Mine Gold.
Create Value.
2019 Annual Report
ASX/LSE:RSG | www.rml.com.au
Contents
About Resolute
Year at a Glance
Managing Director’s Report
Sustainability
Operations Review
Ore Reserves and Mineral Resources
Financial Review
London Stock Exchange Listing
Risk Management
Corporate Governance
Financial Report
Corporate Directory
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3
4
6
26
47
51
53
55
58
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172
Scope of this Report
The Resolute 2019 Annual Report presents the
operating and financial results for the period from
1 January 2019 to 31 December 2019 and has been
prepared for Resolute’s stakeholders in line with
Resolute’s statutory and regulatory reporting
obligations.
Resolute is committed to the ambition of being a
multi-mine, low cost, African-focused, gold producer.
The information contained within this report outlines
Resolute’s operational and financial performance
and provides details on our efforts to deliver lasting
value to all of our stakeholders in a manner that
reflects the Company’s values.
All references to Resolute, the Company, we, us and
our refer to Resolute Mining Limited (ABN 097 088
689) and its subsidiaries. All dollar figures are in
Australian dollar currency unless otherwise stated.
All references to FY18 are for the six-month period
from 1 July 2018 to 31 December 2018 unless
otherwise stated. A six-month comparative period
exists due to a change in the Company’s financial
year end from 30 June to 31 December becoming
effective 1 July 2018. All references to FY19 and
FY20 are for the 12-month periods from 1 January
to 31 December 2019 and 2020 respectively, unless
otherwise stated.
Resolute Mining Limited | 2019 Annual Report
About Resolute
Resolute is a successful gold miner with more than 30 years of experience as an
explorer, developer, and operator of gold mines in Australia and Africa which have
produced more than 8 million ounces of gold.
Resolute currently owns four gold mines: the Syama Gold
Mine in Mali (Syama), the Mako Gold Mine in Senegal (Mako),
the Ravenswood Gold Mine in Australia (Ravenswood) and
the Bibiani Gold Mine in Ghana (Bibiani). The Company’s
Global Mineral Resource base comprises over 19 million
ounces (Moz) of gold.
integral part of Resolute’s business for more than a decade.
In January 2020, Resolute announced that it had entered
into an agreement to sell Ravenswood to a consortium
comprising EMR Capital Management Limited and Golden
Energy and Resources Limited and would receive up to
A$300 million in proceeds.
Syama is a world class, robust, long-life asset capable of
producing more than 300,000 ounces (oz) of gold per
annum from existing processing infrastructure. During
FY19, Resolute commissioned the automated Syama
Underground Mine, which will deliver a low cost, large scale
operation with a mine life beyond 2032.
Mako is a high quality, low cost, open pit gold mine which
was added to Resolute’s portfolio as part of the Company’s
acquisition of Toro Gold Limited (Toro Gold) during FY19.
Ravenswood has been a consistent performer and an
Bibiani is a potential long life, high margin operation.
Resolute is currently undertaking a strategic review to
evaluate options for Bibiani.
A portfolio of strategic investments in highly prospective,
well managed, African-focused gold exploration companies
has been established to provide a pipeline of future
development opportunities. Resolute is also undertaking
active exploration drilling campaigns across its African
portfolio with a particular focus on Mali, Senegal, Côte
d’Ivoire and Guinea.
Mako
Gold Mine
Bibiani
Gold Mine
Syama
Gold Mine
Resolute’s Vision
To be a multi-mine, low cost,
African-focused gold producer
Ravenswood
Gold Mine
Resolute’s Values
BOLD We are determined and unwavering in character, ideas and action
AGILE We adopt new methods, systems and technology to improve performance
COURAGEOUS We take smart risks and make tough decisions
UNITED We work together to achieve what is best for Resolute and our communities
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Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Delivering our Strategy
2
2
Resolute Mining Limited | 2019 Annual Report Year at a Glance
Gold Production:
Revenue:
Cash, Bullion and
Listed Investments:
384,731oz
$770 million
$181 million
All-In Sustaining Cost:
Underlying EBITDA:
A$1,577/oz
(US$1,090/oz)
$208 million
Gold Sales:
394,920oz
Underlying Net Profit
After Tax:
$21 million
Average Realised
Gold Price:
Net Loss
After Tax:
Gold in Circuit
Inventory:
74,389oz
valued at $161 million
Economic Value
Distributed:
$814 million
Total Recordable Injury
Frequency Rate:
A$1,933/oz
(US$1,344/oz)
$113 million
2.09
Completed commissioning of the Syama Underground Mine
Acquired Toro Gold Limited
Commenced trading on the London Stock Exchange
Delivering our Strategy
3
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Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Managing Director’s Report
Over the last 30 years, Resolute has mined more than 8 million ounces of gold from 10
mines in Australia and Africa. The operational expertise we have developed over this
time provides a strong foundation for our future success. The successful delivery of the
Syama Underground Mine provides opportunities to spread our wings and capitalise
on exciting new opportunities to develop and operate large scale, low cost, long life
Resolute gold mines. The decisions taken during 2019 to list the Company on the London
Stock Exchange, to acquire Toro Gold Limited and to commence work on the world’s
largest mine site-based solar-hybrid power station, were consistent with our ambition
to deliver enduring value to shareholders and to the communities in which we operate.
Dear Fellow Shareholders,
Thank you for your consideration of Resolute’s Annual
Report for 2019, a pivotal year which saw the Company
enhance the quality of its portfolio and achieve key
milestones on our growth agenda. Delivering our strategy
in the face of operational challenges was the theme for
Resolute’s 2019 Financial Year. During 2019, we achieved
many strategic objectives including a new Stock Exchange
listing in London and significant portfolio optimisation
through acquisitions and divestments. Having made
major investments across our portfolio, our Company is
now generating strong positive free cash flows across our
operations. The Syama Gold Mine in Mali and the Mako
Gold Mine in Senegal are high quality, low cost operating
assets. Following a strategic review in 2019, the Ravenswood
Gold Mine in Australia will now be transferred to new
owners in 2020 who will deliver the Ravenswood Expansion
Project. Importantly, Resolute shareholders have retained
significant upside exposure to Ravenswood without
having to bear the funding burden and development
risks associated with the Ravenswood Expansion Project.
We also remain confident in our ability to deliver a value
accretive outcome for our shareholders from our ongoing
strategic review of the Bibiani Gold Mine in Ghana. We
have continued to improve the Company’s systems
and processes with a strong focus on innovation and
adopting best practice technologies. I am proud to deliver
a comprehensive review of the Company’s sustainability
practices as part of this year’s Annual Report. Safe work
practices remain at the core of our business and we will
continue to focus on delivering positive safety outcomes
across our portfolio and impressing our safety culture on all
of our employees and contractors.
During 2019, our operations at Syama, Ravenswood
and Mako produced 384,731 ounces of gold at an All-In
Sustaining Cost of $1,577/oz (equivalent to US$1,090/oz).
Group Revenue was $770 million and corresponded with
underlying earnings before interest, tax, depreciation and
amortisation of $208 million and an underlying net profit
after tax of $21 million. Ravenswood was a held for sale
asset and as a result has been classified as a discontinuing
operation in the Company’s 2019 financials. Revenue from
continuing operations at Syama and Mako was $656 million
and corresponded with an underlying net profit after tax
of $25 million. After taking into account Ravenswood and
other non-recurring items including inventory valuation
adjustments, Toro Gold acquisition inventory adjustments
and transaction costs as well as one-off business
development and other items, the Company reported a net
loss after tax of $113 million. The Company finished the year
with $181 million in cash, bullion and listed investments and
total borrowings of $607 million. The repayment of higher
cost debt as part of the Company’s acquisition of Toro Gold
Limited, an expansion of our existing syndicated loan facility
and the generation of positive free cash flows, will enable
the Company to strengthen its balance sheet in 2020 as we
embark on our next phase of growth.
At our flagship operation, the Syama Gold Mine in Mali,
our operational focus for the year was the ramp up of
our Syama Underground Mine and the operation of the
Tabakoroni Open Pit Mine. Syama is a world class, long life,
low cost asset that will deliver long term benefits to our
shareholders, stakeholders, and local Malian communities.
4
4
Resolute Mining Limited | 2019 Annual Report We achieved commercial production rates at the
Syama Underground Mine in June 2019 and completed
commissioning of our automated mining fleet in December
2019. The quality of our operation at Syama was recognised
by our peers at the 2019 Mines and Money Awards
Ceremony where the Syama Underground Mine was
awarded ‘Showcase Mine of the Year’. The performance of
our Tabakoroni Open Pit Mine, located 35km south of the
Syama processing plant was exceptional, with high grade
oxide ore enabling us to achieve record production from
our oxide processing circuit with over 180,000 ounces of
gold being produced for the year. Tabakoroni will be a key
focus for our projects team in 2020 as we look to progress
study work on a future high-grade underground mine.
Resolute aspires to be a leader in mining innovation and
aims to create sustainable economic growth in Africa.
In keeping with this vision, we signed a power supply
agreement in 2019 for the development of a new solar
hybrid power station at Syama. This new power plant will
combine world class solar, battery and thermal generation
technologies to deliver significant electricity cost savings
while reducing carbon emissions by approximately 20%.
In July 2019, Resolute announced the addition of the Mako
Gold Mine in Senegal to its portfolio through the acquisition
of Toro Gold Limited. As a high margin, strongly cashflow
generative asset, Mako complements our existing portfolio
of large-scale, long-life mines and contributes immediate
production and margin growth. The acquisition has further
expanded Resolute’s footprint into Senegal, a stable, mining
friendly jurisdiction. This acquisition was clear evidence
of delivery on our strategy and ambition to be a low cost,
multi-mine, African-focused producer. In the five months
under Resolute ownership, Mako exceeded all budget
parameters, producing 87,187 ounces of gold at All-In
Sustaining Cost of A$1,010/oz (equivalent to US$687/oz).
To optimise our portfolio, we initiated and progressed
strategic reviews of our Ravenswood Gold Mine in Australia
and our Bibiani Gold Mine in Ghana.
The strategic review of Ravenswood culminated in January
2020 with the announcement of the sale of the project
on terms which represent exceptional value for Resolute
shareholders. The divestment has strong strategic merit
for Resolute. We have delivered our objective of ensuring
a new long-life future for Ravenswood under world-class
operators in EMR Capital and Golden Energy and Resources
Limited. We have structured the divestment in a way that
enables Resolute shareholders to share in the upside of
the project. Ravenswood has been a consistent performer
for Resolute for more than 15 years. Since acquisition in
2004, Resolute has mined and processed over 40 million
tonnes of ore and produced almost two million ounces of
gold at Ravenswood. We are proud of our achievements
at Ravenswood and the significant economic benefits we
have provided to the local community, the Queensland
Government, and Resolute shareholders. We are confident
Resolute’s legacy, and the interests of all stakeholders in
Ravenswood, will be protected and enhanced by the new
consortium.
The Bibiani strategic review was initiated following the
receipt of third party expressions of interest to acquire the
project in late 2019. I am confident that a value accretive
outcome can be delivered for our shareholders in 2020.
Over 2019, we reported tremendous exploration results
across our portfolio taking Resolute’s Global Mineral
Resource inventory to 19.1 million ounces of gold which is
inclusive of 7.4 million ounces of gold in Ore Reserves. At
Tabakoroni, our exploration activities resulted in a maiden
Underground Mineral Resource of 5.2 million tonnes of
ore at a grade of 5.1 grams per tonne for 850,000 ounces
of gold. We remain confident that further drilling in 2020
will increase this underground Mineral Resource. We
also delineated new oxide Mineral Resources within very
close proximity of the Syama processing plant which will
further extend oxide processing life. At Ravenswood, we
reported a significant increase in gold inventory which
supported Ravenswood Expansion Project study work and
was important in the context of the sale. At Mako, drilling
activities confirmed Mineral Resource extension potential
below the existing pit as well as the potential to define new
satellite deposits which will extend mine life at Mako.
At the corporate level, I am delighted that we have delivered
as promised on an important strategic goal for 2019
with our listing on the London Stock Exchange in June.
London is the natural home for large mining companies
with an African focus and the LSE is home to some of the
world’s largest mining companies. The dual-listing has
raised Resolute’s profile in global capital markets and has
facilitated improved access to gold and African-focused
institutional investors.
Resolute seeks to operate its business responsibly, with
careful consideration for the health and safety of our
people, the communities surrounding our sites, and the
environment around us. In mid-2019, as a member of the
World Gold Council, Resolute committed to the Responsible
Gold Mining Principles. We have a Sustainability
Performance Framework to reflect this commitment and
govern the way the Company operates in order to meet
international standards of good practice in areas of social
development, human rights, environmental protection and
health and safety. I am pleased to include in this report an
overview of the sustainability performance for each of our
operating assets for 2019. In 2020, Resolute plans to prepare
a more detailed and integrated Sustainability Report for all
its assets in accordance with the Global Reporting Initiative
Sustainability Standards.
During 2019 we have achieved major strategic goals.
We fully commissioned our Syama Underground Mine,
successfully added the Mako Gold Mine to our portfolio,
achieved exploration success across our portfolio with
particularly exceptional results at Tabakoroni, completed
the Ravenswood strategic review culminating in the sale of
the project and significantly progressed our strategic review
of Bibiani. We enter 2020 in a strong position to deliver on
the full potential of our asset base and generate long-term
value for our shareholders and broader stakeholders.
I take this opportunity to recognise the efforts of the
entire Resolute team, led by our Board, my colleagues in
the senior executive group, and our site-based general
managers. The efforts of our employees, contractors and
advisory partners, as well as the support from all of our
stakeholders has enabled Resolute to successfully deliver
key strategic objectives in 2019.
I am proud of Resolute’s progress in 2019 and filled with
optimism for 2020. With Syama poised to deliver on its
potential, Mako on track to deliver another exceptional
operating result and a pipeline of growth opportunities
being progressed, 2020 will be a positive year in Resolute’s
history. I hope you enjoy reading the 2019 Annual Report.
John Welborn
Managing Director and Chief Executive Officer
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Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Sustainability
at Resolute
Contents
1. Our Sustainability Approach
2. Economic Development
3. Environmental Responsibility
4. Our People
5. Social Responsibility
66
Resolute Mining Limited | 2019 Annual Report Part 1: Our Sustainability Approach
Resolute is fully committed to meeting international
standards of good practice in the areas of social
development and human rights, environmental protection,
and health and safety and labour rights. In late-2019,
Resolute drafted a Sustainability Performance Framework
(SPF) to govern the way the Company operates with
respect to these key issues. The SPF includes a set of
business principles and commitments aligned with the
World Gold Council’s Responsible Gold Mining Principles
(RGMPs).
Resolute’s SPF is also guided by the following principles
and standards:
•
•
•
•
•
Performance standards of the International Finance
Corporation;
Sustainability Principles of the International Council on
Metals and Mining;
UN Guiding Principles on Business and Human Rights;
Voluntary Principles on Security and Human Rights;
and
International Cyanide Management Code.
Resolute also recognises the significance of the UN
Sustainable Development Goals (SDGs) adopted in 2015.
Resolute will seek to align its environmental and social
activities to support the achievement of the SDGs.
In order to demonstrate how these commitments are
internalised within its overall management systems and
processes, a management assurance system has been
developed as set out within the SPF. This is supplemented
by a set of operational performance standards, based
on the International Finance Corporation Performance
Standards.
Resolute recognises that its assets and operational
standards are at varying levels of maturity and will develop
an action plan in FY20 that aspires to bring all assets into
alignment with the commitments of the SPF.
committed to, is the importance of transparency in
reporting practices and communicating its goals and
results to stakeholders. The content of this report was
guided by the requirements of the Global Reporting
Initiative Sustainability Standards. It comprises an
overview of sustainability performance for each of
Resolute’s operating assets. This will be supplemented by
a standalone 2019 Sustainability Report for the Mako Gold
Mine. In 2020, Resolute plans to bring its reporting into full
alignment with the Global Reporting Initiative and prepare
a detailed and integrated sustainability report for all its
operating assets.
This content covers the reporting period of 1 January
2019 to 31 December 2019, unless otherwise stated. It
encompasses the activities of Resolute’s operating assets:
the Syama Gold Mine in Mali, the Mako Gold Mine in
Senegal, and the Ravenswood Gold Mine in Queensland,
Australia. Where general statements on approach
are provided, these refer our three operating assets.
Information on the Bibiani Gold Mine in Ghana, which was
under care and maintenance during the reporting period,
is provided where relevant.
The material sustainability topics included in this report
were determined through a survey of select Company
personnel for Syama and Ravenswood, and by a formal
materiality assessment of both internal and external
stakeholders, for Mako. Material topics are:
•
•
•
•
•
Local employment;
Economic performance;
Occupational health and safety;
Local communities; and
Environmental compliance.
Whilst these areas are prioritised, information is also
provided on a number of other relevant sustainability
topics including:
Reporting Approach and
Boundary
At the core of Resolute’s sustainability approach, and
coinciding with the RGMPs that the Company has
• Water use;
•
•
•
Climate change;
Biodiversity;
Training and labour rights; and
• Workplace diversity.
Aerial view of Market Gardens established near the Mako Gold Mine, Senegal
7
Resolute Mining Limited | 2019 Annual Report Part 2: Economic Development
Our Approach
The economic performance of Resolute includes the revenues generated from the Company’s activities, the economic
value distributed through operating costs (including employee wages, payments to local suppliers of goods and services,
payments to governments and local contributions, and indirect economic impacts), as well as the value of capital investment.
Resolute is committed to acting with integrity and creating a culture of ethical behaviour in accordance with our Code of
Conduct and Anti-Bribery and Corruption Policy. Resolute supports the Extractive Industries Transparency Initiative (EITI) and
ensures that all our payments to governments are reported publicly. Of the countries we operate in, Senegal and Mali are
both active members of the EITI.
Resolute is committed to maximising the opportunity for local economic participation through employment and
procurement.
Our SPF has a set of business principles, drawn from the World Gold Council RGMPs, which we adhere to. The relevant
Economic Development business principles include:
•
Ethical conduct – we will conduct our businesses with integrity including absolute opposition to corruption; and
• Working with communities – we will contribute to the socio-economic advancement of communities associated with
our operations and treat them with dignity and respect.
The economic topics covered in this section include:
•
•
Economic performance and direct distribution of benefits; and
Local employment and procurement.
Market Garden Producers - Mako Gold Mine, Senegal
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Resolute Mining Limited | 2019 Annual Report Economic Performance and Direct Distribution of Benefits
The direct economic benefits of our activities are primarily delivered through payments provided to the governments in the
regions where we operate, direct employment (wages and benefits), and procurement of goods and services. In FY19, we
made payments to national and state governments of A$103 million and directly employed 1,256 people.
The direct economic value distributed also includes direct investments in the community that do not constitute impact
mitigation measures. In FY19, the Company committed approximately A$3 million in community investment to projects
that aimed to deliver improvements in education, healthcare, and income generating activities. A full summary of economic
performance is provided in the table below.
Economic value generated and distributed, FY19 (A$ million)
Indicator
Sub-indicator
Syama
Mako
Ravenswood
Bibiani
Economic value
generated
Economic value
distributed
Economic value
retained
Revenues
Operating costs (excludes wages and
benefits)
Employee wages and benefits1
Payments to providers of capital
Payments to government comprising:
Royalties
Other taxes and duties2
Other institutional support
Community investment3
Generated minus distributed
447
324
37
2
76
2
7
29
33
13
363
192
8
17
22
1
123
6
0
0
114
95
24
0
6
<1
(1)
18
3
<1
0
<1
<1
NA
7
2
0
1
<1
NA
Note: Numbers subject to rounding.
1 Gross wages and benefits to national employees.
2 Excludes payroll taxes on wages and benefits to national employees.
3 Investments that do not constitute impact mitigation measures.
Local Employment and Procurement
Employees are recruited and promoted based on experience and capacity, with preference given to local people where they
meet the minimum skill and/or aptitude requirement. At Syama and Mako, we have preferential local employment policies
to maximise the recruitment of local people. This is underpinned by training and skill development programs to help our
employees reach their full potential. At the end of FY19, our mines employed approximately 90% nationals as employees or
in-house contractors.
Many of the critical goods and services required to operate a mine are highly specialised and may only be available from
international suppliers. Subject to availability, we source goods and services from national suppliers and where possible from
the local regions in which we operate. In Senegal, we have actively established links between our international suppliers and
local distributors thus enabling Resolute to source goods onshore and in so doing, strengthen the local supply chain. We also
encourage our international suppliers to register their businesses nationally and localise elements of their operations.
Regional and National Employees Composition, FY19
Employees
Regional
Other national regions
Total nationals
Expats
Syama
324 (47%)
252 (37%)
576 (84%)
107 (16%)
Mako
131 (44%)
112 (38%)
242 (82%)
53 (18%)
Ravenswood
68 (83%)
14 (17%)
82 (100%)
Not applicable
Bibiani
16 (36%)
28 (62%)
44 (98%)
1 (2%)
Regional and National Employee and Contractor Composition, FY19
Workers
Regional
Other national regions
Syama
Contractor split not
available
Contractor split not
available
Mako
568 (53%)
Ravenswood
132 (87%)
Bibiani
192 (51%)
389 (37%)
19 (13%)
181 (48%)
Total nationals
Expats
2,398 (90%)
277 (10%)
957 (90%)
107 (10%)
151 (100%)
373 (99%)
Not applicable
3 (1%)
Note: “regional” encompasses the Sikasso Region for Syama; the Kedougou Region for Mako; Charters Towers, Townsville, and Burdekin for
Ravenswood; 15 surrounding communities for Bibiani. Data provided is as of end-November 2019.
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Resolute Mining Limited | 2019 Annual Report 1010
Resolute Mining Limited | 2019 Annual Report Part 3: Environmental Responsibility
Our Approach
Resolute aims to operate in an environmentally-responsible manner to minimise the impact of our activities and enhance
the environment around our mines. Our Sustainability Performance Framework has a set of environmental business
principles, to which we adhere:
•
•
Environmental stewardship: we will ensure that environmental responsibility is at the core of how we work;
Biodiversity, land use, and mine closure: we will work to ensure that fragile ecosystems, habitats and endangered
species are protected from damage, and will plan for responsible mine closure; and
• Water, energy, and climate change: we will improve the efficiency of our use of water and energy, recognising that
the impacts of climate change and water constraints may increasingly become a threat to the locations where we
work and a risk to our licence to operate.
Our mine sites have an Environmental Management System (EMS), comprised of an Environmental Management Plan
and relevant standard operating procedures, including monitoring, evaluation, and reporting mechanisms.
The environmental topics covered in this section include:
•
Environmental monitoring and compliance;
• Water and effluents;
•
•
•
•
•
Environmental Incidents;
Environmental assessment and permitting;
Climate change and greenhouse gas emissions;
Biodiversity impacts and protection measures; and
Progressive rehabilitation and closure.
Environmental Monitoring and Compliance
Our mine sites implement a comprehensive programme of environmental monitoring according to the presence
of sensitive receptors, encompassing air quality, water quality, noise, vibration, and biodiversity. In FY19, this was
supplemented by various external performance assessments, including: an annual safety inspection of each dam facility by
a certified engineer; independent technical review of health, safety, environment and social performance; audit against the
International Cyanide Management Code principles and standards of practice at Mako; and ongoing review of the Petowal
Biodiversity Offset Programme by an independent Advisory Panel at Mako.
Air Quality Monitoring
At Syama, the treatment of the refractory gold ore includes a high temperature roasting process which liberates sulphur
dioxide (SO2) and other emissions to the atmosphere. Syama is required to monitor SO2 and particulate matter (PM10)
dust concentrations in five Air Quality Monitoring Stations (AQMS) in communities downwind of the mine: Syama,
Bananso, Fourou, Tembléni and N’Golopéné. Passive SO2 monitors are also installed at these communities plus Glambere.
Monitoring is assessed against the Environmental and Social Impact Assessment (ESIA) thresholds, which were based
on World Bank guidelines from 1996. The Company is currently in the process of updating these emissions standards in
consultation with the Government of Mali to comply with the guidelines of the World Health Organisation.
Syama ESIA standards for air quality monitoring
Criteria
Averaging Period
Maximum concentration
SO2
PM10
1 day
1 year
1 day
1 year
500
100
500
100
Unit
µg/m³
µg/m³
µg/m³
µg/m³
Sulphur Dioxide Monitoring
SO2 is monitored both actively and passively. Active monitoring of SO2 requires the operation of specialised and highly
sensitive equipment that requires regular servicing. This is supplemented by passive SO2 monitoring using sampler
Radiello tubes, which is relatively simple to conduct and ensures continuous monitoring of SO2 in instances when active
monitoring cannot take place. SO2 emission results for FY19 were below the Syama ESIA limits. The air quality monitoring
measurements are supplemented by a predictive Cubic Conformal Atmospheric Measurement (CCAM) forecast model.
The CCAM forecast uses weather patterns and real SO2 emission data from AQMS measurements to flag potentials
exceedances of the emission limits. This enables remedial actions to be taken at the processing plant in real time.
11
Resolute Mining Limited | 2019 Annual Report Syama active SO2 monitoring results, maximum recorded and annual averages, FY19
Site
Maximum recorded
24-hour average SO2 (μg/m³)
No. days above daily limit
Annual average SO2
(μg/m³)
AQMS1 – Syama
AQMS2 – Bananso
AQMS3 – Fourou
AQMS4 – Tembléni
AQMS5 – N’golopene
197.0
350.0
54.2
91.0
205.0
Particulate Matter Monitoring
0
0
0
0
0
15.6
63.4
9.10
4.5
6.2
At Syama, active monitoring of PM10 was conducted in FY19. Daily average measurements of PM10 exceeded ESIA limits
on very few occasions. Passive dust deposition monitoring was conducted at the five monitoring sites. The deposition dust
rates were generally highest in the months February and March (dry season).
During the dry season, airborne particulate matter concentrations are high within the ambient airshed due to the
movement of vehicular traffic on unsealed roads, biomass burning and fugitive dust carried on Harmattan winds.
Management practices to reduce airborne particulates associated with mine activities include wetting work areas
susceptible to dust generation, screening and blast controls.
Syama active PM10 monitoring results, maximum recorded and annual averages, FY19
Site
Maximum recorded daily
average PM10 (μg/m³)
No. days above
daily limit
AQMS1 – Syama
AQMS2 – Bananso
AQMS4 – Tembléni
AQMS5 – N’golopene
639.4
812.0
592.9
801.0
1
7
1
2
Month(s)
April
Between February and
March
April
April and November
Annual average
PM10 (μg/m³)
64.7
160.5
45.4
55.8
4 No PM10 measurement was available at Fourou during the reporting period due to equipment damage
Water Use and Effluents
Resolute aims to avoid the release of pollutants or, when avoidance is not feasible, minimise and/or control the intensity
and mass flow of their release. Resolute maintains a comprehensive surface and groundwater monitoring program at its
operating sites. In FY19, no significant downstream chemical water quality issues were recorded at our operations.
Resolute takes a proactive approach to tailings dam management from daily inspections, monitoring of the site water
balance, analysis of piezometer data and annual inspections by certified external engineers.
At Syama, run-off from mine-affected areas discharges to three ephemeral creeks, before entering the larger catchments
of Bafini River to the north and Bagoe River to the west. Surface water and groundwater quality were mostly within
applicable ESIA guidelines, however some parameters (notably Total Suspended Solids (TSS), Iron (Fe) and Sulphate
(SO4) levels) periodically exceed applicable discharge and ambient standards. Engineering and environmental studies
commenced in FY19 to improve containment of potentially contaminated drainage downstream of the site for reuse in the
Process Plant.
At Mako, the Gambia River met ambient standards for chemical water quality during FY19 for all parameters except
TSS and Aluminium (Al). Although Mako contributes some sediment to the Gambia River during the wet season only,
investigations performed by the Company indicate that the main source of sediment is the presence of semi-mechanised
mining. The concentration of Al in the Gambia River is naturally elevated and is unrelated to the development of Mako.
At Ravenswood, the long history of mining in the region has resulted in legacy effects on both surface water and
groundwater quality. As a result, not all standard compliance limits for contaminants are appropriate for the region. The
Queensland Department of Environment and Science has recognised this and is working with Ravenswood towards
developing appropriate compliance limits.
In early FY19, Ravenswood experienced a significant rainfall event that resulted in the release of water from two
sediment dams on site. All efforts were made to ensure the release occurred in accordance with environmental authority
requirements, however, the nature of the event and the current water quality compliance limits meant this was not
entirely achievable. Downstream receiving environment monitoring did not identify any environmental harm as a result
of the releases. Information associated with quality and volume of the discharges was submitted to the Department of
Environment and Science and remains under review.
12
Resolute Mining Limited | 2019 Annual Report Water withdrawal, reuse, and discharge, FY19
Indicator (ML)
Water withdrawal by
source
Water reused
Sub-indicator
Surface water
Groundwater
Syama
1874
673
No data
Mako
1283
Not applicable
2296
Ravenswood
1524
520
3285
Environmental Incidents
In FY19, no major environmental incidents were recorded nor were there any major issues of environmental regulatory
non-compliance.
Syama recorded 10 moderate incidents, mainly related to contained hydrocarbon spills and occasional non-compliance
against discharge standards. Mako recorded two moderate incidents arising from a contained spill of liquor in the process
plant and elevated cyanide concentration in the tailings liquor.
Environmental incidents, FY19
Indicator General Descriptor
Syama
Mako
Ravenswood
i
c
h
p
o
r
t
s
a
t
a
C
j
r
o
a
M
e
t
a
r
e
d
o
M
r
o
n
M
i
Environmental impact: disastrous and/or widespread
impact (e.g. tailings dam breach).
On Site: widespread unconfined and long-term
recovery impact; major damage remains (years)
Offsite: unconfined and long-term recovery impacts;
damage remains (years)
Compliance: prosecution will result in process halt and
lost production time.
Environmental impact: serious environmental impact.
May impact off lease areas (e.g. uncontrolled fire,
destroying heritage site).
On Site: unconfined impact requiring long-term
recovery (years)
Offsite: confined impact requiring medium-term
recovery (1 month or more)
Compliance: management and control of the impact is
required by legislation or statutory obligations and it is
likely that prosecution may result from non-compliance.
Environmental impact: substantial localised impact (e.g.
unapproved clearing, disturbing heritage site).
On site: confined impact requiring medium-term
recovery (1 month+)
0
0
0
0
0
0
Offsite: can be remediated within one week
10
2
0
Compliance: management and control of the impact
is the subject of regulatory inspection, corporate policy,
however, it is unlikely that prosecution may result from
non-compliance.
Environmental impact: small and/or localised impact (e.g.
large contained spill, incorrect waste disposal).
On site: can be remediated within one week
Offsite: can be remediated within one shift
Compliance: non-compliance causing environmental
nuisance. Prosecution unlikely.
16
12
5
13
Resolute Mining Limited | 2019 Annual Report
Environmental Assessments and Permitting
Syama Expansion Projects
In FY19, a permitting process and update to the Environmental and Social Impact Assessment (ESIA) was initiated for the
following optimisation projects:
•
•
•
•
Solar-Hybrid Power Station at Syama;
Six satellite pits to the south and southwest of the Syama main open pit;
In-pit deposition of tailings to the decommissioned A21 satellite pit at Syama; and
Elevation of the existing Spring Pond embankment to increase water storage capacity at Syama.
At the end of FY19, a draft ESIA report for these optimisation projects had been submitted to the Government of Mali for
their review and validation. The permitting process will extend into early 2020.
Mako Optimisation Study Environmental and Social Assessment
In FY19, an optimisation study for the Mako Gold Mine added a projected 105koz of gold to the current Ore Reserve,
increased throughput to the Process Plant, and increased storage capacity within the footprint of the existing tailing
storage facility and waste rock dump. An assessment was conducted of the environmental and social impacts and
risks associated with optimisation of the mine and concluded that these would be consistent with current permitting
conditions.
Ravenswood Expansion Project
In FY19, nine new mining leases were granted for Ravenswood by the Queensland Government to facilitate the
Ravenswood Expansion Project and ancillary mining activities. Approval for additional tailings storage capacity in an
above-ground facility extension and an in-pit facility was also granted by the government through an environmental
authority (EA) amendment. The EA amendment introduced new biodiversity offset requirements associated with residual
impacts to prescribed regional ecosystems within the tailings storage facility expansion footprint.
Climate Change
Resolute recognises the significance of climate change as a global issue and its responsibility to reduce greenhouse gas
(GHG) emissions from its operations. At our mine sites, GHG emissions are produced from diesel consumption to provide
electricity, for transportation, and for mobile equipment use. In accordance with the National Greenhouse and Energy
Reporting Act 2007 (Cth), Resolute reports GHG emissions for all Australian entities to the Clean Energy Regulator.
In FY20, Resolute is committed to the development of a methodology for Scope 3 GHG accounting that will give due
consideration to the materiality of emission sources in our upstream and downstream value chain. We will evaluate
opportunities for the reduction of GHG emissions across our business as a first step towards the establishment of GHG
reduction targets.
At Syama, a solar hybrid power station is being constructed to reduce both power generation costs and GHG emissions.
The solar array is planned to be constructed on the surface of the existing Syama tailings storage facility thereby
minimising requirements to extend the mine’s footprint. The power station is expected to reduce GHG emissions of Syama
by 20%.
Total GHG Emissions, FY19
Indicator
GHG emissions
Sub-indicator
Scope 1
Scope 2
Total
Unit
tCO2eq
tCO2eq
tCO2eq
Mako
Ravenswood
Syama
148,947
6
88,600
16
148,953
88,616
15,776
56,518
72,354
Note: In order to meet Australian National Greenhouse and Energy Reporting (NGER) requirements, Ravenswood’s GHG data covers the
conventional 2019 Australian Financial Year, being for the 12 months to 30 June 2019.
GHG Emissions Intensity, FY19
Indicator
Unit
GHG emissions per ounce of gold produced
tCO2eq per Au oz
Syama
0.61
Mako
0.49
Ravenswood
1.33
14
Resolute Mining Limited | 2019 Annual Report
Biodiversity
Mako Gold Mine Biodiversity Offset Program
The Mako Gold Mine is located in an area of high ecological value, within proximity to the Niokolo-Koba National Park
(NKNP) and the Gambia River. Although Mako is expected to have no direct impact and negligible residual impact on the
NKNP, some residual impacts on biodiversity will result from mine development and operations. This comprises residual
impacts on the habitats of Western chimpanzees, hippopotamus, leopards, and two restricted range plants species
(Lepidagathis capituliformis and Tephrosia berhautiana) through habitat conversion in areas outside the NKNP. Natural
habitats impacted include gallery forest, wooded savannah, bowal habitat, and the Gambia River.
Ecological monitoring activities performed in FY19, including transect surveys and camera traps, indicate that the impacts
to the habitat of priority species is consistent with those predicted in the ESIA and supporting baseline studies. There is no
evidence of degradation to the NKNP nor the Gambia River resulting from the operational activities of the Mako Mine.
The Company is designing and implementing the Petowal Biodiversity Offset Program (PBOP) to achieve a ‘net gain’
in priority biodiversity features and thus offset the residual impacts of the mine. The PBOP aligns with IFC Performance
Standard 6 and the Business and Biodiversity Offset Program’s Standard on Biodiversity Offsets, and necessitates
an innovative approach informed by broad stakeholder engagement, robust science, expert advisory support, and
independent audits to evaluate performance.
The PBOP comprises landscape-level conservation management covering an area in the southeast part of NKNP, and
contiguous community lands in the Commune of Tomboronkoto that are currently absent of formal protection.
In 2017, a tripartite agreement was entered into with the national parks’ authority and the international NGO Panthera, to
implement a conservation program in a 1,700 square kilometres Intervention Zone (IZ) of the NKNP. The overall objective
of the first phase of the program was to keep the IZ secure through an effective system of forest patrols in order to
monitor and protect wildlife and its habitat. A third-party evaluation of the program was carried out in early FY19 which
concluded that it had broadly met its objectives, however, that a number of improvements can be made to increase
program effectiveness and which will be necessary to underpin the long-term sustainability of an agreement between the
partners. In late-FY19, the parties entered discussions to elaborate a new model of partnership for a 5-year term with due
consideration to the evaluation results.
In FY19, the international NGO African Wildlife Foundation was nominated to work with local communities on the
development of a conservation program in areas outside the NKNP but within the surrounding Biosphere Reserve. As
of end-FY19, core members of the program team had mobilised and planning was underway for commencement of
conservation activities in early-FY20.
The offset program is guided by an independent Advisory Panel comprising seven experts with regional experience in
conservation, rural development, primatology, civil society and academia. In its independent oversight role, the Panel
reviews technical plans and monitoring results, engages with stakeholders and provides recommendations to the
Company. In FY19, the Panel held face-to-face meetings in June and December.
15
15
Resolute Mining Limited | 2019 Annual Report Progressive Rehabilitation and Closure
Resolute’s overall objective for mine closure is to prevent or minimise adverse long-term environmental, physical, social,
and economic impacts and to create stable landforms that provide self-sustaining natural ecosystems and leave a positive
legacy on surrounding communities, employees, suppliers, and other people associated with the operation. A key aspect
of mine closure is undertaking progressive rehabilitation, or the restoration of disturbed land during the mining process
rather than large-scale works at the end of a mine’s life.
A formal permitting process is in place to control activities associated with mining, construction and exploration works that
have potential to impact on land, property, flora or fauna. A Land Clearance Permit is mandatory for all land disturbance
activities.
