Earnings call transcript: Resolute Mining Q2 2025 highlights strong cash flow

Resolute Mining reported its second-quarter earnings for 2025, revealing robust financial performance driven by increased gold sales and improved operational efficiency. The company maintained a solid cash position and continued its strategic initiatives in West Africa. With a market capitalization of $75.4 billion and a strong return over the last three months, Resolute remains optimistic about its future prospects. According to InvestingPro analysis, the company shows several promising indicators, including expected net income growth this year. Subscribers can access 5 additional exclusive ProTips for deeper insights into Resolute’s performance.

Key Takeaways

• Resolute Mining achieved a Q2 revenue of $262 million, supported by strong gold sales.
• Operating cash flow increased to $85 million, up by $10 million from the previous quarter.
• The company is advancing its Syama Sulfide Conversion Project and Doropo Project acquisition.
• Resolute aims for a production target of 500,000 ounces by 2028.

Company Performance

Resolute Mining continued to demonstrate resilience in its operations, with Q2 2025 showing a revenue of $262 million and an operating cash flow of $85 million. The company’s strategic focus on geographic diversification and operational efficiency has resulted in a net cash position of $110 million. With a solid gross profit margin of 43.1% and revenue growth of 6.1% over the last twelve months, the company maintains strong operational metrics. Gold sales reached 80,000 ounces, contributing significantly to the revenue, with an all-in sustaining cost (AISC) improvement of $40/oz from the previous quarter.

Financial Highlights

• Revenue: $262 million
• Operating Cash Flow: $85 million, up from $75 million in Q1
• Net Cash Position: $110 million
• Gold Sales: 80,000 ounces at $3,400/oz
• All-In Sustaining Cost: $16.68/oz, improved by $40/oz from Q1

Outlook & Guidance

Resolute Mining has set ambitious production targets, aiming to produce 275,000 to 300,000 ounces in 2025 and over 500,000 ounces by 2028. The company has provided an AISC guidance of $16.50 to $17.50 per ounce and a capital expenditure guidance of $109 to $126 million. Based on InvestingPro’s comprehensive analysis and Financial Health Score of 2.7 (GOOD), the company appears well-positioned to achieve these targets. For detailed valuation metrics and growth potential analysis, investors can access the exclusive Pro Research Report, available for over 1,400 US stocks. The ongoing Syama Sulfide Conversion Project and Doropo Project acquisition are expected to enhance Resolute’s production capabilities and resource base.

Executive Commentary

"We are forming the basis of being a very attractive diversified gold producer in West Africa," stated Chris Egger, CEO of Resolute Mining. He emphasized the company’s strong cash flow generation and strategic focus on geographic diversification, which are pivotal to its growth strategy.

Risks and Challenges

Resolute Mining faces several challenges, including explosive supply chain issues in Mali, VAT recovery challenges, and potential changes in the mining code in Côte d’Ivoire. These factors could impact operational efficiency and financial performance. With a moderate debt-to-equity ratio of 1.16 and strong return on equity of 19%, the company maintains financial flexibility to address these challenges. Additionally, geopolitical challenges in the West African region pose risks to the company’s strategic initiatives. InvestingPro subscribers can access detailed risk analysis and comprehensive financial metrics to better evaluate the company’s risk profile.

Q&A

During the earnings call, analysts inquired about the supply chain issues affecting the Syama Mine and the permitting process for the Doropo project. Resolute’s management addressed concerns about potential delays and emphasized their efforts to mitigate these challenges through strategic planning and resource allocation.

