Mine gold.
Create value.
Annual Report 2017
R
e
s
o
l
u
t
e
|
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
7
ASX:RSG | www.rml.com.au
Contents
Contents
FY17 Highlights
Managing Director’s Review
Board and Executives
Review of Operations
Ore Reserves
Mineral Resources
Sustainability
Governance
Risk Management
Fiscal Responsibility
Financial Report
2
5
8
12
22
24
27
38
41
44
45
Corporate Directory
Directors
Non-Executive Chairman
Managing Director and CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
MJ Botha
JP Welborn
HTS Price
PR Sullivan
M Potts
Y Broughton
Company Secretary
A Stanton
Registered Office and Business Address
Level 2, Australia Place
15-17 William Street
Perth, Western Australia 6000
Postal
PO Box 7232 Cloisters Square
Perth, Western Australia 6850
Telephone: + 61 8 9261 6100
Facsimile: + 61 8 9322 7597
Email: contact@rml.com.au
ABN 39 097 088 689
Website
Resolute Mining Limited maintains a website where all major
announcements to the ASX are available: www.rml.com.au
Share Registry
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne, Victoria 3001
Telephone: 1300 850 505 (within Australia)
Telephone: +61 3 9415 4000 (outside Australia)
Facsimile: + 61 3 9473 2500
Email: www.investorcentre.com/contact
Web: www.computershare.com
Home Exchange
Australian Securities Exchange Limited
Level 40, Central Park
152 St Georges Terrace
Perth, Western Australia 6000
Quoted on the official list of the
Australian Securities Exchange:
ASX Ordinary Share Code: “RSG”
Securities on Issue (17/10/2017)
741,477,595
Ordinary Shares
1,926,629
Performance Rights
Auditor
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia 6000
Bankers
BDM-SA
Avenue Modibo-Keita
BP 94 Bamako, Mali
Africa
Citibank Limited
Level 23, Citigroup Centre
2 Park Street
Sydney, New South Wales 2000
Mine Gold.
Create Value.
Resolute is a successful gold miner focused on
ore body, where operations are expected to
creating long term value for shareholders. The
cease in late FY18. The Company’s next stage of
Company is an experienced explorer, developer and
development in Queensland is the return to large
operator having run nine gold mines across Australia
scale open pit mining at the Ravenswood Expansion
and Africa which have produced 8 million ounces
Project which will extend the Company’s local
(Moz) of gold over the past 28 years. Resolute
operations for a further 13 years to at least 2029.
currently operates two mines, the Syama Gold
The transition to open pit mining has commenced
Mine in Africa and the Ravenswood Gold Mine in
at Ravenswood with current mining activity at the
Australia, and is one of the largest gold producers
Nolans East open pit.
listed on the Australian Securities Exchange with
FY18 guidance of 300,000 ounces (oz) of gold
production at an All-In Sustaining Cost (AISC) of
A$1,280 per ounce (US$960/oz).
In Ghana, the Company has completed a feasibility
study on the Bibiani Gold Mine focused on the
development of an underground operation
requiring modest capital and using existing plant
Resolute’s flagship Syama Gold Mine in Mali
infrastructure.
is a robust long life asset comprising parallel
sulphide and oxide processing plants. The Syama
Underground mine development commenced in
September 2016 and is expected to extend the mine
life beyond 2028. Processing of sulphide open pit
stocks will continue in financial year 2018 (FY18)
while development of the large scale underground
mine accelerates and underground development
ore production increases.
Resolute is focused on growth through exploration
and development and is active in reviewing new
opportunities to build shareholder value. The
Company is currently exploring over 6,600km2 of
potentially gold mineralised tenure in West Africa
and Australia. In Mali, Resolute controls an extensive
exploration footprint along the highly prospective
Syama Shear. An increased budget of $38 million
(M) in FY18 will allow accelerated drilling of key
The Ravenswood Gold Mine in Queensland
targets across active drilling programs in Mali,
demonstrates Resolute’s significant underground
Ghana, Côte d’Ivoire and Australia.
expertise in successfully mining the Mt Wright
1
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
FY17
Highlights
Operations
Gold produced
329,834oz
original guidance of 300,000oz
All-In Sustaining Cost
A$1,132/oz
original guidance of A$1,280/oz
•
Production at the Syama Gold Mine in
Mali was sourced from the processing of
stockpiled sulphide ore and the mining of
oxide ore from satellite open pits.
• Maintained steady production from
Ravenswood Gold Mine in Queensland,
Australia as the operation transitioned to
open pit mining at Nolans East while the
Mt Wright underground mine continues to
extend mine life beyond expectations
Gold Production (oz)
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Jun-14
Jun-15
Jun-16
Jun-17
All-In Sustaining Cost & Average Price Received
(A$/oz)
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Jun-14
Jun-15
Jun-16
Jun-17
All-In Sustaining Cost (A$/oz)
Average Price Received (A$/oz)
Development
•
Syama Underground mine commenced development in September 2016 and is currently on schedule for
completion of the sublevel cave development project in December 2018
• Ravenswood Expansion Project (REP) declared as a ‘Prescribed Project’ by the Queensland Government
• Regulatory approvals for recommencement of mining at Sarsfield obtained in March 2017
Exploration
•
Positive exploration results received from Nafolo, Tabakoroni and BA-01 highlighted underground mining
opportunities that have potential to complement the existing Syama mine plan
2
2
Resolute Mining Limited | Annual Report 2017 Financials
Cash, bullion and listed investments
184%
A$290M
(US$223M)
Gross profit from operations
A$177M
(FY16: A$155M)
14%
•
FY17 Net profit after tax of A$166M
(FY16: A$201M)
• Revenue from gold and silver sales of A$541M
(FY16: A$555M)
• Return on equity of 49%
• Diluted earnings per share of 18.61 cents
• Net cash flows from operations of A$186M
(FY16: A$193M)
• Net investing cash outflows of A$128M
(FY16: A$43M)
• Net financing cash inflows of A$136M
(FY16: -A$79M)
300
250
200
150
100
50
0
-50
-100
250
200
150
100
50
0
Cash & bullion net of debt (A$M)
Jun-14
Jun-15
Jun-16
Jun-17
Operating Cash Flow (A$M)
Jun-14
Jun-15
Jun-16
Jun-17
Corporate
• Appointment of Mr Martin Botha as Chairman replacing longstanding Chairman Mr Peter Huston
• Appointment of Ms Lee-Anne de Bruin as Chief Financial Officer (CFO)
• Appointment of Ms Yasmin Broughton and Mr Mark Potts as Non-Executive Directors
•
Successful institutional share placement raising A$150M in September 2016
• Gold sale linked dividend policy established, featuring innovative option for shareholders to receive dividends
in gold
3
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Resolute’s ambition is to be a technology-driven,
multi-mine, low cost global gold producer
Low cost
producer:
Targeting the lower quartile of the global AISC curve
(~US$750/oz)
Long mine life:
Long term returns from >10 years mine life
Multiple
assets:
Diverse portfolio to spread production risk and allow
portfolio optimisation
Technology
early-adopter:
Technology-driven cost savings and improved safety
outcomes
Be a ‘must
have’ gold
investment:
Establish a base of high conviction investors
| Bold | Agile | Courageous | United |
Resolute is a pioneer of modern gold mining in Australia and Africa and has produced
8 million ounces of gold to date. Resolute seeks to combine this entrepreneurship
with the financial discipline and rigour required to deliver consistent growing returns
to shareholders and a genuine commitment to health, security and communities. This
ambition is embodied in our values.
BOLD - ambitious and entrepreneurial
AGILE – innovative and adaptive
COURAGEOUS – genuine care for employees, environment, community and assets
UNITED – share, collaborate and learn from each other
4
4
Resolute Mining Limited | Annual Report 2017 Managing Director’s
Review
Resolute is building a great gold mining company. The foundations of our future success
are based on 25 years of hard work and consist of the operational expertise gained from
over 8 million ounces of gold production from nine separate operations. Resolute has been
operating in Africa for 20 years. The Company was a pioneer of modern gold mining in West
Africa (Ghana) and Tanzania where we built, operated, closed and rehabilitated the Obotan
and Golden Pride mines. Converting this operating expertise into consistent value creation is
the single focus of the business.
Dear fellow shareholders,
It gives me great pleasure to present the results of
FY17 at Resolute. In 2016 we embarked on the process
of transforming the Company to become not only a
successful miner of gold, but a creator of sustained value
for our shareholders. I am pleased to report we continue
to make substantial progress in the pursuit of that goal.
During FY17, our operations at Syama in Mali and at
Ravenswood in Queensland produced 329,834oz of gold.
Revenue from gold and silver sales of A$541M (FY16:
A$555M) generated a net profit after tax of A$166M
(FY16: A$201M). Gross profit from operations increased
from A$155M to A$177M and a return on equity of 49%
was achieved.
The continuing strong cash flows from our operations
have been used to strengthen the Company’s balance
sheet and provide flexibility to pursue new investment
opportunities and capacity to accelerate exploration
expenditure. Having repaid all senior and secured
debt, we successfully raised A$150M in new equity in
September 2016. This placement, which was achieved
at a price of $1.96 per share, ensures Resolute is well
funded to complete its planned capital investments and
growth projects. As at 30 June 2017, the Company held
cash, bullion and listed investments of A$290M.
5
5
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Having strengthened the balance sheet our focus
has shifted to ensuring our gold assets consistently
provide exceptional rewards to our shareholders.
Resolute’s flagship project is the Syama Gold Mine
in Mali. Production during the financial year was
provided from stockpiled open pit ore processed
through the sulphide plant, and the mining of
satellite open pits providing ore feed for the
oxide circuit. During the course of the financial
year we commenced development of the Syama
Underground mine. The underground mine, when
fully commissioned during FY19, will provide a low
cost 12 year mine life and increase total annual site
production to 250,000oz of gold. This is an exciting
development project for Resolute with opportunity
for further enhancement from ongoing exploration
success and operational refinements. We are
investigating the potential to implement a fully
automated loading and haulage system, which we
believe will create a new standard for underground
safety and productivity.
In Queensland at the Ravenswood Gold Mine,
our expansion plans are progressing and we now
operate with the confidence of a long mine life
future ahead. Mining commenced at the Nolans
East open pit, supplementing production from
the Mt Wright Underground mine. Mt Wright has
significantly exceeded its original forecast closure
date and is now expected to cease operations
in the final quarter of FY18. The extension of the
Mt Wright mine life has been achieved by careful
and conservative management of stope draw
over several years. This successful sub-level cave
management has resulted in a substantial overdraw
from the current production levels. Nolans East open
pit mining is expected to be completed by the end
of calendar year 2017. We are continuing to refine
the Ravenswood Expansion Project which entails a
staged expansion of the Nolans Process plant back
to its former capacity of 5 million tonnes per annum
to secure a 13 year operating life for this asset.
6
6
Resolute Mining Limited | Annual Report 2017 In Ghana, Resolute embarked on a program of drilling
to follow up the highly encouraging feasibility study
for the Bibiani Gold Mine, published in June 2016.
A number of highly promising intersections were
returned from this program which was focused on
increasing the size, grade, and confidence in the
current resource, improving project economics, and
extending the mine life beyond five years. An updated
resource will underpin further project studies and
ultimately, a future decision to mine. These studies will
be completed by the end of calendar year 2017 and
support our ambition to recommission Bibiani as a long
life, low cost gold mine.
During the course of the financial year, Resolute
substantially increased its exploration effort and
investment. This investment was driven by a strong
belief in the capacity of well targeted exploration
to create value. This view has been vindicated by
the Nafolo discovery, adjacent to Syama, which is
emerging as a major new deposit. Similarly drilling
at the Tabakoroni and BA-01 satellites may create
the opportunity to mine high grade underground
orebodies to supplement and increase future
production from Syama. We are committed to creating
value through exploration and in the coming financial
year Resolute will maintain a high level of activity.
Resolute has operated gold mines in numerous
locations in Africa and Australia. For the past 20
years the bulk of our production has come from
developing countries in Africa. Building co-operative
and mutually beneficial relationships with our host
governments and communities has always been a
priority for Resolute. As community expectations grow
it is even more important that our operations make
positive contributions and that these contributions are
understood and acknowledged by host governments.
Equally important to the maintenance of our licence
to operate is the careful management of the safety,
health and environmental impacts of our activities.
During the year Resolute continued to reduce its Total
Injury Frequency Rates, taking us closer to the ultimate
goal of operating a workplace that inflicts zero harm
on its employees and on the surrounding environment.
I congratulate all of our workers across the Company
on their efforts to build a safe and environmentally
responsible business.
Last year Resolute adopted an innovative dividend
policy whereby the Company will seek to pay
shareholders an annual dividend of at least 2% of our
gold sales revenue. Shareholders have the option to
receive dividends from Resolute in cash or in gold
through our partnership with The Perth Mint. For FY16,
where the Company earned revenue of A$555M, a final
dividend of 1.7c per share was declared. For 2017, we
have chosen to increase the dividend to 2.0c per share,
which represents 2.7% of annual gold sales revenue.
The payment of a regular and material dividend is a key
element of Resolute’s confidence and commitment to
the delivery of value to shareholders.
While the results over the past year have been positive,
behind the scenes an equally far-reaching cultural
and organisational change has been taking place. A
new organisational model has been implemented, a
restructure of our senior executive team completed,
and a process of Board renewal undertaken.
These changes seek to transform Resolute into an
organisation that consistently delivers cash flow, profits
and dividends across the business cycle. Achieving
this has become the motivator for all of the Company’s
activities, priorities and decisions and a number of
important steps have been taken along this path.
I welcome the appointments of Mr Martin Botha as
Chairman of our Company and Ms Yasmin Broughton
and Mr Mark Potts as new Non-Executive Directors.
During the financial year Mr Peter Huston stepped
down as Chairman after 15 years of service. I
acknowledge and appreciate Mr Huston’s key role over
a significant period in Resolute’s history.
At an asset level we have embarked on a major
program of redevelopment providing opportunities and
challenges for the organisation and for our employees.
The Company is meeting these challenges, and
delivering excellent cost and production performance.
This success has been achieved, through the efforts
of the entire Resolute team, led by my colleagues
in the senior executive group and our site based
general managers. I thank the Board, shareholders,
and the wider Resolute team, for their hard work and
dedication. I look forward to further success in the
years to come.
I am proud of the results we are achieving and remain
excited about the future opportunities for value
creation at Resolute. This report presents our financial
results and also seeks to inform shareholders on our
strategic ambitions and activity. We have incorporated
a new section on sustainability to highlight our
objectives and performance with regard to corporate
social responsibility. I hope you enjoy reading the 2017
Annual Report.
John Welborn
Managing Director & CEO
7
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Board and Executives
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.
Martin Botha (Non-Executive Chairman)
BScEng
Mr Martin Botha was appointed Chairman in June 2017 after being appointed to the
Board in 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 (appointed 2013). Mr Botha graduated with first class honours from the University
of Cape Town and is based in London.
Mr Botha is Chairman of the Nomination Committee, a member of the Audit and Risk
Committee and a member of the Remuneration Committee.
John Welborn (Managing Director and Chief Executive Officer)
BCom, 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. Prior to joining Resolute Mining
Limited in 2015 Mr Welborn was the Managing Director of Equatorial Resources Limited
and 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 Prairie Mining Limited (February 2009 -
September 2015) and is currently a Non-Executive Director of Equatorial Resources
Limited (appointed 2010) and Kilo Gold Mines (appointed 2017), and is Chairman of Orbital
Corporation Limited (appointed 2014). In September 2017 Mr Welborn was appointed a
director of the World Gold Council.
Mr Welborn is the Chair of the Environment and Community Development Committee and
the Safety, Security and Occupational Health Committee.
8
8
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Peter Sullivan (Non-Executive Director)
BEng, 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 is
an engineer and has been involved in the management and strategic development of
resource companies and projects for over 25 years. Mr Sullivan is also a Director of GME
Resources Limited (appointed 1996), Zeta Resources Limited (appointed 2013), Pan Pacific
Petroleum NL (appointed 2014), Panoramic Resources Limited (appointed 2015) and Bligh
Resources Limited (appointed 2017).
Mr Sullivan is Chair of the Remuneration Committee and a member of the Audit and Risk
Committee.
Bill Price (Non-Executive Director)
BCom, FCA, MAICD
Mr Bill Price is a Non-Executive Director and was appointed to the Board in 2003. Mr
Price is a Fellow of Chartered Accountants Australia and New Zealand 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 a member of the Audit and Risk Committee, Remuneration Committee and
Nomination Committee.
Mark Potts (Non-Executive Director)
BSc (Hons)
Mr Mark Potts is a Non-Executive Director and was appointed to the Board in 2017. Mr
Potts has held senior executive and Board positions, in start-ups and large corporate
environments, over a 30-year career. Most recently Mr Potts was the worldwide CTO
and VP for Corporate strategy at Hewlett Packard, driving technology and business
strategy successfully for over 5 years. Prior to Hewlett Packard Mark was the founder
of several successful, venture backed start-ups, that have driven technology disruption
and business innovation in varied industries. Mr Potts is the Chair of Decimal Software
Limited (appointed 2016), a Director of VGW (appointed 2017) and Board adviser to Advara
(appointed 2014) and Adecco Australia (appointed 2010)
Mr Potts is a member of the Audit and Risk Committee, Remuneration Committee and
Nomination Committee.
Yasmin Broughton (Non-Executive Director)
BCom PG Law GAICD
Ms Yasmin Broughton is a Non-Executive Director and was appointed to the Board on
29 June 2017. Ms Broughton is a highly credentialed lawyer with significant experience
working as both a director and an executive reporting to Boards in a diverse range of
industries. Ms Broughton has over 13 years’ experience working with ASX listed companies
as an officer and has a deep understanding of corporate governance, including compliance
with the ASX Listing Rules, and managing complex legal issues. Ms Broughton’s legal and
commercial qualifications together with her national mediator credentials, define her fact
based and solution orientated approach to corporate management. Ms Broughton is also
a Non-Executive Director of the Insurance Commission of Western Australia (appointed
2015), Edge Employment Solutions Inc (appointed 2012) and CyberGym Global Limited
(appointed 2017).
Ms Broughton is Chair of the Audit and Risk Committee and a member of the
Remuneration Committee and Nomination Committee.
9
9
Resolute Mining Limited | Annual Report 2017 General Counsel / Company Secretary
Amber Stanton
LL.B.
Ms Amber Stanton is a corporate lawyer and was appointed as General Counsel /
Company Secretary in 2017. Prior to joining Resolute, Ms Stanton was a partner at two
international law firms, specialising in mergers and acquisitions, capital markets, energy
and resources and general corporate and commercial matters. Ms Stanton was the WA
winner of the 2011 Telstra Business Women's award (Corporate and Private Sector) and is
also a director of the Liver Foundation of Western Australia.
Executives
Lee-Anne de Bruin, Chief Financial Officer
BCom, BAcc (Hons), CA
Ms Lee-Anne de Bruin joined Resolute as Chief Financial Officer (CFO) in 2017 and
is responsible for the entire accounting, financial, taxation, treasury and technology
functions of the Company. Ms de Bruin has over 15 years of financial, operational and
strategic management experience across multiple industry sectors, including ten years
in the mining industry in both Africa and Australia, where she has held both CFO and
Managing Director positions. Ms de Bruin has lead teams at some of the world’s most
prominent mining organizations with notable positions including Regional CFO Newmont
Asia Pacific, Head of Project Functions BHP Iron Ore and Managing Director Kimberley
Diamond Company.
Peter Beilby, Chief Operating Officer
BSc (Mining Engineering)
Mr Peter Beilby joined Resolute as Chief Operating Officer (COO) in 2010 and is responsible
for the operations and production of the Company’s gold mines. A qualified mining
engineer with over 25 years of operational and project experience in gold, base metals and
mineral sands, Mr Beilby is a highly regarded COO in the industry. Mr Beilby has a strong
background in operations management of open cut and underground gold mining as well
as greenfields and brownfields development in both fields. Prior to joining Resolute, Mr
Beilby was General Manager Murray Basin at Iluka Resources Limited.
Paul Henharen, General Manager – Project Delivery
BSc, MSc, MBA, MAusIMM
Mr Paul Henharen joined Resolute in 2016 as General Manager – Projects, and is
responsible for the Company’s mining development projects. With over 20 years’
experience in the design, commissioning and management of a wide range of mineral
processing operations, Mr Henharen has held senior management roles within a number
of international engineering companies. Mr Henharen provides extensive experience in
the management of feasibility studies and development of mineral processing projects in
Africa and Australia.
10
10
Resolute Mining Limited | Annual Report 2017 Vanessa Hughes, General Manager – People, Culture and Information
BBus
Ms Vanessa Hughes joined Resolute in 2016 as General Manager - People, Culture and
Information, and is responsible for the Company’s human resources function. Ms Hughes
has over 20 years’ experience across the full range of her field from strategic organisational
development and human resources including business strategy, optimising organisational
culture, employee engagement and retention, talent and leadership development and
succession to more generalist HR including recruitment and employee relations. Prior
to joining Resolute Ms Hughes was Manager People and Culture at Poseidon Nickel and
previously Manager People and Culture at Millennium Minerals.
David Kelly, General Manager – Corporate Strategy
BSc (Hons.)
Mr David Kelly joined Resolute in 2016 as General Manager – Corporate Strategy and
is responsible for corporate strategy, business development and investor relations. An
experienced geologist and Company Director, Mr Kelly has served in various senior
executive roles in the resources sector for the last 30 years including as an investment
banker and corporate advisor. Currently a Non-Executive Director of ASX listed Predictive
Discovery Limited and Manas Resources Limited, Mr Kelly has previously served as a
director of Ridge Resources Limited, Renaissance Minerals Limited and Pacific Ore Limited.
Bruce Mowat, General Manager – Exploration
BSc (Geology)
Mr Bruce Mowat joined Resolute in 2011 and is currently General Manager - Exploration,
responsible for the Company’s exploration and development programs in Australia,
Africa and other jurisdictions. Mr Mowat has spent 30 years exploring for and finding
gold and base metal deposits in Australia, PNG, Indonesia and West Africa and has held
senior positions in a number of companies. Prior to joining Resolute Mr Mowat was Chief
Geologist for Straits Resources.
11
11
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Review of Operations
Syama
“The Syama Underground has potential to
be one of the world’s first fully automated
underground truck haulage mines”
The Syama Gold Mine (Syama) is located in the south
of Mali, West Africa approximately 30km from the Côte
d’Ivoire border and 300km southeast of the capital city,
Bamako.
Resolute has an 80% interest in Syama through its
equity in Sociêtê des Mines de Syama S.A. (SOMISY).
The Malian Government holds a 20% interest in
SOMISY.
Syama benefits from two fully operational processing
plants: a 2.4 million tonnes per annum (Mtpa) sulphide
processing circuit and a 1.5Mtpa oxide processing
circuit.
Mining at the main Syama open pit was completed
in May 2015 with ore for the sulphide circuit currently
being sourced from the previously stockpiled sulphide
ore, underground development ore and satellite
operations. Ore for the oxide circuit is currently
sourced from a series of satellite deposits, including
BA-01, Beta, Alpha and Tabakaroni. Due to the
refractory nature of the sulphide ore, it is treated
using conventional three-stage crushing, ball milling,
sulphide flotation and dewatering, roasting, calcine
leaching and elution. The oxide processing circuit is
a conventional crushing, SAG milling, and leaching
circuit. Development of the Syama Underground mine
commenced in September 2016 and will extend the
mine life to beyond 2028.
Sulphide
During FY17 the sulphide processing plant treated 2.11
million tonnes (Mt) (2016: 1.50Mt) of ore at an overall
head grade of 2.59 grams per tonne (g/t) Au (2016:
3.53g/t Au) to produce 136,000oz (2016: 129,585oz) of
gold at an AISC of A$1,001/oz (2016: A$917/oz). The
lower grade was in line with an expected reduction in
head grade as the ore stockpiles remaining from the
Syama open pit operations continue to be depleted.
In FY17 ore supply for the sulphide processing plant
was primarily sourced from the existing sulphide
ore stockpiles with some additional sulphide ore
sourced from the A21 satellite open pit operations.
Gold production from the sulphide processing plant
12
Resolute Mining Limited | Annual Report 2017 FY17
FY16
Cash Cost Per Ounce
was affected by lower flotation recoveries associated
with the ore mined from the A21 satellite open pit
operations. Overall plant recoveries of 69.8% (2016
76.3%) were also affected by the reduced head grade
and associated lower sulphide content from the ore
stockpiles. Overall recoveries are expected to increase
as the proportion of higher grade underground
development ore increases in FY18.
Sulphide ore stockpiles at year-end were
approximately 149,000oz (3.39Mt at 1.4g/t Au).
These ore stockpiles will continue to be blended
with sulphide ore from the satellite open pits and
increasingly from underground development ore while
the sublevel cave is being established over the next
18 months. Development ore production has recently
commenced with pre-production underground
ore of ~1.3Mt expected to be mined prior to the
commencement of the main sublevel cave operation
in December 2018. On completion of the sublevel
cave development the Syama Underground will be
the primary source of sulphide ore for the sulphide
processing plant.
Operating Performance at a glance - Sulphide
Ore Mined
Ore Milled
Head Grade
Recovery Rate
Gold Produced
Cash Cost Per Ounce
CashCost Per Ounce
AISC
AISC
Mt
Mt
g/t Au
%
oz
A$
US$
A$
US$
1.22
2.11
2.59
69.8
0.41
1.50
3.53
76.3
136,000 129,585
857
646
1,001
755
710
517
917
669
Syama – Sulphide Ore Reserves as at 30 June 2017
Deposit
Tonnes Grade
Ounces
Syama Underground
23,855,000
2.8
2,171,000
Syama Stockpiles
3,394,000
1.4
149,000
Total
27,249,000
2.6 2,320,000
Oxide
The oxide processing circuit treated 1.34Mt (2016:
1.26Mt) at an overall head grade of 2.84g/t Au (2016:
2.30g/t Au) to produce 101,830oz (2016: 80,032oz) at
an AISC of A$960/oz (2016: A$1,561/oz). A number of
improvements were made to the oxide processing
plant during FY17 including modifications to the
process water circuit. Milled tonnes increased with
better availability and utilisation than the previous year.
Oxide circuit recoveries of 83.2% (2016: 86.2%) were
affected by transitional material from the A21 satellite
operations and lower recoveries associated with an old
BHP/Randgold stockpile processed during the year.
During FY17 mining of the A21 satellite pits was
completed and mining of the BA-01 satellite pit
commenced. The BA-01 satellite pit is located
approximately 6km north of Syama and forms part of a
series of northern satellite deposits, including Beta and
Alpha. Total waste material mined from the satellite
pits for the financial year was 4.20M bank cubic metres
(BCM) of material (2016: 4.53M BCM). Total ore mined
was 1.13M BCM at a grade of 2.35g/t Au (2016: 0.75M
BCM at 2.23g/t Au) and a (waste:ore) strip ratio of 3.71:1
(2016: 6.04:1)
Operating Performance at a glance - Oxide
Ore Mined
Ore Milled
Mt
Mt
Head Grade
g/t Au
Recovery Rate
Gold Produced
Cash Cost Per Ounce
AISC
AISC
%
oz
A$
US$
A$
US$
FY17
FY16
1.32
1.34
2.84
83.2
1.13
1.26
2.30
86.2
101,830
80,032
948
714
960
725
1,026
747
1,561
1,137
Syama – Satellite Ore Reserves as at 30 June 2017
Deposit
Tonnes Grade
Ounces
Syama Satellite Deposits
(incl. stockpiles)
4,141,000
2.1 285,000
Tabakoroni
Total
3,156,000
2.9 296,000
7,297,000
2.5
581,000
Outlook
Sulphide ore stockpiles will continue to be managed
to maintain an average feed grade of greater than 2g/t
Au to the sulphide plant. Open pit mining will continue
at the BA-01 pit with ore supply increasing as the pit
deepens. Mill feed grades are expected to increase
from the current levels as an increasing amount of
the sulphide feed is delivered from underground
development ore. The underground development
ore is expected to grade in a range of 2.5-3.0g/t Au.