Syama Gold Mine
The total area of land disturbance in FY19 was 16.4 hectares (ha), arising from exploration (15 ha), construction work (0.5
ha) and mine operation (0.9 ha). Progressive rehabilitation of disturbed land was undertaken over a total of 8.3 ha in FY19,
involving the establishment of approximately 14,000 trees of local providence that had been propagated in the on-site
nursery.
As a compensatory measure for development of the Tabakoroni haul road, 16.3 ha of degraded community land was also
rehabilitated by the Company in areas bordering the Kambarke Classified Forest. This activity was agreed in consultation
with six neighbouring villages.
Site Nursery - Syama Gold Mine, Mali
Mako Gold Mine
No new areas of land were disturbed by operational or exploration activities in FY19.
Relatively minor rehabilitation works were conducted in FY19, mainly associated with the reclamation of areas temporarily
disturbed during the construction phase, maintenance of areas rehabilitated in previous years, plus the ongoing
maintenance of active disturbance areas. Rehabilitation included 4 ha of bowal habitat, comprising two herbaceous
species identified as being of restricted range (Lepidagathis capituliformis and Tephrosia berhautiana) and designated as
Critical Habitat. The successful re-establishment of these threatened species in the rehabilitation area has been confirmed.
Rehabilitation trials were initiated on tailings and waste rock material to inform development of a closure strategy for these
physical components of the mine.
In late-FY19, the Company initiated a third-party review of its Rehabilitation and Closure Plan, including development of a
strategy for financial closure provisioning.
Ravenswood Gold Mine
The environmental authority for Ravenswood requires that rehabilitation occur progressively, and within 6 months of
completion of activities causing significant disturbance to land. In FY19, only minor rehabilitation clean-up works were
conducted. New legislation was passed in 2018, requiring operators to prepare a Financial Provisioning Scheme and a
Progressive Rehabilitation and Closure Plan. In FY19, the Company commenced preparation of these plans.
16
Resolute Mining Limited | 2019 Annual Report Regeneration activities as a part of Mako Gold Mine rehabilitation program
17
17
Resolute Mining Limited | 2019 Annual Report Part 4: Our People
Our people are central to the success of our business. Resolute strives to attract, train and retain talented individuals who
live our values and are committed to the delivery of our vision.
Our Approach
Resolute recognises the value of our workforce. Our Sustainability Performance Framework has a set of business principles
for health and safety and labour rights, to which we adhere:
•
•
Safety and health: we will protect and promote the safety and occupational health of our workforce (employees
and contractors) above all other priorities and will empower them to speak up if they encounter unsafe working
conditions.
Labour rights: we will ensure that our operations are places where employees and contractors are treated with respect
and are free from discrimination or abusive labour practices.
Our sites implement Occupational Health and Safety Management Systems focused on continual improvement. We
are committed to operating consistent with good industry practice through the application of rigorous standards and
guidelines.
The Workforce topics covered in this section include:
•
•
•
Occupational health and safety;
Training and education; and
Labour rights and diversity.
Our Workforce
Resolute’s workforce comprises approximately 4,400 employees and contractors across Australia and Africa.
Our workforce mix
Employees by location
Employees Contractors
Australia
United
Kingdom
Mali
Ghana
Senegal
CDI
Guinea
1,256
3,138
206
8
684
45
299
11
3
Gender Diversity
Employee composition in Africa
Female
Female
Expatriates
Expatriates
Expatriates
9%
Total
Organisation
91%
42%
Corporate
Offices
58%
16%
18%
Mali
84%
Senegal
82%
2%
Ghana
98%
Male
Male
Nationals
Nationals
Nationals
Living our Vision – Annual Engagement Survey Summary
A valuable way in which we measure our success as an employer of choice that can attract and retain the best people is
through an annual anonymous Engagement Survey which allows our team to tell us what they value in their work and
where there is room for improvement.
Positive themes from our most recent survey were a strong understanding and commitment to the values and objectives
of our business, a strong alignment with health and safety management, and a high regard for the team and immediate
manager with whom the respondent works. We were pleased that the survey confirmed that our employees value the
nature of the Resolute business which provides variety and challenges in their work.
Construct
Item
% Favourable
Do you know what matters in our business?
I am committed to the values of our business
Are we taking health and safety seriously?
I understand the hazards associated with my job
Do you enjoy your job?
I enjoy working with the people in my team
Do you know what matters in our business?
I understand the objectives of our business
How are we performing?
Our business has a strong focus on achieving results
Note: % Favourable is a rating of Agree or Strongly Agree to the questions
96%
96%
93%
87%
85%
Key areas identified for improvement were the active management of employee workloads to foster improved work-
life balance and the need for enhanced communications across the business. Since the survey was conducted,
communications across the business have been in focus with more regular updates on business activities being provided
through the Resolute Intranet, business-wide CEO update emails and office / site townhall meetings.
18
Resolute Mining Limited | 2019 Annual Report Occupational Health and Safety
Resolute is committed to ensuring the highest health and safety standards across the business. Our R-CARE program
embodies an emotive and personal set of beliefs and behaviours to ensure everyone contributes in a positive manner to
health and safety. The R-CARE program is based on four key principles/actions for all employees and contractors to be
Committed, Accountable, Responsible and Empowered.
Committed
Accountable
Responsible
Empowered
To working safely, all of the time.
To the people we work with.
To our families.
To speak up and share our ideas.
To taking pride, in everything
we do.
To improving the way we work.
For the quality of our work.
To the way we treat others.
To the expectations of our
business.
For learning from our mistakes.
To stop anything we believe is
unsafe.
To challenge the things, we
could do better.
All Resolute operations are covered by individual occupational health and safety (OHS) management systems that
incorporate Resolute’s overarching OHS standards and policies as well as operational procedures. OHS policies and
procedures ensure all employees work safely to prevent injury to themselves and others – Resolute's performance
goal is “zero harm”. Employees participate in the development, implementation, and enforcement of OHS policies and
procedures.
All workers and site visitors receive mandatory inductions to ensure they are made aware of relevant OHS policies,
processes, and practices. In addition, area-specific inductions are provided to employees which are relevant to their
designated work area. Area-specific inductions provide employees with the necessary health and safety requirements and
information on any particular hazards they need to be aware of.
Incident and injury frequency rates at Australian sites are generally higher than in our African operations due to a number
of factors, including lower workforce numbers. Both our Australian and African sites report lower incident rates than
relevant industry averages and no work-related fatalities were recorded.
Key safety initiatives undertaken in FY19 include:
•
Syama incident audit: Based on an increase in measurable trending rates in the first half of FY19, an audit was
undertaken of all incidents that occurred between January 2018 and May 2019. The purpose was to review past
incidents and ensure that controls to manage risks are effective and remain in place. From this audit, a ‘stop work’
meeting was undertaken with all departments and business partners. Actions from the audit have seen a reduction in
injury rates. Incident rates continue to be closely monitored.
• Mako ICAM training: In FY19, Mako transitioned to the Incident-Cause-Analysis-Method (ICAM) for incident
investigation and analysis. ICAM is designed to help incident investigators identify the underlying factors and context
that lead to an incident in order to prevent reoccurrence. To complete this transition, 24 employee and contractor
personnel underwent ICAM training in August and September 2019.
•
Ravenswood Safety Reset: In FY19, the Queensland Government required all mining companies to conduct a ‘Safety
Reset’ with the goal of refocusing attention on OHS issues. At Ravenswood, a total of 223 employees and business
partners attended the Safety Reset. Constructive feedback and concerns were expressed during the awareness
sessions which addressed topics including road maintenance, training needs, and improving communication
protocols. In response, site leaders have and are developing a series of actions to improve safety performance.
OHS Statistics, FY19
Indicator
Description
Syama
Mako
Ravenswood
Lost time injury
frequency rate (LTIFR)
The number of occurrences of Lost Time Injury for
each one million hours worked.
0.15
0.00
6.88
Total Recordable
Incident Frequency
Rate (TRIFR)
The number of fatalities, lost time injuries,
substitute work, and other injuries requiring
treatment by a medical professional per million
hours worked.
1.04
2.96
13.75
Our workforce is provided access to health services. One of our primary health concerns for all operating assets is
dust exposure. To manage dust exposure, we distribute personal protective equipment, implement dust suppression
techniques, and conduct both ambient and personal dust monitoring. At Syama, personal monitors and face masks are
provided to all employees potentially exposed to sulphur dioxide (SO2).
At Syama and Mako, malaria is an additional health concern. Malaria management measures for both work areas and local
communities includes training and education, fogging of accommodation facilities, distribution of mosquito nets, and
treatment of standing water.
19
Resolute Mining Limited | 2019 Annual Report Training and Skills Development
Resolute aims to help our employees reach their potential through the provision of training and skill development
programs. The training provided to our employees varies by site, with greater levels required for our West African mines
due to the lower availability of mining skills. The provision of training is determined by a training needs analysis and, for
safety training, the risk level of a given role.
At Syama and Mako, training is largely on-the-job, supplemented by mentoring and coaching and formal off-the-job
training. Depending on workforce needs, we provide training in the following areas:
•
•
•
•
•
Safety and environment;
Leadership and management;
Technical skills (e.g., skills related to mining, surveying, processing, and measurement);
Computer skills; and
Communication (including French and English literacy).
At Syama, with the transition to automated underground mining, we trained 10 employees to be able to operate the
autonomous underground mining system from the control room. The training journey for these individuals began with
mine safety training, truck simulation training, exposure to the underground environment, and finally, control room
operations training.
At Ravenswood, 32 employees in our Processing Department received their dual Certificate 3 in Resource Processing and
in Surface Extraction. This training included the following processes: milling and grinding, leaching, elution, excavator and
gold room.
In FY19, we also launched a cloud based learning management system to assist with the training and development of
our people. It gives employees access to their personal learning plan and ensures that all compulsory training is planned,
completed and recorded. The system will also facilitate the consistency and quality of training packages across all sites.
Apprenticeship and Internship Programs
We also have an apprenticeship and internship program at Mako and Syama for local youths. Apprentices alternate
between formal education at regional technical colleges and on-site work experience at the mines. The apprenticeship
program at Syama annually recruits four youths to attend a three-year apprenticeship program at the college in Sikasso. As
of end-FY19, we had 12 active apprentices at varying stages of the program. The apprenticeship program at Mako had nine
participants in FY19.
The internship program at Syama and Mako provides vocational training opportunities in various departments, and many
interns are formally recruited for work following the completion of their internship. At Syama, every six months a group of
eight graduates is selected for an internship. At Mako, the internship program had 16 participants in FY19.
Malian Talent Development Program
The Malian Talent Development Program (MTDP) continued into its third year of operation. The MTDP rewards high
achieving local Malian employees with access to a bespoke training programme offering leadership and technical skills to
facilitate career progression. Promotions of Malian Nationals into leadership roles numbered six in FY19, four of which were
MTDP participants.
To complement the MTDP, a considerable amount of effort was focused on organisational design at Syama. This fed into
revised department structures, job design and position description reviews, along with the identification of competencies
required to set the organisation up for success. One key output was a leadership competency framework which will be
used across the organisation to consolidate and strengthen the skills of existing leaders and develop the skills of emerging
leaders.
We were proud that the quality of our Malian Talent Development Program was recognised by the Australia-Africa
Minerals and Energy Group, who awarded Resolute with Best Workforce and Industry Development Initiative at the 2019
African Downunder Conference Awards Ceremony.
Malian Talent Development Program Participants
20
Resolute Mining Limited | 2019 Annual Report Labour Rights and Diversity
We seek to employ a talented and diverse workforce and to treat our employees with dignity and respect. Resolute
implements policies and practices that are in-line with the principles of equal opportunity and fair treatment. All
employees have access to a grievance mechanism should they wish to file a complaint. At Syama and Mako, we have
employee representative committees whose members have been elected by the workforce to represent them in
discussions and negotiations with site management. In FY19, there was no incident of labour unrest or strike action that
resulted in work stoppages at our operations. In Mali the national workers’ union held a three-day strike in February, but no
disruption was recorded at the Syama operation.
At Mako, we initiated a workforce human rights assessment and supply chain risk assessment in late FY19. Results of these
assessments will be available in mid-FY20.
In FY19, we implemented the following initiatives to increase diversity at our mine sites:
•
Syama Gold Mine: in FY19 Syama doubled the number of women in its workforce to 4%, however female employment
remains a challenge due local education levels and customs. A number of key roles for women have been created
including a Female Advancement Specialist, a safety superintendent and an automation officer for the underground
mine. The Company aspires to double female representation to 8% over two years. In FY19 the Company continued
regular monthly dialogue with the Employee Representative Committee to maintain good labour relations and social
interactions between employees and the management team.
• Mako Gold Mine: established a Women’s Representative Committee and ensured that all our internship programs
had at least 25% female beneficiaries so that an increased number of women have the preparatory work experience to
enter the mining sector. Some objectives of the Women’s Representative Committee include:
-
-
-
Providing information to the women in Tomboronkoto Commune on working in the mining sector and the
opportunities for women;
Improving working relations between males and females at Mako and advocating for working considerations
that enable a work-family balance; and
Encouraging and facilitating training opportunities for women to both gain work at Mako and to develop their
skills.
•
Ravenswood Gold Mine: In FY18, a Native Title Agreement with the Traditional Owners, the Birriah People, was signed
as part of the approval requirements for new mining leases. The following commitments were implemented during
FY19:
-
-
The project committee held two formal meetings and several informal engagements where discussions and
planning regarding potential projects and employment processes occurred; and
Recruitment of two mechanical apprentices and one safety trainee, with one processing trainee to be hired.
Processing Plant Laboratory Technician - Mako Gold Mine, Senegal
21
Resolute Mining Limited | 2019 Annual Report Part 5: Social Responsibility
Our Approach
Social responsibility is an important consideration for the mining industry, due to the significant impact mines can have
on surrounding communities and regions. Our SPF has a set of social business principles, to which we adhere:
• Working with communities: we will contribute to the socio-economic advancement of communities associated with
our operations and treat them with dignity and respect.
•
Human rights and conflict: we will respect the human rights of our workforce, affected communities and all those
people with whom we interact.
The Social topics covered in this section include:
•
•
•
Community engagement mechanisms and statistics;
Significant impacts on local communities and social mitigation measures; and
Community investment programs.
22
Resolute Mining Limited | 2019 Annual Report Community Engagement and Grievances
Resolute understands the importance of regular and transparent communication. The Company engages with
communities surrounding its mine sites through a number of permanent and ad hoc consultation structures. In addition,
we meet regularly with local government representatives from local and regional centres. Local communities are defined
as follows for each mine:
•
Syama Gold Mine: villages within Fourou Commune;
• Mako Gold Mine: villages within Tomboronkoto Commune; and
•
Ravenswood Gold Mine: Charters Towers, Townsville, and Burdekin councils.
We aim to develop positive relations with local communities built on trust and transparency. We respond to community
concerns through formal grievance mechanisms. Most concerns arise from miscommunication and are quickly resolved
without formal registration under our grievance mechanism process or as a community incident.
Formal community meetings, FY19
Mine
Syama
Community Group
Meetings
Community Advisory Committee (monthly meetings)
Consultative meetings on the coordination of young people in Fourou
Local Recruitment Committee
Mako
Local Consultative Committee
Local Employment Working Group
Local Procurement Working Group
Ravenswood
Ravenswood Restoration and Preservation Association
Charters Towers Regional Council
Birriah Aboriginal Corporation (project committee representatives)
Bibiani
Resolute Foundation Advisory Panel
Local Consultative Committee
12
24
12
12
9
2
10
5
2
12
2
Community incident categorisation and results, FY19
Incident
categories
Category description
Syama
Mako
Ravenswood
Bibiani
• Minor damage to structures of some
importance
Minor
• Minor and repairable offence to
•
•
•
•
•
•
•
•
•
cultural heritage
Damage or loss of community assets
Serious social problems in progress
Permanent damage to cultural
heritage property
Injuries to a member of the
community
Strong community complaints /
reactions
Significant compensation is required
Very serious and widespread social
impacts, irreparable damage to
structures/objects/sites of high
cultural importance
Deaths in the community
Aggressive community response:
stopping activities during
negotiation
•
External arbitration required
Moderate
Major
1
3
1
3
0
0
0
4
1
0
0
0
23
Resolute Mining Limited | 2019 Annual Report Livelihood Impacts and Management Measures
The construction and operation of a mine in a rural region can have a significant impact on local communities’ livelihoods
and overall wellbeing. Resolute will seek to avoid involuntary resettlement and economic displacement. Where this is
unavoidable, we will consult with affected communities to restore livelihoods and provide fair and timely compensation.
In areas where our mines have impacted livelihoods, various measures have been implemented to mitigate negative
impacts, including programs that aim to ensure local communities benefit from our presence on a long-term basis.
Syama Gold Mine
In accordance with Malian law and accepted practice, impacts to livelihoods associated with land loss or change, are
financially compensated in agreement with those impacted.
In FY19, there were no new impacts to community livelihoods associated with the Syama Gold Mine nor was there any
outstanding financial compensation owed to impacted land owners. Under international guidelines Resolute recognises
that compensation in kind, such as replacement property or security of tenure, should be considered in lieu of cash.
Resolute is reviewing its land acquisition and livelihoods program accordingly.
Mako Gold Mine
The Mako Gold Mine did not require any physical resettlement during its development but did lead to some low levels
of economic displacement, including the loss of fallow farm land, grazing land, areas of artisanal mining, and forestry
resources. In response, the Company is implementing a Livelihood Restoration Program (LRP) to mitigate and compensate
for these impacts, in accordance with commitments made under the Land Acquisition Agreement that was negotiated
with mine-affected communities in 2016. Through the LRP, the Company aims to:
• Modernise rain-fed agriculture in order to restore and increase farming production capacity;
•
•
•
Diversify and intensify agricultural activities in order to create new sources of revenue;
Improve the profitability of livestock farming activities; and
Increase livelihood security for women and the most disadvantaged people in affected villages.
At the end of FY19, 85% of livelihood restoration measures were implemented.
Market Gardens - Mako Gold Mine, Senegal
24
Resolute Mining Limited | 2019 Annual Report Community Investment
Resolute is committed to sharing the benefits of its operations through investment in sustainable development initiatives.
Resolute prioritises initiatives that make use of the inherent strengths, skills and capacities of the Company, partner
organisations, host governments and local people, in sectors including: Water and Sanitation, Community Health,
Education, Income Generation and Accountability.
Resolute is proud and willing to help communities to reach their development goals. In doing so, caution is taken by
Resolute not to displace government responsibility for the delivery of community services.
Key initiatives implemented in FY19 include:
•
Syama Gold Mine: Syama’s community investment strategy was updated in 2019 to reflect a greater focus on leaving
a positive legacy. A participatory diagnostic process for the drafting of community development plans and training to
increase local governance and resilience was completed. Some other examples of investment projects (in addition to
others) include:
-
-
-
-
Construction of 3 rural maternity units;
Construction of 3 equipped classrooms and rehabilitation of 3 classrooms;
Installation of solar-powered water boreholes; and
Funding and training for a soap making project for the Tabakoroni Women's Association.
• Mako Gold Mine Investment Fund: The Social and Environmental Investment Strategy of Mako is aligned with
local planning and development processes and prioritises investments that are sustainable, effective, measurable
and transparent. A total of 20 micro-projects were selected be the local and regional planning and development
authorities for investment in FY19. Investments undertaken in FY19 include:
-
Education: construction of 4 secondary school classrooms; construction of a kindergarten; supply of pedagogical
materials to primary schools; bursary program for tertiary-level students;
- Water, health and sanitation: installation of 2 community boreholes for potable water; extension of Kedougou
District Hospital and maternity ward; pilot community health and sanitation program;
Income generation activities: feasibility study for the construction of a 10ha community market garden;
modernisation of livestock breeding practices through facilitation of access to credit; and
Sustainable natural resource management: support to local authorities in the elaboration of their land use plan.
-
-
-
•
•
Ravenswood Tourism Directions Plan: Ravenswood employed a consultant to prepare a Tourism Directions Plan
for the Ravenswood town, which sets the framework for delivering its future tourism potential. The plan recognises
tourism as a future economic driver for the town of Ravenswood, particularly after current gold mining operations
conclude.
Bibiani Gold Mine: Despite being on ‘care and maintenance’, Resolute has sustained significant investment to the
benefit of communities surrounding Bibiani. Investments completed in FY19 include:
-
-
-
Health: monthly medical outreach comprising health education activities and set-up of temporary mini-clinics,
provision of assistance to the Ghana Health Service to distribute treated mosquito nets and radio campaigns
focused on public health.
Income generation activities: beekeeping pilot project, training for various income generating activities,
development of the value chain for citronella production through construction of a distillation plant.
Education: donation of building materials to Ahyiresu Islamic Junior High School, financial assistance to 35
tertiary students, refurbishment of Old Town Primary School.
The amount spent on community investment for FY19 can be found in the Economic Development section of this report.
Agricultural project maze crop - Mako Gold Mine, Senegal
25
Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Operations
Review
26
26
Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
2727
27
Resolute Mining Limited | 2019 Annual Report Operations
Overview
Resolute is an ASX200 gold producer with three operating mines (Syama, Mako and Ravenswood). The Company’s fourth
mine, Bibiani, is currently held on care and maintenance and is subject to an ongoing strategic review. The Company
produced 384,731oz of gold (poured) at an All-In Sustaining Cost (AISC) of A$1,577/oz (US$1,090/oz) from its operating mines
in FY19.
Over the course of the year, our processing plants milled a total of 6.55 million tonnes (Mt) of ore at an average grade of 2.03
grams per tonne of gold (g/t Au) for the recovery of 364,610oz. Gold in circuit at the end of FY19 totalled 74,389oz primarily
comprised of Carbon Enriched Concentrate stocks held at Syama. The Company’s gold in circuit inventory was valued at
$161 million at the end of FY19.
Mine Operations Review
Measure/
Units
Syama
Sulphide
Syama
Oxide
Syama Total
Mako
Ravenswood
Total
Total Ore Mined
Total Ore
Processed
Tonnes
Tonnes
Grade Processed
g/t Au
Recovery
Gold Recovered
Gold in Circuit
Drawdown /
(Additions)
Gold Poured
Cash Cost
AISC
%
oz
oz
oz
A$/oz
US$/oz
A$/oz
US$/oz
1,293,581
2,096,336
3,389,917
1,062,611
290,437
4,742,965
1,621,378
1,415,535
3,036,913
811,831
2,699,285
6,548,029
1.92
69.5
4.22
86.3
2.99
77.4
69,445
170,359
239,804
(6,921)
10,175
3,254
2.86
93.8
70,647
16,540
0.69
90.6
2.03
84.9
54,159
364,610
327
20,121
62,524
180,534
243,058
87,187
54,486
384,731
2,580
1,780
2,912
2,010
982
681
1,180
818
1,393
964
1,625
1,125
802
546
1,010
687
1,737
1,209
1,949
1,356
1,308
904
1,577
1,090
Note: Gold poured for Mako is based on gold poured and shipped during Resolute’s period of ownership.
“2019 was a pivotal year in the development of our business.
The addition of the Mako Gold Mine in Senegal and the
achievement of commercial production rates from the
Syama Underground Mine has transformed our portfolio.
We look forward to 2020 with confidence.”
David Kelly - Chief Operating Officer
28
Resolute Mining Limited | 2019 Annual Report FY19 Operations
FY19 saw the Company pour 384,731oz of gold at an AISC of A$1,577/oz (US$1,090/oz) and enhance the quality of its
asset base through the commissioning of the Syama Underground Mine, the acquisition of the Mako Gold Mine and
the expansion of its Mineral Resource base which will underpin longer term growth opportunities, including a future
underground mine at Tabakoroni.
At the Syama Gold Mine, the Company completed the commissioning of its Syama Underground Mine with commercial
production rates being achieved in June 2019, a notable milestone after three years of development. In addition, a number
of important steps were taken on the journey to establish Syama as an automated underground gold mine. Automated
drilling, loading and truck haulage were all achieved in FY19. All three aspects will assist in the achievement of the cost and
productivity targets we have set for Syama. Total gold production from the Syama sulphide operation was 62,524oz of gold,
reflecting the progress of the ramp-up of underground production in FY19 and interruptions to processing caused by the
identification of cracks in the shell of the Syama roaster. The Syama roaster was offline for the majority of the December
2019 Quarter but was successfully returned to nameplate capacity prior to the end of FY19.
Record gold production was achieved from oxide operations at Syama, with the Tabakoroni Open Pit Mine (Tabakoroni),
located 32 kilometres south of the Syama processing plant contributing almost 1Mt of ore at an average grade of 2.54
g/t Au with 180,534oz of gold being poured (processed grade of 4.22 g/t Au). Tabakoroni outperformed the original Ore
Reserve, and Mineral Resources continued to grow. The Company is confident that a high grade long life underground
operation will follow the open pit mining phase; study work commenced in FY19
In August 2019, the Mako Gold Mine in Senegal was added to Resolute’s portfolio as part of the Company’s acquisition of
Toro Gold. Since acquisition, Mako has operated beyond initial expectations with excellent plant throughput, grades and
recoveries. In the 5 months under Resolute ownership in FY19, a total of 811,831 tonnes of ore at an average grade of 2.40 g/t
Au was processed for the recovery of 87,187oz of gold (processed grade of 2.86 g/t Au). This was inclusive of gold in circuit
drawdown of 16,540oz which was poured subsequent to acquisition.
At Ravenswood, FY19 saw the completion of underground operations at the Mt Wright Underground Mine (Mt Wright),
after life-of-mine production of over 1Moz. Mt Wright has been a very successful operation and many of the techniques
pioneered at this site are being applied to the Company’s flagship asset, the Syama Underground Mine. With the
completion of underground mining, the third ball mill at Ravenswood was recommissioned in late FY19. This will allow the
operation to return to its former configuration and restores capacity to process up to 5 million tonnes per annum (Mtpa).
Initially this increased capacity will be used to process mineralised waste stocks.
FY20 Outlook
Resolute is forecasting gold production for FY20 of 500,000oz at an AISC of US$980/oz (including corporate overheads and
prior to adjustment for the divestment of Ravenswood). Non-sustaining capital expenditure is forecast at US$15 million and
investment in exploration and other development capital expenditure is forecast at US$25 million for FY20.
FY20 Production and Cost Summary
FY20 GUIDANCE
PRODUCTION (oz)
AISC (US$/oz)
Syama
Mako
Ravenswood
TOTAL
260,000
160,000
80,000
500,000
960
800
1,200
980
Note: Resolute will provide updated FY20 guidance following the sale of Ravenswood.
Tabakoroni Open Pit Mine at Syama
29
Resolute Mining Limited | 2019 Annual Report Syama Gold Mine
30
30
Resolute Mining Limited | 2019 Annual Report 3131
Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Syama Gold Mine
The Syama Gold Mine is located in the south of Mali, West
Africa approximately 30km from the Côte d’Ivoire border and
300km southeast of the capital Bamako.
Syama is a large-scale operation which comprises two separate
processing plants: a 2.4Mtpa sulphide processing circuit (ore
sourced from the Syama Underground Mine) and a 1.5Mtpa
oxide processing circuit (ore sourced from the Tabakoroni
Open Pit Mine).
Syama is owned by Société des Mines de Syama S.A. (SOMISY).
Resolute has an 80% interest in SOMISY and the Government of
Mali holds the remaining 20%. Tabakoroni is owned by Société
des Mines de Finkolo SA (SOMIFI) of which Resolute currently
owns 100% through its wholly owned subsidiary, Resolute
(Finkolo) Pty Ltd. The Government of Mali is entitled to a 10%
free-carried interest in SOMIFI.
Overview
Gold production at Syama during FY19 totalled 243,058oz at
an AISC of A$1,625/oz (US$1,125/oz). The oxide circuit performed
well during the year, with high grades and recoveries achieved
from ore sourced from the Tabakoroni Open Pit Mine. The
performance of the sulphide circuit was affected by an
unscheduled 2-month shutdown of the Syama roaster in the
December 2019 Quarter following the detection of a crack in
the roaster shell as well as earlier unplanned maintenance
work. The roaster was returned to nameplate operating
capacity at the end of FY19.
During FY19, the Company commissioned its automated
Syama Underground Mine with commercial rates of production
being achieved in June. A new Mining Convention was also
agreed with the Government of Mali and a new Mining Permit
issued. Other milestones for the year included a maiden high
grade underground Mineral Resource being delineated at
Tabakoroni, new oxide Mineral Resources being discovered
which will extend the life of existing oxide processing operation,
and the agreement of a new power supply agreement with
Aggreko plc (Aggreko) to provide low cost, environmentally
friendly power through a solar hybrid power plant.
AT A GLANCE
LOCATION
Mali, West Africa
FY19 MINING
3,389,917 tonnes
FY19 PROCESSING
3,036,913 tonnes at
2.99 g/t Au and
77.4% recovery
FY19 PRODUCTION
243,058oz
FY19 CASH COST
A$1,393/oz
(US$964/oz)
FY19 AISC
A$1,625/oz
(US$1,125/oz)
FY19 SALES
258,141oz
RESOURCES
8.3Moz (2.6 g/t Au)
RESERVES
3.3Moz (2.5 g/t Au)
GROWTH POTENTIAL
Study work
currently
progressing on a
new underground
mine at Tabakoroni;
discovery of
additional resources
to extend mine life
3232
32
Resolute Mining Limited | 2019 Annual Report
Sulphide Operations
Gold production from the Syama sulphide circuit for FY19 was 62,524oz at an AISC of A$2,912/oz (US$2,010/oz). The
abnormally high AISC resulted from site costs remaining largely constant while production volumes were impacted by
roaster downtime.
During FY19, an increasing portion of mill feed was sourced from the Syama Underground Mine and this corresponded
with higher head grades and strengthening recoveries. Overall, sulphide circuit recoveries averaged approximately 69.5%
for the year as a large proportion of low grade ore was processed in the first half of FY19. Daily recoveries of over 85% were
achieved during periods of the year. The maximum daily recovery recorded was 92%, an exceptional result demonstrating
the efforts made as part of Project 85. These periods of high recovery, mainly due to an improvement in sulphide flotation
recoveries, provide strong confidence in the Company’s overall target to achieve consistent recoveries above 85%. The
Company continues to fine tune elements of its recovery enhancement project, Project 85, with a focus on improvement
of control methodologies in the floatation circuit. Work is also underway to automate the addition of grinding media to the
calcine regrind mill and to improve management of reagent addition to the calcine and float tails leach circuits.
Syama Sulphide Production and Cost Summary
Ore Mined
Ore Milled
Head Grade
Recovery
Production
Cash Cost
(t)
(t)
FY19
1,293,581
1,621,378
(g/t)
1.92
(%)
69.5
(oz Gold)
($/oz)
62,524
A$2,580/oz
(US$1,780/oz)
A$2,912/oz
(US$2,010/oz)
AISC
($/oz)
As a consequence of the sulphide roaster being taken offline in early October 2019 for repairs to a crack, along with
earlier unplanned maintenance, the Syama sulphide AISC for the FY19 was abnormally high and not a reflection of the
anticipated life-of-mine (LOM) AISC. The roaster was returned to full operation in mid-December 2019 which enabled a
return to full production rates. The ready availability of 440,000 tonnes of stockpiled ore from the Syama Underground
Mine which accumulated while the roaster was offline is expected to result in a substantial reduction in AISC on a unit
basis from the start of FY20.
Oxide Operations
The Syama oxide circuit delivered a record year of production. This was driven by consistent plant recoveries and high-
grade ore being sourced from the Tabakoroni Open Pit Mine which was the sole feed source for the oxide circuit. Gold
production from the oxide circuit for FY19 was 180,534oz at an AISC of A$1,180/oz (US$818/oz).
Syama Oxide Production and Cost Summary
Ore Mined
Ore Milled
Head Grade
Recovery
Production
Cash Cost
AISC
(t)
(t)
FY19
2,096,336
1,415,535
(g/t)
4.22
(%)
86.3
(oz Gold)
180,534
A$982/oz
(US$681/oz)
A$1,180/oz
(US$818/oz)
A zone of particularly high-grade ore in the centre of the deposit was mined at Stage 1 of the Namakan Pit at Tabakoroni.
The deeper extensions of this zone and other areas of high-grade were remodelled as part of the estimation of the new
Tabakoroni Underground Mineral Resource. The higher mined grades observed at Stage 1 of the Namakan Pit were also
accompanied by higher metallurgical recoveries which were in part driven by the commissioning of a gravity circuit at the
oxide plant in late 2018.
FY20 Outlook
Gold production from Syama is expected to be 260,000oz at an AISC of US$960/oz. Syama sulphide production is expected
to accelerate in the March 2020 Quarter and be a strong performer for Resolute in FY20. The Syama roaster is fully
operational and operating at nameplate capacity. Underground mining will supply 100% of sulphide mill feed. Oxide circuit
production will be supplied from stockpiles and ore mined from the Tabakoroni Open Pit Mine, located 32km south of the
Syama processing plant, and from the Cashew, Tellem and Paysans satellite deposits located 5-10km south of the Syama
processing plant. The Company continues to work towards the expansion of mining rates at the Syama Underground Mine
and the addition of a future high-grade underground mine at Tabakoroni. Non-sustaining capital for Syama in FY20 is
forecast to be US$15m which includes Resolute’s total contribution to the new Syama solar hybrid power plant funded by
Aggreko.
FY20 Production and Cost Summary
FY20
GUIDANCE
PRODUCTION
260,000oz
AISC
US$960/oz
33
Resolute Mining Limited | 2019 Annual Report Syama Underground Mine
The Syama Underground Mine is one of the world’s most technically advanced underground gold mines. At full capacity,
the Syama Underground Mine will produce approximately 46,000t of ore per week, or 2.4Mtpa, using integrated
automated mine fleet.
The Syama Underground Mine was commissioned over the course of FY19 with commercial production rates of greater
than 80% of nameplate capacity being achieved in June 2019.
All key aspects of the mine are now operational.
Electric Loader at the Syama Underground Mine
Automation System
A key focus of FY19 was the commissioning of the Syama automated mining system and the successful completion of site
acceptance testing. During FY19, numerous milestones were achieved in the journey to establish Syama as an automated
underground mine.
Operators in the surface control room now control underground production units over shift-change, blasting and re-entry
periods, when there are no personnel in the underground mine. This represents the delivery of one of the main benefits
of automation, the ability to maintain production over periods when operations would normally cease in a typical manual
mine.
The fibre optic backbone and mine-wide wireless network is now complete from the portal down to the haulage levels
and is connected to the surface control room. This network enables the operation of the automated haulage loop,
automated rehandle level, mine digitisation and production automation, all of which allow operators to monitor and
control mine production in real time.
Automated loaders now collect ore from the bottom of ore passes and load automated trucks via a split-level loading
facility. Finally, automated trucks travel up the underground decline under laser guidance before transitioning to satellite
GPS guidance upon exiting the portal and continuing to dump the ore on the ROM pad. A traffic management system
both on surface and in the Syama Underground Mine is now in operation, and work continues to refine the system. All
stope ore is now able to be hauled to the surface via the automated trucking loop.
Collectively, these achievements marked a major milestone for Resolute as the Company commissioned its automated
mining system.
Syama Automation Control Room Operator Workstation
34
Resolute Mining Limited | 2019 Annual Report Solar Hybrid Modular Power Plant
During FY19, Resolute signed a Power Supply Agreement (PSA) with globally leading power generation provider, Aggreko,
for the development of the new solar hybrid modular power station at Syama. The signing of the PSA confirms that a
new Syama solar hybrid modular power station will combine battery, thermal and solar generation technologies into one
integrated power dispatchable solution ensuring instant power, improved power quality, spinning reserve replacement
resulting in fuel savings, optimised plant operation, maintenance efficiencies and reduced emissions.
The new power station will deliver cost effective, environmentally friendly, capital efficient power and long-term electricity
cost savings of up to 40% while reducing carbon emissions by approximately 20%. The power costs provided within the
PSA are consistent with the cost assumption contained in the Syama Definitive Feasibility Study Update.
Work commenced in late FY19 on the detailed design of the new plant which will be delivered in two stages. Phase
1 is expected to be completed in FY20 and will comprise the installation of three new thermal energy Modular Block
generators and a battery storage system. The new Modular Block units will be fuelled using a refined heavy fuel oil
(IFO 180) and also has the capability to run on diesel as a backup fuel providing greater contingency to the operation.
The thermal generation is based on Wärtsilä 32 engines, which will be implemented in partnership with Aggreko and
Wärtsilä Corporation (Wärtsilä), using new Modular Block technology and design. The Wärtsilä modular units utilise ISO
containers to construct a modular powerhouse. The containers conveniently contain auxiliary systems pre-installed at the
factory, minimising site construction. Each modular unit contains a single Wärtsilä W20V32 HFO Generator and has an at-
generator-terminals output of approximately 10 megawatts (MW).
In Stage 1, new Modular Block technology will initially provide 30MW of power and will incorporate an additional 10MW
Y-cube battery storage system. The battery will provide spinning reserve displacement and is planned to be installed by
July 2020.
Stage 2 will include a 20MW solar array which will be constructed on the surface of the existing Syama Tailings Storage
Facility (TSF) thereby maximising positive environmental outcomes and augmenting Resolute’s rehabilitation program.
The solar array will enable the 10MW battery storage system to manage the solar power contribution to the overall Syama
power system and to smooth out fluctuations in solar power output to facilitate integration into the hybrid system. The
timeline on commencement of the solar component will depend on the decommissioning of the existing TSF and is
expected to be completed during FY23.
The site infrastructure layout of the new hybrid power plant will include space to accommodate an additional four 10MW
Modular Block units, enabling the mine to add additional power capacity if needed to support future growth.
