TIDMRSG
RNS Number : 0569Q
Resolute Mining Limited
13 October 2023
13 October 2023
Group Three-Year Forecast and Update to 2023 Guidance
Total group gold production of over 1,000,000 oz from 2024 to
2026
Resolute Mining Limited ("Resolute" or "the Company") (ASX/LSE:
RSG) is pleased to provide an operational forecast for the Syama
mine and Mako mine for the three years of 2024 to 2026 as well as
providing an update of 2023 Guidance.
Over the next three-years we are expected to see strong growth
from the Syama sulphide operations, with the mine exceeding
260,000oz per year by 2026 as the underground Sub-Level Cave
("SLC") performance further improves and the Phase I Expansion
project ramps up.
At Mako, following the successful cut-back completion over 2023,
both 2024 and 2025 will increase profitability with production
between 130,000-140,000oz per year at an all-in sustaining cost
(AISC) reducing to US$1100-1200/oz from approximately
$1,450/oz.
The Company is also taking the opportunity to update the market
of its 2023 Guidance. Mako and Syama sulphide operations continue
to perform according to their respective schedules, however the
Syama oxide operations have not performed to plan as a result of
mining lower grade ores therefore impacting production. This has
resulted in overall gold production being revised down from our
target of 350,000oz to a range of 330,000-340,000oz for the
year.
Group AISC guidance for 2023 remains unchanged at US$1,480/oz,
due to the implementation of sustainable cost reduction initiatives
put in place over 2023 across all aspects of the Group. Capital
expenditures for 2023 are expected to be approximately US$70
million, excluding the Phase 1 Expansion capital, down from the
previous guidance of US$88 million.
Highlights For Three Year Forecast
-- Total Group gold production of 1,000,000-1,100,000 oz for the three years 2024 to 2026;
-- Syama gold production increasing to over 260,000 oz per year
in 2026 as the Syama North enhancement becomes fully
operational;
-- Mako gold production of 130,000-140,000 oz in 2024 and 2025
as high-grade (>2 g/t) ore is processed; and
-- Group AISC systematically falling from US$1480/oz in 2023 to US$1,175-1,275/oz by 2026.
Resolute Mining Limited ("Resolute" or "the Company") (ASX/LSE:
RSG) is pleased to provide three-year forecast for its Mako and
Syama Operations. This follows mine optimisations and incorporation
of the Phase I Expansion Project at Syama.
Resolute's Chief Executive Officer, Mr Terry Holohan,
commented:
"The release of our three-year forecast is to provide clarity
and confidence to the market that Resolute remains on its stated
organic growth path to increase ounces and improve margins across
all its operations. I am pleased to report that the Sub Level Cave,
which is the heartbeat of Syama, continues to improve its overall
performance and is presently being constrained by the crusher plant
which has enhancements scheduled for commissioning over Q4 2023;
these improvements will allow the SLC to increase capacity. The
Syama North Phase I Expansion project, which is on track for
commissioning in H1 2025, will enable stable production in excess
of 260,000oz per year at the mine for many years to come with the
flexibility of having two reliable sources of ore. All of this
being now possible since we have rebuilt the Syama sulphide plant
and demonstrated the ability to economically recover gold from the
refractory sulphide ores over the last two years at production
rates of approximately 160,000 oz per year.
At Mako, we have two extremely strong years ahead of us with
production around 135,000 oz per year at very healthy margins.
While we have presently scheduled to start ramping down the
operations in 2025, we are actively drilling in close proximity to
the mine with full stakeholder support and are, over time, becoming
more confident of being able to extend the mine's life.
Unfortunately, in Syama due to precluding operations in the
Tabakoroni open pit due to the presence of carbon pockets, where we
had scheduled 150kt of high grade (4g/t) material (approx.16,000 oz
recovered) for treatment in the oxide plant we had to replace this
ore with significantly lower grade material. As a result of this
change in the mine plan, we are expecting slightly lower gold
production in 2023 from the oxide operation. Specifically, we are
revising down our guidance to 330,000-340,000 oz. Over Q4 2023 the
oxide operations will return to planned grades as mining in the A21
open pit, originally scheduled for start-up in Q1 2024, commenced
stripping mid-year with ore access in Q2 2023 and plant head grades
returning to planned levels over Q3 2023.
