Gold

Resolute posts improved March quarter production despite major shutdown at Syama

Thu 28 Apr 22, 11:30am (AEST)
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Source: iStock

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Key Points

  • Resolute March quarter gold production inched higher despite a major infrastructure outage
  • The ~$350m mcap gold miner has a similar production profile as $1bn mcap peers
  • Operations in potentially risky jurisdictions like Mali and Senegal could be why it trades at such a hefty discount

Resolute Mining (ASX: RSG) is an unloved goldie, struggling to get out of the doghouse despite operating a similar production profile as mid-tier gold names like St Barbara (ASX: SBM), Westgold Resources (ASX: WGX) and Regis Resources (ASX: RRL).

March quarter at a glance 

Resolute produced 81,770 oz of gold in the March quarter, up 2% compared to last year. It was a noble effort considering major infrastructure was down for half the quarter, from 18 February onwards.

Group all-in sustaining costs was $1,383/oz, a 4% improvement compared to the last quarter, reflecting increased production and lower operational costs due to the infrastructure outage. 

During the quarter, Resolute decreased net debt by $54.1m to $174.7m and maintained $103.9m in cash and gold bullion.

Peer comparison

Resolute Mining: $353m mcap

  • 2022 guidance of 345,000 oz at an AISC of $1,425/oz

Westgold Resources: $750m mcap

  • FY22 production of 270,000 oz at an AISC of $1,500-1,700/oz

St Barbara: $1.1bn mcap

  • FY22 guidance of 275-290,000 oz at an AISC of $1,750-1,870/oz 

Regis Resources: $1.5bn mcap

  • FY22 guidance of 420-475,000 oz at an AISC of $1,425-1,500/oz

The Mali discount

Resolute operates two gold miners out of Mali and neighbouring Senegal, both with similar production profiles.

Mali has been struggling to contain a brutal jihadist insurgency which first emerged in 2012, before spreading to neighbouring states like Burkina Faso and Niger - perhaps why names like Resolute and Firefinch (ASX: FFX) struggle to fetch a fair price tag for their gold assets.

Though, this narrative isn't exactly 'new' and it does seem like Resolute has an unshakeable bearish stigma to it, down in almost every timeframe. The company's stock has fallen -13% year-to-date and -30% in the past 12-months.

Resolute Mining Ltd (ASX RSG) Share Price - Market Index
Resolute Mining 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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