Resolute Mining Limited - Annual Report 2012

A proven gold producer

12 Annual Report

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02 2012 Highlights 04 Chief Executive’s Review 06 Reserves and Resources 07 Production and Project Summary 08 Operations Overview 14 Development Overview 18 Exploration Overview 26 Corporate Responsibility 37 Financial Report

Resolute is one of the largest gold producers listed on the ASX with three operating gold mines in Africa and Australia that have full exposure to the gold price.

It continues to build shareholder value through its proven track record as a successful developer and operator of quality gold projects over the past 20 years. Its projects to date have yielded over 6 million ounces of gold.

The Company is actively progressing its portfolio of projects and assessing new opportunities to further enhance shareholder value.

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Corporate Directory

Directors

Home Exchange

Chairman PE Huston Chief Executive Officer PR Sullivan Non-Executive Director TC Ford Non-Executive Director HTS Price Secretary GW Fitzgerald

Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade Perth, Western Australia 6000 Quoted on the official lists of the Australian Securities Exchange ASX Ordinary Share Code: “RSG”

Securities on Issue (10/10/2012) Ordinary Shares 628,704,290 Unlisted Options 8,368,066

Registered Office and Business Address 4th Floor, The BGC Centre 28 The Esplanade Perth, Western Australia 6000 Postal PO Box 7232 Cloisters Square Perth, Western Australia 6850 Telephone: + 61 8 9261 6100 Facsimile: + 61 8 9322 7597 E-mail: [email protected] ABN 39 097 088 689

Legal Advisors

Hardy Bowen Level 1, 28 Ord Street West Perth, Western Australia 6005

Auditors

Ernst & Young Ernst & Young Building 11 Mounts Bay Rd Perth, Western Australia 6000

Bankers

Web Site

Barclays Bank Plc 5 The North Colonnade Canary Wharf, London E14 4BB, United Kingdom

Resolute maintains a web site where all major announcements to the ASX are available. www.rml.com.au

Citibank Limited Level 23, Citigroup Centre 2 Park Street Sydney, New South Wales 2000

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross, Western Australia 6153 Telephone: + 61 8 9315 2333 Facsimile: + 61 8 9315 2233 [email protected]

Shareholders wishing to receive copies of Resolute Mining Limited ASX announcements by e-mail should register their interest by contacting the Company at [email protected]

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Financial

Strong net profit after tax attributable to members of $105.1m
Robust operating cash inflow of $179m
Net investing cash outflows of $93m with accumulation of other financial assets, expenditure on property, plant and equipment and development
Finance facility repayments totalling $47m
Effectively ungeared balance sheet with conversion of all Convertible Notes and repayment of Senior Debt
Total market value of group cash, bullion and investments of $139m at 30 June 2012
Distribution to shareholders of 5 cents per share declared by directors

Operations

Yielded in excess of 398,000 ounces of gold at a cash cost of $761 per ounce
Syama mine in Mali plant optimisation continuing with float recoveries, concentrate sulphide grades, CIL recoveries and overall gold recoveries all achieving Feasibility Study specifications

Corporate

Unhedged
Fund raising activities during the year ended 30 June 2012, mostly from the exercising of options over Resolute shares, provided gross proceeds of $31.9m
Share Buy-Back Program utilised $31.3m
Strong cash flows to fund identified optimisation and expansion pipeline
Well positioned to consider investment and acquisition opportunities

Development

Definitive Feasibility Study confirmed the economic and technical viability of a major multifaceted expansion of the Syama Gold Mine that was subsequently approved by the Board of Resolute
The Memorandum of Understanding for the proposed Sikasso-Syama power line connection accepted by government agencies and submitted to Cabinet for final consideration
Definitive Feasibility Study examining the re-opening of the Sarsfield open pit at Ravenswood has delivered a positive outcome that is currently below internal return hurdles
Underground resource drilling below the current base of the mine at Mt Wright Underground returned significant results
Scoping Study evaluation of development opportunities for the Nyakafuru project in Tanzania completed. Results are under review

Exploration

A significant increase to the exploration budget has resulted in accelerated regional drill programs in the Syama Formation identifying new targets and improving existing prospects
Drilling at Ravenswood in Queensland has highlighted potential to increase overall resources
Intensive drilling at Nyakafuru Project in Tanzania highlights zones of high grade gold outside the current resource at Kanegele

Highlights

Resolute Mining liMited AnnuAl RepoRt 2012

HIGHLIGHTS

Average cash price for gold sold

Cost per ounce

Total project resources

Gold production

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14.0 400,000
12.0
300,000
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8.0
200,000
6.0
4.0
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2.0
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Resource ounces
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Net profit

Revenue from sales of precious metal

Operating cashflow

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Resolute Mining liMited AnnuAl RepoRt 2012

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Chief Executive’s Review Resolute Mining liMited AnnuAl RepoRt 2012

The 2012 Financial Year has been a transformational period for Resolute Mining. Our substantial, hedge free gold production is generating strong cashflows in the current gold price environment. This has enabled Resolute to eliminate its debt and make significant cash returns to our shareholders while retaining sufficient funding to complete organic growth projects. Resolute is now extremely well positioned for the future.

CHIEF ExECuTIvE’S REvIEW

We are planning for another strong year on the exploration front with an approved budget of $22 million. Apart from Nyakafuru, our major focus is on expanding the oxide resources along the Syama strike where we have already had exceptional success. Further drilling of the breccia pipe targets at Ravenswood, in particular the Golden Valley breccia complex, is also planned.

Production in FY12 of nearly 400,000 ounces of gold was a 20 per cent increase on that produced in the previous year. At the same time average group cash costs of $761 per ounce were down 16% on last year and resulted in a marked improvement in profits and cashflow. We are expecting a continuation of this performance in FY13 with a further production increase forecast albeit at a slightly higher unit cash cost.

Our greatly improved financial position has provided an opportunity to pursue a number of new initiatives to add value for Resolute shareholders. Firstly, we have been able to return just over $70 million to shareholders this year through an opportunistic share buyback program and a 5 cent per share dividend, our first such payment in 13 years. Secondly, we have been able to commit to the organic growth projects without recourse to further debt or equity fund raising activities. Thirdly, we are well placed to consider further growth options to add to our production profile through acquisition or farm in opportunities. Striking the right balance between these three key areas is a challenge that I believe Resolute’s management team and Board has the necessary experience, skills and dedication to accomplish.

This means we are in an enviable position to consider strategic initiatives to add long term value for our shareholders.

The Syama operation in Mali continues to improve and is now Resolute’s major asset. It has become a more consistent and reliable operation this year and is expected to approach its design throughput and production levels in FY13. This has contributed to the Resolute Board’s confidence in committing to a $241 million expansion during FY12 that will make Syama an even more substantial and robust long term asset. The expansion plan consists of three projects: the deepening of the main Syama pit which will double its life to 15 years; addition of an oxide circuit to add lower cost production ounces from treatment of the near-surface oxide ore along strike of the main pit; connection of the site to grid power which will deliver significant energy cost savings and other operational benefits.

We are now very well placed to deliver further value to shareholders. The continued commitment of our employees, support of the Board and encouragement from shareholders is important to the outcomes we will achieve. I would like to very much thank you all for your support and look forward to the year ahead.

At Ravenswood in Queensland, the performance of the Mt Wright mine has been very pleasing. The mining method is now well established and is delivering on both its technical and financial parameters. We expect this to continue in the coming year. The Mt Wright decline is now developed to its designed depth and further development drilling to extend the depth of the ore body has commenced with positive early results. The feasibility study on the re-opening of the Sarsfield open pit, which will deliver a new long term ore source for the plant, is being critically reviewed for both capital and operating cost savings. The process to obtain all regulatory approvals for this is well advanced.

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Peter Sullivan Chief Executive Officer

Our Golden Pride mine in Tanzania is now in its final year of operation. It has been a key asset of the company and will have produced nearly 2.2 million ounces of gold over its 15 year life. We have an approved closure plan and we are well advanced in our work to meet its requirements. The Nyakafuru project, located 120 kilometres from Golden Pride, is shaping as a potential new development option in Tanzania utilising a relocated Golden Pride plant. An extensive drill program to expand the current 1.1 million ounce resource has met with good success and we should get a better understanding of the prospects for this project over the coming year.

Resolute Mining liMited AnnuAl RepoRt 2012

Reserves and Resources Statement

at 30 june 2012

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Gold Reserves PROjECT GOLD PROjECT RESOLuTE GROuP RESOLuTE GROuP
TOnnES GRADE COnTAInED SHARE SHARE
(includes stockpiles) (G/T) OunCES GOLD % OunCES
RESERVES
Reserves ( Proved)
Australia
Mt Wright (insitu) 3 4,845,000 2.6 400,000 100% 400,000
Sarsfield (insitu) 2 24,150,000 0.8 629,000 100% 629,000
Mali
Syama (insitu) 14,115,000 3.1 1,392,000 80% 1,114,000
Stockpiles 918,000 2.7 79,000 80% 63,000
A21 (insitu) 1,058,000 2.2 76,000 80% 61,000
Alpha (insitu) 468,000 2.2 33,000 80% 26,000
Beta (insitu) 216,000 2.2 15,000 80% 12,000
Finkolo-Etruscan JV (insitu) 1,335,000 3.1 133,000 51% 68,000
Tanzania
Golden Pride (insitu) 628,000 2.2 44,000 100% 44,000
Stockpiles 468,000 1.2 18,000 100% 18,000
Total (Proved) 48,201,000 1.8 2,819,000 2,435,000
Reserves ( Probable)
Australia
Mt Wright (insitu) 3 25,000 2.6 2,000 100% 2,000
Sarsfield (insitu) 2 20,520,000 0.7 466,000 100% 466,000
Mali
Syama (insitu) 15,425,000 2.8 1,371,000 80% 1,097,000
Stockpiles 1,432,000 1.8 83,000 80% 66,000
A21 (insitu) 2,748,000 2.3 205,000 80% 164,000
Alpha (insitu) 627,000 2.0 41,000 80% 33,000
Beta (insitu) 692,000 2.2 50,000 80% 40,000
Finkolo-Etruscan JV (insitu) 1,821,000 2.8 163,000 51% 83,000
Tanzania
Golden Pride (insitu) 413,000 2.3 30,000 100% 30,000
Stockpiles 683,000 1.0 17,000 100% 17,000
Total (Probable) 44,386,000 1.7 2,428,000 1,998,000
Total Reserves (Proved and Probable) 92,587,000 1.8 5,247,000 4,433,000
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Gold Resources[1]

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|||||||
|---|---|---|---|---|---|
|(includes stockpiles)|
|RESOURCES 1|
|Resources (Measured)|
|Australia|
|Sarsfield (insitu) 2|1,840,000|1.0|59,000|100%|59,000|
|Mali|
|Syama (insitu)|2,630,000|3.0|254,000|80%|203,000|
|A21 (insitu)|393,000|1.8|22,000|80%|18,000|
|Alpha, Beta & Tellem (insitu)|241,000|1.5|12,000|80%|10,000|
|Finkolo-Etruscan JV (insitu)|996,000|2.7|87,000|60%|52,000|
|Tanzania|
|Golden Pride (insitu)|3,786,000|2.0|238,000|100%|238,000|
|Total (Measured)|9,886,000|2.1|672,000|580,000|
|Resources (Indicated)|
|Australia|
|Mt Wright (insitu) 3|780,000|2.6|65,000|100%|65,000|
|Sarsfield (insitu) 2|3,730,000|1.0|120,000|100%|120,000|
|Mali|
|Syama (insitu)|7,414,000|2.7|644,000|80%|515,000|
|Stockpiles|3,691,000|1.5|172,000|80%|138,000|
|A21 (insitu)|2,341,000|1.7|128,000|80%|102,000|
|Alpha, Beta & Tellem (insitu)|1,852,000|2.0|120,000|80%|96,000|
|Finkolo-Etruscan JV (insitu)|2,674,000|2.6|224,000|60%|134,000|
|Tanzania|
|Golden Pride (insitu)|6,744,000|1.8|401,000|100%|401,000|
|Golden Pride (stockpiled)|1,300,000|0.7|27,000|100%|27,000|
|Nyakafuru JV (insitu) 2|7,700,000|2.2|545,000|100%|545,000|
|Total (Indicated)|38,226,000|2.0|2,466,000|2,143,000|
|Total Resources (Measured and Indicated)|48,112,000|2.0|3,138,000|2,723,000|

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Resolute Mining liMited AnnuAl RepoRt 2012

Reserves and Resources Statement Continued

at 30 june 2012

Gold Resources1Continued	PROjECT TOnnES	GOLD GRADE	PROjECT COnTAInED	RESOLuTE GROuP SHARE	RESOLuTE GROuP SHARE
(includes stockpiles)		(G/T)	OunCES GOLD	%	OunCES
Resources (Inferred)
Australia
Mt Wright (insitu) 3	193,000	2.0	12,000	100%	12,000
Sarsfeld (insitu) 2	16,130,000	0.8	437,000	100%	437,000
Welcome Breccia (insitu)	2,040,000	3.2	210,000	100%	210,000
Mali
Syama (insitu)	3,800,000	2.4	293,000	80%	234,000
A21 (insitu)	5,544,000	2.1	366,000	80%	293,000
Alpha, Beta & Tellem (insitu)	3,280,000	2.3	246,000	80%	197,000
Finkolo-Etruscan JV (insitu)	3,100,000	2.2	219,000	60%	131,000
Tanzania
Golden Pride (insitu)	12,945,000	1.7	724,000	100%	724,000
Nyakafuru JV (insitu) 2	11,700,000	1.4	527,000	75%	393,000

Total (Inferred)	58,732,000	1.6	3,034,000		2,631,000
Total Resources	106,844,000	1.8	6,172,000		5,354,000

notes:

1 Mineral Resources are exclusive of the Reserves - differences may occur due to rounding.

2 All Resources and Reserves are reported above 1g/t cut-off except Sarsfield above 0.4g/t cut off and Nyakafuru above 0.5g/t cut off.

3 Mt Wright Underground Reserves and Resources reported above 1.8 g/t cut off.

The information in this report that relates to the Mineral Resources and Ore Reserves is based on information compiled by Mr Richard Bray who is a Registered Professional Geologist with the Australian Institute of Geoscientists and Mr Iain Wearing, a member of The Australian Institute of Mining and Metallurgy. Mr Richard Bray and Mr Iain Wearing both have more than 5 years’ experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person, as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Richard Bray and Mr Iain Wearing are full time employees of Resolute Mining Limited Group and have consented to the inclusion of the matters in this report based on their information in the form and context in which it appears.

Group Production Summary

	ORE MInED	ORE MILLED	HEAD GRADE	RECOvERY	MInE PRODuCTIOn	CASH COST	CASH COST
	TOnnES	TOnnES	G/T	%	OzS	A$/Oz	uS$/Oz
Syama	2,096,788	1,671,775	3.25	83	145,197	784	813
Ravenswood	1,455,185	1,920,524	2.41	93	137,965	756	783
Golden Pride	1,952,014	2,228,540	1.74	93	115,289	737	764
Total	5,503,987	5,820,839	2.39	89	398,451	761	788

Group Project Summary

COunTRY	PROjECT	GRAnTED AREA	APPLICATIOn AREA	COMMODITY	LOCATIOn
		kM²	kM²
Tanzania
	Bulanga	129	128	Gold	Africa
	Golden Pride	177	179	Gold	Africa
	GP West	114	70	Gold	Africa
	Igunga	26	168	Gold	Africa
	Isaka	229	202	Gold	Africa
	Kahama	28	60	Gold	Africa
	Matinje	106	93	Gold	Africa
	Nyakafuru	173	185	Gold	Africa
		982	1,085
Mali
	Syama	201	0	Gold	Africa
	Finkolo JV	155	230	Gold	Africa
	Other Tenure	824	592	Gold	Africa
		1,180	822
Cote d’Ivoire
	Various	574	8,687	Gold	Africa
		574	8,687
Sub Total Africa		2,736	10,594
Australia
	Ravenswood	1,497	1,581	Gold	Queensland
	Other Tenure	13	0	Gold	Western Australia
Sub Total Australia		1,510	1,581
Total Resolute Tenure		4,246	12,175

Resolute Mining liMited AnnuAl RepoRt 2012

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Operations
Overview
Resolute Mining liMited AnnuAl RepoRt 2012
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OPERATIOnS OvERvIEW

Syama

Resolute’s established operations produced a total of 398,451 ounces at an average cash cost of A$761 per ounce.

In the coming financial year, Resolute’s mines at Golden Pride in Tanzania, Ravenswood in Queensland and Syama in Mali are together forecast to produce approximately 415,000 ounces of gold at an average cash cost of around A$830 per ounce.

The Syama Gold Project is located in the south of Mali, West Africa approximately 30kms from the Côte d’Ivoire border and 300km southeast of the capital Bamako.

Resolute has an 80% interest in the project through its equity in Sociêtê des Mines de Syama S.A. (SOMISY). The Malian Government holds a 20% interest in SOMISY, 15% of which is free carried.

Ore for the Syama Operations is sourced from the Syama open pit. Due to the refractory nature of the ore it is treated using conventional four-stage crushing, ball-milling, sulphide floatation and dewatering, roasting, calcine leaching and elution at the design rate of 2.4mtpa.

Operations

During the 2012 financial year the plant treated 1.67 million tonnes (2011: 1.46mt) at an overall head grade of 3.25g/t Au (2011: 2.57g/t Au) to produce 145,197 ounces (2011: 85,362oz) of gold at a cash cost of $784 per ounce (2011: $1,209). The main reason for the higher ounces and lower cash cost was increased treatment plant efficiencies, including an improved metallurgical recovery rate of 83.1% (2011: 70.9%), and improved head grade from the Syama open pit.

A continued focus on reliability and operational consistency resulted in a much improved availability, utilisation and metallurgical performance of the processing plant. This included the roaster which operated consistently each month over the entire period whilst accommodating regular planned inspections.

Overall for the period, float recoveries, concentrate sulphide grades, CIL recoveries and overall gold recoveries all achieved Feasibility Study specifications.

Crusher availability and performance, that impacted on mill throughput, was steadily addressed over the period along with installation of a second quaternary crusher in October, replacement of the fatigued and cracking crusher product screen in February along with optimisation of crusher screen panel type and aperture.

Resolute Mining liMited AnnuAl RepoRt 2012

OperatiOns Overview

Mill throughput, although improved, was affected by crusher operation and primary mill drive train maintenance issues which caused excessive major unplanned downtime via mechanical (coupling and bearings on gearbox and mill pinion) and electrical breakdowns (mill motor starter, exciter, slipring/brushes and bearings), totalling 40 days. The primary mill drive train issues have now been largely addressed.

Mining progress continued in developing the pit to access the deeper higher grade sulphide ore at the Syama pit. Total waste material moved for the financial year was 2.8 million bank cubic metres (2011: 3.8m BCM). By financial year’s end the pit had reached the 230mRL. During this period 760,998 bank cubic metres of ore (2011: 800,000) was mined at a grade of 2.73g/t Au (2011: 2.40g/t Au)

Mining performance ensured sufficient quantities of ore, at the required grade, was delivered to the treatment plant. Mining was affected by mechanical issues with drill rigs and excavators, however there was no impact on ore supply for treatment.

Pumps were installed to dewater the original Syama pit. These pumps ran continuously all year and by June 2012 the water level had dropped from the 250mRL to the 220mRL with 1 million cubic metres of water having been pumped out and used in processing operations. This equates to 70% of the original volume of water.

Outlook

As a result of the continued focus on maintenance processes, rectification works and improvements throughout the plant and roaster, improvements in the plant performance are expected in the coming year. Mill throughput levels are expected to further improve. Increasing mine head grades and the focus on increasing overall metallurgical recovery, is expected to result in increased gold production. Cash costs are expected to rise as the waste stripping associated with the pit expansion commences.

Activities in the capital Bamako and southern Mali, where the Syama Mine is located (Sikasso Region, 300km from Bamako) have returned to normal following the Malian military intervention in the government in March 2012. A transitional government has been formed and is charged with the responsibility to organise elections for a new president and parliament. The government is working with other countries and groups to resolve broader divisions that exist in the north of Mali. The Syama Mine has not experienced any significant disruptions and it has been essentially business as usual.

Operating Performance at a glance

		12	11
Ore Mined	Million Tonnes	2.10	2.12
Ore Milled	Million Tonnes	1.67	1.46
Head Grade	g/t Au	3.25	2.57
Recovery Rate	%	83.1	70.9
Gold Produced	Oz	145,197	85,362
Cost Per Ounce	A$	784	1,209
Cost Per Ounce	US$	813	1,197

Syama - Ore Reserves as at 30 june 2012

CATEGORY	TOnnES	GRADE	OunCES
Proved (insitu)	14,115,000	3.1	1,392,000
Proved (stockpiled)	918,000	2.7	79,000
Probable (insitu)	15,425,000	2.8	1,371,000
Probable (stockpiled)	1,432,000	1.8	83,000
Total	31,890,000	2.8	2,925,000

Satellite Deposits - Ore Reserves as at 30 june 2012

CATEGORY	TOnnES	GRADE	OunCES
Proved (insitu)	3,077,000	2.6	257,000
Probable (insitu)	5,888,000	2.4	459,000
Total	8,965,000	2.5	716,000

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■ Syama
■ Golden Pride
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Resolute Mining liMited annual repOrt 2012

OperatiOns Overview

Ravenswood

The Ravenswood gold mine is located approximately 95km southwest of Townsville and 65km east of Charters Towers in north-east Queensland. Resolute has a 100% interest in the mine through its subsidiary Carpentaria Gold Pty Ltd.

Ore for the Ravenswood Operations was sourced from the Mt Wright underground mine and low-grade stockpiles from Sarsfield and Nolans. A major reconfiguration of the process plant was conducted during the first quarter after completion of the Sarsfield low-grade stocks. The reconfigured process plant is optimised for processing 1.5 mtpa (previously 4.5 mtpa) of high grade underground ore using single stage crushing, SAG and ball milling and carbon-in-leach processing with a gravity circuit for recovery of free gold.

Operations

During the 2012 financial year, the operations produced 137,965 ounces (2011: 122,576oz) of gold at a cash cost of $756 per ounce (2011: $893). The main reason for the higher ounces and lower cash cost was increased production and grade from the Mt Wright underground operation.

Ore from the Mt Wright underground mine showed a further increase with production of 1.46 million tonnes (2011: 0.93mt) @ 2.96g/t Au (2011: 2.71g/t Au). Development reduced in line with the mining schedule, achieving 4,685 metres (2011: 5,968m). The Sub-Level Shrinkage with Continuous Fill (SLS) mining method continued to perform to expectation and resulted in significantly increased production.

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■ Ravenswood
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Diamond drilling during the year was mainly focused on evaluating resource potential below 600 RL. Mt Wright reserves are 4.85 million tonnes @ 2.68g/t Au, compared to 6.00 million tonnes @ 2.56g/t Au at June 2011. Resources converted to Reserves during the year were 0.30 million tonnes.

Total material movement from low grade stockpiles was 0.34 million tonnes @ 0.56g/t Au (2011: 3.6mt @ 0.54g/t Au).

The processing plant treated 1.9 million tonnes (2011: 4.5mt) at an average head grade of 2.41g/t Au (2011: 0.94g/t Au). The reduction in overall treatment tonnes and increase in head grade was due to the completion of the Sarsfield low grade stocks early in the financial year. As discussed above, the process plant was subsequently reconfigured and optimised for treatment of high grade Mt Wright ore with gravity gold. Improvements to the process plant resulted in an increased overall recovery rate of 92.8% (2011: 90.0%) with the gain attributable to the gravity circuit and improved leach kinetics.

Operating Performance at a glance

		12	11
Ore Mined	Million Tonnes	1.46	0.93
Ore Milled	Million Tonnes	1.92	4.49
Head Grade	g/t	2.41	0.94
Recovery Rate	%	92.8	90.0
Gold Produced	Oz	137,965	122,576
Cost Per Ounce	A$	756	893
Cost Per Ounce	US$	783	885

Ravenswood - Ore Reserves as at 30 june 2012

CATEGORY	TOnnES	GRADE	OunCES
Proved MTW (insitu)	4,845,000	2.6	400,000
Proved Sarsfeld (insitu)	24,150,000	0.8	629,000
Probable MTW (insitu)	25,000	2.6	2,000
Probable Sarsfeld (insitu)	20,520,000	0.7	466,000
Total	49,540,000	0.9	1,497,000

Outlook

The process plant will continue to treat Mt Wright ore with the possibility for some additional ad hoc treatment from other low grade sources. Operational improvement projects will include reducing cyanide consumption rates, minimising raw water requirements and improving operation control through improved sampling techniques.

Mt Wright ore production will continue at similar levels. Operational efficiency improvements will be targeted through the construction of a surface waste pass and a new fresh air rise.

Gold production is expected to be slightly less in the 2013 financial year due to the depletion of low-grade stocks previously supplementing Mt Wright production. Cash costs per ounce are expected to increase from 2012 levels, predominantly due to increased costs from suppliers and the influence of the carbon tax.

Resolute Mining liMited annual repOrt 2012

OperatiOns Overview

Golden Pride

The Golden Pride mine is located in Tanzania, East Africa, 750km northwest of the port of Dar es Salaam and 200km south of Lake Victoria.

