Appendix 4E Preliminary Final Report

RNS Number : 9693Q

Resolute Mining Limited

24 February 2023

 

Appendix 4E

Preliminary Final Report

For the year ended 31 December 2022

24 February 2023  

Reporting Period

The reporting period is the year ended 31 December 2022 with the corresponding reporting period being for the year ended 31 December 2021. Unless otherwise stated, all dollar figures are United States dollars ($).

Results for Announcement to the Market

				12 months ended  31 December 2022	12 months ended  31 December 2021
				$'000	$'000
Revenue from ordinary activities	Up	19%	to	651,129	549,242
Loss for the period	Down	91%	to	(34,665)	(367,471)
Loss after tax attributable to members	Down	89%	to	(34,083)	(319,203)
	Amount per security			Franked amount per security
Dividends
Final dividend (per share)	N/A			N/A
Record date for determining entitlements to the final dividend	N/A			N/A
Payment date for the final dividend	N/A			N/A
Franking	0% franked

 

	12 months ended  31 December 2022	12 months ended 31 December 2021
	$'000	$'000
Net tangible assets backing (per share)1	0.22	0.38

^{1. Net tangible assets excludes right of use assets from the reported net assets in the statement of financial position.}

This Appendix 4E - Preliminary final report has not been subject to audit and there is no audit report provided. This report should be read in conjunction with the Financial Report for the period ended 31 December 2021. The Financial Report for the period ended 31 December 2022 is currently being audited by Ernst & Young and will be finalised for lodgement with ASX in March 2023.

2022 Financial and operational overview

In 2022, a total of 353,609 ounces (oz) of gold were produced (poured) at an All-In Sustaining Cost (AISC) of $1,498/oz with total gold sales of 357,447oz at an average realised price of $1,819/oz.

Further details by operation are provided below.

Financial Performance

The Group's underlying net profit after tax (before abnormal items) was $20.3 million, with a reported net loss after tax of $34.7 million. The financial performance of Resolute for the year ended 31 December 2022 is summarised below:

Profit and Loss Analysis1 ($'000s)	2022 Group		2021 Group
Revenue	651,129		549,242
Cost of sales excluding depreciation and amortisation	(411,482)		(324,984)
Royalties and other operating expenses	(62,016)		(59,066)
Administration and other corporate expenses	(14,850)		(16,809)
Exploration and business development expenditure	(14,615)		(18,484)
EBITDA	148,166		129,899
Depreciation and amortisation	(85,894)		(120,993)
Net interest and finance costs	(15,273)		(11,741)
Inventories NRV movements and obsolete consumables	(36,077)		(44,258)
Fair value movements and unrealised treasury transactions	(13,345)		(27,697)
Other	1,767		(3,481)
Impairment expense	-		(227,464)
Gain on disposal	-		2,707
Indirect tax expense	(13,449)		(24,760)
Net loss before tax	(14,105)		(327,789)
Income tax expense	(20,560)		(39,682)
Reported net loss after tax	(34,665)		(367,471)
Abnormal items2:
+ Disputed Senegalese tax expense	23,926		7,132
+ Historical tax adjustments	14,809		39,334
+ Impairment of obsolete consumables	16,249		-
+ Impairment expense	-		227,464
Underlying net profit/(loss) after tax2	20,319		(93,541)

^{1.  Amounts presented above are aggregate balances of certain line items presented in the Consolidated Statement of Comprehensive Income.}

^{2.  This financial performance indicator is a non-IFRS measure. It is used internally by management to assess the performance of the business}

^{and is therefore considered relevant to readers of this document.}

Group EBITDA of $148.2 million 2022 was a 14% improvement on the comparative period reflecting:

· Higher revenue of $651.1 million from gold sales of 357,447oz (up 13%) at an average realised price of $1,819/oz (up 5%). The higher ounces sold reflects increased gold production (up 19%) due to:

o  improved Sulphide processing performance with gold recovered up 4% (gold poured up 19%);

o  higher gold recovered from both Syama Oxide (up 8%) and Mako (up 2%); and

o  significant drawdown from gold in circuit of 21,752oz (2021: 3,084oz).

