Republic Services
Annual Report 2020

Plain-text annual report

ASX/LSE:RSG | www.rml.com.au 2020 Annual Report Contents About Resolute Resolute’s Vision 2020 at a Glance Chairman’s Report Interim CEO Report Board of Directors Leadership Group Sustainability at Resolute Operations Review Ore Reserves and Mineral Resources Financial Review Risk Management Corporate Governance Financial Report Corporate Directory 1 1 3 4 6 8 11 13 14 27 31 33 36 40 BC Scope of this Report Resolute Mining Limited’s 2020 Annual Report presents the Company’s operating and financial results for the period from 1 January 2020 to 31 December 2020 and has been prepared for our stakeholders in line with statutory and regulatory reporting obligations. Resolute is a multi-mine, low-cost, African-focused gold producer. This report outlines Resolute’s operational and financial performance and details the Company’s efforts in 2020 to deliver long-term value to all stakeholders in a manner that reflects company 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 United States dollar currency unless otherwise stated. All references to 2020 are for the 12-month period from 1 January 2020 to 31 December 2020 unless otherwise stated. Resolute Mining Limited | 2020 Annual Report About Resolute Resolute is a successful African-focused gold miner with more than 30 years of experience as an explorer, developer and operator of ten gold mines which have produced more than 9 million ounces of gold and counting. Resolute currently owns two producing gold mines: the Syama Gold Mine in Mali (Syama) and the Mako Gold Mine in Senegal (Mako). Our Global Mineral Resource base comprises 11 million ounces (Moz) of gold. Syama is a robust, long-life asset which is expected to produce 235,000oz to 255,000oz of gold in 2021 from existing processing and mining infrastructure. Mako is a high quality, open pit gold mine which Resolute has owned and operated since August 2019. The Company is also active in exploration with drilling campaigns underway across its African tenements with a focus on Mali, Senegal, Côte d’Ivoire and Guinea. Resolute’s Vision To be a multi-mine, low-cost, African-focused gold producer 11 Resolute Mining Limited | 2020 Annual ReportResolute Mining Limited | 2020 Annual Report 22 Resolute Mining Limited | 2020 Annual ReportResolute Mining Limited | 2020 Annual Report 2020 at a Glance Gold Production: Revenue: Cash, Bullion and Listed Investments: 395,136oz $618 million $107 million All-In Sustaining Cost: Underlying EBITDA: $1,074/oz $270million Gold Sales: 395,175oz Average Realised Gold Price: $1,562/oz Underlying Net Profit After Tax: $37million Net Profit After Tax: $5 million Gold in Circuit Inventory: 78,420oz valued at $148 million Economic Value Distributed: $760 million Total Recordable Injury Frequency Rate: 0.87 26 March: $300 million debt refinancing completed 26 March: Comprehensive COVID-19 response plan implemented 31 March: Divestment of Ravenswood Gold Mine (Australia) for A$50 million in cash, a A$50 million promissory note with annual coupon of 6% to be capitalised and payable to Resolute at maturity, and up to A$200 million in payments aligned to gold price and strategic outcomes at Ravenswood 31 May: First phase of open pit mining completed at Tabakoroni 30 June: Operation of Syama Underground at nameplate production rate of 2.4Mtpa achieved 20 July: Mako Life of Mine updated 14 October: Tabakoroni Underground Mineral Resource Estimate upgraded 14 October: Tabakoroni Pre-Feasibility Study completed 15 December 2020: Agreement for the $105 million sale of Bibiani Gold Mine (Ghana) signed 3 3 Resolute Mining Limited | 2020 Annual ReportChairman’s Report Resolute is a multi-mine, African-focused gold producer with 30 years experience exploring, developing and operating gold mines. The Company has mined more than 9 million ounces of gold from ten mines in Australia and Africa. During 2020, Resolute achieved a number of significant corporate milestones including the disposal of two non-core assets, namely the Ravenswood Gold Mine in Queensland and towards the end of the year, the announcement of the signing of an agreement to sell the Bibiani Gold Mine in Ghana. These actions enable the simplification of Resolute's current operational and development objectives to focus on our producing mines, Syama and Mako, while providing a stronger foundation from which to pursue a growth agenda. Our commitment remains to deliver sustainable and enduring value to shareholders and to the communities in which we operate. Dear Shareholders, Presenting Resolute Mining Limited’s 2020 Annual Report provides an opportunity to reflect on an extraordinary period for our company. Various management and operational challenges were compounded by the global Coronavirus pandemic which took hold in the first half of 2020, and which continues with full effect as this report is penned. Up front I wish to recognise the great management focus, and resilience of our employees, particularly at our operations, which have ensured that we have safely maintained production throughout the development of this pandemic. Protocols established for earlier regional outbreaks of contagious diseases, such as Ebola, provided an initial platform for addressing COVID-19. Continuous review of these processes, augmented by enhancement of oversight structures and application of technologies such as temperature cameras and site based PCR testing, has ensured targeted improvement. Your company entered 2020 with a Board focused on balance sheet matters, exacerbated by the production consequences of a roaster failure at Syama in Q4 of 2019. In January 2020, shareholders and new investors supported a successful equity raising allowing repayment, as planned, of the outstanding Toro Gold acquisition facility. In March, Resolute completed a debt refinancing allowing repayment of the Mako project loan, further simplifying the Company’s balance sheet. At the end of March, we completed the sale of our Ravenswood operations in Queensland, thus for now, becoming a truly African-focused gold miner. Ravenswood requires significant capital investment to leverage the opportunity within its gold resources. This investment will now be made by its new owners, with Resolute retaining an appropriate upside exposure to the gold price and subsequent performance. In December 2020 we announced the sale of Bibiani, an asset the Company has owned since 2014. We are confident that our positive legacy in Ghana, and the interests of all stakeholders, will be best served under the new ownership arrangements which will allow for early redevelopment of operations at Bibiani. August saw a form of Coup d’Etat in Mali, with some supply disruption caused by ECOWAS sanctions before a new transitional government was established. Whilst a reminder that political stability remains a risk, neither the safety or security of our employees, at Syama and Bamako, were compromised and the impact to production was minimal. Mako, in Senegal, completed its first full year as a Resolute asset, confirming the strategic rationale of the Toro Gold acquisition, meeting all targets and providing strong cash flows. 2021 will see reduced production as a cutback is advanced. The Company's new underground mine at Syama is now operating consistently at nameplate levels, with caving as planned and delivery of fresh ore at grade to the sulphide circuit. Despite the successful advancement of numerous strategic objectives and the pleasing performance of the Mako asset, we recognise the Company requires urgent focus to deliver the expected consistent operational performance at our flagship Syama mine in order to begin to deliver 4 Resolute Mining Limited | 2020 Annual Reportappropriate value to shareholders. Actions have been taken in this regard and we are determined to ensure significant progress in 2021 and beyond. In October 2020, Stuart Gale was appointed Interim CEO following John Welborn stepping down from the role. An active process to recruit a new CEO is under way. John worked hard to reposition and transform Resolute during his time at the Company and we thank him for his contributions and wish him well in his new endeavours. Resolute takes great care to ensure it operates responsibly and with consideration for the health and safety of our employees, the communities within which we operate, and the environment around us. We published our inaugural Sustainability Report this year, which provides a detailed review of our environmental, social, and governance performance for each of our operating assets in 2020, in accordance with leading practice. An integral part of embedding resilience into our operations is our further commitment to support the increase in national Resolute Mining Limited | 2020 Annual Report professionals in senior and upper level management roles at our operations. The gold price continues to maintain its strength amid continued global uncertainty. This provides a favourable environment within which the Company is determined to deliver sustainable value for its shareholders through operational and financial improvement while continuing to assess strategic opportunities. I look forward to being able to report on our progress during 2021. Martin Botha Chairman 5 5 Resolute Mining Limited | 2020 Annual ReportInterim CEO Report Dear Shareholders, During 2020 we achieved a number of major strategic goals. We implemented a robust COVID-19 response plan across our operations which has kept our people safe and our mines running; completed the sale of Ravenswood with proceeds of up to A$300 million and crystallised our strategy to be an African-focused gold producer; successfully refinanced the business through an equity raising and a new low-cost, flexible syndicated debt facility which enabled us to remove the external royalty over our Mako Gold Mine in Senegal; updated the Life of Mine plan for Mako, increasing gold production by 39% and added two years of mine life; announced an updated Mineral Resource Estimate for the Tabakoroni underground and completed a Pre- Feasibility Study to assess its potential to augment gold production at our Syama Gold Mine in Mali. We are proud of our people and were very pleased this year to deliver on our commitment to increase the development of our workforce at Syama with the promotion of a number of Malian professionals in senior and upper level management roles. In September, we appointed Ousmane Coulibaly as Resolute’s Country Manager Mali, responsible for our day to day business in Bamako. We announced the appointment of Mohamed Cisse as Managing Director SOMISY in December, the first Malian to oversee operations at Syama. It was also rewarding to see Awa Fofana, Underground Safety Superintendent at Syama, and also the only female in this role in Mali, recognised as one of Women in Mining UK’s top 100 global inspirational women in mining for 2020. Resolute’s operational performance in 2020 in the face of COVID-19, a Coup d’Etat in Mali and industrial action at Syama, reflects the resilience of our people who performed throughout to ensure that operations were safely maintained, and gold production continued. In the face of these challenges during 2020, Resolute showed positive momentum with our operations and produced 395,136 ounces of gold at an All-In Sustaining Cost of $1,074 per ounce. Group Revenue was $618 million and resulted in underlying earnings before interest, tax, depreciation and amortisation of $270 million and an underlying net profit after tax of $5 million. Revenue from continuing operations at Syama and Mako was $603 million and corresponded with an underlying EBITDA of $270 million. Most pleasingly throughout 2020, our teams worked safely and efficiently to operate our mines, despite the impacts of COVID-19. In response to the pandemic our executive and site management teams implemented measures and protocols that protected the wellbeing of our employees, contractors and the communities in which we operate, while maintaining and improving our operational performance and keeping our mines running. Our comprehensive response plan remains in place to manage the COVID-19 pandemic at all company locations and includes additional hygiene, PPE, and social distancing measures, and extensive testing and mandatory isolation procedures for suspected or confirmed cases amongst the workforces. The impacts of COVID-19 on our expatriate workers, many of whom worked extended rosters, some for several months due to the pandemic’s restriction on air travel and international border closures, should not be overlooked. I take this moment to pause and offer my thanks for their commitment and resolve during a period of unprecedented uncertainty and disruption to regular work life. I also thank our executive and senior management teams who remained vigilant and prioritised the safety of our operations while managing and adjusting to the challenges of the pandemic. The safety and wellbeing of our people remains our number one priority. We have kept our mills running to produce gold and sustain the significant economic contribution we make to our host communities, at the same time as honouring our obligations to maintain the health and safety of our employees and contractors. Our sulphide operations at Syama were fully operational at the beginning of the year with significant underground ore stockpiles at surface. Underground mining and processing rates increased significantly as the roaster was recommissioned following repairs in late 2019 and the underground mine reached full operating capacity. Plant throughput increased as a result of extensive optimisation and modification work on the crushing and milling circuits, while recoveries reflected a similar process of optimisation in the operation of the flotation and leach circuits. Syama’s operating performance continues to improve as we seek to consolidate and deliver a consistent level of throughput aligned with our long-term expectations of the plant and roaster. The Syama oxide operations continued to perform well, although ore grade and gold production were lower in 2020 following the completion of initial oxide open pit operations at the Tabakoroni complex. Exploration at Syama is focused on extended the remaining two-year life of this operation. Political pressures in Mali resulted in a Coup d’Etat in August which saw sanctions placed on the country by the Economic Community of West African States (ECOWAS). The sanctions, which threatened supply lines of key mining consumables for a period, and political instability did not impact production or the safety and security of employees and contractors at Syama, or in Bamako. The resolution of the political issues at the end of the September quarter was pleasing, with a transitional government supported by ECOWAS sworn into office. The establishment of a new administration provides confidence for the Company as we continue our engagement with the Mali Government to resolve our previously documented in-country tax position. During the September and December quarters, a number of local and national strikes at Syama impacted production. Pleasingly, we were able to maintain production throughout this period by capitalising on available ore stockpiles and redeploying essential workers to maintain production at the sulphide and oxide processing plants. 6 Resolute Mining Limited | 2020 Annual ReportThe strategic review of the Bibiani Gold Mine in Ghana resulted in an agreement to sell our interest in Bibiani, to Chijin International (HK) Limited, a wholly owned subsidiary of Chifeng, for total cash consideration of $105 million. Resolute is proud of its contribution to Ghana and pleased that our investments at Bibiani in exploration, feasibility studies, and community support will provide a strong base for future success and value creation. I am confident that Resolute’s positive legacy in Ghana, and the interests of all stakeholders in Bibiani, will be protected and enhanced under Chifeng’s ownership. Resolute operates responsibly, with careful consideration for the health and safety of our people, the communities surrounding our sites, and the environment around us, and is aligned to the World Gold Council’s Responsible Gold Mining Principles. During 2020 we developed a Sustainability Performance Framework to reflect this commitment and govern the way we operate in order to meet international standards of good practice in areas of social development, human rights, environmental protection and health and safety. We are very pleased to publish our first Sustainability Report this year which provides a detailed review of our ESG performance for each of our operating assets in 2020, in accordance with the Global Reporting Initiative Sustainability Standards. I take this opportunity to recognise the efforts of the entire Resolute team, led by our Board, our executive group, senior management team and our site-based general managers. The efforts of our employees, contractors and advisory partners, as well as the support of all our stakeholders has enabled Resolute to remain resilient and determined during 2020. I also wish to thank former Managing Director and Chief Executive Officer, John Welborn for his leadership, valuable contributions and hard work in repositioning and transforming the business over the past five years. In 2021 we will continue to simplify our business and focus on the consistent delivery of operational outcomes and create sustainable value for all stakeholders. Stuart Gale Interim Chief Executive Officer Turning to our operations in Senegal, Mako is a consistent performer for Resolute, delivering strong results and cash flows. An increase in mining volumes in 2020 reflects the arrival of a new mining fleet to accelerate waste stripping to support an enlarged open pit and longer mine life. This reflected the results of work to update the Mako Life of Mine plan, which was completed in July 2020. During 2020 our exploration activity was focused on the underground resource at Tabakoroni and the expansion of our potential oxide deposits around Syama in Mali. Other field programs in Senegal, Côte d'Ivoire and Guinea were paused during the June quarter due to logistical impacts of the COVID-19 pandemic, with border closures and travel restrictions imposed by respective governments. These programs restarted after restrictions eased in August with work continuing as normal for the remainder of the year. On 14 October 2020, Resolute announced an updated Mineral Resource Estimate at Tabakoroni which enabled completion of a Pre-Feasibility Study to assess the potential for a new underground gold mine at Tabakoroni. Excellent drilling results from deep drilling at Tabakoroni throughout the second half of 2020 led to a re-estimation of the Mineral Resource in December. The updated Mineral Resource at Tabakoroni now stands at 8.1 million tonnes at 4.9 grams per tonne of gold for a total of 1.26 million ounces of gold. The Tabakoroni underground deposit remains open, both along strike and at depth with ongoing exploration success expected to expand Mineral Resources and extend mine life. Accelerated drilling programs were undertaken throughout the Syama Greenstone Belt to expand oxide resources and extend mine life which is a key priority for the Company. Positive results from these programs were reported in April and October 2020. The Company is confident that the exploration program will be successful in adding to the oxide mining inventory. Construction of the new hybrid modular power station at Syama in partnership with Aggreko plc continued throughout 2020. Commissioning of the first generating units, and the battery storage system will take place in the first quarter of 2021. The project will be fully commissioned and operating shortly thereafter. At the corporate level, we announced a key milestone in Resolute's history with the sale of our Australian operation at Ravenswood in Queensland, with total proceeds receivable by Resolute of up to A$300 million. Resolute has received A$50 million in cash and a A$50 million promissory note, with A$200 million of upside exposure to Ravenswood in potential payments contingent on future gold prices, future gold production from the mine and the investment outcomes generated by new owners, EMR Capital and Golden Energy and Resources. 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 owners. We also completed an important refinancing during the March quarter for a fully flexible, low-cost $300 million facility provided by syndicate banks which provided significant flexibility in the unstable global environment. As part of that refinancing, we successfully negotiated the acquisition of the external royalty over Mako which was put in place during the financing phase of that mine, to remove the external royalty over the project, increasing future cash flows for the Company. 7 7 Resolute Mining Limited | 2020 Annual ReportBoard of Directors Martin Botha BScEng Non-Executive Chairman Mr Martin Botha was appointed Chairman in June 2017 after being appointed to the Board in February 2014. Mr Botha is Chair of the Nomination Committee and a member of the Audit and Risk Committee and the Remuneration Committee. Skills, experience and expertise Mr Botha is an investment banker with extensive experience as a non-executive director in the metals and mining industry and regulated financial markets. Mr Botha led the establishment and development of Standard Bank’s core global natural resources trading and financing franchise across all continents as a founding director in their London centred international operations. He brings this insight and experience of global commodity markets as well as mining financing and M&A transactions to the Board. Mr Botha is active in assisting early stage mining opportunities in Africa and has a broad strategic understanding of the resources industry and its cyclical nature. He brings deep experience in governance through his board level roles in highly regulated institutions in a number of global financial centres. Mr Botha currently chairs a UK regulated broker as well as a private company building digital marketplaces. Mr Botha graduated with first class honours from the University of Cape Town and is based in London. Current listed directorships • Non-Executive Director of Zeta Resources Limited (appointed 2013) Other current directorships/appointments • • Non-Executive Chair Sberbank (UK) (appointed 2012) Non-Executive Chair Perfect Channel Ltd (appointed 2017) Peter Sullivan BEng, MBA Non-Executive Director 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 a member of the Remuneration Committee (Chair until 19 February 2020), the Audit and Risk Committee and the Nomination Committee. Skills, experience and expertise Mr Sullivan is an engineer with extensive experience as a non-executive director and in senior executive roles, including in chief executive officer and operational positions. Mr Sullivan brings wide-ranging and global experience working in listed and unlisted resource companies. He has valuable insight and experience in engineering and construction, investment banking and capital markets and managing mining operations in Australia and internationally. Mr Sullivan has over 30 years’ experience working with ASX-listed companies and has a broad strategic perspective and understanding of the long-term cyclical nature of the resources industry. Mr Sullivan has been closely involved with the strategic development of resource projects and companies with input across technical, financial, regulatory and governance matters. Mr Sullivan has worked across multiple jurisdictions including Africa, North America, Europe and Asia. He holds a Bachelor of Engineering degree from the University of Western Australia and an MBA from the Australian Graduate School of Management. Current listed directorships • • • • • Non-Executive Director of GME Resources Limited (appointed 1996) Non-Executive Director of Zeta Resources Limited (appointed 2013) Non-Executive Director of Panoramic Resources Limited (appointed 2015) Non-Executive Director of Horizon Gold Limited (appointed 2020) Non-Executive Director of Copper Mountain Mining Corporation (appointed 2020) Note: The Board considers that the specific duties and responsibilities of Mr Sullivan's current listed directorships outside of the Company do not impact on his ability to serve as a Non-Executive Director. Other current directorships/appointments • None 8 Resolute Mining Limited | 2020 Annual ReportYasmin Broughton BACom, Post Graduate Law, FAICD Non-Executive Director Ms Yasmin Broughton was appointed to the Board as a Non-Executive Director in June 2017. Ms Broughton is Chair of the Audit and Risk Committee, and a member of the Remuneration Committee and the Nomination Committee. Skills, experience and expertise Ms Broughton is a barrister and solicitor with extensive experience as a non-executive director and corporate lawyer working in a diverse range of industries including mining, infrastructure, energy, financial services, cyber security and agriculture. Ms Broughton was a senior associate at the international law firm, Ashurst. As a corporate lawyer, Ms Broughton’s speciality is M&A, corporate finance, and corporate governance. Ms Broughton has over 20 years’ experience working with ASX-listed companies and has a deep understanding of strategy, change management, governance and risk, compliance and regulation. In her executive career, Ms Broughton was general counsel and company secretary of several ASX-listed companies including Alinta Limited, a former ASX 50 energy and infrastructure company. Ms Broughton has worked across multiple jurisdictions including the UK, Europe, Asia, and Africa. Ms Broughton is a member of the Audit and Risk Committees of Western Areas, Synergy and the Insurance Commission of WA and a member of the Human Resources and Sustainability Committee at Synergy. Ms Broughton has a broad strategic perspective and understanding of the long-term cyclical nature of the resources industry with proven health, safety and environment performance. Ms Broughton is a Fellow of the Australian Institute of Company Directors. Current listed directorships • Non-Executive Director Western Areas Limited (appointed October 2020) Other current directorships/appointments • • • Non-Executive Director Wright Prospecting Pty Ltd (appointed April 2020) Non-Executive Director of Synergy (appointed November 2017) Non-Executive Director of Insurance Commission of Western Australia (appointed October 2015) Mark Potts BSc (Hons), GAICD Non-Executive Director Mr Mark Potts was appointed to the Board as a Non-Executive Director in June 2017. 