Good morning and welcome to Resolute Mining's Q2 operational results. I'm Chris Eger, your CEO, and today I'm welcomed on the call by Dave Jackson, our CFO, and Bruce Mawat, our Head of Exploration, who is available for Q&A at the end of the presentation. Starting with slide three in our presentation, we believe Resolute Mining had a very strong quarter again with very healthy production of 75,962 ounces, which is similar to what we performed in Q1 at a cost of $1,668. The business continues to perform very strongly on cash flow, and we ended out the quarter with a net cash position of just above $110 million. What was really exciting in Q2, though, is that we acquired the Doropo and ABC projects from AngloGold Ashanti, and we announced and closed that transaction on May 1st.
Most recently, we also appointed Gavin Harris as the new Chief Operating Officer, who's made a real immediate impact into the business. Moving to slide four, I wanted to recap where Resolute operates today. We have two producing mines, one in Mali, the Syama mine, and another in Senegal, the Mako operation. We also have two exploration countries, both in Guinea and in Côte d'Ivoire. As just highlighted on the previous page, we've made a very exciting entrance in Côte d'Ivoire through the acquisition of Doropo and ABC. Let's not forget that we also have the Dabo, which is a very exciting project of 400,000 ounces at 1.3g per ton.
What this means for the business is that whilst today we're on track to produce 275,000- 300,000 ounces in 2025, the business has set itself up so that by 2028, we'll be on track to produce well over 500,000 ounces. We're really forming the basis of being a very attractive, diversified gold producer in West Africa with over 16 million ounces of gold. I'm very excited about what we've been building and the trajectory of the business and what will be, though, a complicated geopolitical environment in which we operate today. Let's turn to slide five. As mentioned on the previous slides, we acquired the Doropo project from AngloGold Ashanti and announced this deal on May 1st.
I have to say, I believe this is one of the most exciting projects in West Africa today, and which will really transform Resolute to be a well-established premier mining business in Africa. The project remains well on track, and the activities in Q2 were robust. We, for the most part, have been hiring a team in order to start the advancement of the Doropo project. The key activities for the rest of the year, though, will be to update the DFS and also to hire the engineering firms to start carrying out the FEED work. Most importantly, we are well into the process of optimizing the pit shells at a higher gold price. You can see in the second bullet on the left that preliminarily we see a substantial increase in gold at the higher pit shell levels.
When we update the JORC tables in the next month or two, you'll understand exactly what that means. For the second half of the year, the activities will be to optimize the DFS, which we anticipate will be issued in Q4. We will also be looking to update the reserve tables in the next quarter. Finally, we expect to complete our permitting process. The permitting process is probably the one area that we have the most concerns on because it's outside of our control. At this stage, all applications have been made. We're at this stage waiting for a final sign from the Ministry of Oil Decree, which we expect by the end of the month. Once that's completed, the final stage will be to convene an interministerial committee to approve the exploitation permit, which we hope will happen in September or October.
Once the exploitation permit is received, we will have approximately 90 days to negotiate with the Minister of Mines Office on the actual mining convention that we will follow. The one complication that we see in Côte d'Ivoire is that today there's an election in October planned. As you know, when there's elections, timelines can slip. We're staying very close to the situation. The other key, very exciting activity on Doropo is that we've hired a Project Director. His name is Rob Ticini. He's got a wealth of experience. He spent 30 years in the mining sector. Most recently, he was a Project Director at the Azumah Resources Project of Black Volta in Ghana. Before that, he was the successful Project Director for the Thunderbird Project, which was a project built in the Kimberley Mineral Sands area of Western Australia, which he built well under budget and on schedule.
That was a project that was over $300 million. In addition, Rob has 23 years with Lycopodium, obviously a well-known engineering firm that will likely be used in this project. Again, I think we're at the process today of putting together the right pieces in order to develop Doropo properly. We get a question often about financing, and look, the financing initiatives for Doropo will be kicked off towards the end of this year once we have finalized the Definitive Feasibility Study and have visibility on the permitting process. It's too premature to start anything at this point in time. As explained in the past, we anticipate that we will fund Doropo through a mixture of debt and our cash. Turning to page six, let's talk about our Mali operation, specifically around Syama. In Q2, Syama poured 41,000 ounces gold All-in Sustaining Cost of $2,134.