Resolute has a 100% interest in the project through its Tanzanian subsidiary, Resolute (Tanzania) Limited.

Ore for the Golden Pride Operations was sourced from the Golden Pride open pit with supplementary feed from on-site low-grade stockpiles. The ore is treated using conventional crushing, SAG and ball-milling with carbon-in-pulp processing at the rate of 2.2Mtpa.

Operations

The 2012 financial year produced 115,289 ounces (2011: 122,921oz) of gold at a cash cost of $737 per ounce (2011: $713).

Operating Performance at a glance

		12	11
Ore Mined	Million Tonnes	1.95	2.06
Ore Milled	Million Tonnes	2.23	2.47
Head Grade	g/t	1.74	1.65
Recovery Rate	%	92.6	93.7
Gold Produced	Oz	115,289	122,921
Cost Per Ounce	A$	737	713
Cost Per Ounce	US$	764	708

Golden Pride - Ore Reserves as at 30 june 2012

Plant throughput was reduced this year to 2.2 million tonnes (2011: 2.4mt) due to a large component of the harder/fresher ore from the deeper sections of the main western pit being processed. The average head grade was 1.74g/t Au (2011: 1.65g/t Au) whilst the recovery rate achieved was 92.6% (2011: 93.7%).

Gold production decreased marginally primarily due to reduced throughput as a result of harder/fresher material experienced from the south west cutback. Oxide blending remained at 30-40% with oxide pit material fed preferentially over stockpiled low grade oxide ore.

Total operating costs were under budget due to less mined volume with different mining rates, however treatment costs were higher with increased crushing costs.

The open pits mined 4.4 million bank cubic metres of material (2011 – 5.1m) at a lower strip ratio of 5.1:1 (2011 – 5.7:1). The relatively similar strip ratio was attributable to the ongoing development of the Maji and Southern Oxides pits. Oxide ore presented from both these pits and was fed in preference to low grade rehandle oxide ore.

The Golden Pride mine has now produced almost 2.1 million ounces of gold since commissioning in 1998.

CATEGORY	TOnnES	GRADE	OunCES
Proved (insitu)	628,000	2.2	44,000
Proved (stockpiled)	468,000	1.2	18,000
Probable (insitu)	413,000	2.3	30,000
Probable (stockpiled)	683,000	1.0	17,000
Total	2,192,000	1.6	109,000

Outlook

The coming 12 month period to June 2013 will see the end of mining operations at Golden Pride.

The south west cutback will remain the source of primary fresh ore with both oxide pits providing higher grade oxide material that will be blended as priority over stockpiled low grade oxide ore.

Mill throughput at current rates will continue until fresh/oxide blend ore is depleted. The remaining lower grade oxide stockpiles will be fed at an increased throughput rate until completed around June 2013.

Head grade will remain near 2g/t Au while mining continues. With cessation of mining, milling will see the head grade reduce as fresh rock and the higher grade oxide ore depletes and only low grade stockpiled oxide ore remains for mill feed.

Cash cost per ounce will be higher due to an overall increase in mining and treatment costs and the lower grade feed.

Resolute Mining liMited annual repOrt 2012

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OperatiOns Overview
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Resolute Mining liMited annual repOrt 2012
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14
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Development
Overview
Resolute Mining liMited AnnuAl RepoRt 2012
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DEvELOPMEnT OvERvIEW

Mali

Resolute is well placed to pursue opportunities by using a common sense approach firmly based on adding value for shareholders. The broad approach is measured risk, cost-effective addition to or acquisition of ounces.

Syama Expansion Study (Resolute 80%)

Early in the year the Company engaged consultants GR Engineering Services to manage a feasibility study assessing an expansion of operations at the Syama Gold Project in Mali. This followed an earlier scoping study completed by Snowden Mining Consultants that identified an opportunity to expand and deepen the Syama open pit to increase the ore reserve and extend the mine life. This study also concluded that additional value could be derived through the establishment of a separate oxide circuit to process the recently outlined oxide ore from satellite deposits.

Process consultants at GR Engineering Services provided the design expertise for the 1.0 Mtpa parallel oxide circuit located within the same footprint area as the current sulphide processing facility. Expanding the Syama open pit will involve a relocation of the current sulphide crushing circuit. To minimise disruption to the current circuit it was proposed to build a new facility which provided the added benefits of minimising future maintenance requirements and optimising the selection of crushing equipment. A new oxide tailings storage facility, upgrading of the water supply pipeline to accommodate both processing plants and demolition work to remove old and redundant items of equipment from the plant area also formed part of the study.

At the end of June, the Resolute Board of Directors gave formal approval for the expansion project enabling work activities to commence. The approved work includes construction of the 72km High Voltage Grid Interconnection which will provide grid power to the upgraded project. The anticipated capital cost for the expansion is US$241 million which will be fully funded from the Company’s cash and bullion holdings and future cash flows. Negotiations for the award of the EPCM contract for the expansion was underway with the contract expected to be awarded in the September quarter.

To ensure that long lead items do not compromise the project timeline, the Company undertook early discussions with Metso Minerals Australia to supply a 3.5MW SAG mill. Similar early works were completed for the supply of temporary accommodation modules for the construction personnel and the supply of four cranes for use during demolition and construction works.

As a result of the expanded Syama open pit and the additional satellite deposits, the total Proved and Probable ore reserve has been extended to 3.64Moz of gold, which includes 557,000oz within oxide material. Average annual gold production for Syama will increase to 270,000 oz per year through the combined sulphide and oxide processing circuits. Mining operations in the Syama sulphide pit have been extended to 15 years.

High voltage Grid Interconnection to Syama (Resolute 80%)

The new 225kV Transmission line from Ferkessedougou in Cote d’Ivoire to Sikasso in Mali, a West African Power Pool project, is proceeding on schedule and is due to be energised in the September quarter.

An angle and detailed contour survey was completed as part of the transmission line survey from Sikasso to Syama (72km) during the year.

The Memorandum of Understanding (MoU) has been accepted by the Ministry of Energy in Mali and presented to the Cabinet for review and acceptance.

Resolute Mining liMited AnnuAl RepoRt 2012

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DEvELOPMEnT OvERvIEW

Australia

Project Implementation and Power Supply agreements have been drafted and will be submitted to the relevant agencies for discussion.

An experienced local environmental consultant has been appointed and commenced work on the Environmental and Social Impact Study for the proposed route.

Satellite Deposit Resource Evaluation (Resolute 80%)

Further investigation work has been conducted at the satellite deposits located along prospective Syama Formation units extending north and south of the Syama mine. Mineral resource and ore reserve information provided to Snowden Mining Consultants for their scoping study evaluation enabled them to establish an optimal mining schedule for the delivery of oxide ore to the proposed parallel oxide circuit.

Drilling programs have been conducted at the satellite deposits to provide additional resource information and geotechnical data required to establish updated ore reserves. The work included updated optimisation studies and open pit designs at four deposits. As a result oxide ore reserves have now been increased to 8Mt at 2.2 g/t Au for an aggregate 557,000oz. The ore reserves will provide up to eight years of feed for the new 1Mtpa oxide plant. The strike extent of prospective Syama Formation within the Company’s tenement package continues to provide an excellent opportunity to further expand the reserve inventory.

Sarsfield Expansion Study (Resolute 100%)

During the year the Company completed a feasibility study evaluation of the Sarsfield Expansion Project. An earlier scoping study had returned positive results for a deepening of the Sarsfield open pit and processing ore through the existing Nolans plant at a rate of 5.5Mtpa in conjunction with continued operations at the Mt Wright underground mine. The Company engaged GR Engineering Services to manage the feasibility study with Coffey Environment completing an extensive EIS study for submission to government.

In the course of the study GRES determined that the capital components of the project would include upgrading of the three stage crushing plant and construction of a new tailings storage facility. Tailings currently stored in the existing Sarsfield pit would be dredged and re-deposited in the new storage facility. The project would include changes to the town water supply and sewerage treatment plant and an expansion of the mine village accommodation.

The Study included a final mine design and ore delivery schedule for the expanded Sarsfield pit and the development of the nearby Nolans East ore body. The two pits provide a cumulative ore reserve inventory of 44.7 million tonnes at 0.8g/t Au. The operating life at the Ravenswood project would be extended by 10 years and include the production of 1.1 million ounces.

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16800mE 17000mE 17200mE 17400mE 17600mE
Sikoro Formation
Current Pit (June 2012) N’Golopene Group
Syama Formation
140m @ 3.43g/t Au
Section Line
105m @ 3.65g/t Au
Potential
Reserves in Design Pit Underground
Resource at 1 g/t cutoff Ore
Drill Hole
Drill Intercept
Stage 3 Pit Shell
16800mE 17000mE 17200mE 17400mE 17600mE
FIGuRE 1
SYAMA OPEn PIT ExPAnSIOn
Stage 1 Pit
Expansion Stage 3 Pit
Expansion Stage 2 Pit
400mRL 400mRL
200mRL 200mRL
0mRL 0mRL
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Resolute Mining liMited AnnuAl RepoRt 2012

DEvELOPMEnT OvERvIEW

The total cost for the new crushing plant, processing plant upgrade, infrastructure, new tails storage facility, related owners costs and engineering contractor costs for the initial mine development is estimated at $123 million. Particular highlights of the Sarsfield Expansion study include:

Total proved and probable ore reserves of 1.1Moz with an open pit strip ratio of 2:1
Revised operational life of 10 years including an average additional production of 110,000oz per annum
Initial Capital of $123million includes EPCM and contingency costs
Net cash flow is estimated at $283million pre-tax based on a $1,650 per oz gold price

Mt Wright Project (Resolute 100%)

At Mt Wright Underground diamond drilling to investigate the extension of rhyolite mineralisation below the current base of the mine at 600RL commenced during the year. A planned campaign of 10,000 metres will be used to test the down-dip extension of rhyolite breccia mineralisation and related geology. Drilling has started from a position in the decline which provides access to a profile of approximately 150 vertical metres. The evaluation program is expected to run for several months which will culminate in an updated resource model and a mining study to assess the potential to extend the operation at depth. By year end eleven drill holes for 3,440m had been completed with the drill program continuing.

Pre-tax internal rate of return (IRR) of 13%
Life of Mine cash costs to average $1,106/oz.

While the outcome of the feasibility study remained positive, the return on capital and payback measured on a standalone basis did not meet the Company’s current internal investment hurdles. During the feasibility study process, some opportunities to improve returns were identified. The Company has elected to investigate these opportunities in the short term while awaiting government environmental (EIS) and social permit approval. Potential exists to reduce project capital cost through modifications to the design of the tailings storage facility. Investigations were underway with engineering consultants to reassess the design and confirm the construction cost. Within and immediately adjacent to the pit shell there are some inferred mineral resources which may be converted to ore reserves, through additional drilling, which will improve the overall project value. Current in-pit tailings material stored in the Sarsfield pit may contain residual quantities of free gold which could be recovered through treatment. Samples of the tailings will be submitted for metallurgical test work to assess the viability of removing any remaining free gold.

At the end of the year Coffey Environmental had completed the comprehensive EIS study document which involved contributions from 27 separate technical sub-studies. The final Study was ready to be submitted to the Queensland Government in July. A Cultural Heritage Management Plan was included as part of the EIS.

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Glory Hole
(mined 100,000t at 5g/t)
Mined Pr e-2 011
1,155,000t @ 2.7g/t
99,000oz
Mined 2011 Current
935,000t @ 2.7g/t Infrastructure
82,000oz
Mined 2012
1,455,000t @ 3.0g/t
138,000oz
Proved/Probable Reserves
4.9Mt @ 2.6g/t
402,000 oz
Mined Depth
Extension
To be Mined Drilling
Rhyolite Breccia
100 m
1,400 mRL
1,400 mRL
1,240 mRL
1,200 mRL
1,200 mRL
1,000 mRL
1,000 mRL
800 mRL 800 mRL
mining method
Sub Level Shrinkage 700mRL
600 mRL
600 mRL
400 mRL
400 mRL
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FIGuRE 2
MT WRIGHT MInInG STATuS AnD PROPOSED DRILLInG ExTEnSIOn
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Resolute Mining liMited AnnuAl RepoRt 2012

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Exploration Overview

Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Resolute is committed to expanding its gold resources and production base through exploration. The main thrust of exploration activities has been on our tenure close to our existing operations or strategic joint ventures on ground that has been identified through our regional studies.

A significant increase to the exploration budget for 2011/12 accelerated work programs in Resolute’s exploration projects.

In Mali, accelerated regional drill programs covered large areas of prospective greenstones in the Syama Formation and parallel greenstones at Tiagole and Borokoba. Intensive air core drilling south of the Syama mine identified new targets and highlighted others which were subsequently reverse circulation drill tested. The new projects at Tiagole and Borokoba are completely unexplored and show encouraging signs for potential gold deposits. Reverse circulation and diamond drilling at Paysans continued to improve the extent and geological model with a resource calculation expected in the next financial year.

In Queensland, recent drilling around the Sarsfield and Nolans pits at Ravenswood has highlighted the potential to increase the overall resources of the project, whilst the Mt Douglas Project continues to show promise with geophysical surveys identifying strong induced polarisation chargeability anomalies coincident with elevated multielement soil geochemistry.

The Company has secured significant land holdings over targeted portions of the largely unexplored Birimian greenstone belts in Cote d’Ivoire. Exploration progress has recently been hampered by a stalled tenement approvals process. Whilst this has dramatically slowed exploration progress the Company believes that the potential to discover large new gold deposits in Cote d’Ivoire is excellent. The exploration team hopes to be in a position to commence work programs in the second half of the financial year.

In Tanzania, Resolute has concentrated on progressing the Nyakafuru Project with a large drilling budget this year. An intensive reverse circulation and diamond drilling program to upgrade and extend delineated resources in the Kanegele area, 10km east of Nyakafuru, commenced this year and is ongoing. Results from the drilling has confirmed the previous model and highlighted zones of high grade gold outside of the current published resource at Kanegele.

Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Mali

Exploration for oxide resources within the Syama Greenstone Belt continued in the reporting year. Intensive air core drilling south of the Syama mine identified new targets and highlighted others which were subsequently reverse circulation drill tested.

Work continued on Birimian greenstone units east (Borokoba) and west (Tiagole) which are held 100% by Resolute. These new areas are completely unexplored and show encouraging signs for potential gold deposits.

Syama Permit (Resolute 80%)

SYAMA SOUTH

This year the area south of the Syama minesite within the SOMISY Permit underwent an intensive exploration phase to define additional resources. Initially, detailed air core drilling was carried out over the previously identified Paysans, Cashew, Basso, Salikou, Tuareg and Senufo prospects. A total of 191 drill holes were completed for 10,113m. The results were encouraging and were followed up by reverse circulation and diamond drilling on a number of these prospects.

Reverse circulation drilling continued this year at Paysans where drilling last year identified three parallel shallow dipping mineralised trends. Significant results included; PARC018: 14m @ 2.11g/t Au from 79m PARC020: 9m @ 4.49g/t Au from 79m and PARC029: 11m @ 2.99g/t from 96m. Diamond drilling was also completed to improve the geological model with three holes completed for 476m. The results of this year’s drilling led to an improved understanding of the deposit which has in turn outlined potential to significantly increase the currently known resources. An infill reverse circulation drill program is planned to commence after the wet season to provide a new resource estimate for this area.

Follow up reverse circulation drilling at the newly identified Salikou prospect produced a number of encouraging intersections with the best SLRC002 6m @ 2.03g/t Au from 40m and SLRC007 43m @ 1.01g/t Au from 29m. The mineralised intercept at SLRC007 is located in sediments at the hanging wall of a porphyry dyke similar to the geology of the Tellem prospect.

The Senufo prospect also generated some positive results from reverse circulation drilling. The southern end of the prospect where the Senufo trend is coincident with the Bee Sting Fault produced an intercept of 33m @ 1.50g/t Au from 36m in SNRC014.

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6°20'W 6°15'W 6°10'W 6°05'W 6°W 5°55'W 5°50'W 5°45'W 5°40'W 5°35'W 5°30'W
N’Golopene Diourkasso
# Bananso Lofig u e -K omoro
A A21
Tiagole AlphaBA01 AA## BetaChert Ridge
Borokoba
# Bagoe Alluvials A SYAMA # Samory (Somirex)
Sindi # Drag Queen
Paysans #
SenufoCashew # #A Basso # Taureg
Tellem A # Doni
# Zekere
Pourou
Finkolo # T-ramp Finkolo East #A Deposit/MineProspect
Shear Zone Kebeni
Crosscut Fault
Granted Tenement
A Tabakoroni Tenement Application
Interflow Seds + Basalt
Conglomerate
Shale / Argillite / Wacke
Neoproterozoic Sediments
Sandstone
Late Intrusive
Bagoe N’Gokoli Undifferentiated Granite
East
10km
6°20'W 6°15'W 6°10'W 6°05'W 6°W 5°55'W 5°50'W 5°45'W 5°40'W 5°35'W 5°30'W
FIGuRE 3.
MALI ExPLORATIOn TEnEMEnTS, DEPOSITS AnD SIMPLIFIED GEOLOGY
11°N 11°N
10°55'N 10°55'N
Syama
10°50'N 10°50'N
10°45'N 10°45'N
10°40'N 10°40'N
10°35'N 10°35'N
10°30'N 10°30'N
10°25'N N’Gokoli Teguere 10°25'N
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Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

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814,000mE 816,000mE 818,000mE
)))) 18m @ 0.86g/t from 39m9m @ 0.58g/t from 54m ) 12m @ 0.95g/t from 24m '))))')')')'' ))')'''')')'')'''')'''''''''''''''''''')'''''''''''' ' '''' ' '''' '' '''''''' ' ' ' '' ' '''''''''''''' ' ''' '' ''''''''''''''' ' '' ' '''' ' ''''' ' ''' ' ''''' ' '' ' '''''''''''''' '' '' '' ['] '''''''' ' '''''''''' ' ''' '' '''''''''''' ' ''''''' ['] ' '''''' ' '' ' '' ' ''''' ' '' ' ''''' ['] ''''''''''''''''''''''''' Tellem ''''''''')''''''''')'''))')'''''''''''''''''''''''' Tellem '''''''' North ''''''''''''' ' ''''''''''''')) ) '' [))] '')''')''''))''''''''''''' 12m @ 0.76g/t from 88m )'')'''))' Senufo ''''))'''''')'''' 5m @ 2.34g/t from 82m )'''')'''') 15m @ 1.48g/t from 6m '''''''')))''')''' )' '' 6m @ 2.03g/t from 40m ''''))'))'''')))'')''''''' 20m @ 1.04g/t from 58m '''')'' 5m @ 1.28g/t from 30mand 3m @ 2.31g/t from 129m ' 3m @ 2.24g/t from 14m ''''''')' ' ' Salikou )''''' 5m @ 1.13g/t from 64mand 9m @ 4.49g/t from 79m ''''' ' '')''''''' 14m @ 0.70g/t from 21m43m @ 1.01g/t from 29m '''' 11m @ 2.99g/t from 96m ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' 33m @ 1.50g/t from 36m ''''''''''))''' 11m @ 0.89g/t from 28mand 5m @ 1.01g/t from 44m '''''''''')) 14m @ 2.11g/t from 79m ''''' 14m @ 0.79g/t from 13m '''''''''''))''''''''''''''')'''''' 9m @ 0.81g/t from 60m ''''''''''')''''''''''''' ' ''''''''''''''''''''''''''')''''')'''''''''''''''') 12m @ 1.94g/t from 4m '''))''' 9m @ 2.73g/t from 28m '')''''''''''')''')'''')'''''')'')''''))'''))''')''''''''') ' ''')))'''''''''''''' ' ))'' ' '''')) '' ' Basso '''')'''''''''''')'''''''))''')'''')'''))')) 3m @ 2.11g/t from 10m ')))''''))))))'')''))))''))')))))''')'))')))'')))'))')'')))''')))''')))')))))'))'')Max Downhole Gold (g/t)))'))'')))))))'')))))'))'))) '' '))''')'' 20m @ 0.71g/t from 48m '''')'')'''))'''')) <.02''''''''))'>31 - 30.5 - 10.02 - 0.5 DykeShear ZoneCrosscut FaultTenement BoundaryInterflow Seds + BasaltConglomerateSikoro Siltstones Paysans )'''''')' ' ')'' ' ''''''' Taureg )''''''''')'''''''')))'''')' ' ''))''' ' ''')'' ' '' ' ''')''' ' '')) 4m @ '' ' ''''''''')))' ' ' Extento be Tested 2013 '''') ' ')))'''''')'))))))))')''')'''''''')''')'''''))''''''')''''''')''''')''))'')'''' 2 )')''')))'')'' s )'' . )'''') 0 ''))'''' ion Potential ))'''') 1 ''))'''))')' g/t from 33m )))))))''))))'))''))')))'')''''))''''''))))''''''' ' ''''' Queen '''''))''')''''''' Drag '''''''''''''''''' ' ''''''''''''''''''''''' ''''' ''''' '''''''''
TellemSouth ''''''' ''' ''' ' ' ' ''''' ' '''''''''' ''' '' ''' ' ' ' ' ' ' ' ' ' ' Arenite / Argillite / WackeBasement Granitoid1km
814,000mE 816,000mE 818,000mE
1,192,000mN 1,192,000mN
1,190,000mN 1,190,000mN
1,188,000mN 1,188,000mN
1,186000mN 1,186,000mN
1,184,000mN 1,184,000mN
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FIGuRE 4
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SYAMA SOuTH DRILLInG InCLuDInG LATEST REvERSE CIRCuLATIOn DRILL RESuLTS
FROM PAYSAnS, SALIkOu AnD SEnuFO
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n’Golopene - Robex Resources jv (Resolute earning 70%)

Work commenced on the N’Golopene joint venture in July 2011 with a multi-element soil sampling program covering the northern part of the exploration permit. A sample spacing of 500m x 500m, closing-up to 250m x 500m over the Syama Formation was completed. In total, 576 samples were collected. An additional twenty five rock samples have also been taken in the NW corner of the permit, in an area consisting of basalts and silicified argillite and corresponding to the western leg of the Syama formation. Favourable lithologies including brecciated gossans and intermediate volcanics were sampled during this first pass geological mapping campaign.

First pass air core drilling has been completed in the N’Golopene joint venture permit with 205 holes drilled for 8,988m.

Tiagole and Sindi (Resolute 100%)

An induced polarisation survey was carried out over the eastern area of the Tiagolé exploration permit. An initial gradient array induced polarisation survey was followed up by a program of pole-dipole lines over areas of chargeability highs.

The survey highlighted highly resistive and low chargeable rocks on the western edge of the grid which are related to a granite pluton. To the east of this granite there is conductive and chargeable rocks that are likely sheared sediments associated with disseminated sulphides and/or graphite, with a general NNE orientation.

Air core drilling was undertaken at the Tiagole project to follow up the induced polarisation anomalies. A total of 121 drill holes for 6,857m have been completed to date. Results received have highlighted low to moderate gold values in the areas of induced polarisation chargeability highs.

Borokoba Project (Resolute 100%)

Exploration progressed to the drilling stage at the newly acquired Borokoba Project where regional spaced air core drilling commenced during the reporting year. A total of 246 air core drill holes for 10,088m were completed at Borokoba on wide spaced lines. The main strategy is to outline the greenstones underneath the shallow transported cover which masks the basement rocks.

Two reverse circulation holes have been drilled at the Sokorani prospect where trenching identified a dyke returning 9m @ 0.45g/t (SKTR002). Reverse circulation chips show a felsic intrusive with abundant pyrite alteration and magnetite is observed at the contact with basalts.

Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Tanzania

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nyakafuru District
kanegele jv 412,000mE 416,000mE 420,000mE
(Resolute 65%) RTL-Yellowstone
Porphyry Centre RTL-Barrick
Voyager Vasse (As, Sb, Bi, Te, Mo)
92,000oz Au
Greenstone Mentelle
104,000oz Au
Mentelle West Extn Vasse East Extn
Voyager East Extn
RTL
RTL-Sun Mining Leeuwin East Extn Greenstone with
Ndizi shallow underplating
granite
Golden Hoe &
WGC Prospects Leeuwin West Extn Cullen
48,000oz Au RTL-Sun Mining
Grange East Extn
Leeuwin Reef
Nyakasaluma Prospect Grange 63,000oz Au
N
Granite 0 2500m
RTL-Barrick
412,000mE 416,000mE 420,000mE
FIGuRE 5
kAnEGELE ExPLORATIOn TEnEMEnTS, DEPOSITS AnD MInERAL RESOuRCES
9,594,000mN 9,594,000mN
9,590,000mN 9,590,000mN
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An intensive reverse circulation and diamond drilling program commenced in November 2011 to upgrade and extend delineated resources in the Kanegele area 10km east of Nyakafuru as well as test a number of priority targets previously delineated in the Nyakafuru district.

Drilling was undertaken at the Mentelle, Voyager and Cullen Prospects which have a total inferred resource of 5.8Mt @ 1.35g/t Au for 250,000oz contained gold. To date 132 reverse circulation drill holes have been completed for 17,726m in addition to 15 diamond drill holes for 3,584m.