Full transcript - Resolute Mining Ltd (RSG) Q2 2025:

Chris Egger, CEO, Resolute Mining: Good morning and welcome to Resolute Mining’s Q2 Operation Results. I’m Chris Egger, your CEO. And today, I’m welcomed on the call by Dave Jackson, our CFO and Bruce Malwat, our Head of Exploration, who is available for Q and A at the end of the presentation. And starting with Slide three in our presentation, we believe Resident Mining had a very strong quarter, again, with very healthy production of 75,962 ounces, which is similar to what we performed in Q1 at a cost of $16.68 dollars The business continues to perform very strongly on cash flow and we ended out the quarter with a net cash position of just above $110,000,000 What was really exciting in Q2 though is that we acquired the Doropo and ABC projects from AngloGold Ashanti and we announced and closed that transaction on May 1. And then most recently, we also appointed Gavin Harris as the new Chief Operating Officer, who’s made a real immediate impact into the business.

So moving to Slide four, I wanted to recap where Resolute operates today. We have two producing mines, one in Mali, the Syama Mine and another in Senegal, the Mako operation. And we also have two exploration countries, both in Guinea and in Cote D’Ivoire. As just highlighted in the previous page, we’ve made a very exciting entrance in Cote D’Ivoire to the acquisition of Doropo and ABC, but let’s not forget that we also have the Dabo, which is a very exciting project of 400,000 ounces at 1.3 grams per tonne. But what this means for the business is that whilst today we’re on track to produce 275,000 to 300,000 ounces in 2025, the business has set itself up so that by 2028, we’ll be on track to produce well over 500,000 ounces.

So we’re really forming the basis of being a very attractive diversified gold producer in West Africa with over 16,000,000 ounces of gold. So look, I’m very excited about what we’ve been building and the trajectory of the business in what will be the complicated geopolitical environment in which we operate today. So let’s turn to Slide five. As mentioned on the previous slides, we acquired the Doropo project from AngloGold Ashanti and announced this deal on May 1. I have to say, I believe this is one of the most exciting projects in West Africa today and which will really transform Resolute to be in a well established premier mining business in Africa.

The project remains well on track and the activities in Q2 were robust. We, for the most part, have been hiring a team in order to start the advancement of the Doropo project. The key activities for the rest of the year though will be to update the DFS and also to hire the engineering firms to start carrying out the FEED work. But most importantly, we are well into the process of optimizing the pit shells at a higher gold price. And you can see in the second bullet on the left that preliminarily we see substantial increase in gold at the higher pitched shell levels.

But when we update the JOR tables in the next month or two, you’ll understand exactly what that means. So again, for the second half of the year, the activities will be to optimize the DFS, which we anticipate will be issued in Q4. We will also be looking to update the reserve tables in the next quarter. And then finally, we expect to complete our permitting process. The permitting process is probably the one area that we have the most concerns on because it’s outside of our control.

At this stage, all applications have been made. We’re at this stage waiting for a final sign from the ministerial decree, which we expect by the end of the month. Once that’s completed, the final stage will be to sorry, convene an inter ministerial committee to approve the exploitation permit, which we hope will happen in September or October. Once the exploitation permit is received though, we will have approximately ninety days to negotiate with the Minister of Mines office on the exact mining convention that we will follow. And the one complication that we see in Ivory Coast is that today, there’s an election in October planned.

As you know, when there’s elections, timelines can slip and so we’re staying very close to the situation. The other key very exciting activity on Doropo is that we’ve hired a Project Director. His name is Rob Ciccini. He’s got a wealth of experience. He spent thirty years in the mining sector.

Most recently, he was the project director at the Azuma Resources Project of Black Volta in Ghana. And then before that, he was the successful project director for the Thunderbird project, which was a project built in the Kimberley Mineral Sands area of Western Australia, which he built well under budget and on schedule and that was a project that was over $300,000,000 In addition, Rob has twenty three years with Lycopodium, obviously a well known engineering firm that will likely be used in this project. So again, I think we’re at the process today of putting together the right pieces in order to develop Doropo properly. We get a question often about financing. And look, the financing initiatives for Doropo will be kicked off towards the end of this year once we have finalized the DFS and have visibility on the permitting process.

