Ladies and gentlemen, and welcome to the Resolute Mining second quarter 2026 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session through the phone lines, and instructions will follow at that time. For those listening via the phone lines, the presentation is now available within the Investors section of Resolute Mining's website. For those watching the webcast, if you wish to submit a written question, you may do so by using the Ask a Question button on the Spark Live page. I would like to remind all participants that this call is being recorded. I will now hand over to the Chief Executive Officer, Chris Eger, to open the presentation. Please go ahead.
Good morning and good afternoon, and welcome to Resolute Mining's Q2 activities report. I am Chris Eger, CEO of the business, and I am joined today by Gavin Harris, our Chief Operating Officer, Dave Jackson, our CFO, and Matt O'Toole, our Head of Investor Relations. Moving to slide four. I wanted to start off by providing a few of the key highlights of the quarter. In general, the business actually performed extremely well in three of the four countries that we operate in, being Senegal, Côte d'Ivoire, and Guinea, with ongoing challenges in Mali, which we will talk about throughout the presentation. Specifically, when we look at activities from a safety perspective, I am very pleased to say that at TRIFR, a 0.59 was extremely robust for the first part of the year, with only two reportable injuries in the second quarter.
At Syama, our quarterly production of just shy of 30,000 ounces was on track with the guidance that we provided in our June statement, with AISC being at $2,654 per ounce . At Mako, we continued to have a very strong quarter with production just over 15,000 ounces at an AISC of $1,538 per ounce. As a group for the quarter, we poured just over 45,000 ounces of gold at an all-in group AISC of $2,484 per ounce. Across the business, we continue to move on all of our key projects, most notably in Côte d'Ivoire with Doropo moving into project execution after FID and permit approvals at the beginning of the year. We spent over $37 million in CapEx, and again, I will explain in detail what we accomplished in this quarter, but more importantly, what we are planning for the rest of the year.
Our other key project in Côte d'Ivoire is our ABC exploration project. I was very pleased to say that we announced an updated MRE on July 22nd, which shows that project having a very viable potential of being our fourth mine within the business. In addition, the Syama Sulphide Conversion Project and the Mako Life Extension Project continue on track and on budget. In addition, in the second quarter, we received close to $54 million as a result of the vendor payment being repaid due to the Ravenswood transaction. Finally, we continue to progress our financing initiatives for the Doropo construction project, and we secured $155 million of local bank financing in Côte d'Ivoire, and we are targeting a total of $260 million, which we anticipate to have fully completed by the end of the Q3 of 2026.
Look, the local bank financing with our existing cash, future operating cash flows in today's operating environments provide sufficient liquidity to fund Doropo, which we're very pleased with. We're maintaining a very healthy balance sheet. Despite the challenges in Mali, we are performing extremely well from a financial perspective. You can see in the bottom right side of the page that our EBITDA was about $130 million for the quarter. We generated $78 million of operating cash flow, and we ended the quarter with $317 million of net cash. On slide five, I wanted to recap the strategy of our business so it's very clear what we're targeting in the coming years. With the ramp-up in construction of the Doropo project, we're firmly on track to achieve over 500,000 ounces from 2028.
More importantly, with what we see at ABC, we're targeting to get up to 700,000-750,000 ounces a couple of years thereafter. If you look at the chart on the bottom left, once Doropo is up into production, we'll have roughly 40% of our ounces coming from Côte d'Ivoire, 40% from Mali, and 20% odd from Senegal. As I said, with the potential that we see at our ABC project in Côte d'Ivoire, we actually see ourselves having a meaningful presence in Côte d'Ivoire in the coming years.
In addition, when you look at all-in sustaining costs as a result of the Doropo project and further optimization that we are doing in the business, we firmly believe that we can reduce our all-in sustaining costs across the portfolio, subject obviously gold prices and royalty expenses that we need to pay, which are actually clouding the efforts that we are making in reducing our overall cost profile in the company. Moving on to specific activities in each of our countries. Let me first start with talking about our activities in Côte d'Ivoire before I turn it over to Gavin to talk about Mali and Senegal. Moving to page seven. First, let's talk about Doropo and the key activities that occurred in the quarter. Like I said, I'm very pleased with the construction activities that have kicked off. There's a lot going on onsite.
