply to the newly commissioned oxide
processing plant from January 2015. A21_10 North is the most
northerly pit from the Syama operations with a mine life until mid-
2016. A sequence of other small satellite pits are scheduled
to ensure continuous ore supply to the mill.
Total waste material mined from the A21 pits for the financial year
was 3.48m bank cubic metres (“BCM”) of material. By financial year’s
end the A21_10 North pit had reached the 320mRL and the A21_20
pit had reached the 390mRL. During this period 0.48m BCM of ore
was mined at a grade of 2.53g/t Au.
All mining of the satellite pits was undertaken by the same Syama
open pit mining contractor, African Mining Services. Ore mined from
the satellite pits is stockpiled at a location near A21. This ore is then
rehandled and hauled to the Syama oxide ROM pad stockpiles, as
required, for processing.
The Syama sulphide open pit will remain open to allow for
the development of the underground portal access from the
conglomerate zone on the eastern wall at the 1200mRL. The
portal access is currently planned to commence in January 2016
to ensure underground access to the ore zone is in line with
scheduled ore supply requirements of the sulphide processing circuit.
Oxide ore mining will continue at the northern satellite pits
with scheduled completion of the A21_10 North pit and the
commencement of A21_10 South pit. Strip ratios will fluctuate during
the year as A21_10 North reaches the lower elevations and A21_10
South commences with higher waste stripping from the surface.
Throughput for the sulphide processing plant will continue to
increase over the coming year due to mechanical and electrical
improvements in the crushing and milling circuits. Despite
increased throughput, gold production will be maintained at similar
levels to last year as a result of sulphide ore predominantly being
sourced from lower average grade sulphide stockpiles, during the
development of the new underground mine. Roaster performance
is expected to further consolidate following a major planned internal
shutdown in the 1st half of FY2016.
Throughput for the oxide processing plant is expected to be
maintained at 1.3mtpa in its first full year of production.
Overall gold production at Syama is expected to be below
FY2015 levels, with reduced sulphide production partially offset
by increased oxide production. Cash cost per ounce is expected
to be just above FY2015 levels in US$ terms.
SYAMA IS A LONG LIFE
FLAGSHIP PROJECT WITH
ROBUST ECONOMICS AND
ENORMOUS OPTIONALITY
SULPHIDE OPERATING PERFORMANCE AT A GLANCE
SULPHIDE ORE RESERVES AS AT 30 JUNE 2015
Ore Mined
Ore Milled
Million Tonnes
Million Tonnes
Head Grade
g/t Au
Recovery Rate
Gold Produced
Cost Per Ounce
%
Oz
A$
Cost Per Ounce
US$
AISC (Sulphide + Oxide) A$
15
3.21
1.95
3.77
75.8
14
2.23
1.78
3.73
77.7
178,995
165,494
830
695
1,029
1,006
922
1,311
CATEGORY
TONNES
GRADE
OUNCES
Proved (stockpiled)
897,000
Probable (insitu) Underground
25,500,000
Probable (stockpiled)
Total
5,313,000
31,710,000
4.4
2.8
1.6
2.6
126,000
2,291,000
265,000
2,682,000
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 1515
OXIDE OPERATING PERFORMANCE AT A GLANCE
OXIDE ORE RESERVES AS AT 30 JUNE 2015
Ore Mined
Ore Milled
Million Tonnes
Million Tonnes
Head Grade
g/t Au
Recovery Rate
Gold Produced
Cost Per Ounce
%
Oz
A$
Cost Per Ounce
US$
15
0.87
0.58
2.72
90.6
45,916
675
527
14
-
-
-
-
-
-
-
CATEGORY
Proved (insitu)
Proved (stockpiled)
Probable (insitu)
Probable (stockpiled)
Total
TONNES
GRADE
OUNCES
4,419,000
179,000
6,253,000
412,000
11,263,000
2.5
2.6
2.3
1.2
2.4
354,000
15,000
466,000
16,000
851,000
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 16
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 various sources. 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 2015 financial year, the operations produced 103,773
ounces (2014: 139,291oz) of gold at a cash cost of $940 per
ounce (2014: $832). The decrease in ounces produced is directly
attributable to lower grade from the Mt Wright underground
operation and a lower throughput rate at the Nolans process plant.
Ore production from the Mt Wright underground mine was 1.48
million tonnes (2014: 1.59mt) @ 2.40g/t Au (2014: 2.78g/t Au). The
lower grade was a natural function of the orebody and in line with
expectations for the material mined during the year. The slightly
lower production was due to the safety orientated operational
changes implemented late in the previous year. Tele-remote bogging
of draw points at predetermined points in the mining cycle was
introduced to further reduce potential risks associated with draw
point production. Commissioning and training affected production
levels in the early part of the year. The Sub-Level Shrinkage with
Continuous Fill mining method continued to perform to expectation.
Development increased slightly in line with the updated mining
schedule, achieving 2,978m (2014: 2,855m). The mining schedule
was expanded due to additional ore being added to the reserves.
The lowest operating level of the Mt Wright mine was previously
planned to be the 525 level as per the July 2014 Reserves. Due to
improvements in the Australian dollar gold price and design changes,
the Mt Wright operation is now planned to extend one level lower to
the 500 level. The addition of the 500 level extends the planned life
of Mt Wright underground to November 2016.
RAVENSWOOD’S MT WRIGHT
UNDERGROUND MINE LIFE
EXTENDED WITH POTENTIAL
FOR FURTHER EXTENSIONS
AT BUCK REEF WEST
Mt Wright reserves at the end of June 2015 are 2.15 million tonnes
@ 2.50g/t Au, compared to 3.29mt @ 2.53g/t Au at June 2014.
The processing plant treated 1.44 million tonnes (2014: 1.67mt) at
an average head grade of 2.37g/t Au (2014: 2.75g/t Au) including
material sourced as supplementary mill feed from low grade
stockpiles of 0.04mt @ 1.17g/t Au (2013: 0.03mt @ 1.07g/t Au). The
decrease in head grade was directly attributable to the lower mined
grade from the Mt Wright underground mine with the reduction in
treatment tonnes due to throughput issues associated with harder
ore from the lower levels of Mt Wright. Recovery increased slightly
to 94.7% (2014: 94.4%) due to ongoing operational improvement
projects in the process plant.
OUTLOOK
Mt Wright ore production is expected to increase slightly as the
previously discussed operational changes are bedded in. Continuous
improvement efforts will focus on maintaining operational efficiencies
and controlling unit costs as the mine deepens.
The processing plant will continue to primarily treat Mt Wright ore
with the possibility for some additional ad hoc treatment from
other low grade sources. A secondary crusher will be installed early
in FY2016 to both compensate for the harder ore coming from
the lower levels of Mt Wright and improve throughput capacity to
make up for the shortfall from FY2015. The plant is considered to
be highly optimized, however continuous improvement efforts will
remain to focus on improving plant recovery and controlling costs.
Gold production is expected to increase in FY2016 due to improved
throughput following the installation of the secondary crusher. Cash
cost per ounce is expected to increase slightly due to increases in
some key consumable costs.
RAVENSWOOD OPERATING PERFORMANCE AT A GLANCE
RAVENSWOOD ORE RESERVES AS AT 30 JUNE 2015
Ore Mined
Ore Milled
Head Grade
Recovery Rate
Gold Produced
Cost Per Ounce
Cost Per Ounce
AISC
Million Tonnes
Million Tonnes
g/t
%
Oz
A$
US$
A$
CATEGORY
TONNES
GRADE
OUNCES
15
1.48
1.44
2.37
94.7
14
1.59
1.67
2.75
94.4
Proved Mt Wright (insitu)
1,644,000
Proved Sarsfield (insitu)
28,450,000
Probable Mt Wright (insitu)
Probable Mt Wright (stockpile)
411,000
91,000
103,773
139,291
Probable Sarsfield (insitu)
18,640,000
940
778
1,180
832
765
1,029
Total
49,236,000
2.7
0.8
1.8
2.4
0.7
0.8
144,000
747,000
23,000
7,000
423,000
1,344,000
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 17
M A L I
■ S YA M A G O L D M I N E
G H A N A
■ B I B I A N I G O L D M I N E
R AV E N S W O O D G O L D M I N E ■
A U S T R A L I A
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 18
DEVELOPMENT OVERVIEW
UNLOCKING
THE VALUE ›
Resolute is well placed to pursue organic growth 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.
MALI
SYAMA EXPANSION AND OXIDE CIRCUIT
SYAMA UNDERGROUND FEASIBILITY
Construction work on the Syama oxide circuit and expansion
infrastructure was completed almost three months ahead of
schedule and well below budget. After commissioning, the oxide
processing plant was handed over to the site operations team
in early 2015 with throughput and gold recovery both ahead of
expectations.
Over the remainder of FY2015 the focus of plant operations was
on stabilising processing operations and identifying and resolving
bottlenecks in the throughput rate, whilst minimising reagent
consumption and maximising gold recovery. 45,916oz had been
produced at a cash cost of $675 per ounce (US$507) in its first
six months of operation.
At Syama, project work was undertaken to interrogate the medium
term mining schedule to identify the most cost effective mining
opportunities and minimise costs within a reduced gold price
environment. In November 2014 the Company announced that mining
of the Syama Stage 2 open pit was to be deferred while accelerating
mining of Stage 1 and expediting the move to underground mining of
the identified ore reserve beneath the open pit (Figure 1).
Early study work on the underground project, completed by
Snowden Mining Industry Consultants (“Snowden”), identified that
reserve grades beneath the Syama open pit were underestimated
when compared with the typical grade profile in the open pit, due
to insufficient drill data. The Company subsequently initiated an
extensive diamond drilling program to both infill and extend the
resource base as part of an updated underground interpretation.
At various times through the year the Company reported significant
intercepts recovered during the drilling program. Some of these
intercepts reported to the ASX on 7th October 2014 (“Further High
Grade Results Boosts Potential for Future Reserve Upgrade at
Syama”) included:
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
19
› 42m @ 3.17g/t Au (from 622m) in SYRD403
› 47m @ 3.00g/t Au (from 621m) in SYRD404
› 55m @ 3.71g/t Au (from 570m) in SYRD406
› 31m @ 4.62g/t Au (from 546m) in SYRD408
› 88m @ 2.73g/t Au (from 413m) in SYRD412
To meet the Company objectives of moving to an underground
operation, an updated Underground Pre-Feasibility Study
was completed by Snowden who delineated an ore reserve
of 25.5 million tonnes @ 2.8g/t Au for 2.3 million ounces (ASX
Announcement 8th June 2015). The Study included all recent
diamond drilling results and included the Stage 2 open pit
resource, immediately beneath the recently completed Stage
1 pit, which was now incorporated within the underground
mining inventory.
The Company’s option studies confirmed that early commencement
of the underground mining resulted in a smoother cash flow profile
compared to mining Stage 2 by open pit methods which was
disadvantaged by a significant waste pre-strip requirement.
Snowden considered that underground mining would be conducted
by a sub-level caving mining method with development accesses
on 25m spaced levels. The chosen mining method was particularly
suited to the large and consistent orebody footprint which would
provide an ore production rate consistent with recent open pit
production, ensuring the process plant remained fully utilised. The
updated ore reserve was sufficient to extend mining operations
until at least 2028. Underground mineralisation remains open down
plunge to the north, at depth and to the south and further drilling
will assess these areas to upgrade future resources and reserves.
The Company is continuing with the detailed Underground
Feasibility Study with work advancing on key areas of mine design,
geotechnical analysis, hydrology and metallurgical test work. A
range of diamond core samples were collected from six dedicated
geotechnical holes for specialised strength test work and stress
test work to assist with determining the orientation of the principal
stress as an input for mine design. Work on metallurgical test work
is well advanced with early results confirming the processing
parameters remain unchanged from routine open pit sulphide ore
that are ideal for the Syama sulphide processing circuit.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
20
SATELLITE DEPOSIT RESOURCE EVALUATION
HIGH VOLTAGE GRID CONNECTION TO SYAMA
In July 2014 the Environmental & Social Impact Study document
for the High Voltage Grid Connection between the town of Sikasso
and Syama was submitted to the governing bodies for acceptance.
In a very positive step forward for the project, on 5 August 2014,
the Company received signed approval from the governing body,
DNACPN.
Other key agreements advanced during FY2015;
›
The Engineering and Design Study has been completed and
submitted to the Technical Committee for signing
The ministerial cabinet has approved the advisory for the
Declaration of Public Utility from the Ministry of Domains and its
approval announced in the Malian media
The Environmental and Social Management Plan was submitted
and approved
The Power Supply and Power Implementation Agreements are in
final negotiations and will be finalised in the short term.
›
›
›
The construction of the high voltage grid connection is scheduled
to commence during calendar 2015 and completed within a 12
month period. As previously reported, once commissioned, this
infrastructure will deliver significant cash cost savings estimated to
be US$100/oz over the remaining mine life at Syama.
Open pit mining operations commenced at the A21 deposit north of
Syama early in the financial year in line with the commencement of
the oxide processing plant. The Company has an extensive portfolio
of open pit oxide resources located in various satellite pits to the
north and south of the main Syama pit. Drilling continued through
the current year to evaluate the extensive strike of mineralisation
with a view to identifying further additions to the oxide resource
inventory near to the processing plant.
During 2015 detailed geological investigations were conducted
along the A21 mineralisation corridor north of Syama, to improve
the understanding of controls on the mineralisation. In addition to
compiling updated wireframe geology interpretations, a number of
targets were identified that warrant additional drilling investigation.
Recent reverse circulation drilling was conducted in these areas
to assess the potential for resource extensions in both oxide
and sulphide areas. As Syama has the choice of two operating
process plant streams it creates opportunities for both oxide and
sulphide ore types. Drilling was targeting the down-dip continuation
of the A21 orebody and assessing the potential for additional
mineralisation along the strike zone between the BA01 deposit and
the Quartz Vein Hill orebody at the south end of A21. Both areas
are in close proximity to the Syama processing plants and present
excellent opportunities to add to the resource inventory.
1.
SYAMA UNDERGROUND LONG SECTION
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
21
GHANA
BIBIANI PROJECT
At the Bibiani project in Ghana, the Company completed a significant
diamond drilling program evaluating the underground potential
immediately below the Bibiani Main Pit mineralisation and extending
to the north and south along the 1,500m strike zone. Drilling
operations commenced during September 2014 and comprised two
surface and two underground rigs drilling on double shifts.
Underground drilling was conducted from main levels 7 and 9 which
were accessible from the mechanised development completed
by previous owners Central African Gold. This drilling focused on
identifying a consistent high grade zone within the Central Lode on
levels 11 to 13 over a strike length of approximately 500m between
5000N and 5500N (Figure 2).
Surface drilling was used where the mineralised strike extended
beyond access from the underground development. In total
26,665m of surface and underground drilling was completed.
Significant assay results were reported to the ASX at various times
throughout the year and included intercepts including 34.0m @
4.37g/t Au from 289m, 27.8m @ 8.49g/t Au from 153m, 16.0m @
12.46g/t Au from 34m and 18.0m @ 5.94g/t Au from 52m (“New
High Grade Drill Results at Bibiani Gold Project” 16th January 2015).
ENHANCED MINERAL
INVENTORY: 26,665M OF
DIAMOND DRILLING IN FY2015
HAS LED TO A 63% INCREASE
IN INDICATED RESOURCES
2.
BIBIANI DRILL HOLE PL AN HIGHLIGHTING F Y2015 SIGNIFICANT INTERCEPTS
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 22
Upon completion of drilling activity the Company prepared an
updated resource model interpretation. With assistance from
consultants at Model Earth, the updated model included a
reinterpretation to better reflect the geology controls at the deposit.
This new resource model included a 60% increase in Indicated
Resource ounces and a 12% increase in overall ounces compared
to the previous 2012 Coffey Model. The Company engaged
independent experts Snowden to undertake an Underground
Scoping Study assessment using the updated resource model.
Snowden identified an underground mining inventory of 4.3Mt @
4.2g/t Au at a 3.25g/t Au cut off for 574,000 ounces using only
the Measured and Indicated resources located close to the existing
underground decline and level development, that potentially require
minimal development capital expenditure.
Snowden identified a number of key outcomes from the Study that
support a redevelopment of the Bibiani underground mine including:
› Stable underground geotechnical conditions which support long
hole stoping mining methods
› Extensive orebody strike length with potential for further
economic ore zones likely as project development continues
› Existing level development available on 7, 8 and 9 level, that
provide early access at low capital cost to potential stoping
blocks, while evaluation work and mine development continues
into new areas
› Established operating site with a processing plant and
associated facilities including grid connected power reducing
any significant capital costs.
With minimal start-up capital required - (underground development
estimate ~US$15M, plant and infrastructure upgrades ~US$15M)
the Study has provided the Company with strong encouragement
to continue its evaluation of the project and to advance the
Feasibility Study work programs. Aspects of the feasibility
work underway include an underground geotechnical evaluation,
process plant engineering studies and a metallurgical assessment.
This Feasibility Study is scheduled for completion in mid-2016.
Additionally, a range of opportunities and alternatives are being
assessed to further optimise Bibiani grades and increase the
production rate. A number of value add scenarios will be considered
in the coming year that will be reported as results are returned.
This includes a possible second phase drilling program in FY2016 to
infill and upgrade the 4.5Mt @ 4.1g/t Au (0.6Moz) Inferred Resource
delineated within the mining inventory area.
3.
LONGITUDINAL SECTION DISPL AYING NEW RESOURCE OUTLINE AND EXISTING AND POTENTIAL DEVELOPMENT AREAS
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 23
AUSTRALIA
NOLANS EAST - BUCK REEF WEST
At Ravenswood work continued on the Nolans East evaluation
and the Buck Reef West Project as an opportunity to supplement
operations to coincide with the completion of the Mt Wright
Underground mine. At Nolans East, further reverse circulation
drilling was undertaken where previous drilling had not provided
adequate coverage due to the location of old overland conveyor
infrastructure. Preliminary optimisation results, using the additional
drilling, identified an intermediate stage pit design which balances
the short term supply of ore against the cost of capital stripping for
the larger pit geometry.
Engineers from consultants Worley Parsons provided technical
advice on the pit slope parameters appropriate for the Nolans East
pit design where it interfaces with the historic Nolans pit and the
larger Sarsfield pit. Baseline environmental monitoring for air and
water quality has commenced for the Buck Reef West Project.
The results from this monitoring will be used to inform any future
environmental impact assessment required as part of the project
approvals process.
Investigations into alternative mining scenarios for the large
Sarsfield Expansion Project were in progress with the aim of
assessing alternative tailings strategies to establish a financially
viable construction methodology which meets the mining
schedule timeframe.
4.
SCHEMATIC SARSFIELD GEOLOGY PL AN HIGHLIGHTING EXISTING PIT OUTLINES AT SARSFIELD, BUCK REEF WEST AND NOL ANS EAST
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
24
EXPLORATION OVERVIEW
INVESTING
IN GROWTH
OPPORTUNITIES ›
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
our regional studies.
Resolute maintained a solid exploration spend during the FY2015
and increased landholdings with new joint ventures in Mali and
Cote d’Ivoire.
In Mali, regional and infill drill programs over the Syama belt in
the Finkolo licence outlined a number of robust gold anomalies.
Reverse circulation and diamond drilling of these targets
commenced with some encouraging initial results and will be
further tested in FY2016. Resolute expanded its landholding in
the Syama greenstone belt with new applications and a joint
venture with TSX-V listed company Legend Gold Corp.
In Queensland, resource drilling on the Buck Reef West area was
completed and studies to maximise resource conversion, optimise
pit schedules and minimise capital requirements are ongoing.
Exploration has commenced at the exciting Mt Glenroy prospect
with drilling planned to commence in 2015.
In West Africa, Resolute greatly increased its presence in
underexplored Cote d’Ivoire with the signing of a new joint venture
with ASX listed Taruga Gold on three 100% owned Permits during
the reporting year. The high priority Takikro application was granted
and exploration commenced immediately. Strong gold anomalies in
surface sampling is due to be drill tested in late 2015.
RESOLUTE IS EXPLORING
MORE THAN 10,800KM2
OF PROSPECTIVE TENURE
ACROSS TWO CONTINENTS
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
25
MALI
FINKOLO (RESOLUTE 85%)
PITIANGOMA EAST JV (RESOLUTE EARNING 70%)
Exploration continued within the Finkolo permit on a highly
prospective area north of the 830koz Tabakoroni gold deposit.
A large aircore drilling program was focused on a 3km strike area
of prospective greenstones where previous wide spaced drilling
identified significant gold anomalism.
The program that totalled 100 drill holes for 7,500m, defined a
new gold anomaly at Zekere. This anomaly was coincident with
a 1km long NNE bend in the sediment/basalt contact and a
linear resistivity high outlined by an induced polarisation
survey completed in late 2014.
Reverse circulation drill testing of the Zekere anomaly was
carried out in February 2015 with three lines of drill holes
completed on 400m spaced traverses. The drilling intersected
wide zones of shearing, sericite-siderite alteration and intense
quartz veining on the contact between the footwall basalt
sequence and the overlying sediments. Whilst economic gold
intersections were relatively narrow the extent of the alteration
and shearing warrants further drill testing, especially in the
untested areas along strike.
An incorporated joint venture agreement on the Pitiangoma East
permit was signed with TSX-V listed Legend Gold in May 2015.
Pitiangoma East is located 30km SSE of the Tabakoroni deposit
and covers the southern extensions of the Syama Formation
greenstones. This permit provides Resolute access to the only
section of the Syama Greenstone Belt which it didn’t previously
control. The permit contains the BHP identified gold prospect
Misséni and a number of drill targets, and is a valuable addition to
the exploration portfolio.
Aircore drilling on the permit commenced immediately and a
program of 96 holes for 4,616m was completed in late June.
The drilling covered an area immediately west of Misséni,
over an untested VTEM anomaly and several untested auger
and soil anomalies.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
26
5.
MALI EXPLOR ATION TENEMENTS, DEPOSITS AND SIMPLIFIED GEOLOGY
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 TANZANIA
NYAKAFURU (RESOLUTE 100%)
An Environmental and Social Impact Assessment report
was completed in preparation for lodgement of mining lease
applications over Nyakafuru Reefs and the Kanegele Resources.
The report included both the Environmental Management Plan
and the Environmental Monitoring Plan in accordance with the
requirements of the Environmental Management Act, 2004.
The report has been lodged with the National Environmental
Monitoring Council for approval.
27
CÔTE D’IVOIRE
TOUMODI
The aircore drilling program at Toumodi, which commenced late in FY2014, was completed
in July 2015. The results were disappointing with no significant gold anomalies outlined.
In July, a soil sampling program was carried out in an area previously classified as a forest
reserve. The area sampled is coincident with the centre of an original 1km spaced multi-
element anomaly utilised to acquire this permit and therefore is a high priority target area.
Early analytical results received support a robust multi-element Au-W-Mo-As anomaly which
warrants immediate follow up.
6.
COTE D’IVOIRE TENEMENTS AND GEOLOGY
TAKIKRO
The Takikro Research Permit application
was finally granted by the ministry in
August 2014. Takikro is considered to be a
highly prospective permit in the Resolute
Cote d’Ivoire portfolio.
Exploration commenced immediately at
Takikro, with landholder negotiations in
preparation for an extensive field program.
Infill soil sampling commenced in late
September 2014 to follow up the large
gold and multi-element indicator element
anomaly identified by the original 1km
spaced regional soil survey. The program
was completed in December 2014, with
a total of 4,400 samples collected at a
nominal spacing of 250m x 250m.
The final analytical results from the infill
soil sampling program confirmed and
enhanced the gold plus pathfinder element
anomaly which runs through the entire
25km length of the Takikro Permit.
Drill testing of this extensive gold in soil
anomaly will commence in FY2016 after
the mid-year wet season.
TARUGA JOINT VENTURE
(RESOLUTE EARNING 75%)
Resolute entered into a Joint Venture with
ASX listed Taruga Gold on two granted
Research Permits and one Research
Permit application.