It’s too premature to start anything at this point in time. But as explained in the past, we anticipate that we will fund Doropo through a mixture of debt and our cash. So turning to Page six, let’s talk about our Mali operations specifically around Syama. In Q2, Syama poured 41,000 ounces of gold at an AISC of $2,134 Unfortunately, this was below our expectations as it regards to the fact that in Q2 and still today, CIAM is impacted by explosive supply chain issues throughout the country. Just to give a backdrop, today as we know, Mali is facing security challenges predominantly in the North and the West.

What this means though is that the importation of explosives and also the transportation of explosives internally is becoming very difficult as it’s due to very cumbersome and complicated permitting procedures. So, we’ve been working tirelessly with the government in order to make sure that our explosives are getting the right permits and then we’re getting the right transportation with those permits, but it’s proving to be difficult and frankly outside our control. So in Q2, there were times where we were short of explosives, which impacted the activities in the underground of the mine, predominantly in the development side. So we’ll continue to work tirelessly with the government in trying to manage these explosive supply issues. But at this point in time, I see that the sulfide activities will be at the lower end of the guidance from a production perspective for the remainder of the year.

When looking at the oxide production, we had a fairly strong quarter on oxides, but we have to remember that the amount of oxides in Syama is diminishing. So, moving forward and as we look into next year, the oxide production will continue to drop as we transfer to fully sulfide operation activities. And finally, look, wanted to have a word on continued sort of dialogue with the government. As we know, things in Mali are complicated, but I have to say for Resolute, it’s progressing. We continue to engage with the government on moving forward.

We are still waiting to hear though from the government a number of documents around the specific terms of the Mining Convention that we’ll be using moving forward. But the discussions like I said are productive and constructive and we’re keeping in an open dialogue with the government at this stage. So, look, all in all in Mali, I’m still very excited about the potential that Syama has. I’m obviously disappointed in some of the supply chain disruptions that we’re facing because it just is impacting the potential of that operation. As I look to the future, think this asset has tremendous potential for our business and our shareholders.

Moving to Page seven. I wanted to give you an update on our SAC project at Syama or another way to call it, the Syama Sulfide Conversion Project. Look, the SACP project for folks that remember is a project whereby we are converting our oxide line to process sulfides. Today at Syama, we roughly have 4,000,000 tonnes of processing capacity, 2,600,000 tonnes is for sulfides and 1,400,000 tonnes are for oxides. We are converting the oxide line to process sulfides.

In doing so, there are basically four key pieces of equipment that needed to be built and installed. It’s a new CCIL circuit, a flotation circuit, a pebble crusher and then a ball mill. So that’s well on track. And what I’m pleased to say is that in the second half of this year, the CCIL circuit and flotation circuits, pebble crushers will start to be commissioned with the ball mill being commissioned in the first half of next year. What this allows for the business is that at Syama, we’ll be able to start processing sulfides through the existing oxide circuit this year increasing the flexibility.

So the project is well on track. It’s on budget. It’s on schedule. This year we anticipate to spend around $30,000,000 on the SSEP with the last $35,000,000 being spent in 2026. So, very pleased with the progress of the SSEP in Mali.

And like I said, this will create greater flexibility for the Syama operation creating a lot more value for our shareholders. And now moving to Page eight, let’s talk a little bit about our operations in Senegal. So starting first with Mako. Mako had a very strong quarter with production of just about 35,000 ounces at an AISC of $972 So, again, pleased with the success at Macao. It’s exceeding all of our expectations.

We had a milestone in June whereby the main mining operations in the original pit ended and now we are in the process of processing stockpiles. We are fortunate that the end of the mining operations in Mako, encountered some higher grade ore than expected, which drove to better than expected results and therefore lower AISC cost. So, as we look at macro for the remainder of the year, it’s performing very well and we expect macro to produce at the upper end of guidance for 2025. However, activities in Senegal are not just about the existing operations at Mako, but more importantly in the life extension opportunities. So moving to Page nine, let’s talk about the first satellite deposits, which is Tombo and Koto.