Higher sulphide feed grades will result in increases in
recoveries.
13
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Review of Operations
Ravenswood
“Mt Wright is one of Australia’s most successful
underground mines, having mined a ~2.5g/t
Au orebody at an average cash cost of A$850/oz
over the last 5 years, down to a depth of ~900m
below surface”
The Ravenswood Gold Mine (Ravenswood) is located
approximately 95km south-west of Townsville and
65km east of Charters Towers in north-east Queensland,
Australia. 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 and
the Nolans East open pit. The Nolans process plant is
currently configured for processing 2.8Mtpa of ore using
three stage crushing, SAG and ball milling and carbon-
in-pulp processing with a gravity circuit for recovery of
free gold.
During FY17 the operations produced 92,004oz (2016:
105,552oz) of gold at an AISC of A$1,406/oz (2016:
A$1,225/oz). The reduction in ounces produced is
the result of lower production from the Mt Wright
underground operation and the reduced head grade
associated with the return to open pit mining at Nolans
East.
Ore production from the Mt Wright Underground Mine
was 1.00Mt (2016: 1.31Mt) at 2.51g/t Au (2016: 2.38g/t
Au). The lower production was due to a reduced number
of draw-points being available for production as the
size of the ore body decreases near the bottom of the
mine. The Mt Wright Underground mine has continued
to extend mine life well beyond expectations and is
currently estimated to continue operations until late
FY18.
The processing plant treated 2.00Mt (2016: 1.70Mt) at
an average head grade of 1.54g/t Au (2016: 2.05g/t Au).
During the year the Stage 1 crusher expansion (2.8Mtpa)
was completed with the installation of a secondary
crusher into the circuit and converting the existing
secondary crusher into a tertiary role. The decrease in
head grade was directly attributable to the addition of
the lower grade open pit mining at Nolans East. Overall
recoveries decreased in line with expectations to 93.1%
(2016: 94.3%) due to the addition of the low grade ore.
14
Resolute Mining Limited | Annual Report 2017 Operating Performance at a glance
Outlook
Ore Mined
Ore Milled
Head Grade
Recovery Rate
Gold Produced
Cash Cost Per Ounce
Cash Cost Per Ounce
AISC
AISC
Mt
Mt
g/t
%
oz
A$
US$
A$
US$
FY17
2.37
2.00
1.54
93.1
FY16
1.31
1.70
2.05
94.3
92,004
105,552
1,252
943
1,406
1,059
1,033
752
1,225
892
Ravenswood - Ore Reserves as at 30 June 2017
Tonnes
Grade
Ounces
Deposit
Sarsfield
47,090,000
Nolans East
2,155,000
Buck Reef West
18,321,000
Stockpiles (O/C)
801,000
Mt Wright
258,000
Stockpiles (U/G)
11,000
Total
68,636,000
0.8
0.7
0.9
0.6
2.7
2.6
0.8
1,170,000
51,000
524,000
16,000
22,000
1,000
1,784,000
Mined ore tonnes from Mt Wright are expected to
reduce as the number of available drawpoints decreases
over the remaining life of the underground mine. Mine
production and processing from Nolans East is expected
to continue at current levels until the Nolans East
open pit is completed in late-2017. Production levels
at Ravenswood are expected to temporarily reduce
as the Mt Wright Underground mine is completed
and the Ravenswood operation transitions to open pit
mining. Ravenswood FY18 production is estimated to be
80,000oz and will be generated from a combination of
Mt Wright Underground ore, open pit mining at Nolans
East, and existing open pit stockpiles. Mt Wright has
significantly exceeded its original forecast closure date
and is expected to cease operations in the final quarter
of FY18. During the second half of FY18 ore feed will be
sourced from Nolans East stockpiles, existing Sarsfield
stockpiles, and any remaining production ore from Mt
Wright.
15
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Review of Operations
Development
Project 85
At Syama, Resolute is implementing a series of process
upgrades with the main objective of increasing the
sulphide gold recovery to 85% (Project 85).
The process upgrades will consist of the following units:
1. Flotation Tails CIL: the current calcine CIL circuit will
be repurposed to treat the flotation tails.
2. New Calcine CIL: a new dedicated calcine CIL circuit
will be designed and installed.
3. Regrind: the coarse calcine product will now be
reground prior to CIL.
4. Upgrade of current flotation circuit: the current
flotation circuit will have a series of minor upgrades
to improve the operational performance.
The project design, procurement and construction are
on schedule and the staged commissioning of Project 85
remains on track for the end of March 2018.
Low Carbon Roaster
At Syama, Resolute has been working closely with
Outotec, the manufacturer of the roaster, in developing
a new roaster technology that will produce a low carbon
calcine to improve CIL recovery. This new technology
will allow Resolute to modify the current single stage
Circulating Fluidized Bed roaster into a Low Carbon
Roaster (LCR). By significantly reducing the carbon in
the calcine being fed to the calcine CIL circuit, the LCR
will contribute to an increase in the overall sulphide gold
recovery above the benefits of Project 85 towards an
overall recovery of 89%.
The LCR technology will deliver a significant reduction
in the organic carbon (COrg) value of the calcine, with
a commensurate increase in calcine leach recovery due
to a reduction in preg-robbing. Project Reprise involves
reclaiming carbon enriched concentrate (CEC) from a
dedicated storage facility and processing this material
through the roaster and the sulphide treatment plant.
Project Reprise requires the LCR technology to increase
the recovery of the CEC from circa 60% to 90%.
Project Phoenix
Project Phoenix involves the assessment of
economically recovering residual gold from the
reclamation and treatment of stored flotation tailings
at Syama. One sector of the Flotation Tailings Storage
Facility (FTSF) was drilled during the year using aircore
drilling. Assay results from the drillholes provided
sufficient confidence for the Resolute Board to approve
additional funds to conduct a specialised drilling
program to further test the grades and tonnages within
the FTSF. The specialised drilling program will provide
samples for metallurgical testing of the tailings material
and delineate a maiden resource estimate for Project
Phoenix.
Syama Underground
Project
The Syama Underground Project commenced in
September 2016 and is currently on schedule for
sublevel cave ore production to commence in
December 2018. During the underground development
phase a significant amount of development ore will
be mined and is expected to augment the stockpiled
sulphide material that is providing mill feed and gold
production. During the year underground development
commenced on the first and second production levels
(the 1130 and 1105 levels) and the incline and decline.
Underground development rates have exceeded
expectations with automated drilling allowing longer
rounds, rapid lateral development and less overbreak.
Underground ore development has commenced and will
form a significant proportion of processed sulphide ore
while the sublevel cave is being developed.
16
Resolute Mining Limited | Annual Report 2017 Syama Underground
MineR of the Future
Throughout the year Resolute investigated a
number of significant technology and innovation
enhancements that have potential to increase efficiency
and productivity of the Syama Underground mine.
Equipment manufacturers are engaged and mine design
improvements have been implemented to capture
the latest underground mining technology with a
focus on automation. In collaboration with equipment
manufacturers the Company is confident that subject
to Board approval, the Syama Underground has
potential to be one of the world’s first fully automated
underground truck haulage mines.
Ravenswood Expansion
Project
The Ravenswood Expansion Project (REP) was
announced in September 2016 with the aim of
maintaining continuity of production at Ravenswood as
the Mt Wright Underground mine prepares for closure.
Resolute has commenced the transition back to open
pit mining, with open pit operations at the Nolans East
deposit having commenced in August 2016. The REP
will see the eventual development of three open pits at
Nolans East, Sarsfield and Buck Reef West.
•
The REP outlined the following development
sequence:
• Mt Wright Underground operations continuing
until eventual closure in late FY18;
• Open pit mining recommenced from Nolans
East and continuing during 2017;
•
•
•
Processing capacity increased to 2.8Mtpa;
Regulatory approvals for recommencement of
mining at Sarsfield obtained in March 2017;
Regulatory approvals for open pit mining of
Buck Reef West expected in mid-2018; and
•
Expansion of the mill to 5.0Mtpa.
The feasibility study into the REP confirmed a long
life, low risk, low cost development plan with robust
economics. Under the REP, average annual production is
expected to increase to greater than 120,000oz of gold.
Mine life will be extended by 13 years with operations
continuing until at least 2029. The operation will
generate Life of Mine AISC of A$1,166/oz (US$880/oz).
The staged development plan requires no immediate
additional capital expenditure and start-up capital
comprises only A$134M for pre-stripping and staged
processing plant expansion to 5.0Mtpa. Significant
potential remains for economic upside and further
extensions.
During the year the Stage 1 crusher expansion to
2.8Mtpa was completed with the installation of a
secondary crusher into the circuit and converting the
existing secondary crusher into a tertiary role. A one
megalitre per day (ML/d) reverse osmosis (RO) plant
was also installed on site to treat supernatant from the
Sarsfield pit. This unit will act as a test bed for the final
design of the RO system.
In December 2016, the REP was declared a ‘Prescribed
Project’ under State Development and Public Works
Organisation Act 1971 by the Queensland Government.
The Prescribed Project status has streamlined
administrative decisions and ensured essential
project regulatory approvals are received on a timely
basis. Resolute continues to work closely with the
Ravenswood community in developing its plans for
the REP. Projects are being developed to preserve and
rehabilitate a number of heritage buildings and artefacts
in the vicinity of the proposed open pits.
In March 2017 the Queensland Department of
Environment and Heritage Protection issued the final
approved Amended Environmental Authority for the
recommencement of mining at the Sarsfield open pit.
The Environmental Authority is a major milestone in the
governmental approval process required to progress the
REP and includes all provisions required to recommence
mining at the Sarsfield open pit. Resolute continues to
work collaboratively with the Queensland Government
on the required regulatory approvals for the REP.
Baseline environmental studies for the Buck Reef West
Project are ongoing with the final approvals expected in
mid-2018.
17
Resolute Mining Limited | Annual Report 2017 Review of Operations
Exploration
Nafolo
During the year Resolute announced a major discovery
at Syama called Nafolo which is a new zone of
mineralisation located immediately south of the Syama
deposit and separate to the main orebody. Discovered
in October 2016, follow up drilling confirmed Nafolo as
having similar characteristics, size and tenor to the 8Moz
Syama orebody.
Nafolo is situated in an area where historic exploration
drilling by BHP was limited to 500m wide spaced lines
of shallow (30m) sterilisation reverse circulation (RC)
drilling. A number of these holes intersected anomalous
gold near the surface indicating significant untested
space to potentially host another large gold deposit
along the extensions of the Syama Shear. Despite this a
large waste dump was constructed immediately south
of the Syama open pit.
Nafolo can potentially be accessed in the early years
of the Syama Underground mine due to its location
just 250m south of the current mine design. Drilling
is continuing with two diamond drill rigs currently
situated on the waste dump. An understanding of the
full potential of the Nafolo discovery is a high priority in
order to assess its potential to enhance the mine plan at
Syama.
Drilling has defined an initial strike length of greater
than 300m and is continuing to deliver consistent, broad
intersections with similar characteristics to Syama.
All holes drilled to date at Nafolo have intersected
alteration and gold mineralisation and the discovery
remains open at depth and to the south. A significant
area under the southern waste dump is still to be tested
and has the potential to host a large ore system similar
to the Syama orebody. A maiden resource for the Nafolo
discovery will be estimated during the course of FY18.
Significant drill results from the Nafolo discovery are
listed below:
•
SYDD442
19m @ 2.6 g/t Au from 273m; and
18m @ 3.0 g/t Au from 372m.
•
SYDD446 41m @ 4.9 g/t Au from 281m; and
37m @ 3.1 g/t Au from 372m
•
SYDD447
13m @ 6.9 g/t Au from 434m; and
11m @ 2.4 g/t Au from 472m
•
SYDD448
10m @ 3.6 g/t Au from 385m; and
29m @ 4.7 g/t Au from 446m
•
•
•
•
•
SYDD450
14m @ 3.5 g/t Au from 251m
SYDD451
19m @ 3.7 g/t Au from 407m
SYDD454
33m @ 3.0 g/t Au from 405m
SYRD456
10m @ 8.3 g/t Au from 394m
SYDD462
25m @ 3.3 g/t Au from 287m
Longitudinal projection showing location of new diamond drillhole pierce points, results and
designed underground development
18
Resolute Mining Limited | Annual Report 2017
Resolute Mining Limited | Annual Report 2017
19
19
Resolute Mining Limited | Annual Report 2017 Tabakoroni
Tabakoroni is located approximately 40km south of
Syama. Mineralisation at Tabakoroni comprises a steep
dipping, north-south striking zone of shearing and
quartz veins, hosted by shale and basalt of the Syama
Formation. An initial 15-hole deep RC drill program
undertaken at Tabakoroni during the year focused on
extending the high grade sulphide shoots at depth.
Results suggest the potential exists for a future
underground mine or an extension of the open pit mine
life at Tabakoroni and confirm the excellent long term
sulphide potential of the system.
Better results from the Tabakoroni drilling program
included:
•
•
TARC532
20m @ 18.28g/t Au from 117m
TARC541
11m @ 5.08g/t Au from 157m
•
•
•
•
•
•
TARC542
23m @ 9.61g/t Au from 140m
TARC543
25m @ 8.06g/t Au from 160m
TARC547
10m @ 5.01g/t Au from 194m (EOH)
TARC549
12m @ 8.41g/t Au from 203m
TARC551
14m @ 16.65g/t Au from 89m
TARC551
12m @ 3.52g/t Au from 111m
See below a longitudinal projection of the Tabakoroni
deposit with grade-tonnage contours indicating high
grade extensions to mineralisation below the current
open pit design. The deposit comprises high grade
mineralisation delineated over a total strike length of
greater than 1km and a number of discreet high grade
shoots which remain open at depth.
Tabakoroni longitudinal projection showing location of new drillhole pierce points, results and planned open pit outline
BA-01
BA-01 is located approximately 6km north of Syama
and forms part of a series of satellite deposits, including
Beta and Alpha. Resolute commenced an oxide open
pit operation at BA-01 in early 2017. Previous drilling
had identified potentially high grade sulphide zones
at the BA-01, Beta and Alpha deposits. A program of
RC drilling was completed at BA-01 during the year to
test the interpreted high grade sulphide shoots. The
initial program returned excellent grades in many of the
drillholes and has reinforced the potential for delineating
additional high grade mineable sulphide resources in the
northern satellite pits.
Better results from the BA-01 drilling program included:
•
•
•
•
•
•
•
•
•
•
•
BARC118
11m @ 7.35g/t Au from 24m
BARC120
6m @ 14.88g/t Au from 36m
BARC122
5m @ 14.87g/t Au from 72m
BARC124
7m @ 13.13g/t Au from 85m
BARC126
9m @ 11.1g/t Au from 70m
BARC129
13m @ 4.04g/t Au from 161m
BARC132
8m @ 6.77g/t Au from 21m
BARC134
6m @ 12.27g/t Au from 94m
BARC136
10m @ 9.19g/t Au from 115m
BARC138
11m @ 14.91g/t Au from 43m
BARC139
6m @ 11.98g/t Au from 19m
20
Resolute Mining Limited | Annual Report 2017 Bibiani
Resolute’s June 2016 feasibility study for Bibiani was
based on an underground mine requiring low start-up
capital of US$72M and a short lead time to production
of only nine months. The feasibility study proposed
a successful underground mine that would produce
in excess of 100,000oz of gold per annum at a Life of
Mine AISC of US$851/oz. The subsequent FY17 drilling
program was focused on increasing the size, grade,
and confidence in the resource, improving project
economics, and extending the mine life beyond five
years.
Resolute commenced the second phase of resource
drilling at Bibiani in December 2016. Results received
from the completed holes were very encouraging
with particularly impressive results from the Central
Lode between 5150N and 5600N suggesting the
mineralisation in this area is better than predicted by the
inferred resource estimate.
Better results from the Bibiani Phase 2 drilling program
included:
•
•
•
•
•
•
•
•
•
BSDD035
14m @ 4.4 g/t Au from 454m;
BSDD040
30.3m @ 8.9 g/t Au from 499m;
BSDD042
23.7m @ 3.2 g/t Au from 426m;
BUDD072
48m @ 3.6 g/t Au from 171m;
BUDD072
5.9m @ 16.5 g/t Au from 227m;
BUDD074
47m @ 2.3 g/t Au from 130m;
BUDD074
17m @ 3.5 g/t Au from 182m;
BUDD077
51m @ 4.3 g/t Au from 117m;
BUDD078 37m @ 3.9 g/t Au from 152m.
Bibiani Phase 2 drilling results long section
21
Resolute Mining Limited | Annual Report 2017 Ore Reserves
2017
ORE RESERVES
Australia
Mt Wright
Sarsfield
Nolans East
Stockpiles (O/C)
Buck Reef West
Mali
Syama Stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Total Proved
Australia
Mt Wright
Mt Wright Stockpiles
Sarsfield
Nolans East
Stockpiles (O/C)
Buck Reef West
Mali
Syama Underground
Syama Stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Ghana
Bibiani
Total Probable
Total Reserves
Tonnes
Gold grade
Ounces
Group Share
Group Share
Tonnes
Gold grade
Ounces
Group Share
Group Share
(000s)
(g/t)
(000s)
%
Ounces
(000s)
(g/t)
(000s)
%
Ounces
Comment on Changes
Proved
22
747
37
9
400
3
68
51
133
1,470
Probable
0
1
423
7
14
124
2,171
146
112
54
163
644
3,859
5,329
2.6
0.8
0.8
0.6
0.9
1.7
2.4
1.9
3.1
1.0
0.0
2.6
0.7
0.6
0.7
0.8
2.8
1.4
2.4
1.8
2.8
3.7
2.0
1.5
100%
100%
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
22
747
37
9
400
2
54
41
113
1,426
0
1
423
7
14
124
1,737
117
90
43
139
580
3,274
4,699
258
28,450
1,543
482
13,652
55
896
824
1,335
47,495
0
11
18,640
319
612
4,669
23,855
3,339
1,459
962
1,821
5,480
61,167
108,662
2016
Proved
60
747
46
0
0
38
107
15
133
1,146
21
1
423
0
25
0
2,173
206
209
49
163
644
3,914
5,060
2.7
0.8
0.8
0.0
0.0
2.9
2.3
1.8
3.1
1.0
2.7
3.0
0.7
0.0
0.9
0.0
2.8
1.5
2.3
1.8
2.8
3.7
2.1
1.7
682
28,450
1,818
0
0
413
1,455
263
1,335
34,416
18,640
248
8
0
0
846
23,863
4,150
2,857
846
1,821
5,480
58,759
93,175
Probable
Comment on Changes
100%
100%
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
60
747
46
0
0
30
86
12
113
21
1
0
25
0
165
167
39
139
Depletion due to mining
No change
Depletion due to mining
No previous stockpile
New open pit ore reserve
Movement in operating stockpiles
Depletion due to mining
Movement in operating stockpiles
No change
1,094
Depletion due to mining
Movement in operating stockpiles
423
No change
No previous stockpile
Depletion due to mining
New open pit ore reserve
1,738
Depletion due to mining
Movement in operating stockpiles
Depletion due to mining
Movement in operating stockpiles
No change
580
No change
3,298
4,392
Notes:
1. Mineral Resources are reported inclusive of Ore Reserves. Differences may occur due to rounding.
2. Resources and Reserves at Buck Reef West, Nolans East and Sarsfield are reported 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 and Reserves are reported above 2.0 g/t cut off.
5. Syama Underground Resources are reported above 1.5 g/t cut off and Reserves above 1.9 g/t cut off.
22
Resolute Mining Limited | Annual Report 2017
ORE RESERVES
Australia
Mt Wright
Sarsfield
Nolans East
Stockpiles (O/C)
Buck Reef West
Mali
Syama Stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Total Proved
Australia
Mt Wright
Mt Wright Stockpiles
Sarsfield
Nolans East
Stockpiles (O/C)
Buck Reef West
Mali
Syama Underground
Syama Stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Ghana
Bibiani
Total Probable
Total Reserves
2017
Proved
Probable
22
747
37
9
400
3
68
51
133
1,470
0
1
423
7
14
124
2,171
146
112
54
163
644
3,859
5,329
2.6
0.8
0.8
0.6
0.9
1.7
2.4
1.9
3.1
1.0
0.0
2.6
0.7
0.6
0.7
0.8
2.8
1.4
2.4
1.8
2.8
3.7
2.0
1.5
258
28,450
1,543
482
13,652
55
896
824
1,335
47,495
0
11
18,640
319
612
4,669
23,855
3,339
1,459
962
1,821
5,480
61,167
108,662
100%
100%
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
22
747
37
9
400
2
54
41
113
1,426
0
1
423
7
14
124
1,737
117
90
43
139
580
3,274
4,699
Tonnes
Gold grade
Ounces
Group Share
Group Share
Tonnes
Gold grade
Ounces
Group Share
Group Share
(000s)
(g/t)
(000s)
%
Ounces
(000s)
(g/t)
(000s)
%
Ounces
Comment on Changes
2016
Proved
60
747
46
0
0
38
107
15
133
1,146
100%
100%
100%
100%
100%
80%
80%
80%
85%
Depletion due to mining
No change
Depletion due to mining
No previous stockpile
New open pit ore reserve
Movement in operating stockpiles
Depletion due to mining
Movement in operating stockpiles
No change
60
747
46
0
0
30
86
12
113
1,094
Probable
Comment on Changes
21
1
423
0
25
0
2,173
206
209
49
163
644
3,914
5,060
100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
21
1
Depletion due to mining
Movement in operating stockpiles
423
No change
0
25
0
No previous stockpile
Depletion due to mining
New open pit ore reserve
1,738
Depletion due to mining
165
167
39
139
Movement in operating stockpiles
Depletion due to mining
Movement in operating stockpiles
No change
580
No change
3,298
4,392
2.7
0.8
0.8
0.0
0.0
2.9
2.3
1.8
3.1
1.0
2.7
3.0
0.7
0.0
0.9
0.0
2.8
1.5
2.3
1.8
2.8
3.7
2.1
1.7
682
28,450
1,818
0
0
413
1,455
263
1,335
34,416
248
8
18,640
0
846
0
23,863
4,150
2,857
846
1,821
5,480
58,759
93,175
23
Resolute Mining Limited | Annual Report 2017
Mineral Resources
MINERAL RESOURCES
Tonnes
Gold grade
2017
Ounces
Group Share
Group Share
Tonnes
Gold grade
Group Share
Group Share
(000s)
(g/t)
(000s)
%
Ounces
(000s)
(g/t)
(000s)
%
Ounces
Comment on Changes
Australia
Mt Wright
Sarsfield
Buck Reef West
Mali
Syama stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Total Measured
Australia
Mt Wright
Stockpiles (sulphide)
Sarsfield
Buck Reef West
Mali
Syama Underground
Syama stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tellem & Paysans
Tabakoroni
Ghana
Bibiani
Total Indicated
Australia
Mt Wright
Sarsfield
Buck Reef West
Welcome Breccia
Mali
Syama Underground
Satellite Deposits
Stockpiles (satellite deposits)
Tellem & Paysans
Tabakoroni
Ghana
Bibiani
Total Inferred
Total Resources
311
45,522
18,400
55
2,337
824
3,210
70,659
0
11
38,497
20,400
37,396
3,339
3,566
962
2,965
4,010
11,180
122,326
1,079
22,079
17,000
2,036
8,095
1,397
64
945
3,000
4,485
60,180
253,165
Measured
35
1,168
532
3
159
51
296
2,244
Indicated
0
1
882
525
3,373
146
243
54
166
289
1,184
6,863
Inferred
107
518
383
208
767
97
3
58
193
591
2,925
12,032
3.5
0.8
0.9
1.7
2.1
1.9
2.9
1.0
0.0
2.6
0.7
0.8
2.8
1.4
2.1
1.8
1.7
2.2
3.3
1.7
3.1
0.7
0.7
3.2
2.9
2.2
1.4
1.9
2.0
4.1
1.5
1.5
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
80%
80%
80%
85%
90%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
35
1,168
532
2
127
41
252
2,157
0
1
882
525
2,698
117
194
43
133
246
1,066
5,905
107
518
383
208
614
78
2
46
164
532
2,652
10,714
Notes:
1. Mineral Resources are reported inclusive of Ore Reserves. Differences may occur due to rounding.
2. Resources and Reserves at Buck Reef West, Nolans East and Sarsfield are reported 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 and Reserves are reported above 2.0 g/t cut off.