For example, today we have over 450 people that are actively working on the project. We completed an enormous amount of civil works with over 74 hectares of cleared land. We built over 20 km of access roads. We've got over 40 pieces of heavy equipment on site. In addition, most of the long lead order items have been put in place. The SAG, ball mill, jaw crusher, high-grade thickeners were all ordered by Metso. As you can see, we've also put in the orders for the CIL tank, CIL agitators, the oxygen plant. As you can see on the right side of the page, the project continues to be on track and on budget, and we anticipate that we'll have a significant ramp-up in activities in the coming quarters. Moving to page eight. Here's just a picture of the current processing plant site layout and as it's progressing.
Moving to page nine. On this page, I really wanted to provide some of the key activities for the upcoming quarter as well as upcoming months. Most notably, at the end of August and into early September, we'll commence concrete works with regards to the CIL ring-beam, the mill, and the crushing areas. In addition, we'll start power infrastructure works. There'll be additional progress on the critical water infrastructure, as well as bringing in additional equipment for the upcoming months ahead. Look, in summary, the project, like I said, remains on track and on budget. I'm very pleased with the team and their performance in maintaining a very tight timeline, as well as maintaining very strict cost controls across the site. Moving to page 10. Turning to our other key asset in Côte d'Ivoire is the ABC project.
As previously highlighted, in the second quarter, we completed 31,000 meters of drilling at ABC and updated the MRE last week. Today, the project has over 3 million ounces of resource, and I'm very excited to say that we believe this could be our fourth operating asset within the Resolute portfolio. As you can see on the right side of the page, ABC is comprised of four operating permits, with the bulk of the resource being at the Kona permit in the center of the page. Turning to slide 11. With regards to the MRE update that we provided last week, I want to provide some more specifics on what we see with regards to the mineralization on the deposit. As you can see from the graph on the right side, the mineralization continues at depth and along strike.
In the first half of the year, the drilling that we completed was meant to really do expansion drilling of the resource from an inferred perspective. As we move into the second part of this year, we're going to focus the attention for not only infilling drilling, but also to continue to do expansion drilling. We completed close to 150 holes, 124 of those being RC and 25 for diamond holes. As you can see on the bottom left, the resource has grown to over 3 million ounces at 0.71 grams per ton. Moving on to page 12. With respects to next steps at our ABC deposit, want to give you some specifics as to what we're planning in the second half of this year.
As you can see on the right side of the page, the deposit, which is over 25 kilometers in strike, sits mostly at the Kona central and Kona south areas. The focus will be infill drilling at both of those areas, plus continued expansion drilling at Moya and a bit at central and a bit at south. We're planning to drill at least 80,000 meters throughout the second half of this year. We've got seven rigs on site today, increasing to 11 rigs in the next month or so. We'll be doing a combination of both RC and diamond drilling throughout the year and looking to really expedite the works necessary in order to file for a mining application in 2027.
In addition to the drilling that needs to be done, we have kicked off work with regards to an ESIA, as well as the necessary work required to complete a feasibility study. In conclusion, very excited about this potential project as it becoming our fourth operating asset within the portfolio. There's an awful lot of work to be done, but I'm very confident in our team in expediting the works necessary to prove out this deposit. With that, I'll now turn it over to Gavin Harris to talk about our operations in both Mali and Senegal.
Thanks, Chris. I will start with an update on our Syama operations down in Mali, which, as we previously advised, faced a number of challenges throughout the second quarter. Okay, we'll move to slide 14. The newly appointed operating team delivered solid results in the previous two quarters, overcoming a number of logistical and operational hurdles arising from the introduction of the new mining code in late 2024. Having learned to operate within the new conditions, the shockwave of a significant security incident early in the second quarter, during which the defense minister was assassinated, was the final straw for many suppliers and transporters. The implications of this event, whilst not immediate, became apparent weeks later, causing significant disruption to supply chain logistics and people movements.