· Higher cost of sales due to significant increases in fuel and consumables prices as well as the impact of non-cash adjustments for bullion and gold in circuit (as a result of the continued drawdown of material).

· Lower exploration and business development expenditure as a result of prior year transaction costs associated with divestments (sale of Bibiani and Cote D'Ivoire exploration assets).

The following abnormal items have been added back to the reported net loss in arriving at the underlying net profit of $20.3 million for the year ended 31 December 2022:

· Disputed Senegalese tax expense ($23.9m), relates to an ongoing dispute with the Senegalese tax authorities regarding PMC's tax exoneration status;

· Historical tax adjustments ($14.8m), included within this amount is $3.0m expected to be cash settled, with the remainder expected to be settled with VAT and other tax credits;

· Provision for obsolete consumables ($16.2m), with $2.3m pertaining to Mako and the remainder to Syama.

Financial Position

Net debt decreased by $197.2 million to $31.6 million at 31 December 2022 (31 December 2021:
$228.8 million). Total borrowings at 31 December 2022 were $125.6 million comprising $80.0 million drawn on the Term Loan Facility and RCF, and overdraft facilities in Mali and Senegal of $45.6 million. Available liquidity of $189.0 million includes cash and bullion of $94.0 million and $95.0 million of undrawn RCF. As at the date of this release, the RCF has been fully repaid with $100 million available to be redrawn.

Resolute continued to invest in the business in 2022 with spending on development, property, plant, and equipment totalling $63.0 million (2021: $56.9 million) including outlays for tailings facilities across both sites, capitalised stripping costs and project capital at Syama.

Syama Gold Mine, Mali

2022 production from the Syama Sulphide circuit was 161,479oz at an AISC of $1,410/oz. A 19% increase in production at a steady AISC compared to the prior year ($1,406/oz). Ore mined increased from 2.2Mt to 2.3Mt while the roaster recorded its highest ever throughput, processing 175.2kt. The Syama sulphide operation is expected to continue to benefit from the successful planned maintenance shutdown which was completed in early April 2022.

Production from the Syama Oxide operations was 62,165oz at an AISC of $1,801/oz. The oxide operations continued lower grade mining at several satellite pits. Gold poured for the year increased 9%, with momentum picking up in the second half and the highest gold production occurring in the December quarter.

Mako Gold Mine, Senegal

2022 production from Mako was 129,425oz at an AISC of $1,318/oz. Tonnes processed steadily increased over the year reflecting increased plant uptime and modifications to the SAG Mill configuration. The increase in AISC reflected a higher volume of material mined, which impacted mining costs and continued pressure on consumables amid industry wide inflationary pressures.

Consolidated Statement of Comprehensive Income

 for the year ended 31 December 2022

$'000	Note	2022	2021
Revenue from contracts with customers for gold and silver sales	1	651,129	549,242
Costs of production relating to gold sales	1	(411,482)	(324,984)
Gross profit before depreciation, amortisation and other operating costs		239,647	224,258
Depreciation and amortisation of mine assets	1	(83,706)	(118,621)
Other operating costs relating to gold sales	1	(62,016)	(59,066)
Gross profit from operations		93,925	46,571
Interest income	1	5,513	5,141
Other income	1	4,549	3,248
Exploration and business development	1	(14,615)	(18,484)
Impairment of exploration and evaluation assets	1	-	(5,068)
Impairment of mine properties and property, plant and equipment	1	-	(222,396)
Administration and other corporate expenses	1	(14,393)	(15,687)
Share based payments expense	1	(457)	(1,122)
Treasury - realised losses	1	(1,477)	(185)
Inventories net realisable value movements and obsolete consumables	1	(36,077)	(44,258)
Fair value movements and unrealised treasury transactions	1	(13,345)	(27,697)
Share of associates' losses	1	(1,305)	(3,838)
Depreciation of non-mine site assets	1	(2,188)	(2,372)
Finance costs	1	(20,786)	(16,882)
Indirect tax expense	1	(13,449)	(24,760)
Profit / (loss) before tax from operations		(14,105)	(327,789)
Tax expense	1	(20,560)	(39,682)
Loss for the year from operations		(34,665)	(367,471)
(Loss)/gain attributable to:
Members of the parent		(34,083)	(319,203)
Non-controlling interest		(582)	(48,268)
		(34,665)	(367,471)