Whilst a large number of these drill holes returned significant intersections at shallow depths, of specific interest are the high grade intersections outside of the current published resource at Voyager and Mentelle. Significant intercepts include 27m @ 8.60g/t Au from 16m in VMRC0058, 12m @ 9.1g/t Au from 91m in VMRC0082, 19m @ 16.69 g/t Au in VMRC 0088 and 16m @ 11.41g/t Au from 174m in VMRC0121. The diamond drilling also produced some excellent intersections with better results including 39m @ 3.34g/t Au from 128m in VMDD0001, 34m @ 8.87g/t from 74m in VMDD0008 and 16m @ 6.65g/t from 123m in VMDD0007.

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Transported Laterite
20m @ 0.94 g/t Au
48m @ 1.97 g/t Au
80m @ 0.95 g/t Au
12m @ 3.59 g/t Au
Meta-Basalt
21m @ 1.64 g/t Au Variably Brecciated
(Ch+Cb+/-Se-Si-Py Alt)
Meta Basalt 11m @ 0.83 g/t Au
16m @ 11.41 g/t Au
Awaiting Results
Legend
0.5 - 3.0 g/t Au
>3.0 g/t Au
0 100m
Feldspar Porphyry
VMDD0009 VMRC0121VMRC0042 KGRC077 KGRC054 KGRC076KGRC055 KGRC075KGRC056
1,200mRL 1,200mRL
1,100mRL 1,100mRL
1,000mRL 1,000mRL
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FIGuRE 6
MEnTELLE PROSPECT DRILLInG CROSS SECTIOn LOOkInG nORTH EAST
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Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Australia

These results confirm, support and enhance previous reverse circulation drill results on which the prior resource estimates were based.

Drilling has only recently commenced at the Cullen prospect however initial results are promising with significant intercepts from the first three reverse circulation drill holes, including 14m @ 6.81g/t Au from 2m, which includes 1m @ 54.2g/t Au from 5m (CURC0003) and 4m @ 2.72g/t Au from 35m (CURC0001).

Diamond drilling has aided the geological model considerably with extensive brittle and ductile deformation clearly evident in drill core. Gold mineralisation at the Voyager Mentelle prospects is controlled by a 100m wide shear zone with simultaneous ductile shearing and brecciation of the host mafic volcanic sequence. The intrusion of a syn-mineralisation felsic porphyry dyke swarm in the deeper parts of the system appears to be spatially associated with gold mineralisation.

nolans Project (Resolute 100%)

A program of deep diamond drilling of the down dip extensions of the Nolans gold mineralisation beneath the historic pit commenced in January 2012 with six holes (ND446 to ND451) completed for 2,010m. Alteration and associated veining typical of the Nolans system was encountered in all drill holes.

Significant results were returned from all holes with ND448 returning an intercept of 28m @ 4.61g/t Au from 194m. Other intersections included 53m @ 1.08g/t Au from 193m in ND446 and two zones of 5m @ 3.84g/t Au from 211m and 8m @ 3.06g/t Au from 222m in ND451.

Drilling will continue at Nolans and Sarsfield to build on the currently delineated resources.

Welcome Project (Resolute 100%)

RESOLUTE EARNED A 100% INTEREST IN THE DENJIM JV DURING THE YEAR.

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146º30'E 147ºE
A Deposit/Mine
# Prospect
Mt Douglas # RoadGranted Tenement
Tenement Application
20km
Mt Success # # Golden Valley
A WELCOME BRECCIA
(Resource 210,000oz Au)
# Mt Chev
MT WRIGHT
A CHARTERS TOWERS( 6. 6Moz) # Anomaly G A (Reserve 402,000oz Au)SARSFIELD
A (Reserve 1.1Moz Au)
MT LEYSHON
A ( 3 .2Moz)
PAJINGO
A (3.5Moz)
Pre - mining reserves and resources 146º30'E 147ºE
FIGuRE 7
RAvEnSWOOD TEnEMEnTS, MAjOR GOLD DEPOSITS AnD CuRREnT TARGET AREAS
20ºS 20ºS
20º30'S 20º30'S
----- End of picture text -----

A further four shallow reverse circulation drill holes were completed at the Welcome prospect testing the interpreted strike extension of the mineralised zone. Results were patchy, with a best intercept of 3m @ 1.28g/t Au from 97m in WERC037.

Diamond drilling was also carried out on the down plunge extensions of the Welcome breccia pipe with WED039 intersecting the down plunge mineralisation in the breccia pipe at the expected position however the results were below expectations with a best intercept of 5m @ 5.16 g/t Au from 485m.

Diamond drill testing of a MIMDAS geophysical target, immediately south of the Welcome breccia pipe (WED038), identified a new zone of mineralisation approximately 200m away from the main Welcome resource. This new zone of mineralisation is at a depth which is roughly equivalent to the high grade portion of the main pipe. Mineralisation occurs as quartz-carbonate-sulphide (pyrite-pyrrhotite +/- sphaleritechalcopyrite-galena) veining within locally sheared, intensely sericite-chlorite altered granodiorite. The results from WED038 were less than expected with a number of low grade zones seen in the top 200m of the hole which correspond to the upper portions of the main breccia pipe, whilst the best intercept at depth was 4m @ 1.67 g/t Au from 557m.

Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Mt Success Project (Resolute 100%)

MT DOUGLAS PROSPECT (70KM NW OF RAVENSWOOD)

Six lines of 2D MIMDAS induced polarisation survey for a total of 18km were collected across the Mount Douglas Prospect during the year. 2D inversions of all six lines of MIMDAS show strong induced polarisation chargeabilities over a strike length of over 2km. The chargeability anomalies are coincident with multi-element (Au, Ag, As, Sb, Mn, Te, Zn) soil geochemistry.

Soil sampling continued on the Mt Douglas area with 456 samples collected during the year. Drill targets have now been selected and will be tested by diamond drilling after access negotiations are completed with the Department of Defence, who recently acquired the Fanning River Station, which covers the Mt Douglas and portions of the Mt Success prospects.

Ten lines of 2D MIMDAS induced polarisation data was collected over the Golden Valley and Mt Success areas. Inversions on the data have highlighted several chargeability anomalies at Golden Valley that require drill testing, including a broad, near surface zone adjacent to the north eastern corner of the breccia pipe (where shallow drilling previously intercepted 14m @ 0.98g/t Au from 15m in GVR051) and a broad untested chargeability anomaly in the core of the breccia pipe below a 250m vertical depth.

Diamond drilling commenced in April 2012 to test deep strong induced polarisation chargeability anomalies within the Golden Valley breccia pipe complex. To date three drill holes GVDD001 to GVDD003 have been completed for 1,977m. The drill holes have encountered a suite of rhyolite dykes and intrusive breccias and sericite altered granite. Within the rhyolite breccia units there are thin veins of quartz-carbonatepyrite-sphalerite +/- galena and quartz-carbonate-pyrite cavity infill.

Ravenswood Project (Resolute 100%)

GOLDEN VALLEY / MT SUCCESS / LIMESTONE HILLS AREA (55KM NW OF RAVENSWOOD)

In June 2011 Resolute completed the purchase of the Golden Valley/ Mt Success mining licences, located within the Company’s exploration permit approximately 55km northwest of its Ravenswood gold mine.

Some drilling was carried out in the project area between 1982 and 1997 although no modern mining has occurred at the site and no exploration work has been conducted for 15 years. Significant intercepts from historical exploration included 50m @ 1.42g/t Au from 58m in MSP82/1 and 16m @ 10.68g/t Au from 36m in MSP001.

A review of the historical data, combined with recent work on the surrounding exploration permit, suggested the presence of a significant gold-bearing, breccia related hydrothermal system, with a geochemical footprint of approximately 10km². Two rhyolite-related breccia pipes outcrop within the project area, the Golden Valley Volcanic Complex, which is approximately 1,000m x 800m across, and the Mt Success breccia pipe, which is located 2km to the north-west and approximately 500m x 500m across.

Both locations share similar geological, geophysical and geochemical characteristics with the nearby rhyolite breccia pipe that hosts the Mt Wright underground mine, currently the major ore source for the Company’s Ravenswood operations. Golden Valley and Mt Success are considerably larger than the Mt Wright breccia complex which is approximately 250m x 250m. The Golden Valley complex is of a similar size to other significant breccia-related gold deposits in north Queensland, including Kidston (~4Moz Au) and Mt Leyshon (~3Moz Au) and has the potential to host similar large tonnage deposits.

QUEEN OF SHEBA (15KM SSE OF RAVENSWOOD)

Detailed mapping has further supported soil and rock chip sampling at the Queen of Sheba Prospect located 15km SSE of Ravenswood. The data collected to date supports the high to low temperature zoning model which appears to be centred on the mafic intrusive/breccia body. The key will be to locate the best zone for Au mineralisation which may be under the Collopy Formation (Sheba East) 2km east of the historic workings.

Soil sampling was extended to the east of the prospect during the year. The results identified several zones of moderate Au anomalism associated with sericite-chlorite alteration and sulphide-quartz veining in three different lithological units (conglomerate, volcanic siltstone and felsic volcanics). The broad area is also strongly anomalous in Ag-AsBa-Hg-Mo-Pb-Sb-Zn with the strong As-Hg-Sb +/- Ag association suggesting a high-level distal/epithermal signature.

Mt Wright Project (Resolute 100%)

MT WRIGHT (11KM NTH OF RAVENSWOOD)

A major review of the geology of Mt Wright was undertaken during the year to guide future exploration strategy. This involved an extensive core re-logging exercise where a total of 581 diamond and reverse circulation drill holes for 104,250m were re-logged and reinterpreted. This exercise identified a previously unrecognised matrix supported milled breccia zone interpreted as “tuffisite”, a term first described at the Mount Leyshon breccia hosted gold deposit in North Queensland. Tuffisite commonly forms dyke-like structures and are thought to serve as fluid pathways which can precipitate gold where pressure/ temperature conditions are favourable. By analysing the geochemical footprint of these tuffisites and placing them in a metal zoning pattern scheme, their relative position within the hydrothermal system can be determined. This will then be used to guide future exploration efforts within the breccia.

Resolute Mining liMited AnnuAl RepoRt 2012

ExPLORATIOn OvERvIEW

Côte d’Ivoire

Infill multi-element soil sampling was also completed over the Toumodi permit during the year. The original multi-element anomalies were identified in 2009 during regional 1km X 1km spaced sampling over the permit area. Soil spacing at 250m X 100m and 500m X 250m was completed over the high and low order targets to the NE and SW of Toumodi respectively. Results from Toumodi similarly confirm the original Au in soil anomaly with supporting multi-element pathfinder elements.

Political instability curtailed all exploration activities until September 2011 when work resumed at the Goumere and Toumodi projects.

The exploration team completed an infill multi-element soil sampling program over a large 6,000m x 2,000m anomaly Au-Cs-Mo-Sb(W) identified from regional 1km X 1km spaced sampling over the Goumere permit. A strong coherent Au anomaly has been outlined at Goumere with supporting anomalous pathfinder elements. Regional interpretation depicts the main magnetic feature within the permit as a fault contact with volcanics along which most of the multi-element anomalous soils are contained.

In February 2012 the Côte d’Ivoire Mines Department suspended all exploration works on the Toumodi and Goumere projects as part of an overhaul of the Ivoirian mining regulations. Similarly all of the Company’s

pending permit applications, which have been awaiting granting, have been stalled by this restriction. Therefore all planned work programs remain on hold until the tenement approvals process is resolved.

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5°W 4°W 3°W 2°W
Mali A Konkera (1.2Moz)
A Tinga
(0.2Moz)
Nassian
Satama East
Goumere
Ghana
T ie-N Diekro Koun-Fao
Bocanda West
Didievi A Ahafo
A Angovia(0.5Moz) (16.5Moz)
Côte d’Ivoire
Bibiani
Toumodi Dimbokro (5.0Moz)
A
A Bonikro (1.7Moz) Dimbokro South (3.5Moz)Chirano A Obotan A
(2.8Moz)
A Agbaou (1.3Moz)
Ayanfuri A
(7.9Moz)
A Deposit/Mine (Reserves/Resources)
Soil Anomaly
Country Border
Terrane Boundary
Tenement Application
Interflow Seds + Basalt
Conglomerate
Shale / Argillite / WackeGranitoid Intrusive Abidjan
Basement Granitoid
50 km
5°W 4°W 3°W 2°W
FIGuRE 8.
CôTE D’IvOIRE TEnEMEnTS AnD GOLD In SOIL RESuLTS OvER REGIOnAL GEOLOGY
10°N 10°N
9°N 9°N
8°N 8°N
7°N 7°N
6°N 6°N
5°N 5°N
----- End of picture text -----

The Company has applications over a large area of very prospective unexplored Birimian greenstone units which await first pass exploration.

Resolute Mining liMited AnnuAl RepoRt 2012

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Corporate Responsibility

Resolute Mining liMited AnnuAl RepoRt 2012

CORPORATE RESPOnSIBILITY

Resolute is mindful its activities may potentially have an impact on the environment and a broad range of people. These people all, in one way or another, contributes to our ability to sustain our activities in a harmonious manner within the community and environment.

The Company is committed to building relationships through welltargeted social, safety and environmental programs. Resolute aims to support the local communities by assisting with programs and projects that deliver lasting benefits.

The taxes that Resolute pay as a Company, those it collects from employees on behalf of the government and those of suppliers dependent on the Company’s presence, are important contributors to the creation of wealth and well-being in host countries.

Almost $78 million (last year $59.7m) was paid directly to governments in taxes in 2011/12. These taxes include Company taxes, employer taxes, royalties and other licencing and statutory levies as follows:

		AuSTRALIA	TAnzAnIA	MALI	OTHER	TOTAL
		$	$	$	$	$
Royalties		11.3m	4.8m	11.5m	-	27.6m
	Employer Taxes	10.2m	5.4m	6.2m	-	21.8m
Company Taxes		-	26.6m	-	-	26.6m
Licencing &		0.9m	0.5m	0.3m	0.1m	1.8m
Statutory Taxes
		22.4m	37.3m	18.0m	0.1m	77.8m

The Resolute Mining Limited group operates under a strict Code of Conduct that underpins, guides and enhances the conduct and behaviour of directors, employees and contractors in performing their everyday roles. The Code specifically emphasises integrity and honesty and recognises that the group will not make any bribes or corrupt payments to government officials to obtain any improper or illegitimate benefit or advantage. The Code encourages and fosters a culture of integrity and responsibility with the focus of augmenting our reputation as a valued employer, business partner and corporate citizen in all our relationships.

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CORPORATE RESPOnSIBILITY

Environment

Resolute strives to balance environmental protection in a financially sound manner over the phases of exploration, to operations and then closure activities.

The Resolute Environmental Policy provides for an environmental management program as it undertakes to:

comply with and, where appropriate, exceed the requirements of applicable legislation, regulations and other policies, codes and standards to which we subscribe
progressively develop and maintain environmental management systems that are consistent with internationally recognised standards
integrate environmental processes throughout all aspects of our activities
identify and assess the potential environmental effects of our activities and manage environmental risk accordingly
continually improve and regularly monitor, audit and review our environmental performance, including the reduction and prevention of impacts and more efficient use of resources
promote environmental awareness among our personnel and contractors to increase understanding of their roles and responsibilities in environmental management

REHABILITATION

Completion of rehabilitation of all batter slopes on both tailings storage facility #1 and #2, south waste rock dump and the north east backfill occurred during the year. The western waste rock dump was also partially rehabilitated. Erosion and sediment control structures were installed on these facilities. As vegetation becomes established, water quality of runoff from these landforms will improve.

In total, 54.4ha of land were prepared for the 2011/12 planting season with 63,000 seedlings planted on these areas. Seedlings of endemic plants were established on this land form and other rehabilitation areas. Support of the reforestation initiatives within the local community occurred with the donation of approximately 12,500 seedlings. Some 15,000 seedlings were also purchased from the community-run nurseries and used in both community projects and site rehabilitation activities.

This year saw a number of milestones reached in our commitment to revegetation in the Nzega District. Over 1 million seedlings have now been raised in the nursery with over 700,000 of these being planted on site. More than 300,000 seedlings have been planted offsite in community lead projects.

WATER MANAGEMENT

develop our people and provide resources to meet our environmental objectives
promote our environmental progress and performance through liaison with, and public reporting to, the Government and community.

Regular monitoring continued throughout the year of surface and groundwaters.

Waste rock dump final closure drainage continues to be directed towards the open pit for development of the open pit water storage facility at end of mining.

Golden Pride Mine – Tanzania

Environmental performance at Golden Pride continues to improve and highlights include:

Golden Pride tree nursery produced its one millionth seedling this year
completion of rehabilitation on the south waste rock dump and north east backfill
commencement of decommissioning and capping of tailings storage facility #2
Regulatory approval request and submission of Environment and Social Impact Assessment for Open-Pit water storage after mine closure and re-diversion of the Bundomo Creek.

STATUTORY MINE CLOSURE PLAN

Golden Pride is the first mine in Tanzania to have a Statutory Mine Closure Plan approved. Annual stakeholder updates were successful in engaging staff, community and regulators in meaningful discussion regarding impending closure. Further detailed planning was successfully undertaken for relinquishment of the site to the Ministry of Home Affairs.

Environmental impact studies were completed for the re-diversion of the Bundomo Creek into the open pit after closure. It is envisaged that the lake formed will become water storage of great value to nearby communities for irrigation and stock watering. After the open pit fills, runoff flowing down the Ibole River will continue on downstream in future seasons.

EMISSIONS TO AIR

Monitoring showed isolated dust levels that were high and which related to lift off from the main site access road or being from bare areas offsite.

TAILINGS MANAGEMENT

The tailings storage facilities continued to be operated efficiently with adherence to procedures and no major issues with structural stability.

Tailings storage facility #2 was decommissioned during the reporting period and closure capping commenced on this facility. The design will allow rainfall runoff to be directed off the landform being rehabilitated and be settled in the open pit.

Resolute Mining liMited AnnuAl RepoRt 2012

PROGRESSIVE REHABILITATION AT GOLDEN PRIDE’S SOUTHERN OXIDES, TANZANIA

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CORPORATE RESPOnSIBILITY
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CORPORATE RESPOnSIBILITY

COMPLIANCE AND RISK MANAGEMENT

Future rehabilitation work as the operation approaches closure will address the periodic measurements of non-conformance against prescribed levels for dissolved salts, iron, sulfate and pH. The catchment landscape around the site is disturbed by agriculture and clearing.

Recommendations from the Tanzanian Government made in the previous reporting period have now been addressed. In groundwater near TSF #1 higher sulfate levels are a signature of the TSF operation. The groundwater is being pumped back to TSF #1 and the groundwater also remains suitable for livestock watering or crop irrigation.

A key risk for environmental management at Golden Pride may be an interruption to the transition of the operation into mine closure. The objectives for closure are set and approved by Government. Controls include the extensive communication with Government, Community Leaders and employees as planning for hand over in post closure land use. The schedule of rehabilitation work is also being kept on track.

Syama Mine – Mali

During the annual review period the monitoring of groundwater, surface water and air quality continued according to permit conditions.

Development of the geographical information system has allowed monitoring and planning information to be overlain which has aided management decisions and assists in reporting of activities.

Environmental and Social Impact Studies have been completed or in the process thereof in support of the feasibility studies prepared in relation to the Syama Expansion and High Voltage Grid Interconnection. These studies are discussed in detail in the Development section of this report.

REHABILITATION

Planting out of seedlings to reshaped waste rock dumps occurred during the reporting period. Modelling to optimise the eventual shape of the waste rock dump to blend it into the existing landform was undertaken using the software “Dump Solver”. This will help to resolve some of the issues of steep embankments on the historic waste rock landform. A management plan for waste rock dumping will be developed to coordinate operations, progressive rehabilitation and monitoring activities. The management plan will link to the mine closure plan for the site.

Renovation of buildings and propagation facilities were completed at the revegetation plant nursery. These included the construction of composting cells for food waste from the site mess. When operational, the cells will compost material and will be used in the “potting media” for seedlings in the nursery and in “planting out” for rehabilitation.

WATER MANAGEMENT

Monitoring the quality of surface water and groundwater, continues to show that it is generally within acceptable values. Total dissolved salt levels are higher than background levels in groundwater down gradient from the tailings storage facilities. Further investigation and management options will be integrated into the tailings cell for the oxide material.

Historical measurements of water quality were collated into a common database and the varying reliability of the measurements was noted.

Water flow meters were installed to measure the flow rates. The volume of water stored in open pits was measured by sonar and a conceptual site wide drainage plan was revised. These measures will improve the calibration of the water balance to generate more reliable predictions of water demand, flows and storages.

WASTE MANAGEMENT

The recovery and reuse of containers or recycling of materials offsite and by nearby communities was made more safe and efficient with the separation of waste streams by use of different disposal bins.

Scrap metal was also recovered from site and the proceeds of sale for recycling were donated to the community.

AIR QUALITY

A network of monitors for air quality is located at four sites to record weather, dust and sulfur dioxide continuously and transmit the data to the site office in “real time”. At three of the sites Fourou, Bananso and Ngolopene, electrical generators will supply power for the monitors and to nearby medical clinics. At the time of this report preparation the instrumentation fit outs were being completed at two of the monitor stations. The weather and air quality data are being used to improve the accuracy of a model to predict dispersion of roaster emissions and in turn guide roaster operation.

COMPLIANCE AND RISK MANAGEMENT

During the year, there were no non-compliances reported.

A key risk for environmental management at Syama is that model predictions of air quality reflect actual measurements. Recorded levels of sulfur dioxide are generally showing that the model is over predicting levels. This is conservative and proving to be an additional level of environmental protection. Over time the measured and predicted levels will be sufficient to permit confident adjustments to the model if warranted. Periodic review of the monitoring data being collected is also ensuring the monitors are calibrated to work reliably and continuously.

Resolute Mining liMited AnnuAl RepoRt 2012

CORPORATE RESPOnSIBILITY

Ravenswood Mine – Queensland

Work continued on the Safety, Health and Environmental (SHE) Management System. Site environmental management focused on:

detailed monthly environmental monitoring and reporting
waste management procedures
monthly inspections for safety, health, environment and training.

An Environmental and Social Impact Assessment supporting the feasibility study to restart mining at the Sarsfield Open Pit was completed and submitted to government for consideration during the reporting period. Key issues addressed include:

noise, dust and vibration emissions from open pit mining and materials handling to the town of Ravenswood
mitigation measures for waste rock and tailings to protect surface and groundwater quality
integration of the proposed landforms with the existing mine features, particularly the waste rock dumps.

COMPLIANCE AND RISK MANAGEMENT

There was a marked improvement with the reporting of only seven spills of oil, fuel or process materials occurring in the reporting period. The main compliance challenge remains sulphate levels in groundwater. Permitting discussions with the Queensland government were resolved for this matter with commencement of earthworks to divert clean rainfall runoff away from recovered groundwater and the interception of groundwater seepage elsewhere. The shedding of rainfall runoff from the Nolans tailing storage facility and the vegetation of its “store and release cover” will further improve groundwater conditions as seepage abates.

A key risk for environmental management at the Ravenswood Mine is the success of revegetation and closure of the Nolan’s TSF. This landform was shaped according to models for surface drainage and the type of soil and vegetation that would develop in it. Erosion of this surface has not been problematic through two prolonged wet seasons so far and water is flowing across the surface according to the design. Water leaving site will also improve over time.

Eastern Goldfields – Western Australia

REHABILITATION

The topsoil capping and seeding for rehabilitation of the landform on the upper surface of the Nolans Tailings Storage Facility was completed prior to the onset of the wet season. Erosion control features withheld against the wet season rainfall and the vegetation cover took hold uniformly across the landform. Discharge of rainfall runoff from site did not adversely impact on the environment.

WATER MANAGEMENT

Sulphate levels in surface and groundwaters near the operation are above background values. Biological studies completed during the review period showed that the stream water quality has not adversely impacted on aquatic flora and fauna.

Financial closure obligations remain in place for the closed and rehabilitated sites of the prior mines of Bullabulling and Hopes Hill. The effectiveness of rehabilitation was reviewed at both sites during the year. At Bullabulling the revegetation continues with widespread and healthy growth of native plants, endemic to the area. Some maintenance earthworks and reseeding were completed during the reporting period.

At Hopes Hill, the rehabilitation effort has been unaltered for a number of years. The gold resource at the mine site was reappraised during the reporting period to determine the value of the asset and if a restart of mining or its sale were warranted.

EMISSIONS

Further to the review of Energy Efficiency Opportunities for the Nolans Mill, a number of improvements were either substantially implemented or are planned should open pit mining recommence, including:

use waste heat in wash water to preheat pregnant liquor
recovery of water and reagents from thickener to reduce pumping demand
optimise air/fuel regulation by replacing burner in elution area
install high efficiency and/or variable speed motors to match demand.

Other energy use and emissions reporting was completed according to regulatory requirements.

Resolute Mining liMited AnnuAl RepoRt 2012

CORPORATE RESPOnSIBILITY

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CORPORATE RESPOnSIBILITY

Community Relations

Resolute recognises the need to consult proactively and help manage community issues near its operations. Fostering long-term relationships and partnerships with communities is envisaged to develop mutual understanding, cooperation, and respect. Our social investment initiatives aim to deliver significant and lasting benefits to employees, communities and key stakeholders.

