 SP Angel today:-Resolute Mining (RSG LN) 33p, Mkt Cap £745m Half year results show return to net cash supported by SyamaResolute produced 167koz Au over the first half, down slightly yoy but in line with expectations.Revenue over the period at $342m vs $330m same period last year, with average realised gold price of $2,170/oz.EBITDA at $116m vs $101m same period last year, OPEX down 2% whilst gold sold down 9%.Net profit after tax of $33.4m, down from $88mAISC for the period at $1,442/oz vs $1,469/oz 1H23 management expects this to continue to fall into H2.CAPEX guidance retained at $115-145m, with CAPEX + exploration expenditure at $44.3m for the period.Net cash up to $97m, cash and bullion at $143m. The company paid a final $25m loan facility, and holds $48m in in-country overdraft facilities.Syama AISC rose from $1,418/oz to $1,502/oz qoq.Syama sulphide grade and tonnage is expected to decrease in 3Q24 on rainy season constraints, before ramping up again.Syama processed oxide tonnage is also expected to be lower this quarter, before increasing into 4Q24.Mako is expected to see AISC meet full year guidance of $1,100-1,200/oz.FY24 production guidance retained at 345-365koz Au with AISC of $1,300-1,400/oz.Management highlights the SSCP project progresses well, supporting 4mtpa of higher-grade sulphide ores from 2.4mtpa to be fed through Syama by mid-2025.Company expects to release an MRE for Tomboronkoto and their Mansala Prospect in Guinea this quarter.Resolute expects a further A$20m to be paid from Ravenswood by 30th September 2024. |
Key points for me are:
1) $341M revenue in H1 and looking at $460M in H2, so total for year of $800M.
This is a 25% increase over last year.
For prod of 188K Oz in H2 (94 per Qtr) at 2,450/oz - so mid range of 355K/yr
2) Capex spend will be approx $85M in H2 (mid range of 130$M with 45$m spent)
3) Will get another $12M from Ravenswood on 30 Sept.
4) Lower AISC in H2, expect net cash to be around $150M at year end.
Would be much higher if Capex in H2 was lower but you have to spend to invest.
5) Most important to me was almost the last sentence in the update, "Looking at finalising a new working capital facility for opportunistic organic and inorganic growth". I read that as potentially looking at an acquisition. As mentioned in an earlier post I see HUM as a possible. Would immediately increase prod from around 350K to 500K+ plus a number of exploratory assets
Should be a good H2 |
This has been an absolute nightmare for me over the last couple of years or so, didn't even bother looking into what was going on, thought the share price kept going up in line with gold price. Looking at the update today seems we have a bright future, bought some more today, maybe a bit late but hey ho |
Gold is up around 15% on the H1 price achieved so H2 cash generation should be even better |
They produced 167koz but only sold 157k, so about 10koz or $20m still sitting in the stock pile |
Looking at the share price reaction. this is an absolutely shocker of a performance to see a cash balance improvement like this... 'Net cash of $96.6 million (31 December 2023: $14.0 million)'
Key highlights for half year ended 30 June 2024 include:
▪ Production (gold poured) for H1 of 167,140 ounces (oz) compared to 176,631oz in H1 2023.
▪ All-In Sustaining Cost (AISC) of $1,442/oz for the first half of the year ($1,469/oz in H1 2023) due to lower operating cost, continued efficiency improvements and lower sustaining capital.
▪ H1 gold sales of 157,321oz at an average realised gold price of $2,170/oz compared to 173,058oz at an average realised gold price of $1,906/oz in H1 2023.
▪ Cash generation of $73.1 million excluding interest payments, working capital movements, Ravenswood payment and debt repayment.
▪ Received A$30m (approximately $20m) first tranche cash payment from restructured Gold Price Contingent Promissory Note from the sale of the Ravenswood Gold Mine in Q1 2020.