Consolidated Statement of Comprehensive Income (continued)

   for the year ended 31 December 2022

 

$'000	Note	2022	2021
Loss for the year (brought forward)		(34,665)	(367,471)
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		(17,298)	(16,106)
Items that may not be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Non-controlling interest		4,507	4,960
Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax		(717)	(12,981)
Other comprehensive loss for the year, net of tax		(13,508)	(24,127)
Total comprehensive loss for the year		(48,173)	(391,598)
Total comprehensive (loss)/gain attributable to:
Members of the parent		(52,098)	(348,290)
Non-controlling interest		3,925	(43,308)
		(48,173)	(391,598)
Loss per share for net loss attributable for continuing operations to the ordinary equity holders of the parent:		cents	cents
Basic loss per share	3	(2.85)	(28.92)
Diluted loss per share	3	(2.85)	(28.92)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position

for the year ended 31 December 2022

$'000	Note	2022	2021 (Restated)(1)
Current assets
Cash	4	80,873	67,607
Other financial assets - restricted cash		1,406	9,443
Receivables	5	48,793	27,812
Inventories	8	146,430	156,589
Financial assets at fair value through other comprehensive income		-	20,828
Prepayments and other assets		11,141	12,868
Asset sale receivable		-	56,495
Total current assets		288,643	351,642
Non current assets
Income tax asset	13	10,545	11,303
Inventories	8	42,434	53,918
Investments in associates		-	1,365
Promissory notes receivable		40,015	40,207
Contingent consideration receivable		13,636	14,524
Exploration and evaluation		3,211	2,909
Development		227,121	264,491
Property, plant and equipment		229,735	229,164
Right of use assets		13,453	7,708
Total non current assets		580,150	625,589
Total assets		868,793	977,231
Current liabilities
Payables		63,700	91,542
Financial derivative liabilities		1,546	-
Interest bearing liabilities	6	95,634	92,726
Provisions	9	100,377	57,165
Lease liabilities		3,373	2,991
Current tax liabilities		19,107	7,137
Total current liabilities		283,737	251,561
Non current liabilities
Interest bearing liabilities	6	29,482	223,979
Provisions	9	71,544	73,424
Deferred tax liabilities		-	1,591
Lease liabilities		12,536	8,086
Total non current liabilities		113,562	307,080
Total liabilities		397,299	558,641
Net assets		471,494	418,590
Equity attributable to equity holders of the parent
Contributed equity	7	882,731	777,021
Reserves		(21,956)	(3,706)
Retained earnings		(317,341)	(283,258)
Total equity attributable to equity holders of the parent		543,434	490,057
Non-controlling interest		(71,940)	(71,467)
Total equity		471,494	418,590