WATER BORE INSTALLATION

In 2011, seven community water boreholes were installed in a program assisted by the Australian Government Direct Aid Program. This has allowed improved access to clean drinking water in seven villages.

KABALE IRRIGATION PROJECT

The Policy commits Resolute to:

recognise and respect the value of cultural heritage and cultural diversity
establish enduring relationships with communities based on honesty and mutual trust
support the development and implementation of sustainable social and economic initiatives within the communities through co-operation and participation
provide management systems to identify, assess, monitor and control existing and potential impacts on communities
maintain an ‘open door’ policy whereby the local traditional leaders and community leaders have access at reasonable times to the company’s management
ensure that employees are aware of and understand the requirements of this policy

Golden Pride Mine – Tanzania

The Golden Pride Project maintained its commitment to sustainable development of the area around Nzega, particularly to the communities near the mine site. Resolute supported both new and long running community development programs to improve infrastructure, education, health and the environment. The overall aim is to help these communities improve their standard of living and capabilities through Participatory Rural Appraisal. The major focus for this reporting period has been on improving income generation.

During the year Resolute assisted Kabale Village through construction of an irrigation scheme to improve yields of rice and maize throughout the growing season.

EDUCATION

In 2011-2012, Resolute assisted 204 students with school fees for both secondary and university studies. Two high quality science laboratories, dormitories, sanitation facilities and staff housing facilities were constructed at local schools. Over 250 desks were constructed by Resolute staff using recycled timbers and donated to local schools.

BEE-KEEPING

During the previous reporting period, twenty-five people were trained in commercial bee-keeping in order to assist in income generation and forest protection. To compliment this, 30 commercial bee-hives were donated to help trainees establish their business of quality honey production.

HOUSEHOLD ECONOMIC DEVELOPMENT

Locally appropriate technologies are critical to longer term economic development. This reporting period, Resolute established a local poultry improvement project, assisted in development of a milling facility to value add to rice and maize products and constructed a carpentry and tailoring training facility.

COMMUNITY NURSERY

BUILDING PROJECT

During the review period several construction projects were completed for nearby communities including two science laboratories, classroom, student dormitories, sanitation facilities, an operating theatre and nursing staff housing.

COMMUNITY HEALTH

Resolute’s key health project for this reporting period was the upgrade of the Lusu Dispensary to Health Centre status. Operating theatres, wards, staff housing and sanitation facilities have been constructed.

Nzega District Hospital was assisted with a tuberculosis campaign which included training over 60 local health workers in awareness, symptoms, causes, prevention and treatment. The program also saw testing of over 200 people. HIV/AIDS awareness training continued at site and in surrounding communities.

During the review period about 12,500 tree seedlings were purchased from the community nurseries. The tree seedlings were planted into the rehabilitation areas and in community agroforestry trials.

Syama Mine – Mali

The Syama Mine Community Consultative Committee held regular meetings for community and environmental issues. Community representatives were updated on mine development progress. Most questions raised by the communities were discussed during these meetings and where possible immediate solutions were implemented.

COMMUNITY COMMUNICATION OF NEEDS

From a social forum (Community Communication Workshop) held in the previous reporting period, stakeholders identified and prioritised their needs for support. To support consolidation of community values, construction of a cultural centre in the nearby town of Fourou was undertaken during the year.

Resolute Mining liMited AnnuAl RepoRt 2012

CORPORATE RESPOnSIBILITY

Health and Safety

The Company sponsored a facilitator to the area for Participatory Rural Appraisals (PRA). The works were substantially completed with a final report in preparation and project designs to be returned for review.

COMMUNITY HEALTH

Medical equipment and supplies were provided to clinics in Fourou and nearby villages and training in the use of this equipment was provided to the local medical staff. These staff also attended malaria diagnostic training. Community awareness sessions for AIDS/HIV were supported and a full refurbishment of the Fourou Medical Centre was also completed.

Resolute is committed to creating and maintaining a safe and healthy workplace through its Occupational Health, Safety and Security Policy which commits the Company to manage programs that:

seek continuous improvement in its Occupational Health, Safety and Security performance taking into account evolving scientific knowledge and technology, management practices and community expectations
comply with the applicable laws, regulations and standards of the countries in which it has workplaces
train and ensure individual employees and contractors understand their obligations and are held accountable for their area of responsibility

EDUCATION SUPPORT

A major undertaking during the reporting period was the construction of a High School at Fourou. The Mali Government also supported the project. Learning materials were supplied and year-end exams supported in some primary schools within the Fourou Rural Commune.

WATER SUPPLY

Eight new bores were equipped with hand operated pumps within Fourou Rural Commune and a solar-powered water distribution system was established in Fourou Town. Four other bores in the commune were refurbished.

COMMUNITY ROADS

Road repairs were undertaken within Fourou Rural Commune & Kadiolo Circle, including the roads between Syama and Bananso, and from Kadiolo to Fourou.

Ravenswood Mine – Queensland

The Ravenswood Gold Mine is located near the historic gold-mining town of Ravenswood. Resolute worked to maintain a positive relationship with, and inform the community about, proposed changes to the operations during the year through:

routine community meetings, particularly on the potential to restart open pit mining
appointment of a Community Relations Advisor to liaise with stakeholders, face to face, and to communicate through regular newsletters
support of the Ravenswood Restoration and Preservation Association in management of heritage listed buildings within the town and maintenance of the community garden
assisting the Ravenswood State School with sporting carnivals and educational events such as National Tree Day and National Water Week
support of the Ravenswood Rural Fire Brigade
providing 24-hour emergency medical support to the community through the onsite clinic and occupational health nurses. These nurses provided 251 community related consultations during the reporting period. On a monthly basis they also organised visits from the Royal Flying Doctor Service.
improve and regularly monitor, audit and review our Occupational Health, Safety and Security performance
communicate and consult openly with employees, contractors, government and the community on Occupational Health, Safety and Security issues
develop risk management systems to identify, assess, monitor and control hazards in the workplace.

The Resolute Safety, Health and Environmental Management System continued to apply across each of the operations. A template is now used consistently across the operations and development groups for safety incidents or injuries, major business interruption, a security breach, community complaint or environmental incident.

The operations continue also to report against key performance indicators. The return to work of injured employees is of special interest as well as tracking the presence of leaders and managers in the field or workplace.

Golden Pride Mine – Tanzania

During the year the Golden Pride Project continued to improve its performance in safety and accident prevention. This is being achieved through integration of safety risk management with the overall enterprise risk management framework. Safety risks and other business risks are undifferentiated and the links between risks are becoming evident. Control of these risks forms a standard part of ownership and accountability for the senior management team at site.

The Task Based Risk register is an ongoing exercise and an audit of High and Very High Risks was undertaken with the assistance of all heads of department. Whilst some controls were already in place for these risks, further controls were identified, including:

amended Emergency Response Training
lifting, rigging and crane operation training
senior and basic first aid for all employees.

The vigilance with regards to cyanide transport, storage and use has resulted in continued excellent conformance in this area during the reporting period.

Resolute Mining liMited AnnuAl RepoRt 2012

CORPORATE RESPOnSIBILITY

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Resolute Mining liMited AnnuAl RepoRt 2012
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CORPORATE RESPOnSIBILITY

Ten injuries required medical treatment during the year and four employees suffered lost work time. At the end of the reporting period the Medical Treatment Injury Frequency Rate (MTIFR) was 3.42. The Restricted Work Injury Frequency Rate (RWIFR) was zero throughout the year and the Lost Time Injury Frequency Rate (LTIFR) was 1.87.

The statistics from the year show that safety performance was down on the previous year. A number of vehicle accidents highlighted the need for further driver training for our administration drivers, who spend a great deal of time on the road and personnel from the exploration department who, with the increase in activity at the Nyakafuru site, also had increased exposure. An external trainer delivered a Defensive Driver Training Course to all relevant personnel and road travel procedures were reviewed and amended.

A number of incidents and injuries were attributed to the failure of personnel to recognise hazards and this area was also targeted for increased training and attention. Further Hazard Identification and Risk Assessment training for all employees will continue in the coming year.

An “exercise” to test the site crisis and emergency response plan was successfully undertaken. The ‘exercise’ consisted of a multiple vehicle accident with multiple casualties designed specifically to test site emergency response and crisis management systems.

Syama Mine – Mali

The emergency response coordinator from Golden Pride also visited site for counterpart sharing of ideas.

A focus on Malaria prevention has resulted in a marked reduction in infection rates. Insecticide fogging, puddled water draining and dosing with larvicide, continued around site throughout the period. Vigilance with mosquito netting has been restated and checked whilst a trial of spraying internal walls with insecticide is underway.

The site team updated the task based risk register and department heads were refocussed on tracking controls for high risks. To this end risk management audits of air charter companies used from time to time and the site aerodrome were completed by a third party.

Injury frequency rates made gradual and steady improvements with the Medically Treated injury Frequency Rate (MTIFR) falling from 4.03 to 3.29. The Restricted Work Injury Frequency Rate (RWIFR) fell from 2.01 to 0.41 and Lost Time Injury Frequency Rate (LTIFR) also improved from 0.81 to 0.41.

Ravenswood Mine – Australia

During the review period drivers of continual improvement in safety and training included:

behavioural culture change
development and roll out of training modules

During the review period a major focus of the occupational health and safety program was on employee training. Courses for many employees included:

defining task demands of all key positions
updating the version of document control software.
Incident investigation and cause analysis
Hazard identification and risk assessment
Job safety and environmental analysis
Basic fire training
Senior First Aid/Basic First-Aid Training
Materials Safety Data.

Supervisors and workplace representatives are the priority group for incident investigation training was largely completed. Other training programs such as first aid and fire training are being promoted beyond the regular and ongoing refresher programs. Exposure to chemicals is being controlled with occupational hygiene (dust and noise) monitoring and training in the use of ‘Chemalert”, the database for materials safety data.

Safety leaders from other Resolute operations visited Syama during the review period and met to discuss reporting and investigation trends for recordable injuries and high potential incidents.

The top five targets of 10 in the plan to improve the safety culture at the operation were completed in the review period. This was supported by a sustained commitment to safety training of employees, the visible interaction of leaders and managers in the workplace and a complete review of the site safety management standards.

The management team continued to review and reappraise risks and control measures across the site. Crisis and emergency preparedness training, with use of incident scenarios, was completed during the review period.

Injury frequency rates remained on a plateau with the Medically Treated injury Frequency Rate (MTIFR) falling slightly from 10.68 to 10.39 and the Lost Time Injury Frequency Rate (LTIFR) increasing slightly from 5.34 to 6.49. The Restricted Work Injury Frequency Rate (RWIFR) increased markedly from 10.68 to 16.88 and reflects the occurrence of sprain and strain injuries in a relatively small workforce. Accordingly these employees are able to recover quickly and contribute in the work place.

Resolute Mining liMited AnnuAl RepoRt 2012

38 Directors’ Report
50 Corporate Governance Statement
54 Auditor’s Independence Declaration
55 Consolidated Statement of Comprehensive Income
56 Consolidated Statement of Financial Position
58 Consolidated Statement of Changes in Equity
60 Consolidated Cash Flow Statement
61 Notes to the Financial Statements
121 Directors’ Declaration
122 Independent Auditor’s Report to the Members
124 Shareholder Information

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Financial Report

Directors’ Report

for the year ended 30 June 2012

Your directors present their report on the consolidated entity (referred to hereafter as the “Group” or “Resolute”) consisting of Resolute Mining Limited and the entities it controlled at the end of or during the year ended 30 June 2012.

Corporate Information

Resolute Mining Limited (“RML” or “the Company”) is a company limited by shares that is incorporated and domiciled in Australia.

Henry Thomas Stuart (Bill) Price (Non-Executive Director)

B.Com., FCA, FAICD

Mr Bill Price is a non-executive director and was appointed to the board in 2003. Mr Price is a Chartered Accountant with over 35 years of experience in the accounting profession. Mr Price has extensive taxation and accounting experience in the corporate and mining sector. In addition to his professional qualifications, Mr Price is a member of the Australian Institute of Company Directors, a registered tax agent and registered company auditor. Mr Price is also a director and treasurer of Tennis West.

Directors

The names and details of the directors of Resolute Mining Limited in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Mr Price is the Chairman of the Audit Committee and a member of the Remuneration and Nomination Committee.

Company Secretary

Greg William Fitzgerald

NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES

Peter Ernest Huston (Non-Executive Chairman)

B. Juris, LLB (Hons), B.Com., LLM

Mr Peter Huston was appointed Chairman in 2000. After gaining admission in Western Australia as a Barrister and Solicitor, Mr Huston initially practised in the area of corporate and revenue law. Subsequently, he moved into the area of public listings, reconstructions, equity raisings, mergers and acquisitions and advised on a number of major public company floats, takeovers and reconstructions. Mr Huston is admitted to appear before the Supreme Court, Federal Court and High Court of Australia. Mr Huston was a partner of the international law firm now known as “Deacons” until 1993 when he retired to establish the boutique investment bank and corporate advisory firm known as “Troika Securities Limited”.

Mr Huston is a member of the Audit Committee and Chairman of the Remuneration and Nomination Committee.

Peter Ross Sullivan (Chief Executive Officer)

B.E., MBA

Mr Peter Sullivan was appointed Chief Executive Officer of the Company in 2001 and has been involved with the Group since 1999. Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies and projects for over 20 years. Mr Sullivan is also a director of GME Resources Limited (appointed 1996).

Mr Sullivan is a member of the Environment and Community Development Committee, the Safety, Security and Occupational Health Committee, and the Financial Risk Management Committee.

Thomas Cummings Ford (Non-Executive Director)

FAICD

Mr Tom Ford is a non-executive director and was appointed to the board in 2001. Mr Ford is an investment banker and financial consultant with over 30 years of experience in the finance industry. He retired as an executive director of a successful and well regarded Australian investment bank in 1991 and is also Chairman of RESIMAC Limited (appointed 1985). In the last 3 years he was a non-executive director of Amalgamated Holdings Limited (appointed in 1993, and served until October 2009).

Mr Ford is a member of the Audit Committee and the Remuneration and Nomination Committee.

B.Bus., C.A.

Mr Greg Fitzgerald is a Chartered Accountant with over 25 years of resources related financial experience and has extensive commercial experience in managing finance and administrative matters for listed companies. Mr Fitzgerald is also the General Manager – Finance & Administration and has been Company Secretary since 1996. Prior to his involvement with the Group, Mr Fitzgerald worked with an international accounting firm in Australia.

Mr Fitzgerald is a member of the Financial Risk Management Committee.

INTERESTS IN THE SHARES AND OPTIONS OF RESOLUTE MINING LIMITED AND RELATED BODIES CORPORATE

As at the date of this report, the interests of the directors in shares, options and convertible notes of Resolute Mining Limited and related bodies corporate were:

		FULLY PAID ORDINARY SHARES	OPTIONS OVER ORDINARY SHARES
P. P.	Huston Sullivan	428,182 3,507,448	- 2,000,000
T.	Ford	464,648	-
H.	Price	194,745	-
		4,595,023	2,000,000

Nature of operations and principal activities

The principal activities of entities within the consolidated entity during the year were:

Gold mining; and,
prospecting and exploration for minerals.

There has been no significant change in the nature of those activities during the year.

Results

Full year revenue from gold sales increased by 30% to $576.7m (2011: $445.1m).

The average cash price received on the 353,321 ounces of gold sold during the year was $1,627/oz (2011: $1,337/oz).

The average cash cost[1] per ounce of gold produced during the year was $761/oz (2011: $908/oz).

1 - Cash cost per ounce of gold produced is calculated as costs of production relating to gold sales excluding gold in circuit inventory movements divided by gold ounces produced. This measure is included to assist investors to better understand the performance of the business. Cash cost per ounce of gold produced is non-International Financial Reporting Standards financial information and where included in this Directors’ Report has not been subject to review by the Group’s external auditors.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

Net profit after tax attributable to members increased by 76% to $105.1m (2011: $59.7m), as a result of a significant improvement in the operating margin. This result includes a $44.9m unrealised foreign currency loss on loans with subsidiaries.

Net operating cash inflows during the year (which include exploration expenditure) were $179.2m (2011: $58.6m).

Net investing cash outflows of $93.3m (2011: $34.2m) with $43.1m accumulation of other financial assets, in line with the Company’s Cash Management Policy to diversify its surplus funds between cash, bullion and gold securities.

Other key investing outflows related to expenditure on plant, equipment, and development.

Tanzania

Scoping Study evaluation of development opportunities for the Nyakafuru project was completed by independent engineering consultants Mining One. The outcomes from their report are being reviewed and will be incorporated with results from the current resource expansion drilling program being carried out by the exploration team at Kanegele.

EXPLORATION

Exploration drilling was carried out in Mali, Tanzania and Queensland while target definition work continued in Cote d’Ivoire.

Tanzania

Net financing outflows of $45.1m (2011: $31.8m) include $47.7m of borrowing repayments, $31.3m in share buy-backs and $31.9m of proceeds from the exercise of options over Resolute shares.

Dividends

The directors have resolved to make a 5 cent distribution to shareholders including a fully franked component of 2.7 cents per share. The payment is expected to occur by December 2012.

Review of operations

PRODUCTION

The Group gold production for the year was 398,451 ounces (2011: 330,859) at an average cash cost of $761/oz (2011: $908/oz).

Syama gold mine in Mali, Africa, produced 145,197 ounces (2011: 85,362) of gold at a cash cost of $784/oz (or US$813/oz) (2011: $1,209/ oz or US$1,197/oz).

Ravenswood gold mine in Queensland, Australia, produced 137,965 ounces (2011: 122,576) of gold at a cash cost of $756/oz (2011: $893/oz).

Golden Pride gold mine in Tanzania, Africa, produced 115,289 ounces (2011: 122,921) of gold at a cash cost of $737/oz (or US$764/oz) (2011: $713/oz or US$708/oz).

DEVELOPMENT

Mali

Definitive Feasibility Study confirmed the economic and technical viability of a major multifaceted expansion of the Syama Gold Mine that was subsequently approved by the Board of Resolute.
Total gold reserves at Syama now stand at 3.64Moz including 0.56Moz in Oxide ore.
The Memorandum of Understanding for the proposed SikassoSyama power line connection was accepted by the relevant government agencies and submitted to Cabinet for final consideration. The transmission line survey that commenced in March was completed.

Queensland

A Definitive Feasibility Study examining the reopening of the Sarsfield open pit at Ravenswood has delivered a positive outcome that is currently below internal return hurdles. However, there remain a number of significant opportunities to improve the economics that are currently being investigated.
Underground resource drilling below the current base of the mine at Mt Wright Underground returned significant results including 38m @ 5.05g/t Au from 130m, 58m @ 3.45g/t Au from 85m and 43m @ 3.84g/t Au from 98m.
An intensive reverse circulation drilling program, which commenced in late 2011, was designed to infill and upgrade the current resources at the Nyakafuru Project, 120km west of Golden Pride. A number of high grade intersections within and outside of the current published resources at the Voyager and Mentelle prospects included 12m @ 10.96g/t Au from 10m, 27m @ 8.60g/t Au from 16m, 12m @ 9.10g/t Au from 91m, 19m @ 16.69g/t Au from 107m and 16m @ 11.41g/t Au from 174m. Early drilling results from nearby Cullen prospect included 14m @ 6.81g/t Au from 2m.
Diamond drilling also commenced on the Voyager-Mentelle deposits to both improve the geological model and test the continuity of mineralisation at depth. Results from the diamond drilling were also encouraging with significant intercepts of 34m @ 8.87g/t Au from 74m and 16m @ 6.65g/t Au from 123m.

Mali

Assays were returned from a reverse circulation program completed in June 2011 at the Quartz Vein Hill Prospect, 7km north of Syama. Significant intercepts include 15m @ 4.45g/t Au from 4m, 18m @ 2.55g/t Au from 7m, 9m @ 4.92g/t Au from 18m, 21m @ 2.93g/t Au from 32m, 11m @ 3.81g/t Au from 1m, 14m @ 2.40g/t Au from 66m and 14m @ 2.77g/t Au from 7m.

• Widespread intensive air core drilling continued on a number of project areas. An IP survey carried out over the Tiagole area has identified a number of strong chargeability anomalies which require drill testing.

Queensland

• Drill testing of the Golden Valley breccia complex commenced with a program of three deep diamond drill holes. An interesting suite of rhyolite dykes, intrusive breccias and sericite altered granite was present in all holes with the last two holes displaying encouraging quartz-sulphide veining and associated alteration.

Results have been received from diamond drill holes beneath the Nolan’s gold system, with the best intersection being 28m @ 4.61g/t Au from 194m.

• At the Welcome Prospect in Queensland, significant results were returned from reverse circulation drilling including 19m @ 1.58g/t Au from 132m, 16m @ 2.98g/t Au from 192m, 7m @ 7.84 g/t Au from 76m, 16m @ 3.16g/t Au from 148m, 5m @ 14.00g/t Au from 119m, 18m @ 5.32g/t Au from 106m and 16m @ 3.39g/t Au from 71m.

CORPORATE

Group cash, bullion and investments at market value at 30 June 2012 of $139m comprised cash of $48.4m (30 June 2011: $25.7m), $42.3m in restricted cash (held as security against a liquid investment) (2011: nil), gold bullion held in metal accounts with a market value of $43.3m (2011: nil) and investments with a

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

market value of $5.5m (2011: $4.0m). The restricted cash is recorded on the Consolidated Statement of Financial Position as Other Financial Assets. The 27,613 ounces of gold bullion on hand is recorded on the Consolidated Statement of Financial Position within Inventories at its production cost of $24.2m (not the $43.3m market value).

The Company has moved to an effectively ungeared position following the conversion of all listed Convertible Notes on issue and the repayment of all of its Senior Debt. At 30 Jun 2012, Resolute’s total borrowings were $11.0m (30 June 2011: $126.0m). The significant reduction in borrowings during the period related to the conversion of $68.4m of Convertible Notes to Resolute shares and the voluntary prepayment of the remaining US$22.4m of Senior Debt. As at 30 June 2012, the weighted average interest rate payable on borrowings was 8.0%.
Repayments of borrowings during the year totalled $47.7m (2011: $46.9m), including two voluntary principal repayments of US$12.4m and US$10.0m to Barclays/Investec in November and December respectively.
$31.9m was raised through the exercise of options.
$31.3m was utilised pursuant to the on market Share Buyback Program.
In the March quarter, Resolute entered into a sale and purchase agreement to acquire the 40 per cent interest of its partner, Endeavour Mining Corporation in the Finkolo Joint Venture in Mali. The purchase is by way of a cash payment of US$20m to be paid to Endeavour by Resolute and is currently awaiting the consent of the Minister of Mines in Mali.

OUTLOOK

Operations

Forecast gold production for the Group for the year ended 30 June 2013 is 415,000 ounces at a cash cost of approximately $830 per ounce (based on an assumed USD/AUD exchange rate of US$1.00).
Resolute’s continued improvement in outlook is underpinned by ongoing progress being achieved at the flagship Syama operation in Mali. Plant throughput and head grades are expected to continue to improve over the period, resulting in another lift in production. This more than offsets the lower production from Golden Pride as that operation moves towards closure by the end of the financial year.

Corporate

Cash generation is expected to continue. This provides a strong base for an active but disciplined examination of new growth opportunities balanced against consideration of shareholder returns.

Significant changes in the state of affairs

There have been no significant changes in the state of affairs of the Company other than those listed above.

Significant events after reporting date

Since 30 June 2012, there were on market buy-backs and subsequent cancellations of 7,300,000 shares at an average price of $1.27 per share. As at the date of this report 628,628,623 shares were on issue.

Likely developments and expected results

The likely developments in the operations of the consolidated entity and the expected results of those operations in the coming financial year are as follows:

(i) The continued production of gold from the Golden Pride, Ravenswood and Syama mines;
(ii) mineral exploration will continue; and,
(iii) the Group will seek to expand its gold production activities by advancing its existing projects or where appropriate, by direct acquisition of projects or investments in other resource based companies.

Environmental regulation performance

The consolidated entity holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities of the various countries in which the Group operates. These licences, Acts and Regulations specify limits and regulate the management of discharges to the air, surface waters and groundwater associated with the mining operations as well as the storage and use of hazardous materials.

There have been no significant known breaches of the consolidated entity’s licence conditions or of the relevant Acts and Regulations.

Remuneration report

The following information has been audited.

Development and Exploration

In the coming year Resolute will advance works on the Syama Expansion Project which will include mobilisation of a new mining contractor and commencement of construction of a new oxide circuit and associated infrastructure.
Work will also commence on installation of the grid power connection at Syama which will deliver significant cost savings and other operational benefits when completed.
At Ravenswood in Queensland further optimisation work will be undertaken following the outcomes of the Sarsfield Feasibility study. The obtaining of regulatory approvals for this project is expected to be completed during the period. Development drilling to extend the depth of the Mt Wright ore body will also continue.
Exploration will continue around Syama in Mali, the Golden Valley, Mt Success and Mt Douglas breccia complexes at Ravenswood and at the Nyakafuru project in Tanzania. The total budget for the year is $20m.

