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
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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
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Resolute Mining Limited | 2020 Annual Report Resolute Mining Limited | 2020 Annual Report
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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
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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
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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
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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.
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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.
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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
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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$'000
777,021
24,175
41,521
842,717
(20,629)
(6,981)
815,107
639,859
(39,908)
25,580
625,531
(1,436)
-
624,095
456,833
(39,506)
93,355
510,682
(16,506)
-
494,176
1 With effect from 1 January 2020, Resolute Mining Limited has elected to change its presentation currency from Australian dollars to US dollars.
As such, in accordance with accounting standard requirements, a third consolidated statement of financial position has been presented.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
73
Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020
Consolidated Statement of Changes in Equity
y
t
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s
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t
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t
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e
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e
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-
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l
a
s
o
p
s
d
f
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i
/
i
s
g
n
n
r
a
e
d
e
n
a
t
e
R
i
/
l
s
e
t
o
n
e
b
i
t
r
e
v
n
o
C
l
e
a
s
r
o
f
d
e
h
p
u
o
r
g
l
Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2020
639,859
(12,288)
4,876
(724)
17,077
(48,849)
25,580
(1,436)
-
624,095
Gain for the year
Other comprehensive
(loss)/income, net of
tax
Total
comprehensive
(loss)/income for the
year, net of tax
-
-
-
16,638
-
16,638
Shares issued
137,162
-
-
-
-
-
Dividends paid
Share based
payments expense
Asset held for sale
At 31 December
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,941
(10,946)
45,915
-
(5,651)
-
-
4,995
56,902
-
45,915
15,941
(16,597)
-
61,897
-
-
1,530
-
-
-
-
-
-
-
(9,577)
-
-
-
-
137,162
(9,577)
1,530
6,981
(6,981)
-
777,021
4,350
4,876
(724)
18,607
(2,934)
41,521
(20,629)
(6,981)
815,107
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
74
Resolute Mining Limited | 2020 Annual Report | Financial Report – for the year ended 31 December 2020
Consolidated Statement of Changes in Equity (continued)
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o
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h
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e
s
e
r
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t
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i
u
q
e
e
e
y
o
p
m
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l
e
v
r
e
s
e
r
s
t
i
f
e
n
e
b
e
v
r
e
s
e
r
n
o
i
t
a
s
n
a
r
t
l
y
c
n
e
r
r
u
c
n
g
e
r
o
F
i
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s
e
s
s
o
l
l
d
e
t
a
u
m
u
c
c
a
(
t
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r
e
t
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g
n
i
l
l
o
r
t
n
o
c
-
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o
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/
i
s
g
n
n
r
a
e
d
e
n
a
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b
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v
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C
US$'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
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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
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s
e
i
t
r
e
p
o
r
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e
n
M
i
y
t
i
v
i
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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)
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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
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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