As we know, Tombo is a site that’s been identified for many years and we are progressing nicely on the development of Tombo with anticipated ore processing in 2028. Tombo is complicated because it has obviously a village that needs to be relocated, but we believe that there is well over 400,000 ounces from Tombo that can be processed in the plant. So in Q2, we made good progress at Tombo. We’ve kicked off the environmental impact studies in the village with the key delivery of an ESIA to the Minister of Mines at the end of this year in order to kick off the permitting process, which will allow for an exploitation permit to be received in the 2026, allowing for the village to be moved as well as additional activities to happen in the surrounding areas. So again, good progress in the 2025 and this project remains well on track to start operations in 2028.

So, very pleased with how Tombo is performing. And now moving to Page 10 to complement Tombo. You will have seen last week that we announced an initial maiden resource for Bentaco, which is a satellite deposit just adjacent to the Tombow deposit. Bentaco is a less complicated area to develop in the sense that we have very limited community involvement in Bentaco. And as per previous slides and information that you may have seen, we have multiple areas of possibilities of ore with regards to Bentaco.

We issued a median resource on two areas specifically, Bentaco West And South, which totaled 266,000 ounces. And as we continue into 2025, we will be continuing to develop and explore these areas. We’ll focus on infill drilling, but as both of these areas are still open at depth and on strike, we’ll be looking to expand the resource with anticipated updated MRE for Bentaco probably in the beginning of next year, if not sooner. Since the Bentaco project has a lot less call it community dynamics than Tombow, we believe that we can get Bentaco into operations like in 2027 ahead of Tombow. But at the end of day between Bentaco, Tombow and our stockpiles, we’re creating effectively the flexibility in order to pick and choose what we’ll be able to mine in order to extend the operations at Mako for years to come.

So, look, in the press release, we’ve highlighted at least five years. I think it will be greater than that. But we’re seeing really good activity in Senegal and very pleased with the operations to date. So, moving to page 11, I want to talk a little bit about our exploration activities in the quarter because we find this again to be very exciting for the business and it creates flexibility and optionality for the future. So, really a core strategy for Resolute moving forward.

Let’s start first with Moly. So, Moly, look, we spent a bit of money just over $1,000,000 but that money was really focused on focusing on additional oxides that can add to the mining production mix in the future. In Mali, at Syama, since we have such a large footprint, we have lots of different opportunities to mine different areas and it’s important that we gain as much knowledge in what will maximize value to ourselves and shareholders in looking for additional oxides. In Senegal, obviously, the focus continues to remain on Tombow and Bentaco and that’s what we’ll continue to do in the second half of this year. But probably most importantly, when we look at our exploration license footprint in Cote D’Ivoire, today we have two other exciting projects aside from Doropo.

It’s the ABC project, which today has 2,100,000 ounces at 0.9 grams per tonne and the Ladabo project, which has 400,000 ounces at 1.3 grams per tonne. So look at ABC, this is a well known project that has actually created a lot of interest. It’s been partially explored. And so our focus will be to actually do some RC drilling at the Farako Nafana permit, which is the northern side of the exploration permits at ABC. And I think that will create quite a bit of value for us and we’ll look to announce those results probably sometime next year.

And then Ladabo with all the drilling that we’ve done, we’re in the process of updating the resource for Ladabo and initiating an MRE in the second half of this year. So again, I think across the spectrum, we’re doing very well in exploration. It’s core to our strategy. I think it’s where you actually create the most value for shareholders and that’s something that will be continued to do for many years to come. So with that, I will turn it over to Dave for a few comments on financials.

Dave Jackson, CFO, Resolute Mining: Thank you, Chris. Today, I’ll be walking you through the quarter’s headline financial results, highlighting the key performance metrics we’re pleased to share with you. Overall, we had a very strong quarter. We exceeded expectations across our core financial metrics for the Group. Operating cash flow for Q2 reached $85,000,000 This was driven by $262,000,000 in revenue and supported by 80,000 ounces of gold sales, at an all time high gold price of just over $3,400 per ounce.