This remuneration report outlines the director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key management personnel (“KMP”) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, including any director (whether executive or otherwise) of the parent company, and includes the executives in the Company and the Group receiving the highest remuneration.

a) Key management personnel
i) Directors

P. Huston Non-Executive Chairman P. Sullivan Director and Chief Executive Officer T. Ford Non-Executive Director H. Price Non-Executive Director

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

ii)	Executives
G.	Fitzgerald	General Manager - Finance & Administration and
		Company Secretary
P.	Beilby	General Manager - Operations
P.	Venn	General Manager - Business Development
b)	Compensation of key management personnel

This report outlines the remuneration arrangements in place for directors and executives of RML.

REMUNERATION STRUCTURE

In accordance with best practice governance, the structure of non-executive director and senior executive remuneration is separate and distinct. Note that the remuneration structure for the Chief Executive Officer is the same as the executive team.

NON-EXECUTIVE DIRECTOR REMUNERATION

Objective

RML REMUNERATION POLICY

The Board has spent considerable time this year focusing on its remuneration framework and policy, reflecting on past feedback, the current strategic direction of the Company and how the remuneration framework can best support the future needs of the various stakeholders of the Company.

During the year, the board undertook a comprehensive review of remuneration practices, and commissioned a review of our remuneration framework by external advisors PwC.

The review will result in significant changes to Resolute’s remuneration framework, with the new remuneration structure to take effect from 1 July 2012.

The key initiatives under this review were:

Benchmarking executive remuneration to determine current market practices for short-term and long-term incentives;
design and implementation of a new cash based short-term incentive (STI) plan; and,
design and implementation of a new equity based long-term incentive (LTI) plan.

The Board recognises that the performance of the Company depends upon the quality of its directors and executives. To achieve its financial and operating objectives, the Company must attract, motivate and retain highly skilled directors and executives.

The Company embodies the following principles in its remuneration framework:

Provides competitive rewards to attract high calibre executives;
structures remuneration at a level that reflects the executive’s duties and accountabilities and is competitive within Australia;
benchmarks remuneration against appropriate groups at approximately the third quartile; and,
aligns executive incentive rewards with the creation of value for shareholders.

REMUNERATION AND NOMINATION COMMITTEE

The Remuneration and Nomination Committee is responsible for determining and reviewing the compensation arrangements for the directors themselves, the Chief Executive Officer and the executive team.

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

Structure

The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed. The latest determination was at the Annual General Meeting held on 30 November 2010 when the shareholders approved an aggregate remuneration of $600,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The board considers fees paid to non-executive directors of comparable companies when undertaking the annual review process. Each non-executive director receives a fee for being a director of the Company and for sitting on relevant board committees. The fee size is commensurate with the workload and responsibilities undertaken.

CHIEF EXECUTIVE OFFICER AND SENIOR EXECUTIVE REMUNERATION

Objective

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to ensure total remuneration is competitive by market standards.

Structure

In determining the level and make up of executive remuneration, the Remuneration and Nomination Committee uses an external consultant’s Remuneration Report to determine market levels of remuneration for comparable executive roles in the mining industry. PwC has been used during the year to design and implement a Remuneration Framework that is in line with industry practice.

It is the Remuneration and Nomination Committee’s policy that employment contracts are entered into with the Chief Executive Officer and the executive employees. Details of these contracts are outlined later in this report.

Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative information and internal and independent external information.

In accordance with best practice governance the Remuneration and Nomination Committee is comprised solely of non-executive directors.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

Remuneration consists of the following key elements:

Fixed remuneration
Variable remuneration
Short term incentives (STI); and,
Long term incentives (LTI).

The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is established for each executive by the Remuneration and Nomination Committee, and with effect from 1 July 2012 will be as follows:

CEO	Fixed	Remuneration	Target STI	Target STI	Target LTI (33%)	Target LTI (33%)
	(45%)		(22%) (50% of fxed)		(75% of fxed)
Other Executives	Fixed	Remuneration	(50%)	Target STI (25%) (50%		Target LTI (25%) (50%
				of fxed)		of fxed)

FIXED REMUNERATION

Objective

The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market.

Fixed remuneration is reviewed annually by the Remuneration and Nomination Committee. The process consists of a review of individual performance, relevant experience, and relevant comparable remuneration in the mining industry.

Structure

Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost to the Company.

VARIABLE REMUNERATION – SHORT TERM INCENTIVE (STI)

Objective

The objective of the STI is to provide a greater alignment between performance and remuneration levels.

Structure

The STI is an annual “at risk” component of remuneration for KMP. It is payable based on performance against key performance indicators (KPIs) set at the beginning of the financial year. STI’s are structured to remunerate KMP for achieving annual Company targets and their own individual performance targets. The net amount of any STI after allowing for applicable taxation, is payable in cash.

KPIs require the achievement of strategic, operational or financial measures and in most cases are linked to the drivers of business performance. For each KPI there are defined “threshold”, “target” and “stretch” measures which are capable of objective assessment.

Target performance represents challenging but achievable levels of performance. Stretch performance requires significant performance above and beyond normal expectations and if achieved is anticipated to result in a substantial improvement in key strategic outcomes, operational or financial results, and/or the business performance of the Company.

The Remuneration Committee is responsible for recommending to the Board KPIs for each KMP and then later assessing the extent to which the KPIs of the KMP have been achieved, and the amount to be paid to each KMP. To assist in making this assessment, the Committee receives detailed reports and presentations on the performance of the business from the CEO, Company Secretary and independent remuneration consultants as required.

The Company STI measures that will apply for the 2013 financial year comprise:

Improved safety performance – measured in the form of a specified reduction in the Total Recordable Injury Frequency Rate by 30 June 2013;
The achievement of defined targets in the coming year relative to budget relating to:
Operating cash flow;
gold production; and,
budgeted cost per tonne milled.

These measures have been selected as they can be reliably measured, are key drivers of value for shareholders and encourage behaviours in line with the Company’s core values.

The individual performance measures vary according to the individual KMP’s position, and for the coming financial year reflect value accretive and/or risk mitigation achievements for the benefit of the Company within each KMP’s respective areas of responsibility. They also include a discretionary factor determined by the Board designed to take into account unexpected events and achievements during the year.

The aggregate of annual STI payments available for executives across the Company is subject to the approval of the Remuneration and Nomination Committee. Payments are delivered as a cash bonus and/ or in the form of superannuation.

VARIABLE REMUNERATION – LONG TERM INCENTIVE (LTI)

Objective

The objective of the LTI plan is to reward executives in a manner, which aligns this element of remuneration with the creation of shareholder wealth.

As such LTIs are made to executives who are able to influence the generation of shareholder wealth and thus have an impact on the Company’s performance against the relevant long-term performance hurdles.

Overview of the Company’s new approach to Long Term Incentives

a) Selecting the right plan vehicle

Up until January 2012, the Company has made use of a standard employee share option plan, however, grants under this plan were more typically made on an ad-hoc basis. It was recognised that the options plan was no longer fit for purpose and was not providing an effective tool to reward, retain and motivate KMP, nor did it meet the criteria expected by some shareholders.

A number of different equity incentive vehicles were explored and following receipt of external advice from PwC, the Board decided that the most appropriate LTI plan going forward should be a Performance Rights Plan. Under a Performance Rights Plan, KMP will be granted a right to be issued a share in the future subject to performance based vesting conditions being met.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

b) Grant Frequency and LTI quantum

Under the new remuneration structure KMP will receive a new grant of Performance Rights every year, such that the LTI will now form a key component of KMP Total Annual Remuneration.

The LTI dollar value that KMP will be entitled to receive is set at a fixed percentage of their fixed remuneration and equates to 75% of fixed remuneration for the Chief Executive Officer and 50% of fixed remuneration for the other KMP. This level of LTI is in line with current market practice.

The number of Performance Rights to be granted is determined by dividing the LTI dollar value of the award by the fair value of a Performance Right.

c) Performance Conditions

The focus was on selecting performance conditions that would reward KMP for creating shareholder value as determined via the change in the Company’s share price and via reserves/resources growth.

From 1 July 2012 the LTI performance will be structured as follows:

Performance Rights will vest subject to meeting service and performance conditions as defined below:

75% of the Rights will be performance tested against the relative TSR measure for the period 1 July 2012 to 30 June 2015; and,
25% of the Rights will be performance tested against the reserve/ resource growth for the period 1 July 2012 to 30 June 2015.

Reflecting on market practice the Board has decided that the most appropriate performance measure to track share price performance is via a relative total shareholder return (TSR) measure.

The Company’s TSR will be measured against a customised peer group comprising the following companies:

Alacer Gold Corporation • Perseus Mining Ltd
• CGA Mining Ltd • Ramelius Resources Ltd • Evolution Mining Ltd • Regis Resources Ltd • Gold One International Ltd • Saracen Mining Ltd • Integra Mining Ltd • Silver Lake Resources Ltd • Kingsgate Consolidated Ltd • St Barbara Ltd • Medusa Mining Ltd • Teranga Gold Corporation • OceanaGold Corporation

No Performance Rights (relating to TSR) will vest unless the percentile ranking of the Company’s TSR for the relevant performance year, as compared to the TSR’s for the peer group companies, is at or above the 50th percentile.

The following table sets out the vesting outcome based on the company’s relative TSR performance:

RELATIVE TSR PERFORMANCE Less than 50thpercentile At the 50thpercentile	PERFORMANCE VESTING OUTCOMES 0% vesting 50% vesting
Between 50th and 75th	For each percentile over the 50th,
percentile	an additional 2% of the
	performance rights will vest
At or above 75thpercentile	100% vesting

The second performance condition is reserve/resource growth net of depletion. Broadly, the quantum of the increase in reserves/resources will determine the number of Performance Rights to vest.

The following table sets out the vesting outcome based on the company’s reserve/resource growth performance:

	RESERVES AND RESOURCE GROWTH PERFORMANCE	PERFORMANCE VESTING OUTCOMES
	R&R depleted R&R maintained R&R grown by up to 30%	0% vesting 50% vesting For each percentile over the 50th,
		an additional 2% of the
		performance rights will vest
	R&Rgrown by30% or more	100% vesting

d) Performance period

Grants under the LTI need to serve a number of different purposes:

i) Act as a key retention tool; and,

ii) focus on future shareholder value generation.

Therefore, the awards under the LTI relate to a 3 year period and provide a structure that is focused on long term sustainable shareholder value generation.

Up until January 2012, LTI grants to executives were delivered in the form of employee share options. These options were previously issued with an exercise price at a 10% premium to the RML ordinary share price at the date the Remuneration and Nomination Committee decided to invite the eligible persons to apply for the option. These employee share options will generally vest over a 30 month period. This option plan has been replaced by the new Performance Rights Plan. All existing options issued under the employee share option plan will continue to vest, however it is the current intention no further options will be issued in the future.

Options granted are vested in accordance with the Resolute Mining Limited Employee Share Option Plan following a review by the relevant supervisor of the executive’s performance. If a satisfactory performance level is achieved, the relevant portions of the options vests to the executive. In order for the executive’s options to vest, the executive must successfully meet the deliverables set out in their employment contract specific to their role. The assessment of whether the executive’s role has been successfully performed (therefore allowing the options to vest) is done by way of a formal annual appraisal of the key management personnel’s individual performance. Assessments of performance generally exclude factors external to the Company.

The performance of the Chief Executive Officer is assessed by the Chairman, and the performance of the other executives is assessed by the Chief Executive Officer. The annual performance appraisal assesses each executive’s performance against the following categories:

(a) Professional and technical competence;

(b) teamwork and administrative skills;
(c) self development and communication skills; and,

(d) developing people.

Although there are no specific performance hurdles in place for the Employee Share Option Plan, these general performance categories which the executives are evaluated against were chosen to enhance accountability of the executives across several areas critical to good management of the Group, and the board believes the annual appraisal process conducted in light of these categories provides an accurate and adequate measurement of their performance. This LTI method enables the Company to provide its executives with long term objectives which create a link between the delivery of value to shareholders, financial performance, and rewarding and retaining their valued services.

The Company prohibits directors or executives from entering into arrangements to protect the value of unvested Resolute Mining Limited shares or options that the director or executive may become entitled to as part of his/her remuneration package. This includes entering into contracts to hedge their exposure to RML rights, options or shares that may vest to him/her in the future.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

Details of remuneration provided to key management personnel are as follows:	Details of remuneration provided to key management personnel are as follows:	Details of remuneration provided to key management personnel are as follows:	Details of remuneration provided to key management personnel are as follows:
				SHORT TERM BENEFITS
12	BASE REMUNERATION	CASH BONUS (iv)		CASH BONUS GRANT, VEST & PAID DATE (iv)	NON MONETARY BENEFITS (i)	ANNUAL LEAVE PROVISION MOVEMENT
Directors	$		$		$	$
P. Huston	162,500		-	-	-	-
P. Sullivan	664,443		74,000	15 Jan 2012	58,611	10,772
T. Ford	38,633		-	-	-	-
H. Price	29,633		-	-	-	-
Ofcers
G. Fitzgerald	388,748		30,000	15 Dec 2011	3,765	(19,168)
P. Beilby (ii)	437,248		40,000	15 Dec 2011	-	5,323
P. Venn	331,898		30,000	15 Dec 2011	6,107	5,532
11 Directors
P. Huston	150,000		-	-	-	-
P. Sullivan	609,859		-	-	60,206	10,016
T. Ford	17,980		-	-	-	-
H. Price	15,367		-	-	-	-
Ofcers
G. Fitzgerald	358,985		-	-	3,764	(8,008)
P. Beilby (ii)	307,272		-	-	-	15,312
P. Venn	275,435		-	-	27,446	1,516
A. King (iii)	78,828		-	-	686	(46,528)

(i) Non monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits and all other benefits received by the executive.

(ii) P. Beilby was appointed 20 September 2010.

(iii) A. King’s contract terminated on 30 July 2010.

(iv) The Remuneration and Nomination Committee approved the amount on the basis of performance during the 2011 calendar year.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

POST EMPLOYMENT	LONG TERM	SHARE BASED	PERFORMANCE RELATED	PERFORMANCE RELATED
BENEFITS	BENEFITS	PAYMENTS
SUPERANNUATION	LONG SERVICE	OPTIONS	OPTIONS	CASH BONUS	CASH BONUS &
	LEAVE PROVISION				OPTIONS
	MOVEMENT
$	$	$	%	%	%
-	-	-	-	-	-
50,000	57,723	482,225	34.50	5.29	39.79
40,742	-	-	-	-	-
49,742	-	-	-	-	-

34,987	14,682	56,211	11.04	5.89	16.93
50,252	8,503	72,170	11.76	6.52	18.28
30,228	21,196	56,211	11.68	6.23	17.92

==> picture [495 x 137] intentionally omitted <==

----- Start of picture text -----

- - - - - -
54,887 32,585 723,352 48.52 - 48.52
47,645 - - - - -
50,258 - - - - -
32,309 23,064 47,761 10.43 - 10.43
49,091 1,854 65,878 14.99 - 14.99
26,949 19,672 47,998 12.03 - 12.03
3,018 (4,399) (24,649) - - -
----- End of picture text -----

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

==> picture [563 x 465] intentionally omitted <==

----- Start of picture text -----

Details of option holdings of key management personnel are as follows:
OPTIONS TYPE BALANCE AT GRANTED GRANT DATE FAIR VALUE OF TOTAL FAIR FIRST EXERCISE
THE START OF DURING THE OPTIONS AT VALUE OF DATE OF
THE YEAR YEAR AS GRANT DATE OPTIONS AT OPTIONS
COMPENSATION GRANT DATE GRANTED
(iv) DURING THE
12 YEAR
Directors $ $
P. Huston (i) Listed 26,761 - - - - -
P. Sullivan Unlisted 2,000,000 - - - - -
P. Sullivan (ii) Listed 133,333 - - - - -
T. Ford (ii) Listed 133,333 - - - - -
H. Price (iii) Listed 67,554 - - - - -
Officers
G. Fitzgerald Unlisted 415,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Beilby Unlisted 190,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Venn Unlisted 415,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Venn Listed 5,000 - - - - -
11
Directors
P. Huston Listed 26,761 - - - - -
P. Sullivan Unlisted - 2,000,000 2 Dec 2010 0.70 1,390,904 5 Jul 2011
P. Sullivan Listed 133,333 - - - - -
T. Ford Listed 133,333 - - - - -
H. Price Listed 67,554 - - - - -
Officers
G. Fitzgerald Unlisted 315,000 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Beilby Unlisted - 90,000 27 Oct 2010 0.73 65,546 16 May 2011
P. Beilby Unlisted - 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Venn Unlisted 315,000 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Venn Listed 5,000 - - - - -
A. King (v), (vi) Unlisted 190,000 - - - - -
----- End of picture text -----

(i) On 31 December 2011, 26,761 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.

(ii) On 31 December 2011, 133,333 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.

(iii) On 31 December 2011, 67,554 listed options were exercised at a price of $0.60 per option. In each instance of exercising options, one ordinary share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.

(iv) Options granted vest in accordance with the Resolute Mining Limited Employee Share Option Plan following the review by the relevant supervisor of the key management personnel’s performance. For details on the valuation of the options, including models and assumptions used, refer to Note 31. The percentage of options granted during the financial year that also vested during the financial year is nil (2011: 1.3%). None of these options were forfeited during the financial year.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

EXPIRY & LAST	EXERCISE PRICE	EXERCISED	LAPSED	ACQUIRED	BALANCE AT	GRANTED &	VESTED AND	EXERCISABLE	VALUE OF
EXERCISE DATE	OF OPTIONS	DURING THE	DURING	DURING THE	THE END OF	VESTED	AT THE END	OF THE YEAR	OPTIONS
OF OPTIONS	GRANTED	YEAR	THE YEAR	YEAR	THE YEAR	DURING THE			EXERCISED
GRANTED	DURING THE					YEAR			DURING THE
DURING THE	YEAR								YEAR
YEAR
	$					No.	No.	%	$
-	-	(26,761)	-	-	-	-	-	-	28,099
-	-	-	-	-	2,000,000	-	666,667	33.33	-
-	-	(133,333)	-	-	-	-	-	-	140,000
-	-	(133,333)	-	-	-	-	-	-	140,000
-	-	(67,554)	-	-	-	-	-	-	70,932

26 Jan 2017	1.85	-	-	-	475,000	-	318,333	67.02	-
26 Jan 2017	1.85	-	-	-	250,000	-	93,333	37.33	-
26 Jan 2017	1.85	-	-	-	475,000	-	318,333	67.02	-
-	-	(5,000)	-	-	-	-	-	-	5,250

==> picture [562 x 177] intentionally omitted <==

----- Start of picture text -----

- - - - - 26,761 - 26,761 100.00 -
4 Jan 2016 1.36 - - - 2,000,000 - - - -
- - - - - 133,333 - 133,333 100.00 -
- - - - - 133,333 - 133,333 100.00 -
- - - - - 67,554 - 67,554 100.00 -
24 Jan 2016 1.43 - - - 415,000 - 205,000 49.40 -
15 Nov 2015 1.43 - - - 90,000 30,000 30,000 33.33 -
24 Jan 2016 1.43 - - - 100,000 - - - -
24 Jan 2016 1.43 - - - 415,000 - 205,000 49.40 -
- - - - - 5,000 - 5,000 100.00 -
- - (50,000) (140,000) - - - - - 16,500
----- End of picture text -----

(v) On 30 July 2010, 50,000 options were exercised at a price of $0.42 per option. The fair value at grant date of the options exercised was $10,200. In each instance of exercising options, one ordinary share was issued for each option exercised. There were no unpaid amounts relating to any ordinary shares acquired through the exercise of options.

(vi) The value of options at the date of lapse was $69,900.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

EMPLOYMENT CONTRACTS

The CEO, Mr Sullivan, is employed under contract. His current employment contract commenced on 14 February 2004 and there is no termination date. Under the terms of the contract:

Mr Sullivan may resign from his position and thus terminate this contract by giving 6 months written notice.
The Company may terminate this employment agreement by providing 12 months written notice or provide payment in lieu of the notice period (based on the fixed component of Mr Sullivan’s remuneration).
Mr Sullivan accrues 5 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 7 years.

Mr Fitzgerald (General Manager – Finance and Administration) is also employed under contract. This contract has no termination date and under the terms of the contract:

Mr Fitzgerald may resign from his position and thus terminate his contract by giving 3 months written notice.
The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the notice period (based on the fixed component of Mr Fitzgerald’s remuneration).
Mr Fitzgerald accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.

Mr Venn (General Manager – Business Development) is also employed under contract. This contract has no termination date and under the terms of the contract:

Mr Venn may resign from his position and thus terminate his contract by giving 3 months written notice.
The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the notice period (based on the fixed component of Mr Venn’s remuneration).
Mr Venn accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.

Mr Beilby (General Manager – Operations) is also employed under contract. This contract has no termination date and under the terms of the contract:

Mr Beilby’s contract commenced on 20 September 2010.
Mr Beilby may resign from his position and thus terminate his contract by giving 3 months written notice.
The Company may terminate his employment agreement by providing 6 months written notice or provide payment in lieu of the notice period (based on the fixed component of Mr Beilby’s remuneration).
Mr Beilby accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements after 10 years.

COMPANY PERFORMANCE

The table below shows the performance of the Consolidated Entity over the last 5 years:

		30 JUNE 2012	30 JUNE 2011	30 JUNE 2010	30 JUNE 2009	30 JUNE 2008
Net proft/(loss) after tax	$'000	101,859	42,930	(56,571)	30,676	(56,722)
Basic earnings/(loss) per share	cents/share	18.62	13.42	(9.90)	10.30	(21.61)

This is the end of the audited information.

Shares under options

Unissued ordinary shares of Resolute Mining Limited under option at the date of this report are as follows:

GRANT DATE	EXPIRY DATE	EXERCISE PRICE	NUMBER ON ISSUE
23/05/08	22/05/13	$2.12	195,000
29/08/08	29/08/13	$1.62	51,000
20/01/09	31/01/14	$0.42	517,333
24/10/09	24/10/12	$0.72	3,000,000
15/02/10	14/02/15	$1.09	556,000
16/07/10	15/07/15	$1.21	81,000
16/11/10	15/11/15	$1.43	135,000
5/01/11	4/01/16	$1.36	2,000,000
25/01/11	24/01/16	$1.43	996,000
30/06/11	15/07/16	$1.18	130,000
4/01/12	26/01/17	$1.85	782,400
			8,443,733

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2012

Shares issued as a result of the exercise of options:

From 1 July 2012 up until the date of this report, no options have been exercised.

Indemnification and insurance of directors and officers

During or since the financial year, the Company paid an insurance premium of $73,130 (2011: $70,716) in respect of a contract insuring the Company’s directors and officers against certain liabilities arising as a result of work performed in the capacity as directors and officers. This insurance premium is not allocated over individuals.

Directors’ meetings

The number of meetings and resolutions of directors (including meetings of committees of directors) held during the year and the number of meetings (or resolutions) attended by each director were as follows:

as follows:
	FULL BOARD	AUDIT	ENVIRONMENT &	REMUNERATION &	SAFETY, SECURITY &	FINANCIAL RISK
			COMMUNITY	NOMINATION	OCCUPATIONAL	MANAGEMENT
			DEVELOPMENT		HEALTH
P. Huston	16	4	n/a	3	n/a	n/a
P. Sullivan	16	n/a	4	n/a	4	19
T. Ford	16	4	n/a	3	n/a	n/a
H. Price	16	4	n/a	3	n/a	n/a
Number of meetings (or resolutions) held	16	4	4	3	4	19

The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.

Rounding

RML is a Company of the kind specified in Australian Securities and Investments Commission Class Order 98/0100. In accordance with that class order, amounts in the financial report and the Directors’ Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.

Auditor independence

Refer to page 54 for the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.

Non-audit services

Non-audit services were provided by the entity’s auditor, Ernst & Young. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Ernst & Young Australia received or are due to receive $155,715 for the provision of taxation planning and review services.

Signed in accordance with a resolution of the directors.

==> picture [85 x 48] intentionally omitted <==

P.R. Sullivan Director Perth, Western Australia

17 September 2012

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Corporate Governance Statement

for the year ended 30 June 2012

The Board of Directors of Resolute Mining Limited (“RML” or “the Company”) is responsible for the corporate governance of the consolidated entity (the “Group”). The Board guides and monitors the business and affairs of RML on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board has adopted the “Corporate Governance Principles and Recommendations” established by the ASX Corporate Governance Council and published by the ASX in August 2007. There is a corporate governance section on the Company’s website which sets out the various policies, charters and codes of conduct which have been adopted to ensure compliance with the “best practice recommendations” referred to above.

A description of the Company’s main corporate governance practices is set out below. All practices, unless otherwise stated, were in place for the entire year.

1. The Board of Directors

The Board have established a “Statement of Matters Reserved to the Board” which is available on the Company website. This outlines the functions reserved to the Board and those delegated to management and demonstrates that the responsibilities and functions of the Board are distinct from management.

The key responsibilities of the Board include:

Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer (“CEO”) and senior management;
Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;
Overseeing the management of business risks, safety and occupational health, environmental issues and community development;
Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control processes are in place and functioning appropriately. Further, approving and monitoring financial and other reporting;
Assuring itself that appropriate audit arrangements are in place;
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of Business Ethics and that the Company practice is consistent with that Code; and

(a) RML was incorporated on 8 June 2001.