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

(1)  Refer to restatement of comparative information Note 13

Consolidated Statement of Changes in Equity

for the year ended 31 December 2022

$'000	Contributed equity	Net unrealised gain/(loss) reserve	Convertible notes/ Share options equity reserve	Non-controlling interests reserve	Employee equity benefits reserve	Foreign currency translation reserve	Retained earnings/ (accumulated losses) (Restated)(1)	Non-controlling interest(1)	Non-controlling interest of disposal group held for sale	Total
At 1 January 2022	777,021	(8,631)	4,876	(724)	19,813	(19,040)	(283,258)	(71,467)	-	418,590
Loss for the year	-	-	-	-	-	-	(34,083)	(582)	-	(34,665)
Other comprehensive (loss)/income, net of tax	-	(717)	-	-	-	(17,298)	-	4,507	-	(13,508)
Total comprehensive (loss)	-	(717)	-	-	-	(17,298)	(34,083)	3,925	-	(48,173)
/income for the year, net of tax
Shares issued (net of cost)	105,710	-	-	-	-	-	-	-	-	105,710
Dividends paid	-	-	-	-	-	-	-	(4,398)	-	(4,398)
Share based payments expense	-	-	-	-	(235)	-	-	-	-	(235)
At 31 December 2022	882,731	(9,348)	4,876	(724)	19,578	(36,285)	(317,341)	(71,940)	-	471,494
At 1 January 2021	777,021	4,350	4,876	(724)	18,607	(2,934)	35,945	(22,023)	(6,981)	808,137
Loss for the year	-	-	-	-	-	-	(319,203)	(47,929)	(339)	(367,471)
Other comprehensive (loss)/income, net of tax	-	(12,981)	-	-	-	(16,106)	-	4,960	-	(24,127)
Total comprehensive (loss)	-	(12,981)	-	-	-	(16,106)	(319,203)	(42,969)	(339)	(391,598)
/income for the year, net of tax
Dividends paid	-	-	-	-	-	-	-	(6,475)	-	(6,475)
Share based payments expense	-	-	-	-	1,206	-	-	-	-	1,206
Disposal of assets held for sale	-	-	-	-	-	-	-	-	7,320	7,320
At 31 December 2021	777,021	(8,631)	4,876	(724)	19,813	(19,040)	(283,258)	(71,467)	-	418,590

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

(1)  Refer to restatement of comparative information Note 13

Consolidated Cash Flow Statement

for the year ended 31 December 2022

$'000	Note	2022	2021
Cash flows from operating activities
Receipts from customers		650,591	549,013
Payments to suppliers, employees and others		(524,706)	(451,554)
Exploration expenditure		(10,745)	(13,643)
Interest paid		(16,619)	(14,874)
Interest received		214	-
Indirect tax receipts/ (payments)		164	(14,853)
Income tax paid		(7,994)	(3,531)
Net cash flows from operating activities		90,905	50,558
Cash flows used in investing activities
Payments for property, plant & equipment		(35,811)	(30,387)
Payments for development activities		(27,602)	(22,908)
Payments for evaluation activities		(4,372)	(2,926)
Proceeds from sale of asset		60,000	30,740
Payments relating to asset held for sale		-	(5,445)
Proceeds from sale of investment in associate		4,534	-
Proceeds from sale of financial assets at fair value through other comprehensive income		19,148	2,289
Payments for sale of financial assets at fair value through other comprehensive income		-	(1,179)
Other investing activities		(725)	(697)
Net cash flows from/(used in) investing activities		15,172	(30,513)
Cash flows from financing activities
Repayment of borrowings		(195,000)	(79,811)
Proceeds from finance facilities		-	50,000
Proceeds from issuing ordinary shares		110,289	-
Payments for share issue costs		(4,579)	-
Dividends paid to non-controlling interest		(5,089)	(5,858)
Repayment of principal portion of lease liability		(3,457)	(13,823)
Net cash flows (used in)/from financing activities		(97,837)	(49,492)
Net increase/(decrease) in cash and cash equivalents		8,240	(29,447)
Cash and cash equivalents at the beginning of the year		25,237	55,226
Exchange rate adjustment		1,982	(542)
Cash and cash equivalents at the end of the year		35,459	25,237
Cash and cash equivalents comprise the following:
Cash at bank and on hand	4	80,873	67,607
Bank overdraft	4	(45,414)	(42,370)
Cash and cash equivalents at the end of the year		35,459	25,237

The above consolidated cash flow statement should be read in conjunction with the accompanying notes

Notes to the Preliminary Final Report

 for the year ended 31 December 2022

About this Report  

The preliminary final report of Resolute Mining Limited and its subsidiaries ("Resolute" or the "Group") for the year ended 31 December 2022 was authorised for issue in accordance with a resolution of 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.

Basis of Preparation

This report is based on accounts that are in the process of being audited.

This report does not include all of the notes normally included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the financial report for the year ended 31 December 2021 and any public announcements made by RML during the reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

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.