The Tiebissou Research Permit was
granted to Taruga in late 2014 and
lies adjacent to the south and west of
Resolute’s Takikro Permit. Tiebissou covers
a 15km strike length of the prospective
Birimian lithological sequence which hosts
the Bonikro and Agbaou gold deposits.
Combined with Takikro, Resolute will
control a strike length of 50km of highly
prospective greenstones.
The second granted permit, Nielle, is
located within granite and greenstone
terrain adjacent to the Tongon gold mine
operated by Randgold Resources.
Resolute commenced detailed geological
mapping on both of the granted permits
during the June 2015 quarter and a
comprehensive multi-element soil survey
was also initiated on the Tiebissou
Research Permit.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 28
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
29
AUSTRALIA
BUCK REEF WEST
Infill and extension drilling at Buck Reef West which started
in early 2014 continued into FY2015. Studies to maximise
resource conversion, optimise pit schedules and minimise capital
requirements are ongoing.
MOUNT GLENROY
Work continued on the large Mt Glenroy rhyolite breccia system,
which has many similar geological and geochemical attributes to
Mt Wright. Detailed geological mapping and surface sampling was
completed during the reporting year.
A pole-dipole 3D induced polarisation geophysical survey was
completed over the Mt Glenroy breccia pipe and surrounding area in
June 2015. Models of the data display a central strong chargeability
high with a coincident resistivity low response. The centre of the
anomaly lies immediately east of the main peak of Mt Glenroy.
A deep diamond drilling program, supported by the Queensland
Government through its collaborative drilling initiative, will
commence to test the strong multi-element geochemical and
geophysical anomalies at Mt Glenroy in 2015.
7.
QUEENSL AND EXPLOR ATION TENEMENTS, DEPOSITS AND SIMPLIFIED GEOLOGY
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 30
CORPORATE RESPONSIBILIT Y
BUILDING
RELATIONSHIPS.
CREATING VALUE. ›
Resolute is committed to operate in a manner that allows us
to approach and sustain our activities harmoniously within the
community and environment.
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 $55 million (last year $63m) was paid directly to governments
in taxes in 2014/15. These taxes include Company taxes, employer
taxes, royalties and other licencing and statutory levies as follows:
The Resolute Mining Limited group willingly 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.
Royalties
Employer Taxes
Company Taxes
Licencing & Statutory Taxes
AUSTRALIA
$
TANZANIA
$
7.3m
14.5m
0.0m
0.9m
22.7m
0.1m
2.5m
0.2m
0.5m
3.3m
MALI
$
18.6m
9.2m
1.0m
0.2m
29.0m
TOTAL
$
26.0m
26.2m
1.2m
1.6m
55.0m
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
31
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 32
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 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
The formal handover of the Golden Pride site and all remaining
infrastructure to the Madini Institute to set up a mining institute of
learning was completed at a ceremony on 12 December 2014. This
ended Resolute’s presence onsite at Golden Pride after 15 years and
production of over 2.2 million ounces of gold.
To achieve this marvellous result, activities undertaken during the
year included:
›
›
›
›
completion of all site rehabilitation, including Tailing Storage
Facilities
effective reconciliation of all compliance issues
demolition, scrap recovery and site rehabilitation of the
Treatment Plant and surrounds
repurposing of site buildings and the set-up of a water supply
for the Madini Institute
FORMAL HANDOVER OF
GOLDEN PRIDE MINE COMPLETED
SYAMA MINE – MALI
The Company is committed to actively managing and working hand
in hand with the Malian Government in relation to a wide range
of environmental activities including rehabilitation, water and air
quality, waste and tailings management and compliance and risk
management.
Significant activities this year included:
›
›
further development of an environmental database and
geographical information system to track land management
planning and changes
achieving formal government approval of the Environmental
and Social Impact Studies to support the High Voltage Grid
Connection.
Other achievements and activities included:
REHABILITATION
› upon the completion of open pit mining at Syama, the life of mine
master plan was re-optimised for the placement of waste rock,
releasing 3ha for rehabilitation this year. Almost 4,000 seedlings
were planted in this initial area in line with our progressive
rehabilitation policy.
WATER MANAGEMENT
›
›
regular and consistent monitoring of the surface water
and groundwater allows pro-active management to ensure
maintenance within acceptable values
enhanced water balance modelling continues to guide efficient
use of this important resource.
TAILINGS MANAGEMENT
›
›
adaption of the tailings landform to store material from the
processing of oxide material
successful innovative trials for upstream raising of
embankments
›
long range planning concluded
›
›
sufficient storage capacity already exists for tailings in areas
already disturbed/assigned
lower environmental risk for water efficiency and control of
cyanide due to more confined tailings activities.
WASTE MANAGEMENT
›
implementation of high temperature incineration for oily wastes
and reagent containers is planned to lower the risk of offsite
disposal of these wastes.
AIR QUALITY
›
›
further enhancement to the network of air quality monitors,
located on site and at nearby villages, transmits data to the site
office in “real time” enabling early management response
program implemented to monitor the ongoing health of crops on
farms in villages near the mine site.
COMPLIANCE AND RISK MANAGEMENT
›
›
compliance audit report for environmental management and
social development was prepared by the Company and approved
by the Malian Government
positive collaboration through regular site inspections by the
Malian Environmental Authorities are encouraged.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 33
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 34
RAVENSWOOD MINE – QUEENSLAND
BIBIANI – GHANA
Work continued on the Safety, Health and Environmental
Management System. Site environmental management focused on:
detailed monthly environmental monitoring and reporting
In 2014, Resolute took management control of the Bibiani mine site
in Ghana. Whilst the site is in care and maintenance, environmental
monitoring programs were maintained and actively managed.
compliance monitoring and investigations
Specific activities included:
›
›
›
›
›
surface and groundwater quality
tailings embankment integrity and water levels
ambient dust levels
› health of revegetated areas
› unauthorised clearing by farmers or disturbance by artisanal
miners.
COMPLIANCE AND RISK MANAGEMENT
› monitoring at surface and groundwater points found levels to be
in compliance with limits
›
as an improved risk management effort, the levees
embankments are regularly monitored, water levels controlled
and as a result some areas are now wetland environments.
› monthly inspections for safety, health, environment and
training.
Significant activities this year included:
REHABILITATION
›
›
review of closure strategies to accommodate the potential for
extensions to mine life. This related to the timing for removal of
redundant infrastructure and the revegetation of disturbed areas
improving the diversity of native plants in the rehabilitation
areas and bushland on the mine site.
WATER MANAGEMENT
›
›
In accordance with a Transitional Environmental Program issued
by the Queensland Government, the mine site continued to
operate and adapt the groundwater recovery system near the
Nolans Tailings Storage Facility
improved the efficient use and management of water in Suhrs
Creek reservoir which provides water to both the operations and
the township of Ravenswood.
EMISSIONS
›
continued to implement opportunities identified by the
Energy Efficiency Opportunities program to save energy and
associated costs
COMPLIANCE AND RISK MANAGEMENT
›
pro-active monitoring and response to water quality
issues continued.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
COMMUNITY RELATIONS
Resolute recognises the need to consult proactively and help
manage community issues near its operations. Fostering long-
term relationships and partnerships with communities is actively
encouraged 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
co-operation and participation
provide management systems to identify, assess, monitor and
control potential impacts on communities
› maintain an ‘open door’ policy whereby the local traditional
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.
SYAMA MINE – MALI
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, including the newly developed A21 satellite open
pit. Most questions raised by the members were discussed during
these meetings and where possible immediate solutions were
implemented. The report, Assistance Program for the Economic
and Social Promotion of the Populations of Fourou Local District, is
being used with in-house expertise to guide improvement programs
through the SMCCC.
SUPPORT OF COMMUNITY ROLES AND FUNCTIONS
Company contributions during the year included:
›
›
›
›
land compensation to Syama village for “Friday” work
assistance to Fourou Mayoral Office for the role of
Community Liaison Agent
support for International Women’s Day in March
support for the Annual traditional feast celebration in
Fourou village
› help to refurbish residency of the Prefect of the Circle of Kadiolo
›
›
›
construction of store house and guard room at the Tribunal of
Justice of Kadiolo
supply of electrical power to the maternity clinic in
N’Golopéné village
provision of potable water to Diou village Catholic Parish for
Christian pilgrimage; and
›
ongoing water supply to sacred fish ponds in Fourou village.
35
COMMUNITY HEALTH
EBOLA PREVENTION
SOMISY provided early and comprehensive support in the prevention
of an Ebola outbreak in the local vicinity of the mine site by:
›
›
›
training of community medical staff on Ebola precautions
and hygiene
providing Personnel Protective Equipment to five medical
centres in the rural commune of Fourou
recruiting two doctors and three casual staff to support SOMISY
medical staff work
› hosting weekly radio communication about Ebola and raising
›
›
awareness at schools
setting up an isolation unit onsite
providing phones to community medical staff for early warning
of potential Ebola cases
› helping to set up and stock health-check points in artisanal camps
›
›
›
›
›
setting up hand washing facilities and providing chlorine to
community health centres
training SOMISY employees in screening and caring of patients
with a fever or suspect conditions
implementing mandatory declarations of prior travel and
activities in areas at risk to site.
daily coordination with national and regional teams in government.
involvement from the outset in an industry response group in
Mali to support Government.
GENERAL MEDICAL SUPPORT
This included a range of initiatives:
›
›
›
›
›
construction of a maternity clinic at Bananso
provision of suction devices and oxygen concentrators to three
medical centres
running education programs and regular radio broadcasts on
issues ranging from lightning awareness, malnutrition, healthy
diet with local cereals, HIV, worms, sanitation and skin diseases
controlling malaria with issue of bed nets, testing, spraying,
larviciding and drainage of wastewater
providing reagents and consumables for HIV diagnosis to five
community medical centres and collaborating with Government
to establish an HIV medical unit in Fourou
›
regular testing of potable water from community wells and bores.
EDUCATION
SOMISY expatriate employees through their Child Education
Sponsorship program provided learning materials, plastic shoes
and soccer balls to the primary school of Glambéré village.
In FY2014 Resolute funded construction of three classrooms
at Tembleni village and support continued there in FY2015, with
construction of ablutions. Similar assistance was provided to the
Baala village primary school.
A carpenter is sponsored to build desks at the mine site from
packing timber and during the year 200 were donated to the
primary schools in Baala, Bananso and Lollè villages. SOMISY also
funded the organisation of school-year end exams at Bananso,
Fourou Gouéné, Torokoro and Watiali villages.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 36
SMALL BUSINESS PROJECTS
COMMUNITY WATER SUPPLIES
During the reporting period SOMISY extended its support of potable
water supply drilling and equipping bores for:
› Baala villages - Cattle Spray Project
› Fouguélé village
› Kambéréké (Women group garden)
›
›
›
›
Lasséribougou village
Tembléni (primary school)
Torokoro (primary school) and
Tabakoroni hamlet.
Support for women’s groups in villages near the mine site is ongoing
and enthusiasm is growing from both women and men. Projects
include:
›
›
›
›
collection of honey from bee keeping
growing of vegetables
batik fabric dying
embroidery
› making of shea butter and soap from tree nut oil
›
funding of trials with improved crop seeds, fertilizers and new
breeds of poultry and
›
building a cattle spray yard to benefit all parts of the rural commune.
SOMISY is helping people across the rural commune of Fourou to
develop self sufficiency in food production. Trials in nine villages on
the cultivation of more productive maize varieties were successful
and now 11 Women’s groups are trialing the growing of a new variety
of peanut. Training in each of these projects is a critical element,
particularly on the running of cooperative associations and in
leadership. The mine site catering provider is supporting these
projects by sourcing this local produce.
The making of shea butter in the wider community has a
long standing tradition and SOMISY introduced the idea of
improved shea butter for commercial benefit to the community.
The enthusiasm has grown from an initial membership of 20 to
now exceed 30. SOMISY brought expert women from the “Natio-
Cajou Centre” in the regional city of Sikasso to train the women
in making improved shea butter, as the method is quite different
from traditional ways.
APDFO will provide a high grade shea butter in a chain of production
connected to N’Golopéné village where soap is made from shea
butter. The interdependence of villages will aid in the sustainability
of the initiative. It may be fostered wider in the rural commune to
ensure new found skills continue to be applied if the market develops.
SOMISY, through its site catering provider is purchasing about
1,400 soap bars per month or 65% of total production. Over time it
is envisaged that the soap and the butter will be sold more widely
in Mali and potentially in neighbouring countries of Côte d’Ivoire and
Burkina Faso.
Shea butter is renowned as a supplement for good health in
cosmetics, massage, traditional medicine nutrition or as a cooking
oil. The cultural significance of shea butter is in body fitness, as a
healing product and for the improvement of lifestyle. The use of
locally made shea butter is predominant in rural areas and is used
more so than commercial cooking products.
Karité trees which provide the nuts to make shea butter are
common in the Sahel landscape of West Africa and the species
is one of many protected by Malian environmental law.
To date this project, with SOMISY involvement, has demonstrated
the interest, dedication and commitment of
the beneficiaries. It has involved all aspects
of village life and not been considered
as the business of the women only.
A constant willingness to learn more
and improve the project has seen the
women now making peanut butter.
THE MAKING OF IMPROVED SHEA BUTTER IN
WATIALI VILLAGE
The project is being run by the “Association pour la Promotion et le
Développement des Femmes de Ouatialy (APDFO)” (Association for
the Promotion and Development of the Women of Watiali). SOMISY
has supported APDFO to make shea butter through construction
of a building, purchase of equipment and consumables to enable
commencement of production.
APDFO aims to:
›
›
›
›
create self-sustaining economic opportunities and improve
living conditions of women in their village
introduce commercial grade or improved shea butter techniques
for income generation
improve the shea butter making skills among women in the
village, and
encourage others in making improved shea butter for income,
cosmetic and nutritional uses.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 37
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 38
RAVENSWOOD MINE – QUEENSLAND
The mine is located nearby the historic gold-mining town of
Ravenswood. Resolute has continued to work to maintain a
positive relationship with this community by:
› maintaining face to face contact with community members,
through production of monthly newsletters and regular social
events meeting government representatives
›
›
supporting the Ravenswood Restoration and Preservation
Association in management of heritage listed buildings within
the town and maintenance of the community garden
providing educational support to the Ravenswood State
School by providing new learning materials, provision of art
lessons with visiting artists and assistance with swimming
lessons
› helping to run sporting carnivals and educational events,
National Water Week
›
›
›
›
›
supporting the Ravenswood Rural Fire Brigade as a major
sponsor of its annual fundraiser
providing 24-hour support to the community for medical
emergencies from nurses at the mine site clinic. The nurses
provided about 350 community consultations during the
reporting period and hosted monthly visits from the Royal
Flying Doctor Service
sponsoring the monthly seniors morning teas in which a
Queensland Health nurse to consult with the elderly
providing trained staff to supervise swimming lessons in
the community pool
providing access to gym facilities and personal training sessions
for staff and community members including those who are
rehabilitating from health problems.
BIBIANI - GHANA
Despite the site being on care and maintenance status, Bibiani
continues to maintain its community involvement, support and
consultation through:
›
›
›
›
›
›
funding Primary and Junior High Schooling for children of
employees and 30% community intake
outreach from the mine site clinic for programs to screen and
treat patients with Hepatitis B, diabetes, malaria and worms
running a community bus service for farmers to and from Bibiani
sole sponsorship of the Gold Stars Football team
drilling a second potable-water bore in Lineso, a village which has
grown in size
open communication with village chiefs, community leaders and
politicians.
The mine community development team is also focused on
preparation of a needs analysis and seeking the perceptions and
community views from Bibiani town and villages nearby to the
mine site.
HEALTH AND SAFETY
The Resolute Occupational Health, Safety and Security Policy
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 consistently across the operations and development groups
for safety incidents or injuries, major business interruption, a security
breach, community complaint or environmental incident.
The operations continue also to report against key performance
indicators. The return to work of injured employees is of special
interest as well as tracking the presence of leaders and
managers in the field or workplace.
SYAMA MINE – MALI
During the review period a major focus of the Occupational Health
and Safety program was directed towards:
›
›
›
›
›
›
›
›
›
review of risks across all departments
completion of advanced supervisor training
implementation of a new protocol for equipment isolation
revision of fatigue management procedures and awareness training
implementation of a task observation program
ensuring the routine monitoring of occupational health and
hygiene exposures
training of personnel including medical professionals
construction and commissioning a new on site clinic for
employees and camp residents
evaluation of capabilities for medical treatment in country and or
the evacuation of personnel with serious illnesses and injuries.
For the Operations group at Syama the “total recordable injury
frequency rate” rose slightly from a very commendable 1.17 to 1.27.
Total recordable injuries in the reporting period also contributed to
changes within the following injury frequency rates:
›
Lost Time Injury Frequency Rate (LTIFR) improved to nil from 0.58
› Restricted Work Injury Frequency Rate (RWIFR) was maintained
at 0.00
› Medical Treatment Injury Frequency Rate (MTIFR) increasing
slightly from 0.58 to 1.27
For the construction group for the now completed Syama
Expansion Program the “total recordable injury frequency rate”
improved substantially from 9.93 to 2.62. Total recordable injuries
in the reporting period also contributed to changes within the
following injury frequency rates:
›
Lost Time Injury Frequency Rate (LTIFR) improved to nil from 1.10
› Restricted Work Injury Frequency Rate (RWIFR) improved to nil
from 5.52
› Medical Treatment Injury Frequency Rate (MTIFR) reducing
substantially from 3.31 to 2.62.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 39
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 40
RAVENSWOOD MINE – AUSTRALIA
BIBIANI - GHANA
During the review period the drivers of continual improvement in
safety and training included:
During the review period a major focus of the occupational health
and safety program was directed towards:
›
›
›
the review and updating of standards and procedures
inspections and integrity checking of equipment
emergency response training
› health surveillance of employees and nearby communities.
During the reporting period the site remained in care and
maintenance whilst development drilling for resource definition
occurred in the underground mine. Relatively few staff were on
site. The “total recordable injury frequency rate” at Bibiani rose from
0.00 to 2.89. Total recordable injuries in the reporting period also
contributed to changes within the following injury frequency rates:
›
Lost Time Injury Frequency Rate (LTIFR) was maintained at nil
throughout the year.
› Restricted Work Injury Frequency Rate (RWIFR) was maintained
at nil.
› Medical Treatment Injury Frequency Rate (MTIFR) increasing
slightly from 0.00 to 2.89.
During the reporting period only three minor or medically treated
injuries occurred.
›
›
›
›
›
completion of the fatigue management processes to align with
the new guideline QGN 16 Fatigue Risk Management
completion of the behavioural culture change project
development of formal-risk assessments with a cross-section
of the workforce for underground mining by “sublevel shrinkage”,
traffic management as well as procedures related to emergency
response and electrical work
review and update of the site risk register in a generalised or
“broad brush” assessment
refining a safety survey for both employees and contractors
followed by the completion of an action plan for improvement
› updating the training for change management to ensure the
work of contractors is included in risk matrices
› modification and updating of the controls for site access by shut
down contractors to ensure standards are met for work-place
competencies and fitness for work
› use of customised checklists across site to audit the work of
Ravenswood employees and contractors.
The priority actions for improvement of the safety culture at
Ravenswood focused on a “sense of ownership” at the shop-
floor level and greater involvement of the site-safety committee.
Leadership interactions continued during the year with a focus on
task observations and site audits.
Ravenswood hosted its second Emergency Response Challenge. It
was well supported by local mining companies which sent emergency
response teams to test their skills against other teams from the region.
Overall the “total recordable injury frequency rate” at Ravenswood
improved from 28.59 to 19.62. Total recordable injuries in the
reporting period also contributed to changes within the following
injury frequency rates:
›
Lost Time Injury Frequency Rate (LTIFR) rose slightly from 1.43
to 1.51.
› Restricted Work Injury Frequency Rate (RWIFR) decreased from
15.73 to 12.07.
› Medical Treatment Injury Frequency Rate (MTIFR) reducing
substantially from 11.44 to 6.04.
Restricted work injuries continued to be the main driver of site
statistics. During the reporting period the occurrence of sprain
and strain injuries continued to be prominent in the relatively small
workforce operating an underground mine. Prompt reporting
and management of these injuries, helped improve the safety
performance. Initiatives aimed at ensuring that managers and leaders
spend sufficient time in the field or workplace it is expected that
further injury prevention will occur. The reporting of planned task
observations and workplace auditing will be part of this initiative.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 41
FINANCIAL
REPORT ›
2015
CONTENTS
42 Directors’ Report
60 Auditor’s Independence Declaration
61
Consolidated Statement of Comprehensive Income
63 Consolidated Statement of Financial Position
64 Consolidated Statement of Changes in Equity
66 Consolidated Cash Flow Statement
67 Notes to the Financial Statements
125 Directors’ Declaration
126
Independent Auditor’s Report to the Members
128 Shareholder Information
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 42
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
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 2015.
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 the entire period unless
otherwise stated.
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 Huston is a member of the Audit Committee and Chairman of the
Remuneration and Nomination Committee.
JOHN PAUL WELBORN (MANAGING DIRECTOR AND CHIEF
EXECUTIVE OFFICER)
B.COMM., FCA, FAIM, MAICD, MAusIMM, SAFin, JP
Mr John Welborn was appointed to the board on 27 February 2015
as a non-executive director and became the Managing Director
and Chief Executive Officer on 1 July 2015. Mr Welborn is a
Chartered Accountant with a Bachelor of Commerce degree from
the University of Western Australia and is a Fellow of the Institute
of Chartered Accountants in Australia, a Fellow of the Australian
Institute of Management and is a member of the Australian Institute
of Mining and Metallurgy, the Financial Services Institute of
Australasia, and the Australian Institute of Company Directors.
Mr Welborn has extensive experience in the resources sector as
a senior executive and in corporate management, finance and
investment banking. He was most recently the Managing Director
of Equatorial Resources Limited and was previously the Head
of Specialised Lending in Western Australia for Investec Bank
(Australia) Ltd. Mr Welborn was a non-executive director of Noble
Mineral Resources Limited (March 2013 to December 2013) and
is currently a non-executive director of Equatorial Resources
Limited (since 2010), Prairie Mining Limited (since 2009), and Orbital
Corporation Limited (since 2014).
Mr Welborn is a member of the Environment and Community
Development Committee, the Safety, Security and Occupational
Health Committee and the Financial Risk Management Committee.
PETER ROSS SULLIVAN (MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER UNTIL 30 JUNE 2015, AND
NON-EXECUTIVE DIRECTOR THEREAFTER)
B.E., MBA
Mr Peter Sullivan was appointed Managing Director and Chief
Executive Officer of the Company in 2001 and retired as Chief
Executive Officer on 30 June 2015. Mr Sullivan remains on the
Board as a Non-Executive Director. 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 Pan Pacific
Petroleum (appointed 2014). Mr Sullivan was a director of Kumarina
Resources Limited (appointed 2011) until the company de-listed
from the ASX following a Scheme of Arrangement with Zeta
Resources Limited.
Mr Sullivan is a member of the Financial Risk Management
Committee.
MARTHINUS (MARTIN) JOHAN BOTHA
(NON-EXECUTIVE DIRECTOR)
BScEng
Mr Martin Botha is a non-executive director and was appointed
to the board on 21 February 2014. Mr Botha is an Engineering
Surveyor by training who has 30 years experience in banking, with
24 years spent in leadership roles building Standard Bank Plc’s
international operations. Mr Botha’s primary responsibilities at
Standard Bank included establishing and leading the development of
the core global natural resources trading and financing franchises,
as well as various geographic strategies, including those in the
Russian Commonwealth of Independent States, Turkey and the
Middle East. Mr Botha is currently non-executive Chairman of
Sberbank CIB (UK) Ltd, a securities broker regulated by the UK
Financial Services Authority and is a non-executive director of Zeta
Resources Limited (an ASX listed company). Mr Botha graduated
with first class honours from the University of Cape Town and is
currently based in London.
Mr Botha 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 Fellow 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 of Tennis West.
Mr Price is the Chairman of the Audit Committee and a member of
the Remuneration and Nomination Committee.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 43
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
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 Chief
Financial Officer 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.