Details of the members of the Board including their experience, expertise and qualifications are set out in the Directors’ Report under the heading “Directors”.

2. Director independence

Directors are expected to contribute independent views to the Board.

The Board has adopted specific principles in relation to the Directors’ independence. These state that to be deemed independent, a director must be a non-executive and:
Not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company.
Within the last three years has not been employed in an executive capacity by the Company or another group member, or been a director after ceasing to hold any such employment.
Within the last three years has not been a principal of a material professional advisor or a material consultant to the Company or another group member, or an employee materially associated with the service provided.
Not a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.
Must have no material contractual relationship with the Company or another group member other than as a director of the Company.
Not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.
Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.

Materiality for these purposes is based on both quantitative and qualitative bases. An amount of over 5% of annual turnover of the Company or Group or 5% of the individual Directors net worth is considered material for these purposes. In addition, a transaction of any amount or a relationship is deemed to be material if knowledge of it impacts the shareholders’ understanding of the director’s performance.

The Board has reviewed and considered the positions and associations of each of the 4 Directors in office at the date of this report and considers that 3 of the directors are independent. Mr Peter Sullivan (CEO) is not considered to be independent. As such it is clear that the majority of the Board are independent and the Chairman is an independent director.

Reporting to and advising shareholders.

The Board is comprised of 3 non-executive Directors including the Chairman and one executive director being the CEO.

The table below sets out the detail of the tenure of each director at the date of this report

DIRECTOR	ROLE OF DIRECTOR	FIRST APPOINTED (a)	NON-EXECUTIVE	INDEPENDENT	GENDER
Peter Ernest Huston	Non-executive chairman	June 2001	Yes	Yes	Male
Peter Ross Sullivan	CEO	June 2001	No	No	Male
Thomas Cummings Ford	Non-executive director	June 2001	Yes	Yes	Male
Henry Thomas Stuart Price	Non-executive director	November 2003	Yes	Yes	Male

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Corporate Governance Statement

for the year ended 30 June 2012

The roles of the Chairman and the CEO are not exercised by the same individual. The Chairman is responsible for leading the Board, ensuring that Board activities are organised and efficiently conducted and for ensuring Directors are properly briefed for meetings. The Board has delegated responsibility for the day-to-day activities to the CEO and the Executive Committee. The Remuneration and Nomination Committee ensure that the Board members are appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the CEO and the Executive Committee. The CEO is accountable to the Board for all authority delegated to that position and the Executive Committee.

Directors and Board Committees have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company’s expense.

In relation to the term of office, the Company’s constitution specifies that one third of all Directors (with the exception of the CEO) must retire from office annually and are eligible for re-election.

3. Remuneration and Nomination Committee

The Remuneration and Nomination Committee consists of the following non-executive Directors, Mr P.Huston (Chairman), Mr T.Ford and Mr H.Price. The attendance record in the current year of members at the Committee meetings is noted in the Directors’ Report under the heading “Directors’ Meetings”.

The Remuneration and Nomination Committee is responsible for determining and reviewing the compensation arrangements for the Directors themselves, the CEO, the executive team and employees. In addition, they are responsible for reviewing the appropriateness of the size of the Board relative to its various responsibilities. Recommendations are made to the Board on these matters. Further roles and responsibilities of this Committee, including a description of the procedure for the selection, appointment and re-election of incumbents, can be found in the Committee’s charter which is posted on the Company website.

A performance evaluation of senior executives took place during the financial year and was conducted in accordance with the procedures outlined by the Remuneration and Nomination Committee.

DIVERSITY

In 2011, Resolute formalised its commitment to diversity in the workplace by approving its Diversity Policy. This policy applies to all Resolute employees and includes the recruitment and selection process, terms and conditions of employment including pay, promotion, work assignment, training and other aspects of employment. Details of the policy are set out under the “About Us – Corporate Governance – Resolute Mining Diversity Policy” section of Resolute’s website at www.rml.com.au

To include in the Remuneration & Nomination Committee Charter responsibility for diversity, including an annual review and report to the board on the:
a. progress towards achieving these measurable objectives and overall effectiveness of the policy;
b. proportion of women and men in the Resolute workforce at three levels in the organisation (board level, senior management and the whole organisation), including benchmarking this data against relevant industry standards where possible; and
c. remuneration by gender together with any recommendations to the board
To engage consultants that support and promote the Company’s diversity policy
To ensure that candidate lists for permanent employee positions are suitably qualified and where possible recognisably diverse by age, sex or ethnicity
To consider diversity when reviewing board succession plans with the aim to have gender representation and diversity

The proportion of women at each key level within the group at 30 June 2012 was as follows:

	LEVEL	%	OF	WOMEN	IN	THE RESOLUTE WORKFORCE
	Board					0%
	Senior Management					0%
	Whole organisation					9%

4. Ethical standards and code of conduct

The Board acknowledges the need for the highest standards of corporate governance and ethical conduct by all Directors and employees of the consolidated entity. As such, the Company has developed a Code of Conduct which has been fully endorsed by the Board and applies to all Directors and employees. This Code of Conduct is regularly reviewed and updated as necessary to ensure that it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Group’s integrity.

A fundamental theme is that all business affairs are conducted legally, ethically and with strict observance of the highest standards of integrity and propriety. The Directors and management have the responsibility to carry out their functions with a view to maximising financial performance of the consolidated entity. This concerns the propriety of decision making in conflict of interest situations and quality decision making for the benefit of shareholders.

Refer to the Company website for specific codes of conduct, including the policy for reporting and investigating unethical practices.

The Diversity Policy includes a commitment to establishing measurable objectives for gender diversity. This commitment has been completed in 2011/12 and the following objectives for the coming year have been set.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Corporate Governance Statement

for the year ended 30 June 2012

5. Securities trading

The Board has adopted the “Dealings in Resolute Mining Limited Securities Trading Policy” (refer website) (which is driven by Corporations Act 2001 requirements) that applies to all Directors, officers and employees of the Company. Under this policy and the Corporations Act 2001, it is illegal for Directors, officers or employees who have price sensitive information relating to the Group which has not been published or which is not otherwise ‘generally available’ to:

Buy, sell or otherwise deal in the Company’s securities;
Advise, procure or encourage another person (for example, a family member, a friend, a family Company or trust) to buy or sell Company securities; or
Pass on information to any other person, if one knows or ought to reasonably know that the person may use the information to buy or sell (or procure another person to buy or sell) Company securities.
Subject to clause 2.5 of the RML Securities Trading Policy, trade in the securities of the Company one week before the release of the Company’s Quarterly, Half yearly or Preliminary Final Report to the ASX is prohibited.

Furthermore, the Company prohibits directors or executives from entering into arrangements to protect the value of unvested Resolute Mining Limited securities that the Director or executive may become entitled to as part of his/her remuneration package. This includes entering into contracts to hedge their exposure to securities that may vest to him/her in the future.

6. Corporate reporting

The CEO and General Manager - Finance & Administration have made the following certifications to the Board:

That the Company’s financial reports are complete and present a true and fair view as required by Accounting Standards, in all material respects, of the financial condition and operational results of the Company and Group; and
That the above statement is founded on a sound system of internal control and risk management which implements the policies adopted by the Board and that the Company’s risk management and internal control is operating efficiently in all material respects.

7. Audit Committee

The Audit Committee consists of the following non-executive Directors; Mr H. Price (Chairman), Mr P. Huston and Mr T. Ford. The attendance record in the current year of members at the Committee meetings is noted in the Directors’ Report under the heading “Directors’ Meetings”.

Details of the members of the Board including their experience, expertise and qualifications are set out in the Directors’ Report under the heading “Directors”.

The Committee operates under a charter approved by the Board which is posted to the corporate governance section of the website. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes. This includes the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations. The Committee also provides the Board with additional assurance regarding the reliability of the financial information for inclusion in the financial reports.

The Audit Committee is also responsible for:

Ensuring compliance with statutory responsibilities relating to accounting policy and disclosure;
Liaising with, discussing and resolving relevant issues with the auditors;
Assessing the adequacy of accounting, financial and operating controls; and
Reviewing half-year and annual financial statements before submission to the Board.

8. External auditors

The Company’s current external auditors are Ernst & Young. As noted in the Audit Committee charter, the performance and independence of the auditors is reviewed by the Audit Committee.

Ernst & Young’s existing policy requires that its audit team provide a statement as to their independence. This statement was received by the Audit Committee for the financial year ended 30 June 2012.

Ernst & Young and the Corporations Act 2001 has a policy for the rotation of the lead audit partner.

9. Continuous disclosure

In accordance with ASX Principle 5, the Board has an established disclosure policy which is available on the Company website.

The Company is committed to:

Ensuring that stakeholders have the opportunity to access externally available information issued by the Company;
Providing full and timely information to the market about the Company’s activities; and
Complying with the obligations contained in the ASX Listing Rules and the Corporations Act 2001 relating to continuous disclosure.

The CEO and the Company Secretary have been nominated as the people responsible for communication with the ASX. This involves complying with the continuous disclosure requirements outlined in the ASX Listing Rules, ensuring that disclosure with the ASX is co-ordinated and being responsible for administering and implementing the policy.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Corporate Governance Statement

for the year ended 30 June 2012

10. Shareholder communication

The Board has established a communications strategy which is available on the Company website.

The Board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary and kept informed of all major developments affecting the Company in a timely and effective manner. Information is communicated to the market and shareholders through:

ENVIRONMENT AND COMMUNITY DEVELOPMENT COMMITTEE

The main responsibility of this Committee is to monitor and review RML’s environmental performance and compliance with relevant legislation and oversee Community Relations.

Information on compliance with significant environmental regulations is set out in the Directors’ Report.

SAFETY, SECURITY AND OCCUPATIONAL HEALTH COMMITTEE

The annual report which is distributed to all shareholders.
Half yearly, quarterly reports and all ASX announcements which are posted on the entity’s website.
The annual general meeting and other meetings so called to obtain approval for Board action as appropriate.
Continuous disclosure announcements made to the Australian Securities Exchange.

Further, it is a CLERP 9 requirement that the auditor of the Company attends the annual general meeting. This provides shareholders the opportunity to question the auditor concerning the conduct of the audit and the preparation and content of the Auditor’s Report.

11. Risk management

The Board recognises the importance of identifying and controlling risks to ensure that they do not have a negative impact on the Company.

In accordance with the ASX Principle 7, the Board has an established Risk Management policy which is available on the Company website which is designed to safeguard the assets and interests of the Company and to ensure the integrity of reporting.

The CEO and General Manager - Finance & Administration will inform the Board annually in writing that:

The sign off given on the financial statements is founded on a sound system of risk management and internal control compliance which implements the policies adopted by the Board.
The Company’s risk management and internal compliance and control systems is operating effectively and efficiently in all material respects.

The Board has established the following Sub Committees to assist in internal control and business risk management:

The main functions of this Committee are to oversee an employee education program designed to increase employee awareness of safety, security and health issues in the workplace and monitor safety statistics and report to the Board on the results of incident investigations.

FINANCIAL RISK MANAGEMENT COMMITTEE

The main responsibility of this Committee is to oversee risk management strategies in relation to gold hedging, currency hedging, debt management, capital management, cash management, insurance and tax risk management.

The Board members and their attendance at meetings is outlined in the Directors’ Report. Senior members of management who specialise in each area also form part of the respective Committees.

12. Remuneration policies

This policy governs the operations of the Remuneration and Nomination Committee. The Committee reviews and reassesses the policy at least annually and obtains the approval of the Board.

The Remuneration and Nomination Committee are responsible for developing measurable objectives and evaluating progress against these objectives.

In accordance with best governance practice a diversity policy has been established which includes the review of diversity within RML by considering board composition, executive composition and employee composition by gender.

The details of the Directors’ and Officers’ remuneration policies are provided in the Directors’ Report under the heading “Remuneration Report”.

Audit Committee
Remuneration and Nomination Committee
Environment and Community Development Committee
Safety, Security and Occupational Health Committee
Financial Risk Management Committee

The function of the Audit Committee and the Remuneration and Nomination Committee are outlined above. The function of the other Committees noted above are as follows:

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Auditor Independence Declaration

for the year ended 30 June 2012

`Auditor’s Independence Declaration to the Directors of Resolute Mining Limited`

In relation to our audit of the financial report of Resolute Mining Limited for the financial year ended 30 June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young Peter McIver Partner Perth 17 September 2012

Liability limited by a scheme approved under Professional Standards Legislation PM:MM:RESOLUTE:011

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2012

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NOTE CONSOLIDATED
12 11
$'000 $’000
Continuing Operations
Revenue from gold sales 2(a) 576,710 445,055
Costs of production relating to gold sales 2(b) (262,173) (293,499)
Gross profit before depreciation, amortisation and other operating costs 314,537 151,556
Depreciation and amortisation relating to gold sales 2(c) (73,221) (62,391)
Other operating costs relating to gold sales 2(d) (35,076) (23,276)
Gross profit 206,240 65,889
Other revenue 2(e) 1,504 329
Other income 2(f) 345 1,316
Exploration expenditure (15,291) (8,726)
Share of associate's loss (1,285) (800)
Administration and other expenses 2(g) (11,744) (9,757)
Treasury - realised losses 2(h) (175) (4,574)
Treasury - unrealised (losses)/gains 2(i) (43,194) 730
Treasury - movement on gold forward contracts closed out - 34,742
Profit before interest and tax 136,400 79,149
Finance costs 2(j) (11,970) (19,597)
Profit before tax 124,430 59,552
Tax expense 3 (22,571) (16,622)
Profit for the year 101,859 42,930
Profit/(loss) attributable to:
Members of the parent 105,103 59,700
Non-controlling interest (3,244) (16,770)
101,859 42,930
Other comprehensive income/(loss)
Exchange differences on translation of foreign operations:
- Members of the parent 15,604 (23,826)
- Non-controlling interest 3,028 1,438
Changes in the fair value of available for sale financial assets, net of tax (364) (52)
Other comprehensive income/(loss) for the year, net of tax 18,268 (22,440)
Total comprehensive income for the year 120,127 20,490
Total comprehensive income/(loss) attributable to:
Members of the parent 120,343 35,822
Non-controlling interest (216) (15,332)
120,127 20,490
Earnings per share for net profit attributable to the ordinary equity holders of the parent:
Basic earnings per share 33 18.62 13.42
Diluted earnings per share 33 16.13 10.97
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The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Statement of Financial Position

for the year ended 30 June 2012

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NOTE CONSOLIDATED
12 11
$'000 $’000
Current assets
Cash 5 48,404 11,213
Other financial assets - restricted cash 6 42,267 -
Receivables - gold bullion sales - 14,465
Receivables - other 7 5,957 4,033
Inventories 8 141,901 96,464
Available for sale financial assets 9 374 692
Financial derivative assets 10 2,364 11
Tax receivable 621 -
Other 11 4,567 3,270
Total current assets 246,455 130,148
Non current assets
Receivables 7 2,143 3,769
Exploration and evaluation expenditure 12 9,522 9,045
Development expenditure 13 208,543 219,329
Property, plant and equipment 14 167,388 190,878
Deferred mining costs 15 28,229 20,585
Investment in associate 16 2,223 5,092
Total non current assets 418,048 448,698
Total assets 664,503 578,846
Current liabilities
Payables 17 42,948 47,433
Interest bearing liabilities 18 7,878 23,539
Tax liabilities - 2,725
Financial liabilities 19 - 18,910
Provisions 20 21,573 14,455
Total current liabilities 72,399 107,062
Non current liabilities
Interest bearing liabilities 18 3,142 78,341
Provisions 20 45,483 38,000
Deferred tax liabilities 3 486 1,125
Total non current liabilities 49,111 117,466
Total liabilities 121,510 224,528
Net assets 542,993 354,318
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The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Statement of Financial Position

for the year ended 30 June 2012

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NOTE CONSOLIDATED
12 11
$'000 $’000
Equity attributable to equity holders of the parent
Contributed equity 21 368,047 287,125
Reserves 22 2,424 (442)
Retained earnings 23 205,861 100,758
Parent interest 576,332 387,441
Non-controlling interest (33,339) (33,123)
Total equity 542,993 354,318
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The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Statement of Changes in Equity

for the year ended 30 June 2012

	CONTRIBUTED	NET UNREALISED	CONVERTIBLE NOTES	SHARE OPTIONS
	EQUITY	GAIN/(LOSS) RESERVE	EQUITY RESERVE	EQUITY RESERVE
	$’000	$’000	$’000	$’000
At 1 July 2011	287,125	112	13,764	5,987
Proft/(loss) for the period	-	-	-	-
Other comprehensive (loss)/income, net of tax	-	(364)	-	-
Total comprehensive (loss)/income for the period, net of tax	-	(364)	-	-
Transactions with owners
Shares issued	112,235	-	-	-
Share issue costs	(41)	-	-	-
Share buy-backs	(31,272)	-	-	-
Equity portion of compound fnancial instruments, net of tax
and transaction costs	-	-	(13,764)	-
Share-based payments to employees	-	-	-	-
At 30 June 2012	368,047	(252)	-	5,987

At 1 July 2010	237,083	164	14,233	5,987
Proft/(loss) for the period	-	-	-	-
Other comprehensive income/(loss), net of tax	-	(52)	-	-
Total comprehensive income/(loss) for the period, net of tax	-	(52)	-	-
Transactions with owners
Shares issued	53,107	-	-	-
Share issue costs	(3,065)	-	-	-
Equity portion of compound fnancial instruments, net of tax
and transaction costs	-	-	(469)	-
Share-based payments to employees	-	-	-	-
At 30 June 2011	287,125	112	13,764	5,987

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Statement of Changes in Equity

for the year ended 30 June 2012

EMPLOYEE EQUITY	FOREIGN CURRENCY	RETAINED EARNINGS	NON-CONTROLLING	TOTAL
BENEFITS RESERVE	TRANSLATION RESERVE		INTEREST
$’000	$’000	$’000	$’000	$’000
3,236	(23,541)	100,758	(33,123)	354,318
-	-	105,103	(3,244)	101,859
-	15,604	-	3,028	18,268
-	15,604	105,103	(216)	120,127

-	-	-	-	112,235
-	-	-	-	(41)
-	-	-	-	(31,272)
-	-	-	-	(13,764)
1,390	-	-	-	1,390
4,626	(7,937)	205,861	(33,339)	542,993

2,021	285	41,058	(17,791)	283,040
-	-	59,700	(16,770)	42,930
-	(23,826)	-	1,438	(22,440)
-	(23,826)	59,700	(15,332)	20,490

-	-	-	-	53,107
-	-	-	-	(3,065)
-	-	-	-	(469)
1,215	-	-	-	1,215
3,236	(23,541)	100,758	(33,123)	354,318

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Consolidated Cash Flow Statement

for the year ended 30 June 2012

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NOTE CONSOLIDATED
12 11
$'000 $’000
Cash flows from operating activities
Receipts from customers 591,175 440,378
Payments to suppliers, employees and others (362,597) (353,220)
Income tax paid (23,425) (15,825)
Exploration expenditure (15,881) (8,649)
Interest paid (11,604) (4,373)
Interest received 1,504 329
Net cash flows from operating activites 28 179,172 58,640
Cash flows from investing activities
Payments for property, plant and equipment (24,412) (20,415)
Proceeds from disposal of property, plant and equipment - 71
Payments for other financial assets (43,103) -
Payments for development costs (24,818) (13,225)
Other (990) (673)
Net cash flows from investing activities (93,323) (34,242)
Cash flows from financing activities
Proceeds from issues of ordinary shares 31,911 41,826
Cost of issuing ordinary shares (41) (3,065)
Payments for share buy backs (31,272) -
Payments for close-out of derivatives funded with proceeds from issuing ordinary shares - (30,368)
Repayment of borrowings (43,959) (44,243)
Repayment of lease liability (3,760) (2,705)
Proceeds from finance facility 1,974 6,750
Net cash flows from financing activities (45,147) (31,805)
Net increase in cash and cash equivalents 40,702 (7,407)
Cash and cash equivalents at the beginning of the financial period 3,671 11,900
Exchange rate adjustment (1,231) (822)
Cash and cash equivalents at the end of the period 5 43,142 3,671
Cash and cash equivalents comprise the following:
Cash 48,404 11,213
Bank overdraft 18 (5,262) (7,542)
43,142 3,671
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The above consolidated cash flow statement should be read in conjunction with the accompanying notes.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Corporate information

The financial report of Resolute Mining Limited (“consolidated entity” or the “Group”) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the Directors on 14 September 2012.

Resolute Mining Limited (the parent entity) is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

The principal activities of entities within the consolidated entity during the year were:

Gold mining; and,
prospecting and exploration for minerals.

There has been no significant change in the nature of those activities during the year.

Note 1: Basis of preparation and summary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes financial information for Resolute Mining Limited (“RML”) as an individual entity and the consolidated entity consisting of RML and its subsidiaries. Where appropriate, comparative information has been reclassified.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values.

The difference between the above items and the fair value of the consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.

Intercompany transactions, balances and unrealised gains on transactions between Group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.

Accounting policies of subsidiaries have been changed were necessary to ensure consistency with the policies adopted by the Group.

(A) BASIS OF PREPARATION

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Board and the Corporations Act 2001.

Compliance statement

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. With the exception of those new accounting standards and interpretations outlined at note 1(ad), accounting policies adopted are consistent with those of the previous year.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities (including derivative instruments) at fair value through profit and loss.

(B) PRINCIPLES OF CONSOLIDATION

(i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of RML as at 30 June 2012 and the results of all subsidiaries for the year then ended. RML and its subsidiaries together are referred to in this financial report as the “Group” or the “consolidated entity”. Interests in associates are equity accounted and are not part of the consolidated Group.

(ii) Joint Ventures

Jointly controlled assets

The proportionate interests in the assets, liabilities and expenses of a joint venture activity have been incorporated in the financial statements under the appropriate headings.

(C) SEGMENT REPORTING

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start-up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the level of segment information presented to the board of directors.

Operating segments have been identified based on the information provided to the chief operating decision maker – being the executive management team.

Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.

However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(C) SEGMENT REPORTING (CONTINUED)

(E) REVENUE RECOGNITION

Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category.

(D) FOREIGN CURRENCY TRANSLATION

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in Australian dollars, which is Resolute Mining Limited’s functional and presentation currency.

(i) Gold sales

Revenue is recognised when the risk and reward of ownership has passed from the Group to an external party and the selling price can be determined with reasonable accuracy. Sales revenue represents gross proceeds receivable from the customer. Certain sales are initially recognised at estimated sales value when the gold is dispatched.

Revenue from the sale of by-products such as silver is included in sales revenue.

(ii) Interest

Revenue is recognised as interest accrues using the effective interest method.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.

(iii) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the date of that consolidated statement of financial position;
income and expenses for each consolidated statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and,
all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is sold or borrowings repaid, a proportionate share of such exchange differences are recognised in the consolidated statement of comprehensive income as part of the gain or loss on sale.

(F) BORROWING COSTS

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed and are included in profit or loss as part of borrowing costs.

The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the entity’s outstanding borrowings during the period.

(G) INCOME TAX

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and by unused tax losses (if appropriate).

Deferred income tax is provided on all temporary differences at the consolidated statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss; and,
in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

Diluted EPS is calculated as the net profit attributable to members, adjusted for:

costs of servicing equity (other than dividends) and;

(G) INCOME TAX (CONTINUED)

Deferred income tax assets are recognised for all deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses, to the extent it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax assets and unused tax losses can be utilised:

except where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss; and,
in respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each consolidated statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Tax consolidation legislation

RML and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2002.

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST except:

Where the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and,
receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

(H) EARNINGS PER SHARE (“EPS”)

Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and,
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares.

Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(I) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and deposits held at financial institutions at call. Bank overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial position.

(J) RECEIVABLES

Trade receivables are initially recognised at fair value and subsequently at amortised cost less a provision for any uncollectible debts. Trade receivables are due for settlement no more than 30 days from the date of recognition. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the transaction. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the consolidated statement of comprehensive income.

Receivables from related parties are recognised and carried at the nominal amount due. Where interest is charged it is taken up as income in profit and loss and included in other income.

(K) INVENTORIES

Finished goods (bullion), gold in circuit and stockpiles of unprocessed ore are stated at the lower of cost and estimated net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to ore stockpiles and gold in circuit items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business (excluding derivatives) less the estimated costs of completion and the estimated costs necessary to make the sale.

Consumables have been valued at cost less an appropriate provision for obsolescence. Cost is determined on a first-in-first-out basis.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(L) INVESTMENTS AND OTHER FINANCIAL ASSETS

The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and reevaluates this designation at each reporting date.

(i) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the consolidated statement of financial position date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the consolidated statement of financial position date which are classified as non-current assets. Loans and receivables are included in receivables in the consolidated statement of financial position.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity.

(iv) Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the consolidated statement of financial position date.

Purchases and sales of investments are recognised on trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the consolidated statement of comprehensive income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the consolidated statement of comprehensive income as gains and losses from investment securities.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss - is removed from equity and recognised in the consolidated statement of comprehensive income. Impairment losses recognised in the consolidated statement of comprehensive income on equity instruments are not reversed through the consolidated statement of comprehensive income.