5. Syama Underground Resources are reported above 1.5 g/t cut off and Reserves above 1.9 g/t cut off.
24
2016
Ounces
Measured
Indicated
78
1,186
598
38
257
15
220
2,392
38
1
892
323
3,736
206
420
59
0
387
1,184
7,246
107
521
356
208
211
219
0
0
219
591
2,432
12,070
Inferred
2.9
0.8
1.0
2.9
2.1
1.8
2.9
1.0
3.3
3.0
0.7
0.9
2.8
1.5
2.1
1.4
0.0
2.7
3.3
1.9
3.1
0.7
0.9
3.2
2.2
2.2
0.0
0.0
2.2
4.1
1.5
1.5
826
46,453
17,857
413
3,778
263
2,331
71,921
354
8
39,024
11,582
40,857
4,150
6,222
1,353
0
4,495
11,180
119,225
1,079
22,192
12,360
2,036
3,048
3,072
0
0
3,132
4,485
51,404
242,550
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
80%
80%
80%
85%
90%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
78
Depletion due to mining
1,186
Depletion due to mining Nolans East
598
Resource adjusted by further drilling
30 Movement in operating stockpiles
206
Resource adjusted by mine depletion
12 Movement in operating stockpiles
187
Resource reviewed with additional drilling
2,297
38
Depletion due to mining
1 Movement in operating stockpiles
892
323
Depletion due to mining
Resource adjusted by further drilling
2,989
Change in cut off grade to 1.5g/t
165 Movement in operating stockpiles
336
Resource adjusted by mine depletion
47 Movement in operating stockpiles
0
Resource reviewed with additional drilling
329
Resource reviewed with additional drilling
No Change
1,066
6,185
107
521
356
208
169
175
0
0
No change
Depletion due to mining
Resource adjusted by updated drilling
No change
Resource reviewed with additional drilling
Resource adjusted by mine depletion
Assessment of historic stockpiles
Resource reviewed with additional drilling
186
Resource reviewed with additional drilling
532
No Change
2,254
10,737
Resolute Mining Limited | Annual Report 2017
Australia
Mt Wright
Sarsfield
Buck Reef West
Mali
Syama stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tabakoroni
Total Measured
Australia
Mt Wright
Stockpiles (sulphide)
Sarsfield
Buck Reef West
Mali
Syama Underground
Syama stockpiles (sulphide)
Satellite Deposits
Stockpiles (satellite deposits)
Tellem & Paysans
Tabakoroni
Ghana
Bibiani
Total Indicated
Australia
Mt Wright
Sarsfield
Buck Reef West
Welcome Breccia
Mali
Syama Underground
Satellite Deposits
Stockpiles (satellite deposits)
Tellem & Paysans
Tabakoroni
Ghana
Bibiani
Total Inferred
Total Resources
2017
Ounces
Measured
Indicated
35
1,168
532
3
159
51
296
2,244
0
1
882
525
3,373
146
243
54
166
289
1,184
6,863
107
518
383
208
767
97
3
58
193
591
2,925
12,032
Inferred
3.5
0.8
0.9
1.7
2.1
1.9
2.9
1.0
0.0
2.6
0.7
0.8
2.8
1.4
2.1
1.8
1.7
2.2
3.3
1.7
3.1
0.7
0.7
3.2
2.9
2.2
1.4
1.9
2.0
4.1
1.5
1.5
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
80%
80%
80%
85%
90%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
35
1,168
532
2
127
41
252
2,157
2,698
0
1
882
525
117
194
43
133
246
1,066
5,905
107
518
383
208
614
78
2
46
164
532
2,652
10,714
311
45,522
18,400
55
2,337
824
3,210
70,659
0
11
38,497
20,400
37,396
3,339
3,566
962
2,965
4,010
11,180
122,326
1,079
22,079
17,000
2,036
8,095
1,397
64
945
3,000
4,485
60,180
253,165
MINERAL RESOURCES
Tonnes
Gold grade
Group Share
Group Share
Tonnes
Gold grade
2016
Ounces
Group Share
Group Share
(000s)
(g/t)
(000s)
%
Ounces
(000s)
(g/t)
(000s)
%
Ounces
Comment on Changes
826
46,453
17,857
413
3,778
263
2,331
71,921
354
8
39,024
11,582
40,857
4,150
6,222
1,353
0
4,495
11,180
119,225
1,079
22,192
12,360
2,036
3,048
3,072
0
0
3,132
4,485
51,404
242,550
Measured
78
1,186
598
38
257
15
220
2,392
Indicated
38
1
892
323
3,736
206
420
59
0
387
1,184
7,246
Inferred
107
521
356
208
211
219
0
0
219
591
2,432
12,070
2.9
0.8
1.0
2.9
2.1
1.8
2.9
1.0
3.3
3.0
0.7
0.9
2.8
1.5
2.1
1.4
0.0
2.7
3.3
1.9
3.1
0.7
0.9
3.2
2.2
2.2
0.0
0.0
2.2
4.1
1.5
1.5
100%
100%
100%
80%
80%
80%
85%
100%
100%
100%
100%
80%
80%
80%
80%
80%
85%
90%
100%
100%
100%
100%
80%
80%
80%
80%
85%
90%
78
Depletion due to mining
1,186
Depletion due to mining Nolans East
598
Resource adjusted by further drilling
30 Movement in operating stockpiles
206
Resource adjusted by mine depletion
12 Movement in operating stockpiles
187
Resource reviewed with additional drilling
2,297
38
Depletion due to mining
1 Movement in operating stockpiles
892
323
Depletion due to mining
Resource adjusted by further drilling
2,989
Change in cut off grade to 1.5g/t
165 Movement in operating stockpiles
336
Resource adjusted by mine depletion
47 Movement in operating stockpiles
0
Resource reviewed with additional drilling
329
Resource reviewed with additional drilling
No Change
1,066
6,185
107
521
356
208
169
175
0
0
No change
Depletion due to mining
Resource adjusted by updated drilling
No change
Resource reviewed with additional drilling
Resource adjusted by mine depletion
Assessment of historic stockpiles
Resource reviewed with additional drilling
186
Resource reviewed with additional drilling
532
No Change
2,254
10,737
25
Resolute Mining Limited | Annual Report 2017
Resolute Mining Limited | Annual Report 2017
26
26
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Sustainability
Dear fellow shareholders,
The principle of sustainability has always underpinned
the way we do business at Resolute. Whether in the
context of our community partnerships, environmental
stewardship or the strength of our balance sheet
our business has always been built on the principles
of sustainable development. While we have been
sharing our commitment to sustainability through
our annual reporting for many years now, this year
we have focused on a more complete account of
our sustainability objectives and performance. We
have dedicated a chapter of this annual report to
sustainability reporting and will aim to produce a
stand-alone document in the coming years to provide
an in-depth account of our sustainability performance
and plans for the future.
At Resolute, we are pleased to see the capital markets
increasing interest in environmental, social and
governance information as this offers an opportunity
for Resolute to reinforce our values and highlight the
great work we are doing with respect to our corporate
social responsibility. This year is Resolute’s 21st year
of operating and investing in Africa and we are proud
to announce that during our time in Africa we have
made total economic contributions of over A$2 Billion
dollars. As well as our economic contributions we
continue to pass on long term sustainable value to our
stakeholders through training and mentoring of our
local workforce and local community initiatives. In FY17
we made significant progress on our commitment to
diversity while acknowledging we are still in the early
phases of a transformation of our workforce diversity. I
am proud of the significant improvement in our group-
wide safety performance but acknowledge the need to
reinforce a culture of reporting and hazard awareness
to ensure that these results are reflective of actual
performance.
In advancing our sustainability reporting, we heed the
advice of our investors not to report for reporting’s
sake. We will focus on what is material and welcome
the advice of our stakeholders if ever this is incomplete.
I hope the following chapter provides a clear account
of the importance we place on managing sustainability
risks and maximising sustainability value, I look forward
to expanding this dialogue with you in the years ahead.
John Welborn
Managing Director & CEO
27
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Our People
Resolute respects and encourages workplace diversity and strives to create a flexible and inclusive work environment.
We endeavour to treat all employees equally and fairly, regardless of gender, age, culture, religion or disability.
Resolute is an equal opportunity employer with a commitment to improving gender diversity and balance within our
workforce. This commitment stands acknowledging the fact that local traditions and customs in our countries of
operation can mean that realising this commitment requires innovative thinking and practices.
Who we are
Our employees
Excluding contractors
Including contractors
741
Diversity
2416
Our Diversity and Inclusion Policy outlines the
Company’s commitment to having a high performing
workforce that is representative of the communities
in which we operate. This includes, but is not limited
by, representation of gender, indigenous and national
workforce diversity. The policy also applies to the
recruitment process, where we are committed to
selecting the best candidates from a balanced pool of
suitably qualified applicants.
Our Directors have set measurable diversity objectives
and the Nomination Committee is responsible for
reviewing our progress towards achieving these
objectives, as well as the overall effectiveness of
the policy. Key metrics assessed include the gender
balance of the workforce across three levels of the
organisation (board level, senior management and the
total workforce) and remuneration by gender.
According to the Chief Executive Women’s 2017
ASX200 Senior Executive Census, women represent
around 20% of ASX200 executive leadership teams.
During the reporting period, Resolute’s executive
leadership team was comprised of six males and two
females, placing us above the ASX200 average. The
Company will continue to focus on fostering female
talent, and providing equal opportunities to improve
this representation in the future.
The gender balance within Resolute's Australian
workforce is detailed in the next table, along with
benchmarking data specific to mining from the
Workplace Gender Equality Agency (WGEA Benchmark
data 2015-2016). The overall representation of women
Employees by location (headcount)
Australia Ghana Mali
219 57 465
of 20.3% was above industry average suggesting
positive progress towards our diversity objectives.
Resolute Women
WGEA
Benchmark
Women
KMP
Senior Managers
Other Managers
FY17
28.6%
0.0%
8.3%
FY16
0.0%
0.0%
0.0%
Overall
20.3%
19.2%
FY17
13.3%
15.6%
16.1%
15.8%
The submission of the Resolute Workplace Gender
Equality Agency report in 2017 demonstrated our public
commitment to transparency and accountability in this
area. This report is available on our website at
www.rml.com.au/corporate-governance.
Talent attraction and retention
At Resolute, our employees are key to our success and
we have various programs in place to attract, retain and
develop talented individuals.
The Malian Talent Development Program commenced
in FY17 and aims to advance the capabilities of Malian
employees in order for them to attain senior positions
at Syama. The program will select up to ten high
performing employees per year, and provides training
and mentoring to enable them to gain success in
leadership and technical positions. It is expected that
inaugural participants will complete their development
pathways by 2020.
28
Resolute Mining Limited | Annual Report 2017 Case Study
Syama’s partnership with Jean Bosco College
Since early 2016 Syama has been working with Mr Georges Koevi (Managing
Director) and his team to develop the affiliation with Jean Bosco College,
the largest Vocational Education Centre in the Sikasso region of Mali which
provides training for over 400 students. The partnership is important to
creating prospects for Jean Bosco trainees to gain work-life experience and
exposure to potential employers whilst also allowing Syama employees to
receive technical skills training in a well-equipped training environment.
Through continued consultation with Mr Georges Koevi and Syama
maintenance leaders, an apprenticeship scheme has been developed and
approved for commencement in October 2017. This is believed to be a first
in Mali for a scholarship program to be offered for entry-level roles. Four
apprenticeships have been created in the following disciplines; electrical, metal fabrication, automotive
mechanic and automotive mechanic specialised in auto electrical. The scheme is offered to males and
females, aged 18 to 21 years old from surrounding villages and involves a formal recruitment approach
including interview and selection process, technical skills training with Jean Bosco College and the potential
for continued employment with Syama at the end of the apprenticeship. The successful candidates selected
for the inaugural intake are; Harouna Coulibaly, Karim Coulibaly, Amadou T Diabate and Assetou Diabate.
Through Resolute’s partnership with the Jean Bosco
College in Sikasso, 24 trainees completed three
month work placements onsite, with one participant
subsequently securing a permanent role with a mining
contractor. Recognising cultural differences and
traditions around diversity in Mali, 25% of trainees
attending this program in FY17 were female.
In Australia, Resolute provided internships to 12
university students and one electrical apprentice in
FY17. The interns gained invaluable hands on experience
at both our Ravenswood mine and corporate office.
Three students went on to take up casual work, with
one joining our corporate team in Perth. The number
of local residents employed at Ravenswood, including
contractors, remained steady at approximately 35
people, 15 of which were female.
As part of our community relations management plan
in Ghana, Resolute has committed to fill a majority
of unskilled positions with members of the local
community.
Human Rights
Resolute acknowledges and respects the human rights
of all people who are involved with, or impacted by
our operations. Our key human rights impacts lie in the
areas of security, labour, land access and environmental
impact. In the upcoming period, we will be formalising
our Human Rights Policy, which will include direct
reference to the United Nations Guiding Principles on
Business and Human Rights.
Resolute’s security measures are aligned with the
Voluntary Principles on Security and Human Rights
(VPSHR). We strive to ensure security measures at our
operations are robust, auditable, ethical and able to
withstand independent scrutiny, to maintain the trust
of neighbours, governments and employees.
In some parts of West Africa, artisanal mining or
‘Galamsey’ is a traditional practice acknowledged by
existing mining codes. Illegal mining differs in that it is
not sanctioned by government, and is often influenced
by people outside local communities. Resolute works
closely with public security forces to protect its
operations and the community from the effects of
illegal mining, in line with the principles of the VPSHR.
Community members can raise concerns about illegal
mining to the Syama Mine Community Consultation
Committee (SMCCC) for Syama, or Resolute
Foundation Advisory Panel (RFAP) for Bibiani. During
FY17 no such concerns were raised.
The five day national mine workers strike in Mali in
2017 represented a potential challenge for Resolute.
However due to careful and regular communication,
and the recognition of the rights of workers to engage
in collective bargaining, operations in Syama were not
significantly affected.
In some areas, Resolute has reached agreements with
traditional land users to enable exploration and protect
resources for ongoing or future use. The protection of
ancient and cultural places in respect of indigenous
rights is a key awareness matter for employees at all
operations. In Mali and Ghana, we have compensation
processes in place that are agreed with government
and stakeholders. The SMCCC at Syama and RFAP
at Bibiani oversee any issues with compensation for
affected parties.
The Ravenswood operation strives to ensure
compliance with native title and cultural heritage
requirements in Australia. The majority of the
Ravenswood permits for exploration or mining overlap
with the local Birriah community.
29
Resolute Mining Limited | Annual Report 2017 Community Relations
Resolute recognises we must contribute to the communities in which we operate to demonstrate our commitment
to sustainable development. Our focus on fostering long-term partnerships with the local community to develop a
mutual understanding, cooperation, and respect, is key to reinforcing our social licence to explore, develop, operate
and close mines.
Our approach
Resolute’s approach to community relations is guided
by our community relations policy. Our activities
focus on community health and wellbeing, water and
sanitation, income generating activities, and education.
Holding these four pillars together is accountability,
or the need to rigorously assess, track progress and
measure the success of programs and projects. The
Company takes a hands on approach to community
support, preferring to have direct involvement in
projects rather than simply providing funding.
We are proud and willing to help communities to reach
their development goals, but caution is needed not
to substitute the help of Resolute at the expense of
government development initiatives.
Water &
Sanitation
Income
Generation
Accountability
Accountability
Community
Health
Education
Community
engagement
Resolute engages with community leaders, local
governments, and non-government organisations
(NGOs) to identify areas where our support is
most needed. We maintain open and transparent
communication channels, including an ‘open door’
policy where community representatives have
reasonable access to the Company’s management. Our
grievance mechanism enables community members to
raise issues and concerns.
The SMCCC was established in 1999, and provides a
forum in which all community issues relating to the
mine can be discussed. It comprises of government
officials, elected representatives, and local community
leaders. Monthly meetings take place to assess ongoing
community needs and priorities of the community.
Resolute is then able to determine the level and
urgency of support required in the community and
prioritise accordingly with the stakeholders concerned.
The constant support to the district health system has
been recognised and highlighted by the participants.
In Ghana, community consultation has been vital
to attain public support for the Bibiani project. The
RFAP was established in FY17 as a formal mechanism
for local community leaders to consult and engage
with the management of the mine. The local villages
and communities are represented on the advisory
panel, with their role being to present the views of
their residents, and in turn provide open and honest
feedback on Company's operations.
Within the Ravenswood community in Queensland,
a monthly community newsletter, the Ravenswood
Roundup provides details of local community
initiatives. The newsletter is compiled based on input
from the state school principal, the Flying Doctors
service, Ravenswood Police and the Ravenswood
Restoration and Preservation Association. A regional
council meeting was held during FY17 to enable the
community to raise questions about the Ravenswood
Expansion Project.
Community initiatives
Community health and wellbeing
Supporting community health and wellbeing programs
has always been a key focus for Resolute. In addition
to providing outreach clinics and medical assistance
(see case study on page 34), Resolute is proud to
support the Bibiani Gold Stars Football Club, a Ghanaian
30
Resolute Mining Limited | Annual Report 2017 Case Study
Community support at
Ravenswood
In FY17, Resolute engaged tourism consultancy
Earthcheck to produce a Tourism Directions Paper
for the Ravenswood community. The aim of this
study is to identify opportunities to increase tourism
to the area and assist the town in becoming self-
sustaining following the eventual mine closure at the
end of the Ravenswood Expansion Project.
A Tourism Advisory Committee was formed and
meetings are run by Ravenswood’s Community
Relations Advisor. The committee, with assistance
from Charters Towers Regional Council, Ravenswood
Mine and local businesses, will begin work on a five-
year plan to promote Ravenswood and its surrounds.
Resolute is a long standing and principal supporter
of the Ravenswood Restoration and Preservation
Association (RRPA), contributing $24,000 annually.
RRPA works to conserve and protect the remaining
seven heritage listed buildings, and maintain the
community garden within the Shire of Ravenswood.
professional football team. Construction of a club
house and changing rooms for the team began in FY17.
At Bibiani, Resolute continued to provide a free
community bus service in FY17. This daily service
enables community members to undertake their work
and education commitments using a safe and reliable
service.
Water and sanitation
In Mali, 3.7 million people do not have access to clean
water and over 4,000 children under the age of five die
every year from diseases caused by poor sanitation.
To complement the support of organisations such
as Wateraid, SOMISY has installed and maintained
approximately 100 potable water boreholes to
communities surrounding Syama and provided over
40,000 people with access to clean water.
Income generating activities
Resolute is committed to boosting the local economies
in which it operates by supporting small scale income
generating activities. With the support of Resolute
providing training and materials, the N’Golopene
Women’s Group produce shea butter soap to sell
to the local market. Soap sales are also supported
by Resolute’s African and Australian operations. In
addition Resolute provided training to the Dieou
and Tembleni villages Women’s Group to propagate
seedlings and sold them back to Syama. Resolute also
provides training in animal husbandry, including sheep,
chicken and cattle rearing, beekeeping and vegetable
production.
Education
Education is key to lifting people out of poverty, and
recognising this Resolute has formed partnerships
with several local schools in the areas in which we
operate. Resolute maintains a close relationship with
the Ravenswood State School in support of its teachers
and pupils. From sponsoring social events to annual
tree planting initiatives for World Environment Day,
Resolute is committed to providing equitable learning
opportunities to local students. Students have been
exposed to many different aspects of the mining
industry with field trips led by the mining, exploration
and environmental departments.
Case Study
Resolute Foundation
Advisory Panel
supports local schools
In January 2017, Resolute's Ghanaian subsidiary
Mensin Gold Bibiani Limited (MGBL) worked with
communities of interest, in and near the town of
Bibiani, to establish the RFAP. A charter was created
for representatives of communities to liaise with
the management of MGBL in a formal and regular
manner. The mission of the RFAP is ‘to engage and
work together with stakeholders to assess, prioritise
and recommend community development projects
to MGBL management’.
Through their RFAP representative, the local
Donkoto-Lineso community requested Resolute’s
assistance to construct six brand new classrooms
and a storeroom for their local school, which
accommodates nearly 150 students. The existing
school consisted of four classrooms which were in
a poor condition, with no doors and windows and
subject to frequent water leaks. Resolute provided
funding for the restoration of the existing facilities
and the addition of new classrooms.
A fire at Babda School in the Bibiani Estate in FY17
resulted in the destruction of an entire classroom
block. Students and teachers were exposed to
roof leakages, congested classrooms and the risk
of possible collapse from the weakened building
structures with over 30 pupils removed from the
school due to safety concerns. Resolute provided
funding for the restoration of three classrooms,
re-roofing and rewiring.
31
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Health and Safety
Our approach
Resolute recognises that prioritising the health and
safety of all employees, contractors and visitors is vital
to the success and sustainability of our operations.
Our approach is guided by the Resolute Occupational
Health, Safety and Security Policy which commits all
areas of the business to continually monitor, review and
improve procedures and performance.
Performance
To monitor our safety performance, Resolute tracks
total recordable injury frequency rate (TRIFR) and lost
time injury frequency rate (LTIFR), which show total
injuries and injuries resulting in lost time per million
hours worked for both employees and contractors.
Across the Resolute group our TRIFR for FY17 was 2.56,
a 50% improvement on FY16. This result was largely
driven by our ongoing improvements to health and
safety systems at Ravenswood, where total recordable
injuries decreased by 60% from FY16.
The Resolute group LTIFR improved by 18% compared
to the previous year, as a result of improved
performance at Ravenswood. However the number of
Lost Time Injuries (LTIs) increased from 0 to 3 at Syama.
Resolute is pleased to report zero work-related
fatalities at any of our sites during the period.
FY17
TRIFR
FY16
GROUP [2.56]
GROUP [5.11]
• Australia [7.35]
• Australia [23.27]
• Mali [1.58]
• Ghana [3.41]
LTIFR
• Mali [2.80]
• Ghana [1.28]
GROUP [0.98]
GROUP [0.80]
• Australia [7.76]
• Australia [2.45]
• Mali [0.00]
• Ghana [0.00]
• Mali [0.68]
• Ghana [0.00]
Initiatives
Following the application of the Resolute Integrated
Management System (RIMS) across the business in
FY16, Resolute has continued to refine its systems and
further invest in health, safety, and security expertise.
32
Resolute Mining Limited | Annual Report 2017 To address its TRIFR being above the industry average,
Resolute engaged an independent party to conduct
a review of safe-working behaviour at Ravenswood.
The resulting change management plan focused
on developing sustainable leadership philosophies
whereby workplace leaders are taught and encouraged
to set standards, coach team members, and recognise
safe and efficient working practices. Since the
program’s inception, TRIFR has decreased from 24.99
to 6.83; nearly half the industry average of 11.7.
Resolute extends this duty of care to all business travel
arrangements. In FY17, we partnered with International
SOS, the world’s largest medical and travel security
services firm. This partnership allows Resolute to
provide all employees with access to 24/7 worldwide
medical, security, travel and emergency assistance
should the need arise.
Resolute is committed to providing ongoing support to
all employees who have been injured in the course of
work. Resolute’s Injury Recovery Tracking Tool ensures
that all affected individuals are provided with effective
and timely support and highlights opportunities to
improve practices and procedures.
Community Safety
At Resolute, we strive to support safety improvement
in all communities in which we operate. At Syama, we
have extended the Golden Safety Rules into the local
community including “SLAM- Stop, Look, Assess, and
Manage”. This has successfully raised safety awareness
both in and outside the workplace.
Members of Resolute’s Emergency Response Teams
and site nurses at Ravenswood are on call 24 hours a
day, seven days a week, to assist police and emergency
services with incidents in the area. The remoteness
of Ravenswood means that an ambulance can take
over an hour to reach the community from the nearest
town of Townsville. Site nurses provide invaluable
support and perform a range of first aid treatments for
community members.
Case Study
Improved bus safety at Syama
In line with Resolute’s focus on improving the quality and safety standards of its contractors, a Syama site
Risk Analysis conducted by an external third party highlighted the need for a number of changes to the
management of our bus contractors.
Our site-based Continuous Improvement Teams are in the process of developing new contracts for service
providers which will stipulate health, safety and training KPI’s. We have also increased the frequency of bus
safety inspections, using a checklist to identify specific ‘class A’ faults which deem the bus unfit to carry staff.
We are working directly with bus contractor mechanics to ensure that they fully understand Resolute’s safety
requirements, and the reasons why buses were frequently failing safety inspections. This has resulted in safer
and better maintained buses.
A training program tailored specifically to the contractor bus drivers was delivered in FY17. It outlines the
expected behaviour of both bus drivers and passengers, with drivers being empowered to report any
misbehaviour or threats from passengers.
Training
At Resolute, we believe a positive health and safety
culture is underpinned by the delivery of timely and
relevant training. We endeavour to communicate
and consult openly with employees and contractors,
ensuring all parties understand their obligations and are
held accountable for their actions and responsibilities.
A key finding of Ravenswood’s independent
safety review was around the level of incident
investigation. To address this, Safety Wise Australia
facilitated Incident Cause Analysis Method (ICAM)
Lead Investigation Training for nine managers and
senior leaders, and Basic Investigator Courses for
60 supervisors, safety representatives, permanent
contractors and other team members.
At all of our sites, training in first aid, mine rescue and
emergency response is provided to selected employees
and Emergency Response Team members on a regular
basis. At our Bibiani site in FY17, training focused on
maintaining the core skills of Emergency Responders
with over 50 team members completing fire defence
and first aid management training.
33
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Occupational health
Occupational hygiene
At Resolute, we strive to create and maintain a safe,
healthy working environment through the prevention
and treatment of occupational diseases.
Employee awareness of alcohol and drug consumption
was maintained in FY17 through the continuation of
random testing in the workplace. All sites maintain
strict fitness for work programs, whereby any
employee who tests positive for illicit drugs or alcohol
in their workplace is sent home immediately and is
monitored in a tailored program.
Infectious diseases
Resolute’s Infectious Disease Policy guides our
approach to preventing and controlling the spread
of infectious diseases. Preventative measures have
been reinforced through training and awareness, and
medical surveillance of workers increased.
At Syama, a malaria control program extends to a
radius of 12 kilometres around the mine site. The
combination of indoor residual spraying, training of
medical staff and provision of mosquito nets has
contributed to a decline in malaria cases in the program
area. Other precautionary activities in place include
maintaining hand-washing facilities across all mine
sites, advising community medical centres on disease
control initiatives, and engaging in ongoing dialogue
and partnerships with health agencies and NGOs.
Rates of HIV transmission in Mali continue to be high
by global standards. In FY17, Resolute assisted the
Regional Health Agency to establish three medical
centres in nearby communities. The medical centres
focus on supporting the prevention of HIV transmission
from mother to child. We are also working in
partnership with Soutura, an NGO that helps promote
HIV testing, distribution of condoms, and awareness for
prevention of sexually transmitted diseases.
Case Study
Mensin Gold Community Medical Outreach
Program
During FY17 Resolute ran several medical outreach programs in the communities surrounding the Bibiani
Gold Mine.
The program focused on communities where access to health care is poor. The program covered health
education and prevention as well as screening for ailments such as hypertension, diabetes, and chronic skin
diseases. This program embarked on a mass deworming/preventive chemotherapy program for children
with the risk of soil helminths and schistosomiasis within those communities where the prevalence for
infection is high.
Since its inception, the program has screened and treated thousands of people in rural areas who lack access
to proper medical care. We have also educated people on the availability of continuous medical care through
the National Health Insurance Scheme.
34
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Security
As a global mining company, Resolute explores,
develops and operates in countries and locations with
a complex range of security issues. Our operations in
Mali and Ghana are supported by public security groups
overseen by expert security advisors. These advisors
work closely with Resolute executive management to
maintain awareness and drive security initiatives.
In FY17, International Alert reviewed the management
of security at Resolute. Specific training on human
rights was given to security providers in Mali for
interaction with neighbouring communities, artisanal
and illegal miners. In Ghana, the Chamber of Mines
conducts regular meetings, and provides training for
members on security issues aligned with the VPSHR.
Resolute has continued to be an active member of the
Australia-Africa Minerals & Energy Group (AAMEG) with
specific participation in the Security working group.
Support has been provided through the assessment
and endorsement of a commercial software product
to provide security situational awareness to mining
companies operating in West Africa and discounted to
AAMEG membership.
35
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Environmental
Management
Resolute is committed to safeguarding the environment and finding the optimal balance between minimising
environmental impact and economic development.
Our approach
The Resolute Environmental Policy outlines our
commitment to integrate environmental measures
into all operations, and comply with or exceed the
requirements of applicable legislation, regulation, and
other codes and standards to which we subscribe.
We identify and assess the potential environmental
effects of our activities and manage associated risk
accordingly. We also aim to continually improve and
regularly monitor, audit and review our environmental
performance.
Implementation of the policy is supported by RIMS,
which includes standards to enable the identification,
assessment, management and control of risks specific
to the business including environmental risks and
cyanide management.
Our Performance
GHG emissions and energy
Scope 1
(tCO2e)
Scope 2
(tCO2e)
Energy
Consumption
(PJ)
Syama
Bibiani
131,829
-
482
3469
Australia
23,172
55,702
1.88
0.01
0.33
Waste
Syama
Bibiani
Australia
Landfill (t)
Recycled (t)
2,500
36
564
1,011
0
444
Greenhouse gas and energy
Resolute acknowledges the link between energy
use and climate change. We continuously work to
use energy more efficiently throughout all of our
operations. In FY17 Resolute emitted a total of 214,654
tCO2e. We are planning to implement more robust
methods of data collection from our African operations,
to better track and manage our environmental impacts.
Resolute reports on greenhouse gas emissions from
its Australian activities as part of the Australian
Government’s National Greenhouse and Energy
Reporting System (NGERS). Our Australian scope 1
emissions rose by 33% from the prior period, from
17,430 tCO2e in FY16 to 23,172 tCO2e in FY17. This
rise was driven by a substantial increase in diesel
consumption due to the commencement of Nolans
East open pit mining operations in FY17.
Water Consumption (ML)
Syama
Bibiani
Australia
1,567
952
1,954
36
Resolute Mining Limited | Annual Report 2017 Cyanide management
Cyanide management is an integral part of the
gold production process. Our approach to cyanide
management is aligned with the International Cyanide
Management Code (ICMC), and performance subjected
to external audit. We make risk based variations to
the ICMC in implementation plans with respect to the
Resolute Cyanide Management Standard.
We only purchase cyanide from manufacturers certified
against the ICMC. The risk from the transportation of
cyanide is managed by only using transport companies
that have established adequate emergency response
plans and capabilities through ICMC certification.
Manufacturers provide training to Resolute personnel
in the storage, use and control of cyanide. Audits and
improvement plans are shared between the operations
and transporters. All Resolute operations have in place
plans for the decommissioning of cyanide facilities
that will protect stakeholders and the environment,
and ensure the costs are included in mine closure
provisions.
