REG - Resolute Mining Ltd - Ravenswood Update

Resolute MiningAnnouncement

19/06/2024 09:30

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RNS Number : 0476T  Resolute Mining Limited  19 June 2024

19 June 2024

 

Ravenswood Update

 

Resolute restructures Ravenswood Payments and receives A$30 million with
further A$20 million due by September 2024

 

Resolute Mining Limited ('Resolute' or 'the Company') (ASX/LSE:RSG) is pleased
to announce that it has received A$30 million from Ravenswood Gold Pty Ltd
("Ravenswood") the owner of the Ravenswood Gold Mine which the Company sold on
31 March 2020.

 

Resolute and Ravenswood have restructured the Gold Price Contingent Promissory
Note and Vendor Financing Promissory Note to support the Ravenswood Mine in
its financing.

 

Based on the original agreements between Resolute and Ravenswood, Resolute was
due to receive a Gold Price Contingent Amount after cumulative ounces produced
from Ravenswood exceeded 500,000oz of gold over a four-year period. The
payment amount was dependent on certain bands linked to gold price:

·      A$10 million if the average gold price is greater than
A$1,900/oz;

·      A$20 million if the average gold price is greater than
A$1,975/oz;

·      A$30 million if the average gold price is greater than
A$2,050/oz;

·      A$40 million if the average gold price is greater than
A$2,075/oz; and

·      A$50 million if the average gold price is greater than
A$2,100/oz.

 

Resolute and Ravenswood have agreed to amend the Gold Price Contingent
Promissory Note including that the requirements of the clause regarding
Payment of Gold Price Contingent Amount of the Original Gold Price Contingent
Promissory Note are deemed to have been met. Accordingly, the Gold Price
Contingent Amount payable to Resolute is A$50 million (the highest payable
amount) and is payable in two tranches as follows:

·      A$30 million paid to Resolute and received on 19 June 2024; and

·      A$20 million to be paid to Resolute no later than 30 September
2024.

 

Additionally, Resolute has amended the A$50 million Vendor Financing
Promissory Note that was originally due in March 2027. The new structure is as
follows:

·      Reset the principal to the increased amount of A$64 million to
account for capitalised accrued interest;

·      Maintain the annual coupon at 6% until 30 June 2025 after which
the annual coupon increases to 12%. Interest will be capitalised and is to be
paid to Resolute upon maturity; and

·      Promissory note maturity extended to 31 December 2027 but may be
repaid early on future Ravenswood financings, liquidity event(s), or excess
cash from Ravenswood.

 

The Upside Sharing Promissory Note (up to A$150 million) linked to the
investment outcomes of Ravenswood for EMR Capital ("EMR") - one of the owners
of Ravenswood - remains unchanged. This instrument is triggered on any
liquidity event including disposal of Ravenswood or qualifying initial public
offering.

 

The payment is determined by reference to the gross money multiple to EMR
which is the gross proceeds (before payment of the Upside Sharing Payment)
divided by the total capital invested in the acquisition, development and
operation of Ravenswood by EMR.

 

Resolute will receive the Upside Sharing Payment from the owners of Ravenswood
based on the amount by which the gross money multiple exceeds a minimum
threshold up to a cap of A$150 million as follows:

·      A$7.5 million for each 0.1 that the gross money multiple is above
2.5x up to 4.0x; and

·      A$5 million for each 0.1 that the gross money multiple is above
4.0x.

 

Chris Eger, CFO, commented,

"This restructuring of the Ravenswood payments is a positive credit enhancing
development for Resolute and further strengthens the Company's cash position
for our growth projects.

We will receive the highest-possible payment of A$50 million from the Gold
Price Contingent Promissory Note whilst also supporting Ravenswood with their
financing. The first A$30 million tranche has been received and the second
A$20 million tranche is due no later than the end of Q3 2024. These payments,
along with strong cash generation from our operations, will further bolster
our liquidity position and balance sheet in H2.

In tandem, we have favourably amended the A$50 million Vendor Financing
Promissory Note with the coupon being increased from 6% to 12% from 30 June
2025 until maturity at the end of 2027, providing further potential cash to
Resolute.

This is a great outcome for both Companies and demonstrates the good business
relationship we have engendered."

 

Authorised by Mr Terence Holohan, Managing Director and Chief Executive
Officer

 

Contact
 Resolute                                               Public Relations

 Matthias O'Toole Howes,                                Jos Simson, Tavistock

 Corporate Development and Investor Relations Manager   resolute@tavistock.co.uk

 Matthias.otoolehowes@resolutemining.com                +44 207 920 3150

 +44 203 3017 620

                                                        Corporate Brokers

                                                        Jennifer Lee, Berenberg

                                                        +44 20 3753 3040

                                                        Tom Rider, BMO Capital Markets

                                                        +44 20 7236 1010

 

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