› Net operating cash inflows during the year were A$62m (2014:
$105m), with the prior year including Golden Pride operations
which ceased production in December 2013 and formally
handed back to the government on 12 December 2014.
› Net investing cash outflows of A$73m (2014: A$97m) included
A$60m of development expenditure, primarily for the Syama
Oxide Circuit and Syama Grid Connection Project, A$33m of
evaluation expenditure, primarily for the Syama Underground
Pre-Feasibility Study and the Bibiani Scoping Study, and
proceeds of A$23m from the sale of available for sale gold
equity investments.
› Net financing outflows of A$2m (2014: $13m) included A$17m
of debt repayments and A$14m of proceeds from new finance
facilities.
INTERESTS IN THE SHARES AND OPTIONS OF RESOLUTE
MINING LIMITED AND RELATED BODIES CORPORATE
DIVIDENDS
As at the date of this report, the interests of the directors in shares,
options, convertible notes and performance rights of Resolute
Mining Limited and related bodies corporate were:
No dividend was declared for the year ended 30 June 2015 (2014: nil).
REVIEW OF OPERATIONS
FULLY PAID
ORDINARY
SHARES
OPTIONS OVER
ORDINARY
SHARES
PERFORMANCE
RIGHTS
PRODUCTION
P. Huston
J. Welborn
M. Botha
H. Price
P. Sullivan
428,182
350,000
-
194,745
-
-
-
-
-
-
-
-
3,1 43,1 42
2,000,000
1,168,897
4,116,069
2,000,000
1,168,897
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, with the exception of the Golden Pride
project in Tanzania which ceased operations and was relinquished
during the year.
FINANCIAL POSITION AND PERFORMANCE
› Revenue from gold sales (including the discontinued operation)
down 12% to $462m (2014: $527m) due to the cessation of
operations at Golden Pride since the comparative period.
› Average cash price received on 313,100 ounces of gold sold
(2014: 371,976 ounces) was $1,468/oz (2014: $1,413/oz).
› Average cash cost per ounce of gold produced¹ was $845/oz
(2014: $922/oz).
› Annual impairment charges of A$572m (of which approximately
60% were included in the December 2014 Half Year Report)
were primarily related to the lower USD gold price environment.
›
Total gold production for the year was 328,684 ounces (2014:
342,774oz) at an average cash cost1 of A$845/oz (2014:
A$922/oz). The annual production summary is as follows:
TOTAL
PRODUCTION
(GOLD OZ)
CASH
COST 1
A$/OZ
CASH
COST 1
US$/OZ
ALL-IN-
SUSTAINING
COST
A$/OZ 2
Syama
2015
2014
Ravenswood
2015
2014
Golden Pride
2015
2014
Group
2015
2014
224,91 1
165,493
800
1,006
103,773
139,291
-
37,990
328,684
342,774
940
832
-
887
845
922
663
922
778
764
-
814
707
847
1,029
1,31 1
1,180
1,029
-
1,030
1,094
1,1 77
› Commissioning of the new parallel Oxide Circuit at Syama
commenced in November 2014, ahead of schedule and within
budget. Commissioning was relatively trouble free with no major
issues. This resulted in gold produced from the new oxide circuit
contributing 45,916oz to Syama’s FY2015 production.
› Mining of oxide ore commenced at the Syama A21 satellite pit to
provide feed for the new oxide plant.
› Construction of the oxide Tailings Storage Facility at Syama was
completed, as well as the raising of the de-slime storage facility.
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 – All in Sustaining Costs (“AISC”) 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 and AISC 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
44
DIRECTORS’ REPORT
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
FOR THE YEAR ENDED 30 JUNE 2015
› As announced on 25 November 2014, the Company decided to
AUSTRALIA
defer mining of the Stage 2 cutback at the Syama sulphide open
pit and initiated a review of the mine plan, ultimately resulting in
an underground pre-feasibility study (see below). The deferral of
Stage 2 delivered cash flow benefits by reducing the short term
requirement to mine an extensive volume of pre-strip waste to
gain access to deeper ore.
› Resolute successfully completed Stage 1 open pit mining at
Syama during the June 2015 quarter, following which initial
earthworks commenced in the Syama pit Stage 1 to prepare
for access to the proposed underground portal location at the
1200mRL. This involved some minor backfill of material and wall
scaling in this area in preparation for preliminary works required
prior to underground commencement.
› Golden Pride Project Closure Handover: As agreed with the
Government of Tanzania, the formal handover of the Golden
Pride site and all remaining infrastructure to the Madini Institute
to set up a mining institute of learning was completed at
a ceremony on 12 December 2014. This ended Resolute’s
presence onsite at Golden Pride after 15 years and production of
over 2.2 million ounces of gold.
DEVELOPMENT
MALI
› At Ravenswood the additional study components of the Buck
Reef West and Nolans East projects were separated to reflect
potential timing differences between the two projects. The
Nolans East pit is located next to the Sarsfield open pit and is
adjacent to the process plant and therefore provides a quick
entry to ore production compared to the Buck Reef West pit.
The current work program for the two projects is dominated by
sub-studies designed to improve the quality of the different
project inputs and to identify capital and operating cost
reductions which will enhance the project outcomes and
economics. Where required, external consultants have been
engaged to provide expert advice in specialised areas.
EXPLORATION
MALI
›
In Mali, encouraging intersections from a first pass 14 hole RC
drill program undertaken in the Finkolo North area, following a
strong air core defined gold anomaly.
› Commencement of an incorporated joint venture with Legend
Gold on the Pitiangoma East research permit. This permit allows
Resolute access to the only section of the Syama Greenstone
Belt not previously controlled by the Company.
› An updated Underground Pre-Feasibility Study at Syama
COTE D’IVOIRE
was completed and confirmed the transition to a large scale
Sub Level Cave underground operation that will deliver strong
economics and cash margins until at least 2028. Mineralisation
remains robust and open, and further diamond drilling is planned
to extend and upgrade the deposit.
› Government approval of the Environmental and Social Impact
Study was received for the Syama Grid Connection Project
in Mali.
GHANA
› An Underground Scoping Study was completed for the Bibiani
gold project with positive results resulting in a decision to
commence and complete a Feasibility Study during FY2016.
A new resource has been estimated following the completion
of the 26,665m drilling program resulting in a 60% increase
in Indicated ounces and a 12% increase in overall ounces
compared to the prior 2012 Coffey Model. The Underground
Scoping Study completed by Snowden Mining Consultants has
delivered a mining inventory of 4.3Mt @ 4.2g/t Au at a 3.25g/t
Au cut off for 574,000 ounces adjacent to existing underground
infrastructure. This inventory does not include 600,000 ounces
@ 4.1g/t Au of Inferred Resources that will be drill tested and
expected to be upgraded for inclusion in the Feasibility Study.
› Exploration commenced on the highly prospective Takikro
research permit, with detailed geological mapping completed.
› A farm in arrangement was finalised with ASX listed Taruga Gold
to earn up to a 75% interest in three tenements in Cote d’Ivoire.
› Exploration commenced on the newly acquired Joint Venture
research permits of Tiebissou and Nielle. Tiebissou covers a
15km strike length of the highly prospective Birimian greenstone
belt which hosts Newcrest’s Bonikro and Endeavour Mining’s
Agbaou gold deposits.
AUSTRALIA
›
In Queensland, a pole-dipole 3D IP geophysical survey was
completed over the Mt Glenroy breccia pipe and surrounding
area. This survey identified a very strong chargeability high
coincident with a resistivity low. Drilling of this well-defined IP/
multi-element target will commence in the September 2015
quarter.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
45
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
CORPORATE
› Successful completion of the A$15m (less costs) Convertible
Note raising via the issue of 15m Notes at an issue price of
A$1.00 each on 15 December 2014. The Notes are unsecured,
have a coupon rate of 10% p.a. payable quarterly and a
3 year term.
› Cash and bullion balance of A$54m as at 30 June 2015
continues to build ahead of scheduled repayment of US$50m
Cash Advance Facility in 2016.
›
Lower gold price environment has been the main trigger of a
A$572m non-cash impairment charge.
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.
SIGNIFICANT EVENTS AFTER REPORTING DATE
On 1 July 2015, 5,588,771 performance rights were granted and
issued, vesting on 30 June 2018 subject to performance hurdles
being met and with a strike price of $nil. A further 5,838,967
performance rights were issued on 28 August 2015, vesting on 30
June 2017 and subject to a service period hurdle and with a strike
price of $nil.
On 28 August 2015, 393,771 fully paid ordinary shares were issued
to Level 1 employees relating to their performance for the 3 years
ended 30 June 2015 and 1,193,207 performance rights vesting on
30 June 2015 lapsed. As at the date of this report 641,582,994
shares were on issue.
Group cash costs for FY2016 are forecast to be A$990/oz and
Group All-In-Sustaining costs are forecast to be identical to the
original guidance for FY2015 of A$1,280/oz. The expected unit
costs for FY2016 are higher than the FY2015 unit costs due to the
transition to a large scale Sub Level Cave underground operation in
the revised life of mine plan for Syama, as explained above, and the
impact of the lower USD/AUD exchange rate.
The revised life of mine plan for Syama, in addition to ongoing
operational efficiencies in both the Sulphide and Oxide circuits,
provides the opportunity for the Company to liquidate the
excess inventory of gold in circuit maintained during FY2015. It is
expected that during FY2016 gold in circuit will be drawn down by
approximately 25,000 ounces which will result in FY2016 gold sales
exceeding forecast gold production by a similar margin.
The group’s committed capital expenditure budgeted for FY2016
includes sustaining capital expenditure and the Ravenswood decline
development costs amounting to A$18m.
Discretionary capital expenditure for FY2016 relating to the
commencement of the Syama underground infrastructure, portal
and decline development, the Syama grid connection, feasibility
studies, exploration and other development expenditure totals
approximately A$97m.
The timing and quantum of this discretionary expenditure will
be determined by the prevailing gold price, operational cashflow
generation and the approach adopted relating to the repayment or
refinancing of existing borrowings.
Resolute’s focus for the year ahead is to take advantage of the
Company’s operating performance at Syama and Ravenswood and
deliver on growth opportunities.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
ENVIRONMENTAL REGULATION PERFORMANCE
Group gold production for FY2016 is anticipated to be at similar
levels to FY2015 and is forecast to be 315,000 ounces.
Production from Syama will be generated from both the Sulphide
processing circuit and the new parallel Oxide processing plant which
was commissioned in January 2015. As previously announced
(see ASX announcements dated 20 March 2015 and 9 June 2015)
Resolute intends to transition Syama to an underground operation
which will more efficiently extract Stage 2 mineralisation and extend
the project mine life to beyond 2028. As a result the Sulphide mill
feed is currently being sourced from stockpiles which consist of
more than 6.2 million tonnes of ore at an average grade of 2 grams
per tonne. Feed for the Oxide circuit will continue to be sourced from
open pit mining at A21 and the other defined satellite deposits.
Production levels at the Ravenswood gold mine in Australia are
expected to continue to be consistent with the life of mine plan with
minor improvements due to higher mill throughput following the
completion of the secondary crusher installation in July 2015.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 46
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
REMUNERATION REPORT
The following information has been audited.
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.
a) Key management personnel
i)
Directors
Name
Position held during the financial year
P. Huston
P. Sullivan
M. Botha
H. Price
J. Welborn
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 27 February
2015)
ii)
Executives
Name
Position held during the financial year
P. Beilby
G. Fitzgerald
P. Venn
Chief Operating Officer
Chief Financial Officer and Company Secretary
Chief Business Development Officer
b) Compensation of key management personnel
This report outlines the remuneration arrangements in place for
directors and executives of RML.
RML REMUNERATION POLICY
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
approximately the third quartile; and,
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.
REMUNERATION STRUCTURE
In accordance with best practice governance, the structure of non-
executive director and senior executive remuneration is separate
and distinct.
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.
CHIEF EXECUTIVE OFFICER AND SENIOR EXECUTIVE
REMUNERATION
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 47
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
STRUCTURE
VARIABLE REMUNERATION – SHORT TERM INCENTIVE (“STI”)
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 has been used in a prior year 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 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:
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.
OBJECTIVE
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.
For the executives, a below “threshold” performance delivers a nil
STI, a “threshold” performance delivers a STI equal to 25% of fixed
remuneration, a “target” performance delivers a STI equal to 50% of
fixed remuneration, and a “stretch” performance delivers a STI equal
to 65% of fixed remuneration. Pro-rata vesting applies on a straight
line basis between “threshold” and “target” and from “target” to
“stretch” Performance.
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.
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 Company STI measures comprise:
›
Improved safety performance – measured by:
›
›
a lag indicator in the form of a specified reduction in the Total
Recordable Injury Frequency Rate in comparison to prior
years; and
specified lead indicators designed to be proactive and
influence future events with measures being put in place to
prevent incidents and injury. As part of this process, a Safety
Action Performance list is prepared each year outlining a set
of actions and deliverables.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 48
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
›
The achievement of defined targets relative to budget relating to:
›
›
›
operating cash flow;
gold production; and,
cost per tonne milled.
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.
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 provided 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 is 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.
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 grant date.
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:
›
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.
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
› Beadell Resources Ltd
› Endeavour Mining Corporation
› Evolution Mining Ltd
› Kingsgate Consolidated Ltd
› Medusa Mining Ltd
› Northern Star
Resources Limited
› OceanaGold Corporation
› Perseus Mining Ltd
› Ramelius Resources Ltd
› Regis Resources Ltd
› Saracen Mining Ltd
› Silver Lake Resources Ltd
› St Barbara Ltd
Teranga Gold
›
Corporation
Troy Resources Limited
›
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:
REL ATIVE 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
RESOLUTE MINING LIMITED ANNUAL REPORT 2015
49
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.
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 1% growth in R&R, an
additional 1.67% 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 50
Details of remuneration provided to key management personnel are as follows:
15
DIRECTORS
P. Huston
P. Sullivan
M. Botha
H. Price
J. Welborn (iii)
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Huston
P. Sullivan
M. Botha (v)
T. Ford (vi)
H. Price
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG TERM
BENEFITS
SHARE BASED
PAYMENTS
BASE
REMUNERATION
NON MONETARY
BENEFITS (i)
SHORT TERM
INCENTIVE (ii)
ANNUAL LEAVE
EXPENSE
SUPERANNUATION
LONG SERVICE LEAVE
EXPENSE
OPTIONS
PERFORMANCE
RIGHTS
PERFORMANCE REL ATED
SHORT TERM
INCENTIVE, OPTIONS
AND PERFORMANCE
RIGHTS
OPTIONS AND
PERFORMANCE
RIGHTS
$
1 7 5,000
545,458
90,000
55,000
27,739
372,665
307,797
286,175
$
-
$
-
$
-
4,918
373,960
71,649
35,000
24,804
61 7,899
-
-
-
-
4,723
4,823
-
-
-
238,699
208,215
187,564
-
-
-
34,180
29,381
26,421
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG TERM BENEFITS
SHARE BASED
PAYMENTS
BASE
REMUNERATION
NON MONETARY
BENEFITS (i)
SHORT TERM
INCENTIVE (iv)
ANNUAL LEAVE
EXPENSE
SUPERANNUATION
LONG SERVICE LEAVE
EXPENSE
OPTIONS
PERFORMANCE
RIGHTS
PERFORMANCE REL ATED
SHORT TERM
INCENTIVE, OPTIONS
AND PERFORMANCE
RIGHTS
OPTIONS AND
PERFORMANCE
RIGHTS
$
1 7 5,000
558,603
30,000
55,046
55,000
365,269
31 7,152
283,1 1 7
$
-
$
-
$
-
4,918
403,418
72,453
25,000
24,672
2,450
442,250
-
-
-
-
4,723
4,834
-
-
-
257,191
223,276
198,847
-
-
-
35,084
29,984
27,763
$
-
-
$
-
-
35,000
2,635
35,000
34,999
35,000
5,092
35,000
25,000
25,000
25,000
1 1,015
9,499
8,584
258,722
226,698
200,494
$
-
-
-
-
$
-
-
-
-
64
64
64
$
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
13,210
1 1,847
1 1,744
8,311
8,311
8,311
185,220
162,226
142,776
%
59
-
-
-
-
52
53
52
%
55
-
-
-
-
51
50
50
%
37
-
-
-
-
27
28
27
%
29
-
-
-
-
22
22
22
(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 for the year ended 30 June 2015 were paid in cash on 15 September 2015.
(iii) Mr Welborn was appointed as a non-executive director on 27 February 2015.
(iv) 90% of the Short Term Incentives for the year ended 30 June 2014 were paid in cash on 27 June 2014. The balance (10%) of the Short Term Incentives was paid in
cash on 15 September 2014.
(v) Mr Botha was appointed as a non-executive director on 21 February 2014.
(vi) Mr Ford resigned on 21 February 2014.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015
51
Details of remuneration provided to key management personnel are as follows:
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG TERM
BENEFITS
SHARE BASED
PAYMENTS
BASE
REMUNERATION
NON MONETARY
BENEFITS (i)
SHORT TERM
INCENTIVE (ii)
ANNUAL LEAVE
EXPENSE
SUPERANNUATION
LONG SERVICE LEAVE
EXPENSE
OPTIONS
PERFORMANCE
RIGHTS
PERFORMANCE REL ATED
SHORT TERM
INCENTIVE, OPTIONS
AND PERFORMANCE
RIGHTS
OPTIONS AND
PERFORMANCE
RIGHTS
$
-
35,000
-
35,000
2,635
35,000
34,999
35,000
$
-
24,804
-
-
-
1 1,015
9,499
8,584
$
-
-
-
-
-
64
64
64
$
-
61 7,899
-
-
-
258,722
226,698
200,494
%
-
59
-
-
-
52
53
52
%
-
37
-
-
-
27
28
27
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG TERM BENEFITS
SHARE BASED
PAYMENTS
BASE
REMUNERATION
NON MONETARY
BENEFITS (i)
SHORT TERM
INCENTIVE (iv)
ANNUAL LEAVE
EXPENSE
SUPERANNUATION
LONG SERVICE LEAVE
EXPENSE
OPTIONS
PERFORMANCE
RIGHTS
$
-
25,000
-
5,092
35,000
25,000
25,000
25,000
$
-
$
-
$
-
24,672
2,450
442,250
-
-
-
13,210
1 1,847
1 1,744
-
-
-
8,311
8,311
8,311
-
-
-
185,220
162,226
142,776
PERFORMANCE REL ATED
SHORT TERM
INCENTIVE, OPTIONS
AND PERFORMANCE
RIGHTS
OPTIONS AND
PERFORMANCE
RIGHTS
%
-
55
-
-
-
51
50
50
%
-
29
-
-
-
22
22
22
15
DIRECTORS
P. Huston
P. Sullivan
M. Botha
H. Price
J. Welborn (iii)
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Huston
P. Sullivan
M. Botha (v)
T. Ford (vi)
H. Price
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
1 7 5,000
545,458
90,000
55,000
27,739
372,665
307,797
286,175
$
$
1 7 5,000
558,603
30,000
55,046
55,000
365,269
31 7,152
283,1 1 7
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
4,918
373,960
71,649
4,723
4,823
238,699
208,215
187,564
34,180
29,381
26,421
4,918
403,418
72,453
4,723
4,834
257,191
223,276
198,847
35,084
29,984
27,763
$
-
-
-
-
$
-
-
-
-
(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 for the year ended 30 June 2015 were paid in cash on 15 September 2015.
(iii) Mr Welborn was appointed as a non-executive director on 27 February 2015.
(iv) 90% of the Short Term Incentives for the year ended 30 June 2014 were paid in cash on 27 June 2014. The balance (10%) of the Short Term Incentives was paid in
cash on 15 September 2014.
(v) Mr Botha was appointed as a non-executive director on 21 February 2014.
(vi) Mr Ford resigned on 21 February 2014.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015
52
Details of option holdings of key management personnel are as follows:
15
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn (ii)
OPTIONS T YPE
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING
THE YEAR AS
COMPENSATION
EXERCISED DURING
THE YEAR
L APSED DURING THE
ACQUIRED DURING
BAL ANCE AT THE END
VESTED AND EXERCISABLE AT THE END
YEAR (i)
THE YEAR
OF THE YEAR
OF THE YEAR
VALUE OF OPTIONS
EXERCISED DURING
THE YEAR
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
250,000
250,000
250,000
-
-
-
-
-
-
-
-
OPTIONS T YPE
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING
THE YEAR AS
COMPENSATION
EXERCISED DURING
THE YEAR
L APSED DURING THE
ACQUIRED DURING
BAL ANCE AT THE END
VESTED AND EXERCISABLE AT THE END
YEAR (i)
THE YEAR
OF THE YEAR
OF THE YEAR
VALUE OF OPTIONS
EXERCISED DURING
THE YEAR
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
250,000
250,000
451,000
-
-
-
-
-
-
-
(150,000)
(51,000)
18,000
(90,000)
(90,000)
-
-
-
-
-
2,000,000
2,000,000
-
-
-
-
-
-
-
-
250,000
160,000
160,000
250,000
250,000
250,000
NO.
250,000
160,000
160,000
NO.
230,000
230,000
230,000
2,000,000
2,000,000
%
100
100
100
100
%
100
92
92
92
$
-
-
-
-
$
-
-
-
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 53
Details of option holdings of key management personnel are as follows:
OPTIONS T YPE
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING
THE YEAR AS
COMPENSATION
EXERCISED DURING
THE YEAR
L APSED DURING THE
YEAR (i)
ACQUIRED DURING
THE YEAR
BAL ANCE AT THE END
OF THE YEAR
VESTED AND EXERCISABLE AT THE END
OF THE YEAR
VALUE OF OPTIONS
EXERCISED DURING
THE YEAR
NO.
-
-
(90,000)
(90,000)
-
-
-
-
2,000,000
2,000,000
250,000
160,000
160,000
250,000
160,000
160,000
%
100
100
100
100
$
-
-
-
-
OPTIONS T YPE
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING
THE YEAR AS
COMPENSATION
EXERCISED DURING
THE YEAR
L APSED DURING THE
YEAR (i)
ACQUIRED DURING
THE YEAR
BAL ANCE AT THE END
OF THE YEAR
VESTED AND EXERCISABLE AT THE END
OF THE YEAR
VALUE OF OPTIONS
EXERCISED DURING
THE YEAR
(150,000)
(51,000)
-
-
-
NO.
-
-
-
-
2,000,000
2,000,000
250,000
250,000
250,000
230,000
230,000
230,000
%
100
92
92
92
$
-
-
-
18,000
15
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn (ii)
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
250,000
250,000
250,000
Unlisted
2,000,000
Unlisted
Unlisted
Unlisted
250,000
250,000
451,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 54
Details of performance rights holdings of key management personnel are as follows:
15
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING THE YEAR AS COMPENSATION
L APSED DURING THE
BAL ANCE AT THE END
YEAR (iii)
OF THE YEAR
NUMBER
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT GRANT
DATE
TOTAL FAIR VALUE
OF PERFORMANCE
RIGHTS AT GRANT
DATE
VESTING PERIOD
(YEARS)
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE PRICE
OF PERFORMANCE
RIGHTS GRANTED
DURING THE YEAR
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
1,772,330
1,053,891
1 Jul 2014
741,968
650,327
57 7,162
441,009
386,833
346,307
1 Jul 2014
1 Jul 2014
1 Jul 2014
$
0.50
0.50
0.50
0.50
$
526,946
220,505
193,41 7
1 7 3,154
30 Jun 2017
1 Jul 2019
(1,111,079)
1,7 15,1 42
30 Jun 2017
30 Jun 2017
30 Jun 2017
1 Jul 2019
1 Jul 2019
1 Jul 2019
-
-
-
1,182,977
1,037,160
923,469
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING THE YEAR AS COMPENSATION
BAL ANCE AT THE END
OF THE YEAR
NUMBER
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT GRANT
DATE
TOTAL FAIR VALUE
OF PERFORMANCE
RIGHTS AT GRANT
DATE
VESTING PERIOD
(YEARS)
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE PRICE
OF PERFORMANCE
RIGHTS GRANTED
DURING THE YEAR
546,875
1,225,455
1 Jul 2013
229,167
200,521
1 74,479
51 2,801
449,806
402,683
1 Jul 2013
1 Jul 2013
1 Jul 2013
$
0.43
0.43
0.43
0.43
$
526,946
220,504
193,41 7
1 7 3,154
30 Jun 2016
1 Jul 2018
30 Jun 2016
30 Jun 2016
30 Jun 2016
1 Jul 2018
1 Jul 2018
1 Jul 2018
1,772,330
741,968
650,327
577,1 62
$
$nil
$nil
$nil
$nil
$
$nil
$nil
$nil
$nil
3
3
3
3
3
3
3
3
(i) The value of options at the date they lapsed was $nil.