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. Skills, experience and expertise Mr Potts is a leading global technology and business executive. He has founded multiple venture backed technology and technology services companies in Australia, the UK and the US. Most recently Mr Potts was an HP Fellow and Chief Technology Officer / Vice President of Corporate Strategy at Hewlett-Packard Enterprise in the US, leading their efforts in both M&A, technology investment and capital strategy. Mr Potts is and has been a non-executive director and chairman at a number of ASX-listed technology companies involved in disruption within both financial services/ superannuation, security/surveillance automation and government service digitisation. He has deep expertise in technology lead innovation leveraging Robotic Process Automation, AI / machine learning, and Blockchain technology, as well as public policy change and privatisation of government soft assets into public and private partnership. Mr Potts has worked across multiple jurisdictions including the UK, Europe, US and Asia Pacific. Mr Potts is also a non-executive director at Linear Clinical Research Limited, a purpose built state-of-the-art, clinical trials facility and a focal point for Australian clinical and medical research. Mr Potts is a Member of the Australian Institute of Company Directors. Current listed directorships • Non-Executive Chairman of icetana (appointed 2018) Other current directorships/appointments • • Non-Executive Director of Linear Clinical Research Limited (appointed 2019) Non-Executive Director of Land Services WA (appointed 2019) 9 Resolute Mining Limited | 2020 Annual ReportSabina Shugg BSc (Mining Engineering), MBA, GAICD Non-Executive Director Ms Sabina Shugg was appointed to the Board as a Non-Executive Director in September 2018. Ms Shugg is a member of the Remuneration Committee, the Sustainability Committee, the Audit and Risk Committee and the Nomination Committee. Skills, experience and expertise 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 has extensive experience in senior roles with mining and consulting organisations including operations management experience at senior site level covering both underground and open pit environments. Ms Shugg's work has a strong people focus together with a solid project management background. Ms Shugg currently serves as the Director of the Kalgoorlie Campus for Curtin University – WA School of Mines with a focus on industry engagement and taking mining education into a digital future. In her role as Founder and Chair of Women in Mining and Resources WA (WIMWA), 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 Australian Institute of Company Directors. Current listed directorships • None Other current directorships/appointments • • • • • Chair of the Goldfields Esperance Development Commission (appointed September 2020) Director of the Kalgoorlie Campus for Curtin University – WA School of Mines (appointed July 2019) Non-Executive Director of the Australian Prospectors & Miners' Hall of Fame Ltd (appointed 2014) Non-Executive Director of the Mining Hall of Fame Pty Ltd (appointed 2016) Director of WIMWA Events Pty Ltd (appointed 2007) 10 Resolute Mining Limited | 2020 Annual ReportLeadership Group Resolute Mining Limited | 2020 Annual Report Stuart Gale Mr Stuart Gale was appointed Chief Financial Officer effective 20 January 2020. On 19 October, Mr Gale was appointed Interim CEO of Resolute. Prior to joining the Company, Mr Gale was Group Manager Corporate Finance for Fortescue Metals Group Limited (FMG). Since joining FMG in 2010, Mr Gale was responsible for FMG’s funding, risk, and treasury functions as well as statutory, management and project accounting, budgeting, forecasting, accounts payable and investor relations programs. During FMG’s expansion period, Mr Gale ensured robust systems and processes were developed and implemented in addition to co-ordinating external and internal finance functions. More recently, the development of FMG’s refinancing strategies to result in a low-cost, flexible, long dated debt portfolio that supports the company’s ongoing growth was part of Mr Gale’s role. Mr Gale has strong global relationships with banks, ratings agencies, shareholders, debt holders and investors that are highly beneficial to Resolute. Prior to his career at FMG, Mr Gale held senior executive positions at Wesfarmers including Chief Financial Officer of Wesfarmers Energy Limited and General Manager Group Accounting at Wesfarmers Limited. Mr Gale is a Fellow of the Institute of Chartered Accountants in Australia and a Fellow of Leadership Western Australia. David Kelly Mr David Kelly joined Resolute in 2016 as General Manager – Corporate Strategy and is currently Chief Operating Officer, responsible for all aspects of the Company’s operations and projects. An experienced geologist and company director, Mr Kelly has served in various senior executive roles in the resources sector for the last 30 years including as an investment banker and corporate advisor. Currently a non-executive director of ASX-listed Manas Resources Limited, Mr Kelly has previously served as a director of Predictive Discovery Limited, Ridge Resources Limited, Renaissance Minerals Limited and Pacific Ore Limited. Amber Stanton 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 M&A, capital markets, energy and resources and general corporate and commercial matters. Ms Stanton has a deep understanding of corporate governance, risk, compliance and regulatory matters and has worked across multiple jurisdictions. Ms Stanton was the WA winner of the 2011 Telstra Business Womens Award (Corporate and Private Sector) and is a director of the Liver Foundation of Western Australia. 11 11 Resolute Mining Limited | 2020 Annual ReportResolute Mining Limited | 2020 Annual Report Jordan Morrissey Mr Jordan Morrissey joined Resolute in 2020 as General Manager People & Sustainability. Mr Morrissey is responsible for all aspects of the Company’s people & HSSEC divisions including the execution of the Company's sustainability strategy. An experienced mining professional, Mr Morrissey has over 15 years' global mining experience and most recently held the Chief People Officer role for Syrah Resources Limited. James Champion de Crespigny Mr James Champion de Crespigny joined Resolute in 2020 as General Manager – Business Development. Mr Champion de Crespigny is a chartered accountant with experience in capital markets, financing, and M&A, primarily in the mining sector. His past experience includes roles with London-based mining finance group Cutfield Freeman & Co and Sydney-based private equity group EMR Capital. Bruce Mowat Mr Bruce Mowat joined Resolute in 2011 and is currently General Manager – Exploration, responsible for the Company’s exploration and development programs in Australia, Africa and other jurisdictions. Mr Mowat has spent 30 years exploring for and finding gold and base metal deposits in Australia, PNG, Indonesia and West Africa and has held senior positions in a number of companies. Prior to joining Resolute, Mr Mowat was Chief Geologist for Straits Resources. 12 12 Resolute Mining Limited | 2020 Annual ReportSustainability at Resolute Resolute operates responsibly in all jurisdictions and is fully committed to meeting international standards of good practice across all ESG areas. Resolute operates responsibly to create long term value and mutual benefit. All sustainability initiatives delivered across the Company conform to at least one of the three strategic pillars of our Sustainability Strategy: • • • Environmental Stewardship Sustainable Development Governance & Integrity Strategic priority areas have been identified under each pillar and will guide the implementation of specific sustainable development programs in the years to come. Resolute recognises the importance of strong sustainability performance and the benefits it provides to all stakeholders including our shareholders, investors and the countries and communities in which we operate. Sustainability is central to our responsible approach to business and corporate governance. As a member of the World Gold Council, Resolute is a signatory to the Responsible Gold Mining Principles (RGMP), a set of values for responsible gold mining across the mine lifecycle from discovery to rehabilitation. Recognising the Company’s assets and operational standards are at varying levels of maturity, Resolute announced a commitment in its 2019 Annual Report to develop an action plan to align all of its assets under a draft Resolute Group sustainability framework. In May 2020, the draft framework was refined as Resolute’s Sustainability System. This system enables Resolute to effectively manage ESG risk and opportunity across the Company and provides a performance measurement framework to drive continual improvement. Resolute’s sustainability approach has been developed in accordance with the Global Reporting Initiative and other leading ESG guidance, relevant to the mining sector, including: • • Performance standards of the International Finance Corporation Sustainability Principles of the International Council on Mining and Metals • • • • UN Guiding Principles on Business and Human Rights Voluntary Principles on Security and Human Rights International Cyanide Management Code UN Sustainable Development Goals (SDGs) Resolute is proud to have published its first Sustainability Report in 2020, to voluntarily disclose its key activities, programs and achievements. Achievements and highlights in 2020 include: Environment: • • • Zero significant non-compliance events Growth trends observed for all endangered species within the Niokolo-Koba National Park Elephant sighted within the Niokolo-Koba National Park for the first time in a decade Social: • External assurance of Group COVID-19 mitigations indicate a competent response pursued • More than $1.1 million in financial and in-kind COVID-19 assistance to Mali and Senegal Governments • • • • • TRIFR of 0.87, a 58% improvement on 2019 safety performance $760 million economic value distributed Local procurement spend of $416 million 91% national employment (direct and contract employees) Significant improvement in health and safety management system effectiveness Governance: • • > 50% alignment with the RGMPs Significant strengthening of Corporate Governance Framework Resolute’s 2020 Sustainability Report is available to download on the Company’s website at https://www.rml.com.au/investors/reports/ 13 13 Resolute Mining Limited | 2020 Annual ReportResolute Mining Limited | 2020 Annual Report Operations Review Overview Resolute is an African-focused ASX200 gold producer with two operating mines: Syama in Mali and Mako in Senegal. Resolute completed the sale of the Ravenswood Gold Mine in Queensland on 31 March 2020 and was attributed with final gold production of 11,046oz for the quarter from that asset. During 2020 Resolute produced 395,136oz of gold (poured) at an All-In Sustaining Cost (AISC) of $1,074/oz from its operating mines. Over the course of 2020, our processing plants milled a total of 6.25 million tonnes (Mt) of ore at an average grade of 2.28 grams per tonne of gold (g/t Au) for the recovery of 400,713oz. Gold in circuit at the end of 2020 totalled 78,420oz primarily comprised of Carbon Enriched Concentrate stocks held at Syama. The Company’s gold in circuit inventory was valued at $148 million at the end of 2020. The teams at both Syama and Mako succeeded in maintaining continuity of production throughout 2020, despite the many difficulties imposed by COVID-19 and a Coup d’Etat in Mali. It was therefore extremely disappointing that these efforts were undermined by the actions of the Union leadership at Syama, which called a series of strikes in protest at the Company’s legitimate and entirely legal efforts to secure the safety and sustainability of the Syama operations. Mine Operations Review Measure/ Units Syama Sulphide Syama Oxide Syama Total Mako Ravenswood Total Total Ore Mined Tonnes 2,097,421 1,321,679 3,419,100 2,744,238 - 6,163,338 Total Ore Processed Tonnes 2,030,823 1,416,116 3,446,939 2,077,879 726,735 6,251,553 Grade Processed g/t Au 2.55 78.2 2.19 91.2 2.40 83.5 2.69 93.5 130,245 91,626 222,171 167,931 (6,745) (1,066) (7,811) 1,800 123,500 90,860 214,360 169,731 % oz oz oz $/oz 1,465 844 1,203 812 0.50 91.8 10,611 435 11,046 1,458 2.28 87.8 400,713 (5,576) 395,136 1,074 Recovery Gold Recovered Gold in Circuit Drawdown/Additions Gold Poured AISC 14 14 Resolute Mining Limited | 2020 Annual Report“Resolute’s performance during a challenging 2020 reflects steady production from Mako in Senegal and a much-improved result from the Syama sulphide operation in Mali, despite the impact of industrial action at Syama. Across the business, our teams have proven their resilience and capability in maintaining operations under trying circumstances, particularly at Syama. We are confident that Syama will deliver increased and consistent production in 2021”. David Kelly - Chief Operating Officer During 2020, Resolute poured 395,136oz of gold at an AISC of $1,074/oz. In Mali, Resolute rebuilt capacity at the Syama sulphide operation after significant disruption in late 2019 when the roaster was offline for two months, after a crack was detected in the shell. In the March 2020 quarter, roaster repairs and other refurbishments were completed, and processing rates were gradually increased. At Syama, the Company continued the production ramp- up at the Syama Underground Mine with mining rates of over 200,000t per month achieved for the final quarter, and a record tonnage of 2,097,421 ore tonnes being mined for the full year. Ore processed increased with the return to normal operations following the roaster repairs in 2019, but progress was slowed in the second half of the year by a series of industrial actions. Total gold production from the Syama sulphide operation was 123,500oz of gold, a 98% increase on 2019 as the Syama roaster, which was offline for the majority of the December 2019 quarter, operated successfully throughout the year. The oxide operations at Syama continued to perform well. The first stage of operations at the Tabakoroni Open Pit Mine (Tabakoroni), located 32km south of Syama, was completed in May. As expected, ore grades fell in the second half of the year as lower grade stockpiles were processed. In the final quarter, the majority of ore was supplied by the newly commissioned Cashew Open Pit Mine (Cashew), located 6km south of Syama. Total Syama Oxide gold production was 90,860oz, achieved from the processing of 1.4Mt at 2.2g/t Au. Resolute is confident that a high-grade long-life underground operation will follow the oxide open pit mining phases at Tabakoroni. A Pre-Feasibility Study (PFS) was completed in October and established a mining schedule, consisting of Indicated and Inferred Resources, of 2.4Mt at 4.9g/t Au containing 387koz. The Tabakoroni underground deposit remains open both along strike and at depth and ongoing exploration success is expected to expand Mineral Resources and extend mine life. Mako continued to perform reliably in 2020 with an increase in mining volumes reflecting the arrival in 2020 of a new mining fleet to accelerate waste stripping and the easing of shortages of operating personnel in the initial stages of the COVID-19 pandemic. Total gold production was 169,731oz from processing of 2.1Mt at 2.7g/t Au. An updated and extended Life of Mine plan (LOM) was completed in July 2020, which delivered material improvements to gold production and mine life. Mine life was extended by two additional years out to early 2027, a total of nine years from commencement in 2018. Over the remaining seven years of mine life Mako will produce 900koz at an average All-In Sustaining Cost of $900/oz. 2021 Outlook Resolute is forecasting gold production for 2021 of 350,000oz to 375,000oz at an AISC of between $1,200/oz and $1,275/oz (including corporate overheads and prior to adjustment for the divestment of Ravenswood). Non- sustaining capital expenditure is forecast at $29 million and investment in exploration is forecast at $17 million for 2021. 2021 Production and Cost Guidance 2021 GUIDANCE PRODUCTION (oz) AISC ($/oz) Syama Sulphide Syama Oxide Mako TOTAL 155,000oz - 170,000oz 80,000oz - 85,000oz 115,000oz - 120,000oz 350,000oz - 375,000oz $1,200/oz - $1,275/oz. $1,050/oz - $1,090/oz $1,175/oz - $1,225/oz $1,200/oz - $1,275/oz 15 Resolute Mining Limited | 2020 Annual Report 2020 AT A GLANCE LOCATION Mali, West Africa MINING 3,419,100t PROCESSING 3,446,939t at 2.40g/t Au and 83.5% recovery PRODUCTION 214,360oz AISC $1,203/oz SALES 215,308oz RESOURCES 7.6Moz (2.6g/t Au) RESERVES 3.3Moz (2.7g/t Au) GROWTH POTENTIAL Progress work on the new underground mine at Tabakoroni; discovery of additional resources to extend mine life Resolute Mining Limited | 2020 Annual Report Syama Gold Mine Syama is located in the southwest 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 and near-mine oxide deposits). Syama is owned by local subsidiary Société des Mines de Syama S.A. (SOMISY) in which Resolute has an 80% interest and the Government of Mali holds the remaining 20%. The Tabakoroni complex is owned by Société des Mines de Finkolo S.A. (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. 16 Resolute Mining Limited | 2020 Annual Report Syama Operations Overview Gold production at Syama during 2020 totalled 214,360oz at an AISC of $1,203/oz. Sulphide gold production increased due to higher rates of underground mining and processing. However, Syama oxide production was lower due to the processing of lower grade stockpiles following completion of open pit mining activities at Tabakoroni, industrial action and some material handling issues associated with sticky ore. Overall, Syama delivered a 12% decrease in gold production compared to 2019. At Tabakoroni the Mineral Resource Estimate was upgraded to 7.4Mt at 4.4g/t Au at a 1.5g/t Au cut off for a total of 1.04Moz, an increase of 22% over the previous estimate. This enabled completion of the PFS to assess the viability of a new underground mine at Tabakoroni. Timing of any development of a Tabakoroni underground operation will be matched to the expected mine life of the existing Syama oxide operation. Syama Sulphide Operations Gold production from the Syama sulphide circuit for 2020 was 123,500oz at an AISC of $1,465/oz. Gold production increased by 98% compared to 2019 despite disruptions from industrial action in the second half of the year. Milled tonnages increased by 25% following the recommencement of processing operations at the end of 2019. Syama sulphide processing and production performance for the second half of 2020 was affected by industrial action, which primarily affected mill and roaster throughput. Plant recovery improved, averaging 78.2% for the year, compared to 69.5% in 2019. This reflected a gradual improvement and consolidation of metallurgical performance over the course of the year, but was also affected by disruptions caused by industrial action. Underground sulphide ore stocks at Syama increased from 440,000t to 498,000t at an average grade of 2.33g/t Au. The large quantity of run-of-mine stockpiled underground ore at Syama provides significant operational flexibility in managing the mining and processing rates. Syama Sulphide Production and Cost Summary Ore Mined Ore Milled Head Grade Recovery Production 2020 2,097,421 2,030,823 (t) (t) (g/t) 2.55 (%) 78.2 (oz Au) 123,500 AISC ($/oz) 1,465 Oxide Operations The Syama oxide operation delivered another solid year. The first phase of open pit mining at the Tabakoroni Open Pit Mine was completed in May. Ore from this campaign, along with stockpiles built up in 2019, provided plant feed for the first three quarters of the year. In the final quarter, mining commenced at Cashew. By the end of 2020 Cashew was the sole source of oxide mill feed. Plant recoveries remained high at 91.2% despite lower grades than in 2019. Gold production from the oxide circuit for 2020 was 90,860oz at an AISC of $844/oz. Syama Oxide Production and Cost Summary Ore Mined Ore Milled Head Grade Recovery Production 2020 1,321,679 1,416,116 (t) (t) (g/t) 2.19 (%) 91.2 (oz Au) 90,860 AISC ($/oz) 844 The identification of additional mineable oxide resources is a focus for the Company in 2021. A series of satellite deposits will ensure mill feed is maintained until the end of 2022. Ongoing exploration is continuing to target new oxide resources to sustain operation beyond 2022. 2021 Outlook Gold production from Syama is expected to be 235,000oz to 255,000oz at an AISC of $1,150/oz to $1,212/oz. Syama sulphide production is expected to increase as a result of further incremental improvements in mill and roaster throughput. Underground mining will supply 100% of sulphide mill feed. Oxide circuit production will be supplied with ore mined from Cashew, located 6km south of Syama, and from a second phase of open pit mining at Tabakoroni, located 32km south of the Syama processing plant. The Company continues to work towards the addition of a future high-grade underground mine at Tabakoroni. Non- sustaining capital for Syama in 2021 is forecast to be $21 million which includes Resolute’s total contribution to the new Syama solar hybrid power plant funded by Aggreko plc (Aggreko). 17 Resolute Mining Limited | 2020 Annual ReportSyama Hybrid Power Station Construction of the new hybrid modular power station at Syama continued during 2020 in partnership with Aggreko. Key project milestones completed this year include all civil works, shipment and installation of generating engines from Europe to CÔte d’Ivoire, completion of fuel treatment and storage at the Syama power plant along with full commissioning of the battery storage system. The heavy fuel oil (HFO) storage facility first fill was delivered in December 2020. The construction activities are nearing completion and the three new generating engines are expected to be commissioned within the first quarter of 2021. Resolute and Aggreko signed a Power Supply Agreement (PSA) in 2019 for development of the new Syama hybrid modular power station. When fully operational the 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 plant is funded and operated by Aggreko with limited capital contribution from Resolute. Cost effective, environmentally friendly, capital efficient power with long-term electricity cost savings of up to 40% is expected while reducing carbon emissions by approximately 20%. 