Quarterly operating cash flow was approximately $10,000,000 more than Q1. This Q2 figure also includes $46,000,000 in corporate income payments in Mali and Senegal. These payments are related to taxable income realized in 2024. Net cash at quarter end stood at $110,000,000 marking a $10,000,000 increase from Q1. This includes the impact of the $46,000,000 in corporate income tax payments just mentioned, as well as the $25,000,000 outlay for the acquisition of Doropo and ABC projects at the May.

We had $47,000,000 drawn on overdraft facilities at quarter end. These continued to be used locally to optimize working capital. You will remember, these facilities were increased to $85,000,000 of availability in Q1, as we continued to maintain financial flexibility for the Group. Included in the net cash figure is $62,000,000 in bullion, representing nearly 19,000 ounces of gold that were sold after the quarter closed. Importantly, all gold is being sold at spot prices as we remain unhedged.

The Group all in sustaining cost was $16.68 dollars per ounce sold. This represents a $40 per ounce improvement from Q1. This reduction was primarily driven by the strong performance at Macko, where higher than expected production and lower operating costs contributed positively. At Syama, all in sustaining cost was higher than Q1 due to lower production volumes. We

: expect this

Dave Jackson, CFO, Resolute Mining: to normalize over the remainder of the year. Importantly, top line operating expenses at Syama have been trending down, thanks to the team’s continued focus on cost discipline. These benefits will become increasingly evident in H2 as production improves. Despite site level variances, we remain firmly on track to meet our full year Group All in Sustaining Cost guidance of $16.50 dollars to $17.50 dollars per ounce. Let me now walk you through the key components of our financial results that led to the cash and bullion position of $157,000,000 at the end of H1.

We generated a solid $160,000,000 operating cash flow during H1, approximately $30,000,000 higher than the comparable period in 2024. This uplift reflects the favorable gold price environment and the continued success of our cost reduction initiatives across the portfolio. CapEx for the half year totaled $57,000,000 including approximately $12,000,000 allocated to exploration. This comprised $19,000,000 in sustaining capital across Syama and Mako and $22,000,000 in non sustaining capital at Syama, of which around $14,000,000 was directed toward the Syama Sulphide conversion project. Overall, CapEx and exploration spend was in line with expectations, and we remain on track to deliver within our 2025 guidance range of 109,000,000 to 126,000,000 As previously noted, we made the initial 25,000,000 payment for the acquisition of the Doropo and ABC projects during Q2.

These projects represent exciting growth opportunities for the company and are expected to deliver meaningful long term value to our stakeholders. VAT outflows for the first half totaled $32,000,000 across both Mali and Senegal. VAT remains a source of cash leakage, but we continue to engage actively with local government to recover these amounts. Our recent discussions have been positive and we remain encouraged by the progress being made. We recorded an $11,000,000 working capital inflow for H1, primarily driven by a reduction in stockpile balances.

In addition, we made solid progress in lowering consumable inventory levels as a part of our ongoing efforts to optimize working capital. Our ending cash and bullion of $157,000,000 marks a $56,000,000 increase from the beginning of the year. This leaves us with ample available liquidity of over $212,000,000 at the end of H1. In summary, we’re in a very solid financial position given the strong H1 results and are excited about the growth potential of the business. With that, I’ll hand it back to Chris.

Chris Egger, CEO, Resolute Mining: So, thank you, Dave. Now moving to Slide 14. So look, in summary, very pleased with how we are progressing across the board, albeit with some challenges in Moly and Supply Chain. So, look, we are very much on track for full year group guidance on both production and cost. We continue to generate very strong cash flow and we had net cash position over $110,000,000 at the end of Q2, but I expect strong free cash flow to continue to build throughout the rest of this year and frankly into next year.

The business continues to execute on its strategy of geographic diversification and becoming a mid tier African gold producer generating well over 500,000 ounces. And we’re well on track to do that by 2028 with the portfolio that we have today. We will continue to evaluate M and A opportunities that we’ve done in the past. Although today I will say we believe that pipeline is very limited. But that being said, we have fantastic opportunities internally to create a lot more value for our shareholders and we’re very excited about delivering on those targets.

