Resolute Mining Limited · ASX:RSG
Resolute Mining — Investor Presentation (November 2022)
61 slides from Resolute Mining's investor presentation, Nov 10, 2022
Slide 1: Equity Raising Presentation
Equity Raising Presentation Terry Holohan – Managing Director and CEO 10 November 2022 www.rml.com.au ASX/LSE - RSG 1 Not for distribution or release in the United States
Slide 2: Important Notices & Disclaimers
Important Notices & Disclaimers You must read the following notices before reading or making any use of this document or any information contained in it. By attending an investor presentation or briefing, or accepting, accessing or reviewing this document you acknowledge and agree to the terms set o
Slide 3: Important Notices & Disclaimers
Important Notices & Disclaimers NOT FINANCIAL PRODUCT ADVICE This Presentation, and the information provided in it, does not constitute, and is not intended to constitute, financial product or investment advice, financial, legal, tax accounting or other advice, or a recommendation to acquire New Sha
Slide 4: Important Notices & Disclaimers
Important Notices & Disclaimers FUTURE PERFORMANCE AND FORWARD-LOOKING STATEMENTS This Presentation contains certain “forward-looking statements”. The words “expect”, “anticipate”, “estimate”, “intend”, “believe”, “guidance”, “outlook”, “target”, “should”, “could”, “may”, “will”, “predict”, “plan”,
Slide 5: Important Notices & Disclaimers
Important Notices & Disclaimers JORC CODE It is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia comply with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("JORC Code"). I
Slide 6: Important Notices & Disclaimers
Important Notices & Disclaimers ASX Listing Rule Disclosures Assumptions on which the production targets in this Presentation are made are based on: • Expanded capacity of 30-50% could be fed by material from the Syama North Resource • To achieve the expanded capacity there is the potential to conve
Slide 7: Important Notices & Disclaimers
Important Notices & Disclaimers JOINT LEAD MANAGERS In the course of its ordinary course business, affiliate(s) of the joint lead managers may execute currency or other hedging transactions with counterparties. The joint lead managers and their related bodies corporate, affiliates, directors, agents
Slide 8: Investment Highlights
Investment Highlights New management team and stronger balance sheet positions Resolute for growth • Revised strategy and focus under experienced Managing Director & CEO Terry Holohan, CFO Doug Refreshed management team Warden and COO Geoff Montgomery • 4 consecutive quarters of incremental producti
Slide 9: Equity Raising
Equity Raising 9
Slide 10: Equity Raising Overview
Equity Raising Overview • Institutional placement to professional and sophisticated investors (“Institutional Placement”) in conjunction with a 1-for-1.11 accelerated non-renounceable entitlement offer (“Entitlement Offer”). • Underwritten A$140 million component comprising: Offer Structure ‒ ~A$41
Slide 11: Sources & Uses
Sources & Uses Stronger balance sheet enables continued focus on Syama North expansion opportunity Underwritten component Underwritten Sources & Uses • The underwritten A$140 million component of the Equity Raising will be Sources A$m US$m1 used to pay down the Company’s Syndicated Loan Facility. •
Slide 12: Pro-Forma Position
Pro-Forma Position Debt Equity Raising Post-Equity Raising Pro- Pre-Equity Raising Repayment/Expenditure Adjustments2 Forma3,4 Adjustments A$ US$ A$ US$ A$ US$ A$ US$ Share price1 $m 0.205 0.13 0.16 0.10 - - 0.185 0.120 Shares Outstanding m 1,104 1,104 875 875 n/a n/a 1,979 1,979 1 Market capitalisa
Slide 13: Enhanced Financial Flexibility
Enhanced Financial Flexibility1 Pre-Equity Raising Debt Maturity4 Net Debt (US$m) US$m 60 50 156 40 65 30 Pre-equity raise Post-equity raise - Pro-forma 20 10 Net Debt / Enterprise Value2 (%) 0 Oct-22 Nov-22 Jan-23 Mar-23 Sep-23 Mar-24 Revolving Credit Facility Term Loan 52% Post-Equity Raising Debt
Slide 14: Indicative Timetable
Indicative Timetable Event Date Announcement of Equity Raising and Trading Halt 10 November 2022 Placement and Institutional Entitlement Offer opens 10 November 2022 Trading halt lifted and shares recommence trading 14 November 2022 Announcement of results of Placement and Institutional Entitlement
Slide 15: Overview of Resolute
Overview of Resolute 15
Slide 16: Resolute Portfolio