18 Resolute Mining Limited | 2020 Annual ReportSyama Exploration Overview Intensive exploration activities in 2020 focused on drill programs at Syama using reverse circulation (RC) and diamond rigs in multiple locations along the greenstone belt. Efforts were focused on increasing oxide resources to extend the life of the oxide operation at Syama. Diamond drilling continued at Tabakoroni to extend the sulphide mineralisation down dip and along strike. Syama Syama Satellite Oxides Exploration to expand oxide resources and extend mine life at Syama is a key priority for Resolute. The Company holds 80km of contiguous tenements along the highly perspective Syama shear and is continuing to explore for new oxide positions as well as high grade sulphide zones to complement the Ore Reserves at the Syama Underground Mine. In the first quarter of 2020 Resolute commenced a program of accelerated oxide exploration to coincide with the dry season in Mali. Work targeted areas adjacent to the oxide deposits north of Syama and in the vicinity of the Tabakoroni deposit. RC drill programs were conducted in the south of Syama, where soil geochemical programs defined new target areas along the main Syama Shear and east of the Paysans – Cashew Trend. Oxide exploration drilling south of Cashew returned encouraging intersections which highlight the potential to expand the pit to the south of the current design. Northern targets Map of Resolute’s operations and exploration tenements at Syama in Mali A re-evaluation of the Syama Shear Zone north of Syama late in 2019 identified several targets for follow up drilling which was undertaken throughout 2020. The targets are adjacent to the existing open pits mined by Resolute between 2017 and 2018. An RC drill program targeting oxide mineralisation extensions and conceptual targets at Syama North commenced in January 2020 and continued through the year. Mineralisation typically occurs within shear zones and around shallow west dipping lithological contacts, in the same manner as the main Syama orebody and the Syama North satellite deposits. Deeper sulphide mineralisation is open down dip and remains a target for future exploration. Throughout the year, RC exploration drilling at A21, part of the Northern Pits, intersected wide zones of ore grade oxide mineralisation in a number of holes. The mineralisation outlined by this drilling has confirmed the oxide resources mined in the A21 South Pit continues northward into an unmined section of the A21 deposit. Results are very encouraging with multiple high-grade oxide intersections returned. 19 Resolute Mining Limited | 2020 Annual ReportTabakoroni Mineral Resource upgrade Resolute announced the results of the ongoing exploration drilling program at Tabakoroni and an updated Mineral Resource in October 2020. The Tabakoroni Mineral Resource was upgraded to 7.4Mt at 4.4g/t Au at a 1.5g/t Au cut-off, for a total of 1.04Moz. Continued exploration drilling success led to an announcement of a further upgrade to the Mineral Resource on 27 January 2021 to 8.1Mt at 4.9g/t Au for a total of 1.26Moz. Tabakoroni Longitudinal Section with Resource Model and drilling pierce points Drill results from this program prove the down dip extensions of the Tabakoroni mineralisation is sufficient to support underground mining operations. Diamond drilling will continue in 2021 to expand the mineral resources at Tabakoroni. Sulphide Pre-Feasibility Study On 14 October 2020 Resolute announced an updated Mineral Resource Estimate at Tabakoroni and completion of the PFS. The PFS established a mining schedule, consisting of Indicated and Inferred Resources, of 2.4Mt at 4.9g/t Au for 387,000oz. Gold production is expected to average approximately 80,000oz per annum over an initial four-year mine life. The AISC is estimated to be $974/oz. The underground operation will require a capital investment of $86 million and total project capital of $118 million. Resolute intends to modify the existing Syama oxide processing infrastructure and commence work on the Tabakoroni underground operation following completion of the Syama oxide operations. The Tabakoroni underground deposit remains open, both along strike and at depth, with ongoing exploration success expected to expand mineral resources and extend mine life. Oxide targets RC drilling programs undertaken in the first quarter of 2020 identified zones of shallow oxide mineralisation to the east of the Tabakoroni pit and adjacent to the Tabakoroni “Porphyry Splay” pit. These encouraging results have been followed up with programs of infill RC drilling to provide sufficient hole density for resource estimation. During 2020, an overperformance of the open pit mining at the “Porphyry Splay” pit encouraged Resolute’s exploration team to re-evaluate the mineralisation interpretation of the Tabakoroni area and focus on resource remodelling. This work will continue in 2021 and Resolute is confident the mineralisation footprint will be expanded sufficiently to support a restart to open pit mining activities. It is expected that the small pit at “Porphyry Splay” will be deepened and expanded laterally to access newly modelled gold mineralisation. The ongoing drilling program continues to expand the mineralisation footprint around the current pits at Tabakoroni. 20 Resolute Mining Limited | 2020 Annual ReportResolute Mining Limited | 2020 Annual Report 21 21 Resolute Mining Limited | 2020 Annual ReportMako Gold Mine Mako is located in eastern Senegal, West Africa and 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 holds the remaining 10%. In January 2020 Resolute acquired the 1.1% gold royalty held by the original project financiers of Mako. As a result, there are no non- government third-party interests over Mako and Resolute is well positioned to receive maximum benefit of any exploration success or future production improvements at Mako. Mako continues to deliver consistently strong results and cash flows. Consistent ore grades, ore presentation and metallurgical characteristics support reliable production rates. 2020 AT A GLANCE LOCATION Senegal, West Africa MINING 2,744,238t PROCESSING 2,077,879t at 2.69 g/t Au and 93.5% recovery PRODUCTION 169,731oz AISC $812/oz SALES 170,810oz RESOURCES 965koz (1.7g/t) RESERVES 780koz (1.8g/t) GROWTH POTENTIAL Potential for further discovery and additional mine life extensions 2222 22 Resolute Mining Limited | 2020 Annual Report Operations Overview Mako delivered an excellent production result during 2020 with 169,731oz of gold being poured at an AISC of $812/oz. Processed tonnages, grades and recoveries at Mako were all ahead of budget and forecast. Plant throughput ran at an annualised rate of around 2.1Mtpa, from an original design capacity of 1.8Mtpa, while maintaining excellent recoveries of around 93.5%. Throughput was slightly lower in the September quarter compared to the June quarter following a planned shut down for a SAG mill reline in August. Mining has outstripped processing rates since the commencement of operations, allowing the accumulation of large stockpiles of lower grade ore (approximately 2.5Mt grading 1.4g/t Au), and delivering higher grades to the processing plant. Mako continues to perform reliably, with an increase in mining volumes reflecting the arrival of a new mining fleet during the year, to accelerate waste stripping and the easing of shortages of operating personnel in the initial stages of the COVID-19 pandemic. Mako Production and Cost Ore Mined Ore Milled Head Grade Recovery Production 2020 2,744,238 2,077,879 (t) (t) (g/t) 2.69 (%) 93.5 (oz Au) 169,731 AISC ($/oz) 812 Mako Life of Mine In July 2020 Resolute announced an updated LOM for Mako which generated a 39% increase in total gold production and mine life extension of two additional years. These material improvements are a result of successful extension exploration drilling programs, mine design improvements, and optimisation of mine scheduling work undertaken at Mako. Mako’s original mine plan consisted of a seven-year mine life expected to produce 890,000oz of gold compared to the now expected nine-year mine life to produce a total of 1.24Moz of gold. Production over the next five years will average 140,000ozpa and the expected average LOM AISC has been updated to $848/oz. A key enhancement of the updated LOM is the increase in processing rates from 1.8Mtpa to 2.2Mtpa resulting in reduced costs and accelerated production in 2020, in addition to future years. Resolute expects to mine a further 900,000oz of gold from Mako until early 2027 at an expected average AISC over this period of $900/oz. Increased Mining Inventory Mako’s Ore Reserves as at 31 December 2019 comprised a total of 11.1Mt at 2.1g/t Au for contained gold of 740,000oz. During 2020, Resolute evaluated options to expand the open pit mining inventory at Mako. A gold price of $1,500/oz was assumed for the updated inventory estimation and a lower processing cut-off grade of 0.60 g/t Au applied, reflecting higher processing rates, the higher gold price assumption, and improved recovery. This resulted in the estimation of an increased available mining inventory (including existing ore stockpiles) of 15.8Mt at 1.90g/t Au for contained gold of 962,000oz of gold, an increase of 222,000oz, or 30%, over the December 2019 Ore Reserves. This represents a 39% increase in total gold production expected from Mako, when compared against the original mine plan as at the commencement of operations. 23 Resolute Mining Limited | 2020 Annual ReportUpdated LOM plan The updated mining inventory enabled a new mining schedule and updated LOM to be developed which demonstrates: • • • • • • Remaining mine life of seven years out to early 2027 (two additional years of gold production) LOM gold production increased by 350,000oz, or 39% to 1.24Moz Including 2020 production, expected remaining gold production from Mako is 900,000oz Average annual gold production over the next five years of 140,000oz LOM average AISC updated to $848/oz Including 2020, remaining average AISC expected to be $900/oz Updated Mako LOM vs Original DFS 200,000 150,000 100,000 50,000 0 1,600 1,400 1,200 1,000 800 600 400 200 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 DFS LOM Ounces Updated LOMP Ounces DFS LOM AISC Updated LOMP AISC 2021 Outlook Mining and processing will continue at Mako with similar rates to 2020, although ore grades will be lower due to depletion of high-grade stockpiles. Gold production from Mako for 2021 is expected to be 115,000oz to 120,000oz at an AISC of $1,175/ oz to $1,225/oz. No non-sustaining capital expenditure is forecast for Mako for 2021. The Company continues to evaluate opportunities to generate additional value demonstrating that Mako is an outstanding Resolute gold mine. 24 Resolute Mining Limited | 2020 Annual Report Mako Exploration On 20 July 2020, the Company announced successful extension exploration drilling programs, mine design improvements, and optimisation of mine scheduling work undertaken at Mako in Senegal which resulted in material improvements to an updated LOM. This initial extension of Mako’s mine life will be further reinforced by Resolute’s investment in the significant untested exploration potential of the region. Mako Long Section with resource block model and 2020 drill results Potential for further discovery and additional mine life extensions In the first half of 2020, exploration activity at Mako was limited due to COVID-19 restrictions. Exploration programs including diamond drilling commenced in August, with a program targeting the down dip extensions of the mineralisation in the main Petowal orebody. This program was completed in October and returned visually interesting mineralisation in all holes, however results were low grade. The intersections from the north-eastern end of the Mako open pit were followed up to outline the full extent of this zone. A more comprehensive regional exploration program is being designed to test new targets on satellite prospects contained in Resolute’s regional tenement package around Mako. In addition, the potential for new joint ventures or acquisitions of prospective ground within trucking distance to Mako continues to be evaluated. Resolute’s tenement holdings in Senegal 25 Resolute Mining Limited | 2020 Annual ReportSale of Ravenswood On 31 March 2020, Resolute announced the successful completion of the sale of the Ravenswood Gold Mine in Queensland (Ravenswood) to a consortium comprising a fund (EMR Fund) managed by specialist resources private equity manager EMR Capital Management Limited (EMR Capital), and Singapore-listed mining and energy company, Golden Energy and Resources Limited (SGX:AUE) (GEAR). The sale of Ravenswood was completed in accordance with the transaction terms and timeline outlined in the definitive agreements signed in January 2020. Resolute received A$100 million of upfront proceeds consisting of A$50 million in cash and A$50 million in promissory notes with a 6% coupon. The terms of the transaction allow Resolute to retain additional upside exposure to Ravenswood through two further notes valued at up to A$200 million which may result in payments to Resolute of: • • up to A$50 million linked to the average gold price and production at Ravenswood over a four-year period; and up to A$150 million linked to the investment outcomes of Ravenswood for the EMR Fund. The transaction provided immediate liquidity and exposure to the future success of the Ravenswood Expansion Project 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. The sale of Ravenswood ensures a new long-life future for the mine and surrounding community while maximising value for Resolute shareholders. Settlement of the sale has allowed Resolute to focus its attention and energy on the Company’s African portfolio. Ravenswood was a strong performer for Resolute for more than 15 years. During this time Resolute mined and processed over 40Mt of ore and produced almost 2Moz of gold. Resolute remains proud of its achievements in Queensland and the significant economic benefits provided to the local community, the government, and Resolute shareholders. Sale of Bibiani Gold Mine On 15 December 2020 Resolute announced the Company had entered into an agreement to sell its interest in the Bibiani Gold Mine (Bibiani), through the sale of shares in Mensin Bibiani Pty Ltd, to Chijin International (HK) Limited, a wholly owned subsidiary of Chifeng, for total cash consideration of $105 million. Cash consideration will be payable as follows: • • $5 million deposit on signing the agreement (received prior to 31 December 2020); and $100 million on completion, following satisfaction of government approvals and other conditions. Resolute and Chifeng are committed to ensuring an orderly transition of ownership at Bibiani. Chifeng is committed to injecting the necessary capital to achieve the rapid restart of Bibiani to ensure that all local and national stakeholders benefit from the economic and social advantages that the successful operation of the mine will provide. The transaction is not expected to result in any immediate changes to employment or contract relationships at Bibiani with Chifeng seeking to retain all existing local employees in future activities. Resolute is proud of its contribution to Ghana since 2014 and pleased that its investments at Bibiani in exploration, feasibility studies, and community support will provide a strong base for future success and value creation. The sale of Bibiani is consistent with Resolute’s strategic focus on the Company’s core operating assets together with balance sheet improvement. 26 Resolute Mining Limited | 2020 Annual ReportOre Reserves and Mineral Resources Resolute maintains Ore Reserves and Mineral Resources net of assets sales, mining and stockpile depletion 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 announcement that relates to data quality, geological interpretation and Mineral Resource estimation for the various projects unless specified in the list below is based on information compiled by Bruce Mowat, a Competent Person who is a Member of the Australian Institute of Geoscientists and a full-time employee of Resolute Corporate Services Pty Ltd, a wholly-owned subsidiary of Resolute Mining Limited. Mr Mowat has sufficient experience that is relevant to the styles of mineralisation and type of deposits under consideration and to the activity being undertaken as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code 2012). Mr Mowat consents to the inclusion in this announcement of the material compiled by him in the form and context in which it appears. The information in this statement that relates to the Mineral Resources and Ore Reserves listed below is based on information and supporting documents prepared by the Competent Person identified. Each person specified in the list has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined in the JORC Code 2012. Mr Pobee, Mr Richter and Mr Watson are full-time employees of Resolute Corporate Services Pty Ltd, a wholly-owned subsidiary of Resolute Mining Limited. Mr Johnson is a full-time employee of MPR Geological Consultants Pty Ltd. Mr Adams is a full-time employee of Cube Consulting Pty Ltd. Mr Cervoj and Ms Havlin are employees of Optiro Pty Ltd. 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 Susan Havlin Australasian Institute of Mining and Metallurgy Syama Reserve Bradley Watson 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 Bibiani Resource Kahan Cervoj Australasian Institute of Mining and Metallurgy Bibiani Reserve Bradley Watson Australasian Institute of Mining and Metallurgy Tabakoroni OP Resource Susan Havlin Australasian Institute of Mining and Metallurgy Tabakoroni OP Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy Tabakoroni UG Resource Susan Havlin Australasian Institute of Mining and Metallurgy Tabakoroni UG Reserves Otto Richter Australasian Institute of Mining and Metallurgy Tellem Resource Nic Johnson Australian Institute of Geoscientists Tellem Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy Cashew NE Resource Bruce Mowat Australian Institute of Geoscientists Cashew NE Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy Paysans Resource Bruce Mowat Australian Institute of Geoscientists Paysans Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy Porphyry Zone Resource Bruce Mowat Australian Institute of Geoscientists Porphyry Zone Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy Mako Resources Patrick Adams Australasian Institute of Mining and Metallurgy Mako Reserves Samuel Pobee Australasian Institute of Mining and Metallurgy 27 Resolute Mining Limited | 2020 Annual ReportOre Reserves Statement ORE RESERVES PROVED PROBABLE TOTAL RESERVES Group Share As at December 2020 Mali Syama Underground Syama Stockpiles Sub Total (Sulphides) Satellite Deposits Stockpiles (Satellite Deposits) Sub Total Satellite Deposits Tabakoroni Underground Tabakoroni Open Pit Tabakoroni Stockpiles Sub Total Tabakoroni Mali Total Senegal Senegal Mako Mako Stockpiles Senegal Total Ghana Bibiani Ghana Total Total Ore Reserves Tonnes g/t oz Tonnes g/t oz Tonnes g/t oz oz (000s) (000s) (000s) (000s) (000s) (000s) (000s) 0 675 675 0 860 860 0 295 950 1,250 2,790 3,860 2,580 6,440 0 0 9,220 0.0 2.0 2.0 0.0 1.5 1.5 0.0 1.6 1.5 1.5 1.6 2.0 1.2 1.7 0.0 0.0 1.6 0 26,800 42 42 0 41 41 0 15 46 61 1,810 28,600 1,810 1,400 3,210 2,910 97 0 3,000 145 34,800 245 98 6,840 0 343 6,840 0 0 6,400 6,400 488 48,100 2.8 1.3 2.7 2.2 1.0 1.7 4.6 1.6 0.0 4.5 2.8 2.0 0.0 2.0 3.3 3.3 2.7 2,440 26,800 77 2,480 2,510 29,300 129 43 172 1,810 2,260 4,070 430 2,910 5 0 392 955 435 4,250 3,120 37,600 438 10,700 0 2,580 438 13,300 660 660 6,400 6,400 4,220 57,300 80% 2,440 1,950 120 96 2,560 2,040 129 84 213 430 20 46 103 67 171 90% 387 18 42 496 447 3,270 2,660 90%90% 614 88 702 90% 594 594 682 98 780 660 660 4,710 3,960 2.8 1.5 2.7 2.2 1.2 1.6 4.6 1.6 1.5 3.6 2.7 2.0 1.2 1.8 3.3 3.3 2.6 Notes: 1. Mineral Resources include Ore Reserves. 2. All tonnes and grade information has been rounded to reflect relative uncertainty of the estimate; small differences may be present in the totals. 3. Bibiani Reserves are reported above 2.75g/t cut-off. 4. Syama Underground mine planning is based on a cut-off grade of 2g/t. 5. Syama Satellite Reserves are reported above 1.0g/t cut-off. 6. Tabakoroni Underground Reserves are reported above a 2.5g/t cut-off. 7. Tabakoroni Satellite Reserves are reported above 1.1g/t cut-off. 8. Mako Reserves are reported above 0.6g/t cut-off. 28 Resolute Mining Limited | 2020 Annual Report Mineral Resources Statement MINERAL RESOURCES As at December 2020 MEASURED INDICATED INFERRED TOTAL RESOURCES Group Share Tonnes g/t oz Tonnes g/t oz Tonnes g/t oz Tonnes g/t oz oz (000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s) (000s) Projects where Resolute has a controlling interest Mali Syama Underground Stockpiles (Sulphide) Sub Total (Sulphides) Satellite Deposits Stockpiles (Satellite Deposits) Sub Total Satellite Deposits 14,100 3.9 1,760 22,300 3.2 2,290 4,230 3.4 458 40,700 3.4 4,510 3,610 676 2.0 42 1,810 1.3 77 0 0.0 0 2,480 1.5 120 96 14,800 3.8 1,810 24,100 3.0 2,370 4,230 3.4 458 43,200 3.3 4,630 3,700 0 0.0 0 10,800 2.0 709 1,830 2.0 115 12,700 2.0 824 659 80% 860 1.5 41 1,400 1.0 43 45 1.1 2 2,310 1.2 86 68 860 1.5 41 12,200 1.9 752 1,870 1.9 117 15,000 1.9 910 728 Old Tailings 0 0.0 0 0 0.0 0 17,000 0.7 365 17,000 0.7 365 292 90% 287 2.4 22 726 3.1 72 15 3.6 2 1,030 2.9 95 86 211 4.4 30 4,440 4.9 669 3,460 4.8 536 8,110 4.8 1,270 1,140 0 0.0 0 955 1,450 1.5 2.1 46 0 0 0.0 0.0 0 0 3,820 2.0 247 3,820 2.0 247 223 0 0.0 0 955 1.5 46 42 Mali Total 17,100 3.5 1,940 41,500 2.9 3,890 30,400 1.8 1,730 89,100 2.6 7,560 6,210 98 5,170 4.6 771 7,300 3.3 785 13,900 3.7 1,650 1,490 1.8 1.2 1.6 0.0 0.0 267 9590 98 0 365 9,590 0 0 13,300 13,300 1.8 0.0 1.8 3.5 3.5 559 1,210 0 0 559 1,210 1,490 8,440 1,490 8,440 1.0 0.0 1.0 3.7 3.7 40 15,300 0 2,580 40 17,900 1,010 21,700 1,010 21,700 90% 780 867 98 88 965 869 90% 2,500 2,250 2,500 2,250 1.8 1.2 1.7 3.6 3.6 24,200 3.0 2,310 64,400 2.9 5,940 40,100 2.2 2,780 129,000 2.7 11,000 9,330 Tabakoroni Open Pit Tabakoroni Underground Tabakoroni Satellite Deposits Tabakoroni Stockpiles Sub Total Tabakoroni Senegal Mako Mako Stockpile 4,530 2,580 Mako Total 7,100 Ghana Bibiani Ghana Total Total Mineral Resources 0 0 Notes: 1. Mineral Resources include Ore Reserves. 2. All tonnes and grade information has been rounded to reflect relative uncertainty of the estimate; small differences may be present in the totals. 3. Resources are reported above 1.5g/t cut-off for the Northern Pits. 4. Resources for the sub-level cave at Syama is reported within an MSO shape generated at 1.3g/t and south of the sub-level cave within an MSO shape generated at 1.5g/t. 5. Resources for the Cashew NE, Paysans, Tellem and Porphyry Zone (Splay) are reported above a cut-off of 1.0g/t. 6. Resources for the Tabakoroni Open Pit are reported above a cut- off of 1.0g/t and within a $2,000 optimised shell. 7. Resources for the Tabakoroni Underground are reported within an MSO shape generated at 1.75g/t (equivalent to $2,000). 8. Mako Resources are reported above a cut-off of 0.5g/t and within a $2,000 optimised shell. 9. Bibiani Resources are reported above 2.0g/t cut-off. 29 Resolute Mining Limited | 2020 Annual Report 30 Resolute Mining Limited | 2020 Annual ReportFinancial Review Resolute’s financial performance was negatively impacted in 2020 by the industrial action at Syama. Mako provided strong operational performance and generated $111 million free cash flow. Financial Performance During 2020, Resolute generated $618 million revenue from the sale of 395,175oz of gold and silver from Syama, Ravenswood and Mako at an average realised gold price of $1,562/oz. Underlying EBITDA from continuing operations in 2020 was $270 million after inventory valuation adjustments and other non-recurring items. An underlying net loss after tax from continuing operations was reported at $5 million. Once the net profit resulting from the divestment of Ravenswood and other non-recurring items were taken into account, the Company reported a net profit after tax of $5 million. Profit and Loss Analysis ($'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: + COVID 19 costs + Inventory adjustments + Business development and acquisition costs Underlying EBITDA Depreciation and amortisation Net interest expense Finance costs Fair value movements and unrealised treasury transactions Other Gain on disposal Non-recurring items: + Non-recurring high cost interest on Toro Bridge Facility Underlying net profit/(loss) before tax VAT expense Current Income tax (expense)/benefit Deferred Income tax (expense)/benefit Underlying net profit/(loss) after tax - Adjustments Net (loss)/profit after tax Continuing Operations (Syama / Mako) Discontinuing Operations (Ravenswood) 2020 Group 2019 Group (restated*) 602,985 15,268 618,253 535,580 (254,848) (13,069) (267,916) (366,037) (73,470) (18,806) (47,628) (14,767) (11,089) (15,362) 246,972 91,786 (71,339) (18,634) (10,910) 247,255 3,195 14,375 5,118 269,942 (175,331) (9,500) (13,023) (30,644) (884) - 8,840 49,400 (24,308) (12,833) (17,212) (4,953) (31,527) (36,480) (2,131) (172) (179) (283) - - - (283) (47) (80) - (47) - 41,932 3,195 14,375 5,118 269,659 (175,378) (9,580) (13,023) (30,692) (884) 41,932 - 8,840 41,475 - - - 41,475 - 41,475 90,875 (24,308) (12,833) (17,212) 36,522 (31,527) 4,995 - 45,326 7,218 144,331 (79,354) - (31,507) - (1,771) - - 31,699 (40,282) (17,345) - (25,928) (52,545) (78,473) *With effect from 1 January 2020, Resolute Mining Limited elected to change its presentation currency from Australian dollars to US dollars. As such, a restated comparative period has been presented. 31 Resolute Mining Limited | 2020 Annual ReportDuring the year Resolute reduced gross debt by 21% to $337 million at 31 December 2020. Net debt, after taking into account cash and bullion balances of $107 million, fell to $230 million, a 28% reduction compared to the prior year. The graph below provides a breakdown of Resolute’s key cashflow movement for the year ended 31 December 2020. 