So, you very much. And with that, I will now turn it over to Q and A. Thank you.

Call Moderator: Thank you very much, sir. Our very first question this morning or today is coming from Richard Hatch calling from Berenberg. Please go ahead.

Richard Hatch, Analyst, Berenberg: Yes. Thanks, Chris. Yes, good morning, team. I’ve got a few questions for you. Just firstly, just on the explosives situation.

So is it the case that you need to increase your inventory levels of explosives so that you’ve got a bit more of a buffer? Or is it simply that it’s, as you say, like a permitting situation, which is just because of the security backdrop and that’s just creating issues. I’m just kind of conscious sort of trying to understand like what the risks are as we go into Q3 and Q4?

Chris Egger, CEO, Resolute Mining: Yes. Good morning, Richard. Thanks for the question. So look, it’s partially both points. Look, the first one is what happened at the end of last year is our main explosive supplier pulled out of Mali in other Western African regions.

So we swapped to a new supplier and we were able to get explosives in effectively January, February, March, April. And then we were in the process of trying to get more explosives in. And then as a result of permitting disruptions, we we were blocked and frustrated. So we are now working to try and get another three months supply in and also focusing on the next three months thereafter that. But as I mentioned previously, the issue that we were facing was due to the fact that with the security challenges that are happening in the country, there’s a heightened level of rigidity and, you know, bureaucracy around explosives.

And then just finding people to sign documents is becoming very difficult. And then once you actually have all the permits in the the explosive needs to be escorted from wherever they’re located, the border or in the capital, the site. And that means you have to find the gendarmes and also per present the right documentation. So all of this is creating a lot more work and effort. And because we had to swap suppliers, it was a bit of a, you know, an unfortunate situation.

So look, we’re we think we’re getting it resolved now as we speak, so that we don’t have disruptions for the rest of the year. But like I know now, we’re going to have at least another three months of availability, but we’re working on the next three to six months thereafter that.

Richard Hatch, Analyst, Berenberg: Okay. Helpful. Thanks. The second one is just on Ravenswood. I note in the release, you mentioned that the EMR has terminated the sales process of mine.

Just wonder if you may be able to give an update on that or just get any form of background. I’m just conscious that it could be a bit of upside into the stock that’s not really given any value to you in the share price.

Chris Egger, CEO, Resolute Mining: Yes. Look, we don’t have much more than what’s in public domain. So there’s not much more I can say except that what we heard from EMR Ravenswood is that they didn’t receive the value that they were expecting from the sales process because they ran into some operational challenges in Q1. So they decided to pull back on the sales process, effectively get the business, their business back on track and maybe look to relaunch it next year. Our key focus with Ravenswood is that we’re a creditor.

They are the VFPN. They’ll owe us about 70,000,000 Australian dollars. And so we’re monitoring, you know, the that payment, which is due in 2027. But look, the way we think about Ravenswood is that business is producing enough gold that it will be okay. It’s just a matter of what the private equity owners want to do with regards to selling it, maybe going the IPO route.

Unfortunately, we just don’t know much more than than what you know in that fact that they’ve just pulled the sales process and look, we’re we’re we’re staying close to them, making sure your operation continues to perform. At this point, we don’t put into our cash flow forecast until the due date.

Richard Hatch, Analyst, Berenberg: Okay. Understood. Just on Bantaka and Tom Brancato, is the right way to think about this is that you put them in sequence, as you say, like maybe one comes ahead of the other or is the expectation that you could potentially mine both at the same time? And then have you got any kind of steer on costs for the sort of all in sustaining costs sort of range there, guide,

Chris Egger, CEO, Resolute Mining: please? So look, the way that it’s looking at this stage is that Bentaco will probably be available in 2027. It will most likely then process a mix of the stockpile ore that we have still remaining and Bentaco ore until Tombo comes in. Tombo out of the three options has what I call the highest grade ore, the best ore for the plant. So once Tombo comes meaningfully on, we’ll probably swap over to Tombo, but still thinking about how we blend in all the different other areas.

