Resolute Mining Faces Higher Costs and Lower Production Amid…

Resolute Mining anticipates reduced production and increased costs in 2025, caused by the nearing depletion of its Mako mine in Senegal and fiscal changes in Mali. The company expects production guidance of 275,000 to 300,000 ounces with AISC between $1,650 and $1,750 per ounce. Recent challenges include a tax dispute with the Malian government that significantly impacted the company’s financial position.

Resolute Mining, focused on gold production in West Africa, announced on Thursday that it expects a decline in production and increased costs in 2025. This is attributed to the depletion of its Mako mine in Senegal and recent fiscal changes in Mali, leading to heightened expenses. The company anticipates production guidance between 275,000 and 300,000 ounces with all-in sustaining costs expected at $1,650 to $1,750 per ounce.

In 2024, Resolute produced approximately 340,000 ounces at a significantly lower AISC of $1,476 per ounce, benefiting from robust output at its flagship Syama mine in Mali. This mine alone contributed 216,000 ounces at an AISC of $1,497 per ounce. However, the situation deteriorated in late 2024 due to sweeping fiscal reforms imposed by Mali’s military-controlled government.

The company faced considerable challenges when Resolute’s CEO, Terry Holohan, and two other executives were detained amid a tax dispute, but were released after the firm agreed to pay $160 million to resolve the issue. Consequently, as of December, Resolute’s liquidity was adversely impacted, with cash and gold holdings reported at only $101 million after settling $30 million with the Malian government.

The agreement with Mali is expected to add an additional $250 per ounce to the AISC, primarily due to increased royalties and loss of tax exemptions. The Malian government’s fiscal pressure has extended to other international miners, mandating higher contributions under the newly introduced mining code.

Despite the difficulties, Resolute Mining remains dedicated to streamlining operations, recently ramping up production at Syama while postponing certain investments, including a $100 million project aimed at doubling processing capacity. The government controls a 20% share in the project, which processes around 2.4 million tons of ore annually.

Resolute is also exploring opportunities in Guinea and the Ivory Coast as it navigates the complex political landscape in West Africa, with a strategic focus on creating value and maintaining operations amid these challenges. The company’s shares experienced a 3.6% decline on Thursday, reflecting the ongoing uncertainties in Mali’s fiscal environment.

Resolute Mining operates primarily in West Africa and has faced significant operational challenges due to political and fiscal changes, particularly in Mali. The military government’s recent reform measures have increased costs for international mining companies, including Resolute. This situation has necessitated adjustments to production forecasts for the upcoming year, highlighting the critical nature of political stability and regulatory environments on mining operations and profitability.

In summary, Resolute Mining is encountering increased operational costs and reduced output forecasts for 2025, driven by the depletion of its Mako mine and fiscal changes in Mali. The company’s financial health has been jeopardized by recent disputes with the Malian government, which greatly impacted liquidity. Moving forward, Resolute aims to optimize its operations while exploring new opportunities in the region amidst a challenging political backdrop.

Original Source: www.mining.com