2020 cash and bullion movements Financial Position At 31 December 2020, the Company’s cash and bullion totalled $106.5 million and listed investments were valued at $53 million while gross borrowings were $336.9 million. The Company’s borrowing facilities at year-end comprised of Resolute’s existing senior revolving syndicated loan facility (SLF) provided by Investec, BNP Paribas, ING Group, Société Générale, Nedbank and Citibank, unsecured bank overdrafts held by Resolute’s Malian subsidiaries, SOMISY and SOMIFI, with the Banque de Développement du Mali (BDM) and asset financing. During the year, the Company undertook an equity raising comprising a two-tranche placement and share purchase plan under which it raised approximately A$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 $195 million syndicated loan facility. A new $300 million facility which comprises a three-year $150 million revolving credit facility and a four-year $150 million term loan facility is now in place. Resolute completed the acquisition of the Mako gold royalty at an agreed amount of $12 million. On 31 March 2020, Resolute completed the sale of the Ravenswood Gold Mine to a consortium comprising a fund (EMR Fund) managed by specialist resources private equity manager EMR Capital Management Limited (EMR Capital) and Golden Energy and Resources Limited (GEAR). Resolute received A$100 million of upfront proceeds consisting of A$50 million in cash and A$50 million in promissory notes which earn a 6% coupon. Resolute retains additional upside exposure to Ravenswood through two further notes valued at up to A$200 million which may result in payments to Resolute of: • • Up to A$50 million linked to the average gold price and production at Ravenswood over a four-year period; and Up to A$150 million linked to the investment outcomes of Ravenswood for the EMR Fund. 32 Resolute Mining Limited | 2020 Annual Report105.787.418.3198.6(37.9)(61.1)(19.9)(82.5)(23.1)(16.5)5.532.4137.3(12.0)(92.0)(27.1)89.117.5106.6Cash & Bullionat 1 Jan 20BullionCashat 1 Jan 20OperatingCash FlowsRoyaltiesVAT & TaxWorkingCapitalExploration& CapexInterestPaidGovernmentDividend &WithholdingTaxProceedsfromBibianiRavenswoodAsset SaleEquityRaisingMakoRoyaltyNet DebtMovementsRefinancingactivitiesOtherCashat 31 Dec 20BullionCash &Bullionat 31 Dec 20-50100150200250300 Risk Management Resolute adopts a consistent, rigorous approach to risk and opportunity management across the Group in accordance with ISO 31000:2018 and the ASX Corporate Governance Council Principles and Recommendations. The Board has ultimate responsibility for ensuring that material risks faced by the Company are identified and appropriate control and monitoring systems are in place to manage the impact of these risks in accordance with the Company's risk appetite. The Audit and Risk Committee is mandated by the Board to provide risk management oversight of Resolute’s material risks in accordance with the Risk Management Policy and Standard underpinned by the Company’s risk appetite. The Audit and Risk Committee continues to work proactively with management to carry out assessments of internal controls and identify processes for improvement supported by assurance gained through the risk based Internal Audit Plan and business led assurance. In support of this, the Audit and Risk Committee receives reports from management on new and emerging sources of risk and related controls and mitigation measures that have been implemented. Whilst the COVID-19 global pandemic has presented a range of risks and opportunities, it has highlighted the strength of Resolute’s integrated risk and assurance program in responding to the unprecedented circumstances of the crisis. The Audit and Risk Committee, together with management, took proactive steps to gain external assurance over the Company’s response to the COVID-19 pandemic to gauge performance and capture opportunities for improvement. Resolute’s commitment to continuous improvement 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. 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.” 33 Resolute Mining Limited | 2020 Annual ReportRisk and Mitigation RISK MITIGATING PRACTICES Security event impacting employees health, safety and wellbeing and/or business operations/continuity Health event impacting employees health, safety and wellbeing and/or business operations/continuity Inability to attract and retain the required skills to maintain safe operational and corporate performance Unwanted health and safety event resulting in serious injury, fatality and/or business/ operations continuity disruptions Negative environmental impact/ environmental incident due to Resolute activities or failures Unable to effectively adjust to physical, legislative, operating and/or environmental changes driven by Climate Change which threatens business continuity/viability. • Security risk assessments in place and updated regularly • MOU with Governor of Sikasso for the provision of public security officers • • • • • • Security Management Plan Crisis and emergency management plans in place Regular corporate review of current security procedures Security operating levels define Regular security intelligence updates - Mali, Senegal & West Africa Security community of practice with neighbouring mining companies • Malaria mitigation initiatives and reporting • • • • • • • • Pre-employment and occupational medical assessments Contractor management COVID-19 Response Plan with all associated controls/initiatives External guidance – i.e. WHO guidelines External health audits with recommendations implemented Health and Hygiene Standard in place Operational escalation protocols defined for varying threat environments Business continuity plans • Mali Talent Development Programme • • • • • • • • • • • • • • • • • • • • • • • • • Senior and junior rosters agreed with unions Active university engagement Established recruitment and learning development systems High risk systems, training and verification of competency Critical Hazard Management Standards Corporate Risk Management Framework and risk analysis tools Crisis & Emergency Management System Primary, occupational & emergency medical capability on sites Trained & competent Emergency Response Teams General training and inductions Strong safety culture Environmental licence/permit requirements Environmental social impact assessments Internal/external audits Environmental monitoring & management programs Trained and competent environmental professionals Internal and regulatory reporting Contractor Management Standards Environmental licence ESIA and monitoring requirements clearly defined Environmental monitoring and reporting Regulatory reporting/site visits Stakeholder engagement – e.g. Regulators, Ministries and communities External audit/assurance Emissions monitoring & reductions – e.g. Syama Hybrid Power Station 34 Resolute Mining Limited | 2020 Annual ReportHuman Rights exposures associated with Resolute's business activities threatens business continuity/viability Cyber-attack compromises the integrity of key commercial systems and/or threatens business continuity/viability Artisanal mining activity threatens business continuity/ viability Bribery or corruption Failure to achieve and maintain operational performance Project delivery failure • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Contract service agreements consider human rights compliance Labour law compliance Commitment to UN Voluntary Principles on Security & Human Rights Training and education Stakeholder engagement Human Rights risk assessments Contractor management Next generation firewalls Next generation end point protection O365: Mimecast Unified security management VLAN segmentation Cisco ISE and Meraki Switching End user training and awareness Internal/external audit Security stress testing Community consultative committees Stakeholder engagement – e.g. local authorities Environmental social impact assessments Land use agreements Resettlement Standards Livelihood generation programs Environmental monitoring 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 within contracts Independently operated whistle-blower hotline Financial system controls in place Fraud risk assessments Regular review and audits Established LOM, 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 35 Resolute Mining Limited | 2020 Annual ReportCorporate Governance Resolute Mining - Code of Conduct Outlines the Company’s expectations of all Directors, Officers and Employees and is supported by the following: Key policies, procedures and statements guiding our approach to responsible mining: Health, Safety & Security Policy Environment Policy Social Performance Policy Human Rights Policy Anti-Bribery & Corruption Policy Diversity & Inclusion Policy Complaints & Grievance Procedure Climate Change Statement Modern Slavery Statement Key shareholder protections: Securities Trading Policy Enterprise Risk Management Framework Continuous Disclosure Policy Conflicts of Interest Policy Privacy Policy Underpinned by: Whistleblower Policy Formalised confidential reporting mechanism for inappropriate conduct Mine Gold. Create Value. 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, contractors and consultants in performing their everyday roles. The Code provides that the following core principles guide the behaviour of Directors, employees, contractors and consultants: • • • 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. 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 retained Market Abuse Regulation as it forms part of English law. 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. 36 Resolute Mining Limited | 2020 Annual Report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 Sustainability 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. The table below sets out the appointment date and qualifications of each Director. Director Role of Director First Appointed Qualification Martin Botha Non-Executive Director and Chairman (appointed Chairman from 29 June 2017) February 2014 BScEng Peter Sullivan Non-Executive Director June 2001 BEng, MBA Yasmin Broughton Non-Executive Director June 2017 BACom, Post Graduate Law, FAICD Mark Potts Non-Executive Director June 2017 BSc (Hons), GAICD Sabina Shugg Non-Executive Director September 2018 BSc (Mining Engineering), MBA, GAICD The table below sets out the detail of the independence of each Director as at 31 December 2020. Director Martin Botha Peter Sullivan Yasmin Broughton Mark Potts Sabina Shugg Non-Executive Independent Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Gender Male Male Female Male Female 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. Resolute Mining Limited Board of Directors Oversees management of Resolute on behalf of shareholders Audit & Risk Committee Oversees financial reporting, risk & opportunity Sustainability Committee Oversees sustainability / ESG strategy & performance Remuneration Committee Oversees company remuneration practices Nomination Committee Oversees Board membership, performance & development Chief Executive Officer Responsible for the execution of Board approved strategies and the leadership of the organisation 37 Resolute Mining Limited | 2020 Annual Report 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 Sustainability Committee Audit and Risk Committee As at 31 December 2020, 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 2020 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. Remuneration Committee As at 31 December 2020, the Remuneration Committee consisted of the following Non-Executive Directors: • Mr M. Potts (Chair) • Mr M. Botha • Ms Y. Broughton • Mr P. Sullivan • Ms S. Shugg As at 31 December 2020 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 2020, 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 2020 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 Directors 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. 38 Resolute Mining Limited | 2020 Annual ReportSustainability Committee As at 31 December 2020, the Sustainability Committee consisted of the following members: • Mr S. Gale (Interim CEO & Chair) • Ms S. Shugg (Non-Executive Director) • Mr M. Potts (Non-Executive Director) • Mr J. Morrissey (General Manager, People and Sustainability) • Mr D. Kelly (Chief Operating Officer) As at 31 December 2020 and as at the date of release of this Annual Report, Ms S. Shugg and Mr M. Potts were the Non- Executive Directors on the Sustainability Committee and were independent. The Sustainability Committee’s key purpose is to review, discuss and guide all matters pertaining to Resolute’s sustainability performance and associated risks and opportunities. These matters predominantly relate to the performance of the people, health, safety, security, environment and community divisions within Resolute and will include regular assessments of the Company’s alignment with leading practice including, but not limited to, the Responsible Gold Mining Principles and the Global Reporting Initiative. The Sustainability 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. 39 Resolute Mining Limited | 2020 Annual ReportFinancial Report Contents 1. Directors' Report 2. Remuneration Report 3. Financial Statements 40 40 Resolute Mining Limited | 2020 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 2020. Corporate Information Resolute Mining Limited (Resolute or the Company) is a company limited by shares that is incorporated and domiciled in Australia. Directors The Directors of Resolute in office at the end of the 2020 financial year and information on the Directors (including qualifications and experience and directorships of listed companies held by the Directors at any time in the last three years) are set out on pages 8-10 of this report. The names and details of the Directors of Resolute in office during the 2020 financial year but not as at 31 December 2020 are as follows: John Welborn (Managing Director and Chief Executive Officer until 18 October 2020) BCom, FCA, MAICD, MAusIMM Mr John Welborn was appointed Managing Director and Chief Executive Officer on 1 July 2015 and stepped down from the role on 18 October 2020. 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 was Chair of the Sustainability Committee. Mr Welborn ceased employment as the Managing Director and Chief Executive Officer on 18 October 2020. During his tenure Mr Welborn was a Director of the World Gold Council (appointed 2017), a Non-Executive Director of Equatorial Resources Limited (appointed 2010) and Chairman of Orbital Corporation Limited (appointed 2014). General Counsel / Company Secretary The General Counsel/Company Secretary of Resolute in office at the end of the 2020 financial year and information (including qualifications and experience) is set out on page 11 of this report. 41 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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. Botha Y. Broughton M. Potts S. Shugg P. Sullivan Total Fully Paid Ordinary Shares 45,455 27,273 79,097 27,273 2,367,946 2,547,044 As at the date of this report, there were no Performance Rights or options on issue held by Directors. 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 27 January 2021, the Group announced that the Tabakoroni Underground Mineral Resource increased to 1.26 million ounces at 4.9g/t gold. On 17 February 2021, the Group released its Annual Ore Reserve and Mineral Resource Statement. 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. 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. 42 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 ended 31 December 2020. The Company’s last Remuneration Report for the year ended 31 December 2019 received substantial support at the Company’s annual general meeting held on 21 May 2020, with 97.7% of votes in favour of the report. 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 2020. We continue to strive to provide a high level of disclosure and transparency 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. Business Outcomes 2020 was an extraordinary year with the various management and operational challenges and the global Coronavirus pandemic. Operationally, Mako completed its first full year as a Resolute asset, meeting all targets and providing strong cashflows. Syama’s underground mine is operating consistently at nameplate levels. During the year, the Company completed an equity raising repaying the Toro acquisition facility, a debt refinancing to $300m allowing repayment of the Mako project loan and further simplifying the balance sheet, the divestment of Ravenswood and announced the sale of Bibiani. 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. Resolute has 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 0.9 at 31 December 2020 from 2.09 at 31 December 2019. Remuneration Outcomes Actual performance for the year ended 31 December 2020 for the KMP STIP outcome was 54% of the maximum outcome possible. 43 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report 1. Letter from the Chair of the Remuneration Committee (continued) Of the 2,833,705 Performance Rights granted in 2017 (performance hurdle tested), 419,809 Performance Rights vested on 30 June 2020, representing a 15% vesting outcome. The Reserves and Resources Growth performance hurdle outcome, which accounts for 25% of the total vesting outcome, was 100%, 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 2021, for awards granted on 1 July 2018 and the CEO Performance Rights. Non-Executive Director Remuneration The Chairman’s fee is A$180,000 and NED fees are A$100,000. In addition, the Chair of the Audit and Risk Committee receives a Committee Chair fee of A$15,000 and the Chair of the Remuneration Committee receives a Committee Chair fee of A$10,000. Members of Committees do not receive a separate fee. Proposed Remuneration Changes for 2021 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 Mark Potts Chair – Remuneration Committee 44 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020, Godfrey Remuneration Group (GRG) was engaged as remuneration consultant to assist with a review of the LTIP. No other consultants were engaged and there were no remuneration recommendations, as defined by the Corporations Act, provided during the year. Reporting in United States Dollars In this report the remuneration and benefits reported have been presented in US dollars. This is consistent with the change by Resolute in presentational currency from Australian dollars to US dollars from 1 January 2020. Compensation for KMP is paid in Australian dollars and, for reporting purposes, converted to US dollars based on the average exchange rate for the payment period. In order to derive US dollar comparatives between 2020 and 2019, the Australian dollar compensation paid during the year ended 31 December 2019 was converted to US dollars at the average exchange rate of US$1: A$1.438. The Australian dollar compensation paid during the year ended 31 December 2020 was converted to US dollars at the average exchange rate of US$1: A$1.448. 45 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 (cessation of employment 18 October 2020) Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Name D. Kelly S. Gale A. Stanton Position held during the year Chief Operating Officer (appointed 1 January 2020) Chief Financial Officer (appointed effective 20 January 2020, until 21 October 2020) Interim Chief Executive Officer (appointed effective 21 October 2020) 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. 46 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 CEO 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. 47 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 3. Remuneration Policy and Outcomes (continued) 3c. Remuneration Framework The Executive remuneration framework consists of Fixed Annual Remuneration (FAR), STI and LTI incentives as outlined in the table below: Remuneration Component Purpose Link to Performance FAR STI LTI 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. 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). 48 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020, 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. 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. The pay mix for the Managing Director and CEO includes the KMP LTI but does not include the CEO LTI. 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. 49 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 3. Remuneration Policy and Outcomes (continued) 3c. Remuneration Framework (continued) Fixed annual remuneration What is included in FAR? How is FAR reviewed and approved? FAR includes base salary and superannuation contributions. FAR is reviewed annually by the Remuneration Committee following consideration of industry benchmarking. FAR increases were made as follows: Name David Kelly(i) Amber Stanton 2019 FAR 2020 FAR A$ 241,962 319,458 A$ 400,000 420,000 % increase 65% 31% (i)The increase in FAR was to reflect the change in Mr D. Kelly’s position from Acting COO to COO, not taking into account the higher duties allowance paid in 2019. 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? 50 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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) How are STI awards determined? 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:  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). 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. 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 51 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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) A$800,000 is Managing Director and CEO’s FAR; and (b) A$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.). 52 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 time of payment 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 three-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 2020 were:  Asanko Gold Inc  Centamin Plc  Evolution Mining Ltd  Golden Star Resources Ltd  Hummingbird Resources Plc  IAMGold Corporation  Pan African Resources Plc  Perseus Mining Ltd  Regis Resources Ltd  Roxgold Inc  Saracen Mining Ltd  Semofo Inc  Shanta Gold Ltd  St Barbara Ltd  Teranga Gold Corporation  West African 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. 53 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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. 54 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 Less than 60th percentile At the 60th percentile Between 60th and 75th percentile Performance Vesting Outcomes 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? 55 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 3. Remuneration Policy and Outcomes (continued) 3d. Executive Remuneration outcomes Company Performance The table below shows the performance of the Consolidated Entity over the last 5 periods: 31 December 2020 31 December 2019 6 months ended 31 December 2018 30 June 2018 30 June 2017 Net profit/(loss) after tax $'000 Basic earnings/(loss) per share cents/share 4,995 1.62 (78,824) (3,752) 60,339 125,184 (8.30) (0.30) 6.86 14.35 KMP remuneration disclosures Table 1 below shows the remuneration expense recognised for each KMP for the year ended 31 December 2020. Table 2 below shows the remuneration expense recognised for each KMP for the year ended 31 December 2019. 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 year ended 31 December 2020. 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. 56 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020 SHORT TERM BENEFITS POST EMPLOYMENT BENEFITS LONG TERM BENEFITS SHARE BASED PAYMENTS PERFORMANCE RELATED ) i ( s t i f e n e B y r a t e n o M n o N $ ) i i ( I e v i t n e c n m r e T t r o h S $ ) v ( s u n o B n o i t c a s n a r T $ e s n e p x E e v a e L l a u n n A $ n o i t a r e n u m e R e s a B $ n o i t a u n n a r e p u S $ ) i v ( n o i t a n m r e T i $ i e v a e L e c v r e S g n o L e s n e p x E $ i s t h g R e c n a m r o f r e P $ l a t o T $ J. Welborn(iii) 413,277 5,232 - - 41,424 30,990 535,072 (62,181) 533,548 1,497,362 D. Kelly 263,330 8,993 74,416 - 12,571 18,736 S. Gale(iv) 312,069 6,989 131,261 - 31,470 17,260 A. Stanton 218,961 6,279 117,206 96,658 27,423 17,260 - - - 6,291 98,214 482,551 10,247 164,478 673,774 11,603 111,957 607,347 Total 1,207,637 27,493 322,883 96,658 112,888 84,246 535,072 (34,040) 908,197 3,261,036 , I e v i t n e c n m r e T t r o h S i s t h g R e c n a m r o f r e P d n a s n o i t p O % i s t h g R e c n a m r o f r e P d n a s n o i t p O % 36 36 44 38 36 20 24 18 (i) (ii) (iii) (iv) (v) (vi) (vii) 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 2020 will be paid in cash in March 2021. Mr J. Welborn ceased employment as Managing Director and CEO on 18 October 2020. Mr S. Gale was appointed as Chief Financial Officer effective 20 January 2020 until 21 October 2020. Mr S. Gale was appointed Interim Chief Executive Officer effective 21 October 2020. This is a discretionary bonus related to the acquisition of Mako and the listing on the London Stock Exchange. Mr J. Welborn received a payment in lieu of notice. The total remuneration for 2020 was converted at the average exchange rate of US$1:A$1.448. 