(M) INVESTMENTS IN ASSOCIATES

The Group’s investment in associates is accounted for using the equity method of accounting in the consolidated financial statements. An associate is an entity over which the Group has significant influence and that are neither subsidiaries nor joint ventures.

The Group generally deems they have significant influence if they have over 20% of voting rights.

Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost plus postacquisition changes in the Group’s share of net assets of the associates. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in associates. Goodwill included in the carrying amount of the investment in associate is not tested separately, rather the entire carrying amount of the investment is tested for impairment as a single asset. If an impairment is recognised, the amount is not allocated to the goodwill of the associate.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(M) INVESTMENTS IN ASSOCIATES (CONTINUED)

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the statement of comprehensive income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parent entity’s statement of comprehensive income as a component of other income.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The Group makes any adjustments to the performance and position of the associate where appropriate in order to allow for differences in the accounting policies of the Group and those of the associate.

(N) DERIVATIVES

The Group uses from time to time derivative financial instruments such as gold options, gold forward contracts, contracts for difference, and interest rate swaps to manage the risks associated with market fluctuations.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).

The fair value of derivative financial instruments that are traded on an active market is based on quoted market prices at the consolidated statement of financial position date. The fair value of financial instruments not traded on an active market is determined using appropriate valuation techniques.

At the inception of the transaction, the Group documents the relationship between hedge instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.

(i) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statement of comprehensive income, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

(ii) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the consolidated statement of comprehensive income.

Amounts accumulated in equity are recycled in the consolidated statement of comprehensive income in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the consolidated statement of comprehensive income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the consolidated statement of comprehensive income.

(iii) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the consolidated statement of comprehensive income.

(O) DEFERRED MINING COSTS

In mining operations, it is necessary to remove overburden and other barren waste materials to access ore from which minerals can economically be extracted. The process of mining overburden and waste materials is referred to as stripping. Stripping costs incurred before production commences are included within capitalised mine development expenditure and subsequently amortised. The Group defers stripping costs incurred subsequently during the production stage of operation.

Stripping ratios are a function of the quantity of ore mined compared with the quantity of overburden, or waste required to be removed to mine the ore. Deferral of the post production costs to the consolidated statement of financial position is made, where appropriate, when actual stripping ratios vary from average life of mine ratios. Deferral of costs to the consolidated statement of financial position is not made when the waste to ore ratio is expected to be consistent throughout the life of the mine.

Costs which have previously been deferred to the consolidated statement of financial position are recognised in the Consolidated statement of comprehensive income on a unit of production basis utilising average stripping ratios. Changes in estimates of average stripping ratios are accounted for prospectively from the date of the change.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(R) PROPERTY, PLANT AND EQUIPMENT

(i) Cost and Valuation

(O) DEFERRED MINING COSTS (CONTINUED)

As it is not possible to separately identify cash inflows relating to deferred overburden removal costs, such assets are grouped with other assets or a cash generating unit for the purposes of undertaking impairment assessments, where necessary, based on future cash flows for the operation as a whole.

(P) MINERAL EXPLORATION AND EVALUATION INTERESTS

Exploration expenditure is expensed to the consolidated statement of comprehensive income as and when it is incurred and included as part of cash flows from operating activities. Exploration costs are only capitalised to the consolidated statement of financial position if they result from an acquisition.

Evaluation expenditure is capitalised to the consolidated statement of financial position. Evaluation is deemed to be activities undertaken from the beginning of the pre-feasibility study conducted to assess the technical and commercial viability of extracting a mineral resource before moving into the Development phase (see note 1(q) Development expenditure). The criteria for carrying forward the costs are:

Such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or
evaluation activities in the area of interest which has not yet reached a state which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area are continuing.

Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the abandonment decision is made.

Property, plant and equipment are stated at cost less any accumulated depreciation and any impairment losses.

The cost of an item of property, plant and equipment comprises:

Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates;
Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and,
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

(ii) Depreciation

Depreciation is provided on a straight-line basis on all property, plant and equipment other than land. Major depreciation periods are:

		LIFE	METHOD
	Motor vehicles Ofce equipement	3 years 3 years	Straight line Straight line
	Plant and equipment	Life of mine years	Straight line

(iii) Impairment

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.

(Q) DEVELOPMENT EXPENDITURE

(i) Areas in Development

Areas in development represent the costs incurred in preparing mines for production including the required plant infrastructure. The costs are carried forward to the extent that these costs are expected to be recouped through the successful exploitation of the Company’s mining leases.

(ii) Areas in Production

Areas in production represent the accumulation of all acquired exploration, evaluation and development expenditure incurred by or on behalf of the entity in relation to areas of interest in which economic mining of a mineral reserve has commenced. Amortisation of costs is provided on the unit-of-production method, with separate calculations being made for each mineral resource. The unit-ofproduction basis results in an amortisation charge proportional to the depletion of the economically recoverable mineral reserves.

The net carrying value of each mine property is reviewed regularly and, to the extent to which this value exceeds its recoverable amount, that excess is fully provided against in the financial year in which this is determined.

The recoverable amount of plant and equipment is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(S) LEASES

Finance leases, which effectively transfer to the consolidated entity all of the risks and benefits incidental to ownership of the leased item, are capitalised at the present value of the minimum lease payments, disclosed as leased property, plant and equipment, and amortised over the period the consolidated entity is expected to benefit from the use of the leased assets. Lease payments are allocated between interest expense and reduction in the lease liability.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charges directly against income.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset.

(S) LEASES (CONTINUED)

(V) PAYABLES

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiation of an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as the lease income.

Operating lease payments are recognised as an expense in the consolidated statement of comprehensive income over the lease term.

(T) BUSINESS COMBINATIONS

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured.

(U) RECOVERABLE AMOUNT OF ASSETS

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.

Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to is recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which it belongs.

Liabilities for trade creditors and other amounts are carried at amortised cost which is the amount initially recognised, minus repayments whether or not billed to the consolidated entity.

Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accruals basis.

(W) INTEREST-BEARING LIABILITIES

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest bearing liabilities are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the consolidated statement of comprehensive income when the liabilities are derecognised and as well as through the amortisation process. Treatment of borrowing costs is outlined in note 1(f).

The component of convertible notes that exhibit characteristics of a liability are recognised as a liability in the consolidated statement of financial position, net of transaction costs.

On issuance of the convertible notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond and that amount is carried as a long-term liability on an amortised cost basis until extinguished on conversion or redemption. The accretion of the liability due to the passage of time is recognised as a finance cost.

Compound financial instruments

The remainder of the proceeds received from the issue of the convertible notes are allocated to the conversion option that is recognised and included in shareholders’ equity, net of transaction costs. The carrying amount of the conversion option is not remeasured in subsequent periods.

Interest on the liability component of the instruments is recognised as an expense in the consolidated statement of comprehensive income except for when the borrowing costs are associated with a qualifying asset, in which case the borrowing costs are capitalised and amortised over the useful life of the qualifying asset.

Transaction costs relating to the convertible note issues are apportioned between the liability and equity components of the convertible notes, based on the allocation of proceeds to the liability and equity components when the instruments are first recognised.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(X) PROVISIONS

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

The consolidated entity records the present value of the estimated cost of legal and constructive obligations (such as those under the consolidated entity’s Environmental Policy) to restore operating locations in the period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas.

Typically the obligation arises when the asset is installed at the production location. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the liability is increased for the change in the present value based on the discount rates that reflect the current market assessments and the risks specific to the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred.

(Y) EMPLOYEE BENEFITS

(i) Wages, Salaries and Annual Leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in other creditors in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is measured in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Termination Gratuity and Relocation

Liabilities for Termination Gratuity and Relocation payments are recognised and are measured as the present value of expected future payments to be made in respect of employees up to the reporting date.

(iv) Share based payments

Equity-based compensation benefits are provided to employees via the Group’s share option plan. The Group determines the fair value of options issued to directors, executives and members of staff as remuneration and recognises that amount as an expense in the consolidated statement of comprehensive income over the vesting period with a corresponding increase in equity.

The fair value at grant date is independently determined using a Black Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each consolidated statement of financial position date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

(v) Superannuation

Contributions made by the Group to employee superannuation funds are charged to the consolidated statement of comprehensive income in the period employees’ services are provided.

(Z) CONTRIBUTED EQUITY

Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(AA) FINANCIAL GUARANTEES

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

(AB) SIGNIFICANT ACCOUNTING JUDGEMENTS

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(AB) SIGNIFICANT ACCOUNTING JUDGEMENTS (CONTINUED)

(i) Determination of mineral resources and ore reserves

The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, deferred stripping costs and provisions for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral resources or mineralisation is reported in accordance with the Aus. IMM “Australian Code for reporting of Identified Mineral Resources and Ore Reserves”. The information has been prepared by or under supervision of competent persons as identified by the Code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated.

(AC) SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

(i) Impairment of capitalised mine development expenditure

The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved and probable reserves and measured, indicated and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

(ii) Life-of-mine stripping ratio

The Group has adopted a policy of deferring production stage stripping costs and amortising them in accordance with the life-ofmine strip ratio. Significant judgement is required in determining this ratio for each mine. Factors that are considered include:

Any proposed changes in the design of the mine;
estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;
future production levels;
future commodity prices; and,
future cash costs of production and capital expenditure.

(iii) Provisions for decommissioning and restoration costs

Decommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation. The discount rate used in the calculation of these provisions is consistent with the risk free rate.

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine-sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

(iv) Recoverability of potential deferred income tax assets

The Group recognises deferred income tax assets in respect of tax losses and temporary differences to the extent that it is probable that the future utilisation of these losses and temporary differences is considered probable. Assessing the future utilisation of these losses and temporary differences requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, this could result in significant changes to the deferred income tax assets recognised, which would in turn impact future financial results.

(v) Share based payments

The Group measures the cost of equity settled transactions with employees by reference to the fair value at the grant date using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 31(b).

(vi) Fair value of derivative financial instruments

The Group assesses the fair value of its financial derivatives in accordance with the accounting policy stated in Note 1(n). Fair values have been determined based on well established valuation models and market conditions existing at the reporting date. These calculations require the use of estimates and assumptions. Changes in assumptions concerning interest rates, gold prices and volatilities could have significant impact on the fair valuation attributed to the Group’s financial derivatives. When these assumptions change or become known in the future, such differences will impact asset and liability carrying values in the period in which they change or become known.

(vii) Significant estimate in determining the beginning of production

Considerations are made in the determination of the point at which development ceases and production commences for a mine development project. This point determines the cut-off between pre-production and production accounting.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

(AC) SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS (CONTINUED)

(vii) Significant estimate in determining the beginning of production (continued)

The Group ceases capitalising pre-production costs and begins depreciation and amortisation of mine assets at the point commercial production commences. This is based on the specific circumstances of the project, and considers when the mine’s plant becomes ‘available for use’ as intended by management. Determining when the production start date is achieved is an assessment made by management and includes the following factors:

the level of redevelopment expenditure compared to project cost estimates;
completion of a reasonable period of testing of the mine plant and equipment;
mineral recoveries, availability and throughput levels at or near expected/budgeted levels;
the ability to produce gold into a saleable form (where more than an insignificant amount is produced); and,
the achievement of continuous production.

Any revenues occurring during the pre-production period are capitalised and offset the capitalised development costs.

(AD) NEW ACCOUNTING STANDARDS AND UIG INTERPRETATIONS

(i) From 1 July 2011 the Group has adopted all new and revised Australian Accounting Standards and Interpretations mandatory for reporting periods beginning on or after 1 July 2011, including:

REFERENCE	TITLE	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 124 (Revised)	The revised AASB 124_Related Party Disclosures (December 2009)_simplifes the	1 January 2011	1 July 2011
	defnition of a related party, clarifying its intended meaning and eliminating
	inconsistencies from the defnition, including:
	(a) The defnition now identifes a subsidiary and an associate with the same
	investor as related parties of each other
	(b) Entities signifcantly infuenced by one person and entities signifcantly
	infuenced by a close member of the family of that person are no longer
	related parties of each other
	(c) The defnition now identifes that, whenever a person or entity has both
	joint control over a second entity and joint control or signifcant infuence
	over a third party, the second and third entities are related to each other
	A partial exemption is also provided from the disclosure requirements for
	government-related entities. Entities that are related by virtue of being controlled
	by the same government can provide reduced related party disclosures.
AASB 2009-12	Amendments to Australian Accounting Standards	1 January 2011	1 July 2011
	[AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4,
	16, 1039 & 1052]
	Makes numerous editorial changes to a range of Australian Accounting Standards
	and Interpretations.
	In particular, it amends AASB 8 Operating Segments to require an entity to
	exercise judgement in assessing whether a government and entities known to be
	under the control of that government are considered a single customer for the
	purposes of certain operating segment disclosures. It also makes numerous
	editorial amendments to a range of Australian Accounting Standards and
	Interpretations, including amendments to refect changes made to the text of
	IFRS by the IASB.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	TITLE	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 2010-4	Amendments to Australian Accounting Standards arising from the Annual	1 January 2011	1 July 2011
	Improvements Project
	[AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13]
	Emphasises the interaction between quantitative and qualitative AASB 7
	disclosures and the nature and extent of risks associated with fnancial
	instruments.
	Clarifes that an entity will present an analysis of other comprehensive income for
	each component of equity, either in the statement of changes in equity or in the
	notes to the fnancial statements.
	Provides guidance to illustrate how to apply disclosure principles in AASB 134 for
	signifcant events and transactions.
	Clarifes that when the fair value of award credits is measured based on the value
	of the awards for which they could be redeemed, the amount of discounts or
	incentives otherwise granted to customers not participating in the award credit
	scheme, is to be taken into account.
AASB 2010-5	Amendments to Australian Accounting Standards	1 January 2011	1 July 2011
	[AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 &
	1038 and Interpretations 112, 115, 127, 132 & 1042]
	This Standard makes numerous editorial amendments to a range of Australian
	Accounting Standards and Interpretations, including amendments to refect
	changes made to the text of IFRS by the IASB.
	These amendments have no major impact on the requirements of the amended
	pronouncements.
AASB 1054	Australian Additional Disclosures	1 July 2011	1 July 2011
	This standard is as a consequence of phase 1 of the joint Trans-Tasman
	Convergence project of the AASB and FRSB.
	This standard, with AASB 2011-1 relocates all Australian specifc disclosures from
	other standards to one place and revises disclosures in the following areas:
	(a) Compliance with Australian Accounting Standards
	(b) The statutory basis or reporting framework for fnancial statements
	(c) Whether the entity is a for-proft or not-for-proft entity
	(d) Whether the fnancial statements are general purpose or special purpose
	(e) Audit fees
	(f) Imputation credits
AASB 2010-6	Amendments to Australian Accounting Standards – Disclosures on Transfers of	1 July 2011	1 July 2011
	Financial Assets [AASB 1 & AASB 7]
	The amendments increase the disclosure requirements for transactions involving
	transfers of fnancial assets but which are not derecognised and introduce new
	disclosures for assets that are derecognised but the entity continues to have a
	continuing exposure to the asset after the sale.
AASB 2010-9	Amendments to Australian Accounting Standards – Severe Hyperinfation and	1 July 2011	1 July 2011
	Removal of Fixed Dates for First-time adopters [AASB 1]
	In respect of the removal of fxed dates, the amendments provide relief for
	frst-time adopters of Australian Accounting Standards from having to reconstruct
	transactions that occurred before their date of transition to Australian Accounting
	Standards. The amendments in respect of severe hyperinfation provide guidance
	for entities emerging from severe hyperinfation either to resume presenting
	Australian Accounting Standards fnancial statements or to present Australian
	Accounting Standards fnancial statements for the frst time.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	REFERENCE	TITLE	APPLICATION DATE OF STANDARD	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 2011-5		Amendments to Australian Accounting Standards – Extending Relief from		1 July 2011	1 July 2011
		Consolidation, the Equity Method and Proportionate Consolidation
		[AASB 127, AASB 128 & AASB 131]
		This Standard makes amendments to:
		AASB 127_Consolidated_	and Separate Financial Statements
		AASB 128_Investments in Associates_
		AASB 131_Interests in Joint Ventures_
		to extend the circumstances	in which an entity can obtain relief from
		consolidation, the equity method or proportionate consolidation, and relates
		primarily to those applying the reduced disclosure regime or not-for-proft
		entities.
*	The new	and revised accounting standards have no impact on the Group’s fnancial report.
(ii)	The following new accounting standards have been issued or amended but are not yet efective. These			standards have not been adopted
	by the Group for the period ended 30 June		2012:
REFERENCE		TITLE	SUMMARY	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
2010-8		Amendments to Australian	These amendments address the determination of deferred	1 Jan 2012	1 July 2012
		Accounting Standards –	tax on investment property measured at fair value and		**
		Deferred Tax: Recovery of	introduce a rebuttable presumption that deferred tax on
		Underlying Assets	investment property measured at fair value should be
		[AASB 112]	determined on the basis that the carrying amount will be recoverable through sale. The amendments also incorporate
			SIC-21 Income Taxes – Recovery of Revalued Non-
			_Depreciable Assets_into AASB 112.
AASB 2011-3		Amendments to Australian	This Standard makes amendments including clarifying the	1 July 2012	1 July 2012
		Accounting Standards – Orderly	defnition of the ABS GFS Manual, facilitating the orderly		**
		Adoption of Changes to the	adoption of changes to the ABS GFS Manual and related
		ABS GFS Manual and Related	disclosures to AASB 1049.
		Amendments
		[AASB 1049]	Amendments to Australian Accounting Standards – Improvements to AASB 1049 can be found in AASB 2011-13.
AASB 2011-9		Amendments to Australian	This Standard requires entities to group items presented in	1 July 2012	1 July 2012
		Accounting Standards – Presentation of Other	other comprehensive income on the basis of whether they might be reclassifed subsequently to proft or loss and		**
		Comprehensive Income	those that will not.
		[AASB 1, 5, 7, 101, 112, 120, 121,
		132, 133, 134, 1039 & 1049]
AASB 10		Consolidated Financial	AASB 10 establishes a new control model that applies to all	1 January 2013	1 July 2013
		Statements	entities. It replaces parts of AASB 127_Consolidated and_
			_Separate Financial Statements_dealing with the accounting
			for consolidated fnancial statements and UIG-112
			Consolidation – Special Purpose Entities.
			The new control model broadens the situations when an
			entity is considered to be controlled by another entity and
			includes new guidance for applying the model to specifc
			situations, including when acting as a manager may give
			control, the impact of potential voting rights and when
			holding less than a majority voting rights may give control.
			Consequential amendments were also made to other
			standards via AASB 2011-7.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	TITLE	SUMMARY	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 11	Joint Arrangements	AASB 11 replaces AASB 131_Interests in Joint Ventures_and	1 January 2013	1 July 2013
		UIG-113_Jointly- controlled Entities – Non-monetary_
		Contributions by Ventures. AASB 11 uses the principle of
		control in AASB 10 to defne joint control, and therefore the
		determination of whether joint control exists may change.
		In addition it removes the option to account for jointly
		controlled entities (JCEs) using proportionate consolidation.
		Instead, accounting for a joint arrangement is dependent on
		the nature of the rights and obligations arising from the
		arrangement. Joint operations that give the venturers a right
		to the underlying assets and obligations themselves is
		accounted for by recognising the share of those assets and
		obligations. Joint ventures that give the venturers a right to
		the net assets is accounted for using the equity method.
		Consequential amendments were also made to other
		standards via AASB 2011-7 and amendments to AASB 128.
AASB 12	Disclosure of Interests in Other	AASB 12 includes all disclosures relating to an entity’s	1 January 2013	1 July 2013
	Entities	interests in subsidiaries, joint arrangements, associates and
		structures entities. New disclosures have been introduced
		about the judgments made by management to determine
		whether control exists, and to require summarised
		information about joint arrangements, associates and
		structured entities and subsidiaries with non-controlling
		interests.
AASB 13	Fair Value Measurement	AASB 13 establishes a single source of guidance for	1 January 2013	1 July 2013
		determining the fair value of assets and liabilities. AASB 13
		does not change when an entity is required to use fair value,
		but rather, provides guidance on how to determine fair value
		when fair value is required or permitted. Application of this
		defnition may result in diferent fair values being determined
		for the relevant assets.
		AASB 13 also expands the disclosure requirements for all
		assets or liabilities carried at fair value. This includes
		information about the assumptions made and the qualitative
		impact of those assumptions on the fair value determined.
		Consequential amendments were also made to other
		standards via AASB 2011-8.
AASB 119	Employee Benefts	The main change introduced by this standard is to revise the	1 January 2013	1 July 2013
		accounting for defned beneft plans. The amendment
		removes the options for accounting for the liability, and
		requires that the liabilities arising from such plans is
		recognized in full with actuarial gains and losses being
		recognized in other comprehensive income. It also revised
		the method of calculating the return on plan assets.
		The revised standard changes the defnition of short-term
		employee benefts. The distinction between short-term and
		other long-term employee benefts is now based on
		whether the benefts are expected to be settled wholly
		within 12 months after the reporting date.
		Consequential amendments were also made to other
		standards via AASB 2011-10.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	TITLE	SUMMARY	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
Interpretation	Stripping Costs in the	This interpretation applies to stripping costs incurred during	1 January 2013	1 July 2013
20	Production Phase of a Surface	the production phase of a surface mine. Production
	Mine	stripping costs are to be capitalised as part of an asset, if an
		entity can demonstrate that it is probable future economic
		benefts will be realised, the costs can be reliably measured
		and the entity can identify the component of an ore body
		for which access has been improved. This asset is to be
		called the “stripping activity asset”.
		The stripping activity asset shall be depreciated or amortised
		on a systematic basis, over the expected useful life of the
		identifed component of the ore body that becomes more
		accessible as a result of the stripping activity. The units of
		production method shall be applied unless another method
		is more appropriate.
		Consequential amendments were also made to other
		standards via AASB 2011-12.
Annual	Annual Improvements to IFRSs	This standard sets out amendments to International	1 January 2013	1 July 2013
Improvements	2009–2011 Cycle	Financial Reporting Standards (IFRSs) and the related bases
2009–2011 Cycle		for conclusions and guidance made during the International Accounting Standards Board’s Annual Improvements process. These amendments have not yet been adopted
		by the AASB.
		The following items are addressed by this standard:
		IFRS 1 First-time Adoption of International Financial
		Reporting Standards
		• Repeated application of IFRS 1
		• Borrowing costs
		IAS 1 Presentation of Financial Statements
		• Clarifcation of the requirements for comparative
		information
		IAS 16 Property, Plant and Equipment
		• Classifcation of servicing equipment
		IAS 32 Financial Instruments: Presentation
		• Tax efect of distribution to holders of equity
		instruments
		IAS 34 Interim Financial Reporting
		• Interim fnancial reporting and segment information
		for total assets and liabilities
AASB 2011-4	Amendments to Australian	This Amendment deletes from AASB 124 individual key	1 July 2013	1 July 2013
	Accounting Standards to	management personnel disclosure requirements for
	Remove Individual Key	disclosing entities that are not companies.
	Management Personnel
	Disclosure Requirements
	[AASB 124]

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	TITLE	SUMMARY	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 1053	Application of Tiers of	This Standard establishes a diferential fnancial reporting	1 July 2013	1 July 2013
	Australian Accounting Standards	framework consisting of two Tiers of reporting requirements
		for preparing general purpose fnancial statements:
		(a) Tier 1: Australian Accounting Standards
		(b) Tier 2: Australian Accounting Standards – Reduced
		Disclosure Requirements
		Tier 2 comprises the recognition, measurement and
		presentation requirements of Tier 1 and substantially
		reduced disclosures corresponding to those requirements.
		The following entities apply Tier 1 requirements in preparing
		general purpose fnancial statements:
		(a) For-proft entities in the private sector that have public
		accountability (as defned in this Standard)
		(b) The Australian Government and State, Territory and
		Local Governments
		The following entities apply either Tier 2 or Tier 1
		requirements in preparing general purpose fnancial
		statements:
		(a) For-proft private sector entities that do not have
		public accountability
		(b) All not-for-proft private sector entities
		(c) Public sector entities other than the Australian
		Government and State, Territory and Local
		Governments.
		Consequential amendments to other standards to
		implement the regime were introduced by AASB 2010-2,
		2011-2, 2011-6, 2011-11 and 2012-1.
AASB 2012-2	Amendments to Australian	AASB 2012-2 principally amends AASB 7 Financial	1 January 2013	1 July 2013
	Accounting Standards –	Instruments: Disclosures to require disclosure of information
	Disclosures – Ofsetting	that will enable users of an entity’s fnancial statements to
	Financial Assets and Financial	evaluate the efect or potential efect of netting
	Liabilities	arrangements, including rights of set-of associated with the
		entity’s recognised fnancial assets and recognised fnancial
		liabilities, on the entity’s fnancial position.
AASB 2012-5	Amendments to Australian	AASB 2012-5 makes amendments resulting from the	1 January 2013	1 July 2013
	Accounting Standards arising	2009-2011 Annual Improvements Cycle. The Standard
	from Annual Improvements	addresses a range of improvements, including the following:
	2009–2011 Cycle; and	• repeat application of AASB 1 is permitted (AASB 1); and
		• clarifcation of the comparative information
		requirements when an entity provides a third balance
		sheet (AASB 101 Presentation of Financial Statements).
AASB 2012-3	Amendments to Australian	AASB 2012-3 adds application guidance to AASB 132	1 January 2014	1 July 2015
	Accounting Standards –	Financial Instruments: Presentation to address
	Ofsetting Financial Assets and	inconsistencies identifed in applying some of the ofsetting
	Financial Liabilities;	criteria of AASB 132, including clarifying the meaning of
		“currently has a legally enforceable right of set-of” and that
		some gross settlement systems may be considered
		equivalent to net settlement.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 1: Basis of preparation and summary of significant accounting policies (continued)

REFERENCE	TITLE	SUMMARY	APPLICATION DATE OF STANDARD	APPLICATION DATE FOR GROUP*
AASB 9	Financial Instruments	AASB 9 includes requirements for the classifcation and	1 January 2015	1 July 2015
		measurement of fnancial assets. It was further amended by
		AASB 2010-7 to refect amendments to the accounting for
		fnancial liabilities.
		These requirements improve and simplify the approach for
		classifcation and measurement of fnancial assets compared
		with the requirements of AASB 139. The main changes are
		described below.
		(a) Financial assets that are debt instruments will be
		classifed based on (1) the objective of the entity’s
		business model for managing the fnancial assets; (2)
		the characteristics of the contractual cash fows.
		(b) Allows an irrevocable election on initial recognition to
		present gains and losses on investments in equity
		instruments that are not held for trading in other
		comprehensive income. Dividends in respect of these
		investments that are a return on investment can be
		recognised in proft or loss and there is no impairment
		or recycling on disposal of the instrument.
		(c) Financial assets can be designated and measured at
		fair value through proft or loss at initial recognition if
		doing so eliminates or signifcantly reduces a
		measurement or recognition inconsistency that would
		arise from measuring assets or liabilities, or recognising
		the gains and losses on them, on diferent bases.
		(d) Where the fair value option is used for fnancial
		liabilities the change in fair value is to be accounted for
		as follows:
		 The change attributable to changes in credit
		risk are presented in other comprehensive
		income (OCI)
		 The remaining change is presented in proft
		or loss
		If this approach creates or enlarges an accounting mismatch
		in the proft or loss, the efect of the changes in credit risk
		are also presented in proft or loss.
		Consequential amendments were also made to other
		standards as a result of AASB 9, introduced by AASB
		2009-11 and superseded by AASB 2010-7 and 2010-10.