Resolute Portfolio Syama Mako Conventional open pit Long-life asset over 85km of mining and processing Description strike in a highly prospective operations with near mine gold region potential Mineral Resources2 8.7Moz1 0.8Moz Ore Reserves2 3.4Moz1 0.7koz Oxide Plant Capacity 1.5Mtpa 2.1Mtpa Sulphi
Slide 17: 2022 Guidance
2022 Guidance Production and AISC • 345,000oz at an AISC of $1,425/oz 2022 Capex • Sustaining capex included in AISC: $63m ‒ $34m capitalised stripping costs (Mako: $22m; Syama: $12m) ‒ $16m in tailings storage and several minor sustaining capex projects • Non-sustaining capex: $18 million ‒ $5m in
Slide 18: Group Forecast Production Update
Group Forecast Production Update • Syama North Expansion prioritised over Tabakoroni underground which is located ~35km south of the Syama processing plant • Sulphide gold production for 2023 and 2024 is expected to average around 160,000 to 165,000 ounces per annum Syama Sulphide • 2023 AISC guidan
Slide 19: New Resolute Management
New Resolute Management Revised strategy and focus under experienced new management Terry Holohan Doug Warden Geoff Montgomery Managing Director and CEO Chief Financial Officer Chief Operating Officer Appointed May 2022 Appointed September 2021 Appointed August 2022 • Over 40 years’ experience in bo
Slide 20: Consistent Production Improvement
Consistent Production Improvement Gold Production & AISC Q3 2021 – Q3 2022 Q3 2022 reflects: Ounces ASIC/oz • 4 consecutive quarters of incremental 100,000 2,000 production growth to Q3 2022 90,000 1,800 80,000 1,600 • 29% increase in Syama Sulphide production 33,649 31,765 70,000 1,400 following th
Slide 21: 29% increase in Sulphide Gold production since Q1 Roaster shut
29% increase in Sulphide Gold production since Q1 22 Roaster shut1 Significant improvement in availability and throughput since April 2022 Sulphide Circuit Physicals Daily Average Sulphide Gold Production Post Roaster shut Ounces Pre-Roaster shut 29% increase in Sulphide April to 30 production since
Slide 22: Syama North Expansion Potential
Syama North Expansion Potential Syama North Updated Mineral Resource Estimate • 40% increase in Syama North Resource and grade confirmed potential for a new open pit mine adjacent to the Syama processing complex1 • Updated Resource is currently being used to inform a PFS (due Q1 2023) Low capex expa
Slide 23: Exploration - Syama North
Exploration - Syama North Latest Mineral Resource a 40% increase1 • Updated Mineral Resource Estimate for Syama North increases to 2 Moz at a cut-off grade of 1 g/t Au • Recent Syama North drilling results over 3 km of strike, detailed below: Cross Section at 1201800N showing drillholes and results
Slide 24: Syama North 20Mt @ 3.1g/t Au for 2 Moz
Syama North 20Mt @ 3.1g/t Au for 2 Moz (surface to 150m) A21 Pit Quartz Vein Hill Pit 1201800N 1200850N 24 Not for distribution or release in the United States
Slide 25: Exploration - Syama
Exploration - Syama Syama Greenstone Belt • Resolute controls the entire 85km strike length of the Syama Greenstone Belt ‒ Highly endowed gold belt with total Mineral Resources of 8.7 Moz ‒ Ore Reserves of 3.4 Moz ‒ Production of 2.5Moz since acquired by Resolute in 2004 ‒ Very well-known geology an
Slide 26: Exploration - Mako
Exploration - Mako Near mine exploration focus to support the capital investment in the operation Mako • Several near-mine targets on Mine Lease • Mako NW target, soil anomaly parallel to Mako mine Laminia JV • Recently signed JV on Laminia permit located 15km from Mako • Outcropping gold mineralisa
Slide 27: Compelling Investment Proposition
Compelling Investment Proposition Equity raising is the final step in Resolute’s transition to a sustainable gold producer with a de-risked balance sheet • Revised strategy and focus under experienced Managing Director & CEO Terry Holohan, CFO Doug Refreshed management team Warden and COO Geoff Mont
Slide 28: Key Risks
Key Risks 28
Slide 29: Key Risks
Key Risks This section discusses some of the risks associated with an investment in Resolute. Resolute and its subsidiaries (together, the “Group”) business is subject to a number of risk factors both specific to its business and of a general nature which may impact on the Group’s future performance
Slide 30: Key Risks (continued)
Key Risks (continued) Licences and approvals The Group's exploration, development and mining activities are dependent upon the grant, or as the case may be, the maintenance, renewal or granting of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or ma
Slide 31: Key Risks (continued)
