Resolute’s costs rise, output falls in Mali, Senegal

West Africa-focused gold producer Resolute Mining (ASX: RSG) forecasts reduced production and higher costs this year as its Mako mine in Senegal nears depletion and tax changes in Mali drive up expenses.

The Australian miner has set its production guidance for the year at 275,000-300,000 oz., with all-in sustaining costs (AISC) projected at US$1,650 to US$1,750 per ounce, it said on Thursday. This marks a significant shift from 2024, when Resolute produced 340,000 oz. at an AISC of US$1,476 per oz., driven by output from its flagship Syama mine in Mali, which accounted for 216,000 oz. at US$1,497 per ounce.

Resolute’s financial position has also been affected after it agreed to pay Mali US$160 million to release CEO Terry Holohan and two other executives detained by Malian authorities in November amid a tax dispute.

The agreement with Mali adds US$250 per oz. to its AISC, reflecting the increased fiscal burden. The additional AISC comes from royalties increasing to 10% from 6% for US$100 per oz., a 4% foundation payment contributing US$100 per oz., and the loss of a fuel tax exemption, acting chief financial officer Dave Jackson said. 

Shares in Resolute closed 3.6% lower on Thursday at A41¢, giving the company a market capitalization of A$862 million ($780 million). The stock gained A1¢ on Friday, but has more than halved since October, when the fiscal landscape in Mali began to deteriorate.

CEO plans

Acting CEO Chris Eger said on Thursday that Holohan, who has been on leave since December after his nearly three-week ordeal, is expected to announce his future with the company next week.

Following the final payment of US$30 million to Mali’s government in December as part of Holohan’s release, the company reported cash and gold holdings of only US$101 million. 

The Malian government, under military control since a 2021 coup, has pressured international miners, including Barrick Gold (TSX: ABX; NYSE: GOLD), B2Gold (TSX: BTO; NYSE-A: BTG), Allied Gold (TSX: AAUC), and AngloGold Ashanti (NYSE: AU), to contribute more under a mining code introduced in 2023. The code grants the government preference shares in mining projects and mandates an annual “foundation payment” to fund community development. 

Syama expansion

Despite these challenges, Resolute remains focused on optimizing operations. In 2024, the company ramped up production at Syama and initiated the second stage of the mine’s development, which is expected to come online this year. 

The Malian government holds a 20% stake in the project, which processes approximately 2.4 million tons of ore annually. However, Resolute has delayed some planned investments, including a $100 million sulphide conversion project aimed at nearly doubling processing capacity to 4 million tons per year. 

“Mine sequencing at Syama has been optimized for near- and medium-term cash generation while the company assesses its longer-term capital plans,” Resolute said in a statement.

 

 

Beyond Mali, Resolute is giving priority to opportunities in Guinea and the Ivory Coast while navigating the increasingly complex political environment in West Africa. The company stated that its priorities for 2025 include “creating value in Guinea and the Ivory Coast and actively managing an increasingly complicated political landscape.”