1  Segment revenues and expenses

				Unallocated (b)
31 December 2022 $'000	Mako (Senegal)	Syama (Mali)		Corporate/ Other		Total
Revenue
Gold and silver sales at spot to external customers (a)	236,760		414,369		-		651,129
Total segment gold and silver sales revenue	236,760		414,369		-		651,129
Costs of production	(129,967)		(259,386)		-		(389,353)
Gold in circuit inventories movement	(336)		(21,793)		-		(22,129)
Costs of production relating to gold sales	(130,303)		(281,179)		-		(411,482)
Royalty expense	(11,838)		(27,736)		-		(39,574)
Operational support costs	(17,714)		(4,728)		-		(22,442)
Other operating costs relating to gold sales	(29,552)		(32,464)		-		(62,016)
Administration and other corporate expenses	(4,777)		(1,160)		(8,456)		(14,393)
Share-based payments expense	-		-		(457)		(457)
Exploration, business development and impairment of investments	(4,018)		(9,578)		(1,019)		(14,615)
Earnings/(loss) before interest, tax, depreciation and amortisation	68,110		89,988		(9,932)		148,166
Amortisation of evaluation, development and rehabilitation costs	(30,496)		(25,520)		-		(56,016)
Depreciation of mine site properties, plant and equipment	(12,002)		(15,688)		-		(27,690)
Depreciation and amortisation relating to gold sales	(42,498)		(41,208)		-		(83,706)
Segment operating result before treasury, other income/ (expenses) and tax	25,612		48,780		(9,932)		64,460
Interest income	7		24		5,482		5,513
Other income	-		14		4,535		4,549
Interest and fees	(442)		(4,121)		(14,871)		(19,434)
Rehabilitation and restoration provision accretion	(397)		(955)		-		(1,352)
Finance costs	(839)		(5,076)		(14,871)		(20,786)
Realised foreign exchange (loss)/gain	853		879		(3,209)		(1,477)
Treasury - realised gains/(losses)	853		879		(3,209)		(1,477)
Inventories net realisable value movements and obsolete consumables	(7,004)		(29,073)		-		(36,077)
Unrealised foreign exchange (loss)/ gain	(1,016)		-		(14,025)		(15,041)
Unrealised foreign exchange loss on intercompany balances	-		-		1,696		1,696
Fair value movements and unrealised treasury transactions	(1,016)		-		(12,329)		(13,345)
Share of associates' losses	-		-		(1,305)		(1,305)
Depreciation of non-mine site assets	(175)		-		(2,013)		(2,188)
Indirect tax expense	-		(13,387)		(62)		(13,449)
Income tax expense	(13,411)		(4,178)		(2,971)		(20,560)
Profit/(Loss) for the 12 months to 31 December 2022	4,027		(2,017)		(36,675)		(34,665)