Community Power Investment
Resolute and Aggreko have agreed to jointly fund community power investments in the Syama region as a joint
corporate social responsibility initiative. The aim of these investments will be to provide sustainable power to the
Syama regional communities. Syama is located in a remote region of southern Mali where there is no available
power grid and limited reliable electricity available in local villages. Aggreko and Resolute intend to work together
on providing access to electricity to these local villages. The provision of electrical power to remote communities
has a positive impact on a wide range of factors including improved health, better educational facilities, and an
improved standard of living.
35
Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
3636
Resolute Mining Limited | 2019 Annual Report New Mining Convention and Permit
In April 2019, Resolute announced that the Government of Mali had agreed to a new Mining Convention which establishes
improved fiscal and operating conditions for Syama and that the Syama Mining Permit had been extended by 10 years.
The Mining Convention defines the fiscal rights and legal obligations of Resolute’s Malian subsidiary, SOMISY, and the
Government of Mali with respect to the operation of Syama pursuant to the extended Mining Permit.
The Syama Mining Permit has now been renewed for the second time, for a further period of 10 years taking effect from 29
March 2019, extending its validity to March 2029. The renewed permit was registered in the Official Public Journal of Mali in
Bamako on 16 April 2019. Further renewals of the Syama Mining Permit, for additional 10-year periods, will be available until
exhaustion of the Ore Reserves.
The Mining Convention operates in parallel with the Mining Permit and – with the applicable Mining Code and other
relevant legislation – governs the conditions that apply to exploration and mining operations. These conditions cover
work obligations, reporting, taxes, duties, customs, local content, training obligations, and Government of Mali equity
participation. Resolute negotiated the terms of the Syama Mining Convention to support the significant investment in the
new Syama Underground Mine.
H.E. Madame Lelenta Hawa Baba Ba, Minister of Mines and Petroleum, Republic of Mali,
visits the Resolute booth at the Africa Downunder Conference, September 2019
37
Resolute Mining Limited | 2019 Annual Report Exploration
Overview
Resolute’s exploration activities at Syama in FY19 were focused on delineating an underground Mineral Resource at
Tabakoroni to support operations beyond the existing open pit as well as the discovery of satellite oxide Mineral Resources
within close proximity to the Syama processing plant to extend the life of oxide processing activities.
Tabakoroni: Maiden Underground Mineral Resource
In April 2019, Resolute announced an updated Mineral Resource for Tabakoroni including a maiden Underground Mineral
Resource of 5.2Mt at 5.1g/t for 850,000oz of gold.
Tabakoroni longitudinal section with Mineral Resource model and drillhole pierce points
The drilling results at the Tabakoroni Main Zone at modest depths continue to increase the dimensions of the high-grade
sulphide zones. Exploration drilling at Tabakoroni has been limited to a depth of 250m below surface and as such, there is
excellent potential for the deposit to grow.
A feasibility study was commenced in FY19 into the development of a new underground mine. The study is examining
options for selective mining of high-grade shoots within the Tabakoroni Mineral Resource. Tabakoroni is well suited to
mechanised underground mining methods, with sub vertical ore zones, and mineralised widths of 5-7m. Work in FY20 will
be focused on confirming the flow sheet and anticipated recoveries. Resolute is aiming to complete its studies in FY20. If
the studies confirm the feasibility of the project, development could be expected to commence in FY21 / FY22.
Syama Satellite Oxides: New Mineral Resources
With a view to extending the life of oxide processing activities at Syama, Resolute conducted regional exploration focused
on expansion of available satellite oxide deposits during FY19. Exploration activities focused on the Cashew NE and Paysans
prospects which are in close proximity to the Syama processing plant. Ore from these satellite deposits has the potential to
provide additional feed for the oxide circuit and extend oxide processing mine life at Syama.
Cashew NE
Cashew NE is located 5km south of the Syama processing plant and immediately adjacent to the Tabakoroni haul road.
Defined mineralisation to date is mostly oxide or transitional material, with relic quartz veining and some fine pyrite
observed in the less weathered units. The prospect was drilled out at 25m centres in FY19 to identify a mineable oxide
Mineral Resource. Following the completion of the infill drilling and the return of all analytical results a new Mineral
Resource of 1.6Mt at 2.0g/t Au for ~100,000oz of gold was delineated. The dimensions of the deposit are ideal for open pit
mining and the majority of the resource is expected to report to an optimised pit with a low strip ratio.
Paysans
Paysans is located only 4km south of the Syama processing plant and is superbly situated to provide future feed to the
Syama oxide processing plant. The Paysans deposit has been defined over a strike length of 1.7km, consisting of zones of
narrow shallow west dipping gold mineralisation.
Following the completion of recent drilling and the return of all analytical results, a Mineral Resource was estimated for
Paysans, comprising 5.1Mt at 1.7g/t Au for approximately 270,000oz of gold.
38
Resolute Mining Limited | 2019 Annual Report 3939
Resolute Mining Limited | 2019 Annual Report AT A GLANCE
LOCATION
Senegal, West Africa
FY19 MINING
1,062,611 tonnes
FY19 PROCESSING
811,831 tonnes at
2.86 g/t Au and
93.8% recovery
FY19 PRODUCTION (Resolute Ownership)
87,187oz
FY19 CASH COST
A$802/oz
(US$546/oz)
FY19 AISC
A$1,010/oz
(US$687/oz)
FY19 SALES (Resolute Ownership)
78,621oz
RESOURCES
1.1Moz (1.8 g/t Au)
RESERVES
740koz (2.1 g/t Au)
GROWTH POTENTIAL
Strong mine life
extension potential
through the
addition of open pit
Mineral Resources
and through the
discovery of new
satellite orebodies
Note: FY19 statistics are based on Resolute’s
period of ownership.
Resolute Mining Limited | 2019 Annual Report
Mako Gold Mine
40
40
Resolute Mining Limited | 2019 Annual Report Mako Gold Mine
The Mako Gold Mine, located in eastern Senegal, West Africa, is a high quality, low cost, open pit mine. Mako is a
conventional drill and blast, truck and shovel operation with mining services undertaken by an established contractor. The
carbon in leach processing plant has 2.3Mtpa of capacity and comprises a single stage crushing circuit, an 8.5MW SAG Mill
and pebble crusher, and a gold extraction circuit.
Mako is owned by Petowal Mining Company S.A. (Petowal). Resolute has a 90% interest in Petowal and the Government of
Senegal has a 10% interest in Petowal.
Mako was added to Resolute’s portfolio in August 2019, following the Company’s acquisition of Toro Gold for US$274
million.
Operations Overview
Mako delivered an excellent production result in the five months under Resolute ownership in FY19 with 87,187oz of gold
being poured at an AISC of A$1,010/oz (US$687/oz). Processed tonnages, grades and recoveries at Mako were all ahead of
budget and forecast. Plant throughput ran at an annualised rate of around 2.2Mtpa, from an original design capacity of
1.8Mtpa, while maintaining excellent recoveries of around 94%.
Mining has outstripped processing rates since the commencement of operations, allowing the accumulation of large
stockpiles of lower grade ore (approximately 1.7Mt grading 1.3g/t Au), and delivering higher grades to the processing plant.
Mako Production and Cost Summary (under Resolute ownership)
Ore Mined
Ore Milled
Head Grade
Recovery
Production
Cash Cost
AISC
(t)
(t)
FY19
1,062,611
811,831
(g/t)
2.86
(%)
93.8
(oz Gold)
87,187
A$802/oz
(US$546/oz)
A$1,010/oz
(US$687/oz)
Processing Plant - Mako Gold Mine, Senegal
FY20 Outlook
At Mako, mining and processing will continue at similar rates to FY19, although ore grades will be lower due to depletion of
high-grade stockpiles. Gold production from Mako for FY20 is expected to be 160,000oz at an AISC of US$800/oz. No non-
sustaining capital expenditure is forecast for Mako for FY20.
FY20 Production and Cost Summary
FY20
GUIDANCE
PRODUCTION
160,000oz
AISC
US$800/oz
41
Resolute Mining Limited | 2019 Annual Report
Exploration:
Excellent Drilling Results Support Mine Life Extension Potential
Resolute was pleased to report positive exploration results which demonstrate the potential for mine life extension at Mako
during FY19. Exploration activities were focused on the existing Mako open pit with a view to expanding Mineral Resources
and thereby extending mine life as well as at nearby satellite prospects. 7,000 metres of diamond drilling was completed
during FY19. This program comprised follow-up drilling of previously identified high grade gold mineralisation in the
north-east corner of the Mako open pit and targeting down dip extensions of the mineralisation.
The follow-up drilling concentrated on previous high grade results to better define ore shoots for future resource
modelling and estimation. The high-grade shoots are located below the base on the 2019 Ore Reserve pit shell and have
the potential to expand the open pit Ore Reserves and extend mine life.
The positive results of the FY19 drilling campaign confirm the potential of a coherent high-grade lode at the north-eastern
end of the Mako open pit. In FY20, exploration activities will follow-up on the high-grade intersections returned during
FY19 from underneath the Mako open pit and test shallow oxide mineralisation identified on adjacent permits. Deep
diamond drilling is planned to commence in the first quarter of 2020 to define the high-grade shoot underneath the
north-eastern end of the Mako open pit.
Mako Long Section with resource block model and FY19 drill results
Resolute’s exploration efforts in Senegal also included the pursuit of satellite resources within trucking distance of Mako
which will provide mill feed for Mako beyond the existing mine life. In FY19, various 100%-owned Research Permits were
granted and two joint ventures adjacent to the Mako permit were formed. A program of RC drilling is also planned on joint
venture properties in FY20.
Exploration activities in Senegal
42
Resolute Mining Limited | 2019 Annual Report
Acquisition of Toro Gold
On 31 July 2019, Resolute announced that it had signed a binding agreement (Implementation Agreement) with Toro
Gold pursuant to which Resolute would acquire all of the shares of Toro Gold. Under the terms of the Implementation
Agreement, Resolute acquired all of the shares of Toro Gold by way of a takeover under the Companies (Guernsey)
Law 2008 for US$274 million comprising US$130 million of cash and 142.5 million freely tradeable Resolute shares
valued at Resolute’s 30-day volume weighted average price (VWAP) of A$1.45 per share equating to US$144 million. The
cash component was funded through a finance facility provided by Taurus Funds Management Pty Limited (Taurus).
Resolute had received all required regulatory approvals and representatives of both Toro Gold and Resolute met with the
Government of Senegal in Dakar prior to announcing the acquisition.
Toro Gold shareholders representing 94% of Toro Gold’s outstanding shares committed to accepting the offer prior to
announcement which resulted in Resolute taking immediate control of Toro Gold effective from 2 August 2019. The
remaining shares were acquired by Resolute by mid-September 2019 which resulted in Toro Gold shareholders owning
15.8% of Resolute.
Transaction Highlights
Value Accretive High Quality, Low Cost Gold Production
Strategic Acquisition: the acquisition of Toro Gold enhances Resolute’s portfolio and delivers on Resolute’s ambition to
be a multi-mine, low cost, African-focused gold producer.
Cash Flow and Value Accretive: Mako is a high quality asset and the acquisition of Toro Gold is cashflow and net asset
value accretive for Resolute shareholders.
Production and Margin Growth: Mako contributes immediate production of 160koz per annum and at an AISC of
US$800/oz (FY19 annualised forecast at time of acquisition) and strengthens Resolute’s operating margins, with
limited future capital expenditure requirements.
Revenue and Dividend Growth: the addition of high-margin ounces from Mako increases Resolute’s revenue base to
which future shareholder dividends are linked.
Diversification of African Production Base: high-margin production at Mako, complements long-life, large-scale
production at Syama and expands Resolute’s African footprint into Senegal, a stable, mining friendly jurisdiction.
Expansive Growth Platform: the acquisition strengthens Resolute’s organic growth profile; three producing assets
(Syama, Mako, and Ravenswood), near term development opportunities, and a highly prospective and expansive
exploration portfolio including Toro Gold’s substantial African exploration tenement package covering over 2,800km2
across Senegal, Côte d’Ivoire and Guinea.
Value Additive Integration Opportunities: the combination of Resolute’s operations with Toro Gold’s production and
exploration assets provides the potential for synergies and cost savings in Africa.
Enhances Resolute’s Investment Case: Resolute is a unique and highly attractive investment proposition for investors
seeking exposure to a gold producer with multiple long-life, high-margin assets, and a strong platform for growth.
43
Resolute Mining Limited | 2019 Annual Report AT A GLANCE
LOCATION
Queensland,
Australia
FY19 MINING
290,437 tonnes
FY19 PROCESSING
2,699,285 tonnes
at 0.69 g/t Au and
90.6% recovery
FY19 PRODUCTION
54,486oz
FY19 CASH COST
A$1,737/oz
(US1,209/oz)
FY19 AISC
A$1,949/oz
(US$1,356/oz)
FY19 SALES
58,158oz
RESOURCES
5.9Moz (0.7 g/t Au)
RESERVES
2.7Moz (0.7 g/t Au)
Resolute Mining Limited | 2019 Annual Report
Ravenswood Gold Mine
The Ravenswood Gold Mine is a proven producing asset with multiple
open pits to support large scale, low cost, long term production.
Ravenswood is located approximately 95km south-west of Townsville
and 65km east of Charters Towers in north-east Queensland, Australia.
Resolute owns 100% of Ravenswood through its wholly owned subsidiary,
Carpentaria Gold Pty Ltd.
In January 2020, Resolute announced that the strategic review of the
Ravenswood Expansion Project (REP) which had been conducted over
FY19 culminated in an agreement to sell Ravenswood for up to A$300
million in proceeds.
Operations Overview
Ravenswood produced 54,486oz in FY19 at an AISC of A$1,949 /oz
(US$1,356/oz). Production was hampered by lower grades and reduced
overdraw from the Mt Wright Underground Mine (Mt Wright). This
trend cemented the decision to suspend underground operations on 31
October 2019 and place Mt Wright on care and maintenance. Since the
commencement of operations in July 2006, 42km of declines and ore
drives were excavated, 12Mt of ore were extracted, and more than one
million ounces of gold were mined.
Successful operation of Mt Wright required the adoption of innovative
mining practices. The particular mining method employed to extract the
orebody at Mt Wright, a modified form of sublevel caving, was unique
and many of the techniques developed have been applied at Syama.
During FY19, Resolute commenced the first stage of the REP. Stage 1 of
the REP comprised the recommissioning of the third grinding mill at the
Nolans Processing Plant which has enabled a return to a processing rate
of 5Mtpa. The three existing mills at Ravenswood were operational prior
to 2011 at throughput rates of approximately 5Mtpa and predominantly
processed material from the Sarsfield open pit. Following the suspension
of open pit mining at Sarsfield, the Nolans Processing Plant was de-rated
to 1.5Mtpa to exclusively process the higher-grade ore mined from the Mt
Wright.
Recommissioning of the third mill was completed in December 2019.
The increased processing capacity will allow Resolute to process greater
volumes of the low-grade material stockpiled during previous open pit
operations at Sarsfield.
In addition, to the commencement of the first stage of the REP, the
Company also received additional mining leases from the Queensland
Government to extend the surface area of tenure to include areas
within the operational footprint of the proposed Buck Reef West open
pit, noise bunding zone and nearby land required for infrastructure. A
new environmental authority permit for in-pit tailings storage was also
granted.
FY20 Outlook
The completion of Stage 1 of the REP has increased processing capacity at
Ravenswood to 5Mtpa enabling a production target for FY20 of 80,000oz
of gold at an AISC of US$1,200/oz. Ravenswood guidance will be removed
from company-wide production and cost guidance on sale completion.
FY20 Production and Cost Summary
FY20
GUIDANCE
PRODUCTION
80,000oz
AISC
US$1,200/oz
44
44
Resolute Mining Limited | 2019 Annual Report Exploration: Major Gold Inventory Upgrade
Drilling and resource estimation work undertaken in the first half of FY19 culminated in a major gold Mineral Resource and
Ore Reserve upgrade for Ravenswood being announced in July 2019. Ravenswood Ore Reserves increased by 1Moz, or 58%,
from 1.7Moz to 2.7Moz while Mineral Resources increased by 24% from 4.8Moz to 5.9Moz.
This updated Mineral Resource estimate was prepared for Resolute’s combined Ravenswood deposits consisting of Buck
Reef West, Nolans and Sarsfield. These deposits are all immediately adjacent to the Nolans Processing Plant within a radius
of 1.5km2. Mining, metallurgical and engineering studies performed during FY19 supported the updated Ore Reserve.
Strategic Review results in sale of Ravenswood
In early 2019, Resolute announced that it had initiated a comprehensive strategic review with respect to Ravenswood
which was focused on maximising returns from the Ravenswood Expansion Project and evaluating development
scenarios and funding requirements.
This strategic review culminated in Resolute announcing shortly following the end of the December 2019 Quarter that it
had entered into definitive transaction documentation to sell Ravenswood to a consortium comprising a fund (EMR Fund)
managed by EMR Capital Management Limited (EMR Capital), and Golden Energy and Resources Limited (SGX:AUE)
(GEAR). EMR Capital and GEAR are committed to progressing the REP.
EMR Capital, led by Executive Chairman Owen Hegarty and Chief Executive Officer Jason Chang, is a globally leading
specialist resources focused private equity group with outstanding credentials and a track record of achievement as
a developer and operator of Australian-based mining assets. EMR Capital currently owns and operates eight mining
operations and projects in six countries globally with an enterprise value in excess of US$5 billion and revenues in excess of
US$1.5 billion.
GEAR is a leading energy and resources company in Asia Pacific that is listed on the Singapore Stock Exchange with
producing coal assets in Indonesia and strategic stake investments in two ASX-listed mining companies, Stanmore Coal
Limited and Westgold Resources Limited.
Resolute will receive cash proceeds of up to A$300 million comprising:
•
•
•
A$100 million of upfront proceeds consisting of A$50 million of cash and A$50 million in promissory notes;
up to A$50 million linked to the average gold price over a four-year period (gold price contingent payment); and
up to A$150 million linked to the investment outcomes of Ravenswood for the EMR Fund (upside sharing payment).
The transaction has been structured to maximise Resolute’s exposure to the future success of the REP while transferring
the capital expenditure funding requirements and development obligation to a highly credentialed and experienced
consortium with a strong relevant track record in successful project development.
Completion of the transaction was subject to standard conditions precedent for a transaction of this nature including
approvals from Australia’s Foreign Investment Review Board, indicative Ministerial approval for the transfer of mining
tenements, Ministerial consent for the transfer of a project specific environmental approval, approval from Resolute’s
existing lending bank syndicate and execution of deeds of assumption in relation to third party contracts.
Completion of the transaction is targeted to occur by 31 March 2020 subject to the satisfaction of conditions precedent.
Cash received will be used to reduce debt and strengthen the Company’s balance sheet.
Based on the current carrying value of the Ravenswood assets, Resolute will record a gain on the sale of Ravenswood in
the Company’s accounts for FY20. Resolute does not expect the transaction will create a tax liability in the current tax
accounting year.
Nolans Processing Plant - Ravenswood Gold Mine, Queensland
45
Resolute Mining Limited | 2019 Annual Report AT A GLANCE
LOCATION
Ghana, West Africa
PRODUCTION TARGET
100kozpa
AISC TARGET
US$764/oz
RESOURCES
2.5Moz (3.6 g/t Au)
RESERVES
0.7Moz (3.3 g/t Au)
Bibiani
Bibiani is situated in the western region of Ghana in West Africa. It is
bordered by Burkina Faso to the north, Côte d’Ivoire to the west and Togo
to the east. The Bibiani mineral concessions lie approximately 80km
south west of the Ashanti capital, Kumasi.
Bibiani is owned by Mensin Gold Bibiani Limited, a wholly owned
subsidiary of Resolute. Resolute currently owns 100% of Mensin Gold
Bibiani Limited through its wholly-owned subsidiary, Resolute (Bibiani)
Pty Ltd. The Government of Ghana is entitled to a 10% dividend following
the commencement of production.
Since assuming ownership in 2014, Resolute has embarked on two
surface and underground resource drilling programs to re-assess the
underground mine potential and in June 2018 released an update to its
June 2016 feasibility study. This update demonstrated the potential for
Bibiani to produce ~100,000oz per annum at a LOM AISC of US$764/oz
over a 10-year mine life. During FY19, the Government of Ghana approved
and issued a new Environment Authority Permit for the redevelopment
and recommissioning of Bibiani. The new permit is valid for the 18
months to June 2021. Resolute has now secured the regulatory permits
and authorities required to commence development and recommission
Bibiani as an operating gold mine.
Strategic Review
In late FY19, Resolute initiated a strategic review process to evaluate
options for Bibiani. The strategic review of Bibiani is designed to review
Resolute’s plans to recommission the mine, assess capital requirements,
evaluate funding alternatives, and investigate expressions of interest
received from third parties seeking to acquire the asset.
The strategic review which is currently ongoing will seek to maximise
value for Resolute shareholders while ensuring that all local stakeholders
in Ghana continue to benefit from the essential economic and social
advantages that re-establishing successful and sustainable operations at
Bibiani will provide.
46
Resolute Mining Limited | 2019 Annual Report Ore Reserves and Mineral Resources
Resolute’s class-leading 19.1Moz gold inventory underpins the
Company’s focus on large scale, long-life mines.
Governance and Controls
Resolute reports its Mineral Resources and Ore Reserves on an annual basis, with Mineral Resources inclusive of Ore
Reserves. Reporting is in accordance with the 2012 Edition of the Australasian Code for Report of Exploration Results,
Mineral Resources and Ore Reserves and the ASX Listing Rules. All Competent Persons named by Resolute are suitably
qualified and experienced as defined in the JORC Code 2012 Edition.
Competent Persons Statement
The information in this report that relates to the Mineral Resources and Ore Reserves listed in the table below is based
on, and fairly represents, information and supporting documentation prepared by the Competent Person whose name
appears in the same row. Each person named in the table below has sufficient experience which is relevant to the style of
mineralisation and types of deposits under consideration and to the activity which he/she has undertaken to qualify as a
Competent Person as defined in the JORC Code 2012. Each person identified in the list below consents to the inclusion in
this announcement of the material compiled by them in the form and context in which it appears.
Activity
Competent Person
Membership Institution
Syama Resource
Syama Reserve
Susan Havlin
Brett Ascott
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Northern Pits Resource
Nic Johnson
Australian Institute of Geoscientists
Syama Tailings Facility
Susan Havlin
Australasian Institute of Mining and Metallurgy
Mt Wright Resource
Welcome Resource
Nic Johnson
Nic Johnson
Australian Institute of Geoscientists
Australian Institute of Geoscientists
Buck Reef West Resource
Nic Johnson
Australian Institute of Geoscientists
Buck Reef West Reserve
David Mackay
Australasian Institute of Mining and Metallurgy
Sarsfield/Nolans Reserve
David Mackay
Australasian Institute of Mining and Metallurgy
Sarsfield/Nolans Resource
Nic Johnson
Australian Institute of Geoscientists
Sarsfield Mineralised Waste
Susan Havlin
Australasian Institute of Mining and Metallurgy
Bibiani Resource
Bibiani Reserve
Kahan Cervoj
Brett Ascott
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Tabakoroni Resource
Susan Havlin
Australasian Institute of Mining and Metallurgy
Tabakoroni Reserves
Brett Ascott
Australasian Institute of Mining and Metallurgy
Tellem Resource
Tellem Reserves
Nic Johnson
Brett Ascott
Australian Institute of Geoscientists
Australasian Institute of Mining and Metallurgy
Cashew NE Resource
Susan Havlin
Australasian Institute of Mining and Metallurgy
Cashew NE Reserves
Brett Ascott
Australasian Institute of Mining and Metallurgy
Paysans Resource
Paysans Reserves
Susan Havlin
Brett Ascott
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Porphyry Zone Resource
Nic Johnson
Australian Institute of Geoscientists
Porphyry Zone Reserves
Brett Ascott
Australasian Institute of Mining and Metallurgy
Mako Resources
Patrick Adams
Australasian Institute of Mining and Metallurgy
Mako Reserves
Harry Warries
Australasian Institute of Mining and Metallurgy
47
Resolute Mining Limited | 2019 Annual Report Ore Reserves Statement
As at 31 December 2019
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces Ounces
PROVED
PROBABLE
TOTAL RESERVES
Group
Share
(000s)
(g/t Au)
(000s)
(000s)
(g/t Au)
(000s)
(000s)
(g/t Au)
(000s)
(000s)
Australia
Sarsfield/Nolans
Buck Reef West
Stockpiles (OC)
Australia Total
Mali
Syama Underground
Syama Stockpiles
Sub Total (Sulphides)
Satellite Deposits
Stockpiles (Satellite
Deposits)
Sub Total Satellite Deposits
Tabakoroni
Tabakoroni Satellite Deposits
Tabakoroni Stockpiles
Sub Total Tabakoroni
Mali Total
Senegal
Mako
Mako Stockpiles
Senegal Total
Ghana
Bibiani
Ghana Total
47,450
19,670
230
67,350
0
550
550
0
840
840
250
0
1,120
1,370
2,760
5,320
1,910
7,230
0
0
Total Ore Reserves
77,340
0.8
0.9
0.5
0.8
0.0
2.2
2.2
0.0
1.3
1.3
3.9
0.0
1.6
2.1
1.9
2.3
1.3
2.0
0.0
0.0
0.9
1,170
42,640
540
5,520
0
10
1,710
48,170
0
40
40
0
40
40
30
0
60
90
32,110
1,850
33,950
1,570
1,400
2,980
70
440
0
420
170
37,440
390
80
470
3,860
0
3,860
0
0
6,400
6,400
2,350
95,870
890
90,090
130
25,190
0
240
1,020
115,520
2,840
32,110
80
2,390
2,920
34,500
110
40
1,570
2,240
160
3,820
10
20
0
30
320
440
1,120
1,880
100%
2,060
2,060
670
0
670
0
2,730
2,730
80%
2,840
2,280
120
90
2,960
2,370
110
80
190
40
20
60
120
90
60
160
90%
40
20
50
110
0.7
0.8
0.5
0.7
2.8
1.5
2.7
2.3
1.1
1.6
4.0
1.7
1.6
2.1
3,120
40,200
2.5
3,280
2,640
270
0
9,180
1,910
270
11,090
660
660
6,400
6,400
5,070
173,210
90%
600
70
670
90%
590
590
660
80
740
660
660
7,420
6,630
2.2
1.3
2.1
3.3
3.3
1.3
0.7
0.7
1.6
0.7
2.8
1.4
2.7
2.3
1.0
1.6
4.4
1.7
0.0
2.1
2.6
2.2
0.0
2.2
3.3
3.3
1.6
Notes:
1. Mineral Resources include Ore Reserves. Differences may occur due to rounding.
2. Ounces under 5,000 are rounded to 0.
3. Reserves at Buck Reef West and Sarsfield/Nolans are reported above 0.3 g/t cut off.
4. Bibiani Reserves are reported above 2.2 g/t cut off.
5. Syama Underground Reserves are reported above 1.65 g/t cut off.
6. Syama Satellite Reserves are reported above 1.0 g/t cut off.
7. Tabakoroni and Tabakoroni Satellite Reserves are reported above 1.1g/t.
8. Tabakoroni Reserves are based on June 2017 Resource model.
9. Mako Reserves are reported above 0.77 g/t cut off for weathered and felsic material and 0.83 g/t for basalt material.
48
Resolute Mining Limited | 2019 Annual Report
Mineral Resources Statement
As at 31 December 2019
MEASURED
INDICATED
INFERRED
TOTAL RESOURCES
Group
Share
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Ounces
(000s)
(g/t Au)
(000s)
(000s)
(g/t Au)
(000s)
(000s)
(g/t Au)
(000s)
(000s)
(g/t Au)
(000s)
(000s)
Projects where Resolute has a controlling interest
Australia
Sarsfield/Nolans
Buck Reef West
50,960
25,480
Sarsfield Mineralised Waste
0
Sub Total OC
Mt Wright
Welcome Breccia
Stockpiles (UG)
Sub Total UG
Australia Total
Mali
Syama Underground
Stockpiles (Sulphide)
Sub Total (Sulphides)
Satellite Deposits
Stockpiles (Satellite Deposits)
Sub Total Satellite Deposits
Old Tailings
Tabakoroni Open Pit
Tabakoroni Underground
Tabakoroni Satellite Deposits
Tabakoroni Stockpiles
Sub Total Tabakoroni
Mali Total
Senegal
Mako
Mako Stockpiles
Mako Total
Ghana
Bibiani
Ghana Total
76,440
130
0
0
130
76,570
17,100
550
17,650
0
840
840
0
190
120
0
1,120
1,440
19,930
7,030
1,910
8,940
0
0
Controlling Interest Total
105,430
0.8
0.9
0.0
0.8
4.8
0.0
0.0
4.8
0.8
3.6
2.2
3.5
0.0
1.3
1.3
0.0
4.3
3.2
0.0
1.6
2.1
3.3
2.0
1.3
1.8
0.0
0.0
1.4
1,230
52,520
710
29,630
0
0
1,940
82,150
20
0
0
20
0
0
10
10
1,960
82,160
1,960
31,590
40
1,850
2,000
33,430
0
40
40
0
30
10
0
60
11,420
1,400
12,820
0
110
1,650
1,520
0
100
3,280
2,140
49,530
440
80
520
9,140
0
9,140
0
0
13,260
13,260
4,620 154,080
Projects where Resolute has a corporate-level equity interest
Sudan (Orca)
Galat Sufar South
Wadi Doum
Sudan Total
DRC (Loncor)
Makapela
Adumbi
DRC Total
Equity Interest Total
0
0
0
0
0
0
0
Total Mineral Resources
105,430
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.4
0
0
0
0
0
0
0
11,600
660
12,260
600
0
600
12,860
4,620 166,940
0.6
0.8
0.0
0.7
0.0
0.0
2.8
2.8
0.7
3.2
1.4
3.1
2.0
1.0
1.9
0.0
4.7
5.2
1.6
0.0
3.5
2.8
1.8
0.0
1.8
3.5
3.5
1.7
1.3
2.1
1.3
8.7
0.0
8.7
1.6
1.7
1,060
39,400
720
36,950
0
23,670
1,780 100,020
0
0
0
0
470
2,040
0
2,510
1,780 102,530
3,280
6,260
80
0
3,360
6,260
740
40
780
1,880
40
1,920
0
17,000
20
270
80
0
0
2,970
640
0
370
3,610
4,510 28,800
540
1,250
0
0
540
1,250
1,490
8,440
1,490
8,440
8,320 141,020
470
40
510
170
0
170
680
2,590
250
2,840
870
5,710
6,580
9,420
9,000 150,430
0.6
0.6
0.4
0.6
3.6
3.2
0.0
3.3
0.6
3.0
0.0
3.0
2.0
1.1
1.9
0.7
1.4
5.2
1.6
0.0
4.6
1.7
1.0
0.0
1.0
3.7
3.7
1.1
1.2
1.3
1.2
5.3
2.5
2.9
2.4
1.1
810 142,880
730
330
92,060
23,670
1,870 258,610
60
210
0
600
2,040
10
260
2,650
2,130 261,260
600
54,950
0
2,390
600
57,340
120
13,290
0
2,290
120
370
15,580
17,000
0
300
500
4,740
30
0
2,160
1,120
530
8,330
1,620
98,260
40
0
40
17,410
1,910
19,320
1,010
21,690
1,010
21,690
4,800 400,530
100
14,190
10
110
910
15,090
150
460
610
1,470
5,710
7,180
720
22,270
5,520 422,800
100%
3,100
2,160
330
3,100
2,160
330
5,590
5,590
80
210
0
290
80
210
0
290
5,870
5,870
80%
5,850
4,680
120
90
5,970
4,770
850
80
930
370
40
780
110
60
990
680
70
750
290
90%
40
700
100
50
890
8,260
6,710
1,020
80
1,100
90%
920
70
990
90%
2,500
2,500
2,250
2,250
17,740
15,830
15%
570
50
620
27%
320
460
780
570
50
620
320
460
780
1,400
1,400
19,140
17,220
0.7
0.7
0.4
0.7
3.9
3.2
2.8
3.3
0.7
3.3
1.5
3.2
2.0
1.1
1.9
0.7
4.4
5.1
1.6
1.6
3.7
2.6
1.8
1.3
1.8
3.6
3.6
1.4
1.3
1.7
1.3
6.7
2.5
3.4
2.0
1.4
Notes:
1. Mineral Resources include Ore Reserves. Differences may occur
7. Mako Resources are reported above 0.5 g/t cut off and within a
due to rounding.
US$1,500 optimised shell
2. Ounces under 5,000 are rounded to 0.
3. Resources are reported above 0.3 g/t cut-off for Sarsfield/Nolans
and Buck Reef West.
4. Mt Wright Resources are reported above 1.8 g/t cut off.
5. Syama Underground, Tabakoroni Underground and Northern
Pits Resources quoted above 1.5g/t cut off.
8. Bibiani Resources are reported above 2.0 g/t cut off.
9. Galat Sufar South resources reported above a 0.6g/t cut-off.
10. Wadi Doum resources reported above a 0.6g/t cut-off.
11. Makapela resources reported above a 2.75g/t cut-off.
12. Adumbi resources reported above a 0.9g/t cut-off.
13. Mineral Resources held by Orca Gold, Loncor and Kilo Gold are
6. Resources for Paysans, Cashew NE, Tellem, Porphyry Zone and
reported as NI43-101 compliant estimates.
Tabakoroni Open Pit are reported above a cut off of 1.0g/t.
49
Resolute Mining Limited | 2019 Annual Report 50
Resolute Mining Limited | 2019 Annual Report Financial Review
Resolute’s financial performance was negatively impacted in FY19 by the ramp up of the Syama Underground Mine and
the structural repairs required to the Syama roaster. These operational issues, combined with various accounting treatment
adjustment relating to inventory valuations, the acquisition of Toro Gold as well as a disputed tax expense, resulted in
the Company recording a net loss for the period. This is balanced by the optimism within our team for a much stronger
performance in 2020, our commitment to meet current guidance, and Syama and Mako’s ability to generate strong ongoing
free cash flow based on the investments we have made in both assets in FY19.
Financial Performance
During FY19, Resolute generated $770 million revenue from the sale of 394,920oz of gold and silver from Syama,
Ravenswood and Mako at an average realised gold price of US$1,344/oz (A$1,933/oz).
Underlying EBITDA from continuing operations in FY19 was $208 million after inventory valuation adjustments associated
with roaster downtime during the December 2019 Quarter, the uplift in inventory valuation as well as transaction costs
associated with the acquisition of Toro Gold and other non-recurring items.
An underlying net profit after tax from continuing operations was reported at $25 million. Once the net loss associated
with discontinuing operations (Ravenswood) and other non-recurring items were taken into account, the Company
reported a net loss after tax of $113 million.
At 31 December 2019, Ravenswood was a held for sale asset and as a result has been classified as a discontinuing operation
and reported separately in the Company’s FY19 financial statements.
Profit and Loss Analysis
(A$'000s)
Revenue
Cost of sales excluding depreciation and
amortisation
Other operating costs relating to gold sales
Administration and other corporate expenses
Exploration and business development expenditure
EBITDA
Non-recurring items
+ Inventory adjustments for Q4 roaster shutdown
+ Mako acquisition inventory adjustments and
transaction costs
+ Business development costs and other
Underlying EBITDA
Depreciation and amortisation relating to gold sales
Net finance costs
Other
Underlying net profit/(loss) before tax
Income tax (expense)/benefit
Underlying net profit/(loss) after tax
Disputed tax expense
- Adjustments made to EBITDA
Continuing
Operations
(Syama / Mako)
Discontinuing
Operations
(Ravenswood)
FY18 (H1
+ H2) for
Comparative
Purposes
FY19
Group
656,392
113,922
770,314
465,692
(423,149)
(103,315)
(526,464)
(347,849)
(60,703)
(19,991)
(20,566)
131,983
45,188
20,004
10,382
207,557
(108,981)
(44,863)
(4,145)
49,568
(24,947)
24,621
(57,937)
(75,574)
(7,799)
(1,248)
(1,529)
31
0
0
0
31
(5,152)
(453)
1,598
(3,976)
0
(3,976)
0
0
(68,502)
(21,239)
(22,095)
132,014
45,188
20,004
10,382
207,588
(114,133)
(45,316)
(2,547)
45,592
(24,947)
20,645
(57,937)
(75,574)
(37,078)
(17,823)
(11,514)
51,428
0
0
0
51,428
(17,368)
(6,936)
5,140
32,264
1,835
34,099
0
0
Net (loss)/profit after tax
(108,890)
(3,976)
(112,866)
34,099
Note: Given the Company’s change in financial year end from June to December, the previously reported FY18 financials were for the six
months to 31 December 2018. For comparative purposes, the Company has prepared the FY18 summary above which is for a previously
unreported 12-month period to 31 December 2018, is not audited and is being provided for comparative purposes only.
51
Resolute Mining Limited | 2019 Annual Report Cash Flow
Resolute generated strong operating cash flow from continuing and discounting operations in FY19 of $142 million. Total
investments in development, property, plant and equipment was $191 million for FY19. A total investment of $14 million
in exploration and evaluation delivered excellent results with a maiden high grade underground Mineral Resource being
reported at Tabakoroni of 850,000oz grading 5.1 g/t Au. Drilling activities undertaken at Ravenswood resulted in an increase
in the Company’s inventory base. At year end, the Company held $151 million in cash and bullion comprising $125 million of
cash and bullion valued at $26 million.