(ii)
(iii)
On 17 January 2014, 150,000 unlisted options were exercised at a price of $0.42 per option. 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.
Performance rights lapsed during the year were a pro-rata portion of Mr Sullivan’s performance rights that had not accrued at the date he ceased to be the Chief
Executive Officer. Mr Sullivan’s remaining performance rights will be performance tested at the normal vesting dates.
(iv) 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 30(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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 55
NUMBER
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT GRANT
TOTAL FAIR VALUE
OF PERFORMANCE
RIGHTS AT GRANT
VESTING PERIOD
(YEARS)
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE PRICE
OF PERFORMANCE
RIGHTS GRANTED
DURING THE YEAR
GRANTED DURING THE YEAR AS COMPENSATION
L APSED DURING THE
YEAR (iii)
BAL ANCE AT THE END
OF THE YEAR
3
3
3
3
30 Jun 2017
1 Jul 2019
30 Jun 2017
30 Jun 2017
30 Jun 2017
1 Jul 2019
1 Jul 2019
1 Jul 2019
$
$nil
$nil
$nil
$nil
(1,111,079)
1,7 15,1 42
-
-
-
1,182,977
1,037,160
923,469
BAL ANCE AT THE
START OF THE YEAR
GRANTED DURING THE YEAR AS COMPENSATION
BAL ANCE AT THE END
OF THE YEAR
NUMBER
GRANT DATE
FAIR VALUE OF
PERFORMANCE
RIGHTS AT GRANT
TOTAL FAIR VALUE
OF PERFORMANCE
RIGHTS AT GRANT
VESTING PERIOD
(YEARS)
VESTING DATE
EXPIRY OF
PERFORMANCE
RIGHTS
EXERCISE PRICE
OF PERFORMANCE
RIGHTS GRANTED
DURING THE YEAR
3
3
3
3
30 Jun 2016
1 Jul 2018
30 Jun 2016
30 Jun 2016
30 Jun 2016
1 Jul 2018
1 Jul 2018
1 Jul 2018
$
$nil
$nil
$nil
$nil
1,772,330
741,968
650,327
577,1 62
Details of performance rights holdings of key management personnel are as follows:
15
BAL ANCE AT THE
START OF THE YEAR
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Sullivan
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
1,772,330
1,053,891
1 Jul 2014
741,968
650,327
57 7,162
441,009
386,833
346,307
1 Jul 2014
1 Jul 2014
1 Jul 2014
546,875
1,225,455
1 Jul 2013
229,167
200,521
1 74,479
51 2,801
449,806
402,683
1 Jul 2013
1 Jul 2013
1 Jul 2013
DATE
$
0.50
0.50
0.50
0.50
DATE
$
0.43
0.43
0.43
0.43
DATE
$
526,946
220,505
193,41 7
1 7 3,154
DATE
$
526,946
220,504
193,41 7
1 7 3,154
(i) The value of options at the date they lapsed was $nil.
(ii)
On 17 January 2014, 150,000 unlisted options were exercised at a price of $0.42 per option. 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.
(iii)
Performance rights lapsed during the year were a pro-rata portion of Mr Sullivan’s performance rights that had not accrued at the date he ceased to be the Chief
Executive Officer. Mr Sullivan’s remaining performance rights will be performance tested at the normal vesting dates.
(iv) 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 30(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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 56
Details of share holdings of key management personnel are as follows:
15
DIRECTORS
P. Huston
P. Sullivan
M. Botha
H. Price
J. Welborn (i)
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn
14
DIRECTORS
P. Huston
P. Sullivan
M. Botha
T. Ford (ii)
H. Price
OFFICERS
P. Beilby
G. Fitzgerald
P. Venn (iii)
BAL ANCE AT
THE START OF
THE YEAR
PURCHASED ON
MARKET DURING
THE YEAR
BAL ANCE AT THE
END OF THE YEAR
428,1 82
3,007,448
-
194,745
-
-
-
-
-
350,000
20,000
-
85,000
-
-
-
428,182
3,007,448
-
194,745
350,000
20,000
-
85,000
BAL ANCE AT
THE START OF
THE YEAR
RECEIVED DURING
THE YEAR ON
THE EXERCISE OF
OPTIONS
OTHER CHANGES
DURING THE YEAR
BAL ANCE AT THE
END OF THE YEAR
428,182
3,007,448
-
464,648
194,745
20,000
-
5,000
-
-
-
-
-
-
-
-
-
-
(464,648)
-
-
-
150,000
(70,000)
428,182
3,007,448
-
-
194,745
20,000
-
85,000
(i) Mr Welborn acquired 350,000 fully paid ordinary shares on 27 February 2015.
(ii) Mr Ford ceased to be a director on 21 February 2014.
(iii) Shares were acquired from the exercise of options, and were sold at the prevailing market price. No amounts remain unpaid as at 30 June 2014.
Details of convertible note holdings of key management personnel are as follows:
15
DIRECTORS
J. Welborn (i)
OFFICERS
P. Beilby
G. Fitzgerald (ii)
P. Venn
BAL ANCE AT
THE START OF
THE YEAR
SUBSCRIPTIONS
SOLD DURING
THE YEAR
BAL ANCE AT THE
END OF THE YEAR
-
-
-
-
200,000
500
500
500
-
-
(500)
-
200,000
500
-
500
(i) Mr Welborn subscribed for 200,000 convertible notes at $1.00 per note, prior to becoming a director of the Company.
(ii) Mr Fitzgerald sold 500 convertible notes at $1.00 per note in January 2015. These convertible notes were acquired in December 2014 at $1.00 per note.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 57
EXECUTIVE EMPLOYMENT CONTRACTS
The Managing Director and CEO, Mr Welborn, is employed under contract. His current employment contract commenced on 27 February 2015
and was revised effective 1 July 2015 (upon his appointment to Managing Director and CEO). There is no termination date. Under the terms of
the contract:
› Mr Welborn 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 Welborn’s remuneration).
› Mr Welborn accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.
Mr Beilby (Chief Operating Officer) 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.
Mr Fitzgerald (Chief Financial Officer and Company Secretary) 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 (Chief Business Development Officer) 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.
LOANS TO KEY MANAGEMENT PERSONNEL
There were no loans to key management personnel during the years ended 30 June 2015 and 30 June 2014.
OTHER TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL
During the year ended 30 June 2015, 500 convertible notes were issued at $1.00 per note to each of Mr Beilby, Mr Fitzgerald and Mr
Venn. These convertible notes were purchased as part of the public offering made by the Company during the year. Apart from the above
transaction, there were no other transactions and balances with key management personnel during the year ended 30 June 2015.
During the year ended 30 June 2014, the Group compulsorily acquired all unowned minority held convertible notes in Noble Mineral Resources
Limited which had a face value of $0.12 per note, a coupon rate of 8% and a term of 3 years. Included in the acquisition was the purchase of
40,000 convertible notes from Hardrock Capital Pty Ltd - CGLW No. 2 Super Fund, whose beneficiary is Peter Sullivan, who is a director and
member of Resolute’s Key Management Personnel. The acquisition price of those notes was $0.129 per note, totalling $5,160. Apart from the
above transaction, there were no other transactions and balances with key management personnel during the year ended 30 June 2014.
COMPANY PERFORMANCE
The table below shows the performance of the Consolidated Entity over the last 5 years:
Net (loss)/profit after tax
$'000
Basic (loss)/earnings per share
cents/share
(568,760)
(78.39)
29,156
5.20
105,443
13.29
101,859
18.62
42,930
13.42
30 JUNE 2015
30 JUNE 2014
30 JUNE 2013
30 JUNE 2012
30 JUNE 2011
This is the end of the audited information.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 58
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
16/11/2010
5/01/2011
25/01/2011
30/06/2011
4/01/2012
15/11/2015
4/01/2016
24/01/2016
15/07/2016
26/01/2017
$1.43
$1.36
$1.43
$1.18
$1.85
90,000
2,000,000
756,333
130,000
647,400
3,623,733
Shares issued as a result of the exercise of options:
From 1 July 2015 up until the date of this report, no options have been exercised.
Shares issued as a result of the exercise of performance rights:
From 1 July 2015 up until the date of this report, 393,771 shares were issued following the testing of performance rights that vested on 30
June 2015. The remaining 1,193,207 performance rights vesting on 30 June 2015 lapsed.
Performance rights at the date of this report are as follows:
GRANT DATE
VESTING DATE
EXERCISE PRICE
NUMBER ON ISSUE
1/07/13
1/07/14
27/08/14
1/07/15
28/08/15
30/06/16
30/06/17
30/06/16
30/06/18
30/06/17
-
-
-
-
-
3,1 76,743
2,385,834
1,519,282
5,588,7 7 1
5,838,967
18,509,597
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.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement
agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst &
Young during or since the financial year.
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:
P. Huston
P. Sullivan
M. Botha
J. Welborn (appointed 27 February 2015)
H. Price
Number of meetings (or resolutions) held
FULL BOARD
AUDIT
ENVIRONMENT
& COMMUNIT Y
DEVELOPMENT
REMUNERATION
& NOMINATION
SAFET Y,
SECURIT Y &
OCCUPATIONAL
HEALTH
FINANCIAL RISK
MANAGEMENT
15
15
15
5
15
15
3
n/a
3
n/a
3
3
n/a
4
n/a
n/a
n/a
4
4
n/a
4
n/a
4
4
n/a
4
n/a
n/a
n/a
4
n/a
22
n/a
n/a
n/a
22
The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 59
ROUNDING
RML is a Company of the kind specified in Australian Securities and Investments Commission Class Order 98/100. 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 60 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 $89,800 for the provision of taxation planning advice and other review services in the
year ended 30 June 2015 (2014: $135,370).
CORPORATE GOVERNANCE STATEMENT
RML provides disclosure of the Company’s Corporate Governance Statement on the Company’s website at
http://www.resolute-ltd.com.au/about-us/corporate-governance.
Signed in accordance with a resolution of the directors.
J.P. Welborn
Director
Perth, Western Australia
21 September 2015
RESOLUTE MINING LIMITED ANNUAL REPORT 2015DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015 60
AUDITOR INDEPENDENCE DECLARATION
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation GB:ET:RESOLUTE:207 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au 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 2015, 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 Gavin Buckingham Partner 21 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation GB:ET:RESOLUTE:207 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au 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 2015, 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 Gavin Buckingham Partner 21 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation GB:ET:RESOLUTE:207 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au 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 2015, 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 Gavin Buckingham Partner 21 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation GB:ET:RESOLUTE:207 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au 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 2015, 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 Gavin Buckingham Partner 21 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation GB:ET:RESOLUTE:207 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au 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 2015, 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 Gavin Buckingham Partner 21 September 2015 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
NOTE
CONSOLIDATED
61
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
Administration and other corporate expenses
Treasury - realised losses
Asset impairment expenses, fair value movements, and unrealised treasury transactions
Share of associates' losses
(Loss)/profit before interest and tax
Finance costs
(Loss)/profit before tax from continuing operations
Tax (expense)/benefit
(Loss)/profit for the year from continuing operations
Discontinued Operation
(Loss)/profit after tax for the discontinued operation
(Loss)/profit for the year
(Loss)/profit attributable to:
Members of the parent
Non-controlling interest
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
2(a)
2(b)
2(c)
2(d)
2(e)
2(f)
2(g)
2(h)
2(i)
2(j)
3
4
15
$’000
459,1 47
(256,935)
202,212
(101,493)
(29,800)
70,919
26
12,109
(7,327)
(6,922)
(579)
(619,461)
-
(551,235)
(1 1,063)
(562,298)
(1,189)
(563,487)
(5,273)
(568,760)
(502,637)
(66,123)
(568,760)
14
$’000
426,753
(276,037)
150,716
(68,021)
(26,925)
55,770
38
1 4,534
(1 1,502)
(7,218)
(78)
(1 4,946)
(704)
35,894
(8,772)
27,122
73
27,195
1,961
29,156
33,313
(4,157)
29,156
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015 62
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Loss)/profit for the year (brought forward)
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Members of the parent
Changes in the fair value/realisation of available for sale financial assets, net of tax
Items that may not be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Non-controlling interest
Other comprehensive income for the year, net of tax
Total comprehensive (loss)/income for the year
Total comprehensive (loss)/income attributable to:
Members of the parent
Non-controlling interest
(Loss)/earnings per share for net (loss)/profit attributable to the ordinary equity holders of the
parent:
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
32
32
(Loss)/earnings per share for net (loss)/profit from continuing operations attributable to the
ordinary equity holders of the parent:
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
NOTE
CONSOLIDATED
15
$’000
14
$’000
(568,760)
29,156
41,361
(11,615)
(7,300)
11,488
1,739
31,485
(537,275)
(469,413)
(67,862)
(537,275)
166
4,354
33,510
37,501
(3,991)
33,510
CENTS
CENTS
(78.39)
(78.39)
(77.57)
(77.57)
5.20
5.1 5
4.89
4.85
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
NOTE
CONSOLIDATED
63
Current assets
Cash and cash equivalents
Receivables
Inventories
Available for sale financial assets
Other current assets
Total current assets
Non-current assets
Receivables
Other financial assets
Exploration and evaluation expenditure
Development expenditure
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Payables
Interest bearing liabilities
Unearned revenue
Provisions
Current tax liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Provisions
Unearned revenue
Total non-current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Contributed equity
Reserves
(Accumulated losses)/retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interest
Total equity
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
15
$’000
9,885
11,451
194,606
114
3,535
14
$’000
1 8,546
4,084
150,7 7 7
23,523
2,644
219,591
199,574
558
3,584
33,951
90,469
66,318
194,880
41 4,471
36,485
99,430
3,307
32,1 5 1
-
1,308
2,908
42,665
457,325
240,509
744,7 15
944,289
49,636
30,699
9,73 1
30,725
1,214
171,373
122,005
14,286
63,586
-
77,872
249,245
165,226
380,305
73,026
(213,793)
239,538
(74,31 2)
58,352
61,283
3,344
122,979
244,984
699,305
380,305
40,084
292,049
712,438
(13,133)
165,226
699,305
6
7
8
9
10
7
11
12
13
14
15
16
17
18
16
18
17
19
20
21
22
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 64
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONTRIBUTED
EQUIT Y
NET UNREALISED
GAIN/(LOSS) RESERVE
CONVERTIBLE NOTES
EQUIT Y RESERVE
SHARE OPTIONS
EQUIT Y RESERVE
EMPLOYEE BENEFITS
EQUIT Y RESERVE
TRANSL ATION
LOSSES)/RETAINED
NON-CONTROLLING
RESERVE
EARNINGS
INTEREST
FOREIGN CURRENCY
(ACCUMUL ATED
At 1 July 2014
Loss for the year
Other comprehensive (loss)/income, net of tax
Total comprehensive (loss)/income for the year, net of tax
Transactions with owners
Equity portion of compound financial instruments, net of tax and transaction
costs
Changes in the proportion held by non-controlling interest
Share-based payments to employees
At 30 June 2015
$'000
380,305
-
-
-
-
-
-
380,305
$'000
11,488
-
(11,615)
(11,615)
-
-
-
(127)
$'000
-
-
-
-
384
-
-
384
At 1 July 2013
Profit for the year
Other comprehensive income/(loss), net of tax
Total comprehensive income for the year, net of tax
Transactions with owners
Shares issued
Transfer from foreign currency translation reserve
Non-controlling interest in subsidiary acquired
Share-based payments to employees
At 30 June 2014
CONTRIBUTED
EQUIT Y
NET UNREALISED
GAIN/(LOSS) RESERVE
SHARE OPTIONS
EQUIT Y RESERVE
EMPLOYEE BENEFITS
EQUIT Y RESERVE
RESERVE
RETAINED EARNINGS
NON-CONTROLLING
INTEREST
FOREIGN CURRENCY
TRANSL ATION
$'000
$'000
380,225
-
-
-
80
-
-
-
-
-
11,488
11,488
-
-
-
-
$'000
5,987
-
-
-
-
-
-
-
380,305
11,488
5,987
14,914
292,049
(13,133)
699,305
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
TOTAL
$'000
699,305
(568,760)
31,485
(537,275)
384
-
2,812
165,226
$'000
5,987
$'000
7,695
56,275
(213,793)
$'000
14,914
41,361
41,361
$'000
259,139
33,313
33,313
-
-
-
-
-
-
-
-
$'000
292,049
(502,637)
(502,637)
-
-
-
(3,205)
$'000
(14,577)
(4,157)
166
(3,991)
-
-
-
5,435
$'000
(13,133)
(66,123)
1,739
(64,384)
3,205
-
-
(74,312)
TOTAL
$'000
658,603
29,156
4,354
33,510
80
-
5,435
1,677
-
-
-
-
-
-
-
-
-
2,812
10,507
$'000
21,8 1 1
(7,300)
(7,300)
403
(403)
-
-
-
-
-
-
-
-
-
-
-
-
5,987
$'000
6,018
1,677
7,695
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015 CONTRIBUTED
NET UNREALISED
CONVERTIBLE NOTES
EQUIT Y
GAIN/(LOSS) RESERVE
EQUIT Y RESERVE
SHARE OPTIONS
EQUIT Y RESERVE
EMPLOYEE BENEFITS
EQUIT Y RESERVE
FOREIGN CURRENCY
TRANSL ATION
RESERVE
(ACCUMUL ATED
LOSSES)/RETAINED
EARNINGS
NON-CONTROLLING
INTEREST
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 1 July 2014
Loss for the year
Other comprehensive (loss)/income, net of tax
Total comprehensive (loss)/income for the year, net of tax
Transactions with owners
costs
Equity portion of compound financial instruments, net of tax and transaction
Changes in the proportion held by non-controlling interest
Share-based payments to employees
At 30 June 2015
At 1 July 2013
Profit for the year
Other comprehensive income/(loss), net of tax
Total comprehensive income for the year, net of tax
Transactions with owners
Shares issued
Transfer from foreign currency translation reserve
Non-controlling interest in subsidiary acquired
Share-based payments to employees
At 30 June 2014
$'000
380,305
-
-
-
-
-
-
-
-
-
-
-
-
80
$'000
11,488
(11,615)
(11,615)
11,488
11,488
-
-
-
-
-
-
-
-
-
-
$'000
$'000
380,225
$'000
384
$'000
5,987
-
-
-
-
-
-
-
-
-
-
-
-
-
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
380,305
11,488
5,987
$'000
5,987
-
-
-
-
-
-
380,305
(127)
384
5,987
$'000
7,695
-
-
-
-
-
2,812
10,507
$'000
14,914
-
41,361
41,361
-
-
-
$'000
292,049
(502,637)
-
(502,637)
-
(3,205)
-
56,275
(213,793)
CONTRIBUTED
NET UNREALISED
EQUIT Y
GAIN/(LOSS) RESERVE
SHARE OPTIONS
EQUIT Y RESERVE
EMPLOYEE BENEFITS
EQUIT Y RESERVE
FOREIGN CURRENCY
TRANSL ATION
RESERVE
RETAINED EARNINGS
NON-CONTROLLING
INTEREST
$'000
6,018
-
-
-
-
-
-
1,677
7,695
$'000
21,8 1 1
-
(7,300)
(7,300)
-
403
-
-
$'000
259,139
33,313
-
33,313
-
(403)
-
-
14,914
292,049
$'000
(14,577)
(4,157)
166
(3,991)
-
-
5,435
-
(13,133)
$'000
(13,133)
(66,123)
1,739
(64,384)
-
3,205
-
(74,312)
TOTAL
$'000
658,603
29,156
4,354
33,510
80
-
5,435
1,677
699,305
65
TOTAL
$'000
699,305
(568,760)
31,485
(537,275)
384
-
2,812
165,226
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015 66
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
Net cash flows from operating activities
Cash flows used in investing activities
Payments for property, plant & equipment
Proceeds from sale of available for sale financial assets
Payments for development activities
Payments for evaluation activities
Proceeds from sale of property, plant & equipment
Proceeds from sale of other assets
Other investing activities
Payments for acquisition of available for sale financial assets
Net cash in subsidiaries acquired
Loan to associate
Net cash flows used in investing activities
Cash flows from financing activities
Repayment of borrowings
Repayment of lease liability
Proceeds from finance facilities
Proceeds from issuing ordinary shares
Costs of issuing ordinary shares
Net cash flows (used in)/from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Exchange rate adjustment
Cash and cash equivalents at the end of the year
Cash and cash equivalents comprise the following:
Cash at bank and on hand
Bank overdraft
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
NOTE
CONSOLIDATED
15
$’000
462,232
(384,817)
(331)
(8,998)
(6,252)
27
14
$’000
526,798
(398,421)
(2,405)
(15,651)
(5,635)
41
27
61,861
104,727
(6,690)
23,252
(59,507)
(33,200)
2,258
3,087
(1,899)
-
-
-
(72,699)
(11,228)
(5,461)
14,411
-
-
(2,278)
(13,116)
(7,344)
725
(19,735)
9,885
(29,620)
(19,735)
(13,47 1)
33,000
(89,216)
(17,76 3)
283
-
(1,120)
(100)
241
(8,868)
(97,014)
(6,670)
(4,736)
24,472
82
(2)
13,146
20,859
(28,143)
(60)
(7,344)
18,546
(25,890)
(7,344)
16
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015 67
CORPORATE INFORMATION
The financial report of Resolute Mining Limited and its controlled
entities (“Resolute”, “consolidated entity” or the “Group”) for the year
ended 30 June 2015 was authorised for issue in accordance with a
resolution of the Directors on 15 September 2015.
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, with the exception of the Golden Pride
project in Tanzania ceased operations and was relinquished 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.
The financial report has been prepared in Australian dollars and all
values are rounded to the nearest thousand dollars ($’000) unless
otherwise stated.
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), 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.
(B)
PRINCIPLES OF CONSOLIDATION
(I)
SUBSIDIARIES
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of RML as at 30 June 2015 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.
The consolidated financial statements comprise the financial
statements of the Group and its subsidiaries as at 30 June 2015.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group
has:
› Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee);
›
›
exposure, or rights, to variable returns from its involvement with
the investee; and
the ability to use its power over the investee to affect its
returns.
When the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
›
›
›
The contractual arrangement with the other vote holders of the
investee;
rights arising from other contractual arrangements; and,
the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the statement of comprehensive
income from the date the Group gains control until the date the
Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income
(“OCI”) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries
to bring their accounting policies into line with the Group’s
accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:
› De-recognises the assets (including goodwill) and liabilities of the
subsidiary;
›
›
›
›
›
›
de-recognises the carrying amount of any non-controlling
interests;
de-recognises the cumulative translation differences recorded
in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss; and,
reclassifies the parent’s share of components previously
recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly
disposed of the related assets or liabilities.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 68
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(B)
PRINCIPLES OF CONSOLIDATION (CONTINUED)
(II)
JOINT ARRANGEMENTS
JOINT VENTURES
A joint venture is a type of joint arrangement whereby the parties
that have joint control of the arrangement have rights to the net
assets of the joint venture. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent
of the parties sharing control.
The considerations made in determining significant influence or joint
control are similar to those necessary to determine control over
subsidiaries.
The Group’s investments in joint ventures are accounted for using
the equity method.