Unfortunately, this was below our expectations as it regards to the fact that in Q2 and still today, Syama is impacted by explosive supply chain issues throughout the country. To give a backdrop, today, as we know, Mali is facing security challenges predominantly in the north and the west. What this means is that the importation of explosives and also the transportation of explosives internally is becoming very difficult as it's due to very cumbersome and complicated permitting procedures. We have been working tirelessly with the government in order to make sure that our explosives are getting the right permits and that we're getting the right transportation with those permits. It's proving to be difficult and frankly outside our control. In Q2, there were times where we were short of explosives, which impacted the activities in the underground of the mine, predominantly in the development side.
We will continue to work tirelessly with the government in trying to manage these explosive supply issues. At this point in time, I see that the sulfide activities will be at the lower end of the guidance from a production perspective for the remainder of the year. When looking at the oxide production, we had a fairly strong quarter on oxides, but we have to remember that the amount of oxides in Syama is diminishing. Moving forward, and as we look into next year, the oxide production will continue to drop as we transfer to fully sulfide operation activities. Finally, I wanted to have a word on continued sort of dialogue with the government. As we know, things in Mali are complicated, but I have to say for Resolute, it's progressing. We continue to engage with the government on moving forward.
We are still waiting to hear, though, from the government a number of documents around the specific terms of the mining convention that we'll be using moving forward. The discussions, like I said, are productive and constructive, and we're keeping an open dialogue with the government at this stage. All in all, in Mali, I'm still very excited about the potential that Syama has. I'm obviously disappointed in some of the supply chain disruptions that we're facing because it just is impacting the potential of that operation. As I look to the future, I think this asset has tremendous potential for our business and our shareholders. Moving to page seven, I wanted to give you an update on our SSCP at Syama, or another way to call it, the Syama Sulphide Conversion Project.
The SSCP, for folks that remember, is a project whereby we are converting our oxide line to process sulphides. Today at Syama, we roughly have 4 million tons of processing capacity, 2.6 million tons is for sulphides, and 1.4 million tons are for oxides. We are converting the oxide line to process sulphides. In doing so, there are basically four key pieces of equipment that needed to be built and installed. It's a new CIL circuit, a flotation circuit, a pebble crusher, and then a ball mill. That's well on track. What I'm pleased to say is that in the second half of this year, the CIL circuit and the flotation circuits, pebble crushers will start to be commissioned, with the ball mill being commissioned in the first half of next year.
What this allows for the business is that at Syama, we'll be able to start processing sulfides through the existing oxide circuit this year, increasing the flexibility. The project is well on track. It's on budget. It's on schedule. This year, we anticipate to spend around $30 million on the SSCP, with the last $35 million being spent in 2026. Very pleased with the progress of the SSCP in Mali. Like I said, this will create greater flexibility for the Syama operation, creating a lot more value for our shareholders. Now moving to page eight, let's talk a little bit about our operations in Senegal. Starting first with Mako, Mako had a very strong quarter with production of just about 35,000 ounces at an AISC of $972. Again, very pleased with the success at its exceeding all of our expectations.
We had a milestone in June whereby the main mining operations in the original pit ended, and now we are in the process of processing stockpiles. We are fortunate that at the end of the mining operations in Mako, we encountered some higher grade ore than expected, which drove to better than expected results and therefore lowered AISC costs. As we look at Mako for the remainder of the year, it's performing very well, and we expect Mako to produce at the upper end of guidance for 2025. However, activities in Senegal are not just about the existing operations at Mako, but more importantly, in the life extension opportunities. Moving to page nine, let's talk about the first satellite deposit, which is Tomboronkoto.
As we know, Tombo is a site that's been identified for many years, and we are progressing nicely on the development of Tombo with anticipated ore processing in 2028. Tombo is complicated because it has, as we know, a village that needs to be relocated, but we believe that there is well over 400,000 ounces from Tombo that can be processed in the plant. In Q2, we made good progress at Tombo. We've kicked off the environmental impact studies in the village with the key delivery of an ESIA to the Minister of Mines at the end of this year in order to kick off the permitting process, which will allow for an exploitation permit to be received in the second half of 2026, allowing for the village to be moved, as well as additional activities to happen in the surrounding areas.