Air quality
Air quality is a key concern for our employees and
local community stakeholders. At Syama, a network
of air quality monitors transmit real-time data to the
operations centre allowing a prompt management
response. During dry periods, Resolute uses dust
suppression at its mining operations and in the local
community.
The process of roasting pyrite “concentrate” that is
rich in gold generates sulphur dioxide fumes which are
emitted to the atmosphere by tall-stack dispersion.
Resolute maintains a strict Air Quality Management
System (AQMS) to control roaster operation and
throughput rates. The AQMS continuously monitors
sulphur dioxide levels in the villages surrounding the
operation.
Monitoring of ambient air quality at Bibiani and
Ravenswood was carried out during the year for both
operational and non-operational areas. Monitoring
showed that air quality was within acceptable limits for
both sites.
Water
Resolute monitors water quality across all sites through
a network of boreholes. In FY17 no adverse results were
identified.
During the reporting period a cocoa farmer near the
Bibiani operation was affected by sediment laden
runoff from a drill pad. Under the direction of the RFAP,
the Bibiani management team is seeking to responsibly
compensate the farmer in a fair and transparent
manner.
At Ravenswood, Resolute is working in cooperation
with the Queensland Department for Environment and
Heritage Protection to monitor the sulphate levels in
surface and groundwater near its waste rock dumps
and tailings storage facilities. Typically the water quality
is near neutral pH and has low or benign levels of trace
elements. A grievance with a neighbouring pastoralist
over groundwater quality was resolved after extensive
studies showed no adverse impacts were evident on
livestock or pastures.
Waste
At Syama, waste collection and segregation continued
throughout the year. Waste oil and scrap steel
continued to be sent off-site for recycling. During the
year, Resolute held a series of ‘‘Clean-Up’’ days and
“Toolbox Talks” across the sites to raise awareness and
improve waste management practices. The Company
also completed the commissioning of the high
temperature incinerator.
At Bibiani, continued improvement was made on waste
collection, treatment and disposal and ongoing training
campaigns were delivered on waste handling and
disposal.
Biodiversity and rehabilitation
At Resolute, we understand the importance of
structured mine closure plans and the importance of
effective rehabilitation to leave behind land capable of
future productive use.
Where possible, we aim to support community
development through our rehabilitation activities. In
FY17 our community development team at Syama
worked closely with women from the Dieou and
Tembleni villages, training them to propagate and
nurture seedlings for mine rehabilitation. Over 6000
seedlings from native tree species were successfully
germinated and sold back to Syama for planting.
The Bibiani Land Reclamation Plan aims to stabilise the
most disturbed areas and restore the habitat to allow
beneficial use of the land by local inhabitants.
As part of the Ravenswood Expansion Project (REP),
possible mine layouts have been amended in order
to reduce the impact on terrestrial flora and fauna
surrounding the Ravenswood mine. This approach
has seen a reduction in the potential impact on
the surrounding Squatter Pigeon habitat, which is
listed as ‘vulnerable’ under both the Commonwealth
Environment Protection and Biodiversity Conservation
Act 1999 and Nature Conservation Act (Qld) 1992.
Regulation approvals and compliance
No financial penalties were imposed on any of
Resolute's operations during the reporting period.
37
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Governance
Code of conduct
Resolute willingly operates under a strict Code of
Conduct (Code) that underpins, guides and enhances
the conduct and behaviour of Directors, employees
and contractors in performing their everyday roles.
The Code provides that the following principles guide
employee behaviour:
•
•
•
to act with integrity and professionalism in the
performance of their duties and in the proper use
of company information, funds, equipment and
facilities;
to exercise fairness, proper courtesy and
consideration in all their dealings in the course of
carrying out their duties; and
to avoid real, apparent or perceived conflicts of
interest.
Resolute aspires to pioneer and achieve best practice,
creating opportunities for the Company’s business
partners to assist both stakeholders and communities,
while operating openly, honestly and with integrity
while maintaining a strong sense of corporate social
responsibility. In maintaining its social corporate
responsibility, Resolute will conduct its business
ethically and according to its values, encourage
community initiatives, consider the environment and
ensure a safe, equal and supportive workplace.
Conflicts of Interest
Resolute recognises that proper disclosure and
management of conflicts of interests is integral to its
reputation and business objectives. It is Resolute’s
policy to impose a duty on all Directors, employees
and consultants (Personnel) to wherever possible avoid
38
any conflict of interest, to disclose any potential for
a conflict of interest, and where a conflict cannot be
avoided, to manage that conflict of interest. The duty
to avoid, disclose, and manage conflicts of interests
does not prohibit all conflicts of interests – rather it
requires that conflicts are adequately disclosed and
managed when they arise.
Insider trading
It is Resolute’s policy that company employees must
ensure all trading of company securities they undertake
complies with the Australian Corporations Act and
Regulations (particularly the prohibitions on insider
trading). The Company’s Securities Trading Policy
provides specific detail and is available to view online at
www.rml.com.au/corporate-governance.
Conducting business
overseas
It is Resolute's policy that its business affairs and
operations should at all times be conducted legally,
ethically, and in accordance with community
standards of integrity and propriety. The Code requires
business dealings must be conducted in accordance
with Australian and other applicable jurisdictions’
anti-bribery laws. The Company’s Anti-Bribery and
Corruption Policy and policy for Reporting and
Investigating Unethical Practices provide specific detail
and are available to view online at www.rml.com.au/
corporate-governance.
Resolute Mining Limited | Annual Report 2017 Health and safety
Additional policies
Resolute is committed to the security, safety and
health of its people and pursues a zero accident
philosophy to provide a safe and healthy working
environment for its employees. The emphasis of this
commitment is the identification of potentially unsafe
practices and the prevention of incidents and injury.
Resolute has a very strict safety culture; all of the
Company's policies and procedures relating to safety
are mandatory.
Environmental
responsibility
Resolute will conduct its business activities with
proper regard to the care and protection of the
environment. Resolute will use best practice and
endeavours to conduct its operations in a manner that
is environmentally responsible and sustainable.
In addition to those mentioned above, Resolute has
implemented the following charters and additional
policies all of which are available to view online at
www.rml.com.au/corporate-governance:
•
Board Charter
• Audit and Risk Committee Charter
• Remuneration Committee Charter
• Nomination Committee Charter
• Continuous Disclosure Policy
• Communication Strategy
• CFO Code of Conduct
• Diversity and Inclusion Policy
Board
The Board of Directors is responsible for the corporate
governance of the Company. The Board guides and
monitors the Company’s business and affairs on behalf
of Resolute shareholders by whom they are elected
and to whom they are accountable.
The table below sets out the detail of the tenure of
each Director as at 30 June 2017.
The table below sets out the detail of the tenure of each director as at 30 June 2017.
Director
Martin Botha
Role of Director
First Appointed
Qualification
Non-Executive director
(appointed Chairman from
29 June 2017)
February 2014
BScEng
John Welborn
Managing Director
February 2015
BCom, CA, FAIM, SA Fin,
MAICD, MAusIMM
Peter Sullivan
Bill Price
Non-Executive Director
June 2001
BEng, MBA
Non-Executive Director
November 2003
BCom, FCA, MAICD
Yasmin Broughton
Non-Executive Director
29 June 2017
BCom, PG Dip Law, GAICD
Mark Potts
Non-Executive Director
29 June 2017
BSc(Hons)
Director
Martin Botha
John Welborn
Peter Sullivan
Bill Price
Yasmin Broughton
Mark Potts
Non-Executive
Independent
Gender
Yes
No
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Male
Male
Male
Male
Female
Male
The Company’s Board Charter outlines the functions
reserved to the Board and those delegated to
management. The Board Charter delineates the
responsibilities and functions of the Board as being
distinct from those of management. Resolute’s Board
Charter is available to view online at www.rml.com.au/
corporate-governance.
39
Resolute Mining Limited | Annual Report 2017 The Remuneration Committee is responsible
for determining and reviewing compensation
arrangements for Resolute’s company Directors, CEO,
Executive Committee and employees, and making
subsequent recommendations to the Board.
The Remuneration Committee Charter is available
to view online at www.rml.com.au/corporate-
governance.
Nomination Committee
The Nomination Committee consists of the following
Non-Executive Directors:
• Mr M. Botha (Chairman)
• Mr B. Price
• Ms Y. Broughton
• Mr M. Potts
The Nomination Committee ensures Board members
are appropriately qualified and experienced to
discharge their responsibilities and implements
procedures to assess the performance of the CEO and
the Executive Committee.
The Nomination Committee Charter is available to view
online at www.rml.com.au/corporate-governance.
Corporate Governance
Statement
The Board has adopted the "Corporate Governance
Principles and Recommendations 3rd edition"
established by the ASX Corporate Governance Council
and published by the Australian Securities Exchange
(ASX) in March 2014.
Resolute’s Corporate Governance Statement is
available to view online at www.rml.com.au/corporate-
governance.
Committees
The Board has established the following sub-
committees to assist with internal control and business
risk management:
• Audit and Risk Committee
• Remuneration Committee
• Nomination Committee
Audit and Risk
Committee
The Audit and Risk Committee consists of the following
Non-Executive Directors:
• Ms Y. Broughton (Chairman)
• Mr M. Botha
• Mr P. Sullivan
• Mr H. Price
• Mr M. Potts
All of the above listed Non-Executive Directors other
than Mr. P. Sullivan, are independent.
The Audit and Risk Committee provides the Board
with additional assurance regarding the reliability of
the financial information for inclusion in the financial
reports, and is also responsible for:
•
•
•
•
•
ensuring compliance with statutory responsibilities
relating to accounting policy and disclosure;
liaising with, discussing and resolving relevant
issues with the auditors;
assessing the adequacy of accounting, financial
and operating controls;
the review of half-year and annual financial
statements before submission to the Board; and
the assessment, management and monitoring of
business risk.
The Audit and Risk Committee Charter is available to
view at www.rml.com.au/corporate-governance.
Remuneration
Committee
The Remuneration Committee consists of the following
Non-Executive Directors:
• Mr P. Sullivan (Chairman)
• Mr M. Botha
• Mr B. Price
• Ms Y. Broughton
40
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Risk Management
Resolute takes an active approach to risk management
across the Company and its operations. The Board
has ultimate responsibility for ensuring principal risks
faced by the Company are identified, and overseeing
appropriate control and monitoring systems are in
place to manage the impact of these risks.
As part of this identification and oversight role, the
Board established the Audit and Risk Committee
during FY17. Prior to the establishment of the Audit
and Risk Committee, this role was performed by the
Board. The Audit and Risk Committee works closely
with management in relation to the assessment,
monitoring and managing of business risk and to carry
out assessments of internal controls and processes for
improvement opportunities.
Resolute is continuously seeking ways to improve
its risk management systems and controls including
engaging KPMG on an ongoing basis, to assist the
Company with continual development of its risk
management framework and supporting processes.
Resolute’s existing risk framework uses a series of
workshops and interviews to assist in the identification
and assessment of key business risks including the
associated mitigation controls and strategies to
appropriately manage the material risks. A summary of
the key business risks is set out below.
Risk
Strategic risks
Asset Portfolio
Mitigation / Comment
Resolute's revenue is derived from two assets - the
Syama Gold Mine in Mali and the Ravenswood Gold
Mine in Queensland, Australia.
Resolute assesses a range of growth opportunities to
build on its existing portfolio as well as ensuring efficient
production from existing assets is maximised.
Reliance on two assets in two different geographical
locations requires continual focus on managing efficient
operations. Targeted projects to enhance asset reliability
and effectiveness are required to ensure Resolute's
ongoing success.
Whilst geographical diversity is an advantage, there is
currently limited overall diversification in the Company’s
portfolio.
For example, exploration activities are ongoing in Côte
d'Ivoire and a feasibility study for the Bibiani Gold
Mine in Ghana has been completed showing a viable
development pathway.
41
Resolute Mining Limited | Annual Report 2017 Risk
Financial risks
Changes to commodity prices, cash flow and credit risk
Resolute's financial performance is closely linked to the
market price of gold.
Financial performance may also be impacted through
foreign exchange movements, or where there is an
inability to secure adequate funding.
Fraud and corruption
Resolute is aware of the risk of internal fraud and
corruption activities, and the various ways that such
risk may transpire. There is also awareness that the risk
is increased where there are differences in financial
processes, language barriers or cultural differences
between stakeholders.
Operational performance
Mitigation / Comment
Resolute monitors its exposure to commodity price
fluctuations and foreign exchange rate fluctuations
as part of financial and treasury planning and controls
procedures.
Gold hedging may be implemented in certain defined
scenarios to ensure the long term funding of existing
projects and significant capital expenditure programmes
such as the Syama Underground project.
Resolute maintains excellent relationships with a
syndicate of international banking counterparts.
Resolute conducts fraud risk assessments and has
internal controls in place to manage the risk of
fraudulent or corrupt activities.
As a listed company, Resolute is aware of the
importance of maintaining required and/or planned
operational performance, in order to meet return on
investment targets and shareholder expectations.
Resolute's focus on a culture of good governance and
disclosure is aimed to provide up-to-date information
on activities impacting shareholders and other key
stakeholders.
Operational risks
Safety
The mining workplace environment is subject to a
number of hazards, including the risk of serious injury or
fatality while working on site. The physical remoteness
of sites also increases the risk of commuting to site and
the availability of medical assistance in the event of an
incident.
Resolute is also aware of the less likely risk of an
outbreak of a serious illness amongst the workforce and
the associated potential for large-scale disruption to
operations as a consequence.
Security and conflict risk
Resolute understands the external physical security
risks presented by artisanal mining activities, territorial
conflicts and/or terrorist actions which could impact our
people, our operations and our broader supply chain.
Resolute employs a wide range of industry standard
safety management systems in order to ensure the
safety of our workers. We provide appropriate training
and supervision on safety management, which
promotes and embeds safe operating practices.
Syama has a well-equipped medical centre on site and
Resolute provides health insurance coverage for not only
our local workers but also for their immediate families.
Resolute employs a range of physical and cyber security
measures to mitigate the risk of harm to our workers
and damage to our assets.
Country-level information is continuously monitored
to assess the risk of terrorism and security plans are in
place to mitigate identified risks.
42
Resolute Mining Limited | Annual Report 2017 Risk
Technology
Resolute understands that innovation in mining
technology is key to future competitiveness and a failure
to adopt more efficient techniques and technologies
represents a risk to improving business processes and
gaining efficiencies.
External risks
Geopolitical, legal and regulatory developments
Resolute's operational and exploration activities
are subject to extensive regulation in the relevant
jurisdictions.
Operating in multiple jurisdictions naturally brings with it
greater complexity and inherent risk.
Changes to existing applicable laws and regulations,
more stringent interpretations of existing laws or
inconsistent interpretation or application of existing laws
by relevant authorities have the potential to adversely
impact Resolute's business activities.
Mitigation / Comment
Resolute monitors technological advancements that
could be adopted or incorporated into our operations,
particularly where new technologies offer the potential
to improve safety and efficiency outcomes.
For example, the Syama Underground project is
investigating leading edge technology and has
engaged global specialists in designing and building
an automated loading and haulage system, which
we believe to be a world first and which will set new
standards for underground safety and productivity while
allowing the local workforce to be upskilled in the latest
technologies in underground mining.
Resolute monitors legal and geopolitical risks as part
of centralised risk management processes. These
risks form a key part of the overall assessment when
considering changes to operations or pursuing new
growth opportunities.
Resolute management actively engage in dialogue with
governments and policy makers at the most senior
levels to discuss regulatory developments that are
applicable to Resolute's business activities.
43
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Fiscal Responsibility
The taxes that Resolute pays as a company, those it collects from employees on behalf of government and those
of suppliers dependent on the Company’s presence, are important in creating positive community benefits in host
countries. Over A$54M was paid in taxes directly to governments in Mali and Ghana in FY17. These are illustrated in
the table below.
Syama
AUD
Bibiani
AUD
Total
AUD
Royalties
26,195,367
-
26,195,367
Corporate and other taxes
11,218,931
422,037
11,640,968
PAYE Tax
16,908,763
186,797
17,095,560
Local vendor payments
131,429,456
13,630,553
145,060,009
Local salaries
CSR spending
8,074,589
2,329,397
10,403,986
623,387
239,145
862,532
194,450,493
16,807,929
211,258,422
The table below illustrates Resolute’s total economic contributions at our current and previous mining operations
in Africa.
Syama
AUD
Tanzania
AUD
Bibiani
AUD
Total
AUD
Royalties
123,472,896
62,233,249
1,736,548
187,442,692
Corporate and other taxes
23,601,062
111,517,453
1,781,160
136,899,675
PAYE Tax
107,445,137
39,045,449
1,159,982
147,650,568
Local vendor payments
925,841,457
534,817,302
34,217,051
1,494,875,810
Local salaries
CSR spending
61,274,322
37,070,597
26,851,958
125,196,877
4,453,716
4,610,935
698,609
9,763,260
1,246,088,590
789,294,985
66,445,307
2,101,828,882
44
Resolute Mining Limited | Annual Report 2017 Resolute Mining Limited | Annual Report 2017
Financial Report
Contents
Directors’ Report
Auditor’s Independence Declaration
Financial Statements & Notes
Director’s Declaration
Independent Auditor’s Report
Shareholder Information
46
66
67
120
121
129
45
Directors’ Report
Your directors present their report on the consolidated entity (referred to hereafter as the “Group” or “Resolute”) consisting of
Resolute Mining Limited and the entities it controlled at the end of or during the year ended 30 June 2017.
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 resigned 29 June 2017)
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 resigned as Chairman of the board in June 2017.
Marthinus (Martin) John Botha (Non-Executive Chairman)
BScEng
Mr Martin Botha was appointed Chairman in June 2017 after being appointed to the board in 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 (appointed 2013). Mr Botha graduated with first class honours from the
University of Cape Town and is based in London.
Mr Botha is Chairman of the Nomination Committee and a member of the Audit and Risk Committee and a member of the
Remuneration Committee.
John Paul Welborn (Managing Director and Chief Executive Officer)
B.Com., 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. Prior to joining Resolute Mining Limited in 2015 Mr Welborn was the Managing Director of Equatorial
Resources Limited and 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 Prairie Mining
Limited (February 2009 - September 2015) and is currently a non-executive director of Equatorial Resources Limited (appointed
2010) and Kilo Gold Mines (appointed 2017), and is Chairman of Orbital Corporation Limited (appointed 2014).
Mr Welborn is a member of the Environment and Community Development Committee and the Safety, Security and Occupational
Health Committee.
46
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Directors (continued)
Names, qualifications, experience and special responsibilities (continued)
Peter Ross Sullivan (Non-Executive Director)
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 is an engineer and has been involved in the management and strategic
development of resource companies and projects for over 25 years. Mr Sullivan is also a director of GME Resources Limited
(appointed 1996), Zeta Resources Limited (appointed 2013), Pan Pacific Petroleum NL (appointed 2014), Panoramic Resources
Limited (appointed 2015) and Bligh Resources Limited (appointed 2017).
Mr Sullivan is Chair of the Remuneration Committee and a member of the Audit and Risk 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 of Chartered Accountants
Australia and New Zealand 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 a member of the Audit and Risk Committee (Chair resigned 27 July 2017), Remuneration Committee and Nomination
Committee.
Mark Potts (Non-Executive Director)
BSc (Hons)
Mr Mark Potts is a non-executive director and was appointed to the board in 2017. Mr Potts has held senior executive and board
positions, in start-ups and large corporate environments, over a 30-year career. Most recently Mr Potts was the worldwide CTO
and VP for Corporate strategy at Hewlett Packard, driving technology and business strategy successfully for over 5 years. Prior
to Hewlett Packard Mark was the founder of several successful, venture backed start-ups, that have driven technology disruption
and business innovation in varied industries. Mr Potts is the Chair of Decimal Software Limited (appointed 2016), a director of
VGW (appointed 2017) and board adviser to Advara (appointed 2014) and Adecco Australia (appointed 2010).
Mr Potts is a member of the Audit and Risk Committee and Nomination Committee.
Yasmin Broughton (Non-Executive Director)
BComm PG Law GAICD
Ms Yasmin Broughton is a non-executive director and was appointed to the board on 29 June 2017. Ms Broughton is a corporate
lawyer with significant experience working as both a director and an executive in a diverse range of industries. Ms Broughton has
over 13 years’ experience working with ASX listed companies as an officer and has a deep understanding of corporate
governance, including compliance with the ASX Listing Rules, and managing complex legal issues. Ms Broughton’s legal and
commercial qualifications together with her national mediator credentials, define her fact based and solution orientated approach
to corporate management. Ms Broughton is also a non-executive director of the Insurance Commission of Western Australia
(appointed 2015), Edge Employment Solutions Inc (appointed 2012) and CyberGym Global Limited (appointed 2017).
Ms Broughton is Chair of the Audit and Risk Committee and a member of the Remuneration Committee and Nomination
Committee.
47
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Company Secretary
Greg William Fitzgerald (resigned 4 August 2017)
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 was also the Chief
Financial Officer (resigned 27 February 2017) 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 resigned as Company Secretary on 4 August 2017.
Amber Stanton
LL.B.
Ms Amber Stanton is a corporate lawyer and was appointed as General Counsel / Company Secretary on 4 August 2017. Prior
to joining Resolute, Ms Stanton was a partner at two international law firms, specialising in mergers and acquisitions, capital
markets, energy and resources and general corporate and commercial matters. Ms Stanton was the WA winner of the 2011
Telstra Business Women's award (Corporate and Private Sector) and is also a director of the Liver Foundation of Western
Australia.
Interests in the shares and options of Resolute and related bodies corporate
As at the date of this report, the interests of the directors in shares, options and performance rights of Resolute Mining Limited
and related bodies corporate were:
P. Huston¹
J. Welborn²
M. Botha
H. Price
P. Sullivan
M. Potts
Y. Broughton
Fully Paid Ordinary
Shares
Performance
Rights
428,182
2,100,000
-
194,745
3,072,051
26,825
-
-
4,079,000
-
-
351,297
-
-
5,821,803
4,430,297
¹ Mr Peter Huston resigned on 29 June 2017.
² As disclosed in the Appendix 3Y lodged with ASX on 21 August 2017, Mr John Welborn is undertaking investigations to confirm
he is the owner (beneficially or otherwise) of 1,218,522 of these shares. Refer to the Appendix 3Y for further detail.
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.
Significant Changes in the State of Affairs
There have been no significant changes in the state of affairs of the Company other than those stated throughout this Report.
48
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Significant Events after Reporting Date
On 23 August 2017, the Company announced a final dividend on ordinary shares in respect of the 2017 financial year of 2.0 cents
per share. The dividend has not been provided for in the 30 June 2017 financial statements.
Environmental Regulation performance
The consolidated entity holds licences and abides by Acts and Regulations issued by the relevant mining and environmental
protection authorities of the various countries in which the Group operates. These licences, Acts and Regulations specify limits
and regulate the management of discharges to the air, surface waters and groundwater associated with the mining operations as
well as the storage and use of hazardous materials.
There have been no significant known breaches of the consolidated entity's licence conditions or of the relevant Acts and
Regulations. Levels of sulphate and some trace elements have been measured above license limits at the Ravenswood operation.
The operation is cooperating with the Queensland Department of Environment and Heritage Protection to evaluate and control
surface and groundwater quality.
Financial Position and Performance
FY17 net profit after tax of $166m (FY16 (restated): $201m).
Cash and bullion at market value increased to a total of A$290m (FY16: A$102m).
Revenue from gold and silver sales of $541m (FY16: $555m).
Gross profit from operations of $177m (FY16 (restated): $155m).
Return on equity of 49%.
Diluted earnings per share of 18.61 cents.
Net operating cash inflows for the year were $186m (FY16: $193m).
Net investing cash outflows of $128m (FY16: $43m).
Net financing inflows of $136m (FY16: outflows $79m).
Review of Operations
Resolute delivered a strong operational performance in 2017 with total gold production of 329,834 ounces at an All-In Sustaining
Cost (AISC) of A$1,132/oz, a significant improvement on the original guidance of 300,000 ounces at an AISC of $1,280/oz. This
result is particularly impressive given 2017 was a transformational year at both Ravenswood and Syama. At Syama the Company
commenced the Syama Underground project and continued mining satellite open pits while depleting large stockpile reserves. At
Ravenswood the Company began open pit mining at Nolans East, initiating the Ravenswood Expansion Project while continuing
to mine the highly successful Mt Wright Underground mine. FY18 will be another year of transition as the Syama Underground
begins ramping up to full production and Ravenswood transitions to a long future of open pit mining beyond the closure of Mt
Wright. The Company is in the process of building a large-scale sublevel caving operation at Syama to be one of the world’s first
fully automated underground truck haulage mines. FY18 will be an exciting year for shareholders as the Company focuses on
delivering the significant potential of its exploration and development pipeline.
49
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Review of Operations
Production
Strong operating performance has bolstered cash and bullion, allowing for the repayment of debt and strengthening of the
Company’s financial position.
Key operating
performance indicators
UG decline development
UG lateral development
UG vertical development
UG ore mined
UG grade mined
OP operating waste
OP ore mined
OP grade mined
Total ore mined
Total tonnes processed
Grade processed
Recovery
CEC Recovery
Adjustment*
Gold Produced
Gold in circuit
drawdown/(addition)
Gold shipped
Gold bullion in metal
account movement
(increase)/decrease
Gold sold
Achieved gold price
Cash Cost
Units
m
m
m
t
g/t
BCM
BCM
g/t
t
t
g/t
%
oz
oz
oz
oz
oz
oz
A$/oz
US$/oz
A$/oz
US$/oz
All-in Sustaining Cost
A$/oz
US$/oz
Syama
Sulphide
3,180
-
-
8,289
2.15
Syama
Oxide
-
-
-
-
-
2017
Syama
Total
3,180
-
-
8,289
2.15
Ravenswood
-
-
-
GROUP
total
3,180
-
-
2016
GROUP
total
-
1,807
-
1,001,067
1,009,356
1,305,585
2.51
2.51
2.38
431,208
3,772,861
4,204,069
989,485
5,193,554
4,508,379
441,933
689,864
1,131,797
328,325
1,460,122
749,667
2.44
2.29
2.35
0.63
1.96
2.22
1,215,153
1,319,596
2,534,749
2,366,159
4,900,908
2,851,091
2,106,371
1,340,097
3,446,468
1,995,292
5,441,760
4,455,437
2.59
69.8
2.84
83.2
2.68
75.3
1.54
93.1
2.27
79.7
13,834
-
13,834
-
13,834
2.61
84.1
-
136,000
101,830
237,830
92,004
329,834
315,169
(20,163)
(4,407)
(24,570)
(410)
(24,980)
9,164
115,837
97,423
213,260
91,594
304,854
324,333
375
10,565
10,940
1,448
12,388
16,208
116,212
107,988
224,200
93,042
317,242
340,540
1,720
1,296
857
646
1,001
755
1,720
1,296
948
714
960
725
1,720
1,296
896
675
984
742
1,708
1,291
1,252
943
1,406
1,059
1,717
1,295
995
750
1,132
853
1,624
1,184
898
654
1,200
874
*Increase in recoverable gold in carbon enriched concentrates (CEC) arising from confirmation of Project Reprise Low Carbon Roast recoveries.
50
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Review of Operations
Exploration
Detailed information about Resolute’s exploration and development highlights is available on the Company’s website.
During the year Resolute made a major new discovery at Syama. The Nafolo discovery is a new zone of mineralisation
located immediately south of the Syama deposit and separate to the main orebody. Nafolo was discovered in October
2016 and follow up drilling confirmed Nafolo as a major discovery. Nafolo has similar characteristics, size and tenor to
the 8 million ounce (Moz) Syama orebody and remains open in all directions.