Under the equity method, the investment in a joint venture is initially
recognised at cost. The carrying amount of the investment is
adjusted to recognise changes in the Group’s share of net assets of
the joint venture since the acquisition date. Goodwill relating to the
joint venture is included in the carrying amount of the investment
and is neither amortised nor individually tested for impairment. The
statement of profit or loss reflects the Group’s share of the results
of operations of the joint venture. Any change in OCI of those
investees is presented as part of the Group’s OCI. In addition, when
there has been a change recognised directly in the equity of the
joint venture, the Group recognises its share of any changes, when
applicable, in the statement of changes in equity. Unrealised gains
and losses resulting from transactions between the Group and
joint venture are eliminated to the extent of the interest in the joint
venture.
The aggregate of the Group’s share of profit or loss of a joint
venture is shown on the face of the statement of profit or loss
outside operating profit and represents profit or loss after tax and
non-controlling interests in the subsidiaries of the joint venture.
The financial statements of the joint venture are prepared for the
same reporting period as the Group. When necessary, adjustments
are made to bring the accounting policies in line with those of the
Group. After application of the equity method, the Group determines
whether it is necessary to recognise an impairment loss on its
investment in its joint venture. At each reporting date, the Group
determines whether there is objective evidence that the investment
in the joint venture is impaired.
If there is such evidence, the Group calculates the amount of
impairment as the difference between the recoverable amount of
the joint venture and its carrying value, then recognises the loss as
‘Share of profit of a joint venture’ in the statement of profit or loss.
Upon loss of significant influence over the joint venture, the Group
measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the joint venture
upon loss of significant influence or joint control and the fair value of
the retained investment and proceeds from disposal is recognised
in profit or loss.
JOINT OPERATIONS
The Group recognises its interest in joint operations by recognising
its:
› Assets, including its share of any assets held jointly;
›
›
›
liabilities, including its share of any liabilities incurred jointly;
revenue from the sale of its share of the output arising from the
joint operation;
share of the revenue from the sale of the output by the joint
operation; and,
›
expenses, including its share of any expenses incurred jointly.
(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.
(D) FOREIGN CURRENCY TRANSLATION
(I)
F UNCTIONAL 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)
T RANSACTIONS 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 69
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(D) FOREIGN CURRENCY TRANSLATION (CONTINUED)
(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.
(E) REVENUE RECOGNITION
(I)
G OLD 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
Revenue is recognised as interest accrues using the effective
interest method.
(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.
(G)
INCOME TAX
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:
›
›
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.
TAX CONSOLIDATION LEGISLATION
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
included.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 70
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(G)
INCOME TAX (CONTINUED)
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.
(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.
(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.
(J)
RECEIVABLES
(II)
L OANS AND 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.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 71
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(L)
INVESTMENTS AND OTHER FINANCIAL ASSETS
(CONTINUED)
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.
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
arrangements.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 72
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(N)
D ERIVATIVES (CONTINUED)
(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.
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.
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).
(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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 73
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(Q) DEVELOPMENT EXPENDITURE (CONTINUED)
(II)
A REAS 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.
(R)
PROPERTY, PLANT AND EQUIPMENT
(I)
COST AND VALUATION
(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.
Property, plant and equipment are stated at cost less any
accumulated depreciation and any impairment losses.
(T)
BUSINESS COMBINATIONS
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:
Motor vehicles
Office equipment
LIFE
3 years
3 years
METHOD
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.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 74
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(U)
R ECOVERABLE AMOUNT OF NON-FINANCIAL 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.
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.
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.
(X)
PROVISIONS
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 75
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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 high quality
corporate bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.
(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)
S HARE 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:
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 76
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(AC)
S IGNIFICANT ACCOUNTING ESTIMATES AND
ASSUMPTIONS (CONTINUED)
(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, discount rates used in determining the estimated
discounted cash flows of 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 dispose (“fair value”), future technological changes which
could impact the cost of mining, and future legal changes (including
changes to environmental restoration obligations). The costs to
dispose have been estimated by management based on prevailing
market conditions. Impairment is recognised when the carrying
amount of the CGU exceeds its estimated recoverable amount.
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 plans. Consideration is also given to analysts’ valuations,
and the market value of the Company’s securities. The fair value
methodology adopted is categorised as Level 3 in the fair value
hierarchy.
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 life-of-mine 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, production assumptions
and operating costs. A change in one or more of the assumptions
used to estimate fair value could reduce or increase 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 value per gold equivalent ounce basis individually for each
CGU, taking into account a range of factors although principally the
current market rate for similar resources. However, where the value
per ounce from the other reserves/resources included in the CGU’s
discounted cash flow model (if applicable) is less than this market
rate determination, the lower value per ounce from the CGU’s
discounted cash flow model is used when calculating that CGU’s
value of unmined ounces. The value per ounce is also discounted
accordingly for any future costs which would be required to exploit
the insitu resources, for example, modifications required to existing
plant. 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 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.
Any variation in the key assumptions used to determine Fair
Value would result in a change of the assessed Fair Value and the
resultant impairment loss recognised.
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.
(II)
L IFE-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)
P ROVISIONS 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 77
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.
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(AC)
S IGNIFICANT ACCOUNTING ESTIMATES AND
ASSUMPTIONS (CONTINUED)
(III)
P ROVISIONS FOR DECOMMISSIONING AND RESTORATION
COSTS (CONTINUED)
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 30(b).
(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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 78
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(AD) NEW ACCOUNTING STANDARDS AND UIG INTERPRETATIONS
(I)
FROM 1 JULY 2014 THE GROUP HAS ADOPTED ALL NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS AND
INTERPRETATIONS MANDATORY FOR REPORTING PERIODS BEGINNING ON OR AFTER 1 JULY 2014, INCLUDING:
REFERENCE
TITLE
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
AASB 2012-3
Amendments to Australian Accounting Standards - Offsetting Financial Assets and
Financial Liabilities
1 January 2014
1 July 2014
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.
AASB 2013-3
Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
1 January 2014
1 July 2014
AASB 2013-3 amends the disclosure requirements in AASB 136 Impairment of Assets.
The amendments include the requirement to disclose additional information about the
fair value measurement when the recoverable amount of impaired assets is based on fair
value less costs of disposal.
AASB 2013-4
Amendments to Australian Accounting Standards – Novation of Derivatives and
Continuation of Hedge Accounting [AASB 139]
1 January 2014
1 July 2014
AASB 2013-4 amends AASB 139 to permit the continuation of hedge accounting
in specified circumstances where a derivative, which has been designated as a
hedging instrument, is novated from one counterparty to a central counterparty as a
consequence of laws or regulations.
AASB 1031
Materiality
1 January 2014
1 July 2014
The revised AASB 1031 is an interim standard that cross-references to other Standards
and the Framework (issued December 2013) that contain guidance on materiality.
AASB 1031 will be withdrawn when references to AASB 1031 in all Standards and
Interpretations have been removed. AASB 2014-1 Part C issued in June 2014 makes
amendments to eight Australian Accounting Standards to delete their references to
AASB 1031. The amendments are effective from 1 July 2014.
AASB 2013-9
Amendments to Australian Accounting Standards – Conceptual Framework, Materiality
and Financial Instruments
PART A & PART B:
1 July 2014
PART A & PART B:
1 July 2014
The Standard contains three main parts and makes amendments to a number Standards
and Interpretations.
PART C:
1 July 2015
PART C:
1 July 2015
Part A of AASB 2013-9 makes consequential amendments arising from the issuance of
AASB CF 2013-1.
Part B makes amendments to particular Australian Accounting Standards to delete
references to AASB 1031 and also makes minor editorial amendments to various other
standards.
Part C makes amendments to a number of Australian Accounting Standards, including
incorporating Chapter 6 Hedge Accounting into AASB 9 Financial Instruments.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 79
NOTE 1: BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(AD) NEW ACCOUNTING STANDARDS AND UIG INTERPRETATIONS (CONTINUED)
(I)
FROM 1 JULY 2014 THE GROUP HAS ADOPTED ALL NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS AND
INTERPRETATIONS MANDATORY FOR REPORTING PERIODS BEGINNING ON OR AFTER 1 JULY 2014, INCLUDING (CONTINUED):
REFERENCE
TITLE
AASB 2014-1
Part A -Annual
Improvements
2010–2012 Cycle
AASB 2014-1 Part A: This standard sets out amendments to Australian Accounting
Standards arising from the issuance by the International Accounting Standards Board
(IASB) of International Financial Reporting Standards (IFRSs) Annual Improvements to
IFRSs 2010–2012 Cycle and Annual Improvements to IFRSs 2011–2013 Cycle.
APPLICATION DATE
OF STANDARD
APPLICATION DATE
FOR GROUP*
1 July 2014
1 July 2014
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
›
›
›
›
AASB 2 - Clarifies the definition of ‘vesting conditions’ and ‘market condition’ and
introduces the definition of ‘performance condition’ and ‘service condition’.
AASB 3 - Clarifies the classification requirements for contingent consideration in a
business combination by removing all references to AASB 137.
AASB 8 - Requires entities to disclose factors used to identify the entity’s reportable
segments when operating segments have been aggregated. An entity is also required
to provide a reconciliation of total reportable segments’ asset to the entity’s total
assets.
AASB 116 & AASB 138 - Clarifies that the determination of accumulated depreciation
does not depend on the selection of the valuation technique and that it is calculated
as the difference between the gross and net carrying amounts.
AASB 124 - Defines a management entity providing KMP services as a related party of
the reporting entity. The amendments added an exemption from the detailed disclosure
requirements in paragraph 17 of AASB 124 for KMP services provided by a management
entity. Payments made to a management entity in respect of KMP services should be
separately disclosed.
AASB 2014-1
Part A -Annual
Improvements
2011–2013 Cycle
Amendments
to Australian
Accounting
Standards - Part B
Defined Benefit
Plans: Employee
Contributions
(Amendments to
AASB 119)
Amendments
to AASB 1053 –
Transition to and
between Tiers,
and related Tier
2 Disclosure
Requirements
[AASB 1053]
Annual Improvements to IFRSs 2011–2013 Cycle addresses the following items:
1 July 2014
1 July 2014
›
AASB13 - Clarifies that the portfolio exception in paragraph 52 of AASB 13 applies
to all contracts within the scope of AASB 139 or AASB 9, regardless of whether they
meet the definitions of financial assets or financial liabilities as defined in AASB 132.
AASB 140 - Clarifies that judgment is needed to determine whether an acquisition of
investment property is solely the acquisition of an investment property or whether it is
the acquisition of a group of assets or a business combination in the scope of AASB 3
that includes an investment property. That judgment is based on guidance in AASB 3.
AASB 2014-Part B makes amendments in relation to the requirements for contributions
from employees or third parties that are set out in the formal terms of the benefit plan
and linked to service.
The amendments clarify that if the amount of the contributions is independent of the
number of years of service, an entity is permitted to recognise such contributions as a
reduction in the service cost in the period in which the related service is rendered, instead
of attributing the contributions to the periods of service.
1 July 2014
1 July 2014
The Standard makes amendments to AASB 1053 Application of Tiers of Australian
Accounting Standards to:
1 July 2014
1 July 2014
›
›
›
clarify that AASB 1053 relates only to general purpose financial statements;
make AASB 1053 consistent with the availability of the AASB 108 Accounting
Policies, Changes in Accounting Estimates and Errors option in AASB 1 First-time
Adoption of Australian Accounting Standards;
clarify certain circumstances in which an entity applying Tier 2 reporting
requirements can apply the AASB 108 option in AASB 1; permit an entity applying Tier
2 reporting requirements for the first time to do so directly using the requirements
in AASB 108 (rather that applying AASB 1) when, and only when, the entity had
not applied, or only selectively applied, applicable recognition and measurement
requirements in its most recent previous annual special purpose financial statements;
and
›
specify certain disclosure requirements when an entity resumes the application of
Tier 2 reporting requirements.
*The new and revised accounting standards have not required any changes to the Group’s financial report, unless otherwise stated.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 80
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 2015:
APPLICATION DATE OF
STANDARD
APPLICATION DATE
FOR GROUP*
1 January 2018
1 July 2018
REFERENCE
TITLE
SUMMARY
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new standard which replaces AASB
139. This new version supersedes AASB 9 issued in December
2009 (as amended) and AASB 9 (issued in December 2010)
and includes a model for classification and measurement, a
single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after
1 January 2018. However, the Standard is available for early
adoption. The own credit changes can be early adopted in
isolation without otherwise changing the accounting for financial
instruments.
Classification and measurement
AASB 9 includes requirements for a simpler approach for
classification and measurement of financial assets compared
with the requirements of AASB 139. There are also some changes
made in relation to financial liabilities.
The main changes are described below.
Financial assets
(a) 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.
(b) 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.
(c) 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.
Financial liabilities
Changes introduced by AASB 9 in respect of financial liabilities are
limited to the measurement of liabilities designated at fair value
through profit or loss (FVPL) using the fair value option.
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
AASB 9 also removes the volatility in profit or loss that was
caused by changes in the credit risk of liabilities elected to be
measured at fair value. This change in accounting means that
gains or losses attributable to changes in the entity’s own credit
risk would be recognised in OCI. These amounts recognised in OCI
are not recycled to profit or loss if the liability is ever repurchased
at a discount.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 81
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 2015 (CONTINUED):
REFERENCE
TITLE
SUMMARY
APPLICATION DATE OF
STANDARD
APPLICATION DATE
FOR GROUP*
Impairment
The final version of AASB 9 introduces a new expected-loss
impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires
entities to account for expected credit losses from when financial
instruments are first recognised and to recognise full lifetime
expected losses on a more timely basis.
Hedge accounting
Amendments to AASB 9 (December 2009 & 2010 editions
and AASB 2013-9) issued in December 2013 included the
new hedge accounting requirements, including changes to
hedge effectiveness testing, treatment of hedging costs, risk
components that can be hedged and disclosures.
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, AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments
arising from the issuance of AASB 9 in Dec 2014.
AASB 2014-8 limits the application of the existing versions of
AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010))
from 1 February 2015 and applies to annual reporting periods
beginning on after 1 January 2015.
AASB 2014-3 amends AASB 11 to provide guidance on the
accounting for acquisitions of interests in joint operations in which
the activity constitutes a business. The amendments require:
(a) the acquirer of an interest in a joint operation in which the
activity constitutes a business, as defined in AASB 3 Business
Combinations, to apply all of the principles on business
combinations accounting in AASB 3 and other Australian
Accounting Standards except for those principles that conflict
with the guidance in AASB 11; and
(b) the acquirer to disclose the information required by AASB
3 and other Australian Accounting Standards for business
combinations.
This Standard also makes an editorial correction to AASB 11.
AASB 116 and AASB 138 both establish the principle for the basis
of depreciation and amortisation as being the expected pattern of
consumption of the future economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to
calculate the depreciation of an asset is not appropriate because
revenue generated by an activity that includes the use of an asset
generally reflects factors other than the consumption of the
economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed
to be an inappropriate basis for measuring the consumption
of the economic benefits embodied in an intangible asset.
This presumption, however, can be rebutted in certain limited
circumstances.
1 January 2016
1 July 2016
1 January 2016
1 July 2016
AASB 2014-3
Amendments to
Australian Accounting
Standards – Accounting
for Acquisitions of
Interests in Joint
Operations
[AASB 1 & AASB 11]
AASB 2014-4
Clarification of
Acceptable Methods
of Depreciation
and Amortisation
(Amendments to
AASB 116 and AASB 138)
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 82
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 2015 (CONTINUED):
APPLICATION DATE OF
STANDARD
APPLICATION DATE
FOR GROUP*
1 January 2017
1 July 2017
REFERENCE
TITLE
SUMMARY
AASB 15
Revenue from Contracts
with Customers
In May 2014, the IASB issued IFRS 15 Revenue from Contracts
with Customers, which replaces IAS 11 Construction Contracts,
IAS 18 Revenue and related Interpretations (IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the Construction
of Real Estate, IFRIC 18 Transfers of Assets from Customers
and SIC-31 Revenue—Barter Transactions Involving Advertising
Services).
The core principle of IFRS 15 is that an entity recognises revenue
to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. An
entity recognises revenue in accordance with that core principle
by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance
obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
Early application of this standard is permitted.
AASB 2014-5 incorporates the consequential amendments
to a number Australian Accounting Standards (including
Interpretations) arising from the issuance of AASB 15.
The International Accounting Standards Board (IASB) in its
July 2015 meeting decided to confirm its proposal to defer the
effective date of IFRS 15 (the international equivalent of AASB
15) from 1 January 2017 to 1 January 2018. The amendment to
give effect to the new effective date for IFRS 15 is expected to
be issued in September 2015 . At this time, it is expected that the
AASB will make a corresponding amendment to AASB 15, which
will mean that the application date of this standard for the Group
will move from 1 July 2017 to 1 July 2018.
AASB 2014-9
Amendments to
Australian Accounting
Standards – Equity
Method in Separate
Financial Statements
AASB 2014-9 amends AASB 127 Separate Financial Statements,
and consequentially amends AASB 1 First-time Adoption of
Australian Accounting Standards and AASB 128 Investments
in Associates and Joint Ventures, to allow entities to use the
equity method of accounting for investments in subsidiaries, joint
ventures and associates in their separate financial statements.
1 January 2016
1 July 2016
AASB 2014-10
Amendments to
Australian Accounting
Standards – Sale or
Contribution of Assets
between an Investor and
its Associate or Joint
Venture
AASB 2014-9 also makes editorial corrections to AASB 127.
AASB 2014-9 applies to annual reporting periods beginning on or
after 1 January 2016. Early adoption permitted.
AASB 2014-10 amends AASB 10 Consolidated Financial
Statements and AASB 128 to address an inconsistency between
the requirements in AASB 10 and those in AASB 128 (August
2011), in dealing with the sale or contribution of assets between
an investor and its associate or joint venture. The amendments
require:
(a) a full gain or loss to be recognised when a transaction involves
a business (whether it is housed in a subsidiary or not); and
(b) a partial gain or loss to be recognised when a transaction
involves assets that do not constitute a business, even if these
assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2014-10 applies to annual reporting periods beginning on or
after 1 January 2016. Early adoption permitted.
1 January 2016
1 July 2016
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
83
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 2015 (CONTINUED):
REFERENCE
TITLE
SUMMARY
APPLICATION DATE OF
STANDARD
APPLICATION DATE
FOR GROUP*
AASB 2015-1
Amendments to
Australian Accounting
Standards – Annual
Improvements to
Australian Accounting
Standards 2012–2014
Cycle
AASB 2015-2
Amendments to
Australian Accounting
Standards – Disclosure
Initiative: Amendments
to AASB 101
AASB 2015-3
AASB 2015-4
AASB 2015-5
Amendments to
Australian Accounting
Standards arising from
the Withdrawal of AASB
1031 Materiality
Amendments to
Australian Accounting
Standards – Financial
Reporting Requirements
for Australian Groups
with a Foreign Parent
Amendments to
Australian Accounting
Standards – Investment
Entities: Applying the
Consolidation Exception
The subjects of the principal amendments to the Standards are
set out below:
1 January 2016
1 July 2016
AASB 5 Non-current Assets Held for Sale and Discontinued
Operations:
›
Changes in methods of disposal – where an entity reclassifies an
asset (or disposal group) directly from being held for distribution
to being held for sale (or visa versa), an entity shall not follow the
guidance in paragraphs 27–29 to account for this change.
AASB 7 Financial Instruments: Disclosures:
›
›
Servicing contracts - clarifies how an entity should apply
the guidance in paragraph 42C of AASB 7 to a servicing
contract to decide whether a servicing contract is ‘continuing
involvement’ for the purposes of applying the disclosure
requirements in paragraphs 42E–42H of AASB 7.
Applicability of the amendments to AASB 7 to condensed
interim financial statements - clarify that the additional
disclosure required by the amendments to AASB 7
Disclosure–Offsetting Financial Assets and Financial Liabilities
is not specifically required for all interim periods. However,
the additional disclosure is required to be given in condensed
interim financial statements that are prepared in accordance
with AASB 134 Interim Financial Reporting when its inclusion
would be required by the requirements of AASB 134.
AASB 119 Employee Benefits:
› Discount rate: regional market issue - clarifies that the high
quality corporate bonds used to estimate the discount rate for
post-employment benefit obligations should be denominated
in the same currency as the liability. Further it clarifies that the
depth of the market for high quality corporate bonds should be
assessed at the currency level.
AASB 134 Interim Financial Reporting:
› Disclosure of information ‘elsewhere in the interim financial
report’ -amends AASB 134 to clarify the meaning of disclosure
of information ‘elsewhere in the interim financial report’ and
to require the inclusion of a cross-reference from the interim
financial statements to the location of this information.
The Standard makes amendments to AASB 101 Presentation of
Financial Statements arising from the IASB’s Disclosure Initiative
project. The amendments are designed to further encourage
companies to apply professional judgment in determining what
information to disclose in the financial statements. For example,
the amendments make clear that materiality applies to the whole
of financial statements and that the inclusion of immaterial
information can inhibit the usefulness of financial disclosures. The
amendments also clarify that companies should use professional
judgment in determining where and in what order information is
presented in the financial disclosures.
1 January 2016
1 July 2016
The Standard completes the AASB’s project to remove Australian
guidance on materiality from Australian Accounting Standards.
1 July 2015
1 July 2015
The amendment aligns the relief available in AASB 10 Consolidated
Financial Statements and AASB 128 Investments in Associates
and Joint Ventures in respect of the financial reporting
requirements for Australian groups with a foreign parent
1 July 2015
1 July 2015
This makes amendments to AASB 10, AASB 12 Disclosure of
Interests in Other Entities and AASB 128 arising from the IASB’s
narrow scope amendments associated with Investment Entities.
1 July 2015
1 July 2015
*
The impact of the adoption of these new and revised standards and interpretations on the financial statements of the Group is yet to be determined.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 84
NOTE 2: (LOSS)/PROFIT FROM CONTINUING OPERATIONS
(A)
REVENUE FROM GOLD AND SILVER SALES
Gold and silver sales
459,147
426,753
CONSOLIDATED
15
$’000
14
$’000
(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
(E)
OT HER REVENUE
Interest income
(F)
OTHER INCOME
Dividend income
Profit on sale of property, plant and equipment
Profit on sale of available for sale financial assets
Other
(G)
ADMINISTRATION AND OTHER CORPORATE EXPENSES
Other management and administration expenses
Share-based payments expense
Depreciation of non mine site assets
(H)
T REASURY - REALISED GAINS/(LOSSES)
Realised foreign exchange gain
Realised loss on repayment of gold prepay loan
275,398
(18,463)
256,935
50,21 7
51,276
101,493
28,313
1,487
29,800
26
64
45
1 1,921
79
12,109
5,153
1,667
102
6,922
237
(816)
(579)
282,396
(6,359)
276,037
36,134
31,887
68,021
25,041
1,884
26,925
38
-
756
13,707
71
14,534
5,867
1,237
114
7,218
59
(137)
(78)
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 85
NOTE 2: (LOSS)/PROFIT FROM CONTINUING OPERATIONS (CONTINUED)
(I)
A SSET IMPAIRMENT EXPENSES, FAIR VALUE MOVEMENTS, AND UNREALISED
TREASURY LOSSES
Impairment of property, plant and equipment (i)
Impairment of exploration, evaluation and development (i)
Impairment of accounts receivable (ii)
Impairment of gold equity investments
Total asset impairment expenses
Inventories net realisable value movements and obsolete consumables (iii)
Unrealised foreign exchange (loss)/gain
Unrealised foreign exchange (loss)/gain on intercompany balances
Fair value movement on convertible notes held in associate
Total fair value movements and unrealised treasury transactions
Total asset impairment expenses, fair value movements and unrealised treasury transactions
(I)
IMPAIRMENT OF NON-CURRENT ASSETS
CONSOLIDATED
15
$’000
14
$’000
(1 42,777)
(418,262)
(10,231)
(331)
(571,601)
(8,389)
(12,519)
(26,952)
-
(47,860)
(619,461)
-
-
-
-
-
(15,013)
1,607
16,460
(18,000)
(14,946)
(14,946)
In accordance with the Group’s accounting policies and processes, the Group performs its impairment testing twice annually at 30 June and
31 December. Non-financial assets are reviewed at each reporting period to determine whether there is an indication of impairment. Where an
indicator of impairment exists, a formal estimate of the recoverable amount is made.