I am happy to report that, despite the lower ounces projected,
we still expect the same Group AISC of US$1,480/oz due to the
sustainable cost reductions we have implemented over 2023 across
the Group . "
Three-Year Forecast
Resolute is pleased to provide three-year production and cost
forecast for its Mako and Syama Operations - Table 1.
Syama
Syama gold production will be stable in 2024 and 2025 and then
increase by approximately 15% in 2026 where production is expected
to exceed 260,000 oz. From 2026 onwards over 90% of production is
expected to come from sulphide ore from underground and open pit
sources. The Phase I Expansion, expected to be commissioned in the
first half of 2025, will retain flexibility to switch between
processing oxide and sulphide ore. At this stage, the board has
approved the funding for long lead items and final board approval
of the project is anticipated once definitive technical
documentation is completed.
The capital expenditure at Syama over the next three years is
driven by the Phase I Expansion and waste stripping of Syama North
pits to access deeper higher-grade sulphide ore. Phase I Expansion
capital expenditure will be approximately US$45-55 million and
US$5-10 million in 2024 and 2025 respectively.
We estimate total sustaining capital expenditure of between
US$20-30 million for each of the next three years with the
remainder being classified as non-sustaining capital.
Non-sustaining capital over the years relates to the Phase I
Expansion capital, fleet additions to increase the underground
production capacity from 2.4 Mtpa to 2.8 Mtpa and
pre-stripping.
There is also approximately $2 million of capital allocated in
2024 for studies on the Phase 2 Expansion Project.
The Syama AISC is expected to decrease gradually over the next
three years due to the continued positive impact of cost-saving
initiatives and from the increase in gold production in 2026 as the
SLC and the Phase 1 Expansion hits optimal capacity.
Mako
Mako gold production will peak in 2024 and 2025 as the
high-grade zones in the Mako pit, that have been exposed in 2023,
are mined and processed. In 2026 stockpiles start to be processed.
The production and cost forecast provided assumes Mako stops gold
production in 2027 and the closure plan commences. However,
Resolute is growing more confident that additional ore source can
be found to extend the mine life with several options being
actively pursued. Further details will be provided throughout the
course of the year.
Assuming the mine is closed, the remaining capital expenditure
at Mako will consist of minimal sustaining costs and final stage of
waste stripping. The estimated waste stripping remaining is US$6-8
million in 2024 with a further US$4-6 million of sustaining
capital. Total capital expenditure falls to US$5-8 million and
US$1-3 million in 2025 and 2026 respectively. This capital
expenditure profile is based on a conservative mine closure
scenario; however, management is actively exploring alternative
scenarios to extend the mine life which if developed would require
additional capital expenditure.
The AISC at Mako over the next three years are expected to be
considerably lower than in 2023. The primary reason are the strong
head grades expected 2.2-2.3 g/t and 2.0-2.1 g/t for 2024 and 2025
respectively, in addition to the lower sustaining capital. The
stockpiles schedules to be processed in 2026 are expected to have a
head grade between 0.9-1.0 g/t; the cessation of mining activities
in 2026 keep the AISC at US$1100-1200/oz.
Revised 2023 Guidance
Group gold production guidance for 2023 is being revised to
330,000-340,000 oz, down from 350,000oz, due to lower production
from Syama with oxide operations requiring treatment of lower grade
ores leading to Syama gold production for 2023 being revised down
from 233,000 oz to 215,000-225,000 oz.
There has been no change at Mako which is performing in line
with guidance of 117,000 oz for 2023.
At Syama, the oxide mining schedule changed because of mining in
an area of the Tabakoroni open pit which hit unexpectedly high
carbon content which impacted recoveries. As a result, this area
was removed from the 2023 mine plan, impacting 2023 total recovered
ounces by approximately 16,000 oz (scheduled at 150kt at 4g/t Au
and 85% recovery). As a result of ceasing mining at Tabakoroni,
mining oxide ore from the A21 pit was brought forward from 2024
into the 2023 schedule however with lower grades being fed into the
mill as compared to the original plan.
The Company remains comfortable of cash costs and capital
expenditures. Group AISC guidance for 2023 remains unchanged at
US$1480/oz as the volume effect is offset by the reduced costs. Due
to a revised budget, we have reduced 2023 capital expenditure
guidance from US$88 million to approximately US$70 million
excluding capital required for the Phase 1 Expansion.