The Nafolo discovery is likely to expand the existing 6Moz resource and 3Moz reserve at Syama. An understanding of
the full potential of the Nafolo discovery is a high priority in order to assess its potential to enhance the mine plan at
Syama. The drilling has now defined an initial strike length of greater than 300m and is continuing to deliver consistent,
broad intersections with similar characteristics to Syama. All holes drilled to date at Nafolo have intersected alteration
and gold mineralisation and the discovery remains open at depth and to the south. A significant area under the southern
waste dump is still to be tested and has the potential to host a large ore system similar to the 8Moz Syama orebody.
Since the discovery of Nafolo the Company has been exploring further opportunities for discoveries within the Syama
region. Resolute has a large ground holding which covers approximately 80km of the Syama shear zone. Within this
ground holding the majority of exploration drilling to date has focused on the discovery of shallow oxide resources. Given
the Company’s strong financial position and long term commitment at Syama, Resolute has seized the opportunity to
systematically test and establish the full potential of this prolific gold belt.
During the year exploration drilling at Syama delivered significant results from the Tabakaroni and BA-01 satellite
operations through extensional drilling aimed at underground mining opportunities that have potential to complement the
existing Syama mine plan.
Tabakoroni is a satellite operation located approximately 40km south of the Syama gold mine. The Tabakoroni
open pit operations are scheduled to commence production in late FY18, significant results from extensional
drilling at Tabakoroni included:
TARC532
TARC542
TARC543
TARC549
TARC551
20m @ 18.3 g/t Au from 117m
23m @ 9.6 g/t Au from 140m
25m @ 8.1 g/t Au from 160m
12m @ 8.4 g/t Au from 203m
14m @ 16.7 g/t Au from 89m
BA-01 is located approximately 6km north of Syama and forms part of a series of satellite deposits, including
BA-01, Beta and Alpha. Resolute commenced an oxide open pit operation at BA-01 in early 2017, significant
results from extensional drilling at BA-01 included:
BARC120
BARC124
BARC126
BARC136
BARC138
6m @ 14.9 g/t Au from 36m
7m @ 13.1 g/t Au from 85m
9m @ 11.1 g/t Au from 70m
10m @ 9.2 g/t Au from 115m
11m @ 14.9 g/t Au from 43m
These results have confirmed the excellent long term sulphide potential of Tabakoroni, BA-01 and other satellite
operations, follow up drilling of the sulphide targets will be undertaken later in 2017.
During the year Resolute announced initial results from the phase 2 drilling campaign at the Company’s Bibiani Gold
Mine in Ghana. The drilling program was designed to upgrade existing inferred mineral resources as well as identify new
mineralisation. The program aims to significantly increase the ore reserve, improve project economics, and confirm a
decision to mine.
The initial drilling has intersected mineralisation better than predicted by the current inferred resource estimate.
It is expected the high grade intersections from the Central Lode will lead to resource and reserve increases.
The drilling program is also targeting new areas of mineralisation outside of the existing resource. Significant
results from the first half of the phase 2 drilling program included:
BSDD040
BUDD072
BUDD077
BUDD078
30m @ 8.9g/t Au from 498m
48m @ 3.6g/t Au from 171m
51m @ 4.3g/t Au from 117m
37m @ 3.9g/t Au from 152m
51
Resolute Mining Limited | Annual Report 2017
Development
The development of the Syama Underground project commenced in September 2016 and the underground development
is currently on schedule for first sublevel cave ore production to commence in the quarter ended December 2018. During
the underground development phase a significant amount of development ore will be mined and is expected to augment
the stockpiled sulphide material that is currently providing mill feed to the sulphide plant at Syama. The underground
development has commenced on the first and second production levels (the 1130 and 1105 levels) and the incline and
decline are advancing simultaneously. The current priority of the underground development is to establish the primary
ventilation and truck haulage infrastructure. Lateral development rates are exceeding expectations with semi-automated
drilling delivering improved advance rates and increased productivities than the definitive feasibility study (DFS)
estimates.
The Ravenswood Expansion Project (REP) study was announced in September 2016 with the aim of maintaining
continuity of production at Ravenswood as the Mt Wright underground mine prepares for closure. Resolute has
commenced the transition back to open pit mining, with open pit operations at the Nolans East deposit having
commenced in August 2016. The REP will see the eventual development of three open pits at Nolans East, Sarsfield
and Buck Reef West.
The REP outlined the following development sequence:
Mt Wright underground operations continuing until eventual closure in late FY18:
Open pit mining recommenced from Nolans East and continuing until late-2017;
Processing capacity increased to 2.8 million tonnes per annum (Mtpa);
Regulatory approvals for recommencement of mining at Sarsfield obtained in March 2017;
Regulatory approvals for open pit mining at Buck Reef West expected in mid-2018; and
Expansion of the mill to 5.0Mtpa.
The feasibility study into the REP confirmed a long life, low risk, low cost development plan with robust economics. Under
the REP, average annual production is expected to increase to approximately 120,000oz of gold. Mine life will be
extended by 13 years with operations continuing until at least 2029. The operation will generate Life of Mine All-In
Sustaining costs of A$1,166/oz (US$880/oz). The staged development plan requires no immediate additional capital
expenditure and start-up capital comprises A$134 million for pre-stripping and staged processing plant expansion to
5.0Mtpa. Significant potential remains for economic upside and further extensions.
In December 2016 the Queensland Government granted Prescribed Project status to the REP. The Prescribed Project
status has streamlined administrative decisions and ensured essential project regulatory approvals are received on a
timely basis. In March 2017 the Queensland Department of Environment and Heritage Protection issued the final
approved Amended Environmental Authority for the recommencement of mining at the Sarsfield open pit. The
Environmental Authority is a major milestone in the governmental approval process required to progress the REP and
includes all provisions required to recommence mining at the Sarsfield open pit. In August 2017, Resolute executed two
significant Heritage Agreements (Heritage Agreements) with the Queensland Government which support the
Ravenswood Expansion Project. The agreements cover areas of the proposed Ravenswood Expansion Project mining
landscape including the historic Chinese Settlement Area and the Ravenswood School and Residence. Resolute
continues to work collaboratively with the Queensland government on the required regulatory approvals for the REP.
Likely Developments and Expected Results
Gold production for FY18 forecast to be a minimum of 300,000oz at All-In Sustaining Costs of A$1,280/oz (US$960/oz).
At Syama, the sulphide head grade will be managed to maintain an average feed grade of greater than 2g/t Au
to the sulphide plant through blending from existing sulphide stockpiles, mined ore from satellite deposits, and
ore produced from the underground mine during development. Development ore production has commenced
from the underground mine with pre-production underground ore of ~1.3Mt expected to be mined prior to
completion of the sublevel cave development in the quarter ended December 2018. Syama sulphide gold
production is forecast to be a minimum of 130,000 ounces at an AISC of A$1,050/oz and Syama oxide gold
production is forecast to be a minimum of 90,000 ounces at an AISC of A$1,260/oz.
At Ravenswood, mined ore tonnes from Mt Wright are expected to reduce as the number of available drawpoints
decreases over the remaining life of the underground mine. Mine production from Nolans East is expected to
be completed in late-2017 and throughout the remainder of FY18 the ore feed will be sourced from Nolans East
stockpiles, existing Sarsfield stockpiles, and remaining production ore from Mt Wright. Ravenswood gold
production is forecast to be a minimum of 80,000 ounces at an AISC of A$1,520/oz.
At Bibiani, a new resource estimate will be undertaken which will form the basis for an updated feasibility study
to be completed over the remainder of calendar 2017. An investment decision is excepted in the March quarter
of 2018
Capital expenditure for major growth projects is expected to be A$162M (US$122M).
Exploration budget increased to A$38M (US$29M).
52
Resolute Mining Limited | Annual Report 2017
Directors’ Report
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
P. Huston
J. Welborn
M. Botha
H. Price
P. Sullivan
Y Broughton
M Potts
(i) Executives
Name
P. Beilby
L. de Bruin
G. Fitzgerald
P. Henharen
V. Hughes
D. Kelly
B. Mowat
Position held during the financial year
Non-Executive Chairman (resigned 29 June 2017)
Managing Director and Chief Executive Officer
Non-Executive Director (Non-Executive Chairman from 29 June 2017)
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 29 June 2017)
Non-Executive Director (appointed 29 June 2017)
Position held during the financial year
Chief Operating Officer
Chief Financial Officer (appointed 27 February 2017)
Chief Financial Officer and Company Secretary (Chief Financial Officer resigned 27 February 2017)
General Manager – Project Delivery
General Manager – People, Culture and Information
General Manager – Corporate Strategy
General Manager - Exploration
b) Compensation of key management personnel
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; and,
Aligns executive incentive rewards with the creation of value for shareholders.
53
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Remuneration Report (continued)
Remuneration Committee and Nomination Committee
On 29 June 2017 the Board resolved to split the Remuneration and Nomination Committee into two separate committees being
the Remuneration Committee and Nomination Committee.
The Remuneration 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.
The Nomination Committee is responsible for Board and Board Committee membership, succession planning and performance
evaluation.
In accordance with best practice governance the Remuneration Committee and the Nomination Committee are 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 29 November 2016 when the
shareholders approved an aggregate remuneration of $1,000,000 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. The fee
size is commensurate with the workload and responsibilities undertaken.
Chief Executive Officer and 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.
Structure
In determining the level and make up of executive remuneration, the Remuneration 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 to assist in the design and implementation of a Remuneration Framework that is in line with
industry practice.
It is the 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).
54
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Remuneration Report (continued)
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is established for
each executive by the Remuneration Committee and for the year ended 30 June 2017 was as follows:
CEO
Fixed Remuneration (40%)
Target STI (20%)
Target LTI (40%)
Other Executives
Fixed Remuneration (47%)
Target STI (23%)
Target LTI (30%)
Variable remuneration
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 Committee. The process consists of a review of individual
performance, relevant experience, and relevant comparable remuneration in the mining industry and more broadly across other
sectors.
Structure
Executives receive a base salary, statutory superannuation and the opportunity to receive income protection insurance as part of
their Fixed Remuneration.
Variable Remuneration – Short Term Incentive (“STI”)
Objective
The objective of the STI is to generate greater alignment between performance and remuneration levels for the purpose of driving
operational excellence.
Structure
The STI is an annual “at risk” component of remuneration for executives. 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 executives 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 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 12.5% of fixed
remuneration, a “target” performance delivers a STI equal to 50% of fixed remuneration, and a “stretch” performance delivers a
STI equal to 75% of fixed remuneration. Pro-rata payment applies on a straight line basis between “threshold” and “target” and
from “target” to “stretch” Performance.
Target performance represents challenging 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 executive and then later assessing
the extent to which the KPIs of the executive have been achieved, and the amount to be paid to each executive. 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.
55
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Remuneration Report (continued)
The 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.
The achievement of defined targets relative to budget relating to:
operating cash flow;
gold production; and,
cost per tonne milled.
A set of personal performance metrics designed to drive optimum operational performance as specifically related to each
executive portfolio.
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.
Changes to the STI Plan from 1 July 2016
An independent review of the Company’s incentive plans in 2016 has informed a number of changes that were implemented from
1 July 2016. The intention of the changes to the STI and LTI plans was to support current strategies and business objectives and
to ensure both programs are correctly aligned with the creation of shareholder value.
With effect from 1 July 2016, amendments have been made to:
the threshold, target, and stretch performance levels to make them more challenging to achieve. This has been balanced
by increasing the reward for executives for a stretch performance to 75% (from 65%) of fixed remuneration; and
introduce Board discretion, on Managing Director and Chief Executive Officer recommendation, to modify the payment
to an individual or to group participants based on performance factors, safety factors, or to recognise extraordinary
occurrences which have had a positive or negative impact on results and shareholder value
The individual performance measures vary according to the individual executive’s position, and reflect value accretive and/or risk
mitigation achievements for the benefit of the Company within each executive’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 Committee. Payments are delivered as a cash bonus and/or in the form of superannuation.
Actual STI performance for the year ending 30 June 2017
Actual performance for the year ending 30 June 2017 was an average of 96% of target performance for KMP.
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 value and thus have an impact
on the Company’s performance against the relevant long-term performance hurdles.
a) Selecting the right plan vehicle
Under a Performance Rights Plan, executives are granted a right to be issued a share in the future subject to performance based
vesting conditions being met.
56
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Remuneration Report (continued)
Overview of the Company’s approach to Long Term Incentives
a) Selecting the right plan vehicle (continued)
In June 2016, the Remuneration and Nomination Committee approved the engagement of Egan Associates Pty Ltd to provide the
Company with CEO Remuneration benchmarking data and to conduct a review of the Company’s Incentive Plan. The
engagement was directly instigated by the Committee Chairman and reports provided by Egan Associates Pty Ltd were submitted
to the Chairman to ensure KMP with a vested interest were removed from this process.
The Committee is satisfied the advice received from Egan Associates Pty Ltd is free from undue influence from the KMP to whom
the remuneration information applies. The recommendations and background information provided on the Company’s incentive
plans were provided to Resolute as an input into the decision making only. The Committee considered the recommendations,
along with other factors, in making remuneration decisions.
The fees paid to Egan Associates Pty Ltd for their report on CEO remuneration benchmarking and recommendations for the
structuring of the Company’s incentive plans were $18,375.
b) Grant Frequency and LTI quantum
Upon Board instigation, Executives receive a new grant of performance rights every year and the LTI forms a key component of
the executive’s Total Annual Remuneration.
The LTI dollar value that executives are entitled to receive is set at a fixed percentage of their fixed remuneration and equates to
100% of fixed remuneration for the Chief Executive Officer and 65% of fixed remuneration for the other executives. This level of
LTI is in line with current market practice.
c) Performance Conditions
Performance conditions have been selected that reward executives for creating shareholder value as determined via the change
in the Company’s share price (Relative Total Shareholder Return) and via reserves/resources growth over a 3 year period.
d) Changes to the LTI Plan from 1 July 2016
Following the receipt of feedback from a remuneration consultant and as approved by shareholders, the following key changes
have been made to the LTI plan with effect from 1 July 2016:
A cap equal to 1% of Resolute shares on issue has been placed on annual performance rights grants. The total number
of performance rights on issue at any point in time is capped at 5% of Resolute shares on issue.
An increase in the threshold for the Total Shareholder Return (“TSR”) metric from P50 to P60 to promote further stretch
for participants to meet the minimum requirement for vesting.
The methodology of valuing performance rights by reference to the fair value has been changed and future performance
rights to be granted will be valued at their face value for the purposes of calculating how many performance rights are to
be granted.
Inclusion in the terms of the LTI Plan the ability to adjust the number of performance rights at vesting to allow for any
capital returns and dividends during the vesting period.
Inclusion in the terms of the LTI Plan a clause to allow the tax beneficial deferral of exercise of Rights following vesting
conditions being met. This change is a result of tax law changes in 2015 and has been made to encourage participants
to retain shares received upon vesting of performance rights as opposed to immediately selling shares to meet tax
liabilities.
An increase in participation rates has seen the CEO’s LTI opportunity increased from 75% of fixed remuneration to 100%
of fixed remuneration and the Executives’ LTI opportunity increased from 50% to 65%. This is designed to provide
stronger alignment of executive behaviour and the creation of enduring shareholder value.
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 (“RTSR”) 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.
57
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Remuneration Report (continued)
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
For the year ending 30 June 2017, in order for performance rights to vest, the Company’s performance must be at or above the
50th percentile in relation to TSR as compared to its peer companies. The following table sets out the vesting schedule based on
the Company’s relative TSR performance for the year ending 30 June 2017:
Relative TSR performance
Less than 50th percentile
At the 50th percentile
Between 50th and 75th percentile
75th percentile and above
Performance Vesting Outcomes
0% vesting
50% vesting
Linear vesting
100% vesting
The second performance condition is resource and reserve (R&R) growth net of depletion over a 3 year period. Broadly, the
quantum of the increase in resources and reserves will determine the number of performance rights to vest.
The following table sets out the vesting outcome based on the Company’s resource and reserve growth performance:
Resource and Reserve Growth Performance
Performance Vesting Outcomes
R&R depleted
R&R maintained
R&R between maintain and 30% growth
R&R grown by up to 30%
e) Performance period
0% vesting
50% vesting
Linear vesting
100% vesting
Grants under the LTI need to serve a number of different purposes:
i.
ii.
act as a key retention tool; and,
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.
f) Change of Control Provisions
On the occurrence of a change of control event of Resolute Mining Limited, the Board will determine, in its sole and absolute
discretion, the manner in which all unvested and vested awards will be dealt with.
Actual LTI performance for the 3 year period ending 30 June 2017
For the year ending 30 June 2017 the Company’s LTI was tested against the relative TSR performance measure and the
resource and reserve growth measure. The Company achieved a TSR between the 50th and 75th percentile relative to
companies in the customised peer group. There was nil growth in resource and reserve performance resulting in a 0% vesting
for this measure. Overall when accounting for both measures, 64% of total performance rights will vest and become exercisable.
58
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Details of remuneration provided to key management personnel are as follows:
2017
SHORT TERM BENEFITS
POST
EMPLOYMENT
BENEFITS
LONG
TERM
BENEFITS
SHARE
BASED
PAYMENTS
n
o
i
t
a
r
e
n
u
m
e
R
e
s
a
B
$
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
)
i
i
(
e
v
a
e
L
l
a
u
n
n
A
e
s
n
e
p
x
E
y
r
a
t
e
n
o
M
n
o
N
)
i
(
s
t
i
f
e
n
e
B
$
$
$
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
e
v
a
e
L
e
c
i
v
r
e
S
g
n
o
L
e
s
n
e
p
x
E
$
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
$
PERFORMANCE
RELATED
s
n
o
i
t
p
O
,
e
v
i
t
n
e
c
n
I
e
c
n
a
m
r
o
f
r
e
P
d
n
a
m
r
e
T
t
r
o
h
S
s
t
h
g
R
i
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
d
n
a
s
n
o
i
t
p
O
%
%
l
a
t
o
T
$
Directors
P. Huston
192,500
-
P. Sullivan (iii)
68,591
13,600
H. Price
M. Botha
55,000
90,000
J. Welborn
649,037
M. Potts (iv)
Y. Broughton (iv)
550
550
Officers
P. Beilby
365,407
L. de Bruin (v)
145,509
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,808
35,000
-
-
-
-
-
-
192,500
(54,012)
35,987
-
-
90,000
90,000
-
-
-
-
-
-
-
-
394,274 54,005
30,000
12,682
864,239 2,004,237
63
43
-
-
-
-
-
-
-
-
-
-
550
550
180,485 34,260
35,000
15,656
176,279
807,087
76,698 11,083
14,094
-
39,931
287,315
G. Fitzgerald
319,260
5,271
197,422 29,393
35,000
9,553
(193,475)
402,424
P. Henharen
205,689
V. Hughes
210,696
-
-
125,821 18,462
20,822
3,264
129,976
504,034
116,821 18,664
21,137
3,215
52,832
423,365
D. Kelly (vi)
226,033
2,427
120,421 18,272
20,611
3,367
103,981
495,112
B. Mowat
213,455
3,639
123,421
8,846
21,386
2,352
92,529
465,628
-
-
44
41
1
51
40
45
46
-
-
22
14
-
26
12
21
20
59
Resolute Mining Limited | Annual Report 2017
Directors’ Report
SHORT TERM BENEFITS
POST
EMPLOYMENT
BENEFITS
LONG
TERM
BENEFITS
SHARE
BASED
PAYMENTS
PERFORMANCE
RELATED
n
o
i
t
a
r
e
n
u
m
e
R
e
s
a
B
$
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
)
x
i
(
$
y
r
a
t
e
n
o
M
n
o
N
)
i
(
s
t
i
f
e
n
e
B
$
e
v
a
e
L
l
a
u
n
n
A
e
s
n
e
p
x
E
$
y
c
n
a
d
n
u
d
e
R
$
175,000
-
68,591 13,600
55,000
90,000
434,384
-
-
-
-
-
-
-
-
-
-
-
255,047
40,589
374,246
-
216,114
34,284
311,878
4,723
185,091
29,445
51,419
3,372
-
-
99,750
4,198
-
284
42,578
788
28,253
3,586
58,139
593
13,505
5,423
-
-
-
-
-
-
-
-
-
-
-
2016
Directors
P. Huston
P. Sullivan (iii)
H. Price
M. Botha
J. Welborn
Officers
P. Beilby
G. Fitzgerald
P. Henharen (vii)
V. Hughes (viii)
D. Kelly (vii)
B. Mowat (vii)
P. Venn
e
v
a
e
L
e
c
i
v
r
e
S
g
n
o
L
e
s
n
e
p
x
E
$
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
$
,
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
d
n
a
s
n
o
i
t
p
O
i
s
t
h
g
R
e
c
n
a
m
r
o
f
r
e
P
d
n
a
s
n
o
i
t
p
O
%
%
l
a
t
o
T
-
-
-
-
-
175,000
(110,291)
(20,291)
-
-
90,000
90,000
-
-
-
-
-
-
-
-
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
-
7,809
35,000
-
30,000
6,014
126,250
892,284
43
14
35,000
13,357
151,276
824,277
35,000
10,299
132,751
709,187
4,885
320
4,045
6,111
683
-
541
1,756
9,228
-
-
-
160,935
3,976
79,791
14,996
100,523
92,933
706,958
45
45
62
-
35
28
29
18
19
-
-
-
15
13
198,802
3,688
108,663
20,430
248,369
24,845
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
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.
The Short Term Incentives for the year ended 30 June 2017 will be paid in cash in September 2017.
This negative is due to the reversal of the expense recognised in prior years relating to the Reserve & Resource growth
metric. In prior years, it had been assumed that the vesting outcome for the R&R growth metric would be 100%, whist
the actual result was a 0% vesting outcome for this metric. Due to this being a non-market related hurdle, the accounting
expense is adjusted to reflect the outcome.
Mr Potts and Ms Broughton were appointed on 29 June 2017.
Ms de Bruin was appointed on 27 February 2017.
$18,250 included in Mr Kelly’s base remuneration relates to director fees for Manas Resources Limited.
Mr Henharen, Mr Kelly and Mr Mowat were appointed on 4 April 2016.
Ms Hughes was appointed on 27 June 2016.
The Short Term Incentives for the year ended 30 June 2016 were paid in cash on 15 September 2016.
60
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Details of option holdings of key management personnel are as follows:
2017
Options type
Balance at
the start of
the year
Lapsed
during the
year (i)
Balance at
the end of
the year
Vested and exercisable at the
end of the year
%
No.
Value of
options
exercised
during the
year
$
Officers
P. Beilby (ii)
G. Fitzgerald (iii)
Unlisted
Unlisted
60,000
60,000
(60,000)
(60,000)
-
-
-
-
-
-
-
-
i.
ii.
iii.
The value of options at the date they lapsed was $nil.
The options that lapsed during the year were granted on 16 November 2010 and 25 January 2011.
The options that lapsed during the year were granted on 25 January 2011.
Details of performance rights holdings of key management personnel are as follows:
Granted during the year as compensation
t
a
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
l
a
v
r
i
a
F
e
t
a
d
t
n
a
r
g
$
-
e
h
t
f
o
t
r
a
t
s
e
h
t
t
a
e
c
n
a
l
a
B
r
a
e
y
r
e
b
m
u
N
e
t
a
d
t
n
a
r
G
1,168,267
-
-
1,515,000 2,564,000
1,835,828
229,325
-
-
-
208,000
245,624
307,030
379,097
154,516
-
124,800
1,611,005
201,588
24 Oct
2016
24 Oct
2016
16 Jan
2017
24 Oct
2016
24 Oct
2016
24 Oct
2016
24 Oct
2016
24 Oct
2016
2017
Directors
P. Sullivan
J. Welborn
Officers
P. Beilby
L. De Bruin
D. Kelly
P. Henharen
B. Mowat
V. Hughes
G. Fitzgerald
(i)
t
a
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
f
o
e
u
l
a
v
r
i
a
F
l
a
t
o
T
e
t
a
d
t
n
a
r
g
)
s
r
a
e
y
(
d
o
i
r
e
p
g
n
i
t
s
e
V
$
e
c
n
a
m
r
o
f
r
e
p
f
o
y
r
i
p
x
E
s
t
h
g
i
r
e
t
a
d
g
n
i
t
s
e
V
r
a
e
y
e
h
t
g
n
i
r
u
d
d
e
s
p
a
L
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
e
h
t
g
n
i
r
u
d
d
e
t
n
a
r
g
f
o
e
c
i
r
p
e
s
i
c
r
e
x
E
r
a
e
y
$
r
a
e
y
e
h
t
g
n
i
r
u
d
d
e
t
s
e
V
e
h
t
f
o
d
n
e
e
h
t
t
a
e
c
n
a
l
a
B
r
a
e
y
-
-
-
1.27 3,256,280
3
1.27
291,243
1.51
314,080
1.27
311,942
1.27
389,928
1.27
196,235
1.27
158,496
1.27
256,017
3
3
3
3
3
3
3
30 Jun
2019
30 Jun
2019
30 Jun
2019
30 Jun
2019
30 Jun
2019
30 Jun
2019
30 Jun
2019
30 Jun
2019
-
1 Jul
2021
1 Jul
2021
1 Jul
2021
1 Jul
2021
1 Jul
2021
1 Jul
2021
1 Jul
2021
1 Jul
2021
-
(388,061)
(428,909)
351,297
$nil
-
- 4,079,000
$nil
(243,580)
(269,221) 1,552,352
$nil
$nil
$nil
$nil
$nil
-
-
-
-
-
-
208,000
245,624
307,030
-
(121,647)
411,966
-
-
124,800
$nil
(1,576,445)
(236,148)
-
i.
ii.
Mr Fitzgerald resigned as Chief Financial Officer on 27 February 2017 and as Company Secretary on 4 August 2017.
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. 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.
61
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Details of shareholdings of key management personnel are as follows:
2017
Directors
P. Huston¹
P. Sullivan
H. Price
J. Welborn
M. Potts
Officers
P. Beilby
G. Fitzgerald²
D. Kelly
B. Mowat
Received during
the year on the
vesting of
performance
rights
Balance at the
start of the year
Purchased on
market during
the year
Shares sold on
market during
the year
Balance at the
end of the year
428,182
3,143,142
194,745
1,550,000
-
77,362
49,754
-
-
-
428,909
-
-
-
269,221
236,148
-
121,647
-
-
-
440,000
26,825
8,300
-
20,000
-
-
(500,000)
-
-
-
-
(50,000)
-
(121,647)
428,182
3,072,051
194,745
1,990,000
26,825
354,883
235,902
20,000
-
¹ Mr Huston resigned on 29 June 2017.
² Mr Fitzgerald resigned as Chief Financial Officer on 27 February 2017 and as Company Secretary on 4 August 2017.
Executive Employment Contracts
Name
Title
Term of
Agreement
Notice Period
by Executive
Notice Period
by Company
Termination
Benefit¹
John Welborn
Managing Director and Chief
Executive Officer
Peter Beilby
Chief Operating Officer
Lee-Anne de
Bruin
Greg Fitzgerald
David Kelly
Paul Henharen
Chief Financial Officer
(commenced 27 February 2017)
Chief Financial Officer (resigned
27 February 2017)
General Manager – Corporate
Strategy
General Manager – Project
Delivery
Open
Open
Open
Open
Open
Open
6 months
12 months
3 months
6 months
3 months
3 months
3 months
6 months
3 months
3 months
3 months
3 months
Bruce Mowat
General Manager – Exploration
Open
3 months
3 months
Vanessa
Hughes
General Manager – People,
Culture & Information
Open
3 months
3 months
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
¹ NES is the National Employment Standards.
62
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Loans to Key Management Personnel
There were no loans to key management personnel during the years ended 30 June 2017 and 30 June 2016.