Cash Flow Reconciliation
(A$ million)
229
(205)
158
(191)
97
(2)
125
26
151
39
Cash
31 Dec 2018
Operating
Cash Flow
Net
Borrowings
Capital
Expenditure
Toro Cash
Consideration
Toro Acquired
Cash
Other
Cash
31 Dec 2019
Bullion
31 Dec 2019
Cash and Bullion
31 Dec 2019
Financial Position
At 31 December 2019, the Company’s cash and bullion totalled $151 million and listed investments were valued at $30
million while gross borrowings were $607 million. The Company’s borrowing facilities at year-end comprised of Resolute’s
existing senior revolving syndicated loan facility , an acquisition bridge facility and project loan provided by Taurus
associated with Toro Gold, an unsecured bank overdraft held by Resolute’s Malian subsidiary, SOMISY, with the Banque de
Développement du Mali (BDM) and asset financing.
Following year-end, the Company undertook an equity raising comprising a two-tranche placement and share purchase
plan under which it raised approximately $195 million. The proceeds of the equity raising were used to repay the bridge
financing facility associated with its acquisition of Toro Gold. The Company also refinanced its existing US$195 million
syndicated loan facility. A new US$300 million Facility which comprises a three-year US$150 million revolving credit facility
and a four-year US$150 million term loan facility is now in place. This new facility simplifies Resolute’s capital structure,
removes restrictive conditions associated with the Mako project loan facility and will reduce annual borrowing costs. The
Company is pleased to have retained the support of its existing senior bank financiers, BNP Paribas, Citibank, Investec and
Nedbank, and to have secured support from new syndicate participants, ING Group and Société Générale. As part of this
refinancing, the Company repaid the project loan associated with Mako that was assumed as part of its acquisition of Toro
Gold and will also be buying out the existing project royalty that was associated with this loan for US$12 million (in cash or
Resolute shares at the election of project financier, Taurus).
52
Resolute Mining Limited | 2019 Annual Report Listing on the London Stock Exchange
In late 2018, Resolute announced its intention to list on the London Stock Exchange (LSE). In June 2019, the Company
satisfied its long-held LSE-listing ambition and was admitted to trading on the London Stock Exchange’s Main Market.
The Company’s dual-listing was undertaken with a view to raising Resolute’s profile in global capital markets and
facilitating improved access to gold and African-focused institutional investors. Over the second half of FY19, Resolute saw
the direct benefits of listing in London through greater European investor engagement and buying activity.
53
Resolute Mining Limited | 2019 Annual Report
Resolute Mining Limited | 2019 Annual Report
5454
Resolute Mining Limited | 2019 Annual Report Risk Management
Resolute has a consistent, proactive approach to risk management across operations and projects globally based on
the Group’s articulated risk appetite and aligned with ISO 31000:2009 as well as the ASX Corporate Governance Council
Principles and Recommendations. The Board has ultimate responsibility for ensuring material risks faced by the Company
are identified and ensuring appropriate control and monitoring systems are in place to manage the impact of these risks
in accordance with the articulated risk appetite.
The Audit and Risk Committee has the mandate from the Board to provide risk management oversight across material
risks in accordance with the Risk Management Policy and Standard underpinned by the endorsed risk appetite. The Audit
and Risk Committee continues to work closely with management in relation to the assessment, monitoring and ongoing
management of business risk with short, medium and longer-term horizons and to carry out assessments of internal
controls and processes for improvement opportunities supported by assurance gained through, for example, the risk
based Internal Audit Plan. In support of this, the Committee receives reports from management on new and emerging
sources of risk and related controls and mitigation measures that management have implemented.
Resolute’s commitment to continuous improvement and innovation extends through to the approach taken to risk
management systems and controls. KPMG is engaged to support the ongoing optimisation of the Company’s risk
management and assurance framework which includes regular identification and assessment of key risks and controls
(financial and non-financial) as well as strategies to appropriately manage risk across corporate activities, operations and
projects. In addition, the Risk Management Standard is reviewed on an annual basis.
The following table is a summary of the environmental risks1 and social risks2 to which Resolute has a material exposure3
as well as Resolute’s material business, safety and security risks. Resolute acknowledges that mining is an industry with
a higher risk profile. The geographical locations in which the majority of Resolute’s activities occur are also higher risk.
Accordingly, Resolute is committed to ensuring the highest health and safety standards are upheld across the business
and to this end have included how safety and security is embedded into the business in the table that follows.
Processing Plant - Mako Gold Mine, Senegal
Notes:
1 “Environmental Risks” is defined in the ASX Corporate Governance Council Principles & Recommendations (4th edition) (“ASX
Recommendations”) as “the potential negative consequences (including systemic risks and the risk of consequential regulatory responses)
to a listed entity if its activities adversely affect the natural environment or if its activities are adversely affected by changes in the natural
environment. This includes the risks associated with the entity polluting or degrading the environment, adding to the carbon levels in the
atmosphere, or threatening a region’s biodiversity or cultural heritage. It also includes the risks for the entity associated with climate change,
reduced air quality and water scarcity.”
2 “Social Risks” is defined in the ASX Recommendations as “the potential negative consequences (including systemic risks and the risk of
consequential regulatory responses) to a listed entity if its activities adversely affect human society or if its activities are adversely affected
by changes in human society. This includes the risks associated with the entity or its suppliers engaging in modern slavery, aiding human
conflict, facilitating crime or corruption, mistreating employees, customers or suppliers, or harming the local community. It also includes the
risks for the entity associated with large scale mass migration, pandemics or shortages of food, water or shelter.”
3 “Material Exposure” is defined in the ASX Recommendations as “a real possibility that the risk in question could materially impact the
Company’s ability to create or preserve value for Shareholders over the short, medium or longer term.”
55
Resolute Mining Limited | 2019 Annual Report Risk and Mitigation Summary
RISK
CONTRIBUTING FACTORS
IMPACT
MITIGATING PRACTICES
Serious injury or
fatality sustained by
Resolute personnel
or contractors at
work or whilst
commuting to/from
work
Security instability
and conflict
Negative
environmental
incident and/or
impact
Deterioration of
political environment
and/or loss of licence
to operate
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Travel within remote
locations by car and by air
Travel on public access
roads
Geotechnical stability
Underground flooding
damage
Non-compliance with the
contract by the contractor
Faulty contractor
equipment
Capability and
competency of operations
staff
Fatigue
Natural disasters
Increasing terrorist
activity
Proximity to artisanal
mining activities
Social instabilities within
North West Africa
•
•
•
•
•
•
•
•
•
•
Fatality
Permanent disability (physical or
mental)
Injury and illness
Legal and legislative implications
Financial loss
Staff safety incident (e.g. fatality,
kidnap)
Compromised asset security
Theft of resources (e.g. fuel,
inventory, etc.)
Financial loss
Reputational damage
Failure to operate
under environmental
requirements
Tailings dam failure
caused by inadequate
design or poor
operational practices
Adverse changes in
Government fiscal or
regulatory position
Increasing focus on
environmental outcomes/
requirements
Complexity of political
and community relations
Negative perception of
technology changes (e.g.
perception of job losses)
• Water, air or ground
contamination
•
•
•
•
•
•
•
•
•
•
•
•
Emissions above expectations
Harm to flora and/or fauna
Significant harm to health and/or
injury to staff and local residents
Significant production impacts
from loss of operational license
Reputational damage
Legislative breach
Financial penalties
Loss of, or significant reduction
to, licence to operate
Increased regulation and
operating scrutiny
Reputational damage and
deterioration of social licence to
operate
Inconsistent availability of labour
resources and complexities in
succession planning
Productivity and cost of
production affected.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Industry standard safety
management systems
Embedded safety conscious
culture
Staff safety training programs
Embedded security services
Operational mining controls
Contractor pre-qualification,
induction and training
Regular review processes and
procedures
Embedded security services
Security Management and Crisis
and Emergency Management
plans
Regular monitoring of local
security operating level and
global terrorism trends
Regular review and audits
Ongoing operational emission
modelling (e.g. Syama roaster
and stack)
Continual air quality monitoring
Ongoing asset monitoring
Independent reviews (e.g.
Tailings dam)
Frequent water monitoring
Long term environmental
strategies
Regular review and audits
Stakeholder engagement
program resulting in strong
relationships with material
stakeholders
Dedicated Community Manager
In-country expertise
Proactive development of local
community (e.g. local Talent
Development Program)
Active engagement with
Universities supporting
communities local to operations
•
Regular review and audits
56
Resolute Mining Limited | 2019 Annual Report RISK
CONTRIBUTING FACTORS
IMPACT
MITIGATING PRACTICES
Poor staff and
community health
and/or wellbeing
•
•
Arrival of persons with
infectious diseases to-site
Community outbreak
of serious diseases (e.g.
Ebola)
•
Dust or chemical spill
• Water contamination
•
Natural disaster
Bribery or corruption
•
Failure to achieve
and maintain
operational
performance
Project delivery
failure
Critical operational
or informational
technology failure
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Lack of understanding of
bribery and corruption by
staff and/or contractors
Poorly managed
facilitation of payments
(in contravention of
Policy)
Mine plan accuracy and
performance
Variable grade quality
Contractor
underperformance
Natural disaster
Unexpected shuts/delays
Industrial action
Availability and/or loss of
key skillsets
Geographical constraints
Availability and/or loss of
key skillsets
Poor project
management
Contractor
underperformance
Logistical constraints and
long asset lead times
Increase rate
of technology
advancements
Increasing reliance on IT
networks for automation
Geographical constraints
Contractor interfaces
Global prevalence and
sophistication of cyber
attacks
Limitations in IT capability
in remote locations
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Illness
Permanent disability
Fatality
Operational site quarantined
and/or large-scale disruption of
operations
Reputational damage impacting
ability to maintain and attract
staff/contractors to site
Compliance breach
Financial impact
Reputational damage
Financial impact
Negative operational impacts
Reputational damage and
unmet shareholder expectations
Significant operational delays
Suboptimal project outcomes
Future operational impacts
Safety of staff
Financial impact
Reputational damage
Failure to meet performance
indicators
Financial loss
Loss of critical information
Negative impacts on operations
and projects
Legislative and or regulatory
breaches
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Implementation of World Health
Organisation guidelines and
Health and Hygiene industry
standards
Regular health audits completed
by external health experts
Continual air quality monitoring
Frequent water monitoring
Regular review and audits
Ongoing Anti-Bribery and
Corruption and Code of Conduct
training and declarations are in
place for all staff
Inclusion of Anti-Bribery and
Corruption requirements for
sub-contractors included within
contracts
Independently operated whistle-
blower hotline
Financial system controls in place
Fraud risk assessments
Regular review and audits
Established Life of Mine,
budgeting and forecasting
processes
Maintenance schedules and
processes
Mine performance management
and reporting processes
Contractor management
procedures
Staff recruitment and training
programs
Use of third party best in
class technical advisors and
consultants
Established project methodology
Project governance structures
in place
Use of third-party technical
advisors and consultants
Project monitoring and reporting
processes
Procurement and contract
management procedures and
practices
Regular review and audits
Network security design and
firewalls
Network backups and disaster
recovery processes
Ongoing IT training
IT infrastructure upgrade
programs
Network penetration testing
Information technology
and operational technology
convergence strategy
•
Regular review and audits
57
Resolute Mining Limited | 2019 Annual Report Corporate 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 consultants in performing their everyday roles. The Code provides that the following
core principles guide the behaviour of Directors and employees:
•
•
•
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, honesty, respect and consideration in all their dealings while carrying out their duties; and
to avoid real, apparent or perceived conflicts of interest.
Resolute aspires to achieve best practice, creating opportunities for its business partners to assist both its stakeholders
and communities, while operating openly, honestly, with integrity and responsibility and maintaining a strong sense of
corporate social responsibility. In maintaining its social corporate responsibility, Resolute will conduct its business ethically,
adhering to the core principles stated in the Code, encourage community initiatives, consider the environment and ensure
a safe, equal and supportive workplace. The Code provides specific detail and is available to view online at www.rml.com.
au/corporate-governance.
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 that all Directors and employees must, wherever possible, avoid any conflict of
interest, must disclose any potential for a conflict of interest, and where a conflict cannot be avoided, must manage that
conflict of interest. The duty to avoid, disclose and manage conflicts of interest does not prohibit all conflicts of interest –
rather it requires that conflicts are adequately disclosed and managed when they arise. The Company’s Conflicts of Interest
Policy provides specific detail and is available to view online at www.rml.com.au/corporate-governance.
Securities Trading
It is Resolute’s policy that Directors and employees must ensure all trading of company securities they undertake complies
with the Australian Corporations Act and the Market Abuse Regulation in England and Wales. 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 Whistleblower Policy provide specific detail and are available to view online at www.rml.com.au/
corporate-governance.
Additional Policies
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
Safety, Security and Environment Committee Charter
Continuous Disclosure Policy
Communication Strategy
Diversity and Inclusion Policy
Performance Evaluation Process
Privacy Policy
Procedure for Appointment of New Directors
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.
58
Resolute Mining Limited | 2019 Annual Report The table below sets out the detail of the tenure of each Director as at 31 December 2019.
Director
Role of Director
Martin Botha
Non-Executive Director
(appointed Chairman from 29
June 2017)
First Appointed
February 2014
Qualification
BScEng
John Welborn
Managing Director
February 2015
Yasmin Broughton
Non-Executive Director
Mark Potts
Non-Executive Director
June 2017
June 2017
Sabina Shugg
Non-Executive Director
September 2018
BCom, FCA, FAIM, SAFin,
MAICD, MAusIMM, JP
BCom, PG Law, FAICD
BSc (Hons)
MBA and BSc (Mining
Engineering)
Peter Sullivan
Non-Executive Director
June 2001
BEng, MBA
The table below sets out the detail of the independence of each Director as at 31 December 2019.
Director
Martin Botha
John Welborn
Yasmin Broughton
Mark Potts
Sabina Shugg
Peter Sullivan
Non-Executive
Independent
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Gender
Male
Male
Female
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.
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
Safety, Security and Environment Committee
Audit and Risk Committee
As at 31 December 2019, the Audit and Risk Committee consisted of the following Non-Executive Directors:
• Ms Y. Broughton (Chair)
• Mr M. Botha
• Mr M. Potts
• Ms S. Shugg
• Mr P. Sullivan
As at 31 December 2019 and as at the date of release of this Annual Report, all of the above listed members of the Audit
and Risk Committee 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.
59
Resolute Mining Limited | 2019 Annual Report Remuneration Committee
As at 31 December 2019, the Remuneration Committee consisted of the following Non-Executive Directors:
• Mr P. Sullivan (Chair) (until 19 February 2020)
• Mr M. Botha
• Ms Y. Broughton
• Mr M. Potts (Chair from 20 February 2020)
• Ms S. Shugg
As at 31 December 2019 and as at the date of release of this Annual Report, all of the above listed members of the
Remuneration Committee were independent.
The Remuneration Committee is responsible for recommending, monitoring and reviewing compensation arrangements
for Resolute’s 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
As at 31 December 2019, the Nomination Committee consisted of the following Non-Executive Directors:
• Mr M. Botha (Chair)
• Ms Y. Broughton
• Mr M. Potts
• Ms S. Shugg
• Mr P. Sullivan
As at 31 December 2019 and as at the date of release of this Annual Report, all of the above listed members of the
Nomination Committee were independent.
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.
Safety, Security and Environment Committee
As at 31 December 2019, the Safety, Security and Environment Committee consisted of the following members:
• Mr J. Welborn (Chair)
• Ms S. Shugg (Non-Executive Director)
• Mr D. Kelly (Acting Chief Operating Officer)
As at 31 December 2019 and as at the date of release of this Annual Report, Ms S. Shugg was the sole Non-Executive
Director on the Safety, Security and Environment Committee and is independent.
The Safety, Security and Environment Committee acts as a forum for presentation of the safety performance and
environmental impact management of Resolute operations and is responsible for monitoring, and advising on the
implementation and management of programs, relating to key health, safety, security and environmental risks.
The Safety, Security and Environment 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 4th edition" established by the ASX
Corporate Governance Council and published by the Australian Securities Exchange (ASX) in February 2019.
Resolute’s Corporate Governance Statement is available to view online at www.rml.com.au/corporate-governance.
60
Resolute Mining Limited | 2019 Annual Report Resolute Mining Limited | 2019 Annual Report
Financial
Report
Contents
1. Directors' Report
2. Renumeration Report
3. Financial Statements
61
61
Resolute Mining Limited | 2019 Annual Report 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 for the year ended 31 December 2019.
Corporate Information
Resolute Mining Limited (Resolute 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 in office during the year ended 31 December 2019, 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
Marthinus (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 with 30 years’ experience in international investment banking. A founding director in Standard
Bank Plc’s London-centred international operations, Mr Botha established and led the development of the core global natural
resources trading and financing franchises, as well as various geographic operations, 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 Chair of the Nomination Committee, and a member of the Audit and Risk Committee and the Remuneration
Committee.
John Welborn (Managing Director and Chief Executive Officer)
BCom, FCA, FAIM, MAICD, MAusIMM, JP
Mr John Welborn was appointed 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, and the Australian Institute of Company Directors.
Mr Welborn is a Director of the World Gold Council (appointed 2017), a Non-Executive Director of Equatorial Resources Limited
(appointed 2010) and is Chairman of Orbital Corporation Limited (appointed 2014).
Mr Welborn is Chair of the Safety, Security and Environment Committee.
Yasmin Broughton (Non-Executive Director)
BComm, PG Law, FAICD
Ms Yasmin Broughton is a Non-Executive Director and was appointed to the Board in 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 16 years’ experience working with ASX-listed companies as an officer and has a deep understanding of corporate
governance, including compliance and managing complex legal issues. Ms Broughton is also a non-executive director of Synergy,
the Insurance Commission of Western Australia and Edge Employment Solutions Inc.
Ms Broughton is Chair of the Audit and Risk Committee, and a member of the Remuneration Committee and the Nomination
Committee.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Directors (continued)
Mark Potts (Non-Executive Director)
BSc (Hons)
Mr Mark Potts is a Non-Executive Director and was appointed to the Board in June 2017. Mr Potts is a leading global technology
executive who for more than 30 years has consistently combined innovation, strategy, vision, technology and execution to drive
business disruption and results for a range of international organizations. Most recently Mr Potts was the Chief Technology Officer
and Vice President for Corporate Strategy at Hewlett-Packard Enterprise. Mr Potts has previously been the founder of several
venture-backed start-ups in a variety of industries in Australia, the United States, and the United Kingdom. Of relevance for
Resolute is Mr Potts’ extensive experience in leading business through technology lead innovation and disruption. Mr Potts is a
sought-after leader, strategic advisor, and speaker in technology, innovation, its application within organisations for business
advantage, and future directions in technology. Mr Potts is currently a director of Linear Clinical Research Limited (appointed
2019) and a non-executive director of iCetana (appointed 2018).
Mr Potts is Chair of the Remuneration Committee (from 20 February 2020), and a member of the Audit and Risk Committee and
the Nomination Committee.
Sabina Shugg (Non-Executive Director)
BSc (Mining Engineering), MBA
Ms Sabina Shugg was appointed to the Board as a Non-Executive Director on 7 September 2018. Ms Shugg is a mining engineer
with over 30 years’ experience involving senior operational roles with leading mining and consulting organisations including
Normandy, Newcrest, and KPMG. Ms Shugg holds a Master of Business Administration from the University of Western Australia,
a Mining Engineering degree from the Western Australian School of Mines, and a Western Australian First Class Mine Manager’s
Certificate of Competency. Ms Shugg currently serves as the Director of the Kalgoorlie Campus for Curtin University – WA School
of Mines. In her role as Founder and Chair of Women in Mining and Resources WA, Ms Shugg was awarded the inaugural Women
in Resources Champion by the Chamber of Minerals and Energy of Western Australia for being an outstanding role model for the
resources industry and broader community. In 2015, Ms Shugg was awarded a Member of the General Division of the Order of
Australia for significant service to the mining industry through executive roles in the resources sector and as a role model and
mentor to women.
Ms Shugg is a member of the Remuneration Committee, the Safety, Security and Environment Committee, the Audit and Risk
Committee and the Nomination Committee.
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 at which point he became a Non-Executive Director of the Company. 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) and Panoramic
Resources Limited (appointed 2015).
Mr Sullivan is a member of the Remuneration Committee (Chair until 19 February 2020), the Audit and Risk Committee and the
Nomination Committee.
General Counsel / Company Secretary
Amber Stanton
LLB
Ms Amber Stanton is a corporate lawyer and was appointed as General Counsel / Company Secretary in 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).
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
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 and related bodies
corporate were:
M. Botha1
J. Welborn2
Y. Broughton3
M. Potts
S. Shugg4
P. Sullivan
Fully Paid Ordinary
Shares
Performance
Rights
-
-
3,250,000
5,563,749
-
79,097
-
2,367,946
5,697,043
-
-
-
-
5,563,749
1) Mr Botha has subscribed for 45,455 fully paid ordinary shares in tranche 2 of the Company’s recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
2) Ms Broughton has subscribed for 27,273 fully paid ordinary shares in tranche 2 of the Company’s recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
3) Ms Shugg has subscribed for 27,273 fully paid ordinary shares in tranche 2 of the Company’s recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
4) Mr Welborn has subscribed for 300,000 fully paid ordinary shares in tranche 2 of the Company’s recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
As at the date of this report, there were no options on issue.
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.
Significant Events after Reporting Date
On 15 January 2020, the Group announced the sale of the Ravenswood Gold Mine for $100 million of upfront value and up to
$200 million in potential payments contingent on future gold prices, future gold production and the investment outcome of EMR
Capital from the Ravenswood Gold Mine.
On 16 January 2020, the Group drew down a further US$5.0 million ($7.1 million) on its syndicated loan facility as provided for in
the Syndicated Facility Agreement.
On 20 January 2020, the Group entered into forward contracts to sell 37,200 ounces at an average US$1,562 per ounce in
scheduled monthly deliveries of 1,200 ounces between July 2020 and December 2020 and scheduled monthly deliveries of 5,000
ounces between January 2021 and June 2021.
On 23 January 2020, the Group completed an equity raising via an Institutional Placement to raise $146 million. These funds were
utilised on 3 February 2020 to repay the US$130 million acquisition bridge loan facility provided by Taurus Funds Management
Limited (“Taurus”) in relation to Toro Gold Limited (“Toro Gold”). The facility was provided for an initial term of six months and has
been repaid in full, at the maturity date, avoiding termination or extension fees.
On 28 January 2020, the Group agreed to terms with Taurus for the acquisition of the 1.1% royalty held by entities associated
with Taurus over gold production from the Mako Gold Mine in Senegal (Mako). The termination value of the royalty has been
agreed at US$12 million with consideration to be paid in cash or in shares at the election of the royalty holders.
On 17 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,590 per ounce in
scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
On 26 February 2020, the Group successfully completed its Share Purchase Plan (SPP). The SPP closed on 21 February 2020,
with valid applications received from 1,168 shareholders for 21,212,747 ordinary shares at an issue price of $1.10 per share. The
total amount raised from the SPP is approximately $23.3 million.
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Directors’ Report
Significant Events after Reporting Date (continued)
On 27 February 2020, the Group received notice that the Mali Government tax authorities and Ministry of Finance had taken
certain steps internally to offset the Group’s VAT withholding tax liabilities (note E.3) with the Group’s VAT tax assets (note D.1).
At the date of signing this report, the Group has not received any confirmation of offset occurring.
On 28 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,670 per ounce in
scheduled monthly deliveries of 5,000 ounces between July 2021 and December 2021.
On 25 March 2020, the Group completed the refinancing of the Group’s syndicated loan as governed by the Syndicated Facility
Agreement. The new US$300 million facility comprises a three-year US$150 million revolving credit facility and a four-year
US$150 million term loan facility. As part of the refinance the group repaid the outstanding balance of the Project Facility
Agreement (US$63.5 million plus interest accrued).
Subsequent to year end, the global impacts of the coronavirus COVID-19 pandemic has created volatility in commodity prices and
resulted in Government regulated restrictions and put pressure on supply chain structures. Resolute’s response recognises that
the Group places the highest priority on the safety and wellbeing of its employees and contractors. Keeping the Group’s operations
running is critically important for employees, local communities, and all of the Group’s stakeholders. Resolute has taken actions
to ensure that the impact of COVID-19 is minimised across all aspects of Group operations. A COVID-19 Management Team has
been deployed and business continuity programs established to ensure the safety and wellbeing of all employees and contractors
while maintaining Group operations.
As at the date of this report, Resolute’s operations have not been materially impacted by Government regulated COVID-19 related
restrictions and the Group has not amended current production or cost guidance. Operations are continuing at all of the Group’s
mines and exploration areas. The Group maintains sufficient staff and inventory of supplies and equipment to support current
operations. The challenges presented by COVID-19 are fluid and continue to change on an almost daily basis. Resolute will
continue to assess and update the Group’s response. Further escalation of the COVID-19 pandemic, and the implementation of
further Government regulated restrictions or extended periods of supply chain disruption, has the potential to impact the Groups
earnings, cash flow and carrying value of the Syama, Mako, Ravenswood and Bibiani cash generating units. The Financial
Statements are prepared based on circumstances as at 31 December 2019, with recent developments as a result of COVID-19
considered a non-adjusting subsequent event.
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 Science to evaluate and control surface and
groundwater quality.
Responsibility Statement
In the opinion of the directors and to the best of their knowledge, the Directors’ report includes a fair review of the development
and performance of the business and the financial position of the consolidated entity, together with a description of the principal
risks and uncertainties that the consolidated entity faces.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report
The following information has been audited.
The 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. The following information has been audited
as required by section 308(c) of the Corporations Act 2001.
The Remuneration Report is presented under the following sections:
1. Letter from the Chair of the Remuneration Committee
2. Remuneration governance
3. Remuneration policy and outcomes
4. Non-Executive Director (NED) remuneration arrangements and outcomes
5. Additional disclosures
6. Loans to Key Management Personnel (KMP) and their related parties
1. Letter from the Chair of the Remuneration Committee
Dear Shareholders,
On behalf of the Board of Directors of Resolute I am pleased to present the Company’s Remuneration Report for the full financial
year ending 31 December 2019, following the change to a 31 December year end in 2018.
The Company’s last Remuneration Report for the period of 6 months ended 31 December 2018 received substantial support at
the Company’s annual general meeting held on 20 May 2019, with 99.6% of votes in favour of the report. The Company was also
seeking Shareholder approval of a special issue of Performance Rights to Mr John Welborn, which was withdrawn at the meeting
prior to voting based on proxy votes received. The Chairman advised at the meeting that the Board intended to consult with
Shareholders to understand concerns and ensure the Board’s remuneration strategy for the CEO was clearly communicated with
the aim of ensuring broad Shareholder support.
Following a series of consultations with Shareholders and proxy advisors following the AGM, the Company held an extraordinary
general meeting on 21 November 2019 where the grant of Performance Rights to CEO Mr John Welborn was approved by
Shareholders. We continue to engage with Shareholders and proxy advisors on our remuneration framework and disclosure.
The Board is satisfied that the current remuneration framework is appropriate, fit-for-purpose and consistent with our current
business strategy. It is also properly set to incentivise for desired behaviours within our risk framework. As a result, only minor
changes were made to the Long-Term Incentive Plan (LTIP) during 2019, predominantly the change from a Reserves and
Resources metric in prior years to an Ore Reserve Replacement metric. We have nevertheless significantly enhanced our level
of disclosure to provide a higher level of transparency and better comprehension of our remuneration framework, particularly with
regard to:
• Objectives of our remuneration framework;
• Pay mix (the disclosure of the pay mix and total remuneration opportunity is discussed at maximum levels as opposed to
target remuneration);
• Short Term Incentive Plan (STI) targets and outcomes; and
• CEO long term incentive (LTI) arrangements.
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Directors’ Report
Remuneration Report (continued)
1. Letter from the Chair of the Remuneration Committee (continued)
Business Outcomes
FY19 was a pivotal year which saw the Company enhance the quality of its portfolio through the acquisition of Mako, a low cost,
high quality gold mine and through continued exploration success at Tabakoroni providing confidence that the underground mine
will generate strong cash flows in the future. Operationally, Resolute continued to generate strong results at the Tabakoroni Open
Pit Mine, at Mako, and at its flagship Syama Underground Mine where commissioning was completed during the year. The
detection of a crack in the shell of the Syama roaster, a key component of the sulphide processing circuit, impacted sulphide
production in the December 19 Quarter and resulted in lower output than forecast for Syama. Pleasingly, repairs to the roaster
were safely and efficiently completed by mid-December 2019, with gold production from the sulphide circuit recommencing and
ramping up to capacity.
Resolute seeks to operate its business responsibly, with careful consideration for the health and safety of our people, the
communities surrounding our sites, and the environment around us. In mid-2019, as a member of the World Gold Council,
Resolute committed to the Responsible Gold Mining Principles. We have a Sustainability Performance Framework to reflect this
commitment and govern the way the Company operates in order to meet international standards of good practice in areas of
social development, human rights, environmental protection and health and safety. Our strong focus on health and safety was
reflected in a reduction in our total reportable injury frequency rate to 2.09 at 31 December 2019 from 2.77 at 30 June 2019.
Remuneration Outcomes
Actual performance for the year ending 31 December 2019 for the KMP STIP outcome was 19% of the maximum outcome
possible.
Of the 3,108,389 Performance Rights granted in 2016 (performance hurdle tested), 559,154 Performance Rights vested on 30
June 2019. The Reserves and Resources Growth performance hurdle outcome, which accounts for 25% of the total vesting
outcome, was 106%, triggering vesting. No Performance Rights were granted linked to the TSR hurdle, which accounts for 75%
of the total vesting outcome. The next period in which an LTIP grant will be tested to determine the level of vesting is 30 June
2020, for awards granted on 1 July 2017 and the CEO Performance Rights.
Non-Executive Director Remuneration
An independent review of NED fees was completed in 2019. Following this review, from 1 March 2019, the Chairman’s annual
fee increased to $180,000 from $175,000 and NED annual base fees increased from $90,000 to $100,000. In addition, the Chair
of the Audit and Risk Committee now receives an annual Committee Chair fee of $15,000 and the Chair of the Remuneration
Committee receives an annual Committee Chair fee of $10,000. Members of Committees do not receive a separate fee.
Proposed Remuneration Changes for 2020
Long Term Incentive Plan
The LTI comparator group used to measure relative Total Shareholder Return (TSR) is reviewed annually prior to LTIP invitations
being despatched to ensure relevant companies are included, being gold producers of a similar size and operational locations.
Details of the performance criteria for the LTIP and the comparator group of companies is included in the Remuneration Report
in Section 3.
Our remuneration strategy is underpinned by our core values and performance culture which includes setting challenging stretch
operational, financial and non-financial targets, and rewarding their achievement. Our key focus areas are safety, growth,
innovation, value creation and long-term sustainability, with the Board exercising discretion to recognise achievement where
outcomes may not accurately reflect performance.
We will commit to consider the concerns and suggestions regarding Executive pay and remuneration disclosure and outcomes
raised by our Shareholders and engage with the required regulatory and external advisory services where required.
We thank our Shareholders for their continued support.
Yours sincerely
Peter Sullivan
Chair – Remuneration Committee (as at 31 December 2019)
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Directors’ Report
Remuneration Report (continued)
2. Remuneration Governance
Remuneration Committee
The Remuneration Committee is responsible for determining and reviewing the compensation arrangements for Non-Executive
Directors, the Chief Executive Officer and Executives. Executive remuneration is reviewed annually having regard to individual
and business performance, relevant comparative information and internal and independent external information. The
Remuneration Committee is also tasked with determining performance targets, performance against those targets and
remuneration outcomes.
In accordance with best practice governance, the Remuneration Committee is comprised solely of independent Non-Executive
Directors, as follows:
Peter Sullivan (Chair until 19 February 2020)
Martin Botha
Yasmin Broughton
Mark Potts (Chair from 20 February 2020)
Sabina Shugg
Nomination Committee
The Nomination Committee is responsible for Board and Board Committee membership, succession planning and performance
evaluation.
In accordance with best practice governance, the Nomination Committee is comprised solely of independent Non-Executive
Directors, as follows:
Martin Botha (Chair)
Yasmin Broughton
Mark Potts
Sabina Shugg
Peter Sullivan
Use of Remuneration Consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, it seeks external remuneration
advice as appropriate. Remuneration consultants are engaged by, and report directly to, the Remuneration Committee. In
selecting remuneration consultants, the Remuneration Committee considers potential conflicts of interest and requires
independence from KMP and other Executives as part of their terms of engagement.
During 2019, the Reward Practice Pty Ltd and Egan Associates were engaged as remuneration consultants to assist with various
remuneration matters including the provision of benchmarking data for Executive remuneration. There were no remuneration
recommendations, as defined by the Corporations Act, provided by The Reward Practice Pty Ltd and Egan Associates during the
year.
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Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes
3a. Key Management Personnel
The Remuneration Report details the remuneration arrangements for KMP who 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.
For the purposes of this report, the term “Executive” includes the Chief Executive Officer (CEO) and other Executives of the
Company and the Group.
Key management personnel
(i) Directors
Name
M. Botha
J. Welborn
Y. Broughton
M. Potts
S. Shugg
P. Sullivan
(ii) Executives
Position held during the year
Non-Executive Director (Non-Executive Chairman)
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Name
P. Beilby
D. Kelly
L. de Bruin
A. Stanton
Position held during the year
Chief Operating Officer (retired effective 31 March 2019)
Acting Chief Operating Officer (appointed 1 April 2019)
Chief Financial Officer (resigned as Chief Financial Officer effective 13 December 2019)
General Counsel and Company Secretary
3b. Remuneration Policy
The Board recognises that the performance of the Company depends upon the quality of its Executives. To achieve its financial
and operating objectives while operating in Africa, the Company must attract, motivate and retain highly skilled Directors and
Executives. The Remuneration Committee is tasked with the responsibility to monitor and review the remuneration framework and
provide recommendations to the Board. As part of the continual review process, the Remuneration Committee has from time to
time engaged external consultants regarding structural changes to the remuneration framework.
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;
• Aligns Executive incentive rewards with the creation of value for Shareholders; and
• Supports achievements consistent with the World Gold Council’s Responsible Gold Mining Principles.
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Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3b. Remuneration Policy (continued)
Business Objective
Mine Gold. Create Value.
Our goal is to create sustainable value for all stakeholders. The Company’s remuneration framework aims to incentivise
for both operational and financial performance, with focus on growth in gold production, managing cost, and improving
operating cash-flows, whilst ensuring the safety and wellbeing of employees and contractors at all times.
Remuneration Objectives
Competitive Remuneration
Shareholder Alignment
Provide rewards to attract, motivate and retain highly
skilled Executives.
Align Executive incentive rewards with the creation of value
for Shareholders.
The Company aims to attract talent, and reward
Executives with a level and mix of remuneration
commensurate with their position and responsibilities
within the Company and to ensure total remuneration is
competitive by market standards.
Resolute’s goal is to maintain its status as a unique and
highly attractive investment for Shareholders, with focus on
sustainable value creation. The remuneration framework
serves to ensure sustainable growth and share price
appreciation, a healthy balance sheet, and an ability to pay
dividends.
It is the Remuneration Committee’s policy that employment contracts are entered into with the Chief Executive Officer and
Executives. Details of these contracts are outlined later in this report.
In accordance with best practice governance, the structure of NED and Executive remuneration is separate and distinct.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework
The Executive remuneration framework consists of Fixed Annual Remuneration (FAR) and short and long term incentives as
outlined in the table below:
Remuneration Component
Purpose
Link to Performance
Fixed annual
remuneration
The level of FAR is set to provide a
base level of remuneration which is
both appropriate to the position and
is competitive in the market.
Short term incentive
Long term incentive
The objective of the annual “at risk”
STI is to generate greater
alignment between performance
and remuneration levels to drive
operational excellence.
The objective of the LTI is to
reward Executives in a manner
which aligns a significant portion of
remuneration with the creation of
Shareholder wealth.
Company and individual performance are considered
as part of the annual remuneration review. While
market and sector peer benchmarking is conducted
regularly to ensure the FAR remains competitive, the
levels of FAR for the Managing Director and CEO and
other Executives are set primarily with regard to their
responsibilities and performance, talent, skills and
experience, taking into account the size, complexity,
scope of operations and structure of Resolute’s
business.
Internal performance measures including safety,
production and costs which represent key business
drivers are considered and assessed to determine
annual outcomes.
Vesting of awards is dependent upon both an external
measure (TSR performance against a peer group)
and an internal measure (ore reserve replacement).
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Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Overall remuneration level and mix
How is overall
remuneration and
mix determined?
Remuneration levels are considered annually through a review that considers comparative market data,
the performance of the Company and individual, and the broader economic environment.
The Company aims to reward Executives with a level and mix (proportion of fixed, short term incentives
and long-term incentives) of remuneration appropriate to their position, responsibilities and performance
within the Company and that which is aligned with targeted market comparators.
In 2019, remuneration benchmarking was undertaken with reference to industry peers (see LTI
comparator groups listed below) for the TSR performance benchmarking. From time to time, depending
on availability and reliability of data, other benchmarking data sources may be used. The Company’s
policy is to position FAR around the median of direct industry peers. As a result of a benchmarking
exercise, in March 2019 three KMP were given increases to their FAR.
In addition to the annual grant of performance rights made to the Managing Director and CEO along with
all other Executives (the KMP LTI), Shareholders have approved a further issue of performance rights to
the Managing Director and CEO specifically targeting the Company’s strategic objectives and
incentivising the Managing Director and CEO to achieve long-term strategic goals on the basis that
Shareholders have received exceptional absolute returns (the CEO LTI). Further details of the CEO LTI
are included below.