Again, good progress in Q2 of 2025, and the project remains well on track to start operations in 2028. Very pleased with how Tombo is performing. Now moving to page 10, to complement Tombo, you will have seen last week that we announced an initial maiden resource for Bentako, which is a satellite deposit just adjacent to the Tombo deposit. Bentako is a less complicated area to develop in the sense that we have very limited community involvement in Bentako. As per previous slides and information that you may have seen, we have multiple areas of possibilities of ore with regards to Bentako. We issued a maiden resource on two areas specifically, Bentako West and South, which total 266,000 ounces. As we continue into 2025, we'll continue to develop and explore these areas. We'll focus on infill drilling.
As both of these areas are still open at depth and on strike, we'll be looking to expand the resource with anticipated updated MRE for Bentako probably in the beginning of next year, if not sooner. Since the Bentako project has a lot less, call it community dynamics, than Tombo, we believe that we can get Bentako into operations in 2027 ahead of Tombo. At the end of the day, between Bentako, Tombo, and our stockpiles, we're creating effectively the flexibility in order to pick and choose what we'll be able to mine in order to extend the operations at Mako for years to come. In the press release, we've highlighted at least five years. I think it'll be greater than that. We're seeing really good activity in Senegal and very pleased with the operations to date.
Moving to page 11, I want to talk a little bit about our exploration activities in the quarter because we find this again to be very exciting for the business, and it creates flexibility and optionality for the future. Really a core strategy for Resolute moving forward. Let's start first with Mali. In Mali, we spent a bit of money, just over $1 million, but that money was really focused on focusing on additional oxides that can add to the mining production mix in the future. In Mali, at Syama, since we have such a large footprint, we have lots of different opportunities to mine different areas, and it's important that we gain as much knowledge and what will maximize value to ourselves and shareholders in looking for additional oxides.
In Senegal, obviously, the focus continues to remain on Tombo and Bentako, and that's what we'll continue to do in the second half of this year. Probably most importantly, when we look at our exploration license footprint in Côte d'Ivoire, today we have two other exciting projects aside from Doropo. It's the ABC project, which today has 2.1 million ounces at 0.9g per ton, and then the Doropo project, which has 400,000 ounces at 1.3g per ton. At ABC, this is a well-known project that has actually created a lot of interest. It's been partially explored, and our focus will be to actually do some RC drilling at the Farako Nafana permit, which is the northern side of the exploration permits at ABC. I think that'll create quite a bit of value for us, and we'll look to announce those results probably sometime next year.
The Dabo, with all the drilling that we've done, we're in the process of updating the resource for the Dabo and initiating an MRE in the second half of this year. I think across the spectrum, we're doing very well in exploration. It's core to our strategy. I think it's where you actually create the most value for our shareholders, and that's something that we'll continue to do for many years to come. I will turn it over to Dave for a few comments on financials.
Thank you, Chris. Today, I'll be walking you through the quarter's headline financial results, highlighting the key performance metrics we're pleased to share with you. Overall, we had a very strong quarter. We exceeded expectations across our core financial metrics for the group. Operating cash flow for Q2 reached $85 million.
This was driven by $262 million in revenue and supported by 80,000 ounces of gold sales at an all-time high gold price of just over $3,400 per ounce. Quarterly operating cash flow was approximately $10 million more than Q1. This Q2 figure also includes $46 million in corporate income tax payments in Mali and Senegal. These payments are related to taxable income realized in 2024. Net cash accord ends to the $110 million, marking a $10 million increase from Q1. This includes the impact of the $46 million in corporate income tax payments just mentioned, as well as the $25 million outlay for the acquisition of Doropo and ABC projects at the start of May. We had $47 million drawn on overdraft facilities at quarter end. These continued to be used locally to optimize working capital.
You will remember these facilities were increased to $85 million of availability in Q1 as we continued to maintain financial flexibility for the group. Included in the net cash figure is $62 million in bullion, representing nearly 19,000 ounces of gold that were sold after the quarter closed. Importantly, all gold is being sold at spot prices as we remain unhedged. All-in Sustaining Cost was $1,668 per ounce sold. This represents a $40 per ounce improvement from Q1. This reduction was primarily driven by the strong performance at Mako, where higher than expected production and lower operating costs contributed positively. All-in Sustaining Cost was higher than Q1 due to lower production volumes. We expect this to normalize over the remainder of the year. Importantly, top line operating expenses at Syama have been trending down thanks to the team's continued focus on cost discipline.