▪ Net cash of $96.6 million (31 December 2023: $14.0 million). |
Don’t know why such a big difference in FX loss up from $2.2m in 2023 to $16.7m in 2024
Unrealised foreign exchange gain/(loss) (2,252) 2023 |
I think it’s down because…
“Net income after tax of $33.4 million (H1 2023: $87.7 million) due to $16.7 million of extra tax expense as the tax exoneration in Senegal ended in July 2023, as well as $37.5 million of non-cash unrealised foreign exchange differences” |
Looks good. Not sure why we are down 8%. Any views? Buying opportunity? |
Cash up $82m in the first 6 months of the year |
29 August 2024
2024 Half Year Financial Results
· Total Recordable Injury Frequency Rate (TRIFR) of 2.11 at the end of H1 2024 with nine recordable injuries during the period of which 5 were medical treatment cases
· Gold production of 167,140 ounces (oz) (H1 2023: 176,631 oz) in line with expectations reflecting lower production in Q1 due to the scheduled 14-day maintenance shutdown at the Syama Sulphide Plant and final portion of waste stripping at Mako
· Revenue of $341.5 million, an increase of 4% from the same period last year (H1 2023: $329.5 million), from gold sales of 157,321 oz at an average realised price of $2,170/oz (H1 2023: 173,058oz at $1,906/oz)
· Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $116.4 million, an increase of 14% from same period last year (H1 2023: $101.4 million) with a 14% increase in gold price and 2% decrease in operating costs offsetting a 9% reduction in gold sold
· Net income after tax of $33.4 million (H1 2023: $87.7 million) due to $16.7 million of extra tax expense as the tax exoneration in Senegal ended in July 2023, as well as $37.5 million of non-cash unrealised foreign exchange differences
· Improved All-In Sustaining Cost (AISC) of $1,442/oz, 2% lower than H1 2023 ($1,469/oz). AISC is expected to continue to track lower in H2
· Capital expenditure (excluding exploration) of $44.3 million (H1 2023: $36.7 million), with spend expected to be H2-weighted and in line with full-year guidance of $115 - 145 million
· Net cash increasing to $96.6 million (H1 2023 net debt of $17.2 million) with cash and bullion at 30 June 2024 of $143.4 million
· Final $25.0 million of Group loan facility repaid; Company borrowings of $47.5 million consisting of in-country overdraft facilities in Mali and Senegal
· Syama Sulphide Conversion Project (SSCP) progressing on plan with most of the earth and civil works engineering and design works nearing completion
· Full year 2024 production and cost guidance maintained at 345,000 - 365,000 oz at an AISC of $1,300 -1,400/oz |
Last year the Half Year Financial Results came out on 22nd August 2023
I assume it is due any day? |
I see it now. Note to self: must lay off the wine |
Have they announced a date for H1 financials? |
I'm a little surprised the directors dont have more skin in the game. But they seem well rewarded. |
Buying out banana skin prone Hummingbird is an interesting idea. Has that been mentioned before. HUM also has a potentially valuable interest in Digby which is undergoing a strategic review. With it haemorrhaging cash it is surprising the Bank has not pulled the rug and a fire sale does sound possible. Resolute will be pouring off cash and will need a strategy to deal with it that satisfy investors. Can you believe it remains so undervalued |
19 June 2024
Ravenswood Update
Resolute restructures Ravenswood Payments and receives A$30 million with further A$20 million due by September 2024
Resolute Mining Limited (‘ResoluteR17; or ‘the Company’) (ASX/LSE:RSG) is pleased to announce that it has received A$30 million from Ravenswood Gold Pty Ltd (“Ravenswood”) the owner of the Ravenswood Gold Mine which the Company sold on 31 March 2020.
Resolute and Ravenswood have restructured the Gold Price Contingent Promissory Note and Vendor Financing Promissory Note to support the Ravenswood Mine in its financing.
Based on the original agreements between Resolute and Ravenswood, Resolute was due to receive a Gold Price Contingent Amount after cumulative ounces produced from Ravenswood exceeded 500,000oz of gold over a four-year period. The payment amount was dependent on certain bands linked to gold price:
• A$10 million if the average gold price is greater than A$1,900/oz;
• A$20 million if the average gold price is greater than A$1,975/oz;
• A$30 million if the average gold price is greater than A$2,050/oz;
• A$40 million if the average gold price is greater than A$2,075/oz; and
• A$50 million if the average gold price is greater than A$2,100/oz.
Resolute and Ravenswood have agreed to amend the Gold Price Contingent Promissory Note including that the requirements of the clause regarding Payment of Gold Price Contingent Amount of the Original Gold Price Contingent Promissory Note are deemed to have been met. Accordingly, the Gold Price Contingent Amount payable to Resolute is A$50 million (the highest payable amount) and is payable in two tranches as follows:
• A$30 million paid to Resolute and received on 19 June 2024; and
• A$20 million to be paid to Resolute no later than 30 September 2024.