Key Risks (continued) The Group’s activities at the Mako Gold Mine employ processes and chemicals that may be harmful to the environment. The Mako Gold Mine has been designed both as a zero discharge project during the operational phase, and to avoid physical resettlement and minimise economic reset
Slide 32: Key Risks (continued)
Key Risks (continued) Gold price As a producer of gold, earnings of the Company are correlated to the price of gold. The gold price fluctuates and is affected by numerous factors beyond the control of the Company. These factors include, but are not limited to, world demand for gold and other metals,
Slide 33: Key Risks (continued)
Key Risks (continued) Tax treatment of non-Australian investors in an Australian company The Company is organised and exists under the laws of Australia and, as such, the Australian tax regime applies to the distribution of profit and other payments from the Company to its shareholders. The taxation
Slide 34: Key Risks (continued)
Key Risks (continued) Notwithstanding this, as required under the relevant accounting standards, a provision of US$44.6 million has been recognised in the Company’s accounts to 30 June 2022 in relation to customs, duties and income taxes the Company may be required to pay if it were to be unsuccessf
Slide 35: Key Risks (continued)
Key Risks (continued) Joint venture parties, contractors and agents The Directors are unable to predict the risk of financial failure or default by a participant in any joint venture to which the Group is, or may become a party; or insolvency or other managerial failure by any of the contractors use
Slide 36: Key Risks (continued)
Key Risks (continued) COVID-19 The COVID-19 pandemic can still impact global commodity prices and lockdowns in other countries such as the local lockdowns in China have created logistical disruptions. Nevertheless, the global impacts of the COVID-19 pandemic has created volatility in commodity price
Slide 37: Key Risks (continued)
Key Risks (continued) External financing The Group’s current operations and expansion plans do not envisage that additional funding or capital will be required within the next 18 months. However, mining operations, exploration and development involve significant financial risk and capital investment
Slide 38: Key Risks (continued)
Key Risks (continued) Uninsured or uninsurable risks The business of the Group is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, changes in the regulatory environment
Slide 39: Key Risks (continued)
Key Risks (continued) Health and safety Mining operations, and in particular underground mining operations, are inherently dangerous workplaces. The Group’s mining operations often place its employees and others in close proximity with large pieces of mechanised equipment, moving vehicles, mining pr
Slide 40: Key Risks (continued)
Key Risks (continued) Sale proceeds of the Ravenswood Gold Mine The sale of the Ravenswood Gold Mine completed on 31 March 2020 to a consortium comprising a fund (“EMR Fund”) managed by EMR Capital Management Limited (“EMR Capital”), and Golden Energy and Resources Limited (SGX:AUE) (“GEAR”) (togeth
Slide 41: Key Risks (continued)
Key Risks (continued) In addition, local governmental and traditional authorities in Mali and Senegal may exercise significant influence with respect to local land use, land labour and local security. From time to time, various governments around the world, albeit not in any jurisdictions in which t
Slide 42: Key Risks (continued)
Key Risks (continued) Repatriation of earnings The Group conducts a significant portion of its operations through, to varying degrees, subsidiaries incorporated in Mali and Senegal and holds significant assets in such subsidiaries. Accordingly, any limitation on the transfer of cash or other assets
Slide 43: Key Risks (continued)
Key Risks (continued) Sovereign action The Group is exposed to the risk of adverse sovereign action by the governments of Mali and Senegal. The mining industry is important to the economies of these countries and thus can be expected to be the focus of continuing attention and debate. In similar cir
Slide 44: Key Risks (continued)
Key Risks (continued) Volatility The price at which the New Shares are quoted and the price at which investors may realise their New Shares may be influenced by a significant number of factors, some specific to the Group and its operations and some which affect quoted companies generally. These fact
Slide 45: Key Risks (continued)