The chart below summarises the Managing Director and CEO’s and other Executives’ remuneration mix
for FAR, STI and LTI at maximum. The current pay mix is considered appropriate for Resolute based on
the Company’s current phase of growth.
Remuneration Mix (at maximum)
MD/CEO
32%
36%
32%
Other Executives
36%
41%
23%
0%
20%
40%
60%
80%
100%
FAR STI
LTI
The pay mix for the Managing Director and CEO includes the KMP LTI but does not include the CEO LTI
granted to Mr Welborn during the year.
To achieve maximum remuneration opportunity, Executives are required to significantly perform above
and beyond normal expectations. If achieved, the outcome is anticipated to result in a substantial
improvement in key strategic outcomes, operational or financial results, and/or the overall performance
of the Company.
While the Company does not have a formal share ownership policy for Executives, all KMP are
encouraged to hold shares in the Company and are incentivised to accumulate equity through the
participation in LTI.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Fixed annual remuneration
What is included
in FAR?
FAR includes base salary and superannuation contributions. For the purposes of the Acting Chief
Operating Officer’s short term incentive plan calculation, FAR includes a higher duties allowance.
How is FAR
reviewed and
approved?
FAR is reviewed annually by the Remuneration Committee following consideration of industry
benchmarking.
FAR increases were made as follows:
Name
2018 FAR
2019 FAR % increase
Lee-Anne de Bruin
400,000
440,000
Amber Stanton
John Welborn
300,483
315,000
705,000
800,000
10%
5%
13%
In March 2019, John Welborn was granted a 13% increase in FAR. The increase was made after several
years of nil or minor increases and recognised the need to bring the Managing Director and CEO’s FAR
in line with the benchmarking data for industry peers.
Short Term Incentive
The Managing Director and CEO and Executives have a maximum opportunity (if all the Stretch
performance hurdles are met for each KPI and individual performance is achieved at a Stretch level) of
112.5% of FAR. A target STI opportunity of 50% of FAR aligns with industry benchmarking.
The STI payable is based on performance against corporate and individual key performance indicators
(KPIs) set at the beginning of the performance period. KPIs require the achievement of strategic,
operational or financial measures and are linked to the drivers of business performance.
What is the value
of the STI award
maximum
opportunity?
What are the
performance
criteria and how
do they align with
business
performance?
73
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Short Term Incentive
What are the
performance
criteria and how
do they align with
business
performance?
(continued)
Corporate KPIs:
Safety
Improved safety performance (10%) – measured by:
• a lag indicator in the form of a specified reduction in the
Total Recordable Injury Frequency Rate in comparison to
prior years (5%); 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 (5%).
Operational
The achievement of defined Targets relative to budget relating
to:
Personal KPIs:
A set of personal performance metrics
designed to drive optimum
operational performance as
specifically related to each
Executive’s portfolio.
The personal metrics are set annually
and are directly linked to the Resolute
strategic plan which drives each
Executive’s annual business plan.
Personal performance acts as a
positive or negative multiplier to the
outcome of the Corporate KPIs. See
below for an example of how the
Managing Director and CEO’s STI
award is calculated.
• operating cash flow (30%);
• gold poured (30%); and
• cost per tonne milled (30%).
The targets with regard to the STI outcomes are documented
below (refer to section 3d Executive Remuneration Outcomes).
How are STI
awards
determined?
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 and risk appetite.
For each KPI there are defined “Threshold”, “Target” and “Stretch” measures which are capable of
objective assessment.
Corporate KPIs are assessed as follows on an individual KPI basis:
• Below Threshold = $nil payment
•
Threshold performance = 25% of KPI opportunity
•
Target Performance = 100% of KPI opportunity
• Stretch performance = 150% of KPI opportunity
Pro-rata payment applies on a straight-line basis between “Threshold” and “Target” and between “Target”
to “Stretch” performance.
Personal KPIs are assessed as follows:
• Below Threshold = $nil payment
•
Threshold performance = 50% of total Corporate KPI outcome
•
Target Performance = 100% of total Corporate KPI outcome
• Stretch performance = 150% of total Corporate KPI outcome
74
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Short Term Incentive
How are STI
awards
determined?
(continued)
Pro-rata payment applies on a straight-line basis between “Threshold” and “Target” and between “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 overall performance of the Company.
As a minimum, a threshold performance outcome must be achieved for both the Corporate KPIs and the
Personal KPIs before a STI award is triggered.
STI award
example
The example below is based upon the Managing Director and CEO’s FAR, indicating possible payments
based upon the range of corporate performance outcomes and personal KPI achievement.
Personal KPI Achievement
The maximum STI award opportunity of FAR is calculated as follows:
(a) $800,000 is Managing Director and CEO’s FAR
(b) $900,000 is maximum KPI outcome (150% of Corporate KPI outcome)
Therefore, the maximum award opportunity of FAR for the Managing Director and CEO is capped at
112.5% ((b)/(a)*100 = 112.5%).
Is the STI award
subject to deferral
provisions?
The actual STI payment is made approximately three months after the completion of the performance
period.
The Remuneration Committee has determined that a formal deferral policy is not appropriate at this time
for KMP, given that a significant portion of the Managing Director and CEO’s and other Executives’ total
remuneration opportunity is in the form of equity and subject to risk. In addition, the Managing Director
and CEO holds a significant number of shares and other Executives have been granted a significant
number of Performance Rights as part of the Resolute LTIP, ensuring close alignment with Shareholders.
Is there a malus
or clawback
policy?
While there is no formal malus/clawback policy, the Board has ultimate discretion to adjust the STI
outcomes upwards or downwards (including to zero), in exceptional circumstances, where the STI
generated outcomes inconsistent with the Company’s performance or resulted in misalignment with
Shareholders (e.g. fatality, financial misstatement, misconduct, reputational damage, etc.).
75
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Short Term Incentive
What happens to
STI awards if
there is a
termination of
employment?
What happens to
STI awards if
there is a change
of control event?
Subject to overarching Board discretion, to be eligible for any payment under the STI, the participant must
be employed by the Company at the earlier of the time of payment and three months after the performance
period in which the STI is tested.
On the occurrence of a change of control event, the Board will determine, in its sole and absolute
discretion, the manner in which STI awards will be dealt with.
Long Term Incentive
How often are LTI
grants made and
what is the
maximum LTI
quantum?
What are the
performance
criteria for the
LTI?
At the Board’s discretion, Executives receive an annual grant of Performance Rights and the LTI forms a
key component of the Executive’s Total Annual Remuneration.
The LTI face value that Executives are entitled to receive is set at a maximum percentage of their FAR,
being 100% of FAR for the Managing Director and CEO and 65% of FAR for the other Executives.
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 the
Ore Reserves Replacement metric over a 3 year period.
Performance Rights will vest subject to meeting service and performance conditions as defined below:
Relative Total Shareholder Return (“rTSR”) – 75%
Ore Reserves Replacement metric - 25%
The rTSR measures the combined return from change in
share price and dividends, against 16 ASX or TSX listed
gold production companies of a similar size which for 2019
were:
• Alacer Gold Corp.
• Beadell Resources
Ltd
• Endeavour Mining
Corporation
• Evolution Mining Ltd
• Kingsgate
Consolidated Ltd
• Medusa Mining
Limited
• Northern Star
Resources
• OceanaGold Corporation
• Perseus Mining Ltd
• Ramelius Resources Ltd
• Regis Resources
• Saracen Mining Ltd
• Silver Lake Resources
Ltd
• St Barbara Ltd
• Teranga Gold
Corporation
• Troy Resources Ltd
Resolute’s TSR is calculated to determine what percentile
in the peer group it relates to and this percentile
determines how many Performance Rights vest.
The Ore Reserves Replacement metric
measures the change in Resolute’s
Reserves at the end of the performance
period as compared to the commencement
of the performance period, net of mining
depletion.
Resolute’s overall change in Ore Reserves
as at the end of the performance period will
determine how many Performance Rights
will vest.
The Board believes that maintaining
reserves for a producing gold miner is a
significant achievement requiring effort,
strategic planning, and sound
management. The achievement of
maintaining reserves would enable a
mining company to continue production
indefinitely and, in a commodity as scarce
as gold, should not be considered the
ordinary course of business.
76
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Long Term Incentive
What is the
objective of the
performance
hurdle and target?
One of Resolute’s goals is to manage achievements
against comparators and outperform our peers to ensure
sustainable growth to our share price above the market.
What is the
rationale for the
chosen metrics?
The rTSR metric provides the closest alignment between
the Company’s performance and Shareholders’ interests
and reflects the creation of Shareholder value above
peers.
The Board acknowledges that rTSR may result in vesting
under negative absolute TSR (“aTSR”). However, the
Board has absolute discretion to amend the vesting
outcomes both downwards and upwards, should the
conditions of the plan result in an inappropriate vesting.
The Board will limit this discretion to extraordinary
circumstances.
rTSR is considered the most relevant performance metric
for KMP LTI purposes. For this reason, the Board has
allocated 75% of the KMP LTI vesting performance metric
to this measure.
Maintaining the Company’s Ore Reserves
is essential for the business to continue. A
sustainable increase in Ore Reserves will
have a direct link with Shareholder value.
The Ore Reserves Replacement metric is
aimed at directing the Executives’ focus on
a long term goal of ensuring the
Company’s gold inventory is robust and
continues growing.
Sustainable growth in Ore Reserves
ensures the growth in the Company’s
market value. Maintaining the Company’s
Ore Reserves enables the business to be
sustainable which is a challenge when
mining a scarce commodity such as gold.
Reserves are the most stringent and
difficult to estimate of mineralisation.
Measurement of a Company’s reserves is
one of the most available and accurate
metrics to establish the Company’s value,
growth prospects, health, and track record
at any point in time.
While rTSR is considered the most relevant
performance metric for KMP LTI purposes,
the Board believes a reserves metric
provides good balance. For this reason,
the Board has allocated 25% of the KMP
LTI to the Ore Reserves Replacement
metric.
How is the
performance
period
determined?
Grants under the LTI need to serve a number of different purposes:
• act as a key retention tool; and
•
focus on future Shareholder value generation.
Therefore, LTI awards have a three year performance period and provide a structure that is focused on
long term sustainable Shareholder value generation.
77
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
Long Term Incentive
How is vesting
determined?
Relative TSR performance
Performance Vesting Outcomes
Less than 60th percentile
At the 60th percentile
Between 60th and 75th percentile
0% vesting
50% vesting
Linear vesting, between 50% and
100%
75th percentile and above
100% vesting
Ore Reserve Replacement Performance
Performance Vesting Outcomes
Ore Reserve Replacement depleted
Ore Reserve Replacement maintained
0% vesting
50% vesting
Ore Reserve Replacement between maintained up
to 30%
Linear vesting, between 50% and
100%
Ore Reserve Replacement grown by 30% or more
100% vesting
Performance is tested only once, at the end of the performance period. No re-testing applies to unvested
awards.
There are no dividends attached to unvested Performance Rights.
While there is no formal malus/clawback policy, the Board has ultimate discretion to adjust LTI outcomes
upwards or downwards (including to zero), in exceptional circumstances, where the LTIP generated
outcomes inconsistent with the Company’s performance or resulted in misalignment with Shareholders
(e.g. financial misstatement, misconduct, reputational damage, etc.).
Vested but unexercised Performance Rights remain on foot unless Board discretion is exercised in
situations such as misconduct. Unvested Performance Rights will be forfeited unless Board discretion is
exercised in circumstances such as death, retirement due to ill health and redundancy.
On the occurrence of a change of control event, the Board will determine, in its sole and absolute
discretion, the manner in which all unvested and vested rights will be dealt with.
Is there an
opportunity to re-
test the
performance
hurdles?
Do dividends vest
on unvested
awards?
Is there a malus
and clawback
policy?
What happens to
LTI awards if
there is a
termination of
employment?
What happens to
LTI awards if
there is a change
of control?
78
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
CEO LTI Performance Rights
What is the
rationale for the
CEO LTI?
How many
awards were
granted?
What are the
performance
metrics for this
award?
From time to time, the Board may allocate Performance Rights to the Managing Director and CEO to
provide further alignment with Shareholders and strengthen the retention mechanism. The Managing
Director and CEO has expressed a strong desire to align his interests with Shareholders and sought to
build and maintain a meaningful shareholding in the Company over time. These objectives have been
carefully considered and balanced by the Board in developing a structured approach to CEO LTI grants
with focus on long-term value creation that motivates exceptional performance, provides a retention
incentive, and allows for regular CEO performance reviews. During the year, Mr Welborn was granted
3,000,000 Performance Rights following Shareholder approval in November 2019, subject to the
conditions described below. The Board has taken considerable effort to ensure that Performance Rights
do not vest in circumstances where Shareholders have not been rewarded with a growth in value or in
circumstances where CEO performance does not warrant the vesting of Performance Rights.
The Managing Director and CEO was granted 3,000,000 Performance Rights which will vest in three
equal tranches. No other Executive participates in the CEO LTI.
Absolute TSR (“aTSR”) – 50%
Strategic Objectives – 50%
The aTSR metric measures the
cumulative growth in Resolute’s share
price over the performance period
(aTSR). Resolute’s aTSR will be
based on the percentage by which
Resolute’s 30-day volume weighted
average share price (VWAP) on the
ASX at the close of trade on the
relevant vesting date (plus the value of
any dividends paid during the
performance period) has increased
over Resolute’s 30-day VWAP at the
commencement date of the
performance period.
The aTSR Metric will be subject to a
condition that the rTSR Metric
(assessed as per the KMP LTI
Performance Rights measure) results
in a result of at or above the 33rd
percentile.
The strategic objectives metric measures the Board’s
assessment of the performance of the CEO in ensuring
achievement by the Company of key strategic objectives
over the relevant performance period (Strategic Objectives
Metric).
The achievement of strategic objectives will be determined
by the Board by referencing Resolute’s Strategic Plan and
Life-of-Mine plans and budgets for the Company’s
operating assets. Importantly, and in addition, will be
assessment of the success of new business opportunities
undertaken by the Company over the relevant period that
extend the Company’s resource and production base and
add Shareholder value.
The successful achievement of the Strategic Objectives
Metric is not the ordinary course of business but requires
outstanding performance by the CEO to deliver Board
approved strategic targets, development plans, value
creative acquisitions, positive divestments, technology
adoption, and industry partnerships that substantially
increase and/or improve the Company’s value and enhance
longer-term sustainability.
79
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
CEO LTI Performance Rights
What is the
objective of the
performance
hurdle and target?
Absolute TSR combines Executives’
efforts in all business areas and
incentivises them to focus on the long-
term value creation culminating in a
continuous growth in share price.
The Strategic Objective Metric is intended to reward
achievement of specific strategic long term objectives of the
Company which are aligned with Company strategy to
create sustainable Shareholder wealth.
Rationale
The performance periods of 2.5, 3.5
and 4.5 years ensure that Performance
Rights subject to this vesting condition
reflect long-term value creation, as
opposed to short-term share price
fluctuations.
Absolute TSR is a direct measure of
the Company’s share price and value
growth. While it may be affected by the
market forces, the Board takes these
into consideration when setting the
targets.
The Board has determined that aTSR
stretch target constitutes a highly
challenging target, achievement of
which will significantly benefit
Shareholders.
The Board has also reviewed similar
type CEO incentive packages on the
market and concluded that the aTSR
stretch target of 20% exceeds the
Company’s peers.
In addition, the aTSR metric will not be
satisfied unless the rTSR Metric
(assessed as per the KMP LTI
Performance Rights measure) results
in a result of at or above the 33rd
percentile.
The Board believes it is appropriate to balance the hard
measure of aTSR with a more qualitative assessment of
CEO performance in preserving and creating value for
Shareholders measured by assessment against clearly
defined Strategic Objectives Metrics.
There are a range of factors beyond the total control of the
CEO which may positively or negatively affect aTSR, such
as gold price or exchange rates or geopolitical risk. The
inclusion of a Strategic Objectives Metric balances the
aTSR Metric and allows the Board to assess how the CEO
has managed the business with reference to clearly defined
objectives.
80
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
CEO LTI Performance Rights
Vesting conditions
aTSR
performance
Vesting
outcome
10% per
annum return
33%
Straight-line
pro-rata
between 33%
and 100%
Above 10% per
annum return
and below 20%
per annum
return
Equal to or
above 20% per
annum return
Tranche 1:
The successful achievement of Board approved strategic
targets, development plans, value creative acquisitions,
positive divestments, technology adoption, and industry
partnerships that substantially increase and/or improve the
Company’s value and enhance longer-term sustainability.
Elements for consideration of the Tranche 1 vesting are
continued asset portfolio optimisation through both
acquisition and divestment, successful reduction of AISC
across all operations, value optimisation from Syama and
the investments made and LOM extension across the
portfolio.
100%
Tranche 2:
The successful achievement of Board approved strategic
targets, development plans, value creative acquisitions,
positive divestments, technology adoption, and industry
partnerships that substantially increase and/or improve the
Company’s value and enhance longer-term sustainability.
Specific strategic objectives for Tranche 2 will be developed
and more detailed elements for considerations for this
tranche will be outlined in the Remuneration Report issued
immediately prior to the Tranche 2 vesting date.
Tranche 3:
The successful achievement of Board approved strategic
targets, development plans, value creative acquisitions,
positive divestments, technology adoption, and industry
partnerships that substantially increase and/or improve the
Company’s value and enhance longer-term sustainability.
Specific strategic objectives for Tranche 3 will be developed
and more detailed elements for considerations for this
tranche will be outlined in the Remuneration Report issued
immediately prior to the Tranche 3 vesting date.
Performance
Period
Tranche 1: 33.3%: 2.5 years (1 January 2019 - 30 June 2021)
Tranche 2: 33.3%: 3.5 years (1 January 2019 - 30 June 2022)
Tranche 3: 33.4%: 4.5 years (1 January 2019 - 30 June 2023)
Re-testing
None
Face value (as at
1 January 2019)
Tranche 1: $1,145,000
Tranche 2: $1,145,000
Tranche 3: $1,145,000
81
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3c.
Remuneration Framework (continued)
CEO LTI Performance Rights
Fair value
Tranche 1: $720,000
Tranche 2: $710,000
Tranche 3: $700,000
How often are
CEO LTI grants
made?
The Board will evaluate in 2022 (for performance periods ending in 2024, 2025 and 2026) whether a
further issue of CEO LTI grants is desirable at that time, having regard to the CEO’s performance, the
Company’s business strategy and objectives, market conditions, and Company circumstances with
regard to CEO incentive and retention. These factors were considered at the time of the CEO LTI grants
in 2016 and 2019.
Notes
The Board acknowledges that aTSR is subject to market volatility and may therefore unfairly penalise
or reward the CEO as a result of market forces. At the same time, aTSR provides direct alignment with
Shareholders given that the CEO will “share the pains and gains” together with Shareholders.
The Board is satisfied that alongside the other three vesting conditions, the performance of the
Company is assessed in a holistic manner and the potential negative consequences of the aTSR are
partially mitigated also by its limited weighting on the total potential vesting.
The Board also has absolute discretion to amend the vesting outcomes both downwards and upwards,
should the conditions of the plan result in an inappropriate vesting. The Board will limit this discretion to
extraordinary circumstances.
3d. Executive Remuneration outcomes
Company Performance
The table below shows the performance of the Consolidated Entity over the last 5 years:
Net (loss)/profit after tax
$'000
31
December
2019
(112,866)
Basic (loss)/earnings per share
cents/share
(11.98)
KMP remuneration disclosures
6 months
ended 31
December
2018
(5,324)
(0.44)
30 June
2018
77,837
30 June
2017
166,096
(Restated)
30 June 2016
200,732
8.85
19.05
26.79
Table 1 below shows the remuneration expense recognised for each KMP for the twelve month period 1 January 2019 to 31
December 2019. Table 2 below shows the remuneration expense recognised for each KMP for the six month period 1 July 2018
to 31 December 2018. The actual remuneration received by KMP for the year is set out in Table 3. The actual remuneration
includes equity grants where the KMP received control of the shares in the period 1 January 2019 to 31 December 2019. This
differs from the remuneration disclosures in Table 1. For example, Table 1 discloses the value of LTI grants which may or may
not vest in future years, whereas Table 3 discloses the value of LTI grants from previous years which have vested during the year.
82
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
Table 1 - Statutory KMP remuneration for the year ended 31 December 2019
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG
TERM
BENEFITS
SHARE
BASED
PAYMENTS
PERFORMANCE
RELATED
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J. Welborn
747,244
5,070 94,816 71,732
25,000
P. Beilby(iii)
104,002
1,268
-
8,872
6,250
D. Kelly(iv)
341,152
6,004 44,199 18,208
24,266
-
-
-
28,306
1,425,504 2,397,672
-
32,902
153,294
9,112
198,978
641,919
L. de
Bruin(v)
471,687
5,070 41,719 59,417
37,500
103,750
13,142
149,601
881,886
A. Stanton
287,710
5,070 44,800 22,420
20,768
-
8,393
122,632
511,793
63
21
38
22
33
59
21
31
17
24
Total
1,951,795 22,482 225,534 180,649
113,784
103,750
58,953
1,929,617 4,586,564
(i)
(ii)
(iii)
(iv)
(v)
(vi)
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 STI for the year ended 31 December 2019 will be paid in cash in March 2020.
Mr P. Beilby retired effective 31 March 2019.
Mr D. Kelly appointed effective 1 April 2019.
Ms L. de Bruin resigned as Chief Financial Officer effective 13 December 2019.
Ms L. de Bruin received a payment in lieu of notice.
83
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
Table 2 - Statutory KMP remuneration for the six month period ended 31 December 2018
SHORT TERM BENEFITS
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SHARE
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n
a
m
r
o
f
r
e
P
$
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
l
a
t
o
T
$
J. Welborn
340,000
5,070
121,918
27,338
12,500
8,878
525,514 1,041,218
P. Beilby
177,604
5,070
64,906
18,162
12,500
5,553
97,991
381,786
L. de Bruin
180,288
5,070
76,532
15,715
12,500
5,038
73,511
368,654
A. Stanton
128,008
7,347
57,491
11,880
10,266
3,796
33,658
252,446
Total
825,900
22,557
320,847
73,095
47,766
23,265
730,674 2,044,104
PERFORMANCE
RELATED
i
s
t
h
g
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e
c
n
a
m
r
o
f
r
e
P
I
,
e
v
i
t
n
e
c
n
m
r
e
T
t
r
o
h
S
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
%
62
43
41
36
50
26
20
13
(i)
Non-monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe
benefits tax on those benefits and all other benefits received by the Executive.
(ii)
The Short Term Incentives for the six months ended 31 December 2018 were paid in cash in March 2019.
84
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
Table 3 - Actual KMP remuneration paid for the year ended 31 December 2019
The following table shows the nominal remuneration value realised by the individual and includes fixed remuneration, any cash
incentives paid and the nominal value of equity at the time the share rights vest or shares are awarded. We believe this information
is helpful to assist shareholders in understanding the actual pay and benefits received by KMPs from various components of their
remuneration.
The following table is a voluntary disclosure and is not prepared in accordance with Australian Accounting Standards.
Fixed Remuneration
(i)
Short Term
Incentives (ii)
Nominal Value of
2016 LTIP Vested
Rights (iii)
$
$
$
TOTAL
$
J. Welborn
P. Beilby
D. Kelly
L. de Bruin
A. Stanton (iv)
Total
784,167
207,975
372,927
559,995
312,816
121,918
64,906
38,462
76,532
57,491
412,610
1,318,695
69,371
74,301
62,920
-
342,252
485,690
699,447
370,307
2,237,880
359,309
619,202
3,216,391
(i)
(ii)
(iii)
Fixed Remuneration includes cash salary, paid leave and superannuation.
Short Term Incentives relate to Short Term Incentives earned for the 6 months period ended 31 December 2018
paid in March 2019.
2016 LTIP vested rights awarded have a nominal value based on the 10 day VWAP up to and including 30 June
2019.
(iv)
Ms A. Stanton did not participate in the 2016 LTIP.
STI outcomes
Performance Measure
Company Operating Cash Flow
($132.411m)
Cash Operating Cost Per Tonne
Milled ($54)
Production Target (Gold Poured)
(330,000oz)
Performance
Area Weighting
Actual Performance
Outcome
Commentary
30%
$11.157m
Not Achieved
30%
$66
Not Achieved
30%
297,544oz
Partially Achieved
Total Recordable Injury Frequency
Rate (2.28)
Safety Action List Performance (3)
5%
5%
1.99
2.7
Achieved
Partially Achieved
85
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
LTI outcomes
The table below displays the KMP LTI Performance Rights and the CEO LTI Performance Rights approved by Shareholders:
Year
LTI
(Perf
KMP
Grant
Rights)
LTI
(Perf
CEO
Grant
Rights)
Potentially
KMP
vesting
LTI at maximum
Potentially
CEO
vesting
LTI at maximum
Vested
KMP LTI*
Vested
CEO LTI*
Total
vested
2015
1,515,000
0
2016
2017
2018
2019
2020
2021
2022
2023
564,000
2,000,000
587,500
277,559
0
0
1,515,000
400,000
1,397,588
400,000 1,797,588
698,690
3,000,000
564,000
600,000
141,000
200,000
341,000
587,500
1,000,000
277,559
1,000,000
698,690
1,000,000
1,000,000
The following table provides information regarding the performance criteria and vesting of the CEO LTI grant in the 2016 financial
year, to demonstrate the Company’s track record and ability to set challenging targets.
Target
Achievement and Performance Rights vesting
Financial
Year 2016
CEO LTI
Tranche A
(20%) -
Ravenswood
400,000
Performance
Rights
Objective: Secure Shareholder value for
Ravenswood.
Board endorsement of either a long-term
development plan for Ravenswood, or an
alternative strategic proposal. The
following are elements for consideration:
• Board approval of a Ravenswood
Vesting: 30
June 2018
Extension Project Plan during the 2017
financial year
- Completion of relevant studies
- Plan to include standard project
components detail
- Component detail will include Buck
Reef West and/or Sarsfield in
production, metrics to be defined and
approved
86
The target of Tranche A was set for Mr Welborn in 2016 at a
period of great uncertainty for the Ravenswood Gold Mine.
Previous to Mr Welborn’s appointment as CEO, Ravenswood
had been scheduled for mine closure.
The Board assessed vesting as at 30 June 2018 based on
CEO performance against the defined target objectives.
Mr Welborn had championed the concept of a return to open
pit mining at Ravenswood and directed the completion of a
Feasibility Study for the Ravenswood Expansion Project
(REP).
The study was approved by the Board and included mining at
Sarsfield and Buck Reef West as per approved and defined
metrics. Mr Welborn directed a clear path forward for a long
life, low risk, low cost development plan for long-term
production at Ravenswood. Key elements of performance have
included:
• Production continuing beyond budgeted expectations at the
Mt Wright Underground Mine;
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
Financial
Year 2016
CEO LTI
Tranche A
(20%) -
Ravenswood
400,000
Performance
Rights
Vesting: 30
June 2018
Tranche B
(30%) –
Syama
600,000
Performance
Rights
Vesting: 30
June 2019
Target
Achievement and Performance Rights vesting
• Board approval of an alternative
strategy to deliver appropriate
Shareholder value
• The REP being granted Prescribed Project Status by the
Queensland Government;
• Investigation and inclusion of beneficiation technology to
• Maintaining production performance as
enhance outcomes;
budgeted
Objective: To ensure Shareholder value
for Syama is realized and protected.
The successful delivery of the Syama
Underground Expansion. The following
are elements for consideration:
• Reference is to relevant original
Budget and Capital approvals as well
as the Syama Underground Extension
Definitive Feasibility Study
- Subject to Board approved change
to take account of optimization
and/or approved changes to mining
or processing methods
• Full production by Q2 Financial Year
2019
• Management of government relations
• All key REP approvals being received on time and on
budget;
• All relevant REP studies being completed; and
• All REP project component details having been defined and
progressed at the Board’s satisfaction.
On the basis that the CEO had demonstrably secured
Shareholder value for Ravenswood by developing a long-term
development plan for the asset that had been fully endorsed by
the Board, the Board resolved that Tranche A of the 2016
financial year CEO LTI grant vested in full.
The Board assessed the Tranche B vesting outcome as at 30
June 2019. The measurement of whether Shareholder value
for Syama has been realised and protected was assessed
based on operating performance and the development status
of the Syama Underground Mine as at end Q2 Financial Year
2019.
Elements that were considered included:
• Status of government relations;
• Performance against budget;
• Development against DFS plan; and
• Timing of full nameplate production, including automation.
The Board (other than Mr Welborn) unanimously agreed that a
vesting outcome of 200,000 Performance Rights was justified
and appropriate based on the performance outcome relating to
delivery of the Syama Underground Expansion.
87
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
3. Remuneration Policy and Outcomes (continued)
3d. Executive Remuneration outcomes (continued)
Financial
Year 2016
CEO LTI
Tranche C
(50%) –
Production &
Sustainability
1,000,000
Performance
Rights
Vesting: 30
June 2020
Target
Achievement and Performance Rights vesting
Objective: To place the Company on a
clear path to a substantial and
sustainable increase in annual gold
production with reduced risk though
further diversification of production
centres.
The successful achievement of Board
approved developments, acquisitions,
divestments and partnerships that
substantially increase the Company’s
mineable reserves and enhance longer-
term sustainability. The following are
elements for consideration:
• the Company’s gold production
ambition of 450k oz or more from 3
operations by the 2020 financial year;
• an increase in the Company’s gold
resources per share; and
• optimum production achieved from
existing owned assets.
The Board has made the CEO aware that achievement of the
Tranche C vesting conditions would require gold production of
450k oz or more based on optimum production from existing
assets and/or the development or acquisition of an alternative
third producing asset.
The Board monitors CEO performance metrics against
strategic goals which include monitoring the Company’s gold
resources per share.
The Board will consider the increase in the Company’s
mineable reserves and assess any relevant achievement of
developments, acquisitions, divestments and partnerships that
substantially enhance Shareholder value.
The Tranche C primary performance objective is the
substantial and sustainable increase in annual gold production
with reduced risk though further diversification of production
centres.
88
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
4. Non-Executive Director Remuneration Arrangements and Outcomes
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 NEDs 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.
An independent review of NED fees was completed in 2019. Following this review, from 1 March 2019, the Chairman’s fee
increased to $180,000 from $175,000 and NED fees increased from $90,000 to $100,000. In addition, the Chair of the Audit and
Risk Committee receives a Committee Chair fee of $15,000 and the Chair of the Remuneration Committee receives a Committee
Chair fee of $10,000. Members of Committees do not receive a separate fee.
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 NEDs of comparable companies when undertaking the annual
review process. Each NED receives a fee for being a Director of the Company. The fee size is commensurate with the workload
and responsibilities undertaken. NEDs do not participate in any incentive programs.
Position
Chair of Board
Non-Executive Director
Audit and Risk Committee Chair
Remuneration Committee Chair
* Payable in addition to the annual NED fee.
Current Annual Fee
$180,000
$100,000
$15,000*
$10,000*
Non-Executive Director remuneration for the twelve month period ending 31 December 2019
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
Remuneration
Non-Monetary
Benefits
Superannuation
TOTAL
$
179,167
110,833
98,333
89,802
87,543
565,678
$
-
-
-
-
9,869
9,869
$
-
-
-
8,531
9,254
17,785
$
179,167
110,833
98,333
98,333
106,666
593,332
M. Botha
Y. Broughton
M. Potts
S. Shugg
P. Sullivan
Total
89
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
4. Non-Executive Director Remuneration Arrangements and Outcomes (continued)
Non-Executive Director remuneration for the six month period ended 31 December 2018
SHORT TERM BENEFITS
POST EMPLOYMENT
BENEFITS
Remuneration
Non-Monetary
Benefits
Superannuation
TOTAL
M. Botha
Y. Broughton
M. Potts
H. Price
S. Shugg
P. Sullivan
Total
$
87,500
45,000
45,000
20,447
25,952
36,161
260,060
$
-
-
-
-
-
4,935
4,935
$
-
-
-
8,217
-
3,904
12,121
$
87,500
45,000
45,000
28,664
25,952
45,000
277,116
5. Additional Disclosures
Executive Employment Contracts
Remuneration arrangements for KMP are formalised in employment agreements. The following table outlines the details of
contracts with key management personnel:
Name
Title
Term of
Agreement
Notice Period
by Executive
Notice Period
by Company
Termination
Benefit¹
John Welborn
Managing Director and Chief
Executive Officer
Open
6 months
12 months
Peter Beilby(i)
Chief Operating Officer
Open
3 months
6 months
David Kelly(ii)
Lee-Anne de
Bruin(iii)
Amber Stanton
Acting Chief Operating Officer
Open
3 months
3 months
Chief Financial Officer
Open
3 months
3 months
General Counsel and Company
Secretary
Open
3 months
3 months
¹ NES is the National Employment Standards.
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
Redundancy as
per NES
(i)
(ii)
(iii)
Retired effective 31 March 2019.
Appointed effective 1 April 2019.
Resigned as Chief Financial Officer effective 13 December 2019.
No options were held by KMP during the period.
90
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
5. Additional Disclosures (continued)
Details of Performance Rights holdings of KMP are as follows:
e
h
t
f
o
t
r
a
t
s
e
h
t
t
a
e
c
n
a
l
a
B
d
o
i
r
e
p
Granted during the period as compensation
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
t
a
s
t
h
g
i
r
$
)
s
r
a
e
y
(
d
o
i
r
e
p
g
n
i
t
s
e
V
f
o
e
u
l
a
v
r
i
a
F
l
a
t
o
T
t
a
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
$
e
t
a
d
t
n
a
r
g
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
f
o
e
c
i
r
p
e
s
i
c
r
e
x
E
s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
p
$
e
t
a
d
g
n
i
t
s
e
V
r
e
b
m
u
N
e
t
a
d
e
u
s
s
I
Directors
J. Welborn
3,029,059
698,690
1,000,000
1,000,000
1,000,000
21 May
2019
21 Nov
2019
21 Nov
2019
21 Nov
2019
0.78
544,978
3
0.72
720,000 2.5
0.71
710,000 3.5
0.70
700,000 4.5
31 Dec
2021
30 Jun
2021
30 Jun
2022
30 Jun
2023
1 Jan
2026
1 Jan
2026
1 Jan
2026
1 Jan
2026
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
d
e
s
p
a
L
d
o
i
r
e
p
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
d
o
i
r
e
p
(823,000)
(341,000)
5,563,749
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
d
e
t
n
a
r
g
nil
nil
nil
nil
Other key management personnel
P. Beilby
581,062
-
-
-
-
D. Kelly (i)
435,106
134,867
L. de Bruin
527,029
249,782
A. Stanton
239,395
178,821
21 May
2019
21 May
2019
21 May
2019
0.93
125,426
0.93
232,297
0.93
166,304
-
3
3
3
-
-
-
(523,731)
(57,331)
-
31 Dec
2021
31 Dec
2021
31 Dec
2021
1 Jan
2026
1 Jan
2026
1 Jan
2026
nil
(184,218)
(61,406)
324,349
nil
(547,682)
(52,000)
177,129
nil
-
-
418,216
(i)
(ii)
These were the number of performance rights held by Mr D. Kelly when he was appointed on 1 April 2019.
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 year that also vested during the year is nil.
91
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
5. Additional Disclosures (continued)
Details of shareholdings of KMP are as follows:
Received
during the year
on the vesting
of performance
rights
Balance at
the start of
the year
Purchased on
market during
the year
Other
changes
during the
year
Shares sold
on market
during the
year
Balance at the
end of the
year
Directors
M. Botha
J. Welborn
Y. Broughton
M. Potts
S. Shugg
P. Sullivan
-
26,825
-
2,840,674
Other key management personnel
P. Beilby (i)
980,229
D. Kelly (ii)
L. de Bruin
20,000
-
-
-
-
4,500,000
341,000
50,000
-
-
-
-
57,331
61,406
52,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,891,000)
3,000,000
-
-
-
-
26,825
-
(500,000)
2,340,674
(1,037,560)
-
-
-
-
(52,000)
-
81,406
-
(i)
(ii)
These were the number of shares held by Mr P. Beilby when he retired on 31 March 2019.
These were the number of shares held by Mr D. Kelly when he was appointed on 1 April 2019.
Every Director is encouraged to hold shares in the Company. Following completion of the Company’s equity raising
announced on 21 January 2020, all Directors will hold shares in the Company, subject to Shareholder approval. The Board
considered a share ownership requirement policy for Directors, however, is not proposing to introduce a formal requirement
due to the current tenure of Directors and to ensure that diversity is one of the priorities for succession planning without
imposing limitations on any potential candidate. The Board will continue reviewing this policy on an ongoing basis to ensure
it meets the requirements of the Company and its stakeholders.
92
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Remuneration Report (continued)
6. Loans to Key Management Personnel and their Related Parties
There were no loans to KMP during the year ended 31 December 2019.
This is the end of the audited information.
Performance Rights
Outstanding performance rights at the date of this report are as follows:
Grant date
29/11/16
Vesting date
30/06/20
Exercise price
-
17/10/17
28/11/17
07/03/18
26/10/18
21/05/19
21/11/19
21/11/19
21/11/19
30/06/20
30/06/20
30/06/20
30/06/21
31/12/21
30/06/21
30/06/22
30/06/23
-
-
-
-
-
-
-
-
Number on
issue
1,000,000
795,382
587,500
319,571
784,916
1,766,003
1,000,000
1,000,000
1,000,000
8,253,372
Indemnification and Insurance of Directors and Officers
Resolute 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 95 for the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.