Additionally, Resolute has amended the A$50 million Vendor Financing Promissory Note that was originally due in March 2027. The new structure is as follows:
• Reset the principal to the increased amount of A$64 million to account for capitalised accrued interest;
• Maintain the annual coupon at 6% until 30 June 2025 after which the annual coupon increases to 12%. Interest will be capitalised and is to be paid to Resolute upon maturity; and
• Promissory note maturity extended to 31 December 2027 but may be repaid early on future Ravenswood financings, liquidity event(s), or excess cash from Ravenswood.
The Upside Sharing Promissory Note (up to A$150 million) linked to the investment outcomes of Ravenswood for EMR Capital (“EMR”) - one of the owners of Ravenswood - remains unchanged.
This instrument is triggered on any liquidity event including disposal of Ravenswood or qualifying initial public offering.
The payment is determined by reference to the gross money multiple to EMR which is the gross proceeds (before payment of the Upside Sharing Payment) divided by the total capital invested in the acquisition, development and operation of Ravenswood by EMR.
Resolute will receive the Upside Sharing Payment from the owners of Ravenswood based on the amount by which the gross money multiple exceeds a minimum threshold up to a cap of A$150 million as follows:
• A$7.5 million for each 0.1 that the gross money multiple is above 2.5x up to 4.0x; and
• A$5 million for each 0.1 that the gross money multiple is above 4.0x.
Chris Eger, CFO, commented,
“This restructuring of the Ravenswood payments is a positive credit enhancing development for Resolute
and further strengthens the Company’s cash position for our growth projects.
We will receive the highest-possible payment of A$50 million from the Gold Price Contingent Promissory Note whilst also supporting Ravenswood with their financing. The first A$30 million tranche has been received and the second A$20 million tranche is due no later than the end of Q3 2024. These payments, along with strong cash generation from our operations, will further bolster our liquidity position and balance sheet in H2.
In tandem, we have favourably amended the A$50 million Vendor Financing Promissory Note with the coupon being increased from 6% to 12% from 30 June 2025 until maturity at the end of 2027, providing further potential cash to Resolute.
This is a great outcome for both Companies and demonstrates the good business relationship we have engendered.”
Authorised by Mr Terence Holohan, Managing Director and Chief Executive Officer |
Not only that - It will get another A$20M from Ravenswood in Q3 with a further potential A$150M if Ravenswood gets sold.
RSG currently has a market cap of £760M but $100M cash so EV of less than £700M, HOCH by comparison has a market cap of £1B and £250M net debt, so an EV of £1.2B. HOCH only produces 300T GEO so less than RSG. So RSG does seem cheap. It is also fully unhedged as well as plans to increase production and lower AISC further. Only downside is that it is in Africa rather than South America.
Personally rather than pay a dividend, would like to see it grow its cash balance during H2. It was only fully unhedged from Q2 so expect cash to grow to around $175M by EOY as has some capital expenditure planned for H2 otherwise would be more.
Rather than a divi going forward, would buying out the basket case that is HUM make sense. Currently has a market cap of £62M but some $200M in debt and is trying to get to 200K oz per year. Both operate in same/similar countries depending on mine (Mali/Guinea/Senegal and Liberia) so would extend geography, economies of scale and immediately get us upto 500K oz with an immediate growth plan to 700K |
With a decreasing AISC ($1300/$1400) and solid production output (345,000/365,000 ozs pa) at these gold prices ($2500) RSG is a massive cash cow - No?
Profit per oz $1100 plus = £845 ($2500 - $1400) times say 350,000 ozs = c. £300m!!
Anyone disagree? |
Is the Half Yearly Report due this week?
Group Exploration update & webcast planned I believe for Q3
Do you think they will seriously consider a dividend soon given cash generation?
Who is the "expert" on this share?? |
And a breakout today 👍 |
RSG chart looks superb perfect bowl chart, could we see 80p again in the next 12 months? |
Up 8.7% on ASX today
H1 results likely this week |
RSG nearly 10 percent up last night should see 35p plus today. |
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