How Did Resolute Double Profit Despite Falling Gold Output?

Strong Financial Performance Amid Operational Challenges

Resolute Mining Limited has delivered a striking financial turnaround in the first half of 2025, reporting revenues of $447.5 million, a 31% increase from the previous year. This surge was largely driven by a significant rise in the average realised gold price, which climbed to $3,076 per ounce from $2,170 per ounce in H1 2024. Despite a 9% drop in gold production to 151,460 ounces, the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) soared by over 80%, reaching $211 million.

The net profit after tax more than doubled to $71 million, underscoring the company’s ability to capitalise on favourable market conditions despite operational headwinds. The decline in production was primarily attributed to explosive supply challenges at the Syama operations in Mali, which also contributed to an increase in all-in sustaining costs (AISC) to $1,688 per ounce from $1,442 per ounce the prior year.

Strategic Expansion in West Africa

In a notable development, Resolute completed the acquisition of the Doropo Gold Project and the ABC exploration project in Côte d’Ivoire from AngloGold Ashanti Plc. This transaction, finalised on 1 May 2025, added significant exploration and development-stage assets to Resolute’s portfolio, with a total consideration of $150 million plus deferred and contingent payments. The acquisition positions Resolute to diversify its asset base and potentially unlock new growth avenues in a promising West African jurisdiction.

The company’s exploration assets ballooned to $180.4 million by the end of June 2025, reflecting this strategic investment. The acquisition also involved complex deferred consideration arrangements, including milestone payments tied to feasibility studies and mineral reserve confirmations, which introduce some future financial commitments.

Solid Balance Sheet and Cash Flow

Resolute’s balance sheet remains robust, with net cash and bullion increasing 13.8% to $109.9 million. Operating cash flow improved to $113.4 million, supporting ongoing development and exploration activities. Total borrowings rose modestly to $47.8 million, primarily from in-country overdraft facilities in Mali and Senegal, reflecting prudent financial management amid expansion efforts.

The company did not declare an interim dividend, choosing instead to reinvest earnings to support growth and navigate regulatory complexities. Notably, Resolute continues to engage with the Malian government to comply with the 2023 mining code, including addressing non-diluting priority dividend rights, a factor that may influence future distributions.

Governance and Outlook

Leadership changes saw Chris Eger appointed Managing Director & CEO in February 2025, succeeding Terence Holohan. The company’s governance framework remains stable, with a full complement of non-executive directors overseeing strategic direction. The half-year financial report was reviewed by Ernst & Young with no independence issues noted, reinforcing confidence in the company’s reporting integrity.

Looking ahead, Resolute faces the challenge of restoring production levels while integrating new assets and managing deferred acquisition obligations. The elevated gold price environment provides a supportive backdrop, but operational and regulatory risks in West Africa warrant close attention.