Contact
Resolute Public Relations
Matthias O'Toole-Howes Jos Simson / Emily Moss, Tavistock
matthias.otoolehowes@resolutemining.com resolute@tavistock.co.uk
+44 203 301 7620 +44 207 920 3150 / +44 7788
554 035
Australian Media
Cameron Morse, FTI Consulting Corporate Broker
cameron.morse@fticonsulting.com Jennifer Lee, Berenberg
+61 433 886 871 +44 20 3753 3040
Authorised by Mr Terry Holohan, Managing Director and Chief
Executive Officer
Production Targets
Certain information in this announcement comprise a Production
Target and/or forecast financial information for the Mako and Syama
Operations and are based on mine optimisations and the
incorporation of the Phase I Expansion Project at Syama .
The Ore Reserves and Mineral Resources underpinning the
Production Target (and the forecast financial information based on
that Production Target) have been prepared by a competent person in
accordance with the requirements in the JORC Code (2012
Edition).
The Production Targets and/or forecast financial information for
the Mako and Syama Projects are based on Resolute's current
expectations of future results or events and should not be relied
upon by investors when making investment decisions. All material
assumptions upon which a Production Target (and forecast financial
information based on the Production Target) are disclosed in this
announcement. Resolute has concluded it has a reasonable basis for
providing the Production Targets and forecast financial information
included in this announcement.
Of material included within the Mako Production Target: material
classified as Proven Ore Reserves contributes 11% and material
classified as Probable Ore Reserves contributes 89%.
Of material included within the Syama Production Target:
material classified as Proven Ore Reserves contributes 33% and
material classified as Probable Ore Reserves contributes 67%.
No new information
The information in this announcement that relates to Mako and
Syama Production Targets is underpinned solely by Ore Reserves and
Mineral Resources from a report entitled 'Increases in Mineral
Resources and Ore Reserves from Exploration Success' announced on 8
March 2023. The Company confirms that it is not aware of any
information or data that materially affects the information
included in the relevant market announcement and all material
assumptions and technical parameters underpinning the estimates in
the original announcement continue to apply and have not materially
changed.
Forward-Looking Statements
This announcement contains certain "forward-looking statements"
including statements regarding our intent, belief or current
expectations with respect to Resolute's business and operations,
market conditions, results of operations and financial condition,
and risk management practices. The words "likely", "expect", "aim",
"should", "could", "may", "anticipate", "predict", "believe",
"plan", "forecast" and other similar expressions are intended to
identify forward-looking statements. Indications of, and guidance
on, future earnings, anticipated production, life of mine and
financial position and performance are also forward-looking
statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
Resolute's actual results, performance and achievements or industry
results to differ materially from any future results, performance
or achievements, or industry results, expressed or implied by these
forward-looking statements. Relevant factors may include (but are
not limited to) changes in commodity prices, foreign exchange
fluctuations and general economic conditions, increased costs and
demand for production inputs, the speculative nature of exploration
and project development, including the risks of obtaining necessary
licences and permits and diminishing quantities or grades of
reserves, political and social risks, changes to the regulatory
framework within which Resolute operates or may in the future
operate, environmental conditions including extreme weather
conditions, recruitment and retention of personnel, industrial
relations issues and litigation.
Forward-looking statements are based on Resolute's good faith
assumptions as to the financial, market, regulatory and other
relevant environments that will exist and affect Resolute's
business and operations in the future. Resolute does not give any
assurance that the assumptions will prove to be correct. There may
be other factors that could cause actual results or events not to
be as anticipated, and many events are beyond the reasonable
control of Resolute. Readers are cautioned not to place undue
reliance on forward-looking statements, particularly in the current
economic climate with the significant volatility, uncertainty and
disruption caused by the COVID-19 pandemic. Forward-looking
statements in this document speak only at the date of issue. Except
as required by applicable laws or regulations, Resolute does not
undertake any obligation to publicly update or revise any of the
forward-looking statements or to advise of any change in
assumptions on which any such statement is based. Except for
statutory liability which cannot be excluded, each of Resolute, its
officers, employees and advisors expressly disclaim any
responsibility for the accuracy or completeness of the material
contained in these forward-looking statements and excludes all
liability whatsoever (including in negligence) for any loss or
damage which may be suffered by any person as a consequence of any
information in forward-looking statements or any error or
omission.
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END
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