This includes the key contractors who are mobilizing for the plant and roaster shutdown, along with the mining equipment destined for the open pit operations in A21. Despite the security situation and other challenges we face with strict local content compliance, the particulars of which are unique to Mali, the Syama team still delivered 29,881 ounces at an all-in sustaining cost of $2,054 per ounce. Mitigation plans throughout the quarter included processing of replenished low-grade underground sulfide stockpiles, pivoting to mining and processing oxide ore scheduled for later in the year, including mill scats using the commissioned SSCP pebble crusher, lengthening the planned plant shutdown and roaster upgrade work to source alternate contractors, completing opportune preventive maintenance on the main sulfide plant to improve future reliability, progressing permitting for the bulk explosive manufacturing plant.
In summary, Mali operations continue to navigate a dynamic and challenging environment with our site teams focused on mitigating the areas within their control. Okay, we'll move to slide 15. Despite the operational challenges, construction work on the Syama Sulphide Conversion Project continued with progress on the secondary crushing circuit, ball mill civil and structural works, and the construction of the electrostatic precipitator for the roaster. The SSCP remains on track and on budget and will be ready for commissioning in the fourth quarter. As we move through the third quarter, we continue to adapt, finding new ways to overcome the challenges we face in Mali. Subject to a stable operating environment in Mali and a strong ramp-up of the SSCP, Syama is expected to remain around the lower end of the 2026 guidance range. Now we move to our Mako operation in Senegal.
Gold production of 15,311 ounces delivered during the second quarter met expectations and capped a successful first half of the year at our Mako operations. The all-in sustaining cost of $1,538 per ounce for the second quarter was below our annual guidance target. Despite fuel price increases and increased royalties in the higher gold price environment, we are delighted to end the first half of the year with an all-in sustaining cost of $1,605 per ounce, landing at the lower end of our guidance range as the site team focus on operational efficiency and cost reduction initiatives. While stockpile variability has been observed through the first half of the year, overall gold production remains on track to meet both production and cost guidance.
The Mako Life Extension Project, or MLEP, has the potential to extend the current Mako mine life by up to seven years, mining the Tomboronkoto and Bantako satellite deposits located approximately 20 km from the existing Mako operations. The second quarter focused on progressing technical studies and permitting for both deposits. Of note was the submission of the remaining environmental social impact assessments, or ESIA, which have been pre-validated by the governmental technical services department and will now proceed to public hearings. This is an important step of the process, which ultimately leads to the granting of exploitation permits. The key work streams for the rest of the year include the submission of the Tomboronkoto exploitation permit application, validation of the Bantako ESIA following the public hearing and subsequent submission of the exploitation permit application, completing the Tomboronkoto village relocation studies.
With that, I'll hand you over to Dave to talk through the financial summary.
Thanks, Gavin. Today, I will walk you through the Q2 headline financial results, highlighting the key performance metrics. Overall, we had a solid quarter. Our Q2 financial metrics were in line with expectations. We continued to strengthen our balance sheet and build significant cash in the business. Looking at the financial highlights, our Q2 revenue was $247 million, generated from the sale of 55,000 ounces of gold at an average realized price of $4,526 per ounce. As previously noted, Resolute remains fully unhedged and continues to sell all of its gold at spot prices. At quarter end, net cash stood at just over $317 million, marking a $2 million increase from Q1. The moderate net cash build was expected given the increased capital spend at Doropo and $49 million of income taxes paid across Mali and Senegal.
Included in the ending net cash figure is $47 million of unsold bullion, representing nearly 12,000 ounces of gold that were sold shortly after the quarter closed. The group all-in sustaining cost for Q2 was $2,484 per ounce, which is above guidance, but within expectations at this stage. We have seen increases in fuel and other input costs, which started to flow through in Q2, impacting all-in sustaining costs. We are maintaining our group all-in sustaining cost guidance of $2,000-$2,200 per ounce. However, this will continue to be monitored if higher input costs persist and gold prices remain at current levels. I will now walk you through the key components of our cash flow summary that led to the net cash position of $317 million at the end of Q2. The quarter delivered a robust operating cash flow of $77 million, driven by strong gold prices.