Key Risks (continued) Opinions of securities or industry analysts Both the market price and trading volume of the New Shares may depend on the opinions of the securities analysts monitoring the operations of the Group and publishing their research reports on its future performance. The Company has n
Slide 46: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any cou
Slide 47: Foreign Selling Restrictions (continued)
Foreign Selling Restrictions (continued) The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of the New Shares purchased pursuant to this document (other than (a) a "Canadian financial institution" o
Slide 48: Foreign Selling Restrictions (continued)
Foreign Selling Restrictions (continued) Cayman Islands The Company is not licensed to conduct investment business in the Cayman Islands by the Cayman Islands Monetary Authority and this document does not constitute a public offer of the New Shares, whether by way of sale or subscription, in the Cay
Slide 49: Foreign Selling Restrictions (continued)
Foreign Selling Restrictions (continued) Mauritius An offer of New Shares is being made by way of private placement only to persons that meet the criteria of “sophisticated investors” as defined in the Securities Act 2005 (“SA 05”) and does not constitute an offer to the public in Mauritius. In acco
Slide 50: Foreign Selling Restrictions (continued)
Foreign Selling Restrictions (continued) Norway This document has not been, and will not be, registered with or approved by Finanstilsynet (the Financial Supervisory Authority of Norway) and it does not constitute a prospectus under the Prospectus Regulation (Regulation (EU) 2017/1129) or the Norweg
Slide 51: Foreign Selling Restrictions (continued)
Foreign Selling Restrictions (continued) Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to
Slide 52: Summary of Underwriting Agreement
Summary of Underwriting Agreement SUMMARY OF UNDERWRITING AGREEMENT FOR THE OFFER Overview The underwriters (Underwriters) and the Company entered into an underwriting agreement (Underwriting Agreement). In accordance with the Underwriting Agreement, the Underwriters have agreed to manage, book run
Slide 53: Summary of Underwriting Agreement (continued)
Summary of Underwriting Agreement (continued) SUMMARY OF UNDERWRITING AGREEMENT FOR THE OFFER Termination events Authorisation (continued) If a Government Agency withdraws, revokes or adversely amends any Authorisation required for the Company to perform its obligations under the Underwriting Agreem
Slide 54: Summary of Underwriting Agreement (continued)
Summary of Underwriting Agreement (continued) SUMMARY OF UNDERWRITING AGREEMENT FOR THE OFFER Termination events Withdrawal (continued) The Company withdraws the Offer (or any part of it) or indicates that it does not intend to, or is unable to proceed with, the Offer. Force majeure There is an even
Slide 55: Summary of Underwriting Agreement (continued)
Summary of Underwriting Agreement (continued) SUMMARY OF UNDERWRITING AGREEMENT FOR THE OFFER Termination events Change in law (continued) There is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any State or Territory of Australia or the
Slide 56: Appendix A
Appendix A 56
Slide 57: Corporate Overview
Corporate Overview Capital Structure Current Pro Forma1 Current Share Register as at 4 November 2022 (Pre-Offer) Share price/TERP2 A$ 0.205 0.185 Shares outstanding m 1,104 1,979 1 ICM Limited 10.7% Market Capitalisation A$m 226 366 2 Baker Steel Capital Managers LLP 6.6% Net debt3 A$m 241 101 3 Dim
Slide 58: Hedge Book at 30 September 2022
Hedge Book at 30 September 2022 Resolute’s funding obligations require a minimum of 30% of forecast production to Mar. 24 to be hedged US Dollar Forward Sales Forward Delivery Quarter Price ($/oz) (oz) December 2022 $1,857 24,000 March 2023 $1,879 35,000 June 2023 $1,933 35,000 September 2023 $1,951
Slide 59: Group Reserves & Resources at 31 December 2021
Group Reserves & Resources at 31 December 2021 59 Not for distribution or release in the United States
Slide 60: Syama North Mineral Resource Statement
Syama North Mineral Resource Statement Syama North Satellite Deposits Mineral Resource (>1g/t) • The Syama North deposit was re-estimated in July 2022 using mineralisation Oxidation Tonnes Grade Ounces wireframe constrained Ordinary Kriged methodology. Oxide 2,054,000 2.9 188,000 Transitional 1,293,
Slide 61: Contact
Contact James Virgo GM – Finance and IR www.rml.com.au Email: contact@rml.com.au Phone: +61 8 9261 6100 61
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