Resolute Mining Limited

Ongoing Investment Plan Augurs well with Growth Prospects: While banking sector stocks were being smashed, gold stock, Resolute Mining Limited (ASX: RSG) was up 3.4% on March 07, 2018 as investors turned their heads to the safe-haven stocks amidst the geopolitical uncertainty. RSG is a successful gold miner with more than 25 years of continuous production. It operates two mines i.e., the Syama Gold Mine in Africa and the Ravenswood Gold Mine in Australia. Revenue for the half year FY18 was A$203 Mn, up 20% from the previous half year. The total half year gold production of 142,748 ounces (oz) was achieved at an All-in Sustaining cost of A$1395 per ounces. Gold production and cost guidance for the full year has been maintained at 300,000 oz at an All-in Sustaining cost of A$1280/oz. NPAT stood at $38.4 Mn in 1HFY18 against $64.2 Mn, down by 40.2% on a year on year basis (YoY) due to increase in exploration expenses and other business development expenses during the period. Further, underground mine development at the Syama Gold Mine in Mali is progressing well with sublevel cave development activity and is expected to be completed in December 2018. Total underground Mineral resources at the Syama Underground mine increased by 39% to 5.7 Mn ounces at 3.2 grams per tonne of gold. This significant upgrade has identified further opportunities to enhance development plans at Syama and future expansion of production rates which will support to increase topline growth in future. At Bibiani Gold mine site, the resource increased by 40% to 2.5 Mn ounces at 3.6 grams per tonne gold during the same period. Based on business prospects coupled with ongoing investment plan, we give a “BUY” recommendation on the stock at the current price of  $1.215
 

First Half Year Performance (Source: Company Reports)

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