Resolute Mining expects lower production and higher costs in 2025 due to the nearing depletion of its Mako mine in Senegal and fiscal changes in Mali. The projected output is 275,000 to 300,000 ounces, with AISC between $1,650 and $1,750 per ounce. The company’s financial strains stem from recent government regulations and tax disputes in Mali, impacting overall profitability.
Resolute Mining, an Australian gold producer focused on West Africa, has announced expectations of reduced production and increased costs for 2025. This change is attributed to the impending depletion of its Mako mine in Senegal and rising expenses due to fiscal modifications in Mali. The company projects its production for the upcoming year to be between 275,000 and 300,000 ounces, with all-in sustaining costs estimated at $1,650 to $1,750 per ounce.
In contrast to 2024, when Resolute achieved a production output of 340,000 ounces at an AISC of $1,476 per ounce from its Syama mine in Mali, which alone yielded 216,000 ounces at a cost of $1,497 per ounce, the current outlook signifies a notable downturn. The challenges intensified in late 2024 when new fiscal reforms implemented by Mali’s military government led to a tax dispute that resulted in the detention of Resolute’s CEO Terry Holohan and other executives until a settlement was reached, amounting to $160 million.
The company’s financial health has suffered; following its final payment of $30 million to the Malian government, cash and gold holdings reported were a mere $101 million. The settlement with Mali is anticipated to contribute an additional $250 per ounce to its AISC, largely due to increased royalties and a loss of previous fuel tax exemptions imposed by the government.
There are further implications as the Malian government urges companies to adhere to a 2023 mining code which demands greater contributions from international miners. This code has assigned the government a 20% stake in mining projects and requires annual compensation payments for community upliftment endeavors.
Despite these adversities, Resolute Mining is concentrating on optimizing its operational efficiencies, having ramped up production at its Syama mine while initiating its second phase of development, expected to commence this year. However, some investments, including a $100 million project aimed at enhancing processing capacities, have been postponed.
Resolute is also broadening its operational focus beyond Mali, with ambitions to explore opportunities in Guinea and the Ivory Coast amidst a politically complex landscape. The company has outlined objectives for 2025 centered on generating value in these new territories while managing the challenges presented by the regional political environment. As of Thursday, Resolute’s shares fell by 3.6%, indicating a market capitalization decline since October 2024 due to deteriorating fiscal conditions in Mali.
Resolute Mining is facing significant operational changes due to the depletion of its Mako mine and increasing costs in Mali stemming from new government mandates and tax changes. The situation reflects broader issues within the Malian mining sector, particularly regulations that compel miners to pay higher royalties and contribute to national projects, impacting overall profitability. Recent management upheaval and financial settlements have also influenced Resolute’s strategic outlook going forward.
In summary, Resolute Mining is navigating a challenging environment characterized by reduced production forecasts and rising costs attributed to regulatory changes in Mali. The company’s strategic focus includes optimization of its operations and exploration of new opportunities in Guinea and the Ivory Coast. The situation remains complex as Resolute aims to adapt to the evolving mining landscape while managing impacted finances and production efforts.
Original Source: www.mining.com