Company Performance
The table below shows the performance of the Consolidated Entity over the last 5 years:
Net profit/(loss) after tax
$'000
30 June
2017
166,096
(Restated)
30 June
2016
200,732
30 June
2015
(568,760)
30 June
2014
29,156
30 June
2013
105,443
Basic earnings/(loss) per share cents/share
19.05
26.79
(78.39)
5.20
13.29
This is the end of the audited information.
Shares under Options
Performance rights at the date of this report are as follows:
Grant date
1/07/15
Vesting date
30/06/18
Exercise price
-
31/08/16
24/10/16
29/11/16
29/11/16
29/11/16
30/06/18
30/06/19
30/06/18
30/06/19
30/06/20
-
-
-
-
-
Number on
issue
4,309,629
470,478
2,823,734
400,000
600,000
1,000,000
9,603,841
63
Resolute Mining Limited | Annual Report 2017
Directors’ Report
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.
Auditor Independence
Refer to page 66 for the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.
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 attended by each director were as follows:
P. Huston
P. Sullivan
M. Botha
J. Welborn
H. Price
M. Potts
Y. Broughton
Number of meetings held
Full Board
8
8
8
8
8
1
1
8
Audit
2
n/a
2
n/a
2
n/a
n/a
2
Remuneration
& Nomination
5
n/a
5
n/a
5
n/a
n/a
5
Financial Risk
Management
n/a
8
n/a
8
n/a
n/a
n/a
8
The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.
64
Resolute Mining Limited | Annual Report 2017
Directors’ Report
Rounding
RML is a Company of the kind specified in Australian Securities and Investments Commission Corporations (Rounding in Financial
Directors’ Reports) Instrument 2016/191. 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.
Non-Audit Services
Non-audit services have not been provided by the entity’s auditor, Ernst & Young for the year ended 30 June 2017. 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 $0 for the provision of taxation planning advice and other review services
in the year ended 30 June 2017 (2016: $21,950).
Signed in accordance with a resolution of the directors.
J.P. Welborn
Director
Perth, Western Australia
23 August 2017
65
Resolute Mining Limited | Annual Report 2017
66
Resolute Mining Limited | Annual Report 2017 Table of Contents
Financial
Statements
Notes to the
Financial
Statements
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
About this Report
A Earnings for the Year
A.1 Segment revenue and expenses
A.2 Dividends paid or proposed
A.3 Earnings per share
A.4 Taxes
B Production and Growth Assets
B.1 Mine properties and property, plant and equipment
B.2 Exploration and evaluation assets
B.3 Impairment of non-current assets
B.4 Segment expenditure, assets and liabilities
C Debts and Capital
C.1 Cash
C.2 Interest bearing liabilities
C.3 Financing facilities
C.4 Contributed equity
C.5 Other reserves
D Other Assets and Liabilities
D.1 Receivables
D.2 Inventories
D.3 Other financial assets and liabilities
D.4 Payables
D.5 Provisions
E Other Items
E.1 Contingent liabilities
E.2 Leases and other commitments
E.3 Auditor remuneration
E.4 Investments in associates
E.5 Subsidiaries and non-controlling interests
E.6 Joint operations
E.7 Discontinued operations
E.8 Subsequent events
E.9 Related party disclosures
E.10 Parent entity information
E.11 Employee benefits and share based payments
E.12 Other accounting policies
E.13 Restatement of comparative information
Other
Director’s Declaration
Independent Auditor’s Report
Shareholder Information
67
Resolute Mining Limited | Annual Report 2017
Consolidated Statement of Comprehensive Income
Continuing Operations
Revenue from gold and silver sales
Costs of production relating to gold sales
Gross profit before depreciation, amortisation and other operating costs
Depreciation and amortisation relating to gold sales
Other operating costs relating to gold sales
Gross profit from operations
Other income
Other expenses
Exploration and business development expenditure
Administration and other corporate expenses
Treasury - realised gains (losses)
Fair value movements and unrealised treasury transactions
Share of associate’ losses
Depreciation of non-mine site assets
Finance costs
2017
$'000
(Restated)
2016
$'000
541,177
554,624
(309,323)
(325,207)
231,854
229,417
(19,727)
(35,222)
176,905
2,052
(202)
(8,430)
(12,097)
4,039
9,039
(1,799)
(83)
(3,328)
(39,121)
(35,585)
154,711
512
(7,741)
(7,626)
(5,970)
(22,846)
54,098
-
(94)
(9,082)
Note
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
A.1
Profit before tax from continuing operations
166,096
155,962
Tax expense
A.1
-
-
Profit for the year from continuing operations
166,096
155,962
Discontinued Operation
Profit after tax for the discontinued operation
E.7
-
44,770
Profit for the year
Profit attributable to:
Members of the parent
Non-controlling interest
166,096
200,732
E.5
136,371
29,725
166,096
171,957
28,775
200,732
68
Resolute Mining Limited | Annual Report 2017
Consolidated Statement of Comprehensive Income
(continued)
Profit for the year (brought forward)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Members of the parent
- Restatement of comparatives
- Transferred to profit and loss - disposed subsidiaries
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
- Restatement of comparatives
Note
2017
$'000
(Restated)
2016
$'000
166,096
200,732
2,501
-
-
(2,005)
164
(39,402)
281
59
1,120
(2,879)
-
41
Other comprehensive income/(loss) for the year, net of tax
3,902
(44,022)
Total comprehensive income for the year
169,998
156,710
Total comprehensive income attributable to:
Members of the parent
Non-controlling interest
139,153
30,845
169,998
130,773
25,937
156,710
Earnings per share for net profit attributable to the ordinary equity
holders of the parent:
Basic earnings per share
Diluted earnings per share
A.3
A.3
19.05 cents
26.79 cents
18.61 cents
26.11 cents
Earnings per share for net profit from continuing operations
attributable to the ordinary equity holders of the parent:
Basic earnings per share
Diluted earnings per share
19.05 cents
19.82 cents
18.61 cents
19.31 cents
69
Resolute Mining Limited | Annual Report 2017
Consolidated Statement of Financial Position
Current assets
Cash
Receivables
Inventories
Available for sale financial assets
Financial derivative assets
Other current assets
Total current assets
Non current assets
Investments in associates
Deferred tax assets
Other financial assets
Exploration and evaluation
Development
Property, plant and equipment
Total non current assets
Total assets
Current liabilities
Payables
Interest bearing liabilities
Provisions
Current tax liabilities
Financial derivative liabilities
Total current liabilities
Non current liabilities
Financial derivative liabilities
Provisions
Total non current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings/(accumulated losses)
Total equity attributable to equity holders of the parent
Non-controlling interest
Total equity
70
Note
C.1
D.1
D.2
D.3
D.3
E.4
A.4
D.3
B.2
B.1
B.1
D.4
C.2
D.5
D.3
D.3
D.5
C.4
C.5
E.5
2017
$'000
282,060
5,748
202,074
3,595
2,214
2,679
498,370
5,840
15,333
3,651
64,879
159,612
90,068
339,383
837,753
65,152
34,558
18,726
3,979
-
122,415
-
66,140
66,140
188,555
649,198
544,987
38,408
83,333
666,728
(17,530)
649,198
(Restated)
2016
$'000
79,873
7,005
174,022
427
-
2,177
263,504
-
-
3,699
46,292
117,190
61,656
228,837
492,341
33,367
26,678
28,328
-
151
88,524
264
65,139
65,403
153,927
338,414
395,198
33,427
(41,836)
386,789
(48,375)
338,414
Resolute Mining Limited | Annual Report 2017
Consolidated Statement of Changes in Equity
y
t
i
u
q
e
d
e
t
u
b
i
r
t
n
o
C
e
v
r
e
s
e
r
)
s
s
o
l
(
/
n
i
a
g
d
e
s
i
l
a
e
r
n
u
t
e
N
s
e
t
o
n
e
l
b
i
t
r
e
v
n
o
C
e
v
r
e
s
e
r
y
t
i
u
q
e
y
t
i
u
q
e
s
n
o
i
t
p
o
e
r
a
h
S
e
v
r
e
s
e
r
y
t
i
u
q
e
e
e
y
o
p
m
E
l
e
v
r
e
s
e
r
s
t
i
f
e
n
e
b
e
v
r
e
s
e
r
n
o
i
t
a
l
s
n
a
r
t
y
c
n
e
r
r
u
c
n
g
i
e
r
o
F
)
s
e
s
s
o
l
d
e
t
a
l
u
m
u
c
c
a
(
i
/
s
g
n
n
r
a
e
d
e
n
i
a
t
e
R
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
Total
$'000 $'000 $'000
$'000
$'000
$'000
$'000
$'000
$'000
At 1 July 2016
395,198
(68)
384
5,987
12,092
14,868
(32,080)
(45,977)
350,404
Restatement of
comparatives (Note E.13)
-
-
-
-
-
164
(9,756)
(2,398)
(11,990)
At 1 July 2016 (restated)
395,198
(68)
384
5,987
12,092
15,032
(41,836)
(48,375)
338,414
Profit for the year
Other comprehensive loss,
net of tax
Total comprehensive
(loss)/income for the year,
net of tax
-
-
-
281
-
281
Shares issued
Share issue costs
Dividends paid
Share-based payments to
employees
152,697
(2,908)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,199
-
136,371
29,725
166,096
2,501
-
1,120
3,902
2,501
136,371
30,845
169,998
-
-
-
-
-
-
(11,202)
-
-
-
-
-
152,697
(2,908)
(11,202)
2,199
At 30 June 2017
544,987
213
384
5,987
14,291
17,533
83,333
(17,530)
649,198
71
Resolute Mining Limited | Annual Report 2017
Consolidated Statement of Changes in Equity (continued)
y
t
i
u
q
e
d
e
t
u
b
i
r
t
n
o
C
e
v
r
e
s
e
r
)
s
s
o
l
(
/
n
i
a
g
d
e
s
i
l
a
e
r
n
u
t
e
N
s
e
t
o
n
e
l
b
i
t
r
e
v
n
o
C
e
v
r
e
s
e
r
y
t
i
u
q
e
s
n
o
i
t
p
o
e
r
a
h
S
e
v
r
e
s
e
r
y
t
i
u
q
e
y
t
i
u
q
e
e
e
y
o
p
m
E
l
e
v
r
e
s
e
r
s
t
i
f
e
n
e
b
e
v
r
e
s
e
r
n
o
i
t
a
l
s
n
a
r
t
y
c
n
e
r
r
u
c
n
g
i
e
r
o
F
i
/
s
g
n
n
r
a
e
d
e
n
i
a
t
e
R
d
e
t
a
l
u
m
u
c
c
a
(
)
s
e
s
s
o
l
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
t
s
e
r
e
t
n
i
Total
$’000
$’000 $’000
$’000
$’000
$’000
$’000
$’000
$’000
At 1 July 2015
380,305
(127)
384 5,987 10,507
56,275
(213,793)
(74,312) 165,226
Profit for the year as reported on
30 June 2016
Restatement of comparatives
(Note E.13)
Restated profit for the year
Other comprehensive
income/(loss), net of tax as
reported on 30 June 2016
Restatement of comparatives
(Note E.13)
Restated other comprehensive
loss, net of tax
Total comprehensive
(loss)/income for the year, net
of tax
-
-
-
-
-
-
-
Shares issued
14,893
Share-based payments to
employees
-
-
-
-
59
-
59
59
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(41,407)
-
164
-
(41,243)
181,713
31,214 212,927
(9,756)
(2,439)
(12,195)
171,957
28,775 200,732
-
-
-
(2,879)
(44,227)
41
205
(2,838)
(44,022)
-
(41,243)
171,957
25,937 156,710
-
1,585
-
-
-
-
-
-
14,893
1,585
At 30 June 2016
395,198
(68)
384
5,987 12,092
15,032
(41,836)
(48,375) 338,414
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
72
Resolute Mining Limited | Annual Report 2017
Consolidated Cash Flow Statement
Cash flows from operating activities
Receipts from customers
Payments to suppliers, employees and others
Exploration expenditure
Interest paid
Interest received
Income tax paid
Net cash flows from operating activities
C.1
Cash flows used in investing activities
Payments for property, plant & equipment
Payments for development activities
Payments for evaluation activities
Proceeds from sale of property, plant & equipment
Payments for other financial assets
Other investing activities
Note
2017
$'000
(Restated)
2016
$'000
545,159
554,624
(339,181)
(347,715)
(8,430)
(1,818)
2,022
(11,368)
186,384
(37,326)
(61,809)
(20,602)
2,233
(7,492)
(2,757)
(8,115)
(6,043)
46
-
192,797
(13,709)
(18,339)
(12,669)
4,078
(254)
(2,407)
Net cash flows used in investing activities
(127,753)
(43,300)
Cash flows from/(used in) financing activities
Proceeds from issuing ordinary shares
Costs of issuing ordinary shares
Repayment of borrowings
Repayment of lease liability
Dividend paid
Net cash flows from/(used in) financing activities
150,000
(2,849)
-
-
-
(74,171)
(234)
(4,688)
(11,202)
135,715
-
(78,859)
Net increase in cash and cash equivalents
194,346
70,638
Cash and cash equivalents at the beginning of the financial year
Exchange rate adjustment
Cash and cash equivalents at the end of the period
53,417
(261)
247,502
(19,735)
2,514
53,417
Cash and cash equivalents comprise the following:
Cash at bank and on hand
Bank overdraft
C.1
C.2
282,060
(34,558)
247,502
79,873
(26,456)
53,417
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
73
Resolute Mining Limited | Annual Report 2017
About this Report
The financial report of Resolute Mining Limited and its controlled entities (“Resolute”, “consolidated entity” or the “Group”) for the
year ended 30 June 2017 was authorised for issue in accordance with a resolution of the Directors on 23 August 2017.
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 nature of the operations and principal activities of the Group
are described in the directors’ report and in the segment information in Note A.1. There has been no significant change in the
nature of those activities during the year.
Statement of Compliance
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 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. The accounting policies are consistent with those disclosed
in the 30 June 2016 Financial Report, except for the impact of all new or amended Standards and Interpretations. The adoption
of these Standards and Interpretations did not result in any significant changes to the Group’s accounting policies.
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.
Basis of Preparation
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.
The financial report comprises the financial statements of the Group and its subsidiaries as at 30 June each year. Subsidiaries
are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date at which
control is transferred out of the Group. 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. Interests in
associates are equity accounted and are not part of the consolidated Group.
Rounding of Amounts
The financial report has been prepared in Australian dollars and all values are rounded to the nearest thousand dollars ($’000)
unless otherwise stated.
Currency
Items in the financial statements of each of the Group’s entities are measured in their respective functional currencies. Resolute
Mining Limited’s functional and presentation currency is Australian dollars.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the rates of
exchange ruling at that date. Exchange differences in the consolidated financial statements are taken to the income statement,
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.
74
Resolute Mining Limited | Annual Report 2017
About this Report (continued)
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.
Financial and Capital 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 Audit and Risk Committee under policies approved by the Board of Directors. The
Audit and Risk 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.
Foreign exchange risk management
The Group receives multiple currency proceeds on the sale of its gold production and significant costs for the Syama Gold Project
and the Bibiani Project are denominated in AUD, USD and the local currencies of those projects, 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 Audit and Risk 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.
Diesel price risk management
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 Audit and Risk 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.
The below risks arise in the normal course of the Group’s business. Risk information can be found in the following sections:
Section C
Section C
Section C
Section D
Capital risk
Interest rate risk
Liquidity risk
Credit risk
75
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
In this section
Results and the performance of the Group, with segmental information highlighting the core areas of the Group’s operations. It
also includes details about the Group’s tax position.
A.1 Segment revenues and expenses
Operating segment information
The Group has identified three operating segments based on the internal reports that are reviewed and used by the chief executive
officer and his executive team (the chief operating decision maker) in assessing performance and in determining the allocation of
resources.
Operating segments are identified by management as being operating mine sites and are managed separately and operate in
different regulatory and economic environments.
Performance is measured based on gold sold and cost of production per ounce. The accounting policies used by the Group in
reporting segments are the same as those used in the preparation of financial statements.
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;
Net gains/losses on disposal of available-for-sale investments.
Finance costs - including adjustments on provisions due to discounting; and,
Recognition and measurement
Revenue from gold and other 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.
Interest
Interest revenue is recognised as interest accrues using the effective interest method.
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.
76
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.1 Segment revenues and expenses (continued)
For the year ended 30 June 2017
Revenue
Gold and silver sales at spot to external
customers (a)
Total segment gold and silver sales
revenue
Costs of production
Gold in circuit inventories movement
Costs of production relating to gold sales
Royalty expense
Operational support costs
Other operating costs relating to gold
sales
Other management and administration
expenses
Share-based payments expense
Administration and other corporate
expenses
Exploration and business development
expenditure
Earnings/(loss) before interest, tax,
depreciation and amortisation
Amortisation of evaluation, development
and rehabilitation costs
Depreciation of mine site properties, plant
and equipment
Depreciation and amortisation relating to
gold sales
Segment operating result before
treasury, other income/(expenses) and
tax
Ravenswood
(Australia)
$'000
Syama
(Mali)
$'000
Bibiani
(Ghana)
$'000
Corporate/
Other
$'000
Treasury
$'000
Total
$'000
Unallocated (b)
158,032
381,293
158,032
381,293
(115,285)
(4,113)
(119,398)
(7,912)
(196)
(8,108)
(213,947)
24,022
(189,925)
(24,687)
(2,427)
(27,114)
(2,561)
(2,182)
-
(2,561)
-
(2,182)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,170)
(1,184)
(7,354)
(3,993)
(1,643)
(1,053)
(1,741)
1,852
541,177
1,852
541,177
-
-
-
-
-
-
-
-
-
-
(329,232)
19,909
(309,323)
(32,599)
(2,623)
(35,222)
(10,913)
(1,184)
(12,097)
(8,430)
23,972
160,429
(1,053)
(9,095)
1,852
176,105
(7,807)
(3,238)
(2,025)
(6,657)
(9,832)
(9,895)
-
-
-
-
-
-
-
-
-
(11,045)
(8,682)
(19,727)
14,140
150,534
(1,053)
(9,095)
1,852
156,378
77
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.1 Segment revenues and expenses (continued)
For the year ended 30 June 2017
Segment operating result before
treasury, other income/(expenses) and
tax (brought forward)
Interest income
Profit on sale of available for sale
financial assets
Other income
Total other income
Interest and fees
Rehabilitation and restoration provision
accretion
Finance costs
Realised foreign exchange loss
Realised gains on forward contracts
Realised gain on available for sale
investments
Treasury - realised gains
Inventories net realisable value
movements and obsolete consumables
Unrealised foreign exchange gain
Unrealised gains on forward contracts
Unrealised foreign exchange loss on
intercompany balances
Fair value movements and unrealised
treasury transactions
Gain/(loss) on sale of property, plant
and equipment
Withholding tax expenses
Other expenses
Share of associates' losses
Depreciation of non mine site assets
Profit/(loss) for the year
Ravenswood
(Australia)
$'000
Syama
(Mali)
$'000
Bibiani
(Ghana)
$'000
Corporate/
Other
$'000
Treasury
$'000
Total
$'000
Unallocated (b)
14,140
150,534
(1,053)
(9,095)
1,852
156,378
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,132
10,292
224
-
-
-
-
-
-
1,132
10,292
224
(45)
-
(45)
-
-
-
-
-
-
-
(170)
(170)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
(9)
13
-
1,983
1,983
-
69
-
69
2,052
2,052
(2,146)
(2,146)
(1,182)
(1,182)
(3,328)
(3,328)
(841)
4,016
(841)
4,016
864
864
4,039
4,039
11,648
446
446
2,629
2,629
(5,684)
(5,684)
(2,609)
9,039
-
-
-
(193)
(9)
(202)
(1,799)
(1,799)
(83)
-
(83)
15,227
160,826
(999)
(9,165)
207
166,096
78
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.1 Segment revenues and expenses (continued)
Ravenswood
(Australia)
$'000
(Restated)
Syama
(Mali)
$'000
Bibiani
(Ghana)
$'000
Corporate
/Other
$'000
Treasury
$'000
(Restated)
Total
$'000
Unallocated (b)
For the year ended 30 June 2016
Revenue
Gold and silver sales at spot to external
customers (a)
Total segment gold and silver sales
revenue
180,425
372,938
180,425
372,938
Costs of production
(109,054)
(174,043)
Gold in circuit inventories movement
(7,980)
(34,130)
Costs of production relating to gold
sales
(117,034)
(208,173)
Royalty expense
Operational support costs
Other operating costs relating to gold
sales
Other management and administration
expenses
(9,014)
(24,684)
-
(1,876)
(9,014)
(26,560)
(1,722)
(1,718)
Share-based payments expense
-
-
(1,722)
(1,718)
Administration and other corporate
expenses
Exploration and business development
expenditure
Earnings/(loss) before interest, tax,
depreciation and amortisation
Amortisation of evaluation,
development and rehabilitation costs
Depreciation of mine site properties,
plant and equipment
Depreciation and amortisation relating
to gold sales
Segment operating result before
treasury, other income/(expenses)
and tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11)
(11)
(1,490)
(1,040)
(2,530)
1,261
554,624
1,261
554,624
-
-
-
-
-
-
-
-
-
-
(283,097)
(42,110)
(325,207)
(33,698)
(1,887)
(35,585)
(4,930)
(1,040)
(5,970)
(7,626)
(2,894)
(345)
(1,845)
(2,542)
49,761
136,142
(1,845)
(5,083)
1,261
180,236
(16,908)
(2,977)
(11,253)
(7,983)
(28,161)
(10,960)
-
-
-
-
-
-
-
-
-
(19,885)
(19,236)
(39,121)
21,600
125,182
(1,845)
(5,083)
1,261
141,115
79
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.1 Segment revenues and expenses (continued)
Ravenswood
(Australia)
$'000
(Restated)
Syama
(Mali)
$'000
Unallocated (b)
Bibiani
(Ghana)
$'000
Corporate
/Other
$'000
Treasury
$'000
(Restated)
Total
$'000
21,600
125,182
(1,845)
(5,083)
1,261
141,115
For the year ended 30 June 2016
Segment operating result before
treasury, other income/(expenses) and
tax (brought forward)
Interest income
Profit on sale of available for sale
financial assets
Other income
Total other income
Interest and fees
Rehabilitation and restoration provision
accretion
Finance costs
Realised foreign exchange loss
Realised loss on repayment of gold
prepay loan
Treasury - realised losses
-
-
23
23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Inventories net realisable value
movements and obsolete consumables
95
26,299
Other
Unrealised foreign exchange gain
Unrealised losses on forward contracts
Unrealised foreign exchange gain on
intercompany balances
Fair value movements and unrealised
treasury transactions
Loss on sale of property, plant and
equipment
Withholding tax expenses
Other expenses
Depreciation of non mine site assets
Profit after tax for the discontinued
operation
-
-
-
-
2,231
-
-
-
95
28,530
-
-
-
-
-
-
(7,092)
(7,092)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
47
99
343
489
47
99
366
512
(7,960)
(7,960)
(1,122)
(1,122)
(9,082)
(9,082)
(22,333)
(22,333)
(513)
(513)
(22,846)
(22,846)
-
-
26,394
2,231
17,221
17,221
(415)
(415)
8,667
8,667
25,473
54,098
(585)
(585)
(64)
(64)
(94)
44,770
-
(585)
-
-
(7,156)
(7,741)
(94)
44,770
Profit/(loss) for the year
21,718
146,620
(1,845)
39,529
(5,290)
200,732
80
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.1 Segment revenues and expenses (continued)
(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.
A.2 Dividends paid or proposed
Proposed dividends on ordinary shares:
Final dividend for 2017: 2.0 cents per share (2016: 1.7 cents per share)
14,740
11,148
2017
$'000
2016
$'000
The dividend has not been provided for in the 30 June 2017 financial statements.
A.3 Earnings per share
Basic earnings per share
Profit attributable to ordinary equity holders of the parent for basic earnings per share
($'000)
Weighted average number of ordinary shares outstanding during the period used in the
calculation of basic EPS
Basic earnings per share (cents per share)
2017
(Restated)
2016
136,371
171,957
716,015,281
641,788,233
19.05
26.79
Diluted earnings per share
Profit used in calculation of diluted earnings per share ($'000)
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
Weighted average number of ordinary shares outstanding during the period used in the
calculation of diluted EPS
Number of potential ordinary shares that are not dilutive and hence not included in
calculation of diluted EPS
Diluted earnings per share (cents per share)
136,371
171,957
716,015,281
641,788,233
16,653,016
16,874,755
732,653,297
658,662,988
-
675,400
18.61
26.11
Measurement
Basic earnings per share (“EPS”) is calculated as net profit attributable to members, adjusted to exclude 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:
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.
81
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.3 Earnings per share (continued)
Information on the classification of securities
Options and performance rights granted to employees (including Key Management Personnel) as described in E.11 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 securities have not been included in the determination of basic earnings per share.
A.4 Taxes
a)
Income tax expense
Current tax expense
Deferred tax benefit
Total tax expense
b) Numerical reconciliation of income tax expense to prima facie tax expense
Profit from continuing operations before income tax expense
Profit from discontinued operation before income tax expense
Profit before income tax expense
Prima facie income tax expense at 30% (2016: 30%)
(Deduct)/add:
- (unrecognised tax losses and other temporary differences utilised)
- difference on foreign exchange gain from divestment of discontinued operation
- effect of different rates of tax on overseas income
- effect of share based payments expense not deductible
- other
Income tax expense attributable to net profit
2017
$'000
15,333
(15,333)
-
166,096
-
166,096
49,829
(35,323)
-
(15,705)
526
673
-
(Restated)
2016
$'000
-
-
-
155,962
44,770
200,732
60,220
(14,432)
(12,746)
(35,197)
1,054
1,101
-
82
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.4 Taxes (continued)
c) Tax losses (tax effected)
Revenue losses
Australia
Mali ¹
Ghana
Capital losses
Australia
Total tax losses not used against deferred tax liabilities for which no deferred tax asset
has been recognised (potential tax benefit at the prevailing tax rates of the respective
jurisdictions) (tax effected)
2017
$’000
2016
$’000
12,767
-
36,676
49,443
43,924
65,471
39,466
148,861
50,084
54,717
99,527
203,578
¹ Resolute received tax advice confirming the availability of carried forward tax losses in Mali in the form of deferred capital
allowances. Subsequent analysis has indicated that these deductions may have been required to be set against the taxable
profits that were realised during the tax exemption period that came to an end on 31 December 2016. Resolute is in the
process of concluding this analysis and has taken the conservative position of reducing the carried forward tax losses in Mali
to nil. As the deferred tax asset in respect of the carried forward losses had not been recognised, this has no impact on
either the Consolidated Statement of Comprehensive Income for the year ended 30 June 2017 or the Consolidated
Statement of Financial Position as at 30 June 2017.
d) Movements in the deferred tax assets balance
Balance at the beginning of the year
(Charged)/credited to equity
Credited/(charged) 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
Provisions
Temporary differences not recognised
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax assets
-
-
15,333
15,333
-
(165)
165
-
84,715
87,344
1,009
9,154
1,086
8,846
150,377
175,895
54,729
54,498
11
752
21,844
22,938
(289,257)
(340,532)
32,582
10,827
(17,249)
(10,827)
15,333
-
83
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.4 Taxes (continued)
e) 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:
Receivables
Inventories
Mineral exploration and development interests
Property, plant and equipment
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax liabilities
f) The equity balance comprises temporary differences attributable to:
Convertible notes equity reserve
Option equity reserve
Unrealised loss reserve
Net temporary differences in equity
Set-off of deferred tax liabilities pursuant to set-off provisions
Total temporary differences in equity
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%.