The Group carried out recoverable amount assessments for all of its cash generating units (“CGUs”), and this has resulted in impairment
charges for Syama, Bibiani and the Nyakafuru tenement (the latter which has been included in the Corporate/Other segment). Included in
the events which triggered a review were a lower USD gold price, significant revision of the life-of-mine plan at the Syama Gold Mine, and the
sustained difference in the carrying amount of the net assets of the group and its quoted market capitalisation.
The key change to the life-of-mine plan at Syama over the past year was the cessation of the Stage 2 cutback and the decision to exploit the
ore reserves beneath the Stage 1 open cut pit by way of an underground mining operation.
Unless otherwise identified, the following discussion of impairment testing and sensitivity analysis is applicable to the assessment of the fair
value of all of the Group’s CGUs.
The methodology used in performing impairment testing is disclosed in Note 1(ac)(i).
KEY ASSUMPTIONS
The table below summarises the key assumptions used in the year end carrying value assessments:
Gold price (US$ per ounce)
Discount rate % (post tax)
Value of unmined resources (US$ per ounce)
$1,070 - $1,310
10% - 13%
$0 - $43
Commodity prices and exchange rates
Commodity price and foreign exchange rates are estimated with reference to external market forecasts, and updated at least twice annually.
The rates applied to the valuation have regard to observable market data.
Discount rate
In determining the fair value of CGUs, the future cash flows were discounted using rates based on the Group’s estimated real weighted average
cost of capital, with an additional premium applied having regard to the geographic location of the CGU. Of the individual CGUs that recognised
impairments, Syama applied a discount rate in a range of 10%-13%, whilst Bibiani and Nyakafuru’s recoverable amount was determined using
the estimated value of unmined resources.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 86
NOTE 2: (LOSS)/PROFIT FROM CONTINUING OPERATIONS (CONTINUED)
(I)
(I)
ASSET IMPAIRMENT EXPENSES, FAIR VALUE MOVEMENTS, AND UNREALISED TREASURY LOSSES (CONTINUED)
IMPAIRMENT OF NON-CURRENT ASSETS (CONTINUED)
Operating and capital costs
Life-of-mine operating and capital cost assumptions are based on the Group’s latest budget and life-of-mine plans. Operating cost
assumptions reflect the expectation that costs will, over the long term, have a degree of positive correlation to the prevailing commodity price
and exchange rate assumptions.
Unmined resources
Unmined resources 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 value of unmined
resources currently excluded from life-of-mine plans but included in the assessed fair value in the current period for each CGU subject to
impairment is as follows:
Unmined resources
IMPACTS
SYAMA
$’000
100,014
BIBIANI
$’000
48,310
After reflecting the write-down of certain assets arising from the Group’s revised operating plans, the Group has conducted carrying value
analysis and non-current asset impairments of $561 million after tax, as summarised in the table below:
CGU
Syama
Bibiani
Nyakafuru
Total CGU impairment
Tax
Total CGU impairment (after tax)
PROFIT & LOSS
$’000
472,401
78,703
9,935
561,039
-
561,039
The impairment charges were applied to the balance sheet in the following manner:
Exploration and evaluation expenditure
Development expenditure
Property, plant and equipment
$’000
33,389
384,873
1 42,7 7 7
561,039
The fair value of the Group’s other CGU was assessed by the Group and it exceeded its carrying value.
SENSITIVITY ANALYSIS
After effecting the impairments for Syama, Bibiani and Nyakafuru, the fair value of these assets is assessed as being equal to their carrying
amount as at 30 June 2015.
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 or positive impact on fair value, it could indicate a requirement for additional impairment or reversal of previous
impairments to non-current assets.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
87
NOTE 2: (LOSS)/PROFIT FROM CONTINUING OPERATIONS (CONTINUED)
(I)
(I)
ASSET IMPAIRMENT EXPENSES, FAIR VALUE MOVEMENTS, AND UNREALISED TREASURY LOSSES (CONTINUED)
IMPAIRMENT OF NON-CURRENT ASSETS (CONTINUED)
It is estimated that changes in the key assumptions would have the following approximate impact on the fair value of each CGU that has been
subject to impairment in the accounts:
2.5% change in gold price
1.0% change in discount rate
2.5% change in the value of unmined resources
SYAMA
$’000
BIBIANI
$’000
INCREASE
DECREASE
INCREASE
DECREASE
79,742
(11,394)
N/A
(100,636)
12,545
N/A
N/A
N/A
(2,430)
N/A
N/A
2,430
It must be noted that each of the sensitivities above assumes that the specific assumption moves in isolation, while all other assumptions are
held constant. In reality, a change in one of the aforementioned assumptions is usually accompanied with a change in another assumption,
which may have an offsetting impact. Action is also usually taken to respond to adverse changes in economic assumptions that may mitigate
the impact of any such change.
(II) The company had recognised a receivable for the return of funds from a government department, but subsequently discounted the
receivable to reflect the longer-term timeframe and risk expected to resolve this matter.
(III) $5.309m of this impairment expense relates to ore stockpile and gold in circuit inventory write-downs. The lower gold price has impacted
the market value of the gold inventories held by Resolute. Hence, non-cash charges have been recorded against the ore stockpile and gold
in circuit inventory values. These inventories are recorded on the Statement of Financial Position at the lower of cost and net realisable
value. The remaining balance of this impairment charge relates to the write-down of warehouse inventory and critical spares to their
recoverable value.
(J)
F INANCE COSTS
Interest and fees
Rehabilitation and restoration provision accretion
(K)
EMPLOYEE BENEFITS
Salaries
Superannuation
Share-based payments expense
CONSOLIDATED
15
$’000
9,967
1,096
1 1,063
65,1 81
3,029
2,489
70,699
14
$’000
7,496
1,276
8,7 7 2
79,491
2,954
1,687
84,132
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
88
NOTE 3: INCOME TAX
(A)
INCOME TAX (EXPENSE)/BENEFIT
Deferred tax (expense)/benefit from continuing operations
Witholding tax expense from continuing operations
Tax (expense)/benefit from continuing operations
Current income tax benefit/(expense) from discontinued operation
Witholding tax expense from discontinued operation
Total tax expense
(B)
NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX
EXPENSE
(Loss)/profit from continuing operations before income tax expense
(Loss)/profit from discontinued operation before income tax expense
Withholding tax
(Loss)/profit before income tax expense
Prima facie income tax (benefit)/expense at 30% (2014: 30%)
Add/(deduct):
- tax losses and other temporary differences not recognised/(recognised to offset deferred tax liabilities)
- effect of different rates of tax on overseas income
- effect of share-based payments expense not deductible
- prior year (over)/under provision
- other
Income tax (benefit)/expense attributable to net profit
Reconciled as:
Income tax expense/(benefit) attributable to continuing operations
Income tax (benefit)/expense attributable to a discontinued operation
CONSOLIDATED
15
$’000
(105)
(1,084)
(1,189)
1,057
-
(132)
(562,298)
(6,330)
(1,084)
(569,7 1 2)
(1 70,91 4)
187,237
(18,265)
1,502
(1,132)
620
(952)
105
(1,057)
(952)
14
$’000
270
(197)
73
(1,326)
(12)
(1,265)
27,122
3,299
(209)
30,212
9,064
(8,584)
(1,289)
655
96
(175)
1,056
(270)
1,326
1,056
(C)
AMOUNTS RECOGNISED DIRECTLY IN EQUITY
Amounts (credited)/debited directly to equity
(105)
270
(D)
TAX LOSSES (TAX EFFECTED)
- Revenue losses
Australia
Tanzania
Mali*
Ghana
- Capital losses
Australia
46,559
10,787
63,289
37,326
157,961
46,989
5,169
67,426
28,075
147,659
49,789
49,766
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)
207,750
197,425
*
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
89
NOTE 3: INCOME TAX (CONTINUED)
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 have been continued to be complied with; and,
(iii) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
(E)
UNRECOGNISED TEMPORARY DIFFERENCES
As at 30 June 2015, aggregate unrecognised temporary differences of $16.883m (2014: $4.474m) are in respect of investments in foreign
controlled entities for which no deferred tax assets 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/(charged) to equity
(Charged)/credited to the income statement
Balance as at the end of the year
The deferred tax assets balance comprises temporary differences attributable to:
Receivables
Inventories
Available for sale financial assets
Mineral exploration and development interests
Property, plant and equipment
Payables
Interest bearing liabilities
Provisions
Tax losses recognised (i)
CONSOLIDATED
15
$’000
-
105
(105)
-
14
$’000
-
(270)
270
-
227,782
60,926
8,963
8,981
168,546
52,192
730
4,726
21,341
-
5,923
8,540
6,353
2,187
707
1,312
22,670
251
Temporary differences not recognised
(486,612)
(107,094)
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax assets
(i) Prior year includes tax losses recognised against deferred tax liabilities in foreign entities of $0.251m.
(G) MOVEMENTS IN THE DEFERRED TAX LIABILITIES BALANCE
There were no movements in the deferred tax liabilities balance in the current or prior year.
The deferred tax liabilities balance comprises temporary differences attributable to:
Mineral exploration and development interests
Property, plant and equipment
Provisions
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax liabilities
6,649
(6,649)
-
6,644
5
-
6,649
(6,649)
-
1,775
(1,775)
-
-
210
1,565
1,775
(1,775)
-
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 90
NOTE 3: INCOME TAX (CONTINUED)
(H)
THE EQUITY BALANCE COMPRISES TEMPORARY DIFFERENCES ATTRIBUTABLE TO:
Convertible notes equity reserve
Option equity reserve
Unrealised (loss)/gain reserve
Net temporary differences in equity
Set-off of deferred tax liabilities pursuant to set-off provisions
Total temporary differences in equity
(I)
TAX CONSOLIDATION
CONSOLIDATED
15
$’000
194
2,566
(38)
2,722
38
2,760
14
$’000
28
2,568
270
2,866
-
2,866
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 91
NOTE 4: DISCONTINUED OPERATION
On 12 December 2014, the formal handover of the Golden Pride site and all remaining infrastructure to the Madini Institute to set up a mining
institute of learning was completed, as agreed with the Government of Tanzania. This ended Resolute’s presence on site at Golden Pride after
15 years and production of over 2.2 million ounces of gold. This arm of the business, previously represented as the Golden Pride operating
segment, has been classified as a discontinued operation and is no longer presented as a segment in Note 34.
The results for the year are presented below:
CONSOLIDATED
15
$’000
3,085
(8,606)
(809)
(6,330)
1,057
(5,273)
14
$’000
100,044
(89,477)
(7,268)
3,299
(1,338)
1,961
(0.82) cents
0.31 cents
(0.82) cents
0.30 cents
(1 7,186)
-
(1 7,186)
(4,316)
(24)
(4,340)
Revenue
Expenses
Accounts receivable impairment expenses and inventory net realisable value movements
(Loss)/profit before tax from a discontinued operation
Tax benefit/(expense)
(Loss)/profit for the year from a discontinued operation
(Loss)/earnings per share:
Basic (loss)/earnings per share of discontinued operation
Diluted (loss)/earnings per share of discontinued operation
The net cash flows of the discontinued operation are as follows:
Operating cash flows
Investing cash flows
Net cash outflow
NOTE 5: DIVIDENDS PAID OR PROVIDED FOR
No dividend has been declared for the year ended 30 June 2015 (2014: nil).
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
103
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 92
CONSOLIDATED
15
$’000
14
$’000
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
9,885
18,546
Cash at bank earns interest at floating rates based on bank deposit rates.
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
Bank overdraft (Note 16)
9,885
(29,620)
(19,735)
18,546
(25,890)
(7,344)
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 7: RECEIVABLES
Current
Sundry debtors (a)
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 $1.318m (2014: $3.221m). 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 loss is as follows
At start of year
Charge for the year
Recognised as a bad debt
Transfer to development expenditure - areas in production
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
61-90 days (Past due but not impaired)
+91 days (Past due but not impaired)
+91 days (Considered impaired)
Total
1 1,451
4,084
10,851
(10,293)
558
13,786
(12,478)
1,308
(12,478)
(11,044)
13,167
-
62
(12,870)
(919)
-
901
410
(10,293)
(12,478)
6,295
2,822
1,574
101
1,217
10,293
22,302
1,909
262
-
236
2,985
12,478
17,870
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
93
CONSOLIDATED
15
$’000
14
$’000
105,740
57,140
18,226
13,500
31,726
194,606
86,875
53,353
4,397
6,152
10,549
150,777
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
NOTE 9: AVAILABLE FOR SALE FINANCIAL ASSETS
Shares at fair value - listed
114
23,523
Available for sale financial assets consist of investments in ordinary shares, and therefore have no maturity date or coupon rate.
NOTE 10: OTHER CURRENT ASSETS
Prepayments
3,535
2,644
NOTE 11: OTHER FINANCIAL ASSETS
Non-current
Environmental bond - restricted cash (a)
3,584
2,908
a) The Ghanaian Environmental Protection Authority holds US$2.7m of restricted cash as security for the rehabilitation and restoration
provision of Mensin Gold Bibiani Limited.
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
- Adjustments to rehabilitation obligations
- Impaired during the year
- Foreign currency translation
- Acquired during the year
Balance at the end of the year
42,665
20,1 42
(1,365)
(33,389)
5,898
-
33,951
11,539
220
-
-
(274)
31,180
42,665
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 94
NOTE 13: DEVELOPMENT EXPENDITURE
Areas in production (at cost)
Mine property development
Balance at the beginning of the year
- Additions
- Transfer to inventory
- Impaired during the year
- 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
- Impaired during the year
- 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
- Impaired during the year
Balance at the end of the year
Total development expenditure
CONSOLIDATED
15
$’000
14
$’000
369,099
57,672
(4,782)
(283,483)
(52,219)
3,195
(2,024)
87,458
21,106
18,646
(28,270)
(8,168)
(303)
3,01 1
67,120
24,821
1,281
(93,222)
-
322,443
81,491
-
-
(36,749)
(725)
2,639
369,099
27,328
5,433
(12,288)
-
633
21,106
46,1 43
20,596
381
-
67,120
90,469
457,325
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 95
NOTE 14: PROPERTY, PLANT & EQUIPMENT
CONSOLIDATED
30 June 2015
BUILDINGS
PL ANT &
EQUIPMENT
MOTOR
VEHICLES
OFFICE
EQUIPMENT
PL ANT AND
EQUIPMENT
UNDER LEASE
$'000
$'000
$'000
$'000
$'000
TOTAL
$'000
At 1 July 2014 net of accumulated depreciation
9,039
215,929
Additions
Impaired during the year
Disposals
Depreciation expense
Foreign currency translation
At 30 June net of accumulated depreciation
30 June 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
30 June 2014
At 1 July 2013 net of accumulated depreciation
Additions through acquisitions of subsidiaries
Additions
Transfers from areas in development
Disposals
Depreciation expense
Foreign currency translation
-
-
(1 49)
(1,531)
1,122
8,481
6,903
(140,999)
(1,150)
(45,659)
12,906
47,930
15,545
384,236
(7,064)
8,481
(336,306)
47,930
5,330
4,615
194
-
-
(1,1 47)
47
166,590
64,1 41
9,516
-
(63)
(26,252)
1,997
At 30 June net of accumulated depreciation
9,039
215,929
30 June 2014
Cost
Accumulated depreciation
Net carrying amount
18,161
(9,122)
9,039
404,483
(188,554)
215,929
1,233
242
-
(1 7 8)
(535)
158
920
3,943
(3,023)
920
81 7
424
367
(66)
(9)
(307)
7
1,233
6,468
(5,235)
1,233
2,578
309
-
(1 10)
(361)
460
2,876
7,051
(4,175)
2,876
1,090
1,728
1 15
(12)
(1)
(346)
4
2,578
1 1,730
240,509
-
(1,778)
(453)
(3,362)
(26)
6,1 1 1
28,383
(22,272)
6,1 1 1
7,907
3,924
3,864
-
-
(3,965)
-
7,454
(142,777)
(2,040)
(51,448)
1 4,620
66,318
439,158
(372,840)
66,318
181,7 34
74,832
1 4,056
(78)
(73)
(32,01 7)
2,055
11,730
240,509
7,386
(4,808)
2,578
28,862
465,360
(17,132)
11,730
(224,851)
240,509
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 96
NOTE 15: PAYABLES
Current
Trade creditors and accruals (a)
CONSOLIDATED
15
$’000
14
$’000
36,485
49,636
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 16: INTEREST BEARING LIABILITIES
Current
Lease liabilities (a), (b)
Bank overdraft (c)
Borrowings (d)
Non-current
Lease liabilities (a), (b)
Borrowings (d)
Convertible notes (e)
4,519
29,620
65,291
99,430
222
-
1 4,064
14,286
4,809
25,890
-
30,699
5,380
52,972
-
58,352
a) Carpentaria Gold Pty Ltd (“CGPL”), a wholly owned subsidiary of RML, entered into hire purchase agreements with 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 2015 and August 2016. RML
has provided an unsecured parent entity guarantee to these financiers in relation to some of these finance facilities.
b) Drilling and Mining Services Limited (“DAMS”), a wholly owned subsidiary of RML, entered into a hire purchase agreement in 2012 with Bank
of Africa Ghana Limited for the purchase of mining equipment. Monthly instalments are required under the terms of the contract which
expires in May 2016. RML has provided an unsecured parent entity guarantee to the financier over this finance facility. Bank of Africa
Ghana Limited has security over DAMS mining fleet equipment.
c) This facility is in place and is subject to an annual revision in approximately June 2016, and has an interest rate of 8% per annum on the
basis of usage. The maximum limit of this facility is $33.060m (AUD equivalent), and as at reporting date $3.225m (AUD equivalent) of the
facility was unused.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 97
NOTE 16: INTEREST BEARING LIABILITIES (CONTINUED)
d) RML entered into a Syndicated Facilities Agreement with Barclays Bank Plc and Investec Bank Plc and a Letter of Credit Facility Agreement
with Citibank N.A. The facilities comprise a US$50.000m senior secured Cash Advance Facility and A$29.339m of Environmental
Performance Bond Facilities. The facilities are revolving with a 3 year term, are fully drawn and expire on 28 February 2016. The facilities are
secured by the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Cross Guarantee and Indemnity given by RML (“the Borrower”), Carpentaria Gold Pty Ltd, Resolute (Somisy) Limited, Resolute
(Treasury) Pty Ltd, Resolute Pty Ltd and Resolute (Bibiani) Limited;
Share Mortgage granted by Resolute Pty Ltd over all of its shares in Resolute (Tanzania) Limited;
Share Mortgage granted by RML over all of its shares in Carpentaria Gold Pty Ltd;
Share Mortgage granted by the Borrower over all of its shares in Resolute (Bibiani) Limited;
Share Mortgage granted by the Borrower over all of its shares in Resolute (Somisy) Limited;
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;
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;
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;
Mortgage of Contractual Rights granted by Resolute (Bibiani) Limited in favour of the Security Trustee over a loan provided to Drilling
and Mining Services Limited, Mensin Gold Bibiani Limited and Noble Mining Ghana Limited to fund the development of the Bibiani Gold
project in Ghana; and,
(x)
Mortgage of Contractual Rights granted by Resolute (Treasury) Pty Ltd in favour of the Security Trustee over a loan provided to
Mensin Gold Bibiani Limited to fund the development of the Bibiani Gold project in Ghana..
Pursuant to the Syndicated Facilities Agreement, the following ratios are required:
(i)
(ii)
(Interest Cover Ratio): the ratio of EBITDA to Net Interest Expense will be greater than 5.00 times;
(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 than1.50:1; and,
(v)
(Reserve Tail Ratio): will exceed 30%..
There have been no breaches of these ratios.
e) On 15 December 2014, the Group issued 15,000,000 unsecured convertible notes which have a coupon rate of 10% p.a., payable quarterly
in arrears, raising $15m (less costs). The notes are convertible into ordinary shares, one for one, at the option of the holder, or repayable on
12 December 2017. The notes are listed on the Australian Securities Exchange (Code: “RSGG”).
f)
The total assets of the entities over which security exists amounts to $392.092m. $66.034m of these assets relate to property plant and
equipment.
g) Refer to Note 35(b) for details of average interest rates.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
98
NOTE 17: UNEARNED REVENUE
Current
Gold prepay loan
Non-current
Gold prepay loan
CONSOLIDATED
15
$’000
14
$’000
3,307
9,731
-
3,344
In October 2013, Resolute drew down on a US$20.000 million extension to the existing secured loan facility jointly provided by Barclays Bank
PLC (“Barclays”) and Investec Bank Plc (“Investec”). The loan is repayable in gold ounces in 24 equal instalments of 660 ounces per month
between November 2013 and October 2015 inclusive.
The secured loan has been classified as unearned revenue on the Statement of Financial Position as Barclays and Investec prepaid Resolute
for a fixed quantity of gold ounces. Resolute has a legal obligation to deliver gold ounces, and recognises revenue as and when it makes the
repayments in gold ounces.
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
Foreign exchange translation
Acquired through asset acquisition
Balance at the end of the year
510
25,581
83
4,916
1,061
32,151
62,097
1,489
63,586
63,451
1,1 15
45
(5,053)
3,049
-
62,607
3,435
21,043
83
4,560
1,604
30,725
60,016
1,267
61,283
57,624
1,332
(725)
(6,465)
261
1 1,424
63,451
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 99
CONSOLIDATED
15
$’000
14
$’000
380,305
380,305
380,305
380,225
-
80
380,305
380,305
NOTE 19: CONTRIBUTED EQUITY
(A)
C ONTRIBUTED EQUITY
Ordinary share capital:
641,189,223 ordinary fully paid shares (2014: 641,189,223)
(B) MOVEMENTS IN CONTRIBUTED EQUITY, NET OF ISSUING COSTS
Balance at the beginning of the year
Exercise of 194,999 unlisted options at $0.42 per share
Balance at the end of the year
(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 30 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 30 for details of the Performance Rights Plan. The vesting of performance rights is conditional upon specific performance
criteria or service hurdles 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.
(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, cash equivalents
and market value of bullion on hand. 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.
CONSOLIDATED
15
36%
14
6%
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 100
NOTE 20: RESERVES
(A) MOVEMENTS IN RESERVES
FOREIGN
CURRENCY
TRANSL ATION
RESERVE
NET
UNREALISED
GAIN/(LOSS)
RESERVE
CONVERTIBLE
NOTES EQUIT Y
RESERVE
EMPLOYEE
BENEFITS
EQUIT Y
RESERVE
$'000
$'000
$'000
As at 30 June 2013
Currency translation differences
Unrealised gain/(loss) reserve, net of tax
Share-based payments to employees
Transfer from retained earnings
As at 30 June 2014
Currency translation differences
Unrealised (loss)/gain reserve, net of tax
Share-based payments to employees
Equity portion of compound financial
instruments, net of tax and transaction costs
21,81 1
(7,300)
-
-
403
14,914
41,361
-
-
-
-
-
11,488
-
-
11,488
-
(11,615)
-
-
As at 30 June 2015
56,275
(127)
(B)
NATURE AND PURPOSE OF RESERVES
(I)
FOREIGN CURRENCY TRANSLATION RESERVE
-
-
-
-
-
-
-
-
-
384
384
SHARE
OPTIONS
RESERVE
$'000
5,987
-
-
-
-
TOTAL
$'000
33,816
(7,300)
11,488
1,677
403
5,987
40,084
-
-
-
-
41,361
(11,615)
2,812
384
$'000
6,018
-
-
1,677
-
7,695
-
-
2,812
-
10,507
5,987
73,026
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)
C ONVERTIBLE 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: (ACCUMULATED LOSSES)/RETAINED EARNINGS
Retained earnings at the beginning of the year
Transfer to foreign currency translation reserve
Changes in the proportion held by non-controlling interest
Net (loss)/profit attributable to members of the parent
(Accumulated losses)/retained earnings at the end of the financial year
CONSOLIDATED
15
$’000
14
$’000
292,049
259,139
-
(3,205)
(502,637)
(213,793)
(403)
-
33,313
292,049
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 NOTE 22: MATERIAL PARTLY-OWNED SUBSIDIARIES
Financial information of subsidiaries that have material non-controlling interests is provided below:
NAME
Societe des Mines de Syama SA
Mensin Gold Bibiani Limited
Societe des Mines de Finkolo SA
COUNTRY OF
INCORPORATION AND
OPERATION
Mali
Ghana
Mali
Accumulated balances of material Non-Controlling Interest:
Societe des Mines de Syama SA ("Somisy")
Mensin Gold Bibiani Limited ("Mensin")
Societe des Mines de Finkolo SA ("Finkolo")
Total Non-Controlling Interest
Loss allocated to material Non-Controlling Interest:
Somisy
Mensin
101
15
20%
10%
15%
15
$’000
(76,020)
(1,497)
3,205
(74,312)
(58,431)
(7,692)
(66,123)
14
20%
10%
-
14
$’000
(18,568)
5,435
-
(13,133)
(4,157)
-
(4,157)
The summarised financial information of these subsidiaries is provided below. This information is based on amounts before inter-company
eliminations.