These benefits will become increasingly evident in H2 as production improves. Despite site level variances, we remain firmly on track to meet our full All-in Sustaining Cost guidance of $1,650 to $1,750 per ounce. Let me now walk you through the key components of our financial results that led to the cash and bullion position of $157 million at the end of H1. We generated a solid $160 million operating cash flow during H1, approximately $30 million higher than the comparable period in 2024. This uplift reflects the favorable gold price environment and the continued success of our cost reduction initiatives across the portfolio. CapEx for the half year totaled $57 million, including approximately $12 million allocated to exploration.
This comprised $19 million in sustaining capital across Syama and Mako and $22 million in non-sustaining capital at Syama, of which around $14 million was directed toward the Syama Sulphide Conversion Project. Overall, CapEx and exploration spend was in line with expectations, and we remain on track to deliver within our 2025 guidance range of $109 million- $126 million. As previously noted, we made the initial $25 million payment for the acquisition of the Doropo and ABC projects during Q2. These projects represent exciting growth opportunities for the company and are expected to deliver meaningful long-term value to our stakeholders. VAT upflows for the first half totaled $32 million across both Mali and Senegal. VAT remains a source of cash leakage, but we've continued to engage actively with local government to recover these amounts. Our recent discussions have been positive, and we remain encouraged by the progress being made.
We record`ed an $11 million working capital inflow for H1, primarily driven by a reduction in stockpile balances. In addition, we made solid progress in lowering consumable inventory levels as a part of our ongoing efforts to optimize working capital. Our ending cash and bullion of $157 million marks a $56 million increase from the beginning of the year. This leaves us with ample available liquidity of over $212 million at the end of H1. In summary, we're in a very solid financial position given the strong H1 results and are excited about the growth potential of the business. With that, I'll hand it back to Chris.
Thank you, Dave. Now moving to slide 14. In summary, very pleased with how we are progressing across the board, albeit with some challenges in Mali on supply chain. We are very much on track for full year group guidance on both production and cost. We continue to generate very strong cash flow, and we had net cash position over $110 million at the end of Q2. I expect strong free cash flow to continue to build throughout the rest of this year and frankly into next year. The business continues to execute on its strategy of geographic diversification and becoming a mid-tier African gold producer generating well over 500,000 ounces, and we're well on track to do that by 2028 with the portfolio that we have today.
We will continue to evaluate M&A opportunities that we've done in the past, although today I will say we believe that pipeline is very limited. That being said, we have fantastic opportunities internally to create a lot more value for our shareholders, and we're very excited about delivering on those targets. Thank you very much, and with that, I will now turn it over to Q&A. Thank you.
Thank you very much, sir. Ladies and gentlemen, if you would like to ask a question, please press star one on your Apple keypad. Please also ensure that your mute function is activated in order to let you reach your equipment. Our very first question this morning or today is coming from Richard Hatch, calling from Berenberg. Please go ahead.
Yeah, thanks, Chris. Morning team. I've got a few questions for you. Just firstly, just on the explosives situation. Is it the case that you need to increase your inventory levels of explosives so that you've got a bit more of a buffer, or is it simply that it's, as you say, like a permitting situation, which is just because of the security backdrop and that's just creating issues? I'm just kind of conscious of trying to understand what the risks are as we go into Q3 and Q4.
Yep.
Thanks.
Morning, Richard. Thanks for the question. It's partially both points. The first one is what happened at the end of last year is our main explosive supplier pulled out of Mali and other Western African regions. We swapped to a new supplier, and we were able to get explosives in effectively, January and February, March, April. We were in the process of trying to get more explosives in, and as a result of permitting disruptions, we were blocked and frustrated. We are now working to try and get another three-month supply in and also focusing on the next three months thereafter. As I mentioned previously, the issue that we were facing was due to the fact that with the security challenges that are happening in the country, there's a heightened level of rigidity and bureaucracy around explosives. Just finding people to sign documents is becoming very difficult.