So look, what the way we think about it and what I’ve highlighted before, it just creates just another tool in the tool chest for greater flexibility. I don’t have a steer on cost yet. I, so I don’t really wanna comment on it, but, you know, we’ll be making still healthy, healthy margins at this gold price. But look, as we complete the DFS for both projects, we’re hoping by the end of the year that we provide a bit more specifics on the production rates, as well as the cost profile. But like I said, you know, right now we have well over 600,000 ounces.

We think that’s going to grow substantially and that’ll create, you know, at least five years more of operations, but I just don’t know yet specifics on the numbers until we complete those DFS studies.

Richard Hatch, Analyst, Berenberg: Okay, cool. Thanks. Just one for Dave. Just on David, on working cap, just seeing the first half you had a bit of a release of working cap because of the stockpiles processing. I guess at Macco, you basically moved fully into stockpiles processing.

Is that going to create a bit more of a working cap tailwind in the second half?

: Thanks, Richard. Mean, you’re bang on the stockpiles. You’d expect the stockpiles to be reducing in macro as obviously we’re just going to be pushing those through the plant. And then we’re doing quite a bit of work on the supply chain side as well. So we’d expect consumables to come down as well.

So we’d expect in the second half to get a bit more of a push on the working capital.

Richard Hatch, Analyst, Berenberg: Right. Thanks. And then just lastly, I don’t know if you’re able to give us any kind of steer on it, but obviously, most interesting thing well, one of the interesting things you said about Dorepay this morning is that, that increased gold price can lift volumes or at least life of mine volumes. Are you able to give us any kind of flavor on that? Or is it just we have to wait and see until you release your definitive feasibility study later this year?

Chris Egger, CEO, Resolute Mining: I think, Richard, we’re going to have to wait. I mean, we’re going to do it in two stages because we can update the door tables sooner than the DFS update. The original pitch were done at 1415 and 1950, there’s a lot more gold. What we’re trying to focus and what we’re evaluating is whether we want to redesign the plant capacity because of this additional ounces. We probably won’t just because there was some real logic as to why the plant capacity was originally designed at 5,600,000 tons per annum.

But that’s why we’re all in, call it discussions with the various consulting firms to decide what we do with the optimized DFS. But look, what we’re focused on, and I don’t think what will change will be that the near term production profile will stay close to 200,000 ounces and effectively the higher pitch levels will increase the mine life and just a lot more ounces into the overall project.

Richard Hatch, Analyst, Berenberg: Yeah. Clear. All right. Okay. That’s me.

Thanks very much for your time. Cheers.

Chris Egger, CEO, Resolute Mining: Thanks, Richard.

Call Moderator: Thank you for your question sir. Our next question today will be coming from Justin Chan calling from S and P Resource Management. Please go ahead. Your line is open.

Justin Chan, Analyst, S&P Resource Management: Hi, guys. Thanks for the call. Just a couple of questions. One one on the VAT. Are you having the same issues in in, Senegal as in as in Valley?

And are there any tax offsets or should we just, at least for the near term model, basically a similar outflow rate going forward?

Chris Egger, CEO, Resolute Mining: Dave, you wanna take this one?

: Thanks, Justin. That’s a good question. So we are seeing the VAT come back in Senegal. The cash leakage is mainly in Mollies. The story is still the same there as it has been in the past, but we are gonna see some offsets in the future from Senegal for basically all of the VAT that we submit.

So really some uplift there.

Justin Chan, Analyst, S&P Resource Management: Okay. Thanks. That’s helpful. And then I guess, so for this quarter’s 32 number, I mean, that representative of a go forward if the gold price doesn’t change? And or the situation in Valley doesn’t change?

Chris Egger, CEO, Resolute Mining: Yeah. I

: mean, we’re running around 1 and a half to 3,000,000 a month, depending on purchases and all that. So it will fluctuate a little bit, but I mean, it’s probably gonna continue like this for the rest of the year.