15
$’000
14
$’000
15
$’000
14
$’000
15
$’000
14
$’000
Somisy
Mensin
Finkolo
Summarised Statement of
Comprehensive Income
Revenue
Loss for the year
Total comprehensive loss for the year
Summarised Statement of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities - External
Non-current liabilities - Intra Resolute Mining
Limited Group
310,761
231,128
(292,157)
(292,157)
(20,787)
(20,787)
194,043
131,87 1
1 15,610
588,396
(70,333)
(32,169)
(58,608)
(30,151)
-
(71,830)
(71,830)
3,570
47,067
(1,51 4)
(12,674)
-
-
-
2,639
87,050
(11,963)
(11,425)
(540,643)
(675,15 7)
(403,406)
(300,438)
Total Equity
(333,492)
(43,649)
(366,957)
(234,137)
-
-
-
-
-
-
37
122
21,341
20,845
(9)
-
(32)
-
(23,961)
(2,592)
(22,299)
(1,364)
Summarised Statement of Cash Flow
Operating
Investing
63,640
(49,086)
25,489
(96,932)
(2,7 7 7)
(35,362)
Net increase/(decrease) in cash and cash
equivalents
1 4,554
(7 1,443)
(38,139)
-
-
-
1,380
496
1,555
748
1,876
2,303
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 102
NOTE 23: 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 2016 for the consolidated entity is approximately
$11.825m (2015: $10.095m). This includes the minimum amounts required to retain tenure. There are no material exploration commitments
further out than one year.
NOTE 24: LEASE COMMITMENTS
A)
F INANCE 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 16)
Non-current liability (Note 16)
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.
C)
OTHER EXPENDITURE COMMITMENTS
Due within one year
Aggregate expenditure contracted for at balance date but not provided for
CONSOLIDATED
15
$’000
4,738
223
4,961
(220)
4,741
4,519
222
4,741
525
1,045
1,570
1,155
1,155
14
$’000
5,426
5,673
1 1,099
(910)
10,189
4,809
5,380
10,189
644
23
667
1,705
1,705
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 103
NOTE 25: RELATED PARTY TRANSACTIONS
(i) Refer to the audited Remuneration Report 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 2015.
(iii) During the year ended 30 June 2015, 500 convertible notes were issued at $1.00 per note to each of Mr Beilby, Mr Fitzgerald and Mr Venn.
(iv) During the year ended 30 June 2014, the Group compulsorily acquired all unowned minority held convertible notes in Noble which had a
face value of $0.12 per note, a coupon rate of 8% and a term of 3 years. Included in the acquisition was the purchase of 40,000 convertible
notes from Hardrock Capital Pty Ltd - CGLW No. 2 Super Fund, whose beneficiary is Peter Sullivan, who is a director and member of
Resolute’s Key Management Personnel. The acquisition price of those notes was $0.129 per note, totalling $5,160.
(v) During the year ended 30 June 2014, pursuant to an interim funding agreement, RML advanced $11.946m (AUD equivalent) to Mensin Gold
Bibiani Limited (formerly Noble Gold Bibiani Limited), in its capacity as an associate. The loan subsequently formed part of the consideration
provided by RML for the acquisition of the Bibiani Gold Project.
NOTE 26: INTERESTS IN JOINT ARRANGEMENTS
The consolidated entity has an interest in the following material joint operations whose principal activities are to explore for gold. The Group’s
interests in the assets employed in the joint operations 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 operations (2014: nil).
JOINT OPERATIONS
ENTIT Y HOLDING INTEREST
OTHER PARTICIPANT/JOINT OPERATION
PERCENTAGE OF INTEREST HELD
Mabangu Mining Limited
Sub Sahara Resources (Tanzania) Limited/Nyakafuru JV¹
Mabangu Mining Limited
Yellowstone Limited /Mega JV
Resolute (Tanzania) Limited
ABG Exploration Limited/GP West JV¹
1)
Interests in joint operations greater than 50% have been accounted for as joint operations as all decision making requires unanimous agreement.
15
%
66
49
70
14
%
63
49
70
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 104
NOTE 27: NOTES TO THE CASH FLOW STATEMENTS
(A)
RECONCILIATION OF NET (LOSS)/PROFIT FROM CONTINUING OPERATIONS AFTER INCOME TAX TO THE NET OPERATING
CASH FLOWS:
Net (loss)/profit from ordinary activities after income tax
(568,760)
29,156
CONSOLIDATED
15
$’000
14
$’000
Add/(deduct):
Share-based payments including employee long term incentive costs
Dividend income
Profit on sale of inventory
Profit on sale of property, plant and equipment
Profit on sale of available for sale financial assets
Rehabilitation and restoration provision accretion
Rehabilitation and restoration provision adjustment from non operating mine sites
Rehabilitation and restoration cash expenditure
Depreciation and amortisation of property, plant and equipment, evaluation, development and rehabilitation costs
Foreign exchange losses/(gains)
Inventory net realisable value movements
Fair value movement on convertible notes held in associate
Impairment of exploration, evaluation and development
Impairment of property, plant and equipment
Impairment of accounts receivable
Impairment of gold equity investments
Non cash finance costs
Share of associates' losses
Changes in operating assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
Increase in stripping activity asset
Decrease in payables
Decrease in current tax balances
Increase/(decrease) in operating provisions
Net operating cash flows
(B)
F INANCE LEASES
1,667
(64)
(2,027)
(225)
(1 1,921)
1,115
(1,7 63)
(5,053)
101,595
39,538
8,389
-
418,262
1 42,7 7 7
1 1,042
331
2,698
-
(16,744)
(48,273)
(771)
(13,31 1)
(7,512)
(1,404)
12,275
61,861
1,677
-
-
(210)
(13,7 07)
1,332
-
(6,465)
67,840
(18,061)
21,362
18,000
-
-
919
-
926
704
4,430
37,229
1,460
(13,877)
(23,743)
(1,069)
(3,1 7 6)
104,727
Refer to Note 16(a) for additions to finance leases and for terms and conditions.
(C)
NON CASH INVESTING AND FINANCING ACTIVITIES
2015
Nil
2014
On 18 June 2014, RML acquired three subsidiaries from Noble Mineral Resources Limited. As part of the consideration, RML forgave amounts
owing on the 706m convertible notes held in Noble Mineral Resources Limited.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 105
NOTE 28: 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 ENTIT Y AND COUNTRY OF
INCORPORATION
CONSOLIDATED ENTIT Y COMPANY HOLDING
THE INVESTMENT
PERCENTAGE OF SHARES HELD BY
CONSOLIDATED ENTIT Y
Amber Gold Cote d’Ivoire SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Carpentaria Gold Pty Ltd, Aust.
Resolute Mining Limited
Drilling and Mining Services Limited, Ghana
Resolute (Bibiani) Limited
Excalibur Cote d’Ivoire SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Goudhurst Pty Ltd, Aust. (a)
Resolute (Treasury) Pty Ltd
Mabangu Exploration Limited, Tanzania
Resolute (Tanzania) Limited
Mabangu Mining Limited, Tanzania
Resolute (Tanzania) Limited
Mensin Gold Bibiani Limited, Ghana
Resolute (Bibiani) Limited
Noble Mining Ghana Limited, Ghana
Resolute (Bibiani) Limited
Resolute (Bibiani) Limited, Jersey (a)
Resolute Mining Limited
Resolute (CDI Holdings) Limited, Jersey (a)
Resolute Mining Limited
Resolute CI SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Resolute Exploration SARL, Mali
Resolute (Finkolo) Limited
Resolute (Finkolo) Limited, Jersey (a)
Resolute Mining Limited
Resolute (Ghana) Limited, Ghana
Resolute Mining Limited
Resolute Mali S.A.,Mali
Resolute Pty Ltd, Aust.
Resolute (Somisy) Limited
Resolute Mining Limited
Resolute (Somisy) Limited, Jersey (a)
Resolute Mining Limited
Resolute (Tanzania) Limited, Tanzania
Resolute Pty Ltd
Resolute (Treasury) Pty Ltd, Aust. (a)
Resolute Mining Limited
Societe des Mines de Finkolo SA, Mali
Resolute (Finkolo) Limited
Societe des Mines de Syama S.A., Mali
Resolute (Somisy) Limited
15
%
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
100
85
80
14
%
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
100
100
80
(a) 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.
(b) There are no significant restrictions over the controlled entities on their ability to use assets and settle the liabilities of the group.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 106
NOTE 29: AUDITOR REMUNERATION
Auditing
Taxation planning advice and review and other services
CONSOLIDATED
15
$
320,000
89,800
409,800
14
$
320,165
135,370
455,535
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)
Total amounts received or due and receivable by Ernst & Young globally
Amounts received or due and receivable by non Ernst & Young firms for auditing
210,37 5
620,1 7 5
32,055
13,225
468,760
33,247
NOTE 30: EMPLOYEE BENEFITS
A)
E MPLOYEE ENTITLEMENTS
The aggregate employee entitlement liability is comprised of:
Provisions (current) (Note 18)
Provisions (non-current) (Note 18)
B)
EMPLOYEE SHARE OPTION PLAN
CONSOLIDATED
15
$’000
25,581
1,489
27,070
14
$’000
21,043
1,267
22,310
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 30(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.
Employees will only be able to exercise the options allocated to them if they meet certain performance criteria.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 107
NOTE 30: EMPLOYEE BENEFITS (CONTINUED)
B)
EMPLOYEE SHARE OPTION PLAN (CONTINUED)
Details of the employee share option plan for the consolidated entity are as follows:
OPTION
CATEGORY
OPENING
NUMBER OF
OPTIONS
L APSED
DURING
THE YEAR
CLOSING
NUMBER OF
OPTIONS
OPTION
GRANT DATE
OPTION
ISSUE DATE
ORIGINAL
NUMBER OF
OPTIONS
ISSUED
EXERCISE
PRICE
EXPIRY
DATE
H
I
J
K
L
M
N
450,000
(450,000)
-
15/02/10
15/02/10
1,237,000
39,000
90,000
2,000,000
815,666
130,000
(6,000)
-
-
33,000
90,000
30/06/10
27/10/10
16/07/10
16/11/10
179,000
135,000
2,000,000
2/12/10
5/01/11
2,000,000
(59,333)
756,333
23/12/10
25/01/11
1,366,000
-
130,000
29/06/11
30/06/11
130,000
823,300
689,400
(42,000)
647,400
4/01/12
27/01/12
4,214,066
(557,333)
3,656,733
15
14/02/15
15/07/15
15/11/15
4/01/16
24/01/16
15/07/16
26/01/17
$1.09
$1.21
$1.43
$1.36
$1.43
$1.18
$1.85
14
Balance at the beginning of the year
- lapsed
- exercised
Balance at end of year (i)
Vested and exercisable at the end of the year
NUMBER OF
EMPLOYEE
OPTIONS
WEIGHTED
AVERAGE
EXERCISE PRICE
NUMBER OF
EMPLOYEE
OPTIONS
WEIGHTED
AVERAGE
EXERCISE PRICE
4,214,066
(557,333)
-
3,656,733
3,656,733
1.42
1.18
-
1.46
1.46
4,680,065
(271,000)
(194,999)
4,21 4,066
3,984,266
1.39
1.58
0.42
1.42
1.39
(i) The weighted average remaining contractual life for the share options outstanding as at 30 June 2015 is 0.57 years (2014: 1.45 years).
The following tables summarises information about options exercised by employees during the year:
2015
Nil
2014
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
194,999
31 Jan 09
17 Jan 14
31 Jan 14
$
0.42
$
81,900
194,999
17 Jan 14
$
0.54
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 108
NOTE 30: EMPLOYEE BENEFITS (CONTINUED)
B)
EMPLOYEE SHARE OPTION PLAN (CONTINUED)
The following table lists the key variables used in the option valuation:
Number of options at year end
33,000
90,000
2,000,000
756,333
130,000
647,400
OPTIONS I
OPTIONS J
OPTIONS K
OPTIONS L
OPTIONS M
OPTIONS N
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 ($)
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 2015 (2014: nil).
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 for Level 1 Employees
I) GRANT FREQUENCY AND LTI QUANTUM
KMP and Operations Managers receive a new grant of Performance Rights every year and the LTI given to KMP forms a key component of
their 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, 50% of fixed remuneration for the other KMP and 30% of fixed
remuneration for the Operations Managers. 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 grant 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 for Level 1 employees 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.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 109
NOTE 30: EMPLOYEE BENEFITS (CONTINUED)
C)
PERFORMANCE RIGHTS PLAN (CONTINUED)
Overview of the Company’s approach to Long Term Incentives for Level 2 Employees
In accordance with the remuneration framework adopted by the RML board in 2012 and rolled out to Level 2 employees (ie. those employees
reporting to a Level 1 employee) on 1 July 2013, Level 2 employees receive a performance based Short Term Incentive (“STI”) each year (target
equal to 20% of their fixed remuneration) and at the time of receiving their STI, receive a deferred STI (or “LTI”) for the same amount in the
form of Performance Rights which will vest in a further 2 years’ time subject to the employee still working for RML for that period. This is the
LTI component of Level 2’s remuneration package and has replaced the employee options that were previously issued. On 28 August 2015,
5,838,967 Performance Rights were issued to Level 2 employees relating to their performance in the year ended 30 June 2015.
ISSUE
DATE
TOTAL
NUMBER
FAIR VALUE
PER RIGHT AT
GRANT DATE
NUMBER
QUOTED
EXERCISE
PRICE
VESTING
DATE
Performance rights on issue
Level 1
Level 1
Level 2
Level 1
As at 30 June 2015
Changes during current year
3/12/12
1/07/13
1,586,97 8
3,1 7 6,743
27/08/14
1,519,282
1/07/14
2,385,834
8,668,837
$1.46
$0.43
$0.56
$0.50
$0.66
Increase through issue of performance rights to eligible employees
(Level 1)
3,088,428
$0.50
Increase through issue of performance rights to eligible employees
(Level 2)
Decrease through lapsing of performance rights (Level 1)
Decrease through lapsing of performance rights (Level 1)
Decrease through lapsing of performance rights (Level 2)
1,544,023
(408,485)
(702,594)
(24,741)
$0.56
$0.43
$0.50
$0.56
The following table lists the key variables used in the valuation of performance rights:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30/06/15
30/06/16
30/06/16
30/06/17
30/06/17
30/06/16
30/06/16
30/06/17
30/06/16
15
14
RESERVE AND
RESOURCES
RIGHTS
TSR RIGHTS SERVICE RIGHTS
TOTAL
RESERVE AND
RESOURCES
RIGHTS
TSR RIGHTS
TOTAL
772,107
2,316,321
1,544,023
4,632,451
896,307
2,688,921
3,585,228
0.62
-
2.64%
64%
0%
0.62
-
2.64%
64%
0%
0.56
-
2.53%
62%
0%
0.53
-
2.75%
53%
3%
0.53
-
2.75%
53%
3%
0.53
-
2.75%
53%
3%
3
3
2
3
3
3
NOT REFLECTED
IN VALUATION
DUE TO
NON-MARKET
CONDITION
REFLECTED
IN VALUATION
THROUGH
MONTE CARLO
SIMUL ATION
WEIGHTED
AVERAGE
NOT REFLECTED
IN VALUATION
DUE TO
NON-MARKET
CONDITION
REFLECTED
IN VALUATION
THROUGH
MONTE CARLO
SIMUL ATION
WEIGHTED
AVERAGE
$0.61
$0.47
$0.50
$0.53
$0.39
$0.43
$0.56
n/a
$0.56
-
-
-
HURDLE
Number of performance rights
issued
Underlying share price ($)
Exercise price ($)
Risk free rate
Volatility factor
Dividend yield
Period of the rights from grant
date (years)
EFFECT OF PERFORMANCE
HURDLES
Value of performance right at
grant date (Level 1)
Value of performance right at
grant date (Level 2)
1,135,820 performance rights lapsed in the year ended 30 June 2015 (30 June 2014: nil).
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 110
NOTE 31: CONTINGENT LIABILITIES & COMMITMENTS
CONTINGENT LIABILITIES
(A)
N ATIVE 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.
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. The Tax Revenue Appeals Board has ruled that a
one third deposit is required to have the appeal heard and this decision has been appealed by MML to the Tax Tribunal. A hearing date is yet to
be set.
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 $5.800m) of fuel taxes to RTL during the period from 1999 to 2005, but due to their change in interpretation are
now arguing they should not have.
RTL strongly disagrees with the TRA revised interpretation and it is vigorously defending 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 2008, RTL lodged an appeal against this demand and was required to pay a deposit of 3.030b Tsh (or $1.931m) for the case to be heard by
the Tax Revenue Appeals Board. These deposits have been fully provided for in RTL’s accounts.
In June 2015, the Tax Revenue Appeals Board heard RTL’s appeal and ruled in RTL’s favour and ordered the withheld refunds of 3.030b Tsh (or
$1.931m) to be released to RTL. The TRA has subsequently appealed this decision to the Tax Tribunal and a hearing date is yet to be set.
3) A Tsh 9.327b (US$5.652m) 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.
This matter was heard by the Tax Revenue Appeals Board and a judgment was handed down in favour of the TRA in November 2013. RTL has
received legal advice confirming that it has strong grounds to appeal this decision and as a result has lodged an appeal against this decision
with the Tax Tribunal and is waiting for its case to be heard.
4) In 2013 and 2014, the TRA issued RTL with tax assessments totalling US$43.820m ($57.225m) relating to income tax and interest allegedly
owing from the 1998 to 2013 financial years. The assessments purport to deny/disallow deductions claimed in the past income tax returns.
RTL and its professional advisors strongly disagree with the TRA’s interpretations in all aspects and have lodged a US$5.900m ($7.705m)
deposit to have its appeal against these assessments heard. The balance of the assessed amount has not been provided for in the June 2015
accounts. A date for the appeal to be heard is yet to be set.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 111
NOTE 31: CONTINGENT LIABILITIES & COMMITMENTS (CONTINUED)
CONTINGENT LIABILITIES (CONTINUED)
(C)
AM OUNTS POTENTIALLY PAYABLE TO HISTORICAL BIBIANI CREDITORS
In June 2014, Mensin Gold Bibiani Limited, Drilling and Mining Services Limited and Noble Mining Ghana Limited (collectively referred to as the
“Companies”) entered into court approved Schemes of Arrangement (“Scheme”) with their creditors and employees (“Scheme Creditors”).
The Scheme outlines the timing and amounts of payments to be made by the Companies to a Scheme Fund and a Future Fund who in turn
are responsible for making payments to the Scheme Creditors. The Scheme Creditors arise from transactions that occurred prior to the
Companies becoming part of the Resolute group. The Scheme Fund and the Future Fund are administered by Ferrier Hodgson.
The implementation of the Scheme has had the effect of removing from the Companies’ balance sheets all historical liabilities relating to
amounts payable to Scheme Creditors and replacing this with an obligation to fund the Scheme Fund and Future Fund as and when necessary.
The unconditional obligations to make payments to the Scheme Fund have been paid prior to 30 June 2015. In addition to those recorded
payments and liabilities, the following contingent liabilities to provide funding to the Scheme Fund and Future Fund exist at year end:
› Potential payment to the Scheme Fund of US$3.600m ($4.701m) if, following receipt of the Feasibility Study, the board of Resolute, in its
absolute discretion, makes a decision to proceed with the development of Bibiani; and
› Potential payment to a Future Fund of up to US$7.800m ($10.186m) conditional upon the generation of Free Cashflow from Bibiani mine
operations for the period of 5 years from the date that Commercial Production is declared. Free Cashflow means 25% of the sum of Project
Revenue for that period less Permitted Payments for that period, which includes:
›
›
operational expenses and capital costs paid in connection with the mining operations; and,
repayment of principal and interest relating to funds advanced by Resolute up to the commencement of mining operations.
COMMITMENTS
(A)
R ANDGOLD/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. As at 30 June 2015, Resolute’s
80% attributable share of Syama’s project to date gold production was 735,906 ounces of gold.
(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$3.75m.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 112
NOTE 32: (LOSS)/EARNINGS PER SHARE (EPS)
CONSOLIDATED
15
14
Basic (loss)/earnings per share
(Loss)/profit attributable to ordinary equity holders of the parent for basic earnings per share ($'000)
(502,637)
33,313
Weighted average number of ordinary shares outstanding during the period used in the
calculation of basic EPS
Basic (loss)/earnings per share (cents per share)
Diluted (loss)/earnings per share
641,189,223
641,081,840
(78.39)
5.20
(Loss)/profit used in calculation of diliuted earnings per share ($'000)
(502,637)
33,313
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic EPS
Weighted average number of notional shares used in determining diluted EPS (i)
Weighted average number of ordinary shares outstanding during the period used in the
calculation of diluted EPS
641,189,223
641,081,840
n/a
5,1 7 2,206
641,189,223
646,254,046
Number of potential ordinary shares that are not dilutive and hence not included in calculation of diluted EPS
18,656,7 33
4,21 4,066
Diluted (loss)/earnings per share (cents per share)
(78.39)
5.15
i)
ii)
Dilutive instruments have not been included in the calculation of diluted earnings per share for 2015 because the result for the year
was a loss.