Once you actually have all the permits in place, the explosive needs to be escorted from wherever they're located, the border or in the capital, to site. That means you have to find the gendarmes and also present the right documentation. All of this is creating a lot more work and effort. Because we had to swap suppliers, it was a bit of an unfortunate situation. We think we're getting it resolved now as we speak so that we don't have disruptions for the rest of the year. I know now we're going to have at least another three months of availability, but we're working on the next three to six months thereafter.
It's helpful. Thanks. The second one's just on Ravenswood. I know in the release you mentioned that EMR has terminated the sales process of the mine. I just wonder if you may be able just to give an update on that or just get any form of background. I'm just conscious that it could be a bit of upside into the stock that's not really given any value in the share price.
Yeah, look, we don't have much more than what's in the public domain. There's not much more I can say except that what we heard from EMR Ravenswood is that they didn't receive the value that they were expecting from the sales process because they ran into some operational challenges in Q1. They decided to pull back on the sales process and effectively get their business back on track and maybe look to relaunch it next year. Our key focus with Ravenswood is that we're a creditor. They further VFPN. They'll owe us about $70 million Australian dollars, and we're monitoring that payment, which is due in 2027. The way we think about Ravenswood is that business is producing enough gold that it will be okay. It's just a matter of what the private equity owners want to do with regards to selling it, maybe going the IPO route.
Unfortunately, we just don't know much more than what you know and the fact that they've just pulled the sales process. We're staying close to them, making sure the operation continues to perform. At this point, we don't put it into our cash flow forecast until the due date.
Okay, understood. Just on Bentako and Tomboronkoto, is the right way to think about this that you put them in sequence, as you say, like maybe one comes ahead of the other, or is the expectation that you could potentially mine both at the same time? Have you got any kind of steer on costs for that, the All-in Sustaining Cost sort of range, steer, guide, place?
The way that it's looking at this stage is that Bentako will probably be available in 2027 and will most likely then process a mix of the stockpile ore that we have still remaining and Bentako ore until Tombo comes in. Tombo, out of the three options, has what I call the highest grade ore, the best ore for the plant. Once Tombo comes meaningfully on, we'll probably swap over to Tombo, but still thinking about how we blend in all the different other areas. The way we think about it and what I highlighted before, it just creates just another tool in the tool chest for greater flexibility. I don't have a steer on cost yet, so I don't really want to comment on it, but we're making still healthy margins at this gold price.
As we complete the Definitive Feasibility Study for both projects, we're hoping by the end of the year that we provide a bit more specifics on the production rates as well as the cost profile. Like I said, right now we have well over 600,000 ounces. We think that's going to grow substantially, and that'll create at least five years more of operations. I just don't know yet the specifics on the numbers until we complete those Definitive Feasibility Study studies.
Okay, cool. Thanks. Just one for Dave. On working cap, just seeing the first half, you had a bit of a release of working cap because of the stockpiles processing. I guess at Mako, you basically moved fully into stockpiles processing. Is that going to create a bit more of a working cap tailwind in the second half?
Thanks, Richard. Yeah, you're bang on on the stockpiles. We'd expect the stockpiles to be reducing in Mako, as obviously there's going to be pushing those through the plant. We're doing quite a bit of work on the supply chain side as well. We'd expect consumables to come down as well. We'd expect in the second half to get a bit more of a push on the working capital.
Okay, thanks. Lastly, I don't know if you're able to give us any kind of steer on it, but obviously the most interesting thing, one of the interesting things you said about Doropo this morning is that that increased gold price can lift volumes or at least life of mine volumes. Are you able to give us any kind of flavor on that, or is it just that we have to wait and see until you release your Definitive Feasibility Study later this year?
I think, Richard, we're going to have to wait. I mean, we're going to do it in two stages because we can update the Doropo tables sooner than the DFS update. The original pits were done at $1,415 and $1,950. There's a lot more gold. What we're trying to focus and what we're evaluating is whether we want to redesign the plant capacity because of this additional ounces. We probably won't, just because there was some real logic as to why the plant capacity was originally designed at 5.6 million tons per annum. That's why we're all in, call it, discussions with the various consulting firms to decide what we do with the optimized DFS.
Look, what we're focused on, and I don't think what will change, will be that the near-term production profile will stay close to 200,000 ounces, and effectively the higher pit shell levels will increase the mine life and just a lot more ounces into the overall project.