1  Segment revenues and expenses (continued)

				Unallocated (b)
31 December 2021 $'000		Mako (Senegal)	Syama (Mali)	Corporate/ Other	Total
Revenue
Gold and silver sales at spot to external customers (a)	221,478		327,764	-	549,242
Total segment gold and silver sales revenue	221,478		327,764	-	549,242
Costs of production	(87,541)		(245,920)	-	(333,461)
Gold in circuit inventories movement	583		7,894	-	8,477
Costs of production relating to gold sales	(86,958)		(238,026)	-	(324,984)
Royalty expense	(11,074)		(21,863)	-	(32,937)
Operational support costs	(17,528)		(5,344)	(3,257)	(26,129)
Other operating costs relating to gold sales	(28,602)		(27,207)	(3,257)	(59,066)
Administration and other corporate expenses	(5,060)		(1,617)	(9,010)	(15,687)
Share-based payments expense	-		-	(1,122)	(1,122)
Exploration, business development and impairment of investments	(3,512)		(4,802)	(10,170)	(18,484)
Earnings/(loss) before interest, tax, depreciation and amortisation	97,346		56,112	(23,559)	129,899
Amortisation of evaluation, development and rehabilitation costs	(15,600)		(25,894)	-	(41,494)
Depreciation of mine site properties, plant and equipment	(40,262)		(36,865)	-	(77,127)
Depreciation and amortisation relating to gold sales	(55,862)		(62,759)	-	(118,621)
Segment operating result before treasury, other income/ (expenses) and tax	41,484		(6,647)	(23,559)	11,278
Interest income	69		-	5,072	5,141
Other income	-		-	3,248	3,248
Interest and fees	(434)		(2,854)	(13,312)	(16,600)
Gain on remeasurement for refinancing	-		-	316	316
Rehabilitation and restoration provision accretion	(165)		(433)	-	(598)
Finance costs	(599)		(3,287)	(12,996)	(16,882)
Realised foreign exchange (loss)/gain	(1,431)		387	859	(185)
Treasury - realised gains/(losses)	(1,431)		387	859	(185)
Inventories net realisable value movements and obsolete consumables	(53,188)		8,930	-	(44,258)
Unrealised foreign exchange (loss)/ gain	635		-	(17,120)	(16,485)
Unrealised foreign exchange loss on intercompany balances	-		-	(11,212)	(11,212)
Fair value movements and unrealised treasury transactions	635		-	(28,332)	(27,697)
Share of associates' losses	-		-	(3,838)	(3,838)
Depreciation of non-mine site assets	(151)		-	(2,221)	(2,372)
Impairment of exploration and evaluation assets	(4,808)		-	(260)	(5,068)
Impairment of mine properties and property, plant and equipment	(55,023)		(167,373)	-	(222,396)
Indirect tax expense	(9,026)		(9,874)	(5,860)	(24,760)
Income tax expense	(1,413)		(34,424)	(3,845)	(39,682)
Profit/(Loss) for the 12 months to 31 December 2021	(83,451)		(212,288)	(71,732)	(367,471)

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.

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 2022.

3  Earnings/(loss) per share

$'000	31 December 2022	31 December 2021
Basic (loss)/earnings per share
(Loss)/profit attributable to ordinary equity holders for operation  of the parent for basic loss per share ($'000)	(34,083)	(319,203)
Weighted average number of ordinary shares outstanding during the year  used in the calculation of basic and diluted EPS	1,196,856,518	1,103,896,747
	cents	cents
Basic (loss)/earnings per share from operations (cents per share)	(2.85)	(28.92)
Diluted (loss)/earnings per share from operations (cents per share) (1)	(2.85)	(28.92)
Basic loss per share - continuing operations
Loss attributable to ordinary equity holders for continuing operations of the parent for basic loss per share ($'000)	(34,083)	(319,203)
Weighted average number of ordinary shares outstanding during the year used  in the calculation of basic EPS	1,196,856,518	1,103,896,747
	cents	cents
Basic loss per share from continuing operations (cents per share)	(2.85)	(28.92)
Diluted loss per share from continuing operations (cents per share) (2)	(2.85)	(28.92)

¹ Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for 31 December 2022 and 31 December 2021 because the result for the year was a loss.

2 Potentially dilutive instruments have not been included in the calculation of diluted earnings per share for continuing operations for 31 December 2022 and 31 December 2021 because the result for the year was a loss.

4  Cash

	31 December 2022	31 December 2021
	$'000	$'000
Cash at bank and on hand	80,873	67,607
Reconciliation to cash flow statement
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	80,873	67,607
Bank overdraft (Note 6)	(45,414)	(42,370)
Cash and cash equivalents at the end of the year	35,459	25 ,237

5  Receivables

	31 December 2022	31 December 2021
	$'000	$'000
Trade and other receivables	37	441
Taxation receivables	48,756	27,371
Total receivables	48,793	27,812

The Taxation receivables balance comprises a receivable of $12.1 million (2021: $9.0 million) in relation to VAT paid by the Syama operation.  Also included in the Taxation receivables is a VAT receivable of $34.9 million (2021: $10.1 million) relating to the Mako operation ("Mako VAT").  The Mako VAT represents the VAT which would be payable (and then refundable) in the event the Company is unsuccessful in extending the tax exoneration by an additional two years to July 2023. The remainder of the balance relates to Australian Goods and services tax (GST) amounts. Resolute continues to work with its legal and tax advisors to contest the position taken by the Senegalese and Malian Authorities. Refer to Note 9.