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) 5,588,771 listed performance rights over Resolute Mining Limited Ordinary Shares were issued to Level 1 employees on 1 July 2015,
vesting on 30 June 2018 subject to performance hurdles being met and with a strike price of $nil.
b) 5,838,967 listed performance rights over Resolute Mining Limited Ordinary Shares were issued to Level 2 employees on 28 August
2015, vesting on 30 June 2017 subject to a service hurdle being met and with a strike price of $nil.
c) 393,771 fully paid ordinary shares were issued to Level 1 employees following the testing of performance rights that vested on
30 June 2015.
INFORMATION ON THE CLASSIFICATION OF SECURITIES
I)
OPTIONS
Options granted to employees (including KMP) as described in Note 30 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)
P ERFORMANCE RIGHTS
Performance rights granted to employees (including KMP) as described in Note 30, 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015
NOTE 33: KEY MANAGEMENT PERSONNEL
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
113
CONSOLIDATED
15
$
14
$
3,044,367
3,101,67 8
1 7 7,634
53,902
1,304,005
4,579,908
1 40,092
61,47 2
959,855
4,263,097
NOTE 34: 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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 114
NOTE 34: OPERATING SEGMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2015
RAVENSWOOD
(AUSTRALIA)
SYAMA
(MALI)
BIBIANI
(GHANA)
CORP/OTHER
TREASURY
TOTAL
$'000
$'000
$'000
$'000
$'000
$'000
UNALLOCATED (B)
Revenue
Gold and silver sales at spot to external customers (a)
147,272
310,761
Total segment gold and silver sales revenue
147,272
310,761
Cash costs
Depreciation and amortisation
Other operating costs (including gold in circuit movement)
Other corporate/admin costs
(97,547)
(177,851)
(35,478)
(4,57 1)
(7 1)
(66,015)
(10,013)
-
Segment operating result before treasury, other income/
(expenses) and tax
9,605
56,882
Other income
Exploration and business development expenditure
Finance costs
Asset impairment expenses and inventory net realisable
value movements
77
(2,1 16)
-
-
(491)
-
-
-
-
-
-
-
-
-
-
-
1,114
1,114
-
-
-
(3,604)
(2,490)
-
-
-
-
-
-
-
-
12,058
(4,720)
-
459,1 47
459,1 47
(275,398)
(101,493)
(14,584)
(3,675)
63,997
12,135
(7,327)
-
(1 1,063)
(1 1,063)
Segment operating result before treasury and tax
6,563
(433,627)
(78,703)
(1 7,476)
995
(522,248)
(1,003)
(490,018)
(78,7 03)
(10,266)
-
(57 9,990)
-
-
-
-
-
-
-
-
-
-
(5,273)
-
-
-
(579)
(5,273)
(579)
(39,47 1)
(39,471)
(1,000)
100
(289)
-
(1,189)
6,563
(434,627)
(78,603)
(23,038)
(39,055)
(568,760)
26,928
14,554
(38,139)
(2,742)
26,21 4
26,815
Loss for the year from discontinued operation, net of tax
Treasury - realised losses
Treasury - unrealised losses
Tax (expense)/benefit
Profit/(loss) for the year
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
Movement in bank overdraft, including foreign exchange
movements
Exchange rate adjustment in cash on hand
Cash flows from discontinued operation
Movement in cash and cash equivalents per consolidated
cash flow statement
Capital expenditure
10,377
54,913
19,111
6
Segment assets in continuing operations
91,723
249,644
52,653
Segment assets in discontinued operation
-
-
-
Total segment assets
91,723
249,644
52,653
Segment liabilities in continuing operations
44,603
92,244
17,148
Segment liabilities in discontinued operation
-
-
-
18,989
1,462
20,451
6,541
5,773
Total segment liabilities
44,603
92,244
17,148
12,314
82,936
249,245
(18,265)
(153)
(3,730)
(597)
(17,186)
(13,116)
84,407
413,009
1,462
414,471
-
-
-
-
82,936
243,472
-
5,773
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 115
NOTE 34: OPERATING SEGMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2014
RAVENSWOOD
(AUSTRALIA)
SYAMA
(MALI)
BIBIANI
(GHANA)
CORP/OTHER
TREASURY
TOTAL
$'000
$'000
$'000
$'000
$'000
$'000
UNALLOCATED (B)
Revenue
Gold and silver sales at spot to external customers (a)
195,083
231,128
Total segment gold and silver sales revenue
195,083
231,128
Cash costs
Depreciation and amortisation
(1 15,946)
(166,450)
(38,052)
(29,969)
Other operating costs (including gold in circuit movement)
(8,124)
(1 4,953)
Other corporate/admin costs
-
-
Segment operating result before treasury, other income/
(expenses) and tax
32,961
19,756
-
-
-
-
-
(4,707)
542
542
-
-
-
-
426,753
426,753
(282,396)
(68,021)
(23,077)
(4,707)
(4,707)
542
48,552
-
-
-
-
-
-
-
-
Other income
Exploration and business development expenditure
Finance costs
128
(2,742)
-
-
-
14,444
(3,31 7)
(2,754)
(2,689)
-
-
-
-
(8,7 7 2)
1 4,57 2
(1 1,502)
(8,7 7 2)
Share of associates' losses, asset impairment expenses and
fair value movements
384
(15,397)
(18,000)
Segment operating result before treasury and tax
30,731
1,042
(20,754)
-
-
-
-
-
-
-
-
-
-
-
-
(704)
(8,100)
1,961
-
-
73
-
(33,717)
6,214
-
(78)
9,133
1,961
(78)
18,067
18,067
-
73
30,731
1,042
(20,754)
(6,066)
24,203
29,156
53,7 1 1
(7 1,443)
-
(14,591)
39,828
7,505
Profit for the year from discontinued operation, net of tax
Treasury - realised losses
Treasury - unrealised gains
Tax benefit
Profit/(loss) for the year
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
Movement in bank overdraft, including foreign exchange
movements
Exchange rate adjustment in cash on hand
Cash flows from discontinued operation
Movement in cash and cash equivalents per consolidated
cash flow statement
Capital expenditure from continuing operations
13,521
82,037
Capital expenditure from discontinued operations
-
-
Total capital expenditure
13,521
82,037
-
-
-
Segment assets in continuing operations
102,021
671,385
93,967
Segment assets in discontinued operation
-
-
-
Total segment assets
102,021
671,385
93,967
Segment liabilities in continuing operations
46,606
78,431
30,127
Segment liabilities in discontinued operation
-
-
-
185
24
209
67,261
9,655
76,916
6,532
16,324
Total segment liabilities
46,606
78,431
30,127
22,856
66,964
244,984
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.
17,157
(4,816)
5,293
60
(4,340)
20,859
95,743
24
95,767
934,634
9,655
944,289
-
-
-
-
-
66,964
228,660
-
16,324
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 116
NOTE 35: 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.
Movements in fair value are accounted for through the consolidated statement of comprehensive income.
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 117
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(A) M ARKET RISK (CONTINUED)
The Group’s exposure to foreign exchange currency risk at the reporting date was as follows:
15
Financial Assets
Cash
Receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities (i)
14
Financial Assets
Cash
Receivables
Available for sale financial assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities (i)
UNITED
STATES
DOLL ARS
AUSTRALIAN
DOLL ARS
TANZANIAN
SHILLINGS
POUNDS
STIRLING
OTHER
NO FOREIGN
CURRENCY
RISK
TOTAL
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
A$'000
3,356
76
-
-
2,983
560
-
-
142
1,024
-
-
61
1,41 1
-
-
-
-
-
-
1,932
10,349
1 1 4
3,584
9,885
12,009
114
3,584
3,432
3,543
1,166
61
1,41 1
15,97 9
25,592
1,7 10
65,291
67,001
6,659
1,155
-
-
990
-
990
1,792
20
-
-
-
-
-
-
-
-
689
-
689
33,096
48,425
36,485
1 13,716
81,521
150,201
620
3,363
-
-
4,598
128
-
-
-
-
-
-
4,749
854
23,523
2,908
18,546
5,392
23,523
2,908
7,814
1,812
3,983
4,598
128
32,034
50,369
4,445
52,972
57,41 7
1,761
-
1,761
2
-
2
-
-
-
1,550
-
1,550
41,87 8
36,079
7 7,957
49,636
89,051
138,687
(i)
Several of the intercompany balances between Group entities create foreign exchange differences which have historically been
material and are not completely eliminated from the Group’s consolidated statement of comprehensive income (Refer to Note 2(i)). 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 2015.
FACILIT Y
CURRENCY
DENOMINATION
FUNCTIONAL
CURRENCY OF
THE LENDER
FUNCTIONAL
CURRENCY OF
THE BORROWER
AUD EQUIVALENT
15
$'000
14
$'000
Resolute Mining Limited (beneficiary)/
Resolute (Somisy) Limited
Resolute (Tanzania) Limited and its controlled
entities (beneficiary)/Resolute Pty Ltd
Resolute (Treasury) Pty Ltd (beneficiary) and
its controlled entity
Resolute (Treasury) Pty Ltd (beneficiary) and
Mensin Gold Bibiani Limited (another Group
controlled entity)
AUD
USD
GBP
USD
AUD
USD
AUD
AUD
Central African
Francs
540,643
537,676
AUD
276,820
231,527
GBP
-
30,763
USD
52,235
869,698
1 1,946
81 1,912
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 118
NOTE 35: 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 2015 and 2014 financial years, the Group’s external 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.
15
Financial Assets
Cash
Receivables
Available for sale financial
assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities
14
Financial Assets
Cash
Receivables
Available for sale financial
assets
Other financial assets
Financial Liabilities
Payables
Interest bearing liabilities
FLOATING
INTEREST
FIXED INTEREST RATE
NON INTEREST
TOTAL
AVERAGE INTEREST RATE
MATURING IN
BEARING
RATE
< 1 YEAR
1 TO 5 YEARS
> 5 YEARS
FLOATING
FIXED
$'000
$'000
$'000
$'000
$'000
$'000
9,885
-
-
3,584
13,469
-
-
-
18,546
-
-
2,908
21,454
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
99,430
99,430
14,286
14,286
-
-
-
-
-
-
-
-
-
-
-
-
83,671
83,671
5,380
5,380
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,885
0.8%
12,009
12,009
1 1 4
-
1 1 4
3,584
12,123
25,592
36,485
36,485
-
113,7 16
36,485
150,201
-
-
0.4%
-
-
-
-
-
-
-
6.1%
-
18,546
0.5%
5,392
5,392
23,523
23,523
-
-
-
2,908
0.4%
28,915
50,369
-
-
-
-
49,636
-
49,636
89,051
49,636
138,687
-
-
-
5.4%
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 119
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(C)
CREDIT RISK EXPOSURE
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.
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 16, 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:
CONSOLIDATED
Cash at bank & short term deposits
Counterparties with external credit ratings
A
BBB
Counterparties without external credit ratings
Total cash at bank & short term deposits
Trade receivables
Counterparties with external credit ratings
AA+
B-
Counterparties without external credit ratings *
Group 1
Group 2
Total trade receivables
Other financial assets - restricted cash
Counterparties without external credit ratings
15
$'000
9,074
226
585
9,885
294
-
1 1,159
10,849
22,302
14
$'000
1 4,37 8
3,643
525
18,546
123
193
1,542
16,012
1 7,870
3,584
2,908
*
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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 120
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(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 2015, the Group had $3.861m (AUD equivalent) (2014: $7.200m AUD equivalent) of unused financing facilities.
The remaining contractual maturities of the Group’s financial liabilities, including future finance costs, are:
LIQUIDITY ANALYSIS
15
Payables
Interest bearing liabilities
14
Payables
Interest bearing liabilities
LESS THAN 3
MONTHS
3 TO 12 MONTHS
1 TO 5 YEARS
LESS FINANCE
CHARGES
$'000
36,485
1 7,408
53,893
49,636
28,209
7 7,845
$'000
-
85,1 7 5
85,1 7 5
-
5,067
5,067
$'000
-
18,834
18,834
-
59,956
59,956
$'000
-
(7,701)
(7,701)
-
(4,181)
(4,181)
TOTAL
$'000
36,485
1 13,7 16
150,201
49,636
89,051
138,687
(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
other than the Group’s interest bearing liabilities which have a fair value of $118.302m (2014: $90.002m) compared to the carrying value of
$113.716m (2014: $89.051m). The differences between the fair value and carrying amount are capitalised borrowing costs and the component
of the Convertible Notes recorded as equity.
(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.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 121
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(F)
FAIR VALUES FOR INSTRUMENTS RECOGNISED AT FAIR VALUE (CONTINUED)
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.
Financial assets*
Available for sale financial assets
15
QUOTED MARKET
PRICE (LEVEL 1)
$'000
114
114
14
QUOTED MARKET
PRICE (LEVEL 1)
$'000
23,523
23,523
TOTAL
$'000
114
114
TOTAL
$'000
23,523
23,523
*
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.
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).
(G)
TRANSFER BETWEEN CATEGORIES
There were no transfers between categories during the year.
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 122
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(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.
15
CARRYING
AMOUNT
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
INTEREST RATE RISK
-1%
+1%
FOREIGN EXCHANGE RISK
GOLD PRICE RISK
-10%
+10%
-10%
+10%
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)
14
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)
9,885
12,009
1 1 4
3,584
36,485
1 13,7 16
18,546
5,392
23,523
2,908
49,636
89,051
(34)
-
-
(25)
-
-
(59)
(41)
-
-
(20)
-
-
(61)
(34)
-
-
(25)
-
-
(59)
(41)
-
-
(20)
-
-
(61)
34
-
-
25
-
-
59
41
-
-
20
-
-
61
34
-
-
25
-
-
59
41
-
-
20
-
-
61
578
78
-
279
(242)
(5,078)
(4,385)
1,056
262
-
226
(241)
(4,120)
(2,817)
578
78
-
279
(242)
(5,078)
(4,385)
1,056
262
-
226
(241)
(4,120)
(2,817)
(473)
(64)
-
(228)
198
4,155
3,588
(864)
(215)
-
(185)
197
3,37 1
2,304
(473)
(64)
-
(228)
198
4,155
3,588
(864)
(215)
-
(185)
197
3,37 1
2,304
-
-
(8)
-
-
-
(8)
-
-
-
-
-
-
-
(8)
-
-
-
(8)
-
-
-
-
-
-
-
8
-
-
-
8
-
-
-
-
-
(1,647)
(1,647)
1,647
1,647
(1,647)
(1,647)
1,647
1,647
-
-
8
-
-
-
8
-
-
-
-
-
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 123
NOTE 35: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONTINUED)
(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.
15
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)
14
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)
CARRYING
AMOUNT
9,885
12,009
1 1 4
3,584
36,485
1 13,7 16
18,546
5,392
23,523
2,908
49,636
89,051
(34)
(34)
34
34
(25)
(25)
25
25
(59)
(59)
59
59
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(41)
(41)
(20)
(20)
(61)
(61)
-
-
-
-
41
-
-
20
-
-
61
-
-
-
-
41
-
-
20
-
-
61
INTEREST RATE RISK
-1%
+1%
FOREIGN EXCHANGE RISK
GOLD PRICE RISK
-10%
+10%
-10%
+10%
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
PROFIT
EQUIT Y
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
578
78
-
279
(242)
(5,078)
(4,385)
1,056
262
-
226
(241)
(4,120)
(2,817)
578
78
-
279
(242)
(5,078)
(4,385)
1,056
262
-
226
(241)
(4,120)
(2,817)
(473)
(64)
-
(228)
198
4,155
3,588
(864)
(215)
-
(185)
197
3,37 1
2,304
(473)
(64)
-
(228)
198
4,155
3,588
(864)
(215)
-
(185)
197
3,37 1
2,304
-
-
(8)
-
-
-
(8)
-
-
-
-
(8)
-
-
-
(8)
-
-
-
-
8
-
-
-
8
-
-
-
-
8
-
-
-
8
-
-
(1,647)
(1,647)
1,647
1,647
-
-
-
-
-
-
-
-
-
-
-
-
(1,647)
(1,647)
1,647
1,647
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 124
NOTE 36: SUBSEQUENT EVENTS
On 1 July 2015, 5,588,771 performance rights were granted and issued to Level 1 employees, vesting on 30 June 2018 subject to performance
hurdles being met and with a strike price of $nil. A further 5,838,967 performance rights were issued on 28 August 2015 to Level 2 employees,
vesting on 30 June 2017 and subject to a service period hurdle and with a strike price of $nil.
On 28 August 2015, 393,771 fully paid ordinary shares were issued to Level 1 employees following the testing of performance rights that
vested on 30 June 2015. As at the date of this report 641,582,994 shares were on issue.
NOTE 37: PARENT ENTITY INFORMATION
Information relating to Resolute Mining Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
(Accumulated loss)/retained earnings
Convertible note equity reserve
Share option equity reserve
Employee benefits equity reserve
Unrealised (loss)/gain reserve
Total shareholders equity
(Loss)/profit of Resolute Mining Limited
Total comprehensive (loss)/profit of Resolute Mining Limited
Refer to Note 31 for the contingent liabilities and commitments of Resolute Mining Limited.
CONSOLIDATED
15
$'000
326
215,21 4
66,647
80,7 16
134,498
380,305
(257,497)
549
5,7 93
5,364
(16)
14
$'000
685
572,533
743
53,728
518,805
380,305
124,810
-
5,987
7,7 03
-
134,498
518,805
(382,307)
(382,307)
57,153
57,153
The parent company guarantees provided by the Resolute Mining Limited as outlined in Note 16(a) has a nil written down value as at 30 June
2015 (30 June 2014: $nil).
RESOLUTE MINING LIMITED ANNUAL REPORT 2015NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2015 125
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)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on
that date; and,
(ii) 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 2015.
On behalf of the Board
J.P. Welborn
Director
Perth, Western Australia
21 September 2015
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015
126
INDEPENDENT AUDIT REPORT
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auIndependent auditor’s report to the members of Resolute Mining LimitedReport on the financial reportWe have audited the accompanying financial report of Resolute Mining Limited, which comprises theconsolidated statement of financial position as at 30 June 2015, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated cash flowstatement for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directorsalso state, in accordance with Accounting Standard AASB 101Presentation of Financial Statements, thatthe financial statements comply withInternational Financial Reporting Standards.Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.IndependenceIn conducting our audit we have complied with the independence requirements of theCorporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report.A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auIndependent auditor’s report to the members of Resolute Mining LimitedReport on the financial reportWe have audited the accompanying financial report of Resolute Mining Limited, which comprises theconsolidated statement of financial position as at 30 June 2015, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated cash flowstatement for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directorsalso state, in accordance with Accounting Standard AASB 101Presentation of Financial Statements, thatthe financial statements comply withInternational Financial Reporting Standards.Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.IndependenceIn conducting our audit we have complied with the independence requirements of theCorporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report.A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auIndependent auditor’s report to the members of Resolute Mining LimitedReport on the financial reportWe have audited the accompanying financial report of Resolute Mining Limited, which comprises theconsolidated statement of financial position as at 30 June 2015, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated cash flowstatement for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directorsalso state, in accordance with Accounting Standard AASB 101Presentation of Financial Statements, thatthe financial statements comply withInternational Financial Reporting Standards.Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.IndependenceIn conducting our audit we have complied with the independence requirements of theCorporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report.A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auIndependent auditor’s report to the members of Resolute Mining LimitedReport on the financial reportWe have audited the accompanying financial report of Resolute Mining Limited, which comprises theconsolidated statement of financial position as at 30 June 2015, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated cash flowstatement for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directorsalso state, in accordance with Accounting Standard AASB 101Presentation of Financial Statements, thatthe financial statements comply withInternational Financial Reporting Standards.Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.IndependenceIn conducting our audit we have complied with the independence requirements of theCorporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report.A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208Ernst & Young11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843Tel: +61 8 9429 2222Fax: +61 8 9429 2436ey.com/auIndependent auditor’s report to the members of Resolute Mining LimitedReport on the financial reportWe have audited the accompanying financial report of Resolute Mining Limited, which comprises theconsolidated statement of financial position as at 30 June 2015, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated cash flowstatement for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directorsalso state, in accordance with Accounting Standard AASB 101Presentation of Financial Statements, thatthe financial statements comply withInternational Financial Reporting Standards.Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal controls. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.IndependenceIn conducting our audit we have complied with the independence requirements of theCorporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, acopy of which is included in the directors’ report. INDEPENDENT AUDIT REPORT
127
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208OpinionIn our opinion:a.the financial report of Resolute Mining Limited is in accordance with theCorporations Act 2001,including:(i)giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 andof its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and theCorporations Regulations 2001; andb.the financial report also complies with International Financial Reporting Standards as disclosed inNote 1(a).Report on the remuneration reportWe have audited the Remuneration Report included in pages 46 to 57 of the directors' report for the yearended 30 June 2015. The directors of the company are responsible for the preparation and presentationof the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.OpinionIn our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2015,complies with section 300A of theCorporations Act 2001.Ernst & YoungGavin BuckinghamPartnerPerth21 September 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208OpinionIn our opinion:a.the financial report of Resolute Mining Limited is in accordance with theCorporations Act 2001,including:(i)giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 andof its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and theCorporations Regulations 2001; andb.the financial report also complies with International Financial Reporting Standards as disclosed inNote 1(a).Report on the remuneration reportWe have audited the Remuneration Report included in pages 46 to 57 of the directors' report for the yearended 30 June 2015. The directors of the company are responsible for the preparation and presentationof the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.OpinionIn our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2015,complies with section 300A of theCorporations Act 2001.Ernst & YoungGavin BuckinghamPartnerPerth21 September 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208OpinionIn our opinion:a.the financial report of Resolute Mining Limited is in accordance with theCorporations Act 2001,including:(i)giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 andof its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and theCorporations Regulations 2001; andb.the financial report also complies with International Financial Reporting Standards as disclosed inNote 1(a).Report on the remuneration reportWe have audited the Remuneration Report included in pages 46 to 57 of the directors' report for the yearended 30 June 2015. The directors of the company are responsible for the preparation and presentationof the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.OpinionIn our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2015,complies with section 300A of theCorporations Act 2001.Ernst & YoungGavin BuckinghamPartnerPerth21 September 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208OpinionIn our opinion:a.the financial report of Resolute Mining Limited is in accordance with theCorporations Act 2001,including:(i)giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 andof its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and theCorporations Regulations 2001; andb.the financial report also complies with International Financial Reporting Standards as disclosed inNote 1(a).Report on the remuneration reportWe have audited the Remuneration Report included in pages 46 to 57 of the directors' report for the yearended 30 June 2015. The directors of the company are responsible for the preparation and presentationof the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.OpinionIn our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2015,complies with section 300A of theCorporations Act 2001.Ernst & YoungGavin BuckinghamPartnerPerth21 September 2015A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationGB:ET:RESOLUTE:208OpinionIn our opinion:a.the financial report of Resolute Mining Limited is in accordance with theCorporations Act 2001,including:(i)giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 andof its performance for the year ended on that date; and(ii) complying with Australian Accounting Standards and theCorporations Regulations 2001; andb.the financial report also complies with International Financial Reporting Standards as disclosed inNote 1(a).Report on the remuneration reportWe have audited the Remuneration Report included in pages 46 to 57 of the directors' report for the yearended 30 June 2015. The directors of the company are responsible for the preparation and presentationof the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.OpinionIn our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2015,complies with section 300A of theCorporations Act 2001.Ernst & YoungGavin BuckinghamPartnerPerth21 September 2015 128
SHAREHOLDER INFORMATION
SUBSTANTIAL SHAREHOLDERS AT 31 AUGUST 2015
Ordinary shares
ICM Limited
Wellington Management Group LLP
DISTRIBUTION OF EQUITY SECURITIES AS AT 31 AUGUST 2015
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
NUMBER HELD
PERCENTAGE
233,579,462
32,426,696
36.4%
5.1%
ORDINARY SHARES
1,129
1,764
845
1,383
222
5,343
1,580
Under the Company's Constitution, all ordinary shares issued by the Company carry one vote per share without restriction.
TWENTY LARGEST SHAREHOLDERS AS AT 31 AUGUST 2015
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
J P Morgan Nominees Australia Limited
HSBC Custody Nominees Australia Limited
National Nominees Limited
Citicorp Nominees Pty Ltd
HSBC Custody Nominees Australia Limited
BNP Paribas Nominees Pty Ltd
NEFCO Nominees Pty Ltd
HSBC Custody Nominees Australia Limited
Hardrock Capital Pty Ltd
Northcliffe Holdings Pty Ltd
Bell Potter Nominees Limited
ABN Amro Clearing Sydney
Avanteos Investments Limited
Sexton Robert
Brispot Nominees Pty Ltd
Factotum Group Pty Ltd
Tierra De Suenos SA
Amalgamated Dairies Limited
Sellers Holdings Pty Ltd
20
Guy Therese & David
NUMBER OF
ORDINARY SHARES
% OF ISSUED CAPITAL
220,041,266
183,459,469
43,802,201
41,988,236
13,165,238
6,033,501
4,21 7,200
2,445,600
2,282,000
2,200,686
1,841,91 1
1,738,57 7
1,733,981
1,400,000
1,122,962
1,1 10,000
1,089,897
1,071,626
1,000,000
1,000,000
34.32%
28.61%
6.83%
6.55%
2.05%
0.94%
0.66%
0.38%
0.36%
0.34%
0.29%
0.27%
0.27%
0.22%
0.18%
0.17%
0.17%
0.17%
0.16%
0.16%
532,744,351
83.09%
RESOLUTE MINING LIMITED ANNUAL REPORT 2015FOR THE YEAR ENDED 30 JUNE 2015 41
RESOLUTE MINING LIMITED ANNUAL REPORT 2015 6
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7
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