Extension of Lead Audit Partner
On 27 June 2019, the Board granted approval pursuant to section 324DAC of the Corporations Act 2001 (Cth), for Mr Gavin
Buckingham of Ernst & Young to play a significant role in the audit of the Company for an additional one financial year through to
the financial year ending 31 December 2020.
The Board considered the matters set out in section 324DAB(3) of the Act and was satisfied that the approval:
(i) was consistent with maintaining the quality of the audit provided to the Company; and
(ii) would not give rise to a conflict of interest situation.
Reasons supporting this decision include:
•
•
•
the benefits associated with the continued retention of knowledge regarding key audit matters;
the Board being satisfied with the quality of Ernst & Young and Mr Buckingham’s work as auditor; and
the Company’s on-going governance processes to ensure the independence of the auditor is maintained.
93
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Report
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of
meetings attended by each Director were as follows:
M. Botha
P. Sullivan
J. Welborn
M. Potts
Y. Broughton
S. Shugg
Number of meetings held
Full Board
20
20
20
20
20
20
20
Audit & Risk
6
6
n/a
6
6
6
6
Remuneration
4
4
n/a
4
4
4
4
Nomination
2
2
n/a
2
2
2
2
The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.
Rounding
Resolute 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 31 December 2019. 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 nil for non-audit services in the year ended 31 December 2019 (six months
ended 31 December 2018: $nil).
Signed in accordance with a resolution of the Directors.
J.P. Welborn
Managing Director and CEO
Perth, Western Australia
27 March 2020
94
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Resolute Mining
Limited
As lead auditor for the audit of the financial report of Resolute Mining Limited for the financial
year ended 31 December 2019, I declare to the best of my knowledge and belief, there have
been:
a)
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Resolute Mining Limited and the entities it controlled during the
financial year.
Ernst & Young
Gavin Buckingham
Partner
27 March 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:JG:RESOLUTE:276
95
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Financial Statements
Financial
Statements
Notes to the
Financial
Statements
Other
96
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/Period
A.1 Segment revenues and expenses
A.2 Dividends paid or proposed
A.3 Loss 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 Cash, Debt 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 Prepayments
D.5 Payables
D.6 Provisions
D.7 Leases
D.8 Derivative Financial Liabilities
D.9 Financial Instruments Hierarchy
E Other Items
E.1 Business combination
E.2 Assets held for sale
E.3 Contingent liabilities
E.4 Commitments
E.5 Auditor remuneration
E.6 Investments in associates
E.7 Subsidiaries and non-controlling interests
E.8 Joint operations
E.9 Subsequent events
E.10 Related party disclosures
E.11 Parent entity information
E.12 Employee benefits and share-based payments
E.13 Other accounting policies
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Consolidated Statement of Comprehensive Income
Continuing operations
Revenue from contracts with customers for 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 continuing operations
Interest income
Other income
Exploration, business development and impairment of investments
in associates
Administration and other corporate expenses
Share based payments expense
Treasury - realised (losses)/gains
Fair value movements and unrealised treasury transactions
Share of associates’ losses
Depreciation of non-mine site assets
Finance costs
Other expenses
Indirect tax expense
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/ E.6
A.1
A.1
A.1
A.1/D.6
12 months to
31 December 2019
$'000
6 months to
31 December 2018
$'000
656,392
(423,149)
233,243
(108,981)
(63,559)
60,703
679
111
(20,566)
(17,538)
(2,453)
(2,980)
4,628
(1,391)
(776)
(45,542)
(881)
(57,937)
152,270
(103,762)
48,508
(9,487)
(15,210)
23,811
329
13
(1,917)
(6,282)
(1,346)
213
(13,190)
(476)
(47)
(4,786)
-
-
Loss before tax from continuing operations
(83,943)
(3,684)
Tax (expense)/benefit
A.1/A.4
Loss for the year/period from continuing operations
Discontinued operations
Loss for the year/period from discontinued operations (1)
Loss for the year/period
Loss attributable to:
Members of the parent
Non-controlling interest
E.2
E.7
(24,947)
(108,890)
(3,976)
(112,866)
(97,821)
(15,045)
(112,866)
1,835
(1,849)
(3,475)
(5,324)
(3,302)
(2,022)
(5,324)
(1) Discontinued operations relates to the Group’s Ravenswood gold mine
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
97
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Consolidated Statement of Comprehensive Income (continued)
12 months to 31
December 2019
$'000
Note
6 months to
31 December
2018
$'000
Loss for the year/period (brought forward)
(112,866)
(5,324)
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
2,606
3,460
Items that may not be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Non-controlling interest
Changes in the fair value/realisation of financial assets at fair value through
other comprehensive income, net of tax
404
(246)
(10,780)
(7,061)
Other comprehensive loss for the year/period, net of tax
(7,770)
(3,847)
Total comprehensive loss for the year/period
(120,636)
(9,171)
Total comprehensive loss attributable to:
Members of the parent
Non-controlling interest
(105,995)
(14,641)
(120,636)
(6,903)
(2,268)
(9,171)
Loss per share for net loss attributable for continuing operations to the
ordinary equity holders of the parent:
Basic loss per share
A.3
(11.98) cents
(0.44) cents
Diluted loss per share
(11.98) cents
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
A.3
(0.44) cents
98
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Consolidated Statement of Financial Position
Note
As at 31 December 2019
$'000
As at 31 December 2018
$'000
Current assets
Cash
Other financial assets – restricted cash
Receivables
Inventories
Financial assets at fair value through other comprehensive income
Assets held for sale
Prepayments and other assets
Current tax asset
Total current assets
Non current assets
Prepayments
Inventories
Investments in associates
Deferred tax assets
Other financial assets
Exploration and evaluation
Development
Property, plant and equipment
Right of use assets
Total non current assets
Total assets
Current liabilities
Payables
Financial derivative liabilities
Interest bearing liabilities
Provisions
Current tax liabilities
Lease liabilities
Liabilities associated with the assets held for sale
Total current liabilities
Non current liabilities
Interest bearing liabilities
Provisions
Financial derivative liabilities
Deferred tax liabilities
Lease liabilities
Total non current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Contributed equity
Reserves
Retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interest
Total equity
C.1
D.3
D.1
D.2
D.3
E.2
D.4
D.2
E.6
A.4
D.3
B.2
B.1
B.1
D.7
D.5
D.8
C.2
D.6
D.7
E.2
C.2
D.6
D.8
A.4
D.7
C.4
E.7
124,495
3,915
70,890
189,898
18,116
95,022
8,031
21,588
531,955
-
63,197
6,151
27,786
-
82,418
774,229
441,708
58,149
38,717
3,890
56,822
178,623
28,324
-
8,296
17,561
332,233
3,609
-
9,583
19,261
32
62,904
405,382
288,481
-
1,453,638
1,985,593
789,252
1,121,485
148,503
4,553
340,269
69,811
30,127
22,074
56,315
671,652
267,216
93,586
12,840
13,219
37,139
424,000
1,095,652
889,941
829,021
29,306
17,795
876,122
13,819
889,941
119,982
-
68,513
23,259
-
-
-
211,754
138,711
70,321
-
-
-
209,032
420,786
700,699
559,809
34,956
115,616
710,381
(9,682)
700,699
99
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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
y
t
i
u
q
e
s
n
o
i
t
p
o
e
r
a
h
S
/
s
e
t
o
n
e
l
b
i
t
r
e
v
n
o
C
e
v
r
e
s
e
r
e
v
r
e
s
e
r
s
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
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
At 1 January 2019
559,809
(7,837)
6,371
(934)
18,122
19,234 115,616
(9,682)
700,699
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Loss for the year
-
-
Other comprehensive
(loss)/income, net of tax
Total comprehensive
(loss)/income for the
year, net of tax
-
(10,780)
-
(10,780)
Shares issued
269,212
Share based payments
expense
Acquisition of non-
controlling interest
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,524
-
-
(97,821)
(15,045)
(112,866)
2,606
-
404
(7,770)
2,606
(97,821)
(14,641)
(120,636)
-
-
-
-
-
-
-
-
269,212
2,524
38,142
38,142
At 31 December 2019
829,021
(18,617)
6,371
(934)
20,646
21,840
17,795
13,819
889,941
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
100
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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
y
t
i
u
q
e
s
n
o
i
t
p
o
e
r
a
h
S
/
s
e
t
o
n
e
l
b
i
t
r
e
v
n
o
C
e
v
r
e
s
e
r
e
v
r
e
s
e
r
s
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
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
At 1 July 2018
544,972
(776)
6,371
(934)
16,576
15,774 134,073
(7,414) 708,642
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Loss for the period
Other comprehensive
(loss)/income, net of
tax
Total comprehensive
(loss)/income for the
period, net of tax
-
-
-
(7,061)
-
(7,061)
Shares issued
14,837
Dividends paid
Share based payments
expense
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,546
-
(3,302)
(2,022)
(5,324)
3,460
-
(246)
(3,847)
3,460
(3,302)
(2,268)
(9,171)
-
-
-
-
(15,155)
-
-
-
-
14,837
(15,155)
1,546
At 31 December 2018
559,809
(7,837)
6,371
(934)
18,122
19,234 115,616
(9,682) 700,699
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
101
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Consolidated Cash Flow Statement
12 months to
31 December
2019
$'000
6 months to
31 December
2018
$'000
Note
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
Payments for other financial assets
Repayment of loan from unrelated parties
Other investing activities
Payment for acquisition of subsidiaries (net of cash acquired)
E.1
Loans to associates
Proceeds from sale of financial assets at fair value through other
comprehensive income
759,219
(593,731)
(3,546)
(37,247)
668
(5,437)
119,926
(94,693)
(96,872)
(14,181)
(249)
2,997
(1,075)
(93,926)
-
-
222,738
(181,435)
(2,924)
(4,926)
396
-
33,849
(82,444)
(92,533)
(6,898)
(848)
2,230
(209)
-
(750)
417
Net cash flows used in investing activities
(297,999)
(181,035)
Cash flows from financing activities
Repayment of borrowings
Dividend paid
Proceeds from finance facilities
Repayment of lease liability
Net cash flows from financing activities
(23,526)
-
314,066
(13,277)
277,263
-
(15,155)
136,732
-
121,577
Net increase/(decrease) in cash and cash equivalents
99,190
(25,609)
Cash and cash equivalents at the beginning of the period
Exchange rate adjustment
Cash and cash equivalents at the end of the period
Cash and cash equivalents comprise the following:
Cash at bank and on hand
Bank overdraft
C.1
C.1
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.
(28,581)
(1,824)
68,785
124,495
(55,710)
68,785
(4,837)
1,865
(28,581)
38,717
(67,298)
(28,581)
102
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
About this Report
The Financial Report of Resolute Mining Limited and its controlled entities (“Resolute”, “consolidated entity” or the “Group”) for
the year ended 31 December 2019 was authorised for issue in accordance with a resolution of the Directors on 27 March 2020.
Resolute Mining Limited (the parent) is a for profit company limited by shares incorporated and domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange and the London Stock Exchange. 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. Information
on the Group’s structure is provided in Note E.7.
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 (Cth). 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 31 December 2018 Financial Report, except for the impact of all new or amended Standards and Interpretations
as detailed in Note E.13.
The Financial Report includes financial information for Resolute Mining Limited (“Resolute”) as an individual entity and the
consolidated entity consisting of Resolute and its subsidiaries (“the Group”). 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 at fair value.
In late 2018, the Group elected to change its financial year end from 30 June to 31 December. This enabled Resolute to align its
financial reporting period with its subsidiaries in Mali and Senegal. This change results in comparatives for financial performance
in these financial statements being made to the six-month transitional period to 31 December 2018.
The Financial Report comprises of the financial statements of the Group and its subsidiaries as at 31 December 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.
At 31 December 2019, the Group has a net current liability position of $139.7 million (principally as a result of $340.3 million of
current interest-bearing liabilities) which was restored post 31 December 2019 following completion of equity raisings and debt
repayment and debt refinance as detailed in Note E.9.
Rounding of Amounts
The Financial Report has been prepared in Australian dollars and all values are rounded to the nearest thousand dollars ($’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.
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at
the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange
at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary
items classified as net investment in a foreign operation. These are recognised in OCI until the net investment is disposed of, at
which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences
on those monetary items are also recorded in OCI.
103
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
About this Report (continued)
Currency (continued)
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at
the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss,
respectively).
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 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 proceeds on the sale of its gold and silver production in US$ and A$ and a large portion of its costs at the
Syama Gold Mine, Mako Gold Mine and the Bibiani Gold Mine are denominated in EUR, US$ and local currencies, 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 in 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 D
Capital risk, Interest rate risk, Liquidity risk, Foreign currency risk
Credit risk, Foreign currency risk
104
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period
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 poured and cost of production per ounce of gold poured. 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:
•
•
•
finance costs;
share of associates’ losses and,
net gains/losses on disposal of available-for-sale investments.
At 31 December 2019, the subsidiaries holding the Ravenswood Gold Mine (“Ravenswood”) in Queensland were classified as a
disposal group held for sale and as a discontinued operation. The business of Ravenswood represented the entirety of the Group’s
Ravenswood (Australia) operating segment. With Ravenswood being classified as discontinued operations, the Ravenswood
segment is no longer presented in the segment note.
On 15 January 2020, Resolute signed a definitive agreement for the sale of Ravenswood to a consortium comprising of a fund
managed by private equity manager EMR Capital Management Limited (“EMR Capital”) and energy and mining company Golden
Energy and Resources Limited.
On 2 August 2019, Resolute (through its wholly-owned subsidiary, Resolute UK 2 Limited) acquired Toro Gold Limited, owner of
the Mako Gold Mine in Senegal (refer to note E.1 for further details). Mako is a separate business segment and has therefore
been included as an additional segment for 2019.
Recognition and measurement
Revenue from gold and other sales
Revenue from gold and other sales represents revenue from contracts with customers and is recognised at the point in time when
the Group transfers control of products to a customer. For sales of gold bullion, control is obtained when the gold is credited to
the metals account of the customer. Revenue is recognised at the amount to which the Group expects to be entitled.
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.
Key estimates and judgements
Revenue from contracts with customers
Judgement is required to determine the point at which the customer obtains control of gold. Factors including transfer of legal
title, transfer of significant risks and rewards of ownership and the existence of a present right to payment for the gold typically
result in control transferring on delivery of the gold.
105
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Notes to the Financial Statements
A: Earnings for the period (continued)
A.1 Segment revenues and expenses (continued)
For the 12 months to 31
December 2019
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
Administration and other
corporate expenses
Share-based payments
expense
Exploration and business
development expenditure
Impairment of investment in
associate
Exploration, business
development and
impairment of investments
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
Unallocated (b)
Mako
(Senegal)
$'000
Syama
(Mali)
$'000
Bibiani
(Ghana)
Corporate/
Other
Treasury
Total
$'000
$'000
$'000
$'000
165,528
490,864
165,528
490,864
(61,574)
(357,504)
272
(4,343)
(61,302)
(361,847)
(8,276)
(32,595)
(11,222)
(11,466)
(19,498)
(44,061)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,489)
(2,797)
(3,282)
(8,970)
-
-
(313)
(2,140)
(2,023)
(3,815)
(440)
(11,907)
-
-
-
-
-
-
-
-
-
-
-
656,392
656,392
(419,078)
(4,071)
(423,149)
(40,871)
(22,688)
(63,559)
(17,538)
(2,453)
(18,185)
-
-
-
-
(2,381)
(2,381)
(2,023)
(3,815)
(440)
(11,907)
(2,381)
(20,566)
80,216
78,344
(4,035)
(23,017)
(2,381)
129,127
(10,285)
(23,247)
-
(40,714)
(32,994)
(1,741)
(50,999)
(56,241)
(1,741)
-
-
-
-
-
-
(33,532)
(75,449)
(108,981)
29,217
22,103
(5,776)
(23,017)
(2,381)
20,146
106
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.1 Segment revenues and expenses (continued)
For the 12 months to 31
December 2019
Segment operating result before
treasury, other
income/(expenses) and tax
(brought forward)
Interest income
Other income
Interest and fees
Rehabilitation and restoration
provision accretion
Finance costs
Realised foreign exchange (loss)/
gain
Realised gain/(loss) on forward
contracts
Treasury - realised gains/(losses)
Inventories net realisable value
movements and obsolete
consumables
Unrealised foreign exchange loss
Unrealised loss on derivative
financial liability
Unrealised foreign exchange loss on
intercompany balances
Fair value movements and
unrealised treasury transactions
Other expenses
Share of associates' losses
Depreciation of non-mine site assets
Indirect tax expense
Income tax (expense)/benefit
Profit/(loss) for the 12 months to
31 December 2019
Mako
(Senegal)
$'000
29,217
Syama
(Mali)
$'000
22,103
Bibiani
(Ghana)
$'000
(5,776)
Corporate/
Other
$'000
(23,017)
Treasury
$'000
(2,381)
Total
$'000
20,146
Unallocated (b)
509
-
(4,663)
(153)
(4,816)
(1,163)
2,767
1,604
-
3
-
(757)
(757)
-
-
-
-
24,890
(1,731)
(1,704)
-
-
-
-
(3,435)
24,890
-
-
-
-
(58)
23,021
(881)
-
-
(57,937)
(33,413)
(45,992)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(109)
-
-
-
-
-
-
-
-
-
-
-
-
-
(776)
-
8,524
170
217
(39,969)
-
679
111
(44,632)
(910)
(39,969)
1,910
(45,542)
747
(6,494)
(3,727)
(4,584)
(2,980)
-
24,890
(2,551)
(4,282)
-
(1,704)
(14,276)
(14,276)
(16,827)
4,628
-
(1,391)
-
-
-
(881)
(1,391)
(776)
(57,937)
(24,947)
(5,776)
(15,378)
(64,765)
(108,890)
107
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.1 Segment revenues and expenses (continued)
For the six months to 31
December 2018
Syama (Mali)
$'000
Bibiani
(Ghana)
$'000
Corporate/
Other
$'000
Treasury
$'000
Total
$'000
Unallocated (b)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
152,270
152,270
(101,538)
(2,224)
(103,762)
(9,709)
(5,501)
(15,210)
(6,282)
(1,346)
(1,917)
23,753
(3,369)
(6,118)
(9,487)
14,266
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
Administration and other corporate
expenses
152,270
152,270
(101,538)
(2,224)
(103,762)
(9,709)
(5,500)
(15,209)
(2,123)
Share-based payments expense
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1)
(1)
(4,159)
(1,346)
(680)
(55)
(1,182)
31,121
(1,182)
(6,186)
(3,369)
(6,118)
(9,487)
-
-
-
-
-
-
21,634
(1,182)
(6,186)
Exploration and business
development expenditure
(Loss)/earnings 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
(expenses)/income and tax
108
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.1 Segment revenues and expenses (continued)
For the six months to 31
December 2018
Syama (Mali)
$'000
Bibiani
(Ghana)
$'000
Corporate/
Other
$'000
Treasury
$'000
Total
$'000
Unallocated (b)
21,634
(1,182)
(6,186)
-
14,266
Segment operating result before
treasury, other
(expenses)/income and tax
(brought forward)
Interest income
Other income
Interest and fees
Rehabilitation and restoration
provision accretion
Finance costs
Realised foreign exchange loss
Realised gain on forward contracts
Treasury - realised gains
Inventories net realisable value
movements and obsolete
consumables
Unrealised foreign exchange loss
Unrealised foreign exchange gain
on intercompany balances
Fair value movements and
unrealised treasury transactions
Other expenses
Share of associates' losses
Depreciation of non-mine site
assets
-
-
-
(415)
(415)
-
-
-
(28,745)
-
-
(28,745)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6)
-
-
-
Income tax (expense)/benefit
(4,283)
(Loss)/profit for the six months
to 31 December 2018
(11,809)
(1,188)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(47)
6,118
(115)
329
13
(4,371)
329
13
(4,371)
-
(415)
(4,371)
(139)
352
213
(4,786)
(139)
352
213
-
(28,745)
(1,477)
(1,477)
17,032
17,032
15,555
(13,190)
-
(476)
-
-
(6)
(476)
(47)
1,835
11,263
(1,849)
109
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
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.
(c) At 31 December 2019, the subsidiaries holding the Ravenswood Gold Mine (“Ravenswood”) were classified as a disposal
group held for sale and as a discontinued operation. The business of Ravenswood represented the entirety of the Group’s
Ravenswood (Australia) operating segment. With Ravenswood being classified as discontinued operations, the Ravenswood
segment is no longer presented in the segment note.
A.2 Dividends paid or proposed
The company’s dividend policy is, subject to board discretion, to pay a minimum of 2% of gold sales revenue as a dividend. A
dividend has not been declared for the year ended 31 December 2019.
A.3 Loss per share
Basic loss per share
12 months to 31
December 2019
6 months to 31
December 2018
Loss attributable to ordinary equity holders for continued operations of the parent for
basic loss per share ($'000)
Weighted average number of ordinary shares outstanding during the period used in
the calculation of basic EPS
(97,821)
(3,302)
816,354,938
755,294,647
Basic loss per share from continuing operations (cents per share)
(11.98)
(0.44)
Diluted loss per share from continuing operations (cents per share) (1)
(11.98)
(0.44)
¹ Dilutive instruments have not been included in the calculation of diluted earnings per share for 31 December 2019 and 2018 because the result
for the period was a loss.
Measurement
Basic earnings per share (“EPS”) is calculated as net (loss)/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 (loss)/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.
110
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.3 Loss per share (continued)
Information on the classification of securities
Options and performance rights granted to employees (including Key Management Personnel) as described in E.12 are
considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent
they are dilutive. These options and performance rights have not been included in the determination of basic loss per share.
A.4 Taxes
a)
Income tax expense/(benefit)
Current tax expense
Deferred tax benefit
Total tax expense/(benefit)
b) Numerical reconciliation of income tax expense/(benefit) to prima facie tax
expense/(benefit)
Loss before income tax benefit from continuing operations
Loss before income tax benefit from discontinued operations
Total accounting loss
Prima facie income tax benefit at 30% (6 months ended 31 December 2018: 30%)
Add/(deduct):
- net movement in temporary differences and tax losses not recognised/recognised
- effect of different rates of tax on overseas income
- effect of share based payments expense not deductible
- other permanent differences
Income tax expense/(benefit) attributable to net loss
12 months to
31 December
2019
$'000
6 months to
31 December
2018
$'000
33,472
(8,525)
24,947
(83,943)
(3,976)
(87,919)
(26,376)
49,602
5,177
776
(4,232)
24,947
7,970
(9,805)
(1,835)
(3,684)
(3,475)
(7,159)
(2,148)
(803)
2,830
447
(2,161)
(1,835)
111
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.4 Taxes (continued)
c) Tax losses (tax effected)
Revenue losses
-
Australia
- Mali
- Ghana
Capital losses
-
Australia
Total tax losses
Total tax losses – recognised (Australia)
Total tax losses – recognised (Mali)
12 months to
31 December
2019
$'000
6 months to
31 December
2018
$'000
20,423
33,789
23,813
78,025
58,466
136,491
(14,642)
(13,144)
15,148
23,649
21,573
60,370
52,314
112,684
(6,118)
(13,143)
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)
108,705
93,423
d) Movements in the deferred tax assets balance
Balance at the beginning of the period/year
Credited to the income statement
Balance as at the end of the period/year
The deferred tax assets balance comprises temporary differences attributable to:
Receivables
Inventories
Financial assets at fair value through other comprehensive income
Mineral exploration and development interests
Investments in associates
Property, plant and equipment
Payables
Provisions
Business related costs
Carried forward tax losses – recognised (Australia)
Carried forward tax losses – recognised (Mali)
Temporary differences not recognised
Set off of deferred tax liabilities pursuant to set off provisions
Net deferred tax assets
19,261
8,525
27,786
9,456
9,805
19,261
110,111
-
5,020
123,726
1,952
23,094
-
19,631
174
14,642
13,144
(252,587)
(31,121)
27,786
81,866
1,008
9,320
128,373
-
53,731
30
174
-
6,118
13,143
(257,954)
(16,548)
19,261
112
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
A.4 Taxes (continued)
e) Movements in the deferred tax liabilities balance
The deferred tax liabilities balance comprises temporary differences attributable to:
Receivables
Inventories
Mineral exploration and development interests
Property, plant and equipment
Payables
Derivative financial liabilities
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
12 months to 31
December 2019
$'000
6 months to
31 December
2018
$'000
1,674
8,380
29,250
2,149
2,492
395
44,340
(31,121)
13,219
194
2,566
64
2,824
(64)
2,760
1,553
8,191
6,804
-
-
-
16,548
(16,548)
-
194
2,566
64
2,824
(64)
2,760
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%.
108
108
Recognition and measurement
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.
113
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
A: Earnings for the period (continued)
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
Resolute 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 Société 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.
Under the terms of the Mining Convention with the Government of Senegal, Petowal Mining Company SARL has a seven-
year tax holiday from the date of award of the mining concession (July 2016). The tax holiday period will be reviewed after two
and a half years of operations and reduced to five years in the event the Company does not extend the mine life by one or
more years by that date.
A deferred income tax asset of $13.1 million has been recognised at 31 December 2019 in relation to carried forward Mali tax
losses and a further $14.6 million in relation to carried forward Australian tax losses. Realisation of sufficient taxable profit in
future periods is regarded as probable.
The future benefit will only be obtained if:
future assessable income is derived of a nature and an amount sufficient to enable the benefit to be realised;
the conditions for deductibility imposed by tax legislation have been continued to be complied with; and,
(i)
(ii)
(iii) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
114
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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 orebodies 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 required plant infrastructure.
b) Areas in Production:
Represent the accumulation of all acquired exploration, evaluation and development expenditure in which economic mining
of an Ore 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 the following basis:
Motor vehicles
Office equipment
Life
3 years
3 years
Plant and equipment
Life of mine years
Method
Straight line
Straight line
Straight line over
life of mine years
115
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
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 orebody, 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.
tonnes) 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 capitalising 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 property 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
116
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
B.1 Mine properties and property, plant and equipment (continued)
Plant and Equipment
Development Expenditure
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
i
t
n
e
m
p
u
q
E
e
c
i
f
f
O
s
t
e
s
s
A
d
e
s
a
e
L
l
a
t
o
T
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
8,030
276,066
1,018
2,883
484
288,481
397,282
8,100
405,382
242
99,256
3,597
2,638
2,214
138,068
1,387
787
105,733
91,500
5,840
97,340
142,456
377,963
-
-
-
1,990
(2,466)
(33)
(722)
-
-
219
(257)
-
(596)
(1,351)
(991)
(31,531)
(863)
(1,301)
-
(34,686)
-
-
-
-
-
377,963
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,886)
(13,886)
-
(63,813)
-
(63,813)
-
18,433
(51,035)
(31,397)
-
-
18,433
(31,397)
(43)
(7,672)
(72)
(6)
160
(7,633)
(15,739)
(54)
(15,793)
Assets held for sale
(2,172)
(48,498)
(100)
(265)
9,237
422,501
4,967
4,955
48
441,708
774,229
Cost
23,204
946,090
12,573
14,260
21,818
1,017,945
1,232,456
Accumulated
depreciation and
impairment
(11,795)
(475,091)
(7,506)
(9,040)
(21,770)
(525,202)
(426,830)
Assets held for sale
(2,172)
(48,498)
(100)
(265)
-
(51,035)
(31,397)
Net carrying
amount
9,237
422,501
4,967
4,955
48
441,708
774,229
12 months to 31
December 2019
Opening write
down value
Additions
Acquisition of
subsidiary
Transfers (to)/from
areas in exploration
and development
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 31 December
net of
accumulated
depreciation
-
-
-
-
-
774,229
1,232,456
(426,830)
(31,397)
774,229
117
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
B.1 Mine properties and property, plant and equipment (continued)
Plant and Equipment
Development Expenditure
t
n
e
m
p
u
q
E
&
i
t
n
a
l
P
s
g
n
d
i
l
i
u
B
s
e
l
c
i
h
e
V
r
o
t
o
M
i
t
n
e
m
p
u
q
E
e
c
i
f
f
O
s
t
e
s
s
A
d
e
s
a
e
L
l
a
t
o
T
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
7,777
160,385
1,000
2,838
656
172,656
301,389
769
302,158
6 months to 31
December 2018
Opening write
down value
Additions
-
116,758
-
-
(86)
(6,490)
(17)
(78)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
116,758
89,656
10,738
100,394
(6,671)
-
-
-
-
-
(3,516)
1,408
-
-
(3,520)
(3,520)
-
-
(3,516)
1,408
339
5,413
35
123
(172)
5,738
8,345
113
8,458
8,030
276,066
1,018
2,883
484
288,481
397,282
8,100
405,382
Depreciation
expense
Amounts amortised
to costs of
production relating
to gold sales
Amortisation
expense
Adjustments to
rehabilitation and
restoration
obligations
Foreign currency
translation
At 31 December
net of
accumulated
depreciation
Cost
17,629
684,573
5,819
9,921
22,254
740,196
768,638
12,210
780,848
Accumulated
depreciation and
impairment
Net carrying
amount
(9,599)
(408,507)
(4,801)
(7,038)
(21,770)
(451,715)
(371,356)
(4,110)
(375,466)
8,030
276,066
1,018
2,883
484
288,481
397,282
8,100
405,382
118
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
B.2 Exploration and evaluation assets
Exploration and evaluation (at cost)
Balance at the beginning of the period
Acquisition of subsidiary
Evaluation expenditure during the period
Adjustments to rehabilitation obligations
Foreign currency translation
Balance at the end of the year
Recognition and measurement
12 months to
31 December
2019
$’000
6 months to
31 December
2018
$’000
62,904
5,697
12,157
1,231
429
82,418
53,162
-
7,098
(184)
2,828
62,904
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 period/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 is 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 and evaluation
expenditure expected in the 12 months ending 31 December 2020 for the consolidated entity is approximately $23.8 million (actual
expenditure for the year ended 31 December 2019: $20.0 million). This includes the minimum amounts required to retain tenure.
There are no material exploration commitments further out than one year.
119
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
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 of disposal and value in use. In assessing fair value less costs of disposal, 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 loss or reversal of prior period impairment loss was recognised in 2019 (31 December 2018: nil).
Key estimates and judgements
Determination of Mineral Resources and Ore Reserves
The determination of Ore 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 are estimated by management based on prevailing market conditions.
When applicable, 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
‐
‐
120
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
B: Production and Growth Assets (continued)
B.4 Segment expenditure, assets and liabilities
For the 12 months to 31
December 2019
Capital expenditure
Segment assets of
continuing operations
Segment liabilities of
continuing operations
For the 6 months to 31
December 2018
Capital expenditure
Segment assets of
continuing operations
Segment liabilities of
continuing operations
Mako
(Senegal)
$’000
6,682
Syama
(Mali)
$’000
164,157
Bibiani
(Ghana) Corp/ Other
$’000
12,326
$’000
9,070
Treasury
$’000
-
Total
$’000
192,235
663,611
1,085,915
111,244
29,801
211,306
443,278
13,796
370,957
-
-
1,890,571
1,039,337
Ravenswood
(Australia)
$’000
7,708
Syama
(Mali)
$’000
176,466
Bibiani
(Ghana) Corp/ Other
$’000
6,233
$’000
23,106
Treasury
$’000
-
88,442
764,239
99,655
169,149
52,934
213,327
12,463
142,062
-
-
Total
$’000
213,513
1,121,485
420,786
121
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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
As at 31
December 2019
As at 31
December 2018
$'000
124,495
$'000
38,717
For the purpose of the cash flow statement, cash and cash equivalents comprise the following at the end of each period:
Cash at bank and on hand
Bank overdraft - ref C.2
124,495
(55,710)
68,785
38,717
(67,298)
(28,581)
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
AA-
A
A+
BB
B
Counterparties without external credit ratings
Total cash at bank and short term deposits
Recognition and measurement
As at 31
December 2019
As at 31
December 2018
332
31,653
21,310
96
69,136
1,968
124,495
13
32,759
-
-
-
5,945
38,717
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 $104.5 million of cash and cash equivalents at 31 December 2019 (31 December 2018: $30.5 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 (December 2019: $82.8 million; December 2018: $28.7 million equivalent) and Euro
(December 2019: $0.2 million; December 2018: $0.01 million equivalent).
Average interest rates earned on cash and cash equivalents during the period was 0.80% (6 months to December 2018: 0.98%).
122
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.1 Cash (continued)
Reconciliation of net loss from continuing and discontinued operations after income tax to the net operating cash flows:
Loss from continuing operations
Loss after tax from discontinued operations
Loss after tax
Add/(deduct):
Share based payments including employee long term incentive costs
Loss on sale of property, plant and equipment
Unrealised loss on derivative financial liability
Profit on sale of financial assets at fair value through other comprehensive income
Rehabilitation and restoration provision accretion
Rehabilitation and restoration cash expenditure
Depreciation and amortisation
Foreign exchange losses/(gains)
Inventory net realisable value movements
Impairment of investment in associate
Share of associates’ losses
Indirect tax expense
Non cash finance costs
Changes in operating assets and liabilities:
Increase in receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
Increase in stripping activity asset
Increase in payables
Net increase in current tax liabilities
Decrease/(increase) in deferred tax balances
Increase in operating provisions
Net operating cash flows
12 months to
31 December
2019
6 months to
31 December
2018
$'000
(108,890)
(3,976)
(112,866)
2,453
-
1,704
-
910
216
$'000
(1,849)
(3,475)
(5,324)
1,346
6
-
(352)
893
(237)
114,909
10,157
18,558
(15,555)
(26,489)
29,157
2,381
1,391
57,937
-
(14,068)
(11,555)
(936)
(5,894)
44,771
26,100
8,525
11,879
119,926
-
476
-
16
(10,021)
7,781
4,745
(7,029)
20,303
3,838
(9,439)
3,088
33,849
123
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.1 Cash (continued)
Cash flow by segment
Mako
(Senegal)
$’000
Syama
(Mali)
$’000
Bibiani
(Ghana)
$’000
Unallocated (b)
Corp/ Other Treasury
$’000
$’000
Total
$’000
190,635
(126,385)
(15,662)
(28,284)
151,966
172,270
(46,165)
(96)
(11,588)
(61)
(15,170)
99,190
-
(98,594)
(7,776)
(21,126)
154,696
27,200
(514)
(2,763)
(20,016)
242
(29,758)
(25,609)
For the 12 months to 31 December 2019
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 poured but unsold at
market value
Mark to market movement in gold
unsold
Movement in bank overdraft, including
foreign exchange movements
Exchange rate adjustment in cash on
hand
Cash flow from discontinued operations
Movement in cash and cash
equivalents per consolidated cash
flow statement
For the 6 months to 31 December 2018
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 poured but unsold at
market value
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
operations
Movement in cash and cash
equivalents per consolidated cash
flow statement
124
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.2 Interest bearing liabilities
Interest bearing liabilities (current)
Bank overdraft - ref C3.1
Insurance premium funding
Borrowings
Interest bearing liabilities (non current)
Borrowings
As at 31
December
2019
As at 31
December
2018
$’000
$’000
55,710
400
284,159
340,269
267,216
267,216
67,298
1,215
-
68,513
138,711
138,711
607,485
207,224
Recognition and measurement
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 $1,766 million (as at December 2018: $1,075 million). $414 million (as at December 2018: $262 million) of these assets relate
to property, plant and equipment.
Interest bearing liabilities
The Group’s interest bearing liabilities have a fair value equal to the carrying value.
The Group held $607 million of interest bearing liabilities at 31 December 2019 (As at 31 December 2018: $207 million) 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 year end was 6.50% (2018: 5.97%).
125
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
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
C.3 Financing facilities
C3.1 Bank overdraft
As at 31 December
2019
As at 31 December
2018
$'000
$'000
192,461
156,068
282,527
631,056
(23,571)
607,485
1,776
76,258
149,486
227,520
(20,296)
207,224
The current facility with the Bank Du Mali SA is in place and is subject to an annual revision in September 2020. The facility totals
CFA 27.5 billion (A$67.0 million) and as at 31 December 2019, $11.1 million of the facility was unused.
C3.2 Syndicated facilities
On 13 July 2018, Resolute established a three-year US$100 million revolving credit facility with Investec Australia Limited
(“Investec”) as Facility A of a new Syndicated Facility Agreement (the “SFA”). Facility A is scheduled to mature on 13 July 2021.
As part of the process of syndication of the Syndicated Facility Agreement, the facility limit of Facility A was expanded to US$150
million with the participation of Investec, BNP Paribas S.A, Citibank N.A and Nedbank Limited. Under the facility expansion, a
$35.0 million Letter of Credit Facility with Citibank N.A. was also rolled into the SFA as a new Facility B. The expanded facility
was signed on 21 December 2018, all conditions precedent were satisfied as of 31 December 2018 and the expanded facility was
fully available to Resolute to draw from 3 January 2019.
The SFA was further expanded to US$195.0 million on 25 November 2019 by the addition of a second US$45.0 million revolving
credit facility as Facility C, which is scheduled to mature on 22 May 2020. As at 31 December 2019, US$5.0 million of Facility C
was undrawn.
In addition, the $35.0 million letter of credit Facility B was reduced to $5 million. Facility B relates mainly to Environmental
Performance Bonds for the Ravenswood Gold Mine. $5.0 million of this facility has been drawn and expires on 30 June 2020.