6  Interest bearing liabilities

	31 December 2022 $'000	31 December 2021 $'000
Interest bearing liabilities (current)
Bank overdraft (Note 4)	45,414	42,370
Insurance premium funding	-	109
Bank borrowings	50,220	50,247
Total Interest bearing liabilities (current)	95,634	92,726
Interest bearing liabilities (non current) Bank borrowings	29,482	223,979
Total Interest bearing liabilities (non current)	29,482	223,979

7  Contributed Equity

	31 December 2022	31 December 2021
	$'000	$'000
Ordinary share capital:
2,129,006,569  ordinary fully paid shares (2021: 1,103,931,520)	883,306	777,021
Movements in contributed equity, net of issuing costs:
Balance at the beginning of the year	777,021	777,021
Placement of shares to institutional and retail investors	110,289	-
Share issue costs	(4,579)	-
Balance at the end of the year	882,731	777,021

8  Inventories

	31 December 2022	31 December 2021
	$'000	$'000
Current
Ore stockpiles
- At cost	27,223	47,054
- At net realisable value	28,286	6,381
Total current ore stockpiles	55,509	53,435
Gold in circuit - at cost	4,186	22,353
Gold in circuit - at net realisable value	373	1,503
Gold bullion on hand - at cost	10,276	15,697
Gold bullion on hand - at net realisable value	-	1,722
Consumables at net realisable value	76,086	61,879
Total inventory (current)	146,430	156,589
Non Current
Ore stockpiles - at cost	1,959	1,935
Ore stockpiles - at net realisable value	3,279	6,559
Gold in circuit - at net realisable value	37,196	45,424
Total inventory (non current)	42,434	53,918

9  Provisions

	31 December 2022	31 December 2021
	$'000	$'000
Current
Site restoration	1,220	1,795
Employee entitlements	4,336	2,511
Dividend payable	136	150
Provision for indirect taxes	92,936	50,381
Other provisions	1,749	2,328
Total provisions (current)	100,377	57,165
Non Current
Site restoration	70,874	72,172
Employee entitlements	670	1,252
Total provisions (non current)	71,544	73,424

Resolute's subsidiaries SOMISY(Mali) and PMC(Senegal), have received demands for payment to the Local Tax Authorities in relation to Income Tax and indirect tax for the years ended 31 December 2015 to 2022.

At 31 December 2022 the total provision for indirect taxes has increased from $50.4 million to $92.9 million.

This increase is as a result of an additional $37.6 million due to the potential reduction in the Mako tax exoneration period to 5 years. This amount relates to provisions for customs duties and VAT.  Whilst these amounts are recognised as provisions. Resolute is firmly of the view that it has complied with all the requirements for the extension of the tax exoneration to 7 years and will continue to work with the Senegalese authorities to resolve this matter. 

The remainder of the increase relates to an additional $4.6 million of indirect tax provisions in Mali based on government demands received, with a provision recognised in line with the requirements of relevant accounting standards. Resolute continues to challenge the factual basis and validity of these demands which are strongly disputed due to fundamental misinterpretations of the application of certain taxes. Resolute continues to work with its legal and tax advisors to contest the positions taken by the Authorities.

10  Subsequent events

On 19 January 2023, the Group announced that the Syama North Resource estimate increased to 34.0 million tonnes at 2.9g/t for 3.2 million ounces of gold.

11  Impairment testing

Impairment indicator assessment

At 31 December 2022, Resolute's quoted market capitalisation was lower than its net asset carrying value. Further, Resolute noted that the impact of inflationary pressures on costs and increase in risk free rate that underpins the applicable discount rate. These factors were considered as indicators of impairment. As a result, an impairment test was performed to determine the recoverable amounts for all CGU's of the Group, being the Syama Gold Mine and the Mako Gold Mine using the fair value less cost to sell (FVLCD) method.