Recognition and measurement
2017
$’000
2016
$’000
889
8,191
8,169
-
1,082
2,304
7,436
5
17,249
10,827
(17,249)
(10,827)
-
-
194
2,566
64
2,824
(64)
2,760
194
2,566
(20)
2,740
20
2,760
108
108
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 tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for deductible
temporary differences, unused tax losses and unused tax credits only if it is probable that sufficient future taxable income will be
available to utilise those temporary differences and losses.
84
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements A: Earnings for the Year
A.4 Taxes (continued)
Recognition and measurement (continued)
Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects neither taxable profit or loss; or the accounting profit or
loss arising from taxable differences related to investment in subsidiaries, associates and interests in joint ventures to the extent
that:
•
•
the Group is able to control the reversal of the temporary difference; and
the temporary difference is not expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantially enacted by the end of
the reporting period. Deferred tax assets and liabilities are offset only if certain criteria are met. Income taxes relating to items
recognised directly in equity are recognised in equity.
Tax consolidation
RML and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2002 and 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.
Key estimates and judgements
The Group records its best estimate of these items based upon the latest information available and management’s
interpretation of enacted tax laws. Whilst the Group believes it has adequately provided for the outcome of these matters,
future results may include favourable or unfavourable adjustments as assessments are made, or resolved.
The recognition basis of deductible temporary differences and unused tax losses in the form of deferred tax assets is
reviewed at the end of each reporting period and de-recognised to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
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 was an income tax holiday for 5 years post the declaration of “first commercial production” at
Syama, which commenced on 1 January 2012. The tax holiday came to an end on 31 December 2016 and taxable profits
arising after that date are subject to tax in accordance with the Establishment Convention.
A deferred income tax asset of $15.3 million has been recognised at 30 June 2017 in relation to deductible temporary
differences. Realisation of sufficient taxable profit in future periods is regarded as probable based on the amount of taxable
income generated in the six months to 30 June 2017 following the end of the tax holiday.
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.
Unrecognised temporary differences
As at 30 June 2017, aggregate unrecognised temporary differences of $5.260m (2016: $4.510m restated) are in respect of
investments in foreign controlled entities for which no deferred tax assets have been recognised for amounts which arise
upon consolidation of their financial statements.
85
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
In this section
Included in this section is relevant information about recognition, measurement, depreciation, amortisation and impairment
considerations of the core producing and growth (exploration and evaluation) assets of Resolute.
B.1 Mine properties and property, plant and equipment
Recognition and measurement
Stripping activity asset
The Group incurs waste removal costs (stripping costs) in the creation of improved access and mining flexibility in relation to ore
to be mined in the future. The costs are capitalised as a stripping activity asset, where certain criteria are met. 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. The costs of each component are amortised on a units of production basis in applying a stripping ratio.
Development expenditure
a. Areas in Development
Costs incurred in preparing mines for production including the required plant infrastructure.
b. Areas in Production
Represent the accumulation of all acquired exploration, evaluation and development expenditure in which economic
mining of a mineral reserve has commenced. Amortisation of costs is provided on the unit-of-production method.
Property, plant and equipment
Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment losses. The cost of an
item of property, plant and equipment comprises:
Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and
rebates;
Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management; and,
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
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
Plant and equipment
Life
3 years
3 years
Life of mine years / unit of
production
Method
Straight line
Straight line
Straight line
86
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.1 Mine properties and property, plant and equipment (continued)
Key estimates and judgements
Stripping activity assets
Judgement is 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.
An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity.
Judgement is also required to identify and define these components, and also to determine the expected volumes (e.g.
tones) of waste to be stripped and ore to be mined in each of these components. These assessments are based on the
information available in the mine plan which will vary between mines for a number of reasons, including, the geological
characteristics of the ore body, the geographical location and/or financial considerations.
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.
Determining the beginning of production
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
specific asset becomes ‘available for use’ as intended by management which includes consideration of 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/feasibility study levels;
the ability to produce gold into a saleable form (where more than an insignificant amount is produced); and,
the achievement of continuous production.
Estimation of mineral reserves and resources – refer to B.3
87
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.1 Mine properties and property, plant and equipment (continued)
Depreciation expense
(160)
(7,876)
(125)
(1,638)
(9,839)
Plant and Equipment
s
g
n
d
i
l
i
u
B
t
n
e
m
p
u
q
E
i
&
t
n
a
l
P
s
e
l
c
i
h
e
V
r
o
t
o
M
t
n
e
m
p
u
q
E
i
e
c
i
f
f
O
s
t
e
s
s
A
d
e
s
a
e
L
l
a
t
o
T
Development Expenditure
In production
s
e
i
t
r
e
p
o
r
P
e
n
M
i
t
e
s
s
A
y
t
i
v
i
t
c
A
i
g
n
p
i
r
t
S
l
a
t
o
T
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
8,016
46,787
811
2,744
3,298
61,656
88,116
29,074
117,190
40,032
-
306
40,338
62,245
42,111
104,356
-
-
-
-
419
(963)
(1,638)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(54,818)
(54,818)
(9,198)
1,327
-
-
(9,198)
1,327
(219)
(1,146)
(19)
(80)
596
(868)
1,151
(396)
755
7,637
77,543
750
2,845
1,293
90,068
143,641
15,971
159,612
15,582
435,206
3,319
7,216
24,813
486,136
507,011
70,789
577,800
(7,945)
(357,663)
(2,569)
(4,371)
(23,520)
(396,068)
(363,370)
(54,818)
(418,188)
-
-
-
408
(662)
-
-
-
-
-
-
11
(13)
(40)
-
-
-
30 June 2017
Opening write down
value
Additions
Reversal of
impairment
Disposals
Amounts amortised to
costs of production
relating to gold sales
Amortisation expense
Adjustments to
rehabilitation and
restoration obligations
Foreign currency
translation
At 30 June net of
accumulated
depreciation
30 June 2017
Cost
Accumulated
depreciation and
impairment
Net carrying amount
7,637
77,543
750
2,845
1,293
90,068
143,641
15,971
159,612
88
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.1 Mine properties and property, plant and equipment (continued)
Plant and Equipment
s
g
n
d
i
l
i
u
B
t
n
e
m
p
u
q
E
i
&
t
n
a
l
P
s
e
l
c
i
h
e
V
r
o
t
o
M
t
n
e
m
p
u
q
E
i
e
c
i
f
f
O
s
t
e
s
s
A
d
e
s
a
e
L
l
a
t
o
T
Development expenditure
In production
s
e
i
t
r
e
p
o
r
P
e
n
M
i
y
t
i
v
i
t
c
A
g
n
p
i
r
t
S
i
t
e
s
s
A
l
a
t
o
T
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
8,481
47,930
920
2,876
6,111
66,318
87,458
3,011
90,469
-
-
13,617
(114)
-
-
92
-
13,709
21,137
39,781
60,918
(152)
(450)
(716)
(2,774)
(713)
(16,006)
(128)
(151)
(2,375)
(19,373)
-
-
-
(2,774)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,365)
(13,365)
(18,470)
-
(18,470)
(623)
-
(623)
248
1,360
19
79
12
1,718
1,388
(353)
1,035
8,016
46,787
811
2,744
3,298
61,656
88,116
29,074
117,190
30 June 2016
Opening write down
value
Additions
Disposals
Depreciation
expense
Amounts amortised
to costs of
production relating
to gold sales
Amortisation
expense
Adjustments to
rehabilitation and
restoration
obligations
Foreign currency
translation
At 30 June net of
accumulated
depreciation
30 June 2016
Cost
15,814
403,499
3,365
7,012
26,167
455,857
442,288
42,439
484,727
Accumulated
depreciation and
impairment
Net carrying
amount
(7,798)
(356,712)
(2,554)
(4,268)
(22,869)
(394,201)
(354,172)
(13,365)
(367,537)
8,016
46,787
811
2,744
3,298
61,656
88,116
29,074
117,190
89
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.2 Exploration and evaluation assets
Exploration and evaluation (at cost)
Balance at the beginning of the year
-
-
-
Expenditure during the year
Adjustments to rehabilitation obligations
Foreign currency translation
Balance at the end of the year
Recognition and measurement
2017
$’000
46,292
19,835
(17)
(1,231)
64,879
2016
$’000
33,951
10,404
1,431
506
46,292
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. 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.
Exploration commitments
It is 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 can be reduced by selective
relinquishment of exploration tenure or by the renegotiation of expenditure commitments. The level of exploration expenditure
expected in the year ending 30 June 2018 for the consolidated entity is approximately $34.178m (2016: $18.720m). This includes
the minimum amounts required to retain tenure. There are no material exploration commitments further out than one year.
90
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.3 Impairment of non-current assets
Recognition and measurement
Impairment testing
The carrying values of non-current assets are reviewed for impairment when indicators of impairment or a reversal of a prior
period impairment may exist or changes in circumstances indicate the carrying value may not be recoverable. At a minimum the
Group makes this assessment twice annually at 30 June and 31 December.
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 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 an asset 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.
Recognised Impairment
No impairment was recognised in 2017. Furthermore, the assessment carried out for 30 June 2017 also concluded that a reversal
of prior period impairment charges would not be supported.
Key estimates and judgements
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 which 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.
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 Cash Generating Units
(“CGUs”), foreign exchange rates, the level of proved and probable reserves and measured, indicated and inferred mineral
resources that may be 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.
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
mine (LOM) 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 (in accordance with
Australian Accounting Standards).
of
‐
‐
91
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements B: Production and Growth Assets
B.3 Impairment of non-current assets (continued)
Key estimates and judgements
Impairment of mine properties, plant and equipment (continued)
In determining the recoverable amount 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. LOM operating and capital cost assumptions are based on the Group’s latest
budget and LOM plans.
Key Assumptions:
The table below summarises the key assumptions used in the year end carrying value assessments:
Gold price (US$ per
ounce):
2017: $1,210- $1,270
(2016: $1,050 - $1,280)
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 %
(post tax)
2017: 9% - 11%
(2016: 10% - 16%)
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.
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.
B.4 Segment expenditure, assets and liabilities
For the year ended 30 June 2017
Capital expenditure
Segment assets in continuing operations
Segment liabilities in continuing
operations
Ravenswood
(Australia)
$’000
13,797
Syama
(Mali)
$’000
87,665
Bibiani
(Ghana)
$’000
17,731
Corp/
Other
$’000
3,225
Treasury
$’000
-
77,314
385,712
78,405
296,322
58,228
105,623
16,221
8,483
-
-
For the year ended 30 June 2016
Capital expenditure
Segment assets in continuing operations
(restated)
Segment liabilities in continuing
operations
Ravenswood
(Australia)
$’000
6,586
Syama
(Mali)
$’000
28,705
Bibiani
(Ghana)
$’000
9,283
Corp/
Other
$’000
675
Treasury
$’000
-
59,682
331,052
63,736
37,871
47,226
81,677
17,114
7,910
-
-
Total
$’000
122,418
837,753
188,555
Total
$’000
45,250
492,341
153,927
92
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
In this section
Cash, debt and capital position of the Group at the end of the reporting period.
C.1 Cash
Cash at bank and on hand
Reconciliation to cash flow statement
2017
$'000
282,060
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
282,060
(34,558)
247,502
2016
$'000
79,873
79,873
(26,456)
53,417
The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings (if available) or to historical
information about counterparty default rates:
Cash at bank and short term deposits
Counterparties with external credit ratings
A+
AA-
B
Counterparties without external credit ratings
Total cash at bank and short term deposits
Recognition and measurement
191,881
89,155
75
949
79,271
14
113
475
282,060
79,873
Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term deposits with an original
maturity of three months or less. Cash and cash equivalents are stated at face value in the statement of financial position.
Fair value and foreign exchange risk
The carrying amount of cash and cash equivalents approximates their fair value.
The Group held A$5.8 million of cash and cash equivalents at 30 June 2017 (2016: A$37 million) in currencies other than
Australian dollars or a different currency to that of the functional currency of the company which holds the item. These exposures
are predominantly US dollars (2017: A$3.8 million; 2016: A$28.1 million equivalent) and Euro (2017: A$1.5 million; 2016: A$8.6
million equivalent).
Average interest rates earned on cash and cash equivalents during the period was 2.2% (2016: 0.7%).
93
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.1 Cash (continued)
Reconciliation of net profit from continuing operations after income tax to the net operating cash flows
Net profit from ordinary activities after income tax
Add/(deduct):
2017
$'000
(Restated)
2016
$'000
166,096
200,732
Share based payments including employee long term incentive costs
1,184
1,040
Loss on sale of property, plant and equipment
Profit on sale of available for sale financial assets
Rehabilitation and restoration provision accretion
Rehabilitation and restoration cash expenditure
Depreciation and amortisation
Gain on sale of the Resolute Pty Ltd group
Foreign exchange (gains)/losses
Realised foreign exchange losses on debt repayments
Foreign exchange loss on deregistration of controlled entity
Inventory net realisable value movements
Realised gain on investment in associate
Unrealised gain on forwards contracts
Reversal of provision of accounts receivable
Share of associates’ losses
Non cash finance costs
Changes in operating assets and liabilities:
Decrease in receivables
Decrease/(increase) in inventories
Decrease in prepayments
Decrease/(increase) in stripping activity asset
(Decrease)/increase in payables
Decrease in current tax balances
Increase in deferred tax balances
Decrease in operating provisions
Net operating cash flows
94
193
(200)
1,182
(1,783)
585
(99)
1,122
(93)
19,811
39,215
-
(46,151)
5,238
(25,888)
-
-
20,795
3,086
(11,424)
(14,404)
(864)
(2,629)
-
-
(529)
1,799
61
-
577
1,557
5,811
(15,610)
43,156
1,196
1,231
12,645
(26,487)
27,678
(5,044)
3,118
(15,333)
-
-
(7,531)
(5,858)
186,384
192,797
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.1 Cash (continued)
Cash flow by segment
For the year ended 30 June 2017
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
Movement in cash and cash equivalents
per consolidated cash flow statement
For the year ended 30 June 2016
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
Ravenswood
(Australia)
$’000
Syama
(Ghana)
$’000
Bibiani
(Ghana)
$’000
Unallocated (b)
Corp/
Other
$’000
Treasury
$’000
Total
$’000
16,646
48,160
(16,089)
(20,460)
151,903
180,160
22,071
(31)
(8,102)
248
194,346
51,833
107,784
(11,994)
(5,658)
(95,930)
46,035
22,074
84
3,164
1,655
(2,374)
70,638
95
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.2 Interest bearing liabilities
Current
Lease liabilities
Bank overdraft - ref C3.1
Recognition and measurement
2017
$'000
-
34,558
34,558
2016
$'000
222
26,456
26,678
All loans and borrowings are initially recognised at fair value less transaction costs and subsequently at amortised cost. Any
difference between the proceeds received and the redemption amount is recognised in the income statement over the period of
the borrowings using the effective interest method.
Resolute has a Security Trust Deed in place with various banks. The total assets of the entities over which security exists amounts
to $805.901m (2016: $481.143m). $88.078m (2016: 61.395m) of these assets relate to property plant and equipment.
Finance 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.
Interest bearing liabilities
The Group’s interest bearing liabilities have a fair value of $34.558m (2016: $26.816m) compared to the carrying value of
$34.558m (2016: $26.678m). The differences between the fair value and carrying amount are capitalised borrowing costs.
The Group held nil interest bearing liabilities at 30 June 2017 (2016: Nil) in currencies other than Australian dollars or a different
currency to that of the functional currency of the company which holds the item. Average interest rates charged on interest bearing
liabilities at period end was 8.0% (2016: 8.0%).
96
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.2 Interest bearing liabilities (continued)
Maturity profile of interest-bearing liabilities
The maturity profile of the Group’s interest-bearing liabilities in total and for finance leases is as follows:
Borrowings
Due within 1 to 3 months
Due within 4 months to one year
Due between one and five years
Total contractual repayments
Less finance charges
Total interest bearing liabilities
Finance Leases
Due within one year
Total minimum lease payments
Less finance charges
Present value of minimum lease payments
C.3 Financing facilities
C3.1 Bank overdraft
2017
$'000
2016
$'000
-
-
35,918
28,047
-
35,918
(1,360)
34,558
-
28,047
(1,369)
26,678
-
-
-
-
224
224
(2)
222
The current facility with the Bank Du Mali SA is in place and is subject to an annual revision in approximately June 2018. As at 30
June 2017 nil of the facility was unused.
C3.2 Syndicated facilities
RML has entered into a Letter of Credit Facility Agreement with Citibank N.A. (relating to the Ravenswood Project) and a Letter
of Credit Facility Agreement with Sociêtê General Ghana Limited (relating to the Bibiani Project). The facilities comprise
A$27.070m of Environmental Performance Bond Facilities. Both of these facilities are fully drawn and expire on 31 December
2019.
The Citibank N.A. Letter of Credit Facility Agreement and hedging facilities provided by Investec Bank Plc and Citibank N.A. are
secured by the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Cross Guarantee and Indemnity given by RML (“the Borrower”), Carpentaria Gold Pty Ltd, Resolute (Somisy)
Limited, Resolute (Treasury) Pty Ltd and Resolute (Bibiani) 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 and 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;
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; and,
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.
97
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.3 Financing facilities (continued)
C3.2 Syndicated facilities (continued)
Pursuant to the Syndicated Facilities Agreement and Letter of Credit Facility Agreement with Citibank N.A, the following ratios are
required:
(i)
(ii)
(iii)
(iv)
(v)
(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;
(Consolidated Gearing): the ratio of Net Debt to Equity will be less than 1.00 times;
(Loan Life Cover Ratio): will be equal to or greater than 1.50:1; and,
(Reserve Tail Ratio): will exceed 30%.
There have been no breaches of these ratios. The Societe General Ghana Limited Letter of Credit Facility Agreement is supported
by a guarantee provided by Resolute Mining Limited.
C.4 Contributed Equity
Ordinary share capital:
736,982,768 ordinary fully paid shares (2016: 655,632,994)
Movements in contributed equity, net of issuing costs:
Balance at the beginning of the year
Placement of shares to institutional investors (net of costs)
Shares issued pursuant to the Osisko Share Purchase Agreement (net of costs) ¹
Exercise of 130,000 unlisted options at $1.18 per share
Conversion of convertible notes into 14,050,000 shares at $1.06 per share
Balance at the end of the year
2017
$'000
2016
$'000
544,987
395,198
395,198
147,092
2,544
153
-
380,305
-
-
-
14,893
544,987
395,198
¹This relates to the purchase of 21,868,000 shares in Kilo Goldmines which resulted in the issue of 1,457,867 Resolute shares.
Recognition and measurement
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.
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.
Rights of employee share based payment recipients
Refer to E.11 for details of the employee share based payment plans which includes option and performance rights plans. Each
option entitles the holder to purchase one share. The names of all persons who currently hold employee share options or
performance rights, 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 and holders of performance rights have no right, by virtue of
the options, to participate in any share issue by the parent entity or any other body corporate.
98
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements C: Cash, Debt and Capital
C.5 Other reserves
Reserve
Nature and purpose
Net unrealised gain/(loss) reserve
Convertible notes equity reserve
Share options equity reserve
Employee benefits equity reserve
Foreign currency translation reserve
This reserve records fair value changes on available for sale investments.
This reserve records the value of the equity portion (conversion rights) of the
convertible notes.
The equity reserve records the fair value of share options issued.
This reserve is used to recognise the fair value of options and performance rights
granted over the vesting period of the securities provided to employees.
Represents exchange differences arising on translation of foreign controlled entities.
Key financial and capital risks in this section
Liquidity risk management
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.
Interest rate risk management
Borrowings issued at variable rates expose the Group to cash flow interest rate risk. 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.
Capital risk 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 at 30 June 2017 is 0% (2016: 0%). The Group is not subject to any externally imposed capital
requirements.
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.
The following table summarises the post-tax effect of the sensitivity of the Group’s debt, cash and capital items on profit and equity
at reporting date to movements that are reasonably possible in relation to interest rate risk and foreign exchange currency risk.
‐
Carrying
Amount
$'000
Interest rate risk
-1%
+1%
Foreign exchange risk
-10%
+10%
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
30 June 2017
Cash
282,060
1,965
1,965
1,965
1,965
Total increase/(decrease)
1,965
1,965
1,965
1,965
560
560
560
560
(458)
(458)
(458)
(458)
30 June 2016
Cash
Total increase/(decrease)
79,873
(350)
(350)
(350)
(350)
350
350
350
4,218
4,218
(3,451)
(3,451)
350
4,218
4,218
(3,451)
(3,451)
99
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
In this section
Other assets and liabilities position at the end of the reporting period.
D.1 Receivables
Current
Trade receivables
2017
$'000
5,748
5,748
2016
$'000
7,005
7,005
The credit quality of receivables can be assessed by reference to external credit ratings (if available) or to historical information
about counterparty default rates:
Counterparties with external credit ratings
AA+
Counterparties without external credit ratings *
Group 1
Total trade receivables
2017
$'000
2016
$'000
511
157
5,237
6,848
5,748
7,005
*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.
Recognition and measurement
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.
Fair value and foreign exchange risk
The carrying amount of receivables approximates their fair value.
The Group held $5.3m receivables at 30 June 2017 (2016: Nil) in currencies other than Australian dollars or in a different currency
to that of the functional currency of the company which holds the item.
100
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
D.1 Receivables (continued)
Movements in the allowance for impairment loss is as follows:
At start of year
Reversal of provision/(Charge for the year)
Recognised as a bad debt
Divestment of discontinued operation
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
2017
$'000
-
-
-
-
-
-
3,298
270
627
1,132
376
45
2016
$'000
(10,293)
529
-
10,427
(663)
-
2,462
1,624
42
-
2,877
-
5,748
7,005
Payment terms on amounts past due but not impaired 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.
D.2 Inventories
Ore stockpiles
-At cost
-At net realisable value
Total ore stockpiles
Gold bullion on hand - at cost¹
Gold in circuit - at cost
Consumables at cost
2017
$'000
(Restated)
2016
$'000
37,411
20,829
58,240
209
90,527
53,098
30,699
14,972
45,671
11,460
66,397
50,494
202,074
174,022
¹ Resolute retains 244oz of gold bullion on hand at 30 June 2017 with a market value of $0.4m (2016: 12,632oz with a market
value of $22m).
Recognition and measurement
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.
101
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
D.3 Other financial assets and liabilities
Available for sale financial assets
Shares at fair value - listed
Other financial assets
Environmental bond - restricted cash (face value approximates fair value)
Other
Financial derivative assets
Gold forwards at fair value - current
Financial derivative liabilities
Gold forwards at fair value - current
Gold forwards at fair value - non-current
2017
$'000
2016
$'000
3,595
427
3,570
3,699
81
-
3,651
3,699
2,214
-
-
-
-
151
264
415
Gold forward sales are deliverable at an average price of A$1,800 an ounce for a total of 12,000 ounces between July 2017 and
October 2017 at the rate of 3,000 ounces per month.
Recognition and measurement
Available-for-sale financial assets
Available for sale financial assets consist of investments in ordinary shares. Comprising principally of marketable equity securities,
they are classified as non-current assets unless management intends to dispose of the investment within 12 months of the
consolidated statement of financial position date. Investments are initially recognised at fair value plus transaction costs.
Unrealised gains and losses arising from changes in the fair value of classified as available-for-sale are recognised in equity in
the available-for-sale investments revaluation reserve. A significant or prolonged decline in the fair value of a security results in
the impairment charge being removed from equity and recognised in the consolidated statement of comprehensive income.
The fair value of the listed securities are based on quoted market prices and accordingly is a level 1 measurement basis on the
fair value hierarchy.
Restricted cash
The environmental bond represents a receivable carried at amortised cost using the effective interest method. The Ghanaian
Environmental Protection Authority holds $3.570m (AUD equivalent) of restricted cash as security for the rehabilitation and
restoration provision of Mensin Gold Bibiani Limited’s Bibiani project. There is no external credit rating basis for the Ghanaian
Environmental Protection Authority. The average interest rate earned on the environmental bond during the period was 0.0%
(2016: 0.0%).
Use of derivative instruments to assist in managing gold price risk
As part of the Group’s risk management practices, selected financial instruments (such as gold forward sales contracts, gold call
options and gold put options) may be used from time to time to reduce the impact a declining gold price has on project life revenue
streams. Within this context, the programs undertaken are project specific and structured with the objective of retaining as much
upside to the gold price as possible, and in any event, 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 hedging facilities provided by the Group's counterparties do not contain margin
calls. The Group did not hedge account for these instruments.
Movements in fair value are accounted for through the consolidated statement of comprehensive income.
102
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
D.4 Payables
Trade creditors
Accruals
2017
$'000
36,331
28,821
65,152
2016
$'000
11,547
21,820
33,367
Recognition and measurement
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. 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.
D.5 Provisions
Current
Site restoration
Employee entitlements ¹
Dividend payable
Withholding taxes
Other provisions
Non-Current
Site restoration
Employee entitlements
2017
$'000
2016
$'000
715
1,503
16,806
26,111
135
262
808
83
240
391
18,726
28,328
64,710
1,430
66,140
63,864
1,275
65,139
¹ Resolute Mining’s 80% owned subsidiary Societe des Mines de Syama SA (“SOMISY”) received notifications from the Nationale
de Prévoyance Sociale (“INPS”) alleging SOMISY owed contributions to the INPS department on salaries paid by SOMISY to its
expatriate employees between January 2005 and July 2013. Malian Legislation requires the remittance of 24% of an employee’s
gross salary and a mandatory health insurance levy to the INPS department and is a form of social tax. In accordance with the
Establishment Convention between SOMISY and the State of Mali, SOMISY is exempt from paying INPS contributions and the
mandatory health insurance levy on expatriate employees during the Syama Mine Development Period. In accordance with the
Establishment Convention, SOMISY did not remit INPS on expatriate salaries during the Mine Development Period, and then
commenced remitting INPS on expatriate salaries after the cessation of the Mine Development Period. SOMISY has acted in
accordance with the Establishment Convention at all times. The INPS department’s claims are for the period during the Mine
that period.
that
Development Period only andSOMISY’s position
for payments during
is not
liable
is
it
103
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
D.5 Provisions (continued)
SOMISY unsuccessfully appealed against this INPS assessment, with a Malian Court of Appeal ruling in favour of the INPS
department on the basis that it was not a government department and hence not a party to the Establishment Convention, so it
was not obliged to follow its terms and conditions. As a result of the Court ruling and subsequent failed attempts to negotiate an
immediate settlement, the Resolute group recorded an A$15m current liability in its June 2015 Financial Statements. Recent
attempts by the INPS to collect the assessed amounts triggered further negotiations between the INPS and SOMISY and in June
2016, a Settlement Agreement was executed by the parties to record an agreed instalment plan that will see SOMISY fully
discharge this disputed liability by paying A$11.5m (CFA 5,157,144,561) to INPS in instalments between 1 July 2016 and 30 June
2018. The instalments paid to date under this Settlement Agreement totalled A$4.6m (CFA 2,172,023,029) as at September
2016, followed by an additional A$1.5m (CFA 672,023,029) paid in December 2016, A$0.9m (CFA 385,516,417) paid in March
2017 & $0.9m (CFA 385,516,417) in June 2017. These are to be followed by 4 more instalments of A$0.9m (CFA 385,516,417)
each in September and December 2017 and then in March and June 2018. The Settlement Agreement incorporated the waiving
of some penalties included in the assessments.
Resolute continues to strongly dispute the validity of the INPS assessments and negotiations with the State of Mali are ongoing
to recover the INPS contributions demanded by the State of Mali in breach the terms of the Establishment Convention. Up to 30
June 2017, CFA 5.424b (A$12.290m) has been paid to the INPS department (CFA 1.947b (A$4.412m) paid in March, July, August
and September 2012) and CFA 3.476b (A$7.878m) as per above. Successful negotiations will see the monies paid to date in
breach of the Establishment Convention returned to SOMISY.