The SFA and hedging facilities, also provided by the lenders or their affiliates are secured by the following:
(i) Cross Guarantee and Indemnity given by Resolute (“the Borrower”), Carpentaria Gold Pty Ltd, Resolute (SOMISY)
Limited, Resolute (Treasury) Pty Ltd and Resolute (Bibiani) Limited;
(ii) Share Mortgage granted by Resolute over all of its shares in Carpentaria Gold Pty Ltd;
(iii) Share Mortgage granted by the Borrower over all of its shares in Resolute (Bibiani) Limited and Resolute (SOMISY)
Limited;
(iv) 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;
(v) 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;
(vi) Mortgage of Contractual Rights granted by Resolute Mining Limited in favour of the Security Trustee over a loan provided
to Société des Mines de Syama SA;
(vii) 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,
(viii) 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.
126
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.3 Financing facilities (continued)
C3.2 Syndicated facilities (continued)
Pursuant to the Syndicated Facility Agreement, the following ratios are required:
(Interest Cover Ratio): the ratio of EBITDA to Net Interest Expense will be greater than 5.00 times;
(i)
(ii) (Net Debt to EBITDA): the ratio of Net Debt to EBITDA will be less than 2.00 times;
(iii) (Consolidated Gearing): the ratio of Net Debt to Equity will be less than 1.00 times; and
(iv) (Reserve Tail Ratio): will exceed 30%.
There have been no breaches of these ratios.
The $9.5 million (US$7 million) Letter of Credit Facility Agreement with Société General Ghana Limited relates to Environmental
Performance Bonds for the Bibiani Project. This facility is fully drawn and expires on 31 December 2020. The Société General
Ghana Limited Letter of Credit Facility Agreement is also supported by a guarantee provided by Resolute Mining Limited. The
Ghanaian Environmental Protection Agency has advised that the amount of the Environmental Performance Bonds can be
reduced to US$5.6 million and the new bond is in the process of being finalised.
On 31 July 2019, Resolute UK 2 Limited (“RUK2”) agreed to acquire all of the issued capital in Toro Gold. To finance part of the
acquisition consideration, a bridge loan facility agreement dated 30 July 2019 was entered into between, among others, RUK2
and Taurus Mining Finance Fund No.2, L.P. as facility agent (the “Acquisition Facility Agreement”) under which RUK2 borrowed
US$130 million. The Acquisition Facility Agreement matures on 1 February 2020, subject to RUK2 having the option to make up
to six extensions of the maturity date, each of one month’s duration. The Acquisition Facility Agreement was secured by a security
interest agreement granted by RUK2 over all of the issued shares of Toro Gold. This has been fully repaid subsequent to 31
December 2019. Please refer to note E.9 for further details.
To finance the construction and development of the Mako Gold Project, a US$110 million project term loan facility agreement
dated 5 May 2017 was entered into between, among others, Bambuk Minerals Limited ("Bambuk") and Taurus Mining Finance
Fund L.P. as facility agent (the "Project Facility Agreement"). The Project Facility Agreement matures on 31 March 2022, with
instalments made quarterly to the date of maturity. Subsequent to year end this facility was repaid (refer to note E.9).
The Project Facility Agreement is secured by the following:
(i) Share pledge granted by Toro Gold in respect of shares held by Toro Gold in Bambuk;
(ii) Assignment of contracts granted by Petowal Mining Co. S.A. (“PMC”);
(iii) Assignment of contracts granted by Bambuk and Toro;
(iv) Assignment of loan to PMC granted by Bambuk;
(v) Offshore (France) bank account pledge agreement granted by PMC;
(vi) Offshore (Mauritius) bank account pledge granted by Bambuk;
(vii) Fixed and floating charge over account (Mauritius) granted by Bambuk;
(viii) Pledge over the shares of PMC granted by Bambuk;
(ix) Pledge over the shares of Mako Exploration Company S.A. granted by Bambuk;
(x) Onshore (Senegal) bank account pledge granted by PMC;
(xi) Pledge of movable assets granted by PMC;
(xii) Mortgage of mining licence and mining convention incorporating a mortgage over buildings and immovable property
granted by PMC;
(xiii) Receivables pledge agreement granted by PMC.
127
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.4 Contributed Equity
Ordinary share capital:
903,153,734 ordinary fully paid shares (2018: 757,512,088)
829,021
559,809
12 months to
31 December
2019
6 months to
31 December
2018
$'000
$'000
Movements in contributed equity, net of issuing costs:
Balance at the beginning of the period
Issue of shares to Manas Resources1
Issue of share to Oklo Resources2
Issue of shares to Toro3
Issue of shares to Taurus4
Issue of shares to Orca Gold
Issue of shares to Loncor Resources
Balance at the end of the year
559,809
544,972
343
323
265,052
3,494
-
-
417
-
-
-
11,774
2,646
829,021
559,809
¹This relates to the purchase of 79,294,874 shares in Manas Resources Limited which resulted in the issue of 300,000 Resolute shares.
2This relates to the purchase of 1,297,944 shares in Oklo Resources Limited which resulted in the issue of 282,500 Resolute shares.
3This relates to the acquisition of Toro Gold which resulted in the issue of 142,500,000 Resolute shares.
4This relates to the transactional costs in Taurus Financing which resulted in the issue of 1,800,000 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.12 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 (Cth.). 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.
128
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
C: Cash, Debt and Capital (continued)
C.5 Other reserves
Reserve
Nature and purpose
Net unrealised gain/(loss) reserve
This reserve records fair value changes on financial assets at fair value through other
comprehensive income.
Convertible notes/Share options equity
reserve
This reserve records the value of the equity portion (conversion rights) of the convertible notes
and records the fair value of share options issued.
Employee benefits equity reserve
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.
Foreign currency translation reserve
Represents exchange differences arising on translation of foreign controlled entities.
Non-controlling interests’ reserve
This reserve records the difference between the fair value of the amount by which the non-
controlling interests were adjusted to record their initial relative interest and the consideration
paid for Resolute’s acquisition for that share of the interest.
Key financial and capital risks associated with Cash, Debt and Capital
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), returns of capital to shareholders, buybacks of its
shares, the issue new shares, the level of borrowing from financiers or the sale of 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 31 December 2019 is 60% (31 December 2018, 2018: 24%). The Group is not subject to any
externally imposed capital management 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
controlling interest) plus net debt.
Statement of Financial Position (including non
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.
‐
Interest rate risk
Foreign exchange risk
Carrying
Amount
$'000
-1%
Profit
$'000
Equity
$'000
+1%
Profit Equity
$'000
$'000
-10%
+10%
Profit
$'000
Equity
$'000
Profit
Equity
$'000
$'000
31 December 2019
Cash
124,495
(870)
(870)
870
870
8,127
8,127
(6,649)
(6,649)
Interest bearing liabilities
551,375
(3,909)
(3,909)
3,909
3,909
43,430
43,430
(35,534)
(35,534)
Total (decrease)/increase
(4,779)
(4,779)
4,779
4,779
51,557
51,557
(42,183)
(42,183)
31 December 2018
Cash
Interest bearing liabilities
Total (decrease)/increase
38,717
138,711
(227)
(992)
(227)
(992)
227
992
227
992
2,221
2,221
(1,817)
(1,817)
11,028
11,028
(9,023)
(9,023)
(1,219)
(1,219)
1,219
1,219
13,249
13,249
(10,840)
(10,840)
129
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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
Trade and other receivables
Taxation receivables ¹
Loans advanced to other parties
As at 31
December
2019
As at 31
December
2018
$'000
702
70,188
-
70,890
$'000
2,757
50,316
3,749
56,822
¹ The taxation receivables primarily relate to indirect taxes owing to the group by the State of Mali.
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
Group 2
As at 31
December
2019
As at 31
December
2018
$'000
$'000
1,554
1,822
68,997
339
70,890
54,544
456
56,822
*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 expected credit
losses. Trade receivables are due for settlement no more than 30 days from the date of recognition.
Taxation receivables are considered statutory in nature and therefore not accounted for as financial assets under AASB 9.
Taxation receivables are initially recognised and subsequently measured at amortised cost.
Fair value and foreign exchange risk
The carrying amount of receivables determines their approximate fair value. The Group always recognises the lifetime expected
credit loss for trade receivables carried at amortised cost. The expected credit losses on these financial assets are estimated
based on the Group’s historic credit loss experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as forecast conditions at the reporting date.
For all other receivables measured at amortised cost, the Group recognises lifetime expected credit losses when there has been
a significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the loss allowance for the financial instrument at an amount equal to
expected credit losses within the next 12 months.
The Group held $3.2 million in receivables at 31 December 2019 (31 December 2018: $1.9 million) in currencies other than
Australian dollars or in a different currency to that of the functional currency of the company which holds the item.
130
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.2 Inventories
Current
Ore stockpiles
- At cost
- At net realisable value
Total ore stockpiles
Gold bullion on hand - at cost
Gold bullion on hand - at net realisable value
Gold in circuit - at cost
Gold in circuit - at net realisable value
Consumables at cost
Non Current
Gold in circuit - at net realisable value 1
As at 31
December 2019
As at 31
December 2018
$'000
$'000
54,552
40,430
94,982
14,927
-
7,913
17,903
54,173
189,898
63,197
63,197
27,347
14,524
41,871
16,553
4,980
9,598
66,7361
38,885
178,623
-
-
1) In the prior year, included in gold in circuit was inventory with carrying value of $56m that was expected to be processed after 12 months. At 31 December 2019,
the carrying value of this gold in circuit inventory has been classified as non-current.
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 of 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 weighted
average basis.
131
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.3 Other financial assets and liabilities
Financial assets at fair value through other comprehensive income (current)
Shares at fair value – listed
Other financial assets (current)
As at 31
December
2019
As at 31
December
2018
$'000
$'000
18,116
28,324
Environmental bond - restricted cash (face value approximates fair value)
3,915
3,890
Other financial assets (non current)
Other
Recognition and measurement
-
32
Financial assets at fair value through other comprehensive income
These financial assets consist of investments in ordinary shares, comprising principally of marketable equity securities.
Investments are initially recognised at fair value plus transaction costs. Unrealised gains and losses arising from changes in the
fair value of these investments are recognised in equity in the financial assets revaluation reserve. Amounts recognised are not
recycled to the statement of comprehensive income in future periods.
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.
Other financial assets - Restricted cash
The environmental bond represents a receivable carried at amortised cost using the effective interest method. The Ghanaian
Environmental Protection Authority holds $3.9 million of restricted cash as security for the rehabilitation and restoration provision
of Mensin Gold Bibiani Limited’s Bibiani Gold Mine. 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% (6 months to
December 2018: 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.
D.4 Prepayments
Non current prepayments in the prior year relate to payments made for the acquisition of plant and equipment.
132
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.5 Payables
Trade creditors
Accruals
Recognition and measurement
As at 31
December 2019
$'000
73,621
As at 31
December 2018
$'000
46,922
74,882
148,503
73,060
119,982
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.6 Provisions
Current
Site restoration
Employee entitlements
Dividend payable
Withholding taxes
Provision for Mali indirect taxes1
Other provisions
Non Current
Site restoration
Employee entitlements
As at 31
December 2019
As at 31
December 2018
$'000
$'000
31
6,447
135
310
57,407
5,481
69,811
92,924
662
3,888
13,384
135
364
-
5,488
23,259
68,891
1,430
70,321
(1) Resolute’s subsidiary SOMISY, has received demands for payment to the Mali Tax Authorities in relation to Income Tax and
Value Added Tax (VAT) for the tax years ended 31 December 2015, 2016, 2017 and 2018. Based on the facts and
circumstances available at the date of this report and in line with requirements of the accounting standards the Group has
provided for the VAT demands as at 31 December 2019 amounting $57.4m. The factual basis and validity of these demands are
been strongly disputed by Resolute due to fundamental misinterpretations of the application of certain tax laws to SOMISY with
reference to the provisions of SOMISY’s Establishment Convention. Resolute has progressed the contesting of the demands
and is working with its legal and tax advisors. Resolute continues to work with its legal and tax advisors to contest the demand
and will resist any efforts to enforce payment. The demand for Income Tax has been disclosed as a contingent liability. Refer to
Note E.3.
93,586
133
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.6 Provisions (continued)
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
The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting
date. The Group recognises a liability for long service leave and annual leave measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected
future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are
discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash outflows.
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
Reclassification of provision for discontinued operations
Rehabilitation and restoration provision from acquisition of subsidiary
Rehabilitation and restoration provision accretion
Change in scope of restoration provision
Utilised during the year
Foreign exchange translation
Balance at the end of the year
Reconciled as:
Current provision
Non current provision
Total provision
As at 31
December
2019
As at 31
December
2018
$'000
$'000
72,779
(30,958)
35,854
910
14,775
(216)
(189)
92,955
31
92,924
92,955
69,587
-
-
893
1,224
(237)
1,312
72,779
3,888
68,891
72,779
134
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.6 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.
D.7 Leases
The Group adopted AASB 16 on 1 January 2019. Refer to Note E.13 for lease transition disclosures.
The Group has lease contracts for various items of mining equipment and buildings used in its operations. Leases of mining
equipment generally have lease terms between three and seven years, while buildings generally have lease terms between three
and five years. Generally, the Group is restricted from assigning and subleasing the leased assets.
The Group also has certain contracts which contain a lease with terms of 12 months or less and contracts which contain a lease
of low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these.
Lease assets
At 1 January 2019
Additions
Acquisition of subsidiary
Depreciation
Foreign exchange
Balance at the end of the year
At 31 December 2019
Historical Cost
Accumulated Depreciation
Lease liabilities
At 1 January 2019
Additions
Acquisition of subsidiary
Repayments
Accretion of interest
Foreign exchange
Balance at the end of the year
At 31 December 2019
Current
Non current
Buildings
$'000
3,007
-
567
(626)
(15)
2,933
3,557
(624)
2,933
3,007
-
578
(672)
149
(16)
3,046
668
2,378
3,046
Plant and
Equipment
$'000
9,426
32,619
25,343
(11,425)
(747)
55,216
66,277
(11,061)
55,216
9,426
32,619
25,772
(12,605)
1,572
(617)
56,167
21,406
34,761
56,167
Total
$'000
12,433
32,619
25,910
(12,051)
(762)
58,149
69,834
(11,685)
58,149
12,433
32,619
26,350
(13,277)
1,721
(633)
59,213
22,074
37,139
59,213
135
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.7 Leases (continued)
Maturity profile of lease liabilities
The table below presents the contractual undiscounted cash flows associated with the Group’s lease liabilities, representing
principal and interest. The figures will not necessarily reconcile with the amounts disclosed in the consolidated statement of
financial position.
Due for payment in:
1 year or less
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
As at 31
December
2019
$'000
25,063
18,513
12,925
7,749
284
-
64,534
Key estimates and judgements
Incremental borrowing rate
The Group cannot readily determine the interest rate implicit in its leases. Therefore, it uses the relevant incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR, therefore, reflects what the Group would have to pay, which requires estimation when no
observable rates are available and to make adjustments to reflect the terms and conditions of the lease. Lease liabilities were
discounted using a weighted average incremental borrowing rate as at 1 January 2019 of 6.00%. For leases acquired as part
of the business combination these were discounted using a weighted average incremental borrowing rate as at 2 August of
5.90%.
Key financial risks associated with other assets and liabilities
Interest rate risk, diesel price risk and foreign exchange risk management
Refer to About this Report (page 103) and Section C (page 122) 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 C.1), 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 C.3, 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.
136
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.8 Derivative Financial Liabilities
Current
Liabilities at fair value through profit or loss
Non Current
Liabilities at fair value through profit or loss
As at 31
December 2019
As at 31
December 2018
$'000
$'000
4,553
12,840
-
-
As part of the US$110 million Taurus Debt Facility entered into by Toro Gold in 2017 to fund the construction of the Mako Gold
Mine, Toro Gold granted Taurus a royalty of 1.1% on gross gold proceeds on gold production up to 1.4 million ounces. The royalty
payable is considered to represent a derivative financial instrument and therefore accounted for at fair value through profit and
loss. Resolute has agreed to terms with Taurus for the acquisition of the 1.1% royalty held by entities associated with Taurus over
gold production from the Mako Gold Mine in Senegal. Subsequent to year end the Group agreed to acquire the Royalty, please
see note E.9 for further details.
The fair value of the royalty payable at 31 December 2019 is $17.3 million (2017: $0). A 10% increase/decrease in the forecast
gold price would increase/decrease the liability by $1.7 million. A one percentage point increase in the discount rate would reduce
the liability by $0.4 million and a one percentage point decrease in the discount rate would increase the liability by $0.4 million.
Foreign exchange risk management
The following table summarises the sensitivity to a reasonably possible change in foreign exchange rates with all other variables
held constant:
31 December 2019
Other financial assets
Loans to subsidiaries
Payables
Total increase/(decrease)
31 December 2018
Other financial assets
Loans advanced to other parties
Loans to subsidiaries
Payables
Total increase/(decrease)
Carrying
Amount
$'000
18,116
766,099
148,503
5,824
3,749
683,685
119,982
Foreign exchange risk
-10%
+10%
Profit
$'000
304
99,493
3,809
Equity
$'000
Profit
$'000
Equity
$'000
304
(249)
(249)
99,493
(121,603)
(121,603)
3,809
(4,655)
(4,655)
103,606
103,606
(126,507)
(126,507)
303
150
53,175
(1,489)
52,139
303
150
53,175
(1,489)
52,139
(248)
(122)
(248)
(122)
(43,507)
(43,507)
1,218
1,218
(42,659)
(42,659)
137
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
D: Other assets and liabilities (continued)
D.9 Financial Instruments Hierarchy
Derivative financial liabilities are measured at fair value on initial recognition and then subsequently re-measured at fair value by
reference to valuation models and the probability of outcome scenarios and categorised as level 3 measurements:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
•
•
Inputs other than quoted prices within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2)
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3)
Level 3 fair value measurements:
Balance at the beginning of the year/period
Acquisition of subsidiary
Fair value adjustment
Utilised
FX Movement
Balance at the end of the year/period
As at 31
December
2019
$'000
-
18,476
1,703
(2,237)
(549)
17,393
As at 31
December
2018
$'000
-
-
-
-
-
-
The fair value of royalty payable to Taurus is based on a discounted cashflow model using the Company’s Life of Mine forecast
gold production, future gold prices based on analyst forecasts and a discount rate that reflects the liability.
138
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
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 Corporations Act 2001
(Cth). This section includes group structure information and other disclosures.
E.1 Business Combination
Acquisition of Toro Gold
On 31 July 2019, Resolute (through its wholly-owned subsidiary, Resolute UK 2 Limited) signed a binding agreement to acquire
all the shares of Toro Gold for US$130 million of cash and 142.5 million Resolute fully paid ordinary shares. The shares were
measured at the share price when control was obtained being, 2 August 2019. The cash component of the consideration was
funded through a US$130 million financing facility provided by Taurus Funds Management Pty Limited (“Taurus Facility”) which
is non-recourse to the Group.
Assets acquired and liabilities assumed
The provisional values of the net identifiable assets acquired and recognised at the date of acquisition are as follows:
Fair value recognised
on acquisition
Assets
Cash and cash equivalents
Other assets
Inventories
Property, plant and equipment
Exploration and evaluation
Development
Right of use asset
Total assets
Liabilities
Payables
Interest bearing liabilities
Decommissioning provision
Derivative financial liabilities
Deferred tax liabilities
Provisions
Lease liabilities
Total liabilities
Total identifiable net assets at fair value
Non-controlling interest measured at fair value
Purchase consideration transferred
$'000
97,764
7,203
90,645
142,456
5,697
377,963
25,910
747,638
38,227
117,295
35,854
21,252
13,636
142
26,350
252,756
494,882
38,142
456,740
139
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.1 Business Combination (continued)
Consideration:
Cash
Resolute shares (142,500,000 ordinary shares) 1
Purchase consideration transferred
1 Shares valuation based on the RSG share price as at the close of trading on 2 August 2019, being $1.86
Analysis of cash flow on acquisition:
Cash acquired with the subsidiary
Cash paid
Net cash flow
Fair value recognised
on acquisition
$'000
191,690
265,050
456,740
97,764
(191,690)
(93,926)
From the date of acquisition, Toro Gold contributed $165.5 million of revenue and $23.0 million to profit before tax for the year
ended 31 December 2019.
If the acquisition had occurred on 1 January 2019, the acquired business’ contribution to the consolidated revenue and loss before
tax for the 12 months period ended 31 December 2019 would have been $370.1 million and $33.1 million respectively.
E.2 Assets held for sale
On 15 January 2020, Resolute signed a definitive agreement for the sale of the Ravenswood Gold Mine in Queensland to a
consortium comprising of a fund managed by private equity manager EMR Capital and energy and mining company Golden
Energy and Resources Limited. The consideration for the sale comprised $100 million of upfront value and up to $200 million
potential payments. This is contingent on future gold prices and future gold production from the Ravenswood Gold Mine as well
as the investment outcomes from the Ravenswood Gold Mine for EMR Capital. As at 31 December 2019, Ravenswood Gold Mine
was classified as a disposal group held for sale and disclosed as a discontinued operation.
Results of the disposal group held for sale asset:
12 months to 31
December 2019
6 months to 31
December 2018
Revenue
Cost of production relating to gold sales
Other operating costs relating to gold sales
Administration and other corporate expenses
Exploration and business development expenditure
Depreciation and amortisation
Finance cost
Fair value movements and unrealised treasury transactions
Loss before tax from discontinued operations
Tax expense
Loss after tax from discontinued operations
Loss per share
Basic loss per share of discontinued operation
Diluted loss per share of discontinued operation
140
$'000
113,922
(103,315)
(7,799)
(1,248)
(1,529)
(5,152)
(453)
1,598
(3,976)
-
(3,976)
(0.49)
(0.49)
$'000
70,504
(65,557)
(3,686)
(2,216)
(1,007)
(623)
(478)
(412)
(3,475)
-
(3,475)
(0.46)
(0.46)
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.2 Assets held for sale (continued)
Cash flow information for disposal group:
Operating cash flows
Investing cash flows
Financing cash flows
Net cash flow
12 months to 31
December 2019
6 months to 31
December 2018
$'000
22,525
(17,421)
-
5,104
$'000
(2,580)
(7,514)
3,521
(6,573)
The major categories of assets and liabilities within the disposal group as at 31 December 2019 are as follows:
Assets
Other assets
Inventories
Property, plant and equipment
Development
Total assets
Liabilities
Payables
Provisions
Site restoration
Total liabilities
Net Assets held for sale
Recognition and measurement
As at 31
December 2019
$'000
613
11,977
51,035
31,397
95,022
16,712
4,788
34,815
56,315
38,707
The Group classifies non current assets and disposal groups as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. Non current assets and disposal groups classified as held for sale
are measured at the lower of their carrying amount and fair value less cost to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal
group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely
that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to
the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified
as held for sale, and:
• Represents a separate major line of business or geographical area of operations;
•
•
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;
or
Is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or
loss after tax from discontinued operations in the statement of profit and loss.
141
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.3 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 enabled Resolute to secure with the endorsement of the Ghanaian government,
ultimate ownership of the Bibiani Gold Mine with protection from those liabilities which had been incurred at a time when the mine
was under the control of the prior owner (Noble Mineral Resources Limited). The Scheme set out the timing and amounts of
payments that were to be made by the Companies to a Scheme Fund and to a Future Fund, from which funds, payments are to
be made to the Scheme Creditors. The Scheme Creditors arise from transactions that occurred prior to the Companies becoming
part of the Group. The Scheme Fund and the Future Fund are effectively administered by representatives of KPMG.
Subject to the issue discussed below regarding two Ghanaian creditors, the implementation of the Scheme had the effect of
removing from the Companies’ balance sheets all historical liabilities relating to amounts payable to Scheme Creditors and
replacing those liabilities 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 were paid in 2014. In addition to those unconditional obligations to pay into
the Scheme Fund, the Scheme imposed following contingent liabilities to provide funding to the Scheme Fund and Future Fund:
Payment to the Scheme Fund of US$3.6 million ($4.8 million) if, following receipt of the Feasibility Study, the Board of Resolute,
in its absolute discretion, made a decision to proceed with the development of the Bibiani Gold Mine; and;
Payment to a Future Fund of up to US$7.8 million ($10.5 million) 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 (“Future Cashflow Payment”). Free
Cashflow means 25% of effectively, Project Revenue for that period less Permitted Payments for that period, which Permitted
Payments include:
- 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.
The Scheme provided that if Commercial Production had not been achieved by June 2019, then the Bibiani Gold Mine had to be
sold and the proceeds applied in the manner set out in the Scheme. On the basis that, in late 2018 it became clear that Commercial
Production would not be achieved by June 2019, and in order to avoid the need to sell the Bibiani Gold Mine, an Amended Scheme
was proposed to Scheme Creditors, which effectively allowed additional time to commence mining at Bibiani. In consideration for
the Scheme Creditors agreeing to the extended timeframe to commence mining, the Amended Scheme provided that upon the
Amended Scheme becoming operative, the payment of US$3.6 million ($4.8 million) referred to at 1 above would be immediately
payable (i.e. it would not be dependent upon the decision of the board of Resolute to proceed with the development of Bibiani).
At the meetings of Scheme Creditors to consider the Amended Scheme in April 2019, the Scheme Creditors approved the
Amended Scheme, it was subsequently and approved by the Court and became operative in May 2019. As a consequence, in
mid-2019 Resolute paid the sum of US$3.6 million ($4.8 million) under the Amended Scheme. The obligation to make the Future
Cashflow Payment in the circumstances described at 2 above remains in place under the Amended Scheme.
Notwithstanding the Scheme’s approval by the Ghanaian High Court, the Scheme Creditors, and the Ghanaian Minister of Mines,
two Ghanaian creditors have sought to circumvent the operation of the Scheme (and Amended Scheme) and are seeking to
enforce a winding up order against Mensin, on the basis of debts incurred prior to implementation of the Scheme. Resolute is
defending Mensin’s right to unencumbered debt free ownership of the Bibiani Gold Mine, which was a key element of the Scheme
supported by both Resolute and the Ghanaian government.
Amounts Potentially Payable to a former fuel supplier
Societe Des Mines De Syama SA (SOMISY) is a party to arbitration proceedings being brought against it by a former fuel supplier
to SOMISY at the Syama Gold Mine. The claim relates to a contractual dispute about responsibility for taxes and for obtaining tax
certificates. The former fuel supplier is claiming payment of the withheld sums and penalties imposed on them by the tax office
in Mali. SOMISY is counterclaiming an amount for additional taxes paid and recovery of amounts paid to Customs for penalties
imposed on SOMISY. Should SOMISY be unsuccessful in defending the claim brought by the former fuel suppliers and in its
counterclaims, SOMISY considers its maximum exposure to be approximately $3.7 million (before costs and interest).
Demand of payment relating to income taxes from the Mali Tax Authorities
On 27 February 2020 Resolute’s subsidiary, SOMISY, received a demand for payment of VAT for the tax years ended 31
December 2015, 2016, 2017 and 2018) and Income taxes for the tax years ended 31 December 2015, 2016 and 2017 from the
Mali Tax Authorities. The demand for payment for VAT has been provided for at 31 December 2019 (refer to Note D.6 for details)
The demand for income tax of $14.7 million has not been provided for at 31 December 2019 as the Group refute the validity and
factual basis of this demand. The Group has commenced the process of disputing the income tax demands due to fundamental
misinterpretations of certain income tax laws applicable to the provisions of SOMISY’s Establishment Convention based on tax
advice that the Group has received. The Group is working with its legal and tax advisors to contest the demand and will resist any
efforts to enforce payment.
142
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Notes to the Financial Statements
E: Other items (continued)
E.4 Commitments
Commitments
Other commitments not disclosed elsewhere in this report include:
Randgold/Syama Royalty
Pursuant to the terms of the Syama Sale and Purchase Agreement, Randgold Resources Limited (now Barrick Gold Corporation)
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 and US$5 per ounce on the next three million attributable ounces
of gold production. As at 31 December 2019, Resolute’s 80% attributable share of Syama’s project to date gold production was
1,337,094 ounces of gold, therefore the royalty is currently US$5 per ounce.
Gold contracts
As part of its risk management policy, the Group enters into gold forward contracts to manage the gold price of a proportion of
anticipated sales of gold. As at 31 December 2019, 155,000 ounces remains outstanding.
The gold forward contracts disclosed below did not meet the criteria of financial instruments for accounting purposes on the basis
that they met the normal purchase/sale exemption because physical gold would be delivered into the contract. Accordingly, the
contracts were accounted for as sale contracts with revenue recognised in the period in which the gold commitment was met.
31 December 2019
US$
Within one year
A$
Within one year
31 December 2018
US$
Within one year
Within one year
Within one year
Within one year
A$
Within one year
Within one year
Within one year
Gold for Physical
Delivery Ounces
Contracted Gold
Sale Price per
Ounce ($)
Value of
Committed sales
$’000
55,000
55,000
100,000
100,000
1,510
83,050,000
83,050,000
1,849
184,900,000
184,900,000
Gold for Physical
Delivery Ounces
Contracted Gold
Sale Price per
Ounce (A$)
Value of
Committed sales
$’000
6,000
2,000
2,000
30,000
40,000
20,000
35,000
30,000
85,000
1,817.17
1,799.66
1,789.74
1,772.30
1,715.00
1,728.16
1,783.20
10,903,020
3,599,320
3,579,480
53,169,000
71,250,820
34,300,000
60,485,600
53,496,000
148,281,600
143
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.5 Auditor remuneration
EY Australia
Total amounts received or due and receivable for an audit or review of the
parents financial statements
EY Australia
Other EY firms
Other non-EY firms
Total amounts received or due and receivable for an audit or review of any
controlled entities financial statements
EY Australia for other assurance services
Total amounts received or due and receivable for an audit or review of any
controlled entities financial statements
12 months to 31
December 2019
6 months to 31
December 2018
$
139,500
139,500
262,500
65,054
179,917
507,471
-
-
$
47,000
47,000
93,500
21,267
28,451
143,218
46,300
46,300
144
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.6 Investments in associates
12 months
to 31
December
2019
6 months to
31
December
2018
12 months
to 31
December
2019
6 months to
31
December
2018
12 months
to 31
December
2019
6 months
to 31
December
2018
Continuing Operations
Kilo Goldmines Ltd
Manas Resources Ltd
Loncor Resources Inc
Shares held in associates (No.
of shares)
46,568,000
46,568,000
682,484,709
603,189,835
25,500,000 51,000,000
Percentage of ownership (%)
27.44%
27.44%
25.82%
22.82%
26.93%
27.22%
Carrying Value
$'000
255
$'000
2,893
$'000
1,480
$'000
1,541
$'000
4,416
$'000
5,149
(b) Movements in the carrying amount of the Group's investment in associates
At 1 January
Purchase of investment
Share of loss after income tax
Impairment
At 31 December
2,893
-
(256)
(2,381)
255
3,077
-
(184)
-
2,893
1,541
342
(403)
-
1,480
1,263
417
(139)
-
1,541
5,149
-
(732)
-
2,654
2,647¹
(153)
-
4,416
5,149
¹ On 13 July 2018, Resolute paid Loncor Resources Inc for 25 million shares acquired during the year, via the issue of
2,012,466 Resolute shares.
(c) Market value of investments in associates
Market value of the Group's
investment
(d) Summarised financial information
255
726
1,365
2,413
12,424
3,977
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/(liabilities)
Share of associates' net assets
185
-
185
604
-
604
(419)
(115)
376
710
1,086
1,006
-
1,006
80
22
7,234
1,834
9,068
111
-
111
8,957
2,313
8,852
839
9,691
155
-
155
9,536
2,176
136
29,664
29,800
1,940
418
2,358
27,442
7,390
1,673
40,336
42,009
1,514
25
1,539
40,470
11,014
Extract from the associates' statement of comprehensive income:
Revenue
-
-
-
-
-
-
(Loss)/profit before tax,
(loss)/profit for the year and
total comprehensive loss
(499)
(696)
597
(62)
(1,481)
(286)
Recognition and measurement
The fair value less cost to dispose (“FVLCD”) was based on market value of the investment at 31 December 2019. The fair
value methodology adopted is categorised as Level 1 in the fair value hierarchy.
145
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.7 Subsidiaries and non-controlling interests
Subsidiaries
The following were controlled entities during the period 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
ACN 627 384 098 Pty Ltd, Aust.
Resolute Mining Limited
Amber Gold Cote d’Ivoire SARL, Cote d'Ivoire
Resolute (CDI Holdings) Pty Ltd
Bambuk Minerals Limited
Bambuk Minerals Senegal SUARL
Carpentaria Gold Pty Ltd, Aust.
Toro Gold Limited
Bambuk Minerals Limited
Resolute Mining Limited
Drilling and Mining Services Limited, Ghana
Resolute (Bibiani) Pty Ltd
Excalibur Cote d’Ivoire SARL, Cote d'Ivoire
Geb and Nut Resources SARL, Cote d'Ivoire1
Resolute Corporate Services Pty Ltd, Aust. 2 (a)
Mensin Gold Bibiani Limited, Ghana
Resolute (CDI Holdings) Pty Ltd
Resolute Cote D’Ivoire SARL
Resolute (Treasury) Pty Ltd
Resolute (Bibiani) Pty Ltd
Nimba Resources SARL, Cote d'Ivoire
Resolute (CDI Holdings) Pty Ltd
Noble Mining Ghana Limited, Ghana
Resolute (Bibiani) Pty Ltd
Orca S.A.
Petowal Mining Company S.A.
Predictive Discovery CI SARL
Resolute (Bibiani) Pty Ltd, Aust. 3 (a)
Resolute Burkina Faso Pty Ltd, Aust.
Resolute Burkina SARL, Burkina Faso
Resolute Canada Pty Ltd, Aust.
Resolute Canada 2 Pty Ltd, Aust.
Resolute (CDI Holdings) Pty Ltd, Aust. 4 (a)
Resolute Corporate Services UK Ltd
Toro Gold Limited
Bambuk Minerals Limited
Toro Gold Equatorial (Guernsey) Ltd
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Toro Gold Limited
Resolute Cote D’Ivoire SARL, Cote d'Ivoire
Resolute (CDI Holdings) Pty Ltd
Resolute Egypt (Australia) Pty Ltd, Aust.
Resolute Mining Limited
Resolute Egypt (Australia) 2 Pty Ltd, Aust.
Resolute Mining Limited
Resolute Egypt Pty Ltd, Egypt
Resolute Exploration SARL, Mali
Resolute (Finkolo) Pty Limited, Aust. 5 (a)
Resolute (Ghana) Limited, Ghana
Resolute Mali S.A.,Mali
Resolute (SOMISY) Pty Ltd, Aust.6 (a)
Resolute Sudan Pty Ltd, Aust.
Resolute Sudan 2 Pty Ltd, Aust.
Resolute (Treasury) Pty Ltd, Aust. (a)
Resolute UK 1 Limited
Resolute UK 2 Limited
RSG Tanzania Pty Ltd, Aust.
Resolute Egypt (Australia) Pty Ltd
Resolute Egypt (Australia) 2 Pty Ltd
Resolute (Finkolo) Pty Ltd
Resolute Mining Limited
Resolute Mining Limited
Resolute (SOMISY) Pty Ltd
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Resolute Mining Limited
Percentage of Shares Held
by Consolidated Entity
As at 31
December
2019
As at 31
December
2018
%
100
100
100
100
100
100
100
80
100
90
100
100
50
90
100
100
100
100
100
100
100
100
100
100
100
50
50
100
100
100
100
100
100
100
100
100
100
100
%
100
100
-
-
100
100
100
80
100
90
100
100
-
-
-
100
100
100
100
100
100
-
100
100
100
50
50
100
100
100
100
100
100
100
100
-
-
100
146
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Notes to the Financial Statements
E: Other items (continued)
E.7 Subsidiaries and non-controlling interests (continued)
Name of Controlled Entity and Country of
Incorporation
Consolidated Entity
Company Holding the Investment
RSG Tanzania 2 Pty Ltd, Aust.
Resolute Mining Limited
Société des Mines de Finkolo S.A., Mali
Resolute (Finkolo) Pty Ltd
Société des Mines de Syama S.A., Mali
Resolute (SOMISY) Pty Ltd
Toro Gold Cote d’Ivoire SARL
Toro Gold Equatorial (Guernsey) Ltd
Toro Gold Equatorial (Guernsey) Ltd
Toro Gold Gabon Ltd
Toro Gold Gabon SUARL
Toro Gold Guinée SUCC
Toro Gold Limited
Toro Gold Pty Ltd
Toro Gold Limited
Toro Gold Limited
Toro Gold Gabon Limited
Toro Gold Limited
Resolute UK 2 Limited
Toro Gold Limited
(a) Entities not separately audited. Entity’s audit scope is limited to the purpose of inclusion in the consolidated entity's accounts.
1 Resolute’s shareholding in this company is subject to a dispute.
2 Previously Goudhurst Pty Ltd, Aust.
3 Previously Resolute (Bibiani) Limited, Jersey.
4 Previously Resolute (CDI Holdings) Limited, Jersey.
5 Previously Resolute (Finkolo) Limited, Jersey.
6 Previously Resolute (SOMISY) Limited, Jersey.
Material partly-owned subsidiaries
Accumulated share of (deficiency)/equity attributable to material Non-Controlling
Interest:
Société des Mines de Syama SA ("SOMISY")
Mensin Gold Bibiani Limited ("Mensin")
Société des Mines de Finkolo SA ("Finkolo")
Petowal Mining Company SA ("Mako")
Total Non-Controlling Interest
(Loss)/profit allocated to material Non-Controlling Interest:
SOMISY
Mensin
Finkolo
Mako
Total Non-Controlling Interest
Percentage of Shares Held
by Consolidated Entity
As at 31
December
2019
As at 31
December
2018
%
100
90
80
100
65
70
100
100
100
100
%
100
90
80
-
-
-
-
-
-
-
As at 31
December
2019
As at 31
December
2018
$'000
$'000
(29,949)
(11,181)
(1,044)
5,343
39,469
13,819
(1,661)
3,160
-
(9,682)
(19,748)
(3,351)
806
2,174
1,723
-
1,329
-
(15,045)
(2,022)
147
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.7 Subsidiaries and non-controlling interests (continued)
The summarised financial information of subsidiaries with non-controlling interests is provided below. This information is based
on amounts before inter-company eliminations.