Syama CGU - 31 December 2022

Syama indicator assessment

Whilst Syama's 2022 forecast production remain in line with budget, as a result of the general indicators of impairment noted above, a formal impairment test was performed to determine the recoverable amount for the Syama CGU.

Key Assumptions used to determine recoverable amount

The table below summarises the key assumptions used in determining the recoverable amount:

	31 December 2022	31 December 2021
Gold price ($/oz)	1,735-1,534	1,777-1,467
Discount rate (post tax real)	14.8%	14.0%
Unmined resources ($/oz)	$20-$58	$20-$54

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 CGU'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 the life ‐ of ‐ 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.

Operating and capital costs

Life ‐ of ‐ mine operating and capital cost assumptions are based on the Group's latest budget and life ‐ of mine plans. Operating cost assumptions reflect an assumption of maintaining current cost, over the long term, without including expected improvements over the life of mine.

Recognition

As a result of the analysis performed, there is no impairment loss recognised for the Syama CGU for the period ended 31 December 2022.

11  Impairment of non current assets (continued)

Mako CGU - 31 December 2022

Mako indicator assessment

Whilst Mako's 2021 forecast production and cost remain in line with budget, as a result of the general indicators of impairment noted above and the reduction in the tax exoneration period to 5 years (refer to Note 5), a formal impairment test was performed to determine the recoverable amount for the Mako CGU.

K ey Assumptions

The table below summarises the key assumptions used in the determining the recoverable amount:

	31 December 2022	31 December 2021
Gold price ($/oz)	1,735-1,534	1,777-1,467
Discount rate (post tax real)	10.5%	10.5%
Unmined resources ($/oz)	$48	$44

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 CGU's estimated  real discount rate, 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 ‐ of ‐ 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.

Operating and capital costs

Life ‐ of ‐ mine operating and capital cost assumptions are based on the Group's latest budget and life ‐ of mine plans. Operating cost assumptions reflect an assumption of maintaining current cost, over the long term, without including expected improvements over the life of mine.

Recognition

As a result of the analysis performed, there is no impairment loss recognised for the Mako CGU for the period ended 31 December 2022.

12  Investment in associates

The Group has 23.3% investment in Loncor Resources Inc, with a carrying value of nil as at 31 December 2022 (31 December 2021:$1.2 million).

 

13  Restatement of comparative information

During 2022, the Group identified information that resulted in a restatement to the prior periods. The impact on previously reported amounts is summarised in the tables below, with the restatement only affecting amounts presented in the Consolidated Statement of Financial Position.

$'000	31 December 2021  As Reported	Restatement	31 December 2021  Restated
Total current assets	351,642	-	351,642
Non current assets
Income tax asset	18,273	(6,970)	11,303
Total non current assets	632,559	(6,970)	625,589
Total assets	984,201	(6,970)	977,231
Total liabilities	558,641	-	558,641
Net assets	425,560	(6,970)	418,590
Equity attributable to equity holders of the parent
Contributed equity	777,021	-	777,021
Reserves	(3,706)	-	(3,706)
Retained earnings	(277,682)	(5,576)	(284,448)
Total equity attributable to equity holders of the parent	495,633	(5,576)	488,867
Non-controlling interest	(70,073)	(1,394)	(71,765)
Total equity	425,560	(6,970)	417,102

 

The decrease in net assets at 31 December 2021 is due to the derecognition of income tax asset for the Syama operation in Mali. A reduction of CFA 4.271 billion ($6.9 million) was recorded on the basis that this amount did not meet the recognition criteria for a tax asset at 30 June 2018 and should have been recognised in the Consolidated Statement of Comprehensive Income as a tax expense.

At 1 January 2021, this resulted in the reduction of the income tax assets of $6.9 million, a reduction in  retained earnings of $5.6 million and a reduction in Non-controlling interest of $1.4 million.

 

 

END

 

 

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