Recognition and measurement
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.
Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the end of the reporting
period. These benefits include wages, salaries, termination gratuity and relocation costs, annual leave and long service leave.
Restoration obligations
The Group records the present value of the estimated cost of 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.
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
Divestment of discontinued operation
Balance at the end of the year
Reconciled as:
Current provision
Non-current provision
Total provision
104
2017
$'000
2016
$'000
65,367
1,182
1,310
(1,783)
(651)
-
62,607
1,122
808
(93)
1,164
(241)
65,425
65,367
715
64,710
65,425
1,503
63,864
65,367
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements D: Other assets and liabilities
D.5 Provisions (continued)
Key estimates and judgements
Restoration
In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing
of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation. The
discount rate used in the calculation of these provisions is consistent with the risk free rate. The ultimate cost of
decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant
legal requirements, the emergence of new restoration techniques or experience at other mine-sites. The expected timing of
expenditure can also change, for example in response to changes in reserves or to production rates. Changes to any of the
estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial
results
Key financial and capital risks in this section
Interest rate risk, diesel price risk and foreign exchange risk management
Refer to About this Report (page 74) and Section C (page 93) for details of how these risks are managed.
Credit risk management
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 (refer to C1), 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 Audit and Risk Committee approval. With the exception of those
items disclosed in C3 and a Resolute Mining parent company guarantee provided to Macquarie Bank Limited relating to their
provision of a hedging facility, no guarantees have been provided to third parties as at the 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.
The following table summarises the sensitivity to a reasonably possible change in foreign exchange rates with all other variables
held constant:
Foreign exchange risk
-10%
+10%
Carrying Amount
$'000
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
3,651
65,152
3,699
33,367
288
(446)
(158)
288
(339)
(51)
288
(446)
(158)
288
(339)
(51)
(227)
(227)
365
138
365
138
(235)
(235)
277
42
277
42
30 June 2017
Other financial assets
Payables
Total (decrease)/increase
30 June 2016
Other financial assets
Payables
Total (decrease)/increase
105
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
In this section
Information on items which require disclosure to comply with Australian Accounting Standards and the Australian Corporations
Act 2001.This section includes group structure information and other disclosures.
E.1 Contingent liabilities
Contingent liabilities
Amounts 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
2017. 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 ($4.854m) 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 ($10.516m) 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.
E.2 Leases and other commitments
Operating leases
Due within one year
Due between one and five years
Aggregate lease expenditure contracted for at balance date but not provided for
Commitments
Other commitments not disclosed elsewhere in this report include:
Randgold/ Syama Royalty
2017
$'000
691
12,911
13,602
2016
$'000
608
613
1,221
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 2017, Resolute’s 80% attributable share of Syama’s project to date gold production was 1,093,864
ounces of gold.
106
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.2 Leases and other commitments (continued)
Commitments (continued)
Other contracted expenditure commitments
Due within one year
Aggregate lease expenditure contracted for at balance date but not provided for
E.3 Auditor remuneration
Auditing
Taxation planning advice and review and other services
2017
$'000
2,180
2,180
2016
$'000
-
-
2017
$
2016
$
179,360
182,000
-
21,950
179,360
203,950
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
52,894
38,800
232,254
242,750
35,690
67,130
107
Resolute Mining Limited | Annual Report 2017
2017
$'000
2016
$'000
2017
$'000
2016
$'000
Kilo Goldmines Ltd
Manas Resources Ltd
Notes to the Financial Statements E: Other items
E.4 Investments in associates
Continuing Operations
Listed
Shares held in associates (No. of shares)
CA$0.135 warrants, expiring 25 August 2018 (No. of
warrants)
Percentage of ownership (%)
3,986
46,568,000
24,700,000
27.44%
(b) Movements in the carrying amount of the Group's investment in associates
At 1 July
Purchase of investment
Share of loss after income tax
At 30 June
-
5,485
(1,499)
3,986
(c) Fair value of investment in listed associates
Market value of the Group's investment as at 30 June
1,627
(d) Summarised financial information
The following table illustrates summarised financial information relating to the Group's associates:
Extract from the associates' statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Share of associates' net assets
3,485
4,856
8,341
123
675
798
7,543
2,070
Extract from the associates' statement of comprehensive income:
Revenue
Loss before tax, loss for the year and total
comprehensive loss
-
(6,781)
-
-
-
-
-
-
-
-
-
-
108
-
-
-
-
-
-
-
-
-
1,854
523,899,835
-
19.90%
-
2,155
(301)
1,854
2,096
10,666
1,913
12,579
161
-
161
12,418
2,358
(5,498)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.5 Subsidiaries and non-controlling interests
Subsidiaries
The following were controlled entities during the year and have been included in the consolidated accounts. All entities in the
consolidated entity carry on business in their place of incorporation.
Name of Controlled Entity and Country of
Incorporation
Consolidated Entity
Company Holding the Investment
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
Geb and Nut Resources SARL, Cote d'Ivoire
Goudhurst Pty Ltd, Aust.1 (a)
Resolute Cote D’Ivoire SARL
Resolute (Treasury) Pty Ltd
Mensin Gold Bibiani Limited, Ghana
Resolute (Bibiani) Limited
Nimba Resources SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Noble Mining Ghana Limited, Ghana
Resolute (Bibiani) Limited, Aust.2 (a)
Resolute (CDI Holdings) Limited, Aust. 3 (a)
Resolute (Bibiani) Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Cote D’Ivoire SARL, Cote d'Ivoire
Resolute (CDI Holdings) Limited
Resolute Egypt (Australia) Pty Ltd, Aust.
Resolute Mining Limited
Resolute Egypt (Australia) 2 Pty Ltd, Aust.
Resolute Egypt Pty Ltd, Egypt
Resolute Mining Limited
Resolute Egypt (Australia) Pty Ltd
Resolute Egypt (Australia) 2 Pty Ltd
Resolute Exploration SARL, Mali
Resolute (Finkolo) Limited, Aust.4 (a)
Resolute (Ghana) Limited, Ghana
Resolute Mali S.A.,Mali
Resolute (Somisy) Limited, Aust.5 (a)
Resolute (Finkolo) Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute (Somisy) Limited
Resolute Mining Limited
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
Percentage of Shares
Held by Consolidated
Entity
2017
%
2016
%
100
100
100
100
80
100
90
100
100
100
100
100
100
100
50
50
100
100
100
100
100
100
85
80
100
100
100
100
-
100
90
100
100
100
100
100
-
-
-
-
100
100
100
100
100
100
85
80
(a) Entities not separately audited. Entity’s audit scope is limited to the purpose of inclusion in the consolidated entity's
accounts.
1 Name changed to Resolute Corporate Services Pty Ltd effective 4 July 2017
2 Previously Resolute (Bibiani) Limited, Jersey
3 Previously Resolute (CDI Holdings) Limited, Jersey
4 Previously Resolute (Finkolo) Limited, Jersey
5 Previously Resolute (Somisy) Limited, Jersey
109
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.5 Subsidiaries and non-controlling interests (continued)
Material partly owned subsidiaries
Accumulated share of (deficiency)/equity attributable to 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
Profit/(loss) allocated to material Non-Controlling Interest:
Somisy
Mensin
Finkolo
Total Non-Controlling Interest
2017
$'000
(Restated)
2016
$'000
(18,372)
(49,236)
(2,203)
(2,211)
3,045
3,072
(17,530)
(48,375)
29,732
28,943
5
(12)
(23)
(145)
29,725
28,775
The summarised financial information of subsidiaries with non-controlling interests is provided below. This information is based
on amounts before inter-company eliminations.
2017
$'000
(Restated)
2016
$'000
2017
$'000
2016
$'000
2017
$'000
2016
$'000
Somisy
Mensin
Finkolo
Statement of Comprehensive Income
Revenue
Gain/(loss) for the period
381,293
372,938
136,740
145,180
Total comprehensive income/(loss) for the period
136,740
145,180
Summarised Statement of Financial Position
-
50
50
-
(236)
(236)
-
(934)
(934)
-
(957)
(957)
Current assets
Non-current assets
Current liabilities
Non-current liabilities - External
Non-current liabilities - Intra Resolute Mining Limited
Group
214,194
240,457
4,030
3,341
305
42
230,255
145,946
73,569
58,856
23,218
21,897
(80,518)
(59,054)
(1,845)
(2,203)
(1,083)
(32,520)
(33,237)
(13,984)
(14,504)
-
(29)
-
(389,291)
(502,507)
(427,281)
(424,356)
(28,187)
(25,542)
Total (deficiency)/equity
(57,880)
(208,395)
(365,511)
(378,866)
(5,747)
(3,632)
Summarised Statement of Cash Flow
Operating
126,159
125,041
939
(2,377)
(897)
(1,013)
Investing
Net increase/(decrease) in cash and cash
equivalents
(77,999)
(17,257)
(17,028)
(9,617)
(1,368)
(567)
48,160
107,784
(16,089)
(11,994)
(2,265)
(1,580)
110
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.6 Joint operations
The consolidated entity has an interest in the following material joint operations whose principal activities are to explore for gold.
Entity Holding Interest
Other Participant/Joint Operation
Resolute Mining Limited
Etruscan Resources Bermuda Ltd/N’Gokoli Est JV¹
Resolute Cote D’Ivoire SARL
Geb and Nut Resources SARL/Geb and Nut JV
Percentage of Interest
Held
2017
%
60%
80%
2016
%
60%
0%
¹ Interests in joint operations greater than 50% have been accounted for as joint operations as all decision making requires
unanimous agreement.
E.7 Discontinued operations
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 October 2015, Resolute completed the divestment of Resolute Pty Ltd, the company holding all of Resolute’s subsidiaries,
assets, liabilities, contingent liabilities, and mineral rights in Tanzania (the “RPL group”). Resolute entered into an agreement with
Cienega S.A.R.L. whereby Cienega S.A.R.L. acquired the RPL group for nominal initial consideration, with a potential deferred
consideration equal to 50% of the proceeds of the sale of any mineral rights, related physical assets, and other specific legal
actions.
The results for the year are presented below:
Revenue
Expenses
Gain on sale of the Resolute Pty Ltd group (i)
Profit for the year from a discontinued operation
Earnings per share:
Basic earnings per share of discontinued operation
Diluted earnings per share of discontinued operation
The net cash flows of the discontinued operation are as follows:
Operating cash flows
Net cash outflow
2017
$'000
-
-
-
-
-
-
-
-
2016
$'000
-
(1,381)
46,151
44,770
6.97 cents
6.80 cents
(2,374)
(2,374)
(i)
The net liabilities of the RPL Group sold for nil consideration totalled $3.615 million. Additionally, the RPL Group’s
accumulated foreign exchange gain recognised in equity was $42.488 million and has now been recycled to profit and
loss.
111
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.8 Subsequent events
On 23 August 2017, the Company announced a final dividend on ordinary shares in respect of the 2017 financial year of 2.0 cents
per share. The dividend has not been provided for in the 30 June 2017 financial statements.
E.9 Related party disclosures
(i)
RML is the ultimate Australian holding company and there is no controlling entity of RML at 30 June 2017.
E.10 Parent entity information
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Convertible note equity reserve
Share option equity reserve
Employee equity benefits reserve
Reserves - unrealised gain/(loss)
Total shareholders equity
Profit of Resolute Mining Limited
Total comprehensive profit of Resolute Mining Limited
2017
$'000
152
(Restated)
2016
$'000
73
463,578
317,639
(1,214)
(1,219)
462,359
545,029
(646)
(651)
316,988
395,196
(94,404)
(89,945)
549
5,793
5,364
28
462,359
6,743
6,743
549
5,793
5,364
31
316,988
167,552
167,552
Refer to E1 for the contingent liabilities and commitments of Resolute Mining Limited. The parent company guarantees provided
by Resolute Mining Limited as outlined in C3 have a nil written down value as at 30 June 2017 (2016: nil).
E.11 Employee benefits and share based payments
Salaries
Superannuation
Share based payments expense
Total employee benefits charged to profit and loss
2017
55,453
3,029
2,129
2016
58,833
2,870
1,716
60,611
63,419
Share based payments
Equity-based compensation benefits are provided to employees via the Group’s share option plan and performance rights plan.
The Group determines the fair value of securities issued as an expense in the profit and loss over the vesting period with a
corresponding increase in equity.
112
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.11 Employee benefits and share based payments (continued)
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
2017
$
2016
$
4,295,562
2,931,464
240,858
50,089
1,212,280
431,383
41,878
407,916
5,798,789
3,812,641
Key estimates and judgements
Share based payments
The Group measures the cost of equity settled share based payment transactions with reference to the fair value at the grant
date using a Black Scholes formula or Monte Carlo simulation. The valuations take into account the terms and conditions upon
which the instruments were granted such as 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.
Employee share option plan
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.
2017
2016
Option
Category
Opening
Number of
Options
Lapsed
During the
Year
Exercised
During
the Year
Closing
Number
of
Options
I
J
K
L
M
N
Weighted
average
exercise price
-
-
-
-
130,000
-
-
-
-
-
-
-
-
-
(130,000)
545,400
(545,400)
-
675,400
(545,400)
(130,000)
1.52
1.52
1.18
-
-
-
-
-
-
-
-
Opening
Number
of
Options
33,000
90,000
Lapsed
During the
Year
Closing
Number of
Options
(33,000)
(90,000)
2,000,000
(2,000,000)
756,333
(756,333)
130,000
-
647,400
(102,000)
-
-
-
-
130,000
545,400
3,656,733
(2,981,333)
675,400
1.46
1.39
1.72
Fair
value of
option at
grant
date
0.61
0.73
0.70
0.72
0.66
0.98
The weighted average remaining contractual life for the share options outstanding as at 30 Jun 2017 is 0 years (2016:0.5 years).
113
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.11 Employee benefits and share based payments (continued)
Performance rights plan
A new Performance Rights Plan was implemented in 2016.The performance rights plan is broken down between:
Performance Rights Plan Category
Type of employee
Level 1
Level 2
Level 3
Level 4
Special
Managing Director and CEO
Executive Team reporting to MD
Site General Managers
Other Participants as recommended by the MD
Special, one-off awards as recommended by the MD
Plan category
Level 1
Grant and frequency¹
Annually set at 100% of
fixed remuneration for the
Managing Director & CEO
Level 2
Annually set at 65% of fixed
remuneration
Level 3
Annually set between 30%
and 50% of fixed
remuneration
Level 4
Annually set between 10%
and 20% of fixed
remuneration
Special
Varies
Performance measures
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.
Performance period
3 years
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.
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.
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.
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.
3 years
3 years
3 years
3 years
¹ Grant sizes have been changed from 1 July 2016 onwards. Refer to the Remuneration Report for further details.
114
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.11 Employee benefits and share based payments (continued)
Performance rights on issue
Level 1
Level 1
Level 2
Level 2
Band 1 to 4
Band 1
Band 1
Band 1
As at 30 June 2017
Changes during current period
Increase through issue of performance rights to eligible employees
(Level 2)
Increase through issue of performance rights to eligible employees
(Band 1 to 4)
Increase through issue of performance rights to eligible employees
(Band 1 to 4)
Increase through issue of performance rights to eligible employees
(Band 1)
Increase through issue of performance rights to eligible employees
(Band 1)
Increase through issue of performance rights to eligible employees
(Band 1)
Decrease through conversion of shares upon vesting of performance
rights (Level 1)
Decrease through lapsing of performance rights (Level 1)
Decrease through conversion of shares upon vesting of performance
rights (Level 2)
Decrease through lapsing of performance rights (Level 2)
Decrease through lapsing of performance rights (Level 2)
Decrease through lapsing of performance rights (Level 2)
Issue Date
Total
Number
Fair Value
per Right
at Grant
Date
01/07/14
2,250,597
01/07/15
5,083,995
28/08/15
3,822,624
31/08/15
470,478
24/10/16
3,025,322
29/11/16
400,000
29/11/16
600,000
29/11/16
1,000,000
16,653,016
$0.50
$0.25
$0.25
$1.89
$1.27
$1.21
$1.20
$1.18
$0.62
Vesting
Date
30/06/17
30/06/18
30/06/17
30/06/18
30/06/19
30/06/18
30/06/19
30/06/20
Date of
Change
Total
Number
Fair Value
per Right
at Grant
Date
Vesting
Date
31/08/16
575,145
$1.89
30/06/18
24/10/16
2,900,389
$1.27
30/06/19
16/01/17
208,000
$1.27
30/06/19
29/11/16
400,000
$1.21
30/06/18
29/11/16
600,000
$1.20
30/06/19
29/11/16
1,000,000
$1.18
30/06/20
31/08/16
(1,655,638)
31/08/16
(1,497,958)
31/08/16
(1,502,764)
31/08/16
(163,401)
24/01/17
(512,107)
24/01/17
(60,630)
Decrease through lapsing of performance rights (Band 1 to 4)
24/01/17
(47,787)
Decrease through lapsing of performance rights (Level 2)
Decrease through lapsing of performance rights (Level 2)
17/03/17
(212,620)
17/03/17
(24,877)
Decrease through lapsing of performance rights (Band 1 to 4)
17/03/17
(19,403)
Decrease through lapsing of performance rights (Level 2)
Decrease through lapsing of performance rights (Level 2)
11/04/17
(173,051)
11/04/17
(19,160)
Decrease through lapsing of performance rights (Band 1 to 4)
11/04/17
(15,877)
$0.43
$0.43
$0.56
$0.25
$0.25
$1.89
$1.27
$0.25
$1.89
$1.27
$0.25
$1.89
$1.27
30/06/16
30/06/16
30/06/16
30/06/17
30/06/17
30/06/18
30/06/19
30/06/17
30/06/18
30/06/19
30/06/17
30/06/18
30/06/19
115
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.11 Employee benefits and share based payments (continued)
The following table lists the key variables used in the valuation of performance rights:
2017
2016
Hurdle
Number of
performance
rights issued
Underlying
share price ($)
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 (Band 1
to 4)
Value of
performance right at
grant date (Level 2)
Reserve
and
resources
rights TSR rights
Service
rights
Reserve
and
resources
Total
rights TSR rights
Service
rights
Total
777,097
2,331,292
575,145
3,683,534
1,397,193
4,191,578
5,838,967 11,427,738
1.68
1.68
1.89
0.31
0.31
0.25
-
1.85%
80%
1.10%
-
1.85%
80%
1.10%
-
1.44%
76%
0%
-
2.08%
78%
0%
-
2.08%
78%
0%
-
1.79%
74%
0%
3
3
2
3
3
2
Not reflected
in valuation
due to non-
market
condition
Reflected in
valuation
through
Monte Carlo
simulation
Weighted
average
Not reflected
in valuation
due to non-
market
condition
Reflected
in valuation
through
Monte
Carlo
simulation
Weighted
average
$1.63
$1.15
$1.89
Value of
performance
right at grant
date
(Level 1)
$0.31
$0.23
$0.25
$1.89
n/a
$1.89
$0.25
n/a
$0.25
E.12 Other accounting policies
Derivatives
Derivatives are categorised as held for trading unless they are designated as hedges. Assets in this category are classified as
current assets or liabilities if they are either held for trading or are expected to be realised within 12 months of the consolidated
statement of financial position date. Items of this nature are recorded at their fair values through profit or loss.
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. 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.
116
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.12 Other accounting policies
New and amended Accounting Standards and Interpretations issued but not yet effective
A number of new Standards, amendment of Standards and interpretations have recently been issued but are not yet effective and
have not been adopted by the Group as at the financial reporting date. The potential effect of these Standards is yet to be fully
determined. However, it is not expected that the new or amended Standards will significantly affect the Group’s accounting
policies, financial position or performance, except for the following:
Title
Application
Date for
Group
Detail
AASB 9 – Financial
Instruments
1 January
2018
AASB 15 - Revenue from
Contracts with Customers
1 January
2018
AASB 2014-10 -
Amendments to Australian
Accounting Standards –
Sale or Contribution of
Assets between an Investor
and its Associate or Joint
Venture
AASB 2016-5 -
Amendments to Australian
Accounting Standards –
Classification and
Measurement of Share-
based Payment
Transactions
1 January
2018
1 January
2018
AASB Interpretation 22 -
Foreign Currency
Transactions and Advance
Consideration
1 January
2018
AASB16 – Leases
1 July 2019
A finalised version of AASB 9 which contains accounting requirements for financial
instruments, replacing AASB 139 Financial Instruments: Recognition and
Measurement. The standard contains requirements in the areas of classification and
measurement, impairment, hedge accounting and de-recognition.
Based on an initial impact assessment, the new standard is not expected to
significantly impact the recognition and measurement of financial instruments.
AASB 15 provides a single, principles-based five-step model to be applied to all
contracts with customers. Guidance is provided on topics such as the point in which
revenue is recognised, accounting for variable consideration, costs of fulfilling and
obtaining a contract and various related matters. New disclosures about revenue are
also introduced.
Based on an initial impact assessment, the new standard is not expected to
significantly impact revenue recognition.
The amendments clarify that a full gain or loss is recognised when a transfer to an
associate or joint venture involves a business as defined in AASB 3 Business
Combinations. Any gain or loss resulting from the sale or contribution of assets that
does not constitute a business, however, is recognised only to the extent of unrelated
investors’ interests in the associate or joint venture.
This Standard amends AASB 2, clarifying how to account for certain types of share-
based payment transactions such as the effect of vesting and non-vesting conditions
on the measurement of cash-settled share-based payments, share-based payment
transactions with a net settlement feature for withholding tax obligations and a
modification to the terms and conditions of a share-based payment that changed the
classification of the transaction from cash-settled to equity-settled.
The Interpretation clarifies that in determining the spot exchange rate to use on initial
recognition of the related asset, expense or income (or part of it) on the derecognition
of a non-monetary asset or non-monetary liability relating to advance consideration,
the date of the transaction is the date on which an entity initially recognises the non-
monetary asset or non-monetary liability arising from the advance consideration. If
there are multiple payments or receipts in advance, then the entity must determine a
date of the transactions for each payment or receipt of advance consideration.
AASB 16 provides a new lessee accounting model which requires a lessee to
recognise assets and liabilities for all leases with a term of more than 12 months,
unless the underlying asset is of low value. A lessee measures right-of-use assets
similarly to other non-financial assets and lease liabilities similarly to other financial
liabilities. Assets and liabilities arising from a lease are initially measured on a present
value basis. The measurement includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to be made in optional periods
if the lessee is reasonably certain to exercise an option to extend the lease, or not to
exercise an option to terminate the lease. AASB 16 contains disclosure requirements
for lessees.
While in early stages of assessment, the Group has yet to fully assess the impact on
the Group’s financial results when it is first adopted for the year ended 30 June 2020.
117
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.13 Restatement of comparative information
During the preparation of the 31 December 2016 financial report it was noted that there was a misstatement in the Gold in Circuit
and Gold Bullion (“GIC”) valuation model for the Syama gold mines sulphide GIC. The financial modelling caused the book value
of GIC to be overstated at 30 June 2016 by $11.990m.
It should be noted that all of the restatements are non-cash in nature, and do not affect reported cash flows. Furthermore, there
is no change or impact on:
the contained ounces of GIC, nor its market value at those balance dates;
Resolute’s enterprise value;
banking covenant ratios;
the group’s liquidity position;
reported gold production, cash costs per ounce of production, and all-in sustaining costs per ounce of production; and,
any of the information disclosed in the group’s quarterly reports.
Restatements for the affected 30 June 2016 financial statement line items for the prior periods are as follows:
Consolidated Statement of Comprehensive Income
Costs of production relating to gold sales
Gross profit before depreciation, amortisation and other operating costs
Gross profit from operations
Profit for the year from continuing operations
Profit for the year
Profit attributable to:
Members of the parent
Non-controlling interest
Total comprehensive income attributable to:
Members of the parent
Non-controlling interest
Earnings per share for net profit attributable to the ordinary equity
holders of the parent:
Basic earnings per share
Diluted earnings per share
Earnings per share for net profit from continuing operations attributable
to the ordinary equity holders of the parent:
Basic earnings per share
Diluted earnings per share
Restated for the
year ended
30-Jun-16
$'000
As previously
stated for the
year ended
30-Jun-16
$'000
(325,207)
(313,217)
229,417
154,711
155,962
200,732
171,957
28,775
126,916
29,794
241,407
166,701
168,157
212,927
181,713
31,214
140,365
28,335
26.79 cents
26.11 cents
28,31 cents
27.59 cents
19.82 cents
19.31 cents
21.34 cents
20.79 cents
118
Resolute Mining Limited | Annual Report 2017
Notes to the Financial Statements E: Other items
E.13 Restatement of comparative information (continued)
Consolidated Statement of Financial Position
Inventories
Total current assets
Total assets
Net assets
Reserves
Accumulated losses
Total equity attributable to equity holders of the parent
Non-controlling interest
Total equity
Restated for the year
ended
As previously stated
for the year ended
30-Jun-16
$'000
30-Jun-16
$'000
174,022
263,504
492,341
338,414
33,427
(41,836)
386,789
(48,375)
338,414
186,012
275,494
504,331
350,404
33,263
(32,080)
396,381
(45,977)
350,404
119
Resolute Mining Limited | Annual Report 2017
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 2017 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)
c)
d)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed throughout
this report;
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,
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 2017.
On behalf of the Board
J.P. Welborn
Director
Perth, Western Australia
23 August 2017
120
Resolute Mining Limited | Annual Report 2017
121
Resolute Mining Limited | Annual Report 2017 122
Resolute Mining Limited | Annual Report 2017 123
Resolute Mining Limited | Annual Report 2017 124
Resolute Mining Limited | Annual Report 2017 125
Resolute Mining Limited | Annual Report 2017 126
Resolute Mining Limited | Annual Report 2017 127
Resolute Mining Limited | Annual Report 2017 128
Resolute Mining Limited | Annual Report 2017 Shareholder Information
Substantial shareholders at 28 September 2017
Number held
Percentage
Ordinary shares
ICM Limited
Van Eck Associates Corporation
Distribution of equity securities as at 28 September 2017
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
Under the Company's Constitution, all ordinary shares issued by the Company carry
one vote per share without restriction.
Twenty largest shareholders as at 28 September 2017
Name
1
2
3
4
5
6
ICM Limited
Van Eck Associates Corporation
Dimensional Fund Advisors LP
L1 Capital Pty Ltd.
The Vanguard Group, Inc.
BlackRock, Inc.
7 Oppenheimer Funds, Inc.
8
State Street Corporation
9 Wellington Management Company, LLP
10
IFM Investors
11 Commonwealth Bank Group
12 Lemanik S.A.
13 Lazard LLC
14 Credit Suisse Group
15 LSV Asset Management
16
Investec Group
17 Baker Steel Capital Managers LLP
18 UBS AG
19 Vinva Investment Management Limited
20 Tribeca Investment Partners Pty Ltd.
148,188,154
69,377,844
19.99%
9.36%
Ordinary Shares
1,571
2,639
1,322
2,090
269
7,891
788
Number of ordinary
shares
148,188,154
% of Issued
Capital
19.99%
69,377,844
33,384,178
23,514,033
23,106,731
16,961,103
16,620,478
15,596,311
12,592,562
12,256,595
12,219,827
11,796,233
11,356,133
10,777,798
10,556,200
10,553,525
9,847,000
8,801,097
5,033,150
4,404,015
9.36%
4.50%
3.17%
3.12%
2.29%
2.24%
2.10%
1.70%
1.65%
1.65%
1.59%
1.53%
1.45%
1.42%
1.42%
1.33%
1.19%
0.68%
0.59%
466,942,967
62.97%
129
Resolute Mining Limited | Annual Report 2017
This page is intentionally left blank
130
Resolute Mining Limited | Annual Report 2017 R
e
s
o
l
u
t
e
|
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
7
ASX:RSG | www.rml.com.au