Resolute Mining rides precious metals rally, H1 EBITDA jumps 171%

Precious metals mining company Resolute Mining Limited (LON: RSG) posted bumper fundamentals during the first half of full-year 2019, with impressive production and financial results. This is only one of many success stories in the precious metals sector this year, with market uncertainty feeding the increased popularity of inverted risk assets.

The Company posted headline-grabbing EBITDA of AUS $78 million, booming 171% on H1 2018 EBITDA of AUS $29 million. This was led by gold and silver sales revenue of AUS $324 million, spiking 33% from AUS $243 million. Resolute gross profit from operations bounced AUS $30 million on a year-on-year basis, up to AUS $69 million for H1 2019.

The Group’s net operating cash flow also jumped on-year, up from AUS $53 million to AUS $95 million. Gold production grew by around 35,000oz, up to 176,237oz during H1 FY19. This allowed gold sales to jump by a similar level, up to 176,294oz.

Shareholders reaped some of the benefit, with EPS rising from 4.40 to 4.71 Australian cents per share.

Regarding its operations, the Company said its Syama prospect achieved commercial production rates, the Ravenswood Expansion Project optimisation study progressed and the Group said there were ‘major gold inventory updates’ at its Tabakoroni project.

Resolute Mining comments

Managing Director and CEO, Mr John Welborn, lauded,

“Delivering 176,237 ounces at an All-In Sustaining Cost of US$828 per ounce generated revenues of A$324 million and EBITDA of A$78 million which is an exceptional result during a period of significant investment in our business.”

“The ramp up of the Syama Underground Mine to full production will further increase Resolute’s production base, margins, and cash flows. The acquisition of Toro Gold is a further boost to the profitability and cash generating capacity of our business.”

“Our investment in exploration enabled us to deliver material growth in our gold inventory. At Tabakoroni, we now have a Mineral Resource comprising over one million ounces of gold at a grade above five grams per tonne which will underpin a potential underground mine, while at Ravenswood we added one million ounces of gold in Ore Reserves. Mineral Resources at Ravenswood are now almost six million ounces of gold with our ongoing study work focused on delivering a project which can produce 200,000 ounces annually over a 15 year mine life.”

“We are delighted to have delivered as promised on important strategic goals for 2019 with our listing on the London Stock Exchange, the ramp-up of Syama, and the acquisition of Toro Gold. Gold production for 2019 is now forecast to be 400,000 ounces at an All-In Sustaining Cost of US$960 per ounce with further growth and upside to come in 2020.”  

Investor notes

Despite today’s seemingly positive update, the Company’s share price dipped 0.67% or 0.63p to 93.98p a share 30/08/19 11:06 BST. The Group’s p/e ratio isn’t available, their market cap is £821.61 million.

Elsewhere in the mining and minerals sector, recent updates have come from; Bisichi Mining PLC (LON: BISI), Polymetal International Plc (LON: POLY) Cora Gold Ltd (LON: CORA), Glencore PLC (LON: GLEN), Jubilee Metals Group PLC (LON: JLP), Ariana Resources plc (LON: AUU) and Bushveld Minerals Limited (LON: BMN).

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Jamie Gordon
Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.