Yeah, clear. All right. Okay, that's me. Thanks very much for your time. Cheers.
Thanks, Richard. Question, sir. Ladies and gentlemen, once again, if you have any questions, please press star one at this time. We'll give you just a chance to signal. Our next question today will be coming from Justin Chan, calling from S&P Resource Management. Please go ahead. Your line is open.
Hi guys. Thanks for the call. Just a couple of questions. One on the VAT. Are you having the same issues in Senegal as in Mali? Are there any tax offsets, or should we just, at least for the near-term model, basically a similar upflow rate going forward?
Dave, you want to take this one?
Thanks, Justin. Yeah, it's a good question. We are seeing the VAT come back in Senegal. The cash flow could just mainly in Mali. The story is still the same there as it has been in the past. We are going to see some offsets in the future from Senegal for basically all of the VAT that we submit. There will be some uplift there.
Okay, thanks. That's helpful. I guess, for this quarter's $32 million number, is that representative of a go-forward if the gold price doesn't change and/or the situation in Mali doesn't change?
Yeah, I mean, we're running around $1.5 million- $3 million a month depending on purchases and all that. It will fluctuate a little bit, but I mean, it's probably going to continue like this for the rest of the year.
Okay, thanks. That's quite helpful. I guess in terms of Doropo, could you just remind me, you'll rerun the DFS and at that point you'll go through the remaining permitting steps. Could you just remind me of what's been done, what needs to be done on the permitting side of things?
Yeah, hi, Justin. It's Chris here. On the permittings, we've launched the permits based off the original DFS and the original ESIA. There are going to be multiple mine plans as we continue to learn more about this project. The optimized DFS is more for a financing initiative at the end of the year and also for firm FID. Like I said, the permits are well underway with applications launched. We're waiting for, obviously, signing from the Ministry of, sorry, a ministerial decree signing, and then we'll move to an interministerial committee. That's again well underway and we expect to hopefully have the permits launched by October, but it could slip. That's why the optimized DFS and permitting are independent of one another.
I suppose, I mean, I guess the new code is waiting for the election. It could go one way. I guess I'm asking, do you expect to be on the new code or old code, or is there any guidance there? I suppose it depends on timing on things.
Yeah, so look, you may have seen that back in mid-June, I actually went to Côte d'Ivoire and met with the Prime Minister as well as the Ministry of Mines with Dave and our Head of Legal. It was very clear in the discussions with the government that they would like us to adopt the new code or parts of the new code, but we don't know what that new code is like. We are actually in consultation with the Minister of Mines and discussing what that new code could look like. As we know, across most of Africa, there's new code being put in place. There are more stringent local content rules, higher royalty rates, and also possibly higher equity ownerships. These are all things that we took account for when we first acquired Doropo. We actually modeled Doropo both off the existing code and the new code.
We're prepared to adopt certain aspects of the new code, but we have to see what those are because we also made decisions on certain points. We just don't know, right? They're in a period of evaluating. What I will say is with Côte d'Ivoire as a government, they're incredibly easy to work with. They're logical, they're sensible, and we have a good conversation with them at this point. I would say I'm very pleased with how we're building that relationship, but I just don't know the exact specifics of what code we'll be under.
Gotcha. I gotcha. As I understand, the code is, I guess the new one's waiting on the election or something to that effect.
I don't think that's the case because they've been working on a new code for some time. When you have elections, people obviously start to disappear for election purposes. I know that the Minister of Mines' office is working hard on the new code and, like I said, having consultation periods with us as well as others. I just don't know how it's all going to be sequenced. I don't think it's directly linked. It may be, but I don't know.
Gotcha. All right. Thanks very much, guys. I'll fade the line. Thanks for us in the call and congrats on the quarter.
Thanks, Justin. Appreciate it.
Thank you, Richard. Questions, sir? As we have no further questions, Scott, we turn the call back over to you. Thank you.
Thank you very much, George. I'm going to pass the call back to Chris for any final closing remarks. Chris, back to you.
No, thanks, Scott and George. Just for everybody, thank you for joining our Q2 operations call. Like I said, I think we had a very good quarter, but a lot more to come. Thank you again for the support. Thank you again.