Justin Chan, Analyst, S&P Resource Management: Okay. Okay. Thanks. That’s that’s quite helpful. And then, I guess, terms of Doropo, could you just remind me so the I guess you’ll you’ll rerun the DFS and at that point, you’ll go through the remaining permitting steps.

Could you just remind me of what’s been done, what needs to be done on the on the permitting side of things?

Chris Egger, CEO, Resolute Mining: Yeah. Hi, Justin. It’s Chris here. No. Look.

So on the permitting, we’re going we’ve we’ve launched the permits based off the original DFS and original ESIA. There’s gonna be look multiple mine plans as we continue to learn more about this project. So the optimized DFS is more for a financing initiative at the end of the year and also for firm FID. The like I said, the permits are well underway with applications lodged and we’re waiting for, obviously, a sign signing from the minister of sorry, a ministerial decree signing, and then we’ll move to an interminisceral committee. So look, that’s again well underway and we expect to hopefully have the permits lodged by October, but it could slip.

So look. That’s why the optimized DFS and permitting are are independent of one another.

Justin Chan, Analyst, S&P Resource Management: Gotcha. And then I suppose I mean, then I guess the new car is waiting for the election. So could could go one way like, I I I guess I’m asking, do you expect to be on the new code or old code, or is there any guidance there? I guess, suppose, it depends on timing and things.

Chris Egger, CEO, Resolute Mining: Yeah. So look. You may have seen that back in mid June, I actually went to Cote D’Ivoire, met with the prime minister as well as the minister of mines with with Dave and our head of legal. It was very clear in the discussions with the government that they would like us to adopt the new code or parts of the new code, but we don’t know what that new code is like. We are actually in consultation with the minister of mines and discussing what that new code could look like.

But look, as we know across most of Africa, there’s new code being put in place. There’s more stringent local content rules. There’s higher royalty rates, and there’s also possibly higher equity ownerships. These are all things that we took account for when we first acquired Doropo. We actually modeled Doropo both off the existing code and the new code.

So we’re prepared to adopt certain aspects of the new code, but, you know, we have to see what those are because we also made decisions on certain certain points. But we just don’t know. Right? They’re in a period of of evaluating. But what I will say is with Cote D’Ivoire as a government, they’re incredibly easy to work with.

They’re they’re logical, they’re sensible, and we have a good conversation with them at this point. So, you know, I would say I’m very pleased with how we’re we’re we’re we’re building that relationships, but I just don’t know the exact specifics of what code will be under.

Justin Chan, Analyst, S&P Resource Management: Gotcha. Yeah. I gotcha. And as I understand, the code is then, I guess, the new one’s waiting on the election or or something to that effect?

Chris Egger, CEO, Resolute Mining: I I I don’t know. I don’t know if that’s I don’t know. I don’t think that’s the case because they’ve been working on a new code for some time. It’s just when you have elections, people obviously start to disappear for election purposes. But I know that the minister of line’s office is working hard on the new code.

And like I said, having consultation periods with us as well as others. So, you know, I just don’t know how it’s all gonna be sequenced, but I don’t think it’s directly linked. It may be, but I don’t know.

Justin Chan, Analyst, S&P Resource Management: Gotcha. Gotcha. Alright. Thanks very much, guys. I’ll I’ll flip the line.

Thanks for hosting the call and congrats on the quarter.

Chris Egger, CEO, Resolute Mining: Thanks, Justin. Appreciate it.

Call Moderator: Thank you for your question, sir. As we have no further questions, I’d like to return the call back over to you. Thank you.

: Thanks very much, George. So I’m going to pass the call back to Chris for any final closing remarks. Chris, back to you.

Chris Egger, CEO, Resolute Mining: No. Thanks, Scott and George. And just for everybody, thank you for joining our Q2 operations call. Like I said, I think we had a very good quarter. A lot more to come, and so thank you again for your support.

Thank you again. Good

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