57 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 3. Remuneration Policy and Outcomes (continued) 3d. Executive Remuneration outcomes (continued) Table 2 - Statutory KMP remuneration for the year ended 31 December 2019 SHORT TERM BENEFITS POST EMPLOYMENT BENEFITS LONG TERM BENEFITS SHARE BASED PAYMENTS PERFORMANCE RELATED ) i ( s t i f e n e B y r a t e n o M n o N $ ) i i ( I e v i t n e c n m r e T t r o h S $ e s n e p x E e v a e L l a u n n A $ n o i t a r e n u m e R e s a B $ n o i t a u n n a r e p u S $ ) i v ( n o i t a n m r e T i $ i e v a e L e c v r e S g n o L e s n e p x E $ i s t h g R e c n a m r o f r e P $ l a t o T $ J. Welborn 519,503 3,525 65,919 49,870 17,381 P. Beilby(iii) D. Kelly(iv) 72,305 882 - 6,168 4,345 237,178 4,174 30,728 12,659 16,870 - - - 19,679 991,047 1,666,924 - 22,874 106,574 6,335 138,335 446,279 L. de Bruin(v) 327,929 3,525 29,004 41,308 26,071 72,130 9,137 104,007 613,111 A. Stanton 200,023 3,525 31,146 15,587 14,438 - 5,835 85,257 355,811 Total 1,356,938 15,631 156,797 125,592 79,105 72,130 40,986 1,341,520 3,188,699 , I e v i t n e c n m r e T t r o h S i s t h g R e c n a m r o f r e P d n a s n o i t p O % i s t h g R e c n a m r o f r e P d n a s n o i t p O % 63 21 38 22 33 59 21 31 17 24 (i) (ii) (iii) (iv) (v) (vi) (vii) 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 six months ended 31 December 2019 were 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. The total remuneration for 2019 was converted at the average exchange rate of US$1:A$1.438. 58 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020 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 grants where the KMP received control of the shares in the year ended 31 December 2020. 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) Termination(iv) Transaction Bonus Short Term Incentives(ii) Nominal Value of 2017 LTIP Vested Rights(iii) Total J. Welborn(v) D. Kelly S. Gale(vi) A. Stanton Total $ 563,686 293,176 329,330 271,723 $ 535,072 - - - 1,457,915 535,072 $ $ $ $ - - - 96,658 96,658 65,462 30,516 69,042 30,471 377,355 1,541,575 24,433 - 30,853 348,125 398,372 429,705 195,491 432,641 2,717,777 (i) (ii) (iii) (iv) (v) (vi) (vii) Fixed Remuneration includes cash salary, paid leave and superannuation. Short Term Incentives relate to Short Term Incentives earned for the year ended 31 December 2019 paid in March 2020. 2017 LTIP vested rights awarded have a nominal value based on the 10-day VWAP up to and including 30 June 2020. Mr J. Welborn received a payment in lieu of notice. Mr J. Welborn ceased employment as Managing Director and CEO on 18 October 2020. Mr S. Gale was appointed as Chief Financial Officer effective 20 January 2020 until 21 October 2020. Mr S. Gale was appointed Interim Chief Executive Officer effective 21 October 2020. The total remuneration for 2020 was converted at the average exchange rate of US$1:A$1.448. STI outcomes Performance Measure Performance Area Weighting Actual Performance Outcome Commentary Company Operating Cash Flow (A$169.195 million) Cash Operating Cost Per Tonne Milled (A$83.05) Production Target (Gold Poured) (430,000oz) Total Recordable Injury Frequency Rate (1.8) Safety Action List Performance (3) 30% A$60.2 million Not Achieved 30% A$83.32 Achieved 30% 395,136oz Partially Achieved 5% 5% 0.9 3 Achieved Achieved 59 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 relating to the Managing Director and CEO, and the CEO LTI Performance Rights approved by Shareholders: Year KMP LTI Grant (Perf Rights) CEO LTI Grant (Perf Rights) Potentially vesting KMP LTI at maximum* Potentially vesting CEO LTI at maximum* Vested KMP LTI Vested CEO LTI Total vested 2015 1,515,000 0 564,000 2,000,000 587,500 277,559 0 0 698,690 3,000,000 699,668 2016 2017 2018 2019 2020 2021 2022 2023 1,515,000 400,000 1,397,588 400,000 1,797,588 564,000 587,500 215,879 426,977 194,352 600,000 141,000 200,000 341,000 1,000,000 146,875 350,000 496,875 732,600 - - *The potentially vesting performance rights have been adjusted in accordance with the cessation of employment of Mr. J Welborn. 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. Financial Year 2016 CEO LTI Target 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 • Board approval of an alternative strategy to deliver appropriate Shareholder value Achievement and Performance Rights vesting 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; • The REP being granted Prescribed Project Status by the Queensland Government; • Maintaining production performance as • Investigation and inclusion of beneficiation technology to budgeted enhance outcomes; 60 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 3. Remuneration Policy and Outcomes (continued) 3d. Executive Remuneration outcomes (continued) Financial Year 2016 CEO LTI Target Tranche B (30%) – Syama 600,000 Performance Rights Vesting: 30 June 2019 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 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. Tranche C (50%) – Production & Sustainability 1,000,000 Performance Rights Vesting: 30 June 2020 Achievement and Performance Rights vesting • 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 (other than Mr Welborn) 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. The Board assessed the Tranche C vesting outcome as at 30 June 2020. The measurement of whether there was a clear path to a substantial and sustainable increase in annual gold production, an increase in the Company’s gold resources per share and optimum production achieved from existing owned assets was assessed. Elements that were considered included: • Annual gold production taking into account the divestment of Ravenswood • The increase in resources on the Reserves and Resources statement taking into account the divestment of Ravenswood • Amount of shares outstanding from July 2017 to June 2020 • Strategic acquisition of Mako The Board (other than Mr Welborn) unanimously agreed that a vesting outcome of 350,000 Performance Rights was justified and appropriate based on the performance outcomes above. 61 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 A$1,000,000 per year. The Chairman’s fee is A$180,000 and NED fees are A$100,000. In addition, the Chair of the Audit and Risk Committee receives a Committee Chair fee of A$15,000 and the Chair of the Remuneration Committee receives a Committee Chair fee of A$10,000. Members of Committees do not receive a separate fee. The amount of aggregate remuneration sought to be approved by Shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers fees paid to NEDs of comparable companies when undertaking the annual review process. Each NED receives a fee for being a Director of the Company. The fee size is commensurate with the workload and responsibilities undertaken. NEDs do not participate in any incentive programs. Position Chair of Board Non-Executive Director Audit and Risk Committee Chair Remuneration Committee Chair * Payable in addition to the annual NED fee. Current Annual Fee (A$) $180,000 $100,000 $15,000* $10,000* Non-Executive Director remuneration for the year ended 31 December 2020 SHORT TERM BENEFITS POST EMPLOYMENT BENEFITS Remuneration Non-Monetary Benefits Superannuation $ 124,275 79,398 74,795 63,052 60,084 401,604 $ - - - - 6,814 6,814 $ - - - 5,990 3,076 9,066 TOTAL $ 124,275 79,398 74,795 69,042 69,974 417,484 M. Botha Y. Broughton M. Potts S. Shugg P. Sullivan Total (i) The total remuneration for 2020 was converted at the average exchange rate of US$1:A$1.448. 62 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 4. Non-Executive Director Remuneration Arrangements and Outcomes (continued) Non-Executive Director remuneration for the year ended 31 December 2019 SHORT TERM BENEFITS POST EMPLOYMENT BENEFITS Remuneration Non-Monetary Benefits Superannuation $ 124,562 77,054 68,364 62,433 60,862 393,275 $ - - - - 6,861 6,861 $ - - - 5,931 6,434 12,365 TOTAL $ 124,562 77,054 68,364 68,364 74,157 412,501 M. Botha Y. Broughton M. Potts S. Shugg P. Sullivan Total (i) The total remuneration for 2019 was converted at the average exchange rate of US$1:A$1.438. 5. Additional Disclosures Executive Employment Contracts Remuneration arrangements for KMP are formalised in employment agreements. The following table outlines the details of contracts with key management personnel: Name Title Term of Agreement Notice Period by Executive Notice Period by Company Termination Benefit¹ John Welborn(i) Managing Director and Chief Executive Officer Open 6 months 12 months David Kelly Chief Operating Officer Open 3 months 3 months Stuart Gale(ii) Chief Financial Officer Open 3 months 3 months Amber Stanton General Counsel and Company Secretary ¹ NES is the National Employment Standards. Open 3 months 3 months Redundancy as per NES Redundancy as per NES Redundancy as per NES Redundancy as per NES (i) (ii) Ceased employment effective 18 October 2020. Appointed effective 20 January 2020. No options were held by KMP during the year. 63 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Directors’ Report Remuneration Report (continued) 5. Additional Disclosures (continued) Details of Performance Rights holdings of KMP are as follows: r a e y e h t f o t r a t s e h t t a e c n a a B l Granted during the year as compensation e c n a m r o f r e P l f o e u a v r i a F e t a d t n a r g t a s t h g R i i t a s t h g R e c n a m r o f r e P l f o e u a v r i a F l a t o T e t a d t n a r g ) s r a e y ( d o i r e p g n i t s e V A$ A$ e c n a m r o f r e P f o y r i p x E s t h g R i r a e y e h t g n i r u d d e t n a r g i s t h g R e c n a m r o f r e P f o e c i r p e s c r e x E i A$ e t a d g n i t s e V r a e y e h t g n i r u d d e s p a L r a e y e h t g n i r u d d e t s e V r e b m u N e t a d e u s s I r a e y e h t f o d n e e h t t a e c n a a B l Directors J. Welborn(i) 5,563,749 699,668 Other key management personnel D. Kelly 324,349 227,392 A. Stanton 418,216 216,022 S. Gale - 500,000 264,343 21 May 2020 21 May 2020 21 May 2020 21 May 2020 21 May 2020 0.56 391,825 3 31 Dec 2022 1 Jan 2027 nil (4,196,734) (496,875) 1,569,808 0.85 193,283 0.85 183,619 0.49 245,000 0.85 224,692 3 3 3 3 31 Dec 2022 31 Dec 2022 31 Dec 2021 31 Dec 2022 1 Jan 2027 1 Jan 2027 1 Jan 2027 1 Jan 2027 nil (96,514) (32,172) 423,055 nil (121,875) (40,625) 471,738 nil nil - - 764,343 (i) (ii) These were the number of Performance Rights held by Mr J. Welborn when he ceased employment on 18 October 2020. Of the 4,196,734 Performance Rights that lapsed during the year, 3,106,109 Performance Rights lapsed due to cessation of employment. 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. 64 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 during the year Other changes during the year Shares sold on market during the year Balance at the end of the year - - 45,455 - 3,000,000 496,875 703,125 (4,200,000) Directors M. Botha J. Welborn(i) Y. Broughton M. Potts S. Shugg P. Sullivan - 26,825 - 2,340,674 - - - - Other key management personnel D. Kelly S. Gale A. Stanton 81,406 32,172 - - - - 27,273 52,272 27,273 27,272 - - - - - - - - - - - - - - - - - - - 45,455 - 27,273 79,097 27,273 2,367,946 113,578 - - (i) These were the number of shares held by Mr J. Welborn when he ceased employment on 18 October 2020. Every Director is encouraged to hold shares in the Company. 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. 65 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020. This is the end of the audited information. Performance Rights Outstanding Performance Rights at the date of this report are as follows: Grant date Vesting date Exercise price 26/10/18 21/05/19 21/11/19 21/05/20 21/05/20 21/05/20 30/06/21 31/12/21 30/06/21 31/12/21 31/12/21 31/12/22 - - - - - - Number on issue 481,880 1,041,225 732,600 500,000 43,668 1,616,997 4,416,370 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 the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited. 66 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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: Board Audit & Risk Remuneration Nomination Sustainability M. Botha P. Sullivan J. Welborn (ceased 18 October 2020) M. Potts Y. Broughton S. Shugg Number of meetings held 25 25 17 25 25 25 25 4 4 n/a 4 4 4 4 4 4 n/a 4 4 4 4 2 2 n/a 2 2 2 2 n/a n/a 3 n/a n/a 4 4 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 2020. Ernst & Young Australia received or are due to receive nil for non-audit services in the year ended 31 December 2020 (year ended 31 December 2019: $nil). Signed in accordance with a resolution of the Directors. Martin Botha Chairman Perth, Western Australia 17 March 2021 67 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 68 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020Financial Statements Financial Statements Notes to the Financial Statements Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement About this Report A Earnings for the Year A.1 Segment revenues and expenses A.2 Dividends paid or proposed A.3 Earnings (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 Subsequent events E.9 Related party disclosures E.10 Parent entity information E.11 Employee benefits and share-based payments E.12 Supplemental disclosure to the Consolidated Cash Flow Statement E.13 Other accounting policies Other Directors’ Declaration Independent Auditor’s Report Shareholder Information 69 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 gains/(losses) 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 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 602,985 (254,848) 456,400 (294,222) 348,137 162,178 (172,606) (71,339) 104,192 2,152 - (10,910) (17,456) (1,178) 867 (30,644) (1,661) (2,725) (24,676) (88) (24,308) (75,776) (44,194) 42,208 472 77 (14,300) (12,194) (1,706) (2,072) 3,218 (967) (540) (31,666) (613) (40,630) Gain/ (loss) before tax from continuing operations (6,435) (58,713) Tax expense A.1/A.4 Loss for the year from continuing operations Discontinued operations Gain/(loss) for the year from discontinued operations (1) Gain/(loss) for the year Gain/(loss) attributable to: Members of the parent Non-controlling interest E.2 E.7 (30,045) (36,480) 41,475 4,995 15,941 (10,946) 4,995 (17,346) (76,059) (2,765) (78,824) (67,775) (11,049) (78,824) (1) Discontinued operations relates to the Group’s Ravenswood gold mine The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 70 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Statement of Comprehensive Income (continued) 31 December 2020 US$'000 Note 31 December 2019 (Restated) US$'000 Gain/ (loss) for the year (brought forward) 4,995 (78,824) 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 45,915 5,338 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 (5,651) 16,638 186 (7,495) Other comprehensive gain/(loss) for the year, net of tax 56,902 (1,971) Total comprehensive gain/(loss) for the year 61,897 (80,795) Total comprehensive gain/(loss) attributable to: Members of the parent Non-controlling interest Earnings (loss) per share for net income (loss) attributable for operations to the ordinary equity holders of the parent: Basic gain/(loss) per share Diluted gain/(loss) per share Loss per share for net loss attributable for continuing operations to the ordinary equity holders of the parent: Basic gain/(loss) per share Diluted gain/(loss) per share A.3 A.3 A.3 A.3 78,494 (16,597) 61,897 (69,932) (10,863) (80,795) 1.62 cents 1.62 cents (8.30) cents (8.30) cents (2.60) cents (2.60) cents (7.96) cents (7.96) cents The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 71 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Statement of Financial Position 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 Promissory notes receivable Contingent consideration receivable Deferred tax 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 Note C.1 D.3 D.1 D.2 D.3 E.2 D.4 D.2 E.6 E.2 E.2 A.4 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 As at 31 December 2020 US$'000 As at 31 December 2019 (Restated) US$'000 As at 1 January 2019 (Restated)1 US$'000 88,591 - 78,852 158,929 36,004 80,608 8,785 17,911 469,680 - 67,923 4,649 40,262 15,417 10,081 6,469 495,281 292,678 22,518 955,278 1,424,958 83,832 415 62,558 75,720 - 11,249 8,821 242,595 273,613 71,863 - 9,422 12,358 367,256 609,851 815,107 87,305 2,745 49,713 133,171 12,704 66,637 5,632 15,139 373,046 - 44,318 4,314 - - 19,486 57,798 535,829 309,759 40,778 1,012,282 1,385,328 104,141 3,193 238,622 48,957 21,127 15,480 39,492 471,012 187,392 65,630 9,004 2,152 26,043 290,221 761,233 624,095 27,305 2,743 40,074 125,975 19,976 - 5,851 12,385 234,309 2,568 - 6,758 - - 13,584 44,364 285,899 203,454 - 556,627 790,936 84,618 - 48,319 16,404 - - - 149,341 97,827 49,592 - - - 147,419 296,760 494,176 1. With effect from 1 January 2020, Resolute Mining Limited has elected to change its presentation currency from Australian dollars to US dollars. As such, in accordance with AASB 101.39, a third consolidated statement of financial position has been presented. 72 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Statement of Financial Position (continued) 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 Non-controlling interest of disposal group held for sale Total equity Note C.4 E.7 E.2 As at 31 December 2020 US$'000 As at 31 December 2019 (Restated) US$'000 As at 1 January 2019 (Restated)1 US$'000 777,021 24,175 41,521 842,717 (20,629) (6,981) 815,107 639,859 (39,908) 25,580 625,531 (1,436) - 624,095 456,833 (39,506) 93,355 510,682 (16,506) - 494,176 1 With effect from 1 January 2020, Resolute Mining Limited has elected to change its presentation currency from Australian dollars to US dollars. As such, in accordance with accounting standard requirements, a third consolidated statement of financial position has been presented. The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 73 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Statement of Changes in Equity y t i u q e d e t u b i r t n o C e v r e s e r ) s s o l ( / n a g i d e s i l a e r n u t e N y t i u q e s n o i t p o e r a h S e v r e s e r e v r e s e r s t s e r e t n i g n i l l o r t n o c - n o N y t i u q e e e y o p m E l e v r e s e r s t i f e n e b e v r e s e r n o i t a s n a r t l y c n e r r u c n g e r o F i ) s e s s o l l d e t a u m u c c a ( t s e r e t n i g n i l l o r t n o c - n o N t s e r e t n i g n i l l o r t n o c - n o N l a s o p s d f o i / i s g n n r a e d e n a t e R i / l s e t o n e b i t r e v n o C l e a s r o f d e h p u o r g l Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 At 1 January 2020 639,859 (12,288) 4,876 (724) 17,077 (48,849) 25,580 (1,436) - 624,095 Gain for the year Other comprehensive (loss)/income, net of tax Total comprehensive (loss)/income for the year, net of tax - - - 16,638 - 16,638 Shares issued 137,162 - - - - - Dividends paid Share based payments expense Asset held for sale At 31 December 2020 - - - - - - - - - - - - - - - 15,941 (10,946) 45,915 - (5,651) - - 4,995 56,902 - 45,915 15,941 (16,597) - 61,897 - - 1,530 - - - - - - - (9,577) - - - - 137,162 (9,577) 1,530 6,981 (6,981) - 777,021 4,350 4,876 (724) 18,607 (2,934) 41,521 (20,629) (6,981) 815,107 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 74 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Statement of Changes in Equity (continued) y t i u q e d e t u b i r t n o C e v r e s e r ) s s o l ( / n a g i d e s i l a e r n u t e N y t i u q e s n o i t p o e r a h S e v r e s e r e v r e s e r s t s e r e t n i g n i l l o r t n o c - n o N y t i u q e e e y o p m E l e v r e s e r s t i f e n e b e v r e s e r n o i t a s n a r t l y c n e r r u c n g e r o F i ) s e s s o l l d e t a u m u c c a ( t s e r e t n i g n i l l o r t n o c - n o N / i s g n n r a e d e n a t e R i / l s e t o n e b i t r e v n o C US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Total US$'000 456,833 (4,793) 4,876 (724) 15,322 (54,187) 93,355 (16,506) 494,176 - - - (7,495) - (7,495) - - - - - - - - - - - - - - - - - - - - - 1,755 - - (67,775) (11,049) (78,824) 5,338 - 186 (1,971) 5,338 (67,775) (10,863) (80,795) - - - - - - - - 183,026 1,755 25,933 25,933 At 1 January 2019 (Restated) Loss for the year Other comprehensive (loss)/income, net of tax Total comprehensive (loss)/income for the year, net of tax Shares issued 183,026 Share based payments expense Acquisition of non- controlling interest At 31 December 2019 (Restated) 639,859 (12,288) 4,876 (724) 17,077 (48,849) 25,580 (1,436) 624,095 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 75 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Consolidated Cash Flow Statement 31 December 2020 Note US$'000 31 December 2019 (Restated)1 US$'000 Cash flows from operating activities Receipts from customers Payments to suppliers, employees and others Exploration expenditure Interest paid Interest received Income tax paid Settlement of Taurus royalty 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 Payments for acquisition of subsidiaries (net of cash acquired) Proceeds from sale of Ravenswood Gold Mine Proceeds relating to assets held for sale Proceeds from sale of financial assets at fair value through other comprehensive income Other investing activities 617,218 (496,999) (6,052) (20,221) 616 (32,610) (12,000) 49,952 (49,724) (35,455) (5,799) (5,603) - - 29,916 5,445 1,145 (418) 527,897 (412,830) (2,466) (25,898) 464 (3,780) - 83,387 (65,842) (67,357) (9,860) (173) 2,084 (65,308) - - - (747) Net cash flows used in investing activities (60,493) (207,203) Cash flows from financing activities Repayment of borrowings Proceeds from finance facilities Proceeds from issuing ordinary shares Payments for share issue Dividends paid to non-controlling interest Repayment of lease liability Net cash flows from financing activities (202,963) 110,000 137,428 (266) (9,577) (18,012) 16,610 (16,358) 218,375 - - (9,232) 192,785 Net (decrease)/increase in cash and cash equivalents 6,069 68,969 Cash and cash equivalents at the beginning of the year Exchange rate adjustment Cash and cash equivalents at the end of the year Cash and cash equivalents comprise the following: Cash at bank and on hand Bank overdraft C.1 C.1 The above consolidated cash flow statement should be read in conjunction with the accompanying notes. 48,237 920 55,226 88,591 (33,365) 55,226 (20,157) (575) 48,237 87,305 (39,068) 48,237 76 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020 was authorised for issue on 17 March 2021 in accordance with a resolution of the Directors. Resolute Mining Limited (the parent) is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange and the London Stock Exchange. 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 2019 Financial Report, except for the impact of all new or amended Standards and Interpretations as detailed in Note E.13 and the impact of the changes in presentation currency detailed below. 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 to align to changes in presentation in the current period. 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. 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. Rounding of Amounts The Financial Report has been prepared in United States dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated. Currency Functional and presentation currency The Directors have elected to change the Group’s presentation currency from Australian dollars (A$) to United States (US$) dollars effective 1 January 2020. The change in presentation currency is a voluntary change which is accounted for retrospectively. All other accounting policies are consistent with those adopted in the annual financial report from the year ended 31 December 2019. The financial report has been restated to US dollars using the procedures outlined below: 1. Income statement and Statement of Cash Flow have been translated into US dollars using average foreign currency rates prevailing from the relevant year. For material income statement items the spot rate at the date of transaction was used. 2. Assets and liabilities in the Statement of Financial Position have been translated into US dollars at the closing foreign currency rate on the relevant balance sheet dates. 3. The equity section of the Statement of Financial Position, including foreign currency translation reserve, retained earnings, share capital and other reserves, has been translated into US dollars on the basis that the Group had always reported in US dollars. 4. Earnings per share and dividend disclosure have also been restated to US dollars to reflect the change in presentation 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 is Australian dollars and presentation currency is United States 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. 77 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020About this Report (continued) Currency (continued) Transaction and balances 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. 