We paid a total of $64 million in VAT and income tax in the quarter, which was made up of $15 million of VAT and $49 million in corporate income tax payments in both Mali and Senegal. The corporate income tax payments were in line with expectations and align with the anticipated amounts noted in Q1. I am pleased to note that we received just over $10 million of VAT mandates in Senegal in the quarter, which were used to offset payables in the country. Further to this, Chris recently had very positive discussions with a number of government officials in Mali, which resulted in obtaining preliminary approval to receive approximately $17 million in VAT mandates. At the end of Q2, we had approximately $80 million of VAT receivables outstanding in Mali.
Based on these recent discussions, we are cautiously optimistic that we will be able to receive these amounts in the future, which will continue to strengthen our balance sheet and cash position. CapEx and exploration spend totaled $63 million for the quarter. This includes $16 million at Syama, including $7.5 million spent on the SSCP, $2 million spent at Mako, which is solely attributable to the Mako Life Extension Project, $10 million spent across our exploration portfolio, including ABC, and $37 million spent on Doropo, which is progressing on time and on budget. Overall, CapEx and exploration spend were within expectations in Q2 and remain on track with full year guidance of $310 million-$360 million. Finally, as previously announced on the 20th of June, a full settlement of the vendor financing note was made by Ravenswood, for which we received $54 million.
In conclusion, we closed the quarter with net cash of $317 million. This is an increase of $2 million over the quarter.
Also marks a $108 million increase from the start of the year. We currently have just under $100 million in available overdraft facilities in Mali and Senegal, which are available for working capital management or development opportunities in country. This positions the business with $426 million of available liquidity at the end of the quarter. I am happy to announce that post quarter end, we have secured $155 million US dollars of credit facilities from local banks in Côte d'Ivoire, and expect to increase the financing by a further $105 million in Q3. All facilities have attractive terms, including minimal security commitments, no financial covenants, and come at highly competitive interest rates between 6.5% and 7.4%. We expect to draw on these funds gradually in 2026 and 2027, in line with the increased capital spend at Doropo in the future.
With these facilities in place, under current market conditions, we are well-capitalized to finance the Doropo project and fund ABC through the feasibility study work streams to FID. In summary, we're in a very solid financial position and are excited about the continued growth of the business. With that, I'll hand it back to Chris.
Thank you, Dave. Look on page 23, in conclusion, the business continues to perform well despite the challenges that we're facing in Mali. The business is well capitalized to fund Doropo construction based off the current market and regulatory conditions. We're advancing a robust pipeline of projects across the business, and I still see opportunities in possibly increasing the capacity and throughputs at both Syama and at Doropo in the future. We're financially very healthy, maintaining a very strong balance sheet of over $300 million of net cash, and we have very clear strategic objectives of achieving over 500,000 ounces of gold production from 2028. With that, I'll turn it over to questions. Thank you very much.
Thank you. Ladies and gentlemen, we'll now begin the question and answer session. If you are dialed into the call and would like to ask a question, please signal by pressing star one on your telephone keypad. Once again, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will pause for a moment to assemble the queue. Our first question comes from the line of Justin Chen with SCP Resource Finance. Please go ahead.
Hi, guys. Thanks for hosting the call. I guess my first question is just with regards to Syama and some of the commentary around if subject to stable conditions. I'm just curious, I guess, if we could get a bit more color. How are things now? If they continue as they are, do you feel that you have the explosive supply, the pits in the underground are in condition to meet guidance, or are you looking for further improvement in that regard?
Justin, thanks for the question. It's Gavin here. Currently as we stand at Syama, provided we stay in the stable environment we've got at the moment and things continue going to plan, then we see that we can still meet our guidance range. Obviously, we do caveat that with a lot of challenges within the country that come up infrequently, both in security and local content. Yes, at the current stage, we're confident that we can reach our target range for Syama, as long as things maintain a stable footing at this stage.
