Resolute Mining

The Business

Resolute operates two producing gold mines today: Syama in Mali, an underground and open-pit complex contributing roughly 70% of current output but plagued by explosive supply and roaster outages, and Mako in Senegal, a smaller open-pit asset running down its remaining ore by late 2027. A third project, Doropo in Côte d'Ivoire, has secured final investment approval, a mining permit and $155 million of non-dilutive financing, and is under construction toward first gold in the second half of 2028. Unlike Syama, Doropo is designed as a low-cost oxide open-pit, intended to cut the group's average production cost roughly in half.

Recent Performance

RSG shares currently trade at A$1.37, buoyed less by operational delivery than by gold's surge to around $4,400 an ounce, some 67% above its five-year average. First-half 2026 revenue rose 31% year-on-year even as gold production fell 31%, entirely a function of price rather than volume. Syama's output declined on equipment and supply disruptions, while Mako continued its scheduled run-down, leaving the recent re-rating almost wholly attributable to the commodity, not the company.

Outlook

Earnings will trough before they recover. Revenue is expected to decline over the next two years as gold prices normalise from currently elevated levels and Mako ceases production, before Doropo's ramp-up drives a step-change higher as the new mine reaches full output. EBITDA margins are expected to follow the same path: compressing during the FY27-28 transition period as the higher-cost Syama and Mako mix dominates, then recovering meaningfully once Doropo's lower-cost ounces enter the blend. Free cash flow is expected to be negative in the near term as Doropo construction spend peaks, before turning solidly positive once the project is complete and generating cash.

Key Risks

Three risks dominate the thesis. First, gold reverting toward its longer-run cyclical average would materially compress margins given Resolute's cost base leaves little buffer at lower prices; the company would be among the first regional producers to see cash flow turn negative in a genuine downturn. Second, Doropo's construction carries execution risk: a delay or cost overrun on the $400 million build is a real possibility given management's mixed record on delivering existing operations to guidance, and the risk compounds if it coincides with a weaker gold price. Third, Mali's 2023 mining code, if enforced through priority state dividend provisions, could meaningfully reduce Syama's cash flow, a live risk given roughly 71% of current revenue is sourced from Mali under a military government.

What to Watch

The thesis-defining event is Doropo's first gold pour, targeted for the second half of 2028, which will confirm whether the project delivers the cost transformation embedded in the investment case.

• H2 2028 Doropo first gold — on-time delivery would validate the cost transformation thesis; delay or overrun would undermine it.
• Quarterly, next Oct 2026 World Gold Council central bank buying data — sustained buying would support the structural case for elevated gold prices; the gold price is the single largest swing factor in the outlook.

Latest Developments

In its half-year result to June 2026, Resolute reported revenue of $585 million on a realised gold price of $4,712/oz, up from $3,076/oz a year earlier, even as production fell 31% to 105,000 ounces on Syama supply disruptions and Mako's scheduled decline. Cash costs rose to $2,327/oz AISC, above management's own $2,000-2,200/oz guidance range.

Company Description

Resolute Mining is a gold producer with three assets across three West African jurisdictions. Syama, an underground and open-pit complex in Mali, is the largest contributor, producing an estimated 155,000-165,000 ounces a year and accounting for around 70% of current group output, though at a high cost given ageing infrastructure and a sulphide ore treatment circuit. Mako, an open-pit mine in Senegal, contributes the balance but is running down its remaining ore reserve and is expected to cease production by the end of 2027. Doropo, in Côte d'Ivoire, is a fully permitted oxide open-pit development under construction, with first gold targeted for the second half of 2028 and nameplate output of 200,000 ounces a year by FY30. None of the three assets is a low-cost, tier-one orebody by global standards.

Where the Growth Is

Doropo is the entire growth story. It contributes nothing to current production but is forecast to reach roughly 57% of group output by FY30, ramping from first gold in the second half of 2028 to 200,000 ounces a year at nameplate. Because Doropo's estimated cash cost of around $800/oz sits well below Syama's $1,600/oz, its ramp-up is expected to roughly halve the group's blended all-in sustaining cost to around $1,550/oz. Delivered on time and on budget, this transforms the group's cost position; delivered late or over budget, the opposite applies and the funding buffer that currently protects the balance sheet narrows.

Competitive Position

Resolute holds no durable competitive advantage in the conventional sense. Gold miners compete on cost position and ore quality, not brand or customer relationships, and Resolute's $2,327/oz AISC sits well above the $1,050-1,200/oz range of regional peers Endeavour, West African Resources and Perseus. What separates Resolute from concept-stage developers is that Doropo is fully permitted and funded: final investment decision taken, mining permit issued, and $155 million of financing secured without diluting shareholders. That is a genuine, if temporary, head start over peers still working through feasibility studies. The advantage narrows once Doropo enters production and competes on the same cost curve as everyone else, and it does nothing to address the near-term reality that Syama, the group's main cash generator, is a higher-cost, ageing operation with a reserve life measured in single-digit years.

Management & Capital Discipline

Management's capital allocation has been consistent: fund Doropo's construction first, pay no dividend until the project is complete, and avoid dilutive equity raises where possible. The $155 million financing package carries no financial covenants, and no dividend is pencilled in until FY29 at the earliest, when a payout ratio of around 15% is assumed. On delivery, the record is mixed. Doropo's permitting and financing milestones have been hit on schedule, which is where management's credibility is strongest. Existing operations tell a different story: Syama's production guidance has repeatedly disappointed on explosive supply and roaster issues, and cost guidance of $2,000-2,200/oz AISC has been exceeded in the most recent half.

Financial Position

Resolute holds net cash of approximately $317 million, a rare position of strength for a company mid-way through a $400 million construction project. Combined with $260 million of undrawn facilities, the group has funding headroom to absorb some degree of cost overrun or schedule slippage without needing to raise equity. That buffer narrows quickly if gold prices fall sharply during construction, since Syama and Mako's cash generation is highly price-sensitive. The company can likely weather a moderate downturn, but a severe and prolonged gold price decline combined with Doropo delays would test the balance sheet's ability to fund completion without dilution.