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 78 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year In this section Results and the performance of the Group, with segmental information highlighting the core areas of the Group’s operations. It also includes details about the Group’s tax position. A.1 Segment revenues and expenses Operating segment information The Group has identified two 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 subsidiary holding the Ravenswood Gold Mine (“Ravenswood”) in Queensland was 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 starting 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. 79 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (continued) A.1 Segment revenues and expenses (continued) 31 December 2020 Revenue Gold and silver sales at spot to external customers (a) Total segment gold and silver sales revenue Mako (Senegal) Syama (Mali) US$'000 US$'000 274,400 328,585 274,400 328,585 Costs of production (59,019) (189,732) Gold in circuit inventories movement (5,578) (519) Unallocated (b) Corporate/ Other US$'000 - - - - - - (3,480) Total US$'000 602,985 602,985 (248,751) (6,097) (254,848) (37,085) (34,254) Costs of production relating to gold sales Royalty expense Operational support costs Other operating costs relating to gold sales Administration and other corporate expenses (64,597) (190,251) (13,720) (18,470) (23,365) (12,304) (32,190) (35,669) (3,480) (71,339) (3,717) (3,266) (10,473) (17,456) Share-based payments expense - - (1,178) (1,178) 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 (1,624) (2,512) (6,774) (10,910) 172,272 96,887 (21,905) 247,254 (20,012) (20,116) - (40,128) (67,853) (63,335) (1,290) (132,478) (87,865) (83,451) (1,290) (172,606) 84,407 13,436 (23,195) 74,648 80 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (continued) A.1 Segment revenues and expenses (continued) 31 December 2020 Segment operating result before treasury, other income/(expenses) and tax (brought forward) Interest income Interest and fees Loss on remeasurement for refinancing Rehabilitation and restoration provision accretion Finance costs Realised foreign exchange (loss)/gain Treasury - realised gains/(losses) Inventories net realisable value movements and obsolete consumables Unrealised foreign exchange (loss)/ gain 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 2020 Mako (Senegal) US$'000 Syama (Mali) US$'000 Corporate/ Other US$'000 Total US$'000 Unallocated (b) 84,407 13,436 (23,195) 74,648 431 (3,459) - (386) (3,845) 912 912 300 (1,493) - (392) (1,885) (381) (381) (5,304) (41,595) 1,421 (14,235) (4,711) 2,152 (19,187) (4,711) - (778) (18,946) 336 336 287 (24,676) 867 867 (46,612) (1,650) (1,167) - 5 - - 33,133 31,488 - (1,167) (14,353) (14,353) (8,121) (41,590) 19,067 (30,644) - - (133) - (15,768) 57,883 - - - (24,308) (4,184) (58,612) (88) (1,661) (2,592) - (10,093) (35,751) (88) (1,661) (2,725) (24,308) (30,045) (36,480) 81 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (continued) A.1 Segment revenues and expenses (continued) Mako (Senegal) US$'000 Syama (Mali) US$'000 Corporate/Other US$'000 Total US$'000 Unallocated (b) 115,095 341,305 115,095 (42,813) 189 341,305 (248,578) (3,020) (42,624) (251,598) (5,755) (7,803) (13,558) (1,730) (22,664) (7,972) (30,636) (1,945) - - (1,407) (2,653) - - - - - - - - (8,519) (1,706) (8,585) (1,655) 456,400 456,400 (291,391) (2,831) (294,222) (28,419) (15,775) (44,194) (12,194) (1,706) (12,645) (1,655) (14,300) (1,407) (2,653) (10,240) 55,776 54,473 (20,465) 89,784 (7,151) (16,164) - (23,315) (28,309) (22,941) (1,211) (52,461) (35,460) (39,105) (1,211) (75,776) 20,316 15,368 (21,676) 14,008 Impairment of investment in associate - - 31 December 2019 (Restated) 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 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 82 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (continued) A.1 Segment revenues and expenses (continued) 31 December 2019 (Restated) 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) US$'000 Syama (Mali) US$'000 Corporate/ Other US$'000 Total US$'000 Unallocated (b) 20,316 15,368 (21,676) 14,008 354 - (3,242) (106) (3,348) (809) 1,924 1,115 - (1,204) (1,185) - (2,389) - - - - (40) - 2 - (527) (527) - - - 17,307 - - - 17,307 (613) - - (40,630) (23,233) 118 75 (27,791) - (27,791) 1,328 (4,515) (3,187) - (1,774) - 472 77 (31,033) (633) (31,666) 519 (2,591) (2,072) 17,307 (2,978) (1,185) (9,926) (9,926) (11,700) - (967) (540) - 5,927 16,008 (32,326) (59,741) 3,218 (613) (967) (540) (40,630) (17,346) (76,059) 83 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (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)The discrete financial information for Bibiani (Ghana) is no longer regularly reviewed by the Chief Operating Decision Maker on a standalone basis and now forms part of the operating segments to the financial statements. As such, Bibiani is no longer presented as a reported segment. The comparative information have also been restated to reflect this. 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 2020. A.3 Earnings/(loss) per share Basic earnings/(loss) per share Profit/(loss) attributable to ordinary equity holders for operations of the parent for basic loss per share (US$'000) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS 15,941 (67,775) 981,553,095 816,354,938 31 December 2020 31 December 2019 (Restated) Basic earnings/(loss) per share from operations (cents per share) 1.62 cents (8.30) cents Diluted earnings/(loss) per share from operations (cents per share) (1) 1.62 cents (8.30) cents Basic loss per share Loss attributable to ordinary equity holders for continued operations of the parent for basic loss per share (US$'000) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS (25,534) (65,010) 981,553,095 816,354,938 Basic loss per share from continuing operations (cents per share) (2.60) cents (7.96) cents Diluted loss per share from continuing operations (cents per share) (2) (2.60) cents (7.96) cents ¹ Dilutive instruments have not been included in the calculation of diluted earnings per share for 31 December 2019 because the result for the year was a loss. For 31 December 2020, the performance rights outstanding are not dilutive as performance conditions were not met at 31 December 2020. 2 Dilutive instruments have not been included in the calculation of diluted earnings per share for continuing operations for 31 December 2020 and 31 December 2019 because the result for the year was a loss. 84 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (continued) A.3 Loss per share (continued) 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 year 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. Information on the classification of securities file 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 expense/(benefit) Total tax expense b) Numerical reconciliation of income tax expense/(benefit) to prima facie tax expense/(benefit) Profit/(loss) before income tax benefit from continuing operations Profit/(loss) before income tax benefit from discontinued operations Total accounting profit / (loss) Prima facie income tax expense /(benefit) at 30% (31 December 2019: 30%) Add/(deduct): - net movement in temporary differences and tax losses not recognised - effect of different rates of tax on overseas income - effect of share based payments expense not deductible - other permanent differences Income tax expense attributable to net profit/(loss) 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 12,681 17,364 30,045 (6,435) 41,475 35,040 10,512 9,035 3,599 521 6,378 30,045 23,274 (5,928) 17,346 (58,367) (2,765) (61,132) (18,340) 34,489 3,600 540 (2,943) 17,346 85 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (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) 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 12,209 46,721 434 59,364 39,037 98,401 - (10,081) 14,200 23,494 16,558 54,252 40,652 94,904 (10,181) (9,139) 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) 88,320 75,584 d) Movements in the deferred tax assets balance Balance at the beginning of the year (Utilised)/recognised during the period Foreign currency translation Balance as at the end of the year The deferred tax assets balance comprises temporary differences attributable to: Receivables Financial assets at fair value through other comprehensive income Mineral exploration and development interests Investments in associates Property, plant and equipment 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 19,486 (10,093) 688 10,081 81,696 3,867 86,778 2,671 14,464 4,060 239 - 10,081 (170,173) (23,602) 10,081 13,584 5,928 (26) 19,486 77,218 3,520 86,766 1,369 16,193 10,751 122 10,268 9,218 (177,131) (18,808) 19,486 86 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (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 Provision Set off of deferred tax assets 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 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 9,021 5,744 15,800 - 1,927 532 33,024 (23,602) 9,422 149 1,977 49 2,175 (49) 2,126 1,174 5,876 8,239 - 1,748 3,923 20,960 (18,808) 2,152 136 1,799 45 1,980 (45) 1,935 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%. 83 76 Recognition and measurement The income tax expense or revenue for the year is the tax payable on the current year’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. 87 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements A: Earnings for the year (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 year 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 year. 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 year 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). A deferred income tax asset of $10.08 million has been recognised at 31 December 2020 in relation to carried forward Mali tax losses. Realisation of sufficient taxable profit in future years 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. 88 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 Processing plant Life of mine production Units of production 89 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 90 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 31 December 2020 s g n d i l i u B t n e m p u q E i & t n a P l i l s e c 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 i S t e s s A l a t o T US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Opening write down value 6,478 296,289 3,483 3,475 34 309,759 535,829 - 535,829 Additions 327 35,940 115 375 36,757 21,679 7,510 29,189 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 - - - - 4,793 (10,536) (64) 4,688 - - (1,119) 1,431 - (109) (36) (15) (34) (194) - - - - (441) (45,341) (924) (2,078) - (48,784) - - - - - - - - - - - - - - - - - - - - - - - 1,431 - - (984) (984) - - (109,152) - (109,152) 11,166 - - 11,166 - Assets held for sale (3,942) (16,851) (212) (1,356) - (22,361) - Foreign currency translation At 31 December net of accumulated depreciation 582 17,406 196 436 - 18,620 27,756 46 27,802 7,797 276,798 2,558 5,525 - 292,678 488,709 6,572 495,281 Cost 15,330 585,851 6,743 14,884 - 622,808 820,270 7,574 827,844 Accumulated depreciation and impairment (3,592) (292,202) (3,972) (8,003) - (307,769) (331,561) (1,002) (332,563) Assets held for sale (3,941) (16,851) (213) (1,356) - (22,361) - - - Net carrying amount 7,797 276,798 2,558 5,525 - 292,678 488,709 6,572 495,281 91 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 31 December 2019 (Restated) s g n d i l i u B t n e m p u q E i & t n a P l i l s e c 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 i S t e s s A l a t o T US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Opening write down value 5,663 194,698 718 2,033 342 203,454 280,186 5,713 285,899 Additions 170 69,606 2,522 1,850 1,553 96,824 973 552 74,148 64,167 4,095 68,262 99,902 257,937 - 257,937 1,396 (1,729) 154 (179) - - Disposals (23) (506) - (418) (947) (695) (22,112) (605) (912) - (24,324) - - - - - - - - - - (9,738) (9,738) - - - - - - - - - - - - - - - - - (44,750) - (44,750) - 12,927 - 12,927 (1,523) (34,010) (70) (186) - (35,789) (22,018) - (22,018) (63) (6,482) (55) (16) 110 (6,506) (12,620) (70) (12,690) - - - Acquisition of subsidiary Transfers (to)/from areas in exploration and development Depreciation expense Amounts amortised to costs of production relating to gold sales Amortisation expense Adjustments to rehabilitation and restoration obligations Assets held for sale Foreign currency translation At 31 December net of accumulated depreciation 6,478 296,289 3,483 3,475 34 309,759 535,829 Cost 16,272 663,469 8,817 10,000 15,300 713,858 857,172 Accumulated depreciation and impairment Assets held for sale Net carrying amount (8,271) (333,170) (5,264) (6,339) (15,266) (368,310) (299,325) (1,523) (34,010) (70) (186) - (35,789) (22,018) 6,478 296,289 3,483 3,475 34 309,759 535,829 92 - - - - - 535,829 857,172 (299,325) (22,018) 535,829 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements B: Production and Growth Assets (continued) B.2 Exploration and evaluation assets Exploration and evaluation (at cost) Balance at the beginning of the year Acquisition of subsidiary Evaluation expenditure during the year Transfers (to)/from areas in exploration and development Adjustments to rehabilitation obligations Write-off during the year Asset held for sale Foreign currency translation Balance at the end of the year Recognition and measurement 31 December 2020 US$’000 31 December 2019 (Restated) US$’000 57,798 - 5,699 (1,431) 334 (2,836) (53,329) 234 6,469 44,364 3,873 8,453 - 866 - - 242 57,798 Exploration expenditure is expensed to the consolidated statement of comprehensive income as and when it is incurred and included as part of cash flows from operating activities. Exploration costs are only capitalised to the consolidated statement of financial position if they result from an acquisition. Evaluation expenditure is capitalised to the consolidated statement of financial position. Evaluation is deemed to be activities undertaken from the beginning of the pre-feasibility study conducted to assess the technical and commercial viability of extracting a mineral resource before moving into the Development phase. The criteria for carrying forward the costs are:  Such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or  Evaluation activities in the area of interest which has not yet reached a state which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area are continuing. Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the abandonment decision is made. Exploration commitments It is difficult to accurately forecast the nature or amount of future expenditure, although it 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 2021 for the consolidated entity is approximately $17.1 million (actual expenditure for the year ended 31 December 2020: $16.0 million). This includes the minimum amounts required to retain tenure. There are no material exploration commitments further out than one year. 93 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements B: Production and Growth Assets (continued) B.3 Impairment of non current assets Recognition and measurement Impairment testing In accordance with its accounting policies and processes, each asset or cash-generating unit CGU is evaluated to determine whether there are any indications of impairment. If any such indications of impairment exist, a formal estimate of the recoverable amount is performed. In assessing whether an impairment is required, the carrying value of the asset or CGU is compared with its recoverable amount. The recoverable amount is the higher of the CGU’s fair value less costs of disposal (FVLCD) and value in use (VIU). Given the nature of the Group’s activities, information on the fair value of an asset is usually difficult to obtain unless negotiations with potential purchasers or similar transactions are taking place. Consequently, the FVLCD for each CGU is estimated based on discounted future estimated cash flows (expressed in real terms) expected to be generated from the continued use of the CGUs using market-based gold price assumptions, the level of proved and probable reserves and measured, indicated and inferred mineral resources, estimated quantities of recoverable gold, production levels, operating costs and capital requirements, including any expansion projects, and its eventual disposal, based on the CGU latest life of mine (LOM) plans. These cash flows were discounted using a real post-tax discount rate that reflected current market assessments of the time value of money and the risks specific to the CGU. When LOM plans do not fully utilise existing mineral properties for a CGU, and options exist for the future extraction and processing of all or part of those resources, an estimate of the value of mineral properties is included in the determination of fair value. The determination of FVLCD for each CGU are considered to be Level 3 fair value measurements, as they are derived from valuation techniques that include inputs that are not based on observable market data. The Group considers the inputs and the valuation approach to be consistent with the approach taken by market participants. 31 December 2020 Assessment At 31 December 2020 Resolute’s quoted market capitalisation was lower than its net asset carrying value, which is an indicator of impairment. Further, for Syama Gold Mine, the financial and operation performance was below budget. As a result, an impairment review was undertaken on the recoverable amounts for all CGU’s being the Syama Gold Mine and the Mako Gold Mine. The recoverable amount of each CGU was assessed for impairment using the FVLCD method. Key Assumptions The table below summarises the key assumptions used in the carrying value assessment: Gold price ($/oz) Discount rate (post tax real) 31 December 2020 $1,977 - $1,441 8%-12% Gold prices Gold prices are estimated with reference to external market forecasts based on a consensus view of market experts. Discount rate In determining the recoverable amount of assets, the future cash flows were discounted using rates based on the Group’s estimated real weighted average cost of capital, with an additional premium applied having regard to the CGU’s risk profile. Unmined resources Unmined resources which are not included in a CGU’s life mine plan as result of the current assessment of economic returns, timing of specific production alternatives and the prevailing economic environment have been valued and included in the assessed fair value for each CGU. of - - of Operating and capital costs Life of mine plans. Operating cost assumptions reflect the expectation that costs will, over the long term, have a degree of positive correlation to the prevailing gold price rate assumptions. mine operating and capital cost assumptions are based on the Group’s latest budget and life - - - 94 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements B: Production and Growth Assets (continued) B.3 Impairment of non current assets (continued) Syama Sensitivity Analysis It was estimated that changes in key assumptions, in isolation, would have had the following approximate impact (increase or decrease) on the recoverable amount of the Syama Gold Mine as at 31 December 2020 Increase in key assumption Decrease in key assumption 10% change in gold price ($ per oz) 1% change in discount rate 10% change in value of unmined resources 10% change in operating cost US$‘000 159,488 (20,662) 21,897 (74,086) US$‘000 (161,554) 21,906 (21,897) 74,768 Mako Sensitivity Analysis It was estimated that changes in key assumptions, in isolation, would have had the following approximate impact (increase or decrease) on the recoverable amount of the Mako Gold Mine as at 31 December 2020 Increase in key assumption Decrease in key assumption 10% change in gold price ($ per oz) 1% change in discount rate 10% change in value of unmined resources 10% change in operating cost Recognised Impairment US$‘000 90,195 (10,617) 830 (42,655) US$‘000 (88,442) 11,224 (830) 42,463 As a result of the analysis performed by Management, there is headroom of $39.7 million for the Syama CGU and $61.1 million for the Mako CGU. No impairment loss or reversal of prior year impairment loss was recognised in 2020 (31 December 2019: 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 assumptions, the level of proved and probable reserves and measured, indicated and inferred mineral resources, estimated quantities of recoverable gold, production levels, operating costs and capital requirements, including any expansion projects, and its eventual disposal, based on the CGU latest life of mine (LOM) plans. 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 gold price assumptions, the level of proved and probable reserves and measured, indicated and inferred mineral resources, estimated quantities of recoverable gold, production levels, operating costs and capital requirements, including any expansion projects, and its eventual disposal, based on the CGU latest life of 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). 95 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020Notes to the Financial Statements B: Production and Growth Assets (continued) B.4 Segment expenditure, assets, and liabilities 31 December 2020 Capital expenditure Segment assets of continuing operations Segment liabilities of continuing operations 31 December 2019 (Restated) Capital expenditure Segment assets of continuing operations Segment liabilities of continuing operations Mako (Senegal) US$’000 10,802 347,272 Syama (Mali) US$’000 55,577 812,967 Corp/ Other US$’000 5,266 184,109 Total US$’000 71,645 1,344,348 69,455 222,634 308,941 601,030 Mako (Senegal) US$’000 4,646 458,254 Syama (Mali) US$’000 114,141 761,525 Corp/ Other US$’000 14,877 98,912 Total US$’000 133,664 1,318,691 141,064 310,860 269,818 721,742 96 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital In this section Cash, debt and capital position of the Group at the end of the reporting year. C.1 Cash Cash at bank and on hand Reconciliation to cash flow statement As at 31 December 2020 As at 31 December 2019 (Restated) US$'000 88,591 US$'000 87,305 For the purpose of the cash flow statement, cash and cash equivalents comprise the following at the end of each year: Cash at bank and on hand Bank overdraft - ref C.2 Total 88,591 (33,365) 55,226 87,305 (39,068) 48,237 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 2020 As at 31 December 2019 (Restated) 246 1,005 86,065 67 1,000 208 88,591 233 22,197 14,944 67 48,483 1,381 87,305 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 US$82.5 million of cash and cash equivalents at 31 December 2020 (31 December 2019: US$87.3 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 2020: $81.2 million; December 2019: US$58.1 million equivalent) and Euro (December 2020: US$0.5 million; December 2019: US$0.1 million equivalent). Average interest rates earned on cash and cash equivalents during the year was 2.44% (December 2019: 0.80%). 