Justin, maybe I'll just add, I think we've got a very clear understanding of all the issues that exist. A lot of those require government cooperation and still requires approvals from the government with regards to transportation of explosives, and permit approvals has been the main sticking point. As Gavin highlighted, if we continue to see security issues in the country, that could be problematic for us. At this point, I think we're okay with what we stated, but it's going to be obviously a challenge if things start to get difficult in country.
Got you. I'm just curious, from an operating perspective, what, if any, contingencies or cushions do you have? For example, do you have some period of explosive stockpiles, so you have a buffer and in terms of development in the underground and stripping in the open pit, how much of a buffer do you feel you have?
I think the major thing here, Justin, is obviously the bulk manufacturing explosive plant that we're putting in. We're significantly advanced in that now. We have permits from the government to proceed. The construction is already starting. We expect to have that up and running towards the end of Q3 or early Q4. That makes a lot of the logistical issues that we have coming, bringing stuff into the site or moving the bulk explosives around the country redundant because we'll be bringing in raw materials and making it ourselves. We believe that's probably the biggest contingency we've got in place there. At the moment, we do have regular deliveries coming in, but we would like more, put it that way.
Okay, thanks. That's very helpful. At Doropo, just on the update, I guess, are you happy with where earthworks are coming into rainy season in terms of getting areas cleared, compacted, drained, or drainage put in place?
Look, I think obviously being very close to Doropo, I'm very happy with the progress to date. The team are doing a fantastic job down there. We're ahead of where we expected to be at this stage. We haven't seen any real significant rainfall at this stage to cause us any concerns. Obviously, we're only sort of in the very early stages of the wet season, but plenty of contingency and a lot of work streams that are independent of anything that could be impacted by the rain. Really pleased with where we are on this to date.
Okay, gotcha. Maybe just the last one I'll ask, and then rejoin the queue would be, in terms of long leads and timelines, could you give us a picture of how things are in terms of fabrication timelines and what you're expecting? Heard some things maybe on that some of those long lead timelines are expanding just due to the war and other conditions, I'm curious if you're actually seeing that or if that's not really happening.
No, we've had no problems to date with long lead items. We got in very early in the piece, sort of in the end of Q1, start of Q2. Get a lot of these orders placed and fabrication queues and obviously the getting in the manufacturing slots and everything. We haven't seen any concerns over that at this stage, and everything seems to be running on track within our original schedule. Yeah. Nothing to worry us there at this stage.
Justin, from my side, also on cost side, everything that we've ordered has been actually on, not everything, but the vast majority have been actually lower than what we had budgeted. We haven't seen any escalation in pricing as well.
Okay, perfect. Thanks, guys. Thanks so much for the call, and I'll rejoin the queue.
Once again, if you would like to ask a question and are dialed into the conference, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Regan Burrows with Macquarie. Please go ahead.
Hi, Chris and team. Thanks for taking my questions. Just in terms of, I guess, the A21 pit, you mentioned obviously mobilization of fleet there over the quarter has improved. Are there any sort of restrictions coming into the third quarter that we should be adjusting for there, or is it business as usual going forward here, so we should see sort of increase in the tonnage and also an increase in the grade?
Hi, it's Chris Eger here. In short, the answer is yes. With the new equipment, we're able to obviously ramp up the mining of A21. The one caveat that I'll make, it's still subject to explosives coming in on time because of, obviously, it's the drill and blast requirements for the A21 sulfide pit. At this stage, we think it's all on track. Look, we also are starting to build stockpiles again, which was not the case in previous quarters as a result of some of the challenges we had on equipment. Again, assuming things stay stable and in control, we should be able to increase the grades and throughput.
How confident are you that when we get to fourth quarter, that the commissioning is going to go smoothly and everything's going to sort of align to hit that low end of the guidance? There seems to be quite a lot of weight placed on that fourth quarter now. If the issues continue over the third quarter, how sort of confident are you?
