RESOLUTE Mining has raised $60m in debt boosting its plans to expand gold production in West Africa where it currently operates two mines.
Senior debt facilities were raised with South Africa’s Nedbank Corporate and Investment Bank and Citibank and take the gold producer’s liquidity to $200m which includes cash and bullion on hand of $143.3m. Resolute had net cash of $96.6m as of end-June.
Terry Holohan, CEO of Resolute said last month the company was in its “strongest position for several years” after stabilising production at its Syama mine in Mali. It also mines gold from Senegal’s Mako mine which it wants to expand.
The debt, which also includes potential to add a further $80m via an ‘Accordian Facility’, will be for new organic and inorganic expansion as existing projects at Mako, and a plant upgrade at Syama were already funded from existing cash.
The three year facility consists of a $30m revolving credit facility and $30m in a term loan with a one year drawdown period. Hedging is not required. “This financing demonstrates the company’s ability to access commercial debt financing at competitive terms from international lenders,” said Chris Eger, CFO of Resolute in a statement.
The increased liquidity marks another stage in Resolute’s turnaround.
The company’s balance sheet was swamped as net debt climbed to $229m prior to Holohan joining the company in 2021. Resolute had also sold forward a significant portion of production as below market prices.
Resolute produced 167,140 ounces in the first half of its financial year, a decline from 176,631 oz last year. This was owing to the downtime at Syama. Despite this revenue was 4% higher at some $341.5m thanks to a higher realised gold price of $2,170/oz which compares to $1,906/oz for the corresponding period last year.
Net income after tax came in at $33.4m (H1 2023: $87.7m) due to $16.7m of extra tax expense as the tax exoneration in Senegal ended in July 2023, as well as $37.5m of non-cash unrealised foreign exchange differences.