12 months
to 31
December
2019
$'000
6 months
to 31
December
2018
$'000
12 months
to 31
December
2019
$'000
6 months
to 31
December
2018
$'000
12 months
to 31
December
2019
$'000
6 months
to 31
December
2018
$'000
12 months
to 31
December
2019
$'000
6 months
to 31
Decembe
r 2018
$'000
SOMISY
Mensin
Finkolo
Mako
124,952
130,670
-
(98,744)
(21,692)
(5,605)
-
12
361,215
21,518
165,533
24,009
14,903
33,453
(88,935)
(21,375)
(2,727)
(340)
24,094
14,921
32,842
Statement of
Comprehensive
Income
Revenue
(Loss)/gain for the
year
Total
comprehensive
(loss)/income for
the year
Summarised
Statement of
Financial
Position
Current assets
235,157
240,277
7,064
4,304
Non current assets
685,075
569,763
103,958
94,788
82,239
69,090
34,046
109,095
44,534
552,788
Current liabilities
(256,922)
(137,721)
(2,649)
(2,607)
(115,981)
(40,666)
(61,548)
Non current
liabilities - External
Non current
liabilities - Intra
Resolute Mining
Limited Group
Net asset
/(deficiency)
Summarised
Statement of
Cash Flow
Operating
Investing
Net
(decrease)/increa
se in cash and
cash equivalents
(59,580)
(38,949)
(11,069)
(9,430)
(10,770)
(2,073)
(78,299)
(756,599)
(660,928)
(171,811)
(487,077)
-
(64,650)
(74,241)
(152,869)
(27,558)
(74,507)
(400,022)
24,578
(28,809)
447,795
13,165
58,623
786
(223)
(168,466)
(157,625)
(15,284)
(6,233)
35,757
(6,013)
9,518
(9,110)
72,096
(6,850)
(155,301)
(99,002)
(14,498)
(6,456)
29,744
408
65,246
-
-
-
-
-
-
-
-
-
-
-
-
148
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.8 Joint operations
The consolidated entity has an interest in the following joint operations whose principal activities are to explore for gold.
Entity Holding Interest
Other Participant/Joint Operation
Percentage of Interest Held
As at 31
December 2019
%
As at 31
December
2018
%
Resolute Mining Limited
Etruscan Resources Bermuda Ltd/N’Gokoli Est JV¹
60%
60%
¹ Interests in joint operations greater than 50% have been accounted for as joint operations as all decision making requires unanimous agreement.
E.9 Subsequent events
On 15 January 2020, the Group announced the sale of Ravenswood Gold Mine for $100 million of upfront value and up to $200
million in potential payments contingent on future gold prices, future gold production and the investment outcome of EMR Capital
from the Ravenswood Gold Mine. Further detail is presented in note E.2.
On 16 January 2020, the Group drew down a further US$5.0 million ($7.1 million) on its syndicated loan facility.
On 20 January 2020, the Group entered into forward contracts to sell 37,200 ounces at an average US$1,562 per ounce in
scheduled monthly deliveries of 1,200 ounces between July 2020 and December 2020 and scheduled monthly deliveries of 5,000
ounces between January 2021 and June 2021.
On 23 January 2020, the Group completed an equity raising via an Institutional Placement to raise $146 million. These funds were
utilised on 3 February 2020 to repay the US$130 million acquisition bridge loan facility provided by Taurus Funds Management
Limited (“Taurus”) in relation to Toro Gold Limited (“Toro Gold”). The facility was provided for an initial term of six months and has
been repaid in full, at the maturity date, avoiding termination or extension fees.
On 28 January 2020, the Group agreed to terms with Taurus for the acquisition of the 1.1% royalty held by entities associated
with Taurus over gold production from the Mako Gold Mine in Senegal (Mako). The termination value of the royalty has been
agreed at US$12 million with consideration to be paid in cash or in shares at the election of the royalty holders.
On 17 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,590 per ounce in
scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
On 26 February 2020, the Group successfully completed its Share Purchase Plan (SPP). The SPP closed on 21 February 2020,
with valid applications received from 1,168 shareholders for 21,212,747 ordinary shares at an issue price of $1.10 per share. The
total amount raised from the SPP is approximately $23.3 million.
On 27 February 2020, the Group received notice that the Mali Government tax authorities and Ministry of Finance had taken
certain steps internally to offset the Group’s VAT withholding tax liabilities (note E.3) with the Group’s VAT tax assets (note D.1).
At the date of signing this report, the Group has not received any confirmation of offset occurring.
On 28 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,670 per ounce in
scheduled monthly deliveries of 5,000 ounces between July 2021 and December 2021.
On 25 March 2020, the Group completed the refinancing of the Group’s syndicated loan as governed by the Syndicated Facility
Agreement. The new US$300 million facility comprises a three-year US$150 million revolving credit facility and a four-year US$150
million term loan facility. As part of the refinance the group repaid the outstanding balance of the Project Facility Agreement
(US$63.5 million plus interest accrued).
Subsequent to year end, the global impacts of the coronavirus COVID-19 pandemic has created volatility in commodity prices and
resulted in Government regulated restrictions and put pressure on supply chain structures. Resolute’s response recognises that
the Group places the highest priority on the safety and wellbeing of its employees and contractors. Keeping the Group’s operations
running is critically important for employees, local communities, and all of the Group’s stakeholders. Resolute has taken actions
to ensure that the impact of COVID-19 is minimised across all aspects of Group operations. A COVID-19 Management Team has
been deployed and business continuity programs established to ensure the safety and wellbeing of all employees and contractors
while maintaining Group operations.
As at the date of this report, Resolute’s operations have not been materially impacted by Government regulated COVID-19 related
restrictions and the Group has not amended current production or cost guidance. Operations are continuing at all of the Group’s
mines and exploration areas. The Group maintains sufficient staff and inventory of supplies and equipment to support current
operations. The challenges presented by COVID-19 are fluid and continue to change on an almost daily basis. Resolute will
continue to assess and update the Group’s response. Further escalation of the COVID-19 pandemic, and the implementation of
further Government regulated restrictions or extended periods of supply chain disruption, has the potential to impact the Groups
earnings, cash flow and carrying value of the Syama, Mako, Ravenswood and Bibiani cash generating units. The Financial
Statements are prepared based on circumstances as at 31 December 2019, with recent developments as a result of COVID-19
considered a non-adjusting subsequent event.
149
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Notes to the Financial Statements
E: Other items (continued)
E.10 Related party disclosures
Resolute is the ultimate Australian holding company and there is no controlling entity of Resolute at 31 December 2019.
E.11 Parent Entity Information
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Convertible note/Share option equity reserve
Employee equity benefits reserve
Reserves - unrealised (loss)/gain
Total shareholders equity
Profit of Resolute Mining Limited
Total comprehensive profit of Resolute Mining Limited
As at 31
December
2019
As at 31
December
2018
$'000
1,044
740,554
(1,609)
(676)
739,878
829,058
$'000
1,468
470,150
(2,564)
(2,569)
467,581
559,852
(100,885)
(103,976)
6,342
5,363
-
6,342
5,364
(1)
739,878
467,581
3,023
3,023
5,320
5,320
Refer to E.3 for the contingent liabilities and E.4 for the commitments of Resolute Mining Limited. The parent company guarantees
provided by Resolute Mining Limited are outlined in C.3.
150
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.12 Employee benefits and share-based payments
Salaries
Superannuation
Share-based payments expense
Total employee benefits charged to profit and loss
Share-based payments
12 months to
31 December
2019
6 months to
31 December
2018
$'000
68,419
13,439
1,657
83,515
$'000
39,019
1,577
1,566
42,162
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 and recognises an expense in the profit and loss over the vesting period
with a corresponding increase in equity.
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
12 months to
31 December
2019
6 months to
31 December
2018
$
2,956,007
235,319
58,953
$
1,507,394
59,887
23,265
1,929,617
730,674
5,179,896
2,321,220
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.
151
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.12 Employee benefits and share-based payments (continued)
Performance rights plan
The performance rights plan is broken down between:
Performance Rights Plan Category
Type of employee
Band AO
Band A1
Special
Managing Director and CEO
CFO, COO, Site General Managers, General Counsel &
Company Secretary, General Manager – Exploration,
General Manager – Business Development & Investor
Relations and Project Director
Special, one-off awards as recommended by the MD
Plan category
Band A0
Grant and frequency
Annually set at 100% of
fixed remuneration for the
Managing Director & CEO
Performance measures
•
75% of the rights will be performance
tested against the relative total
shareholder return (“RTSR”) measure
over a 3 year period; and
Performance period
3 years
CEO LTI Grant (varies)
Band A1
Annually set at 65% of fixed
remuneration
Special
Varies
•
•
•
•
•
•
•
25% of the right will be performance
tested against the reserves growth hurdle
over a 3 year period.
50% of the rights will be performance
tested against the absolute total
shareholder return (“ATSR”) measure
over the relevant period; and
50% of the rights will be performance
tested against the specified strategic
objectives over the relevant period
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 reserves growth hurdle
over a 3 year period.
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 reserves growth hurdle
over a 3 year period.
2.5, 3.5 and 4.5 years
(varies)
3 years
3 years
152
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.12 Employee benefits and share-based payments (continued)
Issue Date
Total
Number
Fair Value per Right
at Grant Date
Vesting
Date
Performance rights on issue
Band A0
Band A1 to A2
Band A0
Band A1 to A2
Band A1 to A2
Band A0
Band A0
Band A1 to A2
Band A0
Band A0
Band A0
As at 31 December 2019
Opening number of performance rights
29/11/16
1,000,000
17/10/17
28/11/17
07/03/18
26/10/18
26/10/18
21/05/19
955,583
587,500
319,571
583,042
277,559
698,690
21/05/19
1,235,209
21/11/19
1,000,000
21/11/19
1,000,000
21/11/19
1,000,000
8,657,154
$1.18
$0.81
$0.74
$0.85
$0.92
$0.77
$0.88
$0.93
$0.72
$0.71
$0.70
Date of
Change
Total
Number
7,338,476
Fair Value
per Right at
Grant Date
Decrease through lapsing of performance rights (Band A1 to A2)
31/03/19
(9,147)
Decrease through lapsing of performance rights (Band A1 to A2)
31/03/19
(253,616)
Decrease through lapsing of performance rights (Band A1 to A2)
31/03/19
(120,728)
Decrease through lapsing of performance rights (Band A1 to A2)
Decrease through lapsing of performance rights (Band A1 to A2)
18/04/19
19/04/19
(6,753)
(5,962)
Decrease through lapsing of performance rights (Band A1 to A2)
30/04/19
(49,102)
Decrease through lapsing of performance rights (Band A1 to A2)
30/04/19
(19,727)
$1.27
$0.81
$0.92
$1.27
$0.92
$0.81
$0.92
30/06/20
30/06/20
30/06/20
30/06/20
30/06/21
30/06/21
31/12/21
31/12/21
30/06/21
30/06/22
30/06/23
Vesting
Date
30/06/19
30/06/20
30/06/21
30/06/19
30/06/21
30/06/20
30/06/21
Increase through issue of performance rights to eligible employees
(Band A1 to A2)
Increase through issue of performance rights to eligible employees
(Band A0)
21/05/19
1,484,991
$0.93
31/12/21
21/05/19
698,690
$0.88
31/12/21
Decrease through lapsing of performance rights (Band A1 to A2)
10/06/19
(37,189)
Decrease through lapsing of performance rights (Band A1 to A2)
Decrease through lapsing of performance rights (Band A1 to A2)
Decrease through lapsing of performance rights (Band A1 to A2)
Decrease through lapsing of performance rights (Band A1 to A2)
10/06/19
10/06/19
03/08/19
03/08/19
(10,776)
(18,117)
(16,600)
(25,619)
Decrease through lapsing of performance rights (Band A0)
06/09/19
(400,000)
$0.81
$1.27
$0.92
$0.92
$0.81
$1.20
30/06/20
30/06/19
30/06/21
30/06/21
30/06/20
30/06/19
Decrease through conversion of shares upon vesting of
performance rights (Band A0)
06/09/19
(200,000)
$1.20
30/06/19
Decrease through lapsing of performance rights (Band A1 to A2)
06/09/19
(1,677,470)
$1.27
30/06/19
Decrease through conversion of shares upon vesting of
performance rights (Band A1 to A2)
06/09/19
(559,154)
$1.27
30/06/19
Decrease through lapsing of performance rights (Band A1 to A2)
30/09/19
(22,500)
Decrease through lapsing of performance rights (Band A1 to A2)
30/09/19
(11,071)
Decrease through lapsing of performance rights (Band A1 to A2)
31/10/19
(9,558)
Decrease through lapsing of performance rights (Band A1 to A2)
31/10/19
(20,232)
$0.81
$0.92
$0.92
$0.81
30/06/20
30/06/21
30/06/21
30/06/20
153
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.12 Employee benefits and share-based payments (continued)
Increase through issue of performance rights to eligible employees
(Band A0)
Increase through issue of performance rights to eligible employees
(Band A0)
Increase through issue of performance rights to eligible employees
(Band A0)
Date of
Change
Total
Number
Fair Value
per Right at
Grant Date
Vesting
Date
21/11/19
1,000,000
$0.72
30/06/21
21/11/19
1,000,000
$0.71
30/06/22
21/11/19
1,000,000
$0.70
30/06/23
Decrease through lapsing of performance rights (Band A1 to A2)
13/12/19
(39,538)
Decrease through lapsing of performance rights (Band A1 to A2)
13/12/19
(102,362)
Decrease through lapsing of performance rights (Band A1 to A2)
13/12/19
(249,782)
$0.81
$0.92
$0.93
30/06/20
30/06/21
31/12/21
Closing number of performance rights
8,657,154
The following table lists the key variables used in the valuation of performance rights:
Hurdle
Number of performance rights issued
Underlying share price ($)
Exercise price ($)
Risk free rate
Volatility factor
Dividend yield
Period of the rights from grant date (years)
12 months to 31 December 2019
21 May 2019 Issue
21 May 2019 Issue
Reserve and
resources rights
371,248
TSR rights
1,113,743
Reserve and
resources rights
174,672
TSR rights
524,018
1.15
-
1.82%
54%
2.22%
3
1.15
-
1.82%
54%
2.22%
3
1.14
-
1.82%
54%
2.39%
2.62
Hurdle
Number of performance
rights issued
Underlying share price
($)
Exercise price ($)
Risk free rate
Volatility factor
Dividend yield
Period of the rights from
grant date (years)
21 November 2019
Issue
12 months to 31 December 2019
21 November 2019
Issue
21 November 2019
Issue
Strategic
objectives
rights
ATSR
rights
Strategic
objectives
rights
ATSR
rights
Strategic
objectives
rights
ATSR
rights
500,000
500,000
500,000
500,000
500,000
500,000
5,183,681
1.09
1.09
1.09
1.09
1.09
1.09
-
0.74%
53%
2.22%
-
0.74%
53%
2.22%
-
0.74%
55%
2.22%
-
0.74%
55%
2.22%
-
0.76%
55%
2.22%
-
0.76%
55%
2.22%
1.61
1.61
2.61
2.61
3.61
3.61
1.14
-
1.82%
54%
2.39%
2.62
Total
Effect of performance hurdles
Value of performance right at grant date (Band A0)
Value of performance right at grant date (Band A1 to A2)
Value of performance right at grant date (Band A0)
Value of performance right at grant date (Band A0)
Value of performance right at grant date (Band A0)
Fair value of
performance
rights granted
$0.92
$0.93
$0.72
$0.71
$0.70
154
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.12 Employee benefits and share-based payments (continued)
Hurdle
Number of performance rights
issued
Underlying share price ($)
Exercise price ($)
Risk free rate
Volatility factor
Dividend yield
Period of the rights from grant date
(years)
26 October 2018 Issue
26 October 2018 Issue
6 months to 31 December 2018
Reserve and
resources
rights
Reserve and
resources
rights
TSR rights
TSR rights
Total
221,792
665,375
69,390
208,169
1,164,726
1.28
-
2.01%
36%
1.42%
3
1.28
-
2.01%
36%
1.42%
3
1.08
-
2.01%
59%
1.42%
2.68
1.08
-
2.01%
59%
1.42%
2.68
Effect of performance hurdles
Value of performance right at grant date (Band 1 to 4)
Fair value of performance
rights granted
$0.92
Value of performance right at grant date (Band 1)
$0.77
155
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.13 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.
New and amended Accounting Standards and Interpretations for current year
A number of new Standards, amendment of Standards and interpretations have recently been issued that were effective for the
year ended 31 December 2019. Details of these are provided below:
AASB 16: Leases
AASB 16 supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation
115 Operating Leases-Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires
lessees to account for most leases under a single on-balance sheet model.
The Group adopted AASB 16 using the modified retrospective method of adoption with the date of initial application of
1 January 2019. At the transition date, the Group assessed all contracts which had assets embedded in it for leases under AASB
16 The Group elected to use the practical expedient for lease contracts that, at the application date, have a lease term of 12
months or less and do not contain a purchase option (‘short-term leases’). The Group elected to record the right of use asset at
an amount equal to the lease liability.
The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitments as of 31 December 2018 as
follows:
Operating lease commitments at 31 December 2018
Present value discounting of lease liabilities
Commitments relating to variable lease payments
Additional right of use asset recognised on adoption of AASB 16
Lease liabilities at 1 January 2019
At 1 January 2019
$’000
8,937
(495)
(5,169)
9,160
12,433
Impact on the statement of financial position as at 1 January 2019 on adoption of AASB 16 and the carrying values of right of use
assets and lease liability at 31 December 2019 are set out in the table below:
At 1 January
2019
$’000
At 31 December
2019
$’000
3,007
9,426
12,433
3,007
9,426
12,433
2,933
55,216
58,149
22,074
37,139
59,213
Assets
Right of use assets - Buildings
Right of use assets - Plant and Equipment
Total assets
Liabilities
Lease liability - current
Lease liability - non current
Total liabilities
156
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.13 Other accounting policies (continued)
Set out below are the new accounting policies of the Group upon adoption of AASB 16:
(i) Right of use assets
The Group recognises right of use assets at the commencement date of the lease (i.e. the date the underlying asset is available
for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any re-measurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless
the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right of use
assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term (where the entity
does not have a purchase option at the end of the lease term). Right of use assets are subject to impairment.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the
option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as an expense in the
period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate of the lessee at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset.
(ii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption (i.e. below US$5,000). Lease payments on short-term leases and
leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.
(iii) Significant judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers
all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group
reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability
to exercise (or not to exercise) the option to renew (e.g. a change in business strategy).
The Group included the renewal period as part of the lease term for leases of plant and machinery due to the significance of these
assets to its operations.
AASB Interpretation 23: Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application
of AASB 112 Income Taxes. It does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include
requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses
the following:
The assumptions an entity makes about the examination of tax treatments by taxation authorities
• Whether an entity considers uncertain tax treatments separately
•
• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
• How an entity considers changes in facts and circumstances
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other
uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be followed.
The Group applies significant judgement in identifying uncertainties over income tax treatments. Since the Group operates in a
complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements.
The interpretation did not have an impact on the consolidated financial statements of the Group.
157
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Notes to the Financial Statements
E: Other items (continued)
E.13 Other accounting policies (continued)
New and amended Accounting Standards and Interpretations for future periods
A number of new Standards, amendment of Standards and interpretations have recently been issued that are effective in future
periods (and have not been adopted by the Group as at the financial reporting date). Details of these are provided below:
Title
Detail
Application
Date for
Group
Amendments to AASB 3
– Definition of Business
1 January
2020
Amendments to
Australian Accounting
Standards – Definition of
Material
1 January
2020
Amendments to AASB
10 and AASB 28: Sale or
Contribution of Assets
between an Investor and
its Associate or Joint
Venture
1 January
2022
The Standard amends the definition of a business in AASB 3 Business Combination.
The amendments clarify the minimum requirement for a business, remove the
assessment of whether market participants are capable of replacing missing elements,
and guidance to help entities assess whether an acquired process is substantive,
narrow the definition of a business and of outputs, and introduce an optional fair value
concentration test. New illustrative examples were provided along with the amendments.
Since the amendments apply prospectively to transactions or other events that occur on
or after the date of first application, the Group will not be affected by these amendments
on the date of transition.
In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial
Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
to align the definition of ‘material’ across the standards and to clarify certain aspects of
the definition. The new definition states that, Information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the
primary users of general purpose financial statements make on the basis of those
financial statements, which provide financial information about a specific reporting entity.
The amendments to the definition of material is not expected to have a significant impact
on the Group’s consolidated financial statements.
The amendments address the conflict between AASB 10 and AASB 28 in dealing with
the loss of control of a subsidiary that is sold or contributed to an associate or joint
venture. The amendments clarify that the gain or loss resulting from the sale or
contribution of assets that constitute a business, as defined in AASB 3, between an
investor and its associate or joint venture, is recognised in full. Any gain or loss resulting
from the sale or contribution of assets that do not constitute a business, however, is
recognised only to the extent of unrelated investors’ interests in the associate or joint
venture. The AASB has deferred the effective date of these amendments indefinitely,
but an entity that early adopts the amendments must apply them prospectively. The
Group will apply these amendments when they become effective.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Directors’ Declaration
In accordance with a resolution of the directors of Resolute Mining Limited, we state that:
In the opinion of the directors:
a.
the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2019 and of its
performance for the year ended on that date; and,
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
b.
c.
the financial statements and notes also comply with International Financial Reporting Standards as disclosed throughout
this report; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
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 year ended 31 December 2019.
On behalf of the Board
J.P. Welborn
Managing Director and CEO
Perth, Western Australia
27 March 2020
159
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Resolute Mining Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Resolute Mining Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
position as at 31 December 2019, the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated cash flow statement for the year
then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 31
December 2019 and of its consolidated financial performance for the year ended on that
date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements
of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Emphasis of matter: Subsequent events – Impact of the Coronavirus (COVID-19)
outbreak
We draw attention to Note E.9 of the financial report which notes the World Health
Organisation’s declaration of the outbreak of COVID-19 as a global pandemic subsequent to
31 December 2019 and how this has been considered by the directors in the preparation of the
financial report. As set out in Note E.9, no adjustments have been made to the financial
statements as at 31 December 2019 for the impacts of COVID-19. Our opinion is not modified in
respect of this matter.
A member firm of Ernst & Young Global Limited
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GB:JG:RESOLUTE:000
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 2
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial report of the current year. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter
below, our description of how our audit addressed the matter is provided in that context.
1.
Acquisition of Toro Gold Limited
Why significant
How our audit addressed the key audit matter
On 2 August 2019, the Group completed the
acquisition of Toro Gold Ltd (“Toro Gold”) for
total consideration of $456,740,000. The
acquisition has been accounted for as a business
combination (refer to Note E.1 of the financial
report).
The acquisition is significant to the Group and
accounting for the acquisition was complex due to
the judgment required by the Group to identify
and determine the fair values of all of the assets
and liabilities acquired.
Our audit procedures included the following:
► Read the purchase agreement to gain an
understanding of the key terms.
► Assessed the appropriateness of the
acquisition accounting applied.
► Assessed the fair value of all of the assets
and liabilities acquired, with the assistance of
our valuation specialists, including
considering whether the valuation
methodologies applied were in accordance
with the requirements of Australian
Accounting Standards.
► Assessed the qualifications, competence and
objectivity of the Group’s external and
internal experts involved in the fair value
assessment process.
► Evaluated the adequacy of the Group’s
disclosures in the financial report relating to
the acquisition of Toro Gold.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 3
2.
Physical existence and valuation of ore stockpiles and gold in circuit
Why significant
How our audit addressed the key audit matter
As at 31 December 2019 the Group had ore
stockpiles and gold in circuit inventories of
$97,064,000 and $91,156,000 respectively
(refer to Notes D.2 & E.2 in the financial report).
Critical to the determination of the carrying value
of ore stockpiles and gold in circuit inventories is
the cost and net realisable value assumptions
adopted by the Group in measuring the ore
stockpiles and gold in circuit and the
determination of the physical existence of the ore
stockpiles (tonnes) and gold in circuit (ounces).
We focused on this matter because of the:
► Significant judgment required to assess the
quantity of ore stockpiles and the quantity
and recoverable metal content for gold in
circuit. This includes determination of
estimated grades, recovery rates and other
geophysical properties.
► Significant estimates and judgments involved
in the valuation of ore stockpiles and gold in
circuit including the allocation of operating
costs to various stock types included in ore
stockpiles and gold in circuit inventories.
► Significant estimates involved in the
determination of the net realisable value of
ore stockpiles and gold in circuit, including
the appropriateness of the estimated
recoverable gold, selling price in the ordinary
course of business and estimated costs of
completion necessary to make the sale.
Our audit procedures included the following:
► Obtained an understanding of the Group’s
processes and controls in place for
determining the physical quantities and
metal contents of stockpiles and gold in
circuit, which included observation of the
stockpile surveys at the Syama, Mako and
Ravenswood mine sites during the financial
year.
► Assessed the qualifications, competence and
objectivity of the Group’s internal experts
involved in determining the quantity and
recoverable metal content for ore stockpiles
and gold in circuit.
► Agreed the estimated grades, recovery rates
and other geophysical properties against the
underlying reports prepared by the Group’s
internal experts and assessed the
reasonableness of this information based on
the current operations.
► Assessed the accuracy of the inventory
valuation models including assessing the
nature of costs allocated to inventories in
determining the unit cost of inventories.
► Assessed the carrying value of inventories at
31 December 2019 to evaluate whether they
were valued at the lower of cost and net
realisable value. This included evaluating the
assumptions and methodologies used by the
Group, in particular those relating to the
forecast gold price, costs to complete and
gold recoveries.
► Evaluated the adequacy of the Group’s
disclosures in the financial report relating to
inventories.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 4
3.
Impairment assessment of non-current assets
Why significant
How our audit addressed the key audit matter
As at 31 December 2019, the Group had non-
current assets of $1,356,504,000 comprising
capitalised development expenditure, property,
plant and equipment, capitalised exploration and
evaluation expenditure and right of use assets
(refer to Notes B.1, B.2 and D.7 to the financial
report).
At the end of each reporting period, the Group
exercises judgment in determining whether there
is any indication of impairment or indication that
an impairment loss recognised in prior periods
should be reversed. If any such indicators exist,
the Group estimates the recoverable amount of
that asset. The Group assessed whether any
indicators of impairment were present at 31
December 2019 and concluded that an indicator
of impairment was present in respect of the
Bibiani Gold Project. No impairment has been
recognised.
We considered this to be a key audit matter
because of the:
► Significant judgment involved in determining
if indicators of impairment or indicators that
an impairment loss recognised in prior
periods should be reversed, were present.
► Significant judgment and estimates involved
in the determination of the recoverable
amount of the Bibiani Gold Project CGU
including assumptions relating to future gold
prices, exchange rates, operating and capital
costs and an appropriate discount rate to
reflect the risk associated with the forecast
cash flows having regard to the current
status of the Project.
We evaluated the Group’s assessment as to the
presence of any indicators of impairment or
indicators that an impairment loss recognised in
prior periods should be reversed. Our audit
procedures included the following:
► Comparison of the Group’s market
capitalisation relative to its net assets.
► Reading operational reports, board reports,
minutes and market announcements.
► Consideration of changes to reserves and
resources and other macro-economic factors
including the gold price.
► Consideration of the status of capital
projects via discussions with management,
review of operational reports and minutes
and site visits.
When indicators of impairment were identified, we
assessed the reasonableness of the Group’s
impairment assessment process. Our audit
procedures included the following:
► Evaluated the assumptions and
methodologies used by the Group, in
particular, those relating to forecast cash
flows and inputs used to formulate them.
This included assessing, with involvement
from our valuation specialists, where
appropriate, the foreign exchange rates and
gold prices with reference to market prices
(where available), market research, market
practice, market indices, broker consensus,
historical performance and the discount
rate.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 5
3.
Impairment assessment of non-current assets
Why significant
How our audit addressed the key audit matter
► Tested the mathematical accuracy of the
Group’s discounted cash flow impairment
model and agreed relevant data, including
assumptions on timing and future capital and
operating expenditure, to the Group’s
feasibility analysis of the project and the
latest Board approved life of mine plan (as
appropriate).
► Ensured the Group’s impairment methodology
and calculations were in accordance with the
requirements of Australian Accounting
Standards.
► Assessed the work of the Group’s internal and
external experts with respect to the capital
and operating assumptions used in the cash
flow forecasts. This included understanding
the underlying cost estimation process,
information in Board reports and releases to
the market. We also considered the
competence, qualifications and objectivity of
the experts and assessed whether key capital
and operating expenditure assumptions were
consistent with information in Board reports
and releases to the market.
► Assessed the work of the Group’s experts with
respect to the reserve and resource
assumptions used in the cash flow forecasts.
This included understanding the estimation
process. We also examined the competence,
qualifications and objectivity of the Group’s
experts, and assessed whether key economic
assumptions were consistent with those used
elsewhere in the financial report.
► Assessed the impact of a range of sensitivities
to the economic assumptions underpinning
the Group’s impairment assessment.
► Evaluated the adequacy of the Group’s
disclosures in the financial report relating to
impairment.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 6
4.
Rehabilitation and restoration provisions
Why significant
How our audit addressed the key audit matter
As a consequence of its operations, the Group
incurs obligations to rehabilitate and restore its
mine sites. Rehabilitation activities are governed
by local legislative requirements. As at 31
December 2019 the Group’s consolidated
statement of financial position includes provisions
of $92,955,000 in respect of these obligations
(refer to Note D.6 of the financial report).
We focused on this matter because estimating
the costs associated with these future activities
requires judgment and estimation for factors
such as timing of when rehabilitation will take
place, the extent of the rehabilitation and
restoration activities and economic assumptions
relating to inflation and discount rates are taken
into account to determine the provision amount.
We evaluated the assumptions and methodologies
used by the Group in determining their
rehabilitation obligations. Our audit procedures
included the following:
► Assessed the qualifications, competence and
objectivity of the Group’s external and
internal experts, the work of whom, formed
the basis of the Group’s rehabilitation cost
estimates. We assessed the appropriateness
of the cost estimates, including comparing
these to historical rehabilitation costs
incurred.
► Considered the estimated timing of when the
rehabilitation cash flows will be incurred
based on the life of mine and the resultant
inflation and discount rate assumptions used
in the Groups cost estimates, having regard
to available economic data relating to future
inflation and discount rates.
► Evaluated the adequacy of the Group’s
disclosures relating to rehabilitation
obligations and considered the
appropriateness of the accounting for the
changes in the rehabilitation and restoration
provision.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 7
5.
Taxation
Why significant
How our audit addressed the key audit matter
Our audit procedures in relation to indirect tax,
current and deferred tax included the following:
► Involved our tax specialists in the
interpretation of enacted tax laws in these
multiple jurisdictions, where necessary,
including the related judgments and
interpretations made by the Group.
► Considered the appropriateness of the
Group’s assumptions and estimates in
relation to tax positions, assessed those
assumptions and considered the advice the
Group received from external experts to
support the accounting for the tax positions
in accordance with enacted laws.
► Considered the appropriateness of the tax
assets and liabilities recognised by the
Group at 31 December 2019 having regard
to the requirements of the applicable
accounting standards.
► Where external experts were engaged by
the Group, we assessed their qualifications,
competence and objectivity.
► Assessed the adequacy of the Group’s
disclosures relating to taxation in the 31
December 2019 financial report.
The Group has operations in multiple countries,
each with its own taxation legislation. The nature
of the Group’s activities give rise to various
taxation obligations including corporate income
tax, VAT, royalties, employment related taxes,
and other indirect taxes.
As set out in the Consolidated Statement of
Financial Position the Group has a current tax
receivable of $21,588,000, current tax liabilities
of $30,127,000 and recognised deferred tax
assets of $27,786,000 and deferred tax liabilities
of $13,219,000 as at 31 December 2019. The
Group has recognised a tax expense of
$24,947,000 for the year ended 31 December
2019. In addition, as set out in Note D.1 and D.6
to the financial report, the Group has indirect tax
receivables from the Mali Tax Office of
$70,188,000 and a provision for indirect tax
payable to the Mali Tax Office of $ 57,407,000 as
at 31 December 2019.
Further, as set out in Notes A.4 and E.3 to the
financial report the Group has significant
unrecognised tax assets as at 31 December 2019
and has contingent liabilities in connection with
tax disputes with the tax authorities in Mali.
We focused on this matter because the:
► Group is required to exercise significant
judgment with regards to interpretation of
enacted tax laws in these multiple countries
which in turn requires significant judgment in
estimating the groups taxation assets and
liabilities at 31 December 2019. The Group
engages external independent tax advisors to
assist with the interpretation of tax laws and
the estimation of its tax assets and liabilities.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 8
Why significant
How our audit addressed the key audit matter
► Determination of the probability of the Group
deriving taxable income in the future to
utilise deferred tax assets is highly
judgmental. This is subject to numerous
assumptions around the future profitability
of the Group’s mining assets, which in turn is
primarily dependent upon assumptions
including future production levels, gold
prices and exchange rates, operating and
capital development costs.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2019 Annual Report, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon, with the exception of the Remuneration
Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to
enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
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167
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 9
In preparing the financial report, the directors are responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters relating to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole
is free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgment and maintain professional scepticism throughout the audit. We also:
► Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 10
► Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group audit. We
remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of
most significance in the audit of the financial report of the current year and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended
31 December 2019.
In our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 31
December 2019, complies with section 300A of the Corporations Act 2001.
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Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 11
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Ernst & Young
Gavin Buckingham
Partner
Perth
27 March 2020
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170
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Shareholder Information
Substantial Shareholders as at 28 February 2020
Shareholder
ICM Limited
Van Eck Associates Corporation
L1 Capital Pty Ltd.
Distribution of Equity Securities as at 28 February 2020
Size of Holding
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 for Ordinary Shares
Ordinary Shares
130,527,654
92,404,105
67,744,202
Percentage of
Issued Capital
12.60%
8.92%
6.54%
Total Holders
Percentage of
Issued Capital
1,954
2,896
1,560
2,529
335
9,274
Holders
931
0.09%
0.82%
1.21%
7.47%
90.41%
100.00%
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 February 2020
Name
Ordinary Shares
1
2
3
4
5
6
7
8
9
ICM Limited
Van Eck Associates Corporation
L1 Capital Pty Ltd
The Vanguard Group Inc
QG Investments Africa Management Ltd
Baker Steel Capital Managers LLP
Dimensional Fund Advisors LP
BlackRock Inc
FMR LLC
10 Schroders Plc
11
12
13
Investec Group
Lemanik SA
Invesco Plc
14 IFM Investors
15
State Street Corporation
16 Credit Suisse Group
17
First Sentier Investors Realindex Pty Ltd
18 Morgan Stanley & Co Inc
19 Wellington Management Company LLP
20 Canaccord Genuity Group Inc
130,527,654
92,404,105
67,744,202
43,055,846
41,189,189
36,364,193
35,851,803
30,622,047
30,026,355
21,114,888
20,777,469
14,741,433
14,399,969
13,741,159
12,672,917
12,360,911
12,233,791
11,587,972
11,326,869
9,436,438
Percentage of
Issued Capital
12.60%
8.92%
6.54%
4.16%
3.98%
3.51%
3.46%
2.96%
2.90%
2.04%
2.01%
1.42%
1.39%
1.33%
1.22%
1.19%
1.18%
1.12%
1.09%
0.91%
662,179,210
63.92%
171
Resolute Mining Limited | 2019 Annual Report | Financial Report – for the year ended 31 December 2019 Corporate Directory
Directors
Share Registry
Non-Executive Chairman
Martin Botha
Computershare Investor Services Pty Limited
Managing Director and CEO
John Welborn
Level 11, 172 St Georges Terrace
Non-Executive Director
Yasmin Broughton
Perth, Western Australia 6000
Non-Executive Director
Mark Potts
Non-Executive Director
Non-Executive Director
Sabina Shugg
Peter Sullivan
Company Secretary
Amber Stanton
Registered Office and
Business Address
Level 2, Australia Place
15-17 William Street
Perth, Western Australia 6000
Postal/Contact
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
Home Exchange
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth, Western Australia 6000
Quoted on the official lists of the Australian Securities
Exchange (ASX) and the London Stock Exchange (LSE)
under the ticker “RSG”
Securities on Issue
28 February 2020
Ordinary Shares
1,035,886,919
Performance Rights
8,657,154
Auditor
Ernst & Young
Ernst & Young Building
11 Mounts Bay Rd
Perth, Western Australia 6000
Website
Resolute maintains a website where all major
announcements to the ASX/LSE are available:
www.rml.com.au
Shareholders wishing to receive copies of Resolute’s ASX
announcements by e-mail should register their interest by
contacting the Company at contact@rml.com.au
172
Resolute Mining Limited | 2019 Annual Report
ASX/LSE:RSG | www.rml.com.au
Resolute’s 2019 Annual Report has
been printed on recycled paper.