Look, it's a good question. Confident enough that we have not revised guidance. Like I said, the team understands and we all understand exactly what the issues are, and we are working to make sure that we solve those one at a time. It requires a stable operating environment, which is probably the key caveat. If things are all stabilized and we continue to get supply chain working as we need it to be, then we'll be fine and we'll be able to actually have a very robust 2027 because we are starting to access higher grade zones. We need to catch up on development activity, as previously highlighted, get the equipment in country and make sure that the explosive supplies remain stable.
If I could just squeeze another one in there in terms of Doropo, you mentioned on time and on budget. If we're looking down those lists of long lead items and packages that you've announced, how much of that has sort of been locked in from a cost perspective, and how much of it is flexible moving forward and is subject to change?
Gavin here. The majority of costs are locked in. They're fixed costs, so we don't expect to see any significant changes on the main plant long lead items. That's probably around about a third of the total expenditure we're looking at at Doropo. That's certainly locked in at this stage, and we're seeing that coming in slightly under budget, which is promising.
Great. Thank you very much. I'll rejoin the queue.
Once again, if you would like to ask a question and are dialed into the conference lines, please signal by pressing star one on your telephone keypad. Once again, we have a question from Regan Burrows with Macquarie. Please go ahead.
Back again so soon. In terms of the financing, you announced the $155 million, and the remaining $105 million for Doropo. What are the sort of terms on that first $155 million, and what's left to finalize before you receive the balance?
Yeah. Morning there. It's Chris here. Look, for the $155, which were three local banks. We're using in total, I would say, local banks between both Côte d'Ivoire and Mali, and even looking at Senegal to finance the total $260 million. There's very little left, to be honest, with the remaining banks that we're going to bring in the additional $105 million because we did a club deal ourselves. I have to say we have very high probability that these will close in the next couple of months. It's just documentation at this stage.
In terms of rates, and terms for the sort of whole package, have you sort of announced any of that? Is there anything you can provide?
Yeah, look, we will at some stage provide a comprehensive update. We're just as we're still negotiating the rates and trying to beat them down a bit. We didn't want to provide too much detail, but the rates will be between 6.5%-7.4%. Two-year drawdown periods and three-year paybacks are pretty much a standard across. As Dave highlighted, they're in many cases covenant-free, with very limited security packages and parent company guarantees at the holding level. Very attractive facilities that maintain a lot of flexibility for the business.
Right. I'll leave it there. Thank you very much for taking my questions.
Thank you, Regan. We have no further questions at this time, but we will pause for a moment to allow for any final questions. Thank you. Our next question comes from the line of Laura Chan with RBC Capital Markets. Please go ahead.
Hi, guys. Thanks so much for the call and taking my question. I was just wondering, what's the maximum gearing you'd be comfortable carrying through peak construction say, I know you're in a net cash position at the moment, but say things take a turn for worse on a stress scenario, what does that look like? Secondly, on the ABC project, obviously it looks like you guys are pretty confident and optimistic about it. Could you just share how you're thinking about funding that post Doropo? Thanks.
Sorry, just on the first question, it cut out a bit. Were you asking about what we're comfortable from a net cash perspective?
Yeah. Say like in a stress scenario, what's the maximum gearing you would be comfortable carrying through that peak construction period?
Oh, with regards to gearing. Look, I think when we look at our debt package, we're broadly happy with the $250 million, $260 million of debt. We don't want to look to increase any more at this stage. Look, the business always looks to maintain at least about $100 million of net cash. Look, with respects to the second part of the question of ABC, like as I highlighted in the presentation, we're very positive and feel very excited about the potential upcoming our fourth mine, we're trying to accelerate as many of the works possible. Look, there are limitations in country for accessing rigs in order to continue the drilling, because the drilling is really the key that's needed to increase from inferred to indicated, and then to update the technical studies that have been done to date.
Look, we're pretty confident we'll be able to complete all that through next year, and there'll probably be an increase in the budgets for ABC next year. We'll announce that later this year once we start thinking about guidance for 2027.
Okay, awesome. Thanks so much.
Thank you.
Once again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. There are no further questions on the conference line. This concludes today's call. You may now disconnect. Have a nice day.