97 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital (continued) C.1 Cash (continued) Reconciliation of net profit from continuing and discontinued operations after income tax to the net operating cash flows: 31 December 2020 31 December 2019 (Restated) US$'000 (36,480) 41,475 4,995 (1,530) 1,167 4,711 14,353 778 2 175,331 (31,488) - 1,661 24,308 (1,536) 2,224 US$'000 (76,059) (2,765) (78,824) 1,706 1,185 - - 633 150 79,898 13,250 1,656 967 40,630 - - - (4,098) (29,139) (49,363) (3,153) (50,378) (12,000) (23,899) 16,675 6,233 49,952 (9,782) (26,453) (651) 30,784 - 18,148 5,928 8,260 83,387 Loss from continuing operations Profit/(loss) after tax from discontinued operations Profit/(loss) after tax Add/(deduct): Share based payments including employee long term incentive costs Unrealised loss on derivative financial liability Loss on remeasurement for refinancing Unrealised foreign exchange loss on intercompany balances Rehabilitation and restoration provision accretion Rehabilitation and restoration cash expenditure Depreciation and amortisation Foreign exchange losses/(gains) Impairment of investment in associate Share of associates’ losses Indirect tax expense Non cash interest income Exploration write offs Other non-cash transactions Changes in operating assets and liabilities: Increase in receivables Increase in inventories Increase in prepayments (Decrease)/increase in payables Decrease in financial derivative liabilities Net increase/(decrease) in current tax liabilities Decrease in deferred tax balances Increase in operating provisions Net operating cash flows 98 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital (continued) C.1 Cash (continued) Cash flow by segment For the 12 months to 31 December 2020 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 Mako (Senegal) $’000 Syama (Mali) $’000 Unallocated (b) Corp/ Other $’000 Treasury $’000 Total $’000 137,383 (127,424) 1,910 (21,188) (9,319) (7,188) (23) (4,647) 1,099 26,147 6,069 For the 12 months to 31 December 2019 (Restated) Cash flow by segment, including gold bullion, and gold shipped but unsold and held in metal accounts Reconciliation of cash flow by segment to the cash flow statement: Movement in gold poured but unsold at market value Mark to market movement in gold unsold Movement in bank overdraft, including foreign exchange movements Exchange rate adjustment in cash on hand Cash flows from discontinued operations Movement in cash and cash equivalents per consolidated cash flow statement 132,551 (87,877) (30,556) 105,664 119,782 (32,099) (67) (8,057) (42) (10,548) 68,969 99 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital (continued) C.2 Interest bearing liabilities Interest bearing liabilities (current) Bank overdraft - ref C3.1 Insurance premium funding Borrowings Total Interest bearing liabilities (current) Interest bearing liabilities (non current) Borrowings Total Interest bearing liabilities (non current) Total Recognition and measurement 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 33,365 483 28,710 62,558 273,613 273,613 39,068 280 199,274 238,622 187,392 187,392 336,171 426,014 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 year 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 US$1,321 million (as at December 2019: US$1,238 million). US$299 million (as at December 2019: US$290 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 $336 million of interest bearing liabilities at 31 December 2020 (As at 31 December 2019: $426 million) in currencies other than Australian dollars or a different currency to that of the functional currency of the company which holds the item. Average interest rates charged on interest bearing liabilities at year end was 6.50% (2019: 5.97%). Notes to the Financial Statements Maturity profile of interest-bearing liabilities The maturity profile of the Group’s interest-bearing liabilities in total and for finance leases is as follows: 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 4,466 69,751 292,887 367,104 (30,933) 336,171 134,968 109,447 198,129 442,544 (16,530) 426,014 Borrowings Due within 1 to 3 months Due within 4 months to one year Due between one and five years Total contractual repayments Less future interest charges Total interest bearing liabilities 100 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C.3 Financing facilities C3.1 Bank overdraft The current facilities with the Bank Du Mali SA are in place and are subject to an annual revision in December 2021. The facilities total CFA 25.0 billion (US$46.7 million) and as at 31 December 2020, $13.3 million of the facility was unused. C3.2 Syndicated facilities On 25 March 2020, Resolute entered into a US$300 million Syndicated Facility Agreement (the “SFA”) comprising a three-year US$150 million revolving credit facility (Facility A) and a four-year US$150 million term loan facility (Facility C) with the participation of Investec, BNP Paribas S.A, Citibank N.A, ING Group, Societe Generale and Nedbank Limited. In addition, Facility B is a US$5 million letter of credit facility which relates mainly to lease guarantees. As at 31 December 2020, US$150 million of Facility A and US$150 million of Facility C has been drawn Facility A and Facility B are scheduled to mature on 27 March 2023 and Facility C is scheduled to mature on 25 March 2024. The SFA and hedging facilities, also provided by the lenders or their affiliates are secured and guaranteed by the following: (i) Cross Guarantee and Indemnity given by Resolute Mining Limited, Carpentaria Gold Pty Ltd, Resolute (SOMISY) Pty Ltd , Resolute (Treasury) Pty Ltd and Resolute (Bibiani) Pty Ltd; (ii) Guarantee and indemnity given by Carpentaria Gold Pty Ltd, Resolute (Treasury) Pty Ltd, Resolute (Bibiani) Pty Ltd, Resolute (Somisy) Pty Ltd, Resolute Mining Limited, Resolute Treasury UK Limited, Resolute (Finkolo) Pty Ltd, Toro Gold Limited and Bambuk Minerals Limited; (iii) Share Mortgage granted by Resolute Mining Limited over all of its shares in Carpentaria Gold Pty Ltd; (iv) Share Mortgage granted by Resolute Mining Limited over all of its shares in Resolute (Bibiani) Pty Ltd and Resolute (SOMISY) Pty Ltd; (v) Fixed and Floating Charge granted by Resolute (Treasury) Pty Ltd over all its current and future assets including bank accounts and an assignment of all Hedging Contracts; (vi) Mining Mortgage and Fixed and Floating Charge granted by Carpentaria Gold Pty Ltd, including mining mortgage over key Carpentaria Gold Pty Ltd mining tenements and charge over all the current and future assets of Carpentaria Gold Pty Ltd including bank accounts and an assignment of all Hedging Contracts; (vii) Mortgage of Contractual Rights granted by Resolute Mining Limited in favour of the Security Trustee over a loan provided to Société des Mines de Syama SA; (viii) Mortgage of Contractual Rights granted by Resolute (Bibiani) Pty Ltd 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; (ix) Mortgage of Contractual Rights granted by Resolute (Treasury) Pty Ltd in favour of the Security Trustee over loans provided to Mensin Gold Bibiani Limited, Drilling and Mining Services Limited, Noble Mining Ghana Limited. (x) Security Agreement granted by Resolute Treasury UK Limited over all current and future assets including bank accounts and assignment of all Hedging contracts, (xi) Specific Security Deed granted by Resolute Mining Limited over all its share in Resolute (Finkolo) Pty Ltd and a featherweight security over its assets not secured under a Security Document, (xii) Share Pledge Agreement granted by Toro Gold Limited over all its share in Bambuk Minerals Limited; and, (xiii) Mortgage of Contractual Rights granted by Resolute (Bibiani) Pty Ltd over loans provided to Drilling and Mining Services Limited, Noble Mining Ghana Limited and Mensin Gold Bibiani Limited. 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 2.50 times; (iii) (Consolidated Gearing): the ratio of Net Debt to Equity will be less than 1.00 times; (iv) (Reserve Tail Ratio): will exceed 30%; (v) (Project Life Coverage Ratio): will be equal to or greater than 1.50:1; and (vi) (Tangible Net Worth): will be equal to or greater than A$500,000,000 There have been no breaches of these ratios. The US$7 million Letter of Credit Facility Agreement with Société General Ghana Limited relates to Environmental Performance Bonds for the Bibiani Project. This facility is fully drawn and expires on 31 December 2021. The Société General Ghana Limited Letter of Credit Facility Agreement is also supported by a guarantee provided by Resolute Mining Limited. 101 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital (continued) C.4 Contributed Equity Ordinary share capital: 1,103,892,706 ordinary fully paid shares (2019: 903,153,734) 777,021 639,859 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 Movements in contributed equity, net of issuing costs: Balance at the beginning of the year Placement of shares to institutional investors Share issue costs Issue of shares to Manas Resources1 Issue of share to Oklo Resources2 Issue of shares to Toro3 Issue of shares to Taurus4 Balance at the end of the year 639,859 137,428 (266) - - - - 777,021 456,833 - - 248 234 180,183 2,361 639,859 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.11 for details of the employee share-based payment plans which includes option and performance rights plans. Each option entitles the holder to purchase one share. The names of all persons who currently hold employee share options or performance rights, granted at any time, are entered into the register kept by the Company, pursuant to Section 215 of the Corporations Act 2001 (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. 102 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements C: Cash, Debt and Capital (continued) C.5 Other reserves Reserve Net unrealised gain/(loss) reserve Nature and purpose 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 year 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 2020 is 29% (31 December 2019: 60%). 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. The following table summarises the post-tax Statement of Financial Position (including non effect of the sensitivity of the Group’s cash and debt 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(1) Carrying Amount US$'000 -0.25% +0.25% -10% +10% Profit US$'000 Profit Equity US$'000 US$'000 Equity US$'000 Profit US$'000 Equity US$'000 Profit US$'000 Equity US$'000 31 December 2020 Cash Interest bearing liabilities Total (decrease)/increase 31 December 2019 (Restated) Cash Interest bearing liabilities Total (decrease)/increase 88,591 336,171 (150) (522) (672) (150) (522) (672) 150 522 672 150 522 672 6,414 23,605 30,019 6,414 23,605 30,019 (6,414) (23,605) (30,019) (6,414) (23,605) (30,019) 87,305 386,666 (610) (2,741) (610) (2,741) 610 2,741 610 2,741 5,699 30,456 5,699 30,456 (4,663) (24,919) (4,663) (24,919) (3,351) (3,351) 3,351 3,351 36,155 36,155 (29,582) (29,582) (1) The above analysis principally relates to the risks associated with movements in the Australian dollar against the US dollar. 103 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities In this section Other assets and liabilities position at the end of the reporting year. D.1 Receivables Trade and other receivables Taxation receivables ¹ Total receivables 31 December 2020 31 December 2019 (Restated) US$’000 258 78,594 78,852 US$’000 492 49,221 49,713 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 Total receivables 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 270 1,090 - 78,582 78,852 48,386 237 49,713 *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. 104 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.2 Inventories Current Ore stockpiles - At cost - At net realisable value Total current ore stockpiles Gold in circuit - at cost Gold in circuit - at net realisable value Gold bullion on hand - at cost Gold bullion on hand - at net realisable value Consumables at cost Total inventory (current) Non Current Ore stockpiles - at cost Ore stockpiles - at net realisable value Gold in circuit - at net realisable value Total inventory (non current) Recognition and measurement 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 71,082 4,237 75,319 23,038 2,745 9,887 - 47,940 158,929 2,803 26,695 38,425 67,923 38,256 28,353 66,609 5,549 12,555 10,468 - 37,990 133,171 - - 44,318 44,318 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. 105 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.3 Other financial assets and liabilities 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 Financial assets at fair value through other comprehensive income (current) Shares at fair value – listed 36,004 12,704 Other financial assets (current) Environmental bond - restricted cash (face value approximates fair value) 1 - 2,745 (1) Resolute entered into a binding agreement to sell the Bibiani Gold Mine in Ghana. Total net asset associated with the mine is now classified as held for sale. Refer to Note E.2. Recognition and measurement 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 years. 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 US$2.7 million of restricted cash as security for the rehabilitation and restoration provision of Mensin Gold Bibiani Limited’s Bibiani Gold Mine. There is no external credit rating basis for the Ghanaian Environmental Protection Authority. The average interest rate earned on the environmental bond during the year was 0.0% (6 months to December 2019: 0.0%). Use of derivative instruments to assist in managing gold price risk As part of the Group’s risk management practices, selected financial instruments (such as gold forward sales contracts, gold call options and gold put options) may be used from time to time to reduce the impact a declining gold price has on project life revenue streams. Within this context, the programs undertaken are project specific and structured with the objective of retaining as much upside to the gold price as possible, and in any event, limiting derivative commitments to no more than 50% of the Group’s gold reserves. The value of these financial instruments at any given point in time, will in times of volatile market conditions, show substantial variation over the short term. The hedging facilities provided by the Group's counterparties do not contain margin calls. The Group did not hedge account for these instruments. D.4 Prepayments Non current prepayments in the prior year relate to payments made for the acquisition of plant and equipment. 106 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.5 Payables Trade creditors Accruals Held for sale deposit Total payables Recognition and measurement 31 December 2020 US$’000 40,740 31 December 2019 (Restated) US$’000 51,629 37,526 5,566 83,832 52,512 - 104,141 Liabilities for trade creditors and other amounts are carried at amortised cost which is the amount initially recognised, minus repayments whether or not billed to the consolidated entity. Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accruals basis. Payables are non-interest bearing and generally settled on 30-90 day terms. Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value. D.6 Provisions Current Site restoration Employee entitlements Dividend payable Withholding taxes Provision for Mali indirect taxes1 Other provisions Total provisions (current) Non Current Site restoration Employee entitlements 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 352 4,922 104 237 68,533 1,572 75,720 71,335 528 22 4,521 95 217 40,258 3,844 48,957 65,165 465 Total provisions (non current) 65,630 (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 to 2020. 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 an additional $24.3m for the VAT demands as at 31 December 2020, with the provisions for these matters totalling $68.5m. The factual basis and validity of these demands are being 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 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. 71,863 107 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 years 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 year 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 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 65,187 (8,097) - 778 11,092 (929) 3,656 71,687 352 71,335 71,687 51,328 (21,710) 24,377 633 10,361 (150) 348 65,187 22 65,165 65,187 108 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 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. 31 December 2020 Lease assets At 1 January 2020 Additions Lease remeasurements Depreciation Foreign currency translation Balance at the end of the year At 31 December 2020 Historical Cost Accumulated Depreciation Net carrying amount Lease liabilities At 1 January 2020 Additions Lease remeasurements Repayments Accretion of interest Foreign currency translation Balance at the end of the year At 31 December 2020 Current Non current Carrying amount at 31 December 2020 Buildings US$'000 Plant and Equipment US$'000 2,057 - - (555) 189 1,691 2,970 (1,279) 1,691 2,136 - - (621) 110 270 1,895 606 1,289 1,895 38,721 456 (2,848) (15,066) (436) 20,827 37,577 (16,750) 20,827 39,387 456 (2,893) (16,571) 1,837 (504) 21,712 10,643 11,069 21,712 Total US$'000 40,778 456 (2,848) (15,621) (247) 22,518 40,547 (18,029) 22,518 41,523 456 (2,893) (17,192) 1,947 (234) 23,607 11,249 12,358 23,607 109 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.7 Leases (continued) 31 December 2019 (Restated) Lease assets At 1 January 2019 (Restated) Additions Acquisition of subsidiary Depreciation Foreign currency translation Balance at the end of the year (Restated) At 31 December 2019 (Restated) Historical Cost Accumulated Depreciation Balance at the end of the year (Restated) Lease liabilities At 1 January 2019 (Restated) Additions Acquisition of subsidiary Repayments Accretion of interest Foreign currency translation Balance at the end of the year (Restated) At 31 December 2019 (Restated) Current Non current Balance at the end of the year (Restated) Maturity profile of lease liabilities Buildings US$'000 Plant and Equipment US$'000 Total US$'000 2,109 - 398 (439) (11) 2,057 2,495 (438) 2,057 2,109 - 405 (471) 104 (11) 2,136 468 1,668 2,136 6,610 22,875 17,772 (8,012) (524) 38,721 46,478 (7,757) 38,721 6,610 22,875 18,073 (8,840) 1,102 (433) 39,387 15,012 24,375 39,387 8,719 22,875 18,170 (8,451) (535) 40,778 48,973 (8,195) 40,778 8,719 22,875 18,478 (9,311) 1,206 (444) 41,523 15,480 26,043 41,523 The table below presents the contractual undiscounted cash flows associated with the Group’s lease liabilities, representing principal and interest. The figures will not necessarily reconcile with the amounts disclosed in the consolidated statement of financial position. Due for payment in: 1 year or less 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Total 110 31 December 2020 31 December 2019 US$'000 US$'000 12,320 8,216 4,762 219 - - 25,517 17,578 12,984 9,065 5,435 199 - 45,261 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.7 Leases (continued) 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 lessee 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 lessee 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 for December 2020 of 6.00% (December 2019:6.0%). 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 and Section C 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. With respect to credit risk arising from other financial assets for the Group, which comprise financial instruments and contingent receivables, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. The Group limits its counterparty credit risk on these assets by dealing only with financial institutions with credit ratings of at least B or equivalent. D.8 Derivative Financial Liabilities 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 Current Liabilities at fair value through profit or loss 415 3,193 Non Current Liabilities at fair value through profit or loss - 9,004 As part of the $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 acquired this royalty held by Taurus. During 2020, the Group entered into zero-cashflow collar contracts whereby the Group purchased a total of 60,000 ounces of gold call options and sold a total of 60,000 ounces of gold put options contracts with equal and offsetting values at inception. These contracts are comprised of put options at $1,600/oz and $1,700/oz and call options at an average of $2,300/oz. All of these contracts were outstanding at 31 December 2020 and mature over the period January to October 2021. The gold zero-cashflow collars are classified as level 2 in the fair value hierarchy valued at $0.4m. These zero-cashflow collar contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. 111 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements D: Other assets and liabilities (continued) D.8 Derivative Financial Liabilities (continued) Foreign exchange risk management The following table summarises the sensitivity to a reasonably possible change in foreign exchange rates with all other variables held constant: 31 December 2020 Other financial assets Loans to subsidiaries Payables Total increase/(decrease) 31 December 2019 (Restated) Other financial assets Loans to subsidiaries Payables Total increase/(decrease) Carrying Amount US$'000 35,917 761,329 85,030 12,704 537,246 104,141 Foreign exchange risk -10% +10% Profit Equity Profit Equity US$'000 US$'000 US$'000 US$'000 227 75,563 553 76,343 213 69,772 2,671 72,656 227 (227) (227) 75,563 (75,563) (75,563) 553 (553) (553) 76,343 (76,343) (76,343) 213 69,772 2,671 72,656 (175) (175) (85,277) (85,277) (3,264) (3,264) (88,716) (88,716) (1) The above analysis principally relates to the risks associated with movements in the Australian dollar against the US dollar. 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 Acquisition of subsidiary Fair value adjustment Utilised Repurchase FX Movement Balance at the end of the year 31 December 2020 US$’000 12,112 - - - (12,112) - - 31 December 2019 (Restated) US$’000 - 12,475 1,162 (1,525) - - 12,112 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. 112 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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. When Resolute issued its 31 December 2019 financial statements, the measurement of the acquired assets and liabilities was provisional. In the 31 December 2019 financial statements, Resolute had recognised a deferred tax liability on acquisition of $9m and mine properties and development of $257m. Upon finalisation of the purchase price accounting, Resolute has adjusted the provisional amount for following:   the valuation of the deferred tax liability was finalised and updated to $2m following further clarification on operation of tax regime in Senegal. The valuation of mine properties and development was finalised and updated to $250m Adjustment in the 31 December 2019 financial statements: In accordance with accounting standards, Resolute has made retrospective adjustments by restating the 31 December 2019 financial information in accounting for the finalisation of the business combination as detailed below:   the carrying amount of the deferred tax liability at 31 December 2019 decreased by $7m. the carrying amount of mine properties and development at 31 December 2019 decreased by $7m. E.2 Asset Held for Sale and Discontinued Operation Sale of Ravenswood Gold Mine 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 A$50m of cash up front, A$50m promissory note and up to A$200m potential payments. The potential payments are 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. The asset sale was completed on 31 March 2020 and is reported in the current year as a discontinued operation. Transaction consideration comprises total cash payments to Resolute of up to A$300m as follows: - A$100m of immediate value represented by o A$50m of cash; and o A$50m in Promissory Note; - Up to A$50m via a Gold Price Contingent Payment instrument; and - Up to A$150m via an Upside Sharing Payment instrument The consideration received from EMR is being accounted for under AASB 15: Revenue from Contract with Customers. 113 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.2 Asset Held for Sale and Discontinued Operation (continued) Promissory Note A A$50m promissory note with an annual coupon rate of 6% to be paid in cash to Resolute at maturity. The receivable matures at the earlier of liquidity date or maximum term of seven years. The Promissory Note is initially valued at net present value of A$50m ($30.7m) and subsequently measured at amortised cost under AASB 9 of A$52m ($40.3m) as at 31 December 2020. The carrying amount of the promissory note at 31 December 2020 approximates its fair value. Financial Instruments Due after five years Total contractual receipts Less future interest charges Total promissory notes receivable 31 December 2020 31 December 2019 (Restated) US$’000 US$’000 57,952 57,952 (17,690) 40,262 - - - - Gold Price Contingent Payment Instrument A Gold Price Contingent Payment is payable to Resolute for years following Financial Close based on the following bands: - - - - - A$10m if the average gold price is greater than A$1,900/oz, A$20m if the average gold price is greater than A$1,975/oz, A$30m if the average gold price is greater than A$2,050/oz, A$40m if the average gold price is greater than A$2,075/oz, and A$50m if the average gold price is greater than A$2,100/oz. Payment of the Gold Price Contingent Payment is subject to the cumulative ounces produced from Ravenswood exceeding 500,000oz of gold over the four-year period and is subject to adjustment if the production adopted by the buyer is reduced or lower than expected. For the Gold Price Contingent Payment Instrument, we have assessed the likelihood of the production target being met as well as the likely weighted average gold price to be achieved over the four-year period. We have used the following assumptions in the determination of this variable consideration: - Resolute assumed that the 500,000oz of gold production over the four-year period will be met. - Resolute used forecast gold prices submitted by reputable banks and brokerage firms and forecast out to a period of up to 5 years. - Resolute assessed that the occurrence of a liquidity event within the 4-year period to be unlikely. The Gold Price Contingent Payment Instrument is valued at a net present value of A$20m ($15.4m) at 31 December 2020, based on the most likely amount method. 114 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.2 Asset Held for Sale and Discontinued Operation (continued) Results of the discontinued operation: Revenue Cost of production relating to gold sales Other operating costs relating to gold sales Administration and other corporate expenses Exploration and business development expenditure Depreciation and amortisation Finance cost Fair value movements and unrealised treasury transactions Loss before tax from discontinued operations Tax expense Loss for the year Gain on disposal of discontinued operation (net of tax expense) Profit/(loss) after tax from discontinued operations Gain/(loss) per share Basic gain/(loss) per share relating to discontinued operation Diluted gain/(loss) per share relating to discontinued operation Cash flow information for the discontinued operation: Operating cash flows Investing cash flows Financing cash flows Net cash flow 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 15,268 (13,069) (2,131) (172) (179) (47) (80) (47) (457) - (457) 41,932 41,475 79,212 (71,837) (5,423) (868) (1,063) (3,582) (315) 1,111 (2,765) - (2,765) - (2,765) 4.23 cents 4.23 cents (0.34) cents (0.34) cents 31 December 2020 US$'000 (2,611) 31 December 2019 (Restated) US$'000 15,662 28,758 - 26,147 (12,113) - 3,549 115 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.2 Asset Held for Sale and Discontinued Operation (continued) Sale of Bibiani Gold Mine On 15 December 2020, Resolute has entered into a binding agreement to sell the Bibiani Gold Mine (Bibiani disposal group) in Ghana to Chifeng Jilong Gold Mining Co. Ltd. (Chifeng). Cash consideration of $5.5 million deposit on signing the agreement and $100 million on completion of the transaction. The completion of the sale is pending on the satisfaction of government approvals and other conditions. The net assets of the sale group are reported in the current year as held for sale assets and liabilities. The Bibiani disposal group is not presented as a discontinued operation in the Consolidated Statement of Comprehensive Income as it does not meet the definition under the accounting standards. The major categories of assets and liabilities within the disposal group are as follows: Assets Cash Other financial assets – restricted cash Other assets Inventories Property, plant and equipment Exploration and evaluation Total assets Liabilities Payables Provisions Site restoration Total liabilities Net Assets held for sale 31 December 2020 Bibiani disposal group US$'000 31 December 2019 (Restated) Ravenswood disposal group US$'000 381 2,745 141 1,651 22,361 53,329 80,608 358 366 8,097 8,821 71,787 - - 430 8,399 35,790 22,018 66,637 11,720 3,358 24,415 39,493 27,144 The above Net Assets held for sale represents the carrying value of the Bibiani disposal group with no fair value adjustments required at balance date Recognition and measurement 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. 116 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 year less Permitted Payments for that year, 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, which 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 (being Riasand and Scan minerals) 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. The appeal proceedings involving Riasand have been settled on the basis of a payment to Riasand. Orders giving effect to the settlement (including vacating the stayed winding up order) are expected to be made at a hearing in the Ghanaian High Court within one month. These contingent liabilities reside in the Bibiani disposal group and will be transferred to Chifeng upon completion of the sale. Demand of payment relating to income taxes from the Mali Tax Authorities Resolute’s subsidiary, SOMISY, received demands for payment of VAT and Income Tax for the tax years ended 31 December 2015 to 2020 from the Mali Tax Authorities. The demands relating to SOMISY’s VAT have been provided for (refer to Note D.6 for details). Resolute’s subsidiary, SOMIFI, received a demand for payment of income taxes from the Mali Tax Authorities, relating to tax years ended 31 December 2017 and 2018. The demands for income tax of $23.5 million for SOMISY and $7.9 million for SOMIFI has not been provided for as at 31 December 2020 as the Group refute the validity and factual basis of these demands. 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 each entities Establishment Convention based on tax advice that the Group has received. The Group is working with its legal and tax advisors to contest the demands and will resist any efforts to enforce payment. 117 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 2020, Resolute’s 80% attributable share of Syama’s project to date gold production was 1,439,693 ounces of gold, therefore the royalty is currently US$5 per ounce. Gold contracts As part of its risk management policy, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated sales of gold. As at 31 December 2020, 123,000 ounces remains outstanding. The gold forward contracts disclosed below did not meet the criteria of financial instruments for accounting purposes on the basis that they met the normal purchase/sale exemption because physical gold would be delivered into the contract. Accordingly, the contracts were accounted for as sale contracts with revenue recognised in the year in which the gold commitment was met. 31 December 2020 US$ Within one year Total 31 December 2019 (Restated) US$ Within one year Total A$ Within one year Total Gold for Physical Delivery Ounces Contracted Gold Sale Price per Ounce (US$) Value of Committed sales US$’000 123,000 123,000 1,672 205,656 205,656 Gold for Physical Delivery Ounces Contracted Gold Sale Price per Ounce (US$) Value of Committed sales US$’000 55,000 55,000 100,000 100,000 1,510 1,849 83,050 83,050 184,900 184,900 118 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 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 31 December 2020 US$ 31 December 2019 (Restated) US$ 84,319 84,319 153,581 94,683 121,051 96,997 96,997 182,520 45,233 125,099 Total amounts received or due and receivable for an audit or review of any controlled entities financial statements 369,315 352,852 E.6 Investments in associates Continuing Operations Shares held in associates (No. of shares) Percentage of ownership (%) Carrying Value 31 December 2020 31 December 2019 (Restated) 31 December 2020 31 December 2019 (Restated) Manas Resources Ltd Loncor Resources Inc 682,484,709 682,484,709 29,650,000 25,500,000 24.73% US$'000 651 25.82% US$'000 1,038 (a) Movements in the carrying amount of the Group's investment in associates At 1 January 1,038 1,081 Purchase of investment Share of loss after income tax Foreign currency translation At 31 December - (469) 82 651 240 (283) - 1,038 26.42% US$'000 3,801 3,097 1,470 (1,192) 426 3,801 26.93% US$'000 3,097 3,611 - (514) - 3,097 (b) Market value of investments in associates Market value of the Group's investment 3,156 957 13,264 8,713 (c) Summarised financial information - Extract from the associates' statement of financial position Current assets 4,128 5,073 862 Non current assets Total assets Current liabilities Non current liabilities Total liabilities Net assets/(liabilities) Share of associates' net assets 2,215 6,343 255 - 255 6,088 1,572 1,286 6,359 78 - 78 6,281 1,622 31,895 32,757 1,464 1,626 3,090 29,667 7,980 95 20,803 20,898 1,360 293 1,653 19,245 5,182 Extract from the associates' statement of comprehensive income: (Loss)/profit before tax, (loss)/profit for the year and total comprehensive loss (957) (419) (1,948) (1,039) * The Group has an investment in Kilo Goldmines Limited with a current carrying value of $197k as at 31 December 2020 (31 December 2019: 179k) 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. 119 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.7 Subsidiaries and non-controlling interests Material subsidiaries The following were materially controlled entities during the year and have been included in the consolidated accounts. All entities in the consolidated entity carry on business in their place of incorporation. Name of Controlled Entity and Country of Incorporation Consolidated Entity Company Holding the Investment Percentage of Shares Held by Consolidated Entity 31 December 2020 31 December 2019 Bambuk Minerals Limited, Mauritius Toro Gold Limited Carpentaria Gold Pty Ltd, Australia Mensin Bibiani Pty Ltd, Australia Mensin Gold Bibiani Limited, Ghana Resolute Mining Limited Resolute Mining Limited Mensin Bibiani Pty Ltd Petowal Mining Company S.A., Senegal Bambuk Minerals Limited Resolute Canada Pty Ltd, Australia Resolute Canada 2 Pty Ltd, Australia Resolute Mining Limited Resolute Mining Limited Resolute Corporate Services Pty Ltd, Australia Resolute (Treasury) Pty Ltd Resolute Corporate Services UK Limited, UK Toro Gold Limited Resolute (Finkolo) Pty Ltd, Australia Resolute Mining Limited Resolute Mali S.A. Mali Resolute (SOMISY) Pty Ltd Resolute (SOMISY) Pty Ltd, Australia Resolute Mining Limited Resolute Treasury UK Limited, UK Resolute UK 1 Limited, UK Resolute UK 2 Limited, UK Resolute Mining Limited Resolute Mining Limited Resolute UK 1 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 Limited, Guernsey Resolute UK 2 Limited 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") Asset held for sale Total Non-Controlling Interest (Loss)/profit allocated to material Non-Controlling Interest: SOMISY Mensin Finkolo Mako Total Non-Controlling Interest % 100 100 100 90 90 100 100 100 100 100 100 100 100 100 100 90 80 100 % 100 100 100 90 90 100 100 100 100 100 100 100 100 100 100 90 80 100 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 (48,406) (17,359) (6,981) 3,130 24,647 6,981 (20,629) (6,510) 1,989 27,108 - 5,228 (18,336) (13,512) (474) 747 7,117 (386) 1,674 1,175 (10,946) (11,049) 120 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.7 Subsidiaries and non-controlling interests (continued) The summarised financial information of subsidiaries with non-controlling interests is provided below. This information is based on amounts before inter-company eliminations. 31 December 2020 US$'000 31 December 2019 US$'000 31 December 2020 US$'000 31 December 2019 US$'000 31 December 2020 US$'000 31 December 2019 US$'000 31 December 2020 US$'000 31 December 2019 US$'000 SOMISY Mensin Finkolo Mako 204,666 86,881 - - 123,919 251,158 274,400 115,098 (95,149) (68,658) 28,860 (3,897) 7,179 16,694 57,879 23,260 (113,485) 18,223 28,386 (3,897) 7,927 267,852 64,996 138,358 Statement of Comprehensive Income Revenue (Loss)/gain for the year Total comprehensive (loss)/income for the year Summarised Statement of Financial Position Current assets 252,320 164,910 4,919 4,954 5,812 57,672 83,046 76,506 Non current assets 511,891 480,426 75,691 72,903 41,612 48,451 225,611 387,656 Current liabilities (153,471) (180,173) (724) (1,858) (11,494) (81,335) (25,014) (43,162) 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 (45,988) (41,782) (8,097) (7,762) (8,594) (7,553) (23,073) (54,909) (777,579) (530,584) (92,973) (120,487) 120 - (11,307) (52,063) (212,827) (107,203) (21,184) (52,250) 27,456 17,235 249,263 314,028 (43,988) 9,232 1,624 551 (25,583) 25,075 130,094 (52,863) (118,141) (4,132) (10,718) (4,990) (4,217) (7,194) 50,559 (4,804) (96,851) (108,909) (2,508) (10,167) (30,573) 20,858 122,900 45,755 121 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.8 Subsequent events On 27 January 2021, the Group announced the Tabakoroni Underground mineral resource increased to 1.26 million ounces at 4.9g/t gold. On 17 February 2021, the Group released its Annual Ore Reserve and Mineral Resource Statement. E.9 Related party disclosures Resolute is the ultimate Australian holding company and there is no controlling entity of Resolute at 31 December 2012. No related party transactions occurred during the period other than payments to KMP as disclosed in E.11 E.10 Parent Entity Information Current assets Total assets Current liabilities Total liabilities Net assets Issued capital Accumulated losses Reserve Total shareholders’ equity Profit of Resolute Mining Limited Total comprehensive profit of Resolute Mining Limited 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 28,227 691,126 (1,336) (1,340) 689,786 777,021 732 519,332 (1,128) (474) 518,462 639,859 (127,067) (128,237) 39,832 689,786 1,170 32,632 6,840 518,462 2,069 4,689 Refer to E.3 for the contingent liabilities and E.4 for the commitments of Resolute Mining Limited. The parent company guarantees provided by Resolute Mining Limited are outlined in C.3. 122 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.11 Employee benefits and share-based payments Salaries Superannuation Share-based payments expense Total employee benefits charged to profit and loss Share-based payments 31 December 2020 US$'000 31 December 2019 (Restated) US$'000 50,623 10,455 1,380 62,458 47,573 9,344 1,152 58,069 Equity-based compensation benefits are provided to employees via the Group’s share option plan and performance rights plan. The Group determines the fair value of securities issued and recognises an expense in the profit and loss over the vesting year with a corresponding increase in equity. Key management personnel Details of remuneration provided to key management personnel are as follows: Short-term employee benefits Post-employment benefits Long-term employment benefits Share-based payments Total Key estimates and judgements Share-based payments 31 December 2020 US$ 31 December 2019 (Restated) US$ 2,175,977 2,055,093 628,384 (34,040) 908,197 163,600 40,986 1,341,520 3,678,518 3,601,199 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. 123 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.11 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 and A2 Band B1 Special Plan category Band A0 Managing Director and CEO CFO, COO, General Counsel & Company Secretary, General Manager – Exploration, General Manager – Business Development, General Manager – People & Sustainability, General Managers Special, one-off awards as recommended by the MD 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 & A2 Annually set at 65% of fixed remuneration Band B1 Annually set at 40% 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 year; and 50% of the rights will be performance tested against the specified strategic objectives over the relevant year 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. 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 3 years 124 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.11 Employee benefits and share-based payments (continued) Performance rights on issue Band A1 to A2 Band A0 Band A0 Band A1 to A2 Band A0 Band A1 to A2 Band A1 to A2 Band A1 to A2 Band A0 As at 31 December 2020 Opening number of performance rights Issue Date 26/10/18 26/10/18 21/05/19 21/05/19 21/11/19 22/05/20 22/05/20 Total Number 414,886 215,879 426,977 913,736 732,600 500,000 43,668 22/05/20 1,731,790 22/05/20 194,352 5,173,888 Fair Value per Right at Grant Date $0.92 $0.77 $0.88 $0.93 $0.72 $0.49 $0.78 $0.85 $0.56 Vesting Date 30/06/21 30/06/21 31/12/21 31/12/21 30/06/21 31/12/21 31/12/21 31/12/22 31/12/22 Fair Value per Right at Grant Date Vesting Date Date of Change Total Number 8,657,154 Decrease through lapsing of performance rights (Band A1 to A2) 20/02/2020 (75,685) $0.92 30/06/2021 Decrease through lapsing of performance rights (Band A1 to A2) 20/02/2020 (160,201) $0.81 30/06/2020 Decrease through lapsing of performance rights (Band A1 to A2) 20/02/2020 (167,896) $0.93 31/12/2021 Decrease through lapsing of performance rights (Band A1 to A2) 31/03/2020 (6,349) $0.81 30/06/2020 Decrease through lapsing of performance rights (Band A1 to A2) 31/03/2020 (15,028) $0.92 30/06/2021 Decrease through lapsing of performance rights (Band A1 to A2) 22/05/2020 (69,231) $0.92 30/06/2021 Decrease through lapsing of performance rights (Band A1 to A2) 22/05/2020 (153,577) $0.93 31/12/2021 Increase through issue of performance rights to eligible employees (Band A1 to A2) Increase through issue of performance rights to eligible employees (Band A0) Increase through issue of performance rights to eligible employees (Band A1 to A2) Increase through issue of performance rights to eligible employees (Band A1 to A2) 21/05/2020 43,668 $0.78 31/12/2021 21/05/2020 699,668 $0.56 31/12/2022 21/05/2020 1,731,790 $0.85 31/12/2022 21/05/2020 500,000 $0.49 31/12/2021 Decrease through lapsing of performance rights (Band A1 to A2) 05/06/2020 (8,212) $0.92 30/06/2021 Decrease through lapsing of performance rights (Band A1 to A2) 05/06/2020 (16,881) $0.81 30/06/2020 Decrease through conversion of shares upon vesting of performance rights (Band A1 to A2) 01/09/2020 (419,809) $0.81 30/06/2020 Decrease through lapsing of performance rights (Band A1 to A2) 01/09/2020 (1,259,414) $0.81 30/06/2020 Decrease through conversion of shares upon vesting of performance rights (Band A1 to A2) 01/09/2020 (350,000) $1.18 30/06/2020 Decrease through lapsing of performance rights (Band A1 to A2) 01/09/2020 (650,000) $1.18 30/06/2020 Decrease through lapsing of performance rights (Band A0) 29/10/2020 (61,680) $0.77 30/06/2021 Decrease through lapsing of performance rights (Band A0) 29/10/2020 (271,713) $0.88 31/12/2021 Decrease through lapsing of performance rights (Band A0) 29/10/2020 (267,400) $0.72 30/06/2021 Decrease through lapsing of performance rights (Band A0) 29/10/2020 (1,000,000) $0.71 30/06/2022 125 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.11 Employee benefits and share-based payments (continued) Decrease through lapsing of performance rights (Band A0) Date of Change 29/10/2020 Total Number (1,000,000) Fair Value per Right Vesting at Grant Date Date $0.70 30/06/2023 Decrease through lapsing of performance rights (Band A0) 29/10/2020 (505,316) $0.56 31/12/2022 Closing number of performance rights 5,173,888 The following tables list the key variables used in the valuation of each performance rights granted to key management personnel during the year ended 31 December 2020: Hurdle Number of performance rights issued Underlying share price ($) Exercise price ($) Risk free rate Volatility factor Dividend yield Period of the rights from grant date (years) 12 months to 31 December 2020 20 January 2020 Grant 20 January 2020 Grant Reserve and resources rights 125,000 TSR rights 375,000 Reserve and resources rights 10,917 TSR rights 32,751 1.18 - 0.88% 46% 1.91% 1.95 1.18 - 0.88% 46% 1.91% 1.95 1.18 - 0.88% 46% 1.91% 1.61 12 months to 31 December 2020 1.18 - 0.88% 46% 1.91% 1.61 Total 21 May 2020 Grant Reserve and resources rights 174,917 TSR rights 524,751 2,975,126 Hurdle Number of performance rights issued Underlying share price ($) Exercise price ($) Risk free rate Volatility factor Dividend yield Period of the rights from grant date (years) 1 January 2020 Grant Reserve and resources rights TSR rights 432,948 1,298,842 1.24 - 0.88% 46% 1.91% 3 1.24 - 0.88% 46% 1.91% 3 1.14 - 0.88% 46% 1.91% 2.61 1.14 - 0.88% 46% 1.91% 2.61 Effect of performance hurdles Value of performance right at grant date (Band A1 to A2) Value of performance right at grant date (Band A1 to A2) Value of performance right at grant date (Band A1 to A2) Value of performance right at grant date (Band A0) Fair value of performance rights granted $0.49 $0.93 $0.85 $0.56 126 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.11 Employee benefits and share-based payments (continued) Hurdle Number of performance rights issued Underlying share price ($) Exercise price ($) Risk free rate Volatility factor Dividend yield Period of the rights from grant date (years) 12 months to 31 December 2019 21 May 2019 Issue 21 May 2019 Issue Reserve and resources rights 371,248 TSR rights 1,113,743 Reserve and resources rights 174,672 TSR rights 524,018 1.15 - 1.82% 54% 2.22% 3 1.15 - 1.82% 54% 2.22% 3 1.14 - 1.82% 54% 2.39% 2.62 Hurdle Number of performance rights issued Underlying share price ($) 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 $0.70 127 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 Notes to the Financial Statements E: Other items (continued) E.12 Supplemental disclosure to the Consolidated Cash Flow Statement The Group had non-cash additions to property, plant and equipment of $8.0m for the year ended 31 December 2020 (31 December 2019:nil) purchased through asset finance facilities, the cash outflows for which will be reflected as repayment of borrowings when those asset finance facilities are repaid. E.13 Other accounting policies New and amended Accounting Standards and Interpretations issued but not yet effective A number of new Standards, amendment of Standards and interpretations have recently been issued but are not yet effective and have not been adopted by the Group as at the financial reporting date. The potential effect of these Standards is yet to be fully determined. However, it is not expected that the new or amended standards will significantly affect the Group’s accounting policies, financial position or performance, except for the following: Title Detail Applicati on Date for Group Amendments to AASB 101: Classification of Liabilities as Current or Non- current 1 January 2023 1 January 2022 In January 2020, the IASB issued amendments to paragraphs 69 to 76 of AASB 101 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:  What is meant by a right to defer settlement    That a right to defer must exist at the end of the reporting year That classification is unaffected by the likelihood that an entity will exercise its deferral right That only if an embedded derivative is a convertible liability is itself an equity instrument would the terms of a liability not impact its classification The Group is currently assessing the impact the amendments will have on current practice and whether existing loan agreements may require renegotiation. In May 2020, the IASB issued Amendments to AASB 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements. The Board also added an exception to the recognition principle of AASB 3 to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within the scope of AASB 137 or AASB 21 Levies, if incurred separately. The amendments are not expected to have a material impact on the Group. 1 January 2022 In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendments are not expected to have a material impact on the Group. In May 2020, the IASB issued amendments to AASB 137 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making. 1 January 2022 1 January 2022 The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract. As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to AASB 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting year in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Group. Reference to the Conceptual Framework – Amendments to AASB 3 Property, Plant and Equipment: Proceeds before Intended Use – Amendments to AASB 116 Onerous Contracts – Costs of Fulfilling a Contract – Amendments to AASB 137 AASB 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities 128 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020  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 2020 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 2020. On behalf of the Board Martin Botha Chairman Perth, Western Australia 17 March 2021 129 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020 130 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020131 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020132 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020133 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020134 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020135 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020136 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020137 Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020Shareholder Information Substantial shareholders as at 31 January 2021 Ordinary shares ICM Limited Van Eck Associates Corporation L1 Capital Pty Ltd. Distribution of equity securities as at 31 January 2021 Size of Holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over Total equity security holders Number of equity security holders with less than a marketable parcel Voting Rights a) Ordinary Shares Number held Percentage 12.58% 9.69% 6.36% 138,885,657 106,961,138 70,242,015 Ordinary Shares 2,632 4,469 2,395 3,941 424 13,861 1,733 Under the Company's Constitution, all ordinary shares issued by the Company carry one vote per share without restriction. Twenty largest shareholders as at 31 January 2021 Name 1 2 3 4 5 6 7 ICM Limited Van Eck Associates Corporation L1 Capital Pty Ltd. Baker Steel Capital Managers LLP The Vanguard Group, Inc. BlackRock, Inc. ASF Africa Mining LP 8 Dimensional Fund Advisors LP 9 Ninety One Group 10 Schroders PLC 11 State Street Corporation 12 Konwave AG 13 Morgan Stanley & Co. Inc. 14 Accident Compensation Corporation 15 Lemanik S.A. 16 Mitsubishi UFJ Financial Group, Inc. 17 DST Systems Inc 18 UBS AG 19 Douglas Family Holdings (Retail Group) 20 Macquarie Group Limited Number of ordinary shares % of Issued Capital 138,885,657 106,961,138 70,242,015 56,740,000 55,787,623 44,443,458 41,189,189 35,055,605 32,375,379 23,837,633 19,611,652 18,960,000 13,038,330 11,890,685 9,781,608 9,523,337 9,432,775 8,919,023 8,140,000 6,888,877 12.58% 9.69% 6.36% 5.14% 5.05% 4.03% 3.73% 3.18% 2.93% 2.16% 1.78% 1.72% 1.18% 1.08% 0.89% 0.86% 0.85% 0.81% 0.74% 0.62% 721,703,984 65.38% 138 Resolute Mining Limited | 2020 Annual Report Corporate Directory Directors Non-Executive Chairman Non-Executive Director Share Registry Martin Botha Peter Sullivan Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Non-Executive Director Yasmin Broughton Perth, Western Australia 6000 Non-Executive Director Mark Potts Non-Executive Director Sabina Shugg 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 16 March 2021 Ordinary Shares 1,103,892,706 Performance Rights 4,416,370 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 ASX/LSE:RSG | www.rml.com.au 

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