The impact of the adoption of these new and revised standards and interpretations has not been determined by the Company.
** These standards are effective from 1 July 2012 however have no impact on the financial report.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 2: Profit from continuing operations

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CONSOLIDATED
12 11
$'000 $’000
(A) REVENUE FROM GOLD SALES
Gold sales at spot price 576,710 462,911
Realised loss on gold forward contracts - (17,856)
576,710 445,055
(B) COSTS OF PRODUCTION RELATING TO GOLD SALES
Costs of production (excluding gold in circuit inventories movement) 303,104 300,342
Gold in circuit inventories movement (40,931) (6,843)
262,173 293,499
(C) DEPRECIATION AND AMORTISATION RELATING TO GOLD SALES
Amortisation of evaluation, development and rehabilitation costs 36,342 23,712
Depreciation of mine site properties, plant and equipment 36,879 38,679
73,221 62,391
(D) OTHER OPERATING COSTS RELATING TO GOLD SALES
Royalty expense 28,676 19,541
Operational support costs 4,284 3,735
Write-off of obsolete spares and consumables 2,116 -
35,076 23,276
(E) OTHER REVENUE
Interest income - other persons/corporations 1,504 329
1,504 329
(F) OTHER INCOME
Rehabilitation provision adjustment from non operating mine sites 258 1,073
Profit on sale of property, plant and equipment - 139
Other 87 104
345 1,316
(G) ADMINISTRATION AND OTHER EXPENSES
Other management and administration expenses 5,151 4,379
Non mine site insurance costs 619 714
Operating lease expenses 821 770
Share based payments expense 1,390 1,215
Depreciation of non mine site assets 196 250
8,177 7,328
Loss on sale of property, plant and equipment 196 -
Impairment of investment in associate 1,584 -
Impairment of accounts receivable 1,201 1,361
Other 586 1,068
3,567 2,429
11,744 9,757
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 2: Profit from continuing operations (continued)

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CONSOLIDATED
12 11
$'000 $’000
(H) TREASURY - REALISED GAINS/(LOSSES)
Realised loss on gold put options (4,014) (3,909)
Realised foreign exchange gain/(loss) 3,839 (665)
(175) (4,574)
(I) TREASURY - UNREALISED (LOSSES)/GAINS
Unrealised gain on gold put options 4,002 2,930
Unrealised gain on financial derivative assets 2,364 -
Unrealised foreign exchange (loss)/gain (4,622) 7,991
Unrealised foreign exchange loss on loans with subsidiaries (i) (44,938) (10,191)
(43,194) 730
i) Due to an accounting standard requirement the unrealised gains and losses on intercompany
balances between entities in the Group are taken directly to the Group’s profit or loss.
(J) FINANCE COSTS
Interest and fees paid/payable to other entities 10,445 18,612
Rehabilitation provision discount adjustment 1,525 985
11,970 19,597
(K) EMPLOYEE BENEFITS
Salaries 44,909 44,090
Superannuation 2,866 2,545
Share based payments expense 1,390 1,215
49,165 47,850
Note 3: Income tax
(A) INCOME TAX EXPENSE ATTRIBUTABLE TO CONTINUING OPERATIONS
Current tax expense 19,355 15,962
Deferred tax expense/(benefit) 1,251 (1,127)
Income tax expense attributable to profit from continuing operations 20,606 14,835
Witholding tax 1,965 1,787
Total tax expense 22,571 16,622
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 3: Income tax (continued)

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----- Start of picture text -----

CONSOLIDATED
12 11
$'000 $’000
(B) NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX EXPENSE
Profit from continuing operations before income tax expense 124,430 59,552
Withholding tax (1,965) (1,787)
Profit from continuing operations including withholding tax before income tax expense 122,465 57,765
Prima facie income tax expense at 30% (2011: 30%) 36,739 17,330
Add/(deduct):
- tax losses and other temporary differences recognised to offset deferred tax liabilities (14,921) (3,603)
- effect of share based payments expense not deductible 417 365
- prior year over provision (2,160) -
- other 531 743
Income tax expense attributable to net profit 20,606 14,835
(C) AMOUNTS RECOGNISED DIRECTLY IN EQUITY
Amounts credited directly to equity (1,942) (222)
Refer to 3(h) for the composition of deferred tax balances in equity.
(D) TAX LOSSES (TAX EFFECTED)
- Revenue losses
Australia 67,052 78,774
Tanzania 632 -
Mali 50,611 59,470
Other 534 327
118,829 138,571
- Capital losses
Australia 38,872 38,723
Total tax losses not used against deferred tax liabilities for which no deferred tax asset has been
recognised (potential tax benefit at the prevailing tax rates of the respective jurisdictions) 157,701 177,294
----- End of picture text -----*

Pursuant to the Establishment Convention between the State of Mali and Societe des Mines de Syama S.A. (owner of the Syama gold mine), there is an income tax holiday for 5 years post the declaration of “first commercial production” at Syama, which commenced on 1 January 2012.

A deferred income tax asset has not been recognised for these amounts at reporting date as realisation of the benefit is not regarded as probable. The future benefit will only be obtained if:

(i) future assessable income is derived of a nature and an amount sufficient to enable the benefit to be realised;

(ii) the conditions for deductibility imposed by tax legislation continue to be complied with; and,

(iii) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.

(E) UNRECOGNISED TEMPORARY DIFFERENCES

As at 30 June 2012, aggregate unrecognised temporary differences of $2.381m (2011: $7.062m) are in respect of investments in foreign controlled entities for which no deferred tax liabilities have been recognised for amounts which arise upon translation of their financial statements.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 3: Income tax (continued)

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CONSOLIDATED
12 11
$'000 $’000
(F) MOVEMENTS IN THE DEFERRED TAX ASSETS BALANCE
Balance at the beginning of the year - -
Credited to equity 1,942 222
Charged to the income statement (1,942) (222)
Balance as at the end of the year - -
The deferred tax assets balance comprises temporary differences attributable to:
Receivables 6,902 1,119
Other financial assets 238 133
Available for sale financial assets 1,178 317
Property, plant and equipment 1,170 2,274
Interest bearing liabilities 47,693 34,409
Provisions 14,412 11,917
Other 18 15
Tax losses recognised (i) 10,850 15,435
Temporary differences not recognised (42,804) (31,876)
39,657 33,743
Set off of deferred tax liabilities pursuant to set off provisions (39,657) (33,743)
Net deferred tax assets - -
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(i) This amount includes tax losses recognised against deferred tax liabilities in foreign entities of $1.353m (2011: $1.458m).

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 3: Income tax (continued)

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----- Start of picture text -----

CONSOLIDATED
12 11
$'000 $’000
(G) MOVEMENTS IN THE DEFERRED TAX LIABILITIES BALANCE
Balance at the beginning of the year 1,125 3,049
Credited to the income statement (696) (1,349)
Foreign exchange 57 (575)
Balance as at the end of the year 486 1,125
The deferred tax liabilities balance comprises temporary differences attributable to:
Receivables 7,181 4,898
Mineral exploration and development interests 25,816 20,589
Property, plant and equipment 919 1,724
Financial derivative assets 709 3
Interest bearing liabilties 5,378 7,272
Payables 140 382
40,143 34,868
Set off of deferred tax liabilities pursuant to set off provisions (39,657) (33,743)
Net deferred tax liabilities 486 1,125
(H) THE EQUITY BALANCE COMPRISES TEMPORARY DIFFERENCES ATTRIBUTABLE TO:
Convertible notes equity reserve - 1,922
Option equity reserve 2,568 2,568
Unrealised gain/(loss) reserve - 48
Other 28 -
Net temporary differences in equity 2,596 4,538
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(I) TAX CONSOLIDATION

Resolute Mining Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation on 1 July 2002. On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement, which limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, Resolute Mining Limited.

The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Resolute Mining Limited for any current tax payable assumed and are compensated by Resolute Mining Limited for any current tax receivable. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial statements. The head entity and controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

The amount receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The tax funding agreement requires payments to/from the head entity to be recognised via an inter-entity receivable/payable which is at call.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 4: Dividends paid or provided for

The directors have resolved to make a 5 cent distribution to shareholders including a fully franked component of 2.7 cents per share. The payment is expected to occur by December 2012.

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CONSOLIDATED
12 11
$'000 $’000
The amount of franking credits available for subsequent financial years is as follows.
The amount has been determined using a tax rate of 30%. 7,417 7,417
Note 5: Cash
Cash at bank and on hand 8,404 11,213
Short-term deposits 40,000 -
48,404 11,213
Cash at bank earns interest at floating rates based on bank deposit rates.
Reconciliation to cash flow statement
For the purpose of the cash flow statement, cash and cash equivalents comprise the following
at 30 June:
Cash at bank and on hand 8,404 11,213
Short-term deposits 40,000 -
Bank overdraft (Note 18) (5,262) (7,542)
43,142 3,671
Short-term deposits are made for varying periods depending on the immediate cash requirements
of the Group, and earn interest at the respective short term deposit rates.
The fair value of cash and cash equivalents is equal to their book value.
Note 6: Other financial assets
CURRENT
Restricted cash (note 36) 42,267 -
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Restricted cash is held as security against a liquid investment. Amounts can be withdrawn on a 7 business day notice period, following sale of part or all of the underlying liquid investment.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 7: Receivables

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CONSOLIDATED
12 11
$'000 $’000
CURRENT
Sundry debtors (a) 6,794 4,940
Allowance for impairment loss (837) (907)
5,957 4,033
NON-CURRENT
Sundry debtors 7,174 7,500
Allowance for impairment loss (5,031) (3,731)
2,143 3,769
a) Current sundry debtors are non interest bearing and are generally on 30-60 day terms.
A provision for doubtful debt is recognised when there is objective evidence that the Group
may not be able to collect all amounts due according to original terms of the transaction.
Receivables past due but not considered impaired are $4.852m (2011: $3.245m). Payment terms
on these amounts have not been re-negotiated, however the Group maintains direct contact
with the relevant debtor and is satisfied that payment will be received in full.
Movements in the allowance for impairment losses were as follows:
At start of year (4,638) (4,844)
Charge for the year (1,201) (1,355)
Amount reversed - 890
Foreign exchange translation (29) 671
At end of year (5,868) (4,638)
As at 30 June 2012, the aging analysis of current and non-current sundry debtors is as follows:
0-30 days 3,006 4,165
31-60 days 242 392
61-90 days (Past due but not impaired) 136 130
+91 days (Past due but not impaired) 4,716 3,115
+91 days (Considered impaired) 5,868 4,638
Total 13,968 12,440
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 8: Inventories

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CONSOLIDATED
12 11
$'000 $’000
Gold in circuit and gold bullion
- At cost 69,593 10,530
- At net realisable value - 19,670
Total gold in circuit 69,593 30,200
Consumables at cost 43,834 44,186
Ore stockpiles
- At cost 22,194 14,914
- At net realisable value 6,280 7,164
Total ore stockpiles 28,474 22,078
141,901 96,464
Inventory recognised as an expense within costs of gold production for the year ended 30 June 2012
totalled $61.849m (2011: $94.041m) for the Group.
Note 9: Available for sale financial assets
Shares at fair value - listed 374 692
Available for sale financial assets consist of investments in ordinary shares, and therefore have no
maturity date or coupon rate. Refer to Note 36(f) for information on the determination of fair value.
Note 10: Financial derivative assets
CURRENT
Financial derivative assets (Note 36) 2,364 11
Note 11: Other assets
CURRENT
Prepayments 4,567 3,270
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 12: Exploration and evaluation expenditure

The consolidated entity has the following gold mineral exploration and evaluation expenditure carried forward in respect of areas of interest:

CONSOLIDATED

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12 11
$'000 $’000
Areas in exploration and evaluation (at cost)
Balance at the beginning of the year 9,045 10,970
- Expenditure during the year 271 -
- Impaired during the year (45) (362)
- Foreign currency translation 251 (1,563)
Balance at the end of the year 9,522 9,045
Ultimate recoupment of costs carried forward, in respect of areas of interest in the exploration and
evaluation phase, is dependent upon the successful development and commercial exploitation, or
alternatively the sale of the respective areas at an amount at least equivalent to the carrying value.
For areas which do not meet the criteria of the accounting policy per Note 1(p), those amounts are
charged to the consolidated statement of comprehensive income.
Note 13: Development expenditure
Areas in production (at cost)
Balance at the beginning of the year 219,329 231,030
- Additions 28,036 9,443
- Transfers to income statement (119) -
- Transfer to other monetary assets and liabilities (1,437) (58)
- Amount amortised during the year (38,023) (24,622)
- Adjustments to rehabilitation obligations 11,973 14,678
- Foreign currency translation (11,216) (11,142)
Balance at the end of the year 208,543 219,329
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

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Note 14: Property, plant & equipment
CONSOLIDATED
BUILDINGS PLANT & MOTOR OFFICE PLANT AND TOTAL
EQUIPMENT VEHICLES EQUIPMENT EQUIPMENT
12 UNDER LEASE
$’000 $’000 $’000 $’000 $’000 $’000
At 1 July 2011 net of accumulated
depreciation 5,206 172,658 2,433 2,235 8,346 190,878
Additions 11 21,907 83 436 1,975 24,412
Disposals - (191) - (5) - (196)
Depreciation expense (1,126) (30,467) (1,099) (1,113) (3,270) (37,075)
Foreign currency translation (227) (10,218) (93) (93) - (10,631)
At 30 June 2012 net of
accumulated depreciation 3,864 153,689 1,324 1,460 7,051 167,388
Cost 10,246 290,741 5,083 4,495 21,343 331,908
Accumulated depreciation (6,382) (137,052) (3,759) (3,035) (14,292) (164,520)
Net carrying amount 3,864 153,689 1,324 1,460 7,051 167,388
11
At 1 July 2010 net of
accumulated depreciation 6,669 204,023 3,158 3,368 4,056 221,274
Additions 196 12,701 526 212 6,851 20,486
Depreciation expense (1,247) (32,903) (1,060) (1,158) (2,561) (38,929)
Foreign currency translation (412) (11,163) (191) (187) - (11,953)
At 30 June 2011 net of
accumulated depreciation 5,206 172,658 2,433 2,235 8,346 190,878
Cost 10,404 281,323 5,223 4,839 19,368 321,157
Accumulated depreciation (5,198) (108,665) (2,790) (2,604) (11,022) (130,279)
Net carrying amount 5,206 172,658 2,433 2,235 8,346 190,878
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Note 15: Deferred mining costs

Note 15: Deferred mining costs
	CONSOLIDATED
	12	11
	$'000	$’000
Deferred mining costs	28,229	20,585

These costs represent prepaid mining expenses deferred in accordance with the accounting policy referred in Note 1(o).

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 16: Investment in associate

CONSOLIDATED

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12 11
$'000 $’000
(A) INVESTMENT DETAILS
Listed
Viking Ashanti Limited 2,223 5,092
The Group holds 23 million shares (2011: 23 million) in Viking Ashanti Limited
which represents 33.25% (2011: 33.25%) of their ordinary shares on issue.
(B) MOVEMENTS IN THE CARRYING AMOUNT OF THE GROUP'S INVESTMENT IN ASSOCIATE
Viking Ashanti Limited
At 1 July 5,092 5,892
Share of loss after income tax (1,285) (800)
Impairment of investment (1,584) -
At 30 June 2,223 5,092
(C) FAIR VALUE OF INVESTMENT IN LISTED ASSOCIATE
The market value of the Group's investment in Viking Ashanti Limited is $2.760m (2011: $3.220m).
(D) SUMMARISED FINANCIAL INFORMATION
The following table illustrates summarised financial information relating to the Group's associate:
Extract from the associate's statement of financial position
Current assets 653 4,230
Non-current assets 6,419 6,435
Total assets 7,072 10,665
Current liabilities 477 456
Non-current liabilities - -
Total liabilities 477 456
Net assets 6,595 10,121
Share of associates' net assets 2,193 3,365
Extract from the associate's statement of comprehensive income:
Revenue - -
Total comprehensive loss (3,741) (3,632)
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 17: Payables

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CONSOLIDATED
12 11
$'000 $’000
CURRENT
Trade creditors and accruals (a) 42,948 47,433
(a) Payables are non-interest bearing and generally settled on 30-90 day terms. Due to the short
term nature of these payables, their carrying value is assumed to approximate their fair value.
Note 18: Interest bearing liabilities
CURRENT
Lease liabilities (a) 2,616 3,353
Borrowings (b) - 12,644
Bank overdraft (d) 5,262 7,542
7,878 23,539
NON-CURRENT
Lease liabilities (a) 3,142 4,189
Borrowings (b) - 11,223
Convertible notes (c) - 62,929
3,142 78,341
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(a) Carpentaria Gold Pty Ltd (“CGPL”), a wholly owned subsidiary of RML, has entered into hire purchase agreements with Esanda Finance Corporation Limited, Atlas Copco Customer Finance Pty Ltd and the Commonwealth Bank of Australia for the purchase of mining equipment which is being used at Mt Wright, Ravenswood. Monthly instalments are required under the terms of the contracts which expire between July 2011 and July 2014. RML has provided an unsecured parent entity guarantee to these financiers in relation to some of these finance facilities.
(b) During the year ended 30 June the remaining balance of the Barclays/Investec Senior Debt facility of $20.923m (US22.425m) was repaid in full with the final repayment made on 30 December 2011.
A $5.000m Environmental Bond facility provided by Barclays Bank Plc is secured by the following:
(i) Cross Guarantee and Indemnity given by RML, Carpentaria Gold Pty Ltd, Resolute (Tanzania) Limited, Mabangu Mining Limited, Resolute Pty Ltd, Resolute (Treasury) Pty Ltd and Resolute (Somisy) Limited;
(ii) fixed and floating charge over all the current and future assets of Resolute (Tanzania) Limited including onshore and offshore bank accounts and shares of Mabangu Mining Ltd;
(iii) fixed and floating charge over all the current and future assets of Mabangu Mining Limited including onshore and offshore bank accounts;
(iv) mortgage over mining lease ML 19/97 of the Resolute (Tanzania) Limited group of companies;
(v) mortgage over prospecting licences PL 1461/2000, PL 1462/2000, PL 1732/2001, PL 347/95, PL 1833/2001, PL 1890/2002, PL 1891/2002 and PL 1892/2002 of Resolute (Tanzania) Limited;
(vi) share Mortgage by Resolute Pty Ltd over all of its shares in Resolute (Tanzania) Limited;
(vii) share Mortgage by the Borrower over all of its shares in Carpentaria Gold Pty Ltd;
(viii) share Mortgage by the Borrower over all of its shares in Resolute (Somisy) Limited;
(ix) fixed and floating charge over all the current and future assets of Resolute (Treasury) Pty Ltd including bank accounts and an assignment of all Hedging Contracts;
(x) fixed and floating charges over all the current and future assets of Carpentaria Gold Pty Ltd including bank accounts and an assignment of all Hedging Contracts;

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 18: Interest bearing liabilities (continued)

(xi) mortgage over key Carpentaria Gold Pty Ltd mining tenements, and
(xii) caveat over Carpentaria Gold Pty Ltd’s Exploration permits for Minerals 14778, 15098, 15099, 16203, 16204 and 16847; and
(xiii) mortgage over the $407.594m (2011: $436.601m) loan receivable from Societe des Mines de Syama SA.
(c) During the year 136,670,429 convertible notes were converted into ordinary shares resulting in a reduction in convertible note debt of $64.663m. This amount was transferred into contributed equity, along with the associated equity reserves of $13.764m.
The convertible notes were on issue at a price of $0.50 each. Subscribers also received one free option for every 3 convertible notes taken up under this offer. The average effective interest rate on these convertible notes for accounting purposes was 17.48%. A portion of the funds raised pursuant to the issue were recognised in the Convertible Notes Equity Reserves.
The notes were unsecured and subordinated to the senior credit facilities, and had a coupon rate of 12% on the $0.50 face value and were convertible into ordinary shares, one for one, at the option of the holder up until 31 December 2012 or repayable by the Company on 31 December 2012. The Company had the right to redeem the notes from 31 December 2011 by paying $0.50 per note to the note holders, and in this event, the note holder had the right to convert their notes into ordinary shares on a one for one basis prior to them being redeemed. Full terms and conditions of the convertible notes can be found in the Convertible Note Trust Deed.
The total assets of the entities over which security exists amounts to A$978.911m, of these assets $167.118m relates to property plant and equipment.
The following debt ratios are required to be maintained:
(i) A debt service cover ratio of not less than 1.35:1;
(ii) a loan life cover ratio of not less than 1.65:1; and,
(iii) a reserve tail ratio of not less than 30%.
There have been no breaches of the above ratios.
Refer to Note 36(b) for details of average interest rates.
(d) This facility is in place and is subject to an annual revision in approximately December 2012, and has an interest rate of 8% per annum on the basis of usage. The maximum limit of this facility is $9.510m (AUD equivalent), and as at reporting date $4.248m (AUD equivalent) of the facility was unused.

Note 19: Financial liabilities

CONSOLIDATED

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12 11
$'000 $’000
CURRENT
Financial liabilities (a) - 18,910
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(a) During the year the remaining balance of the Barclays/Investec Hedging Credit facility of $18.910m was repaid in full, with the final repayment being made on 30 September 2011.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 20: Provisions

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CONSOLIDATED
12 11
$'000 $’000
CURRENT
Site restoration (a) 5,174 5,341
Employee entitlements 11,662 6,197
Dividend payable 68 68
Withholding taxes 3,575 1,800
Other provisions 1,094 1,049
21,573 14,455
NON CURRENT
Site restoration (a) 44,727 37,236
Employee entitlements 756 764
45,483 38,000
(A) SITE RESTORATION
Balance at the beginning of the year 42,577 33,422
Restoration borrowing cost unwound 1,525 985
Change in scope of restoration provision 11,709 13,587
Utilised during the year (5,407) (2,980)
Foreign exchange translation (503) (2,437)
Balance at the end of the year 49,901 42,577
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The nature of restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas.

Typically the obligation arises when the asset is installed at the production location. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the liability is increased for the change in present value based on the discount rates that reflect the current market assessments and the risks specific to the liability. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 21: Contributed equity

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CONSOLIDATED
12 11
$'000 $’000
(A) CONTRIBUTED EQUITY
Ordinary share capital: 368,047 287,125
635,928,623 ordinary fully paid shares (2011: 467,638,948)
(B) MOVEMENTS IN CONTRIBUTED EQUITY, NET OF ISSUING COSTS
Balance at the beginning of the year 287,125 237,083
Transfer convertible note equity reserves to share capital 9,346 -
Exercise of 50,962,416 listed options at $0.60 per share 30,577 -
Exercise of 163,334 unlisted options at $0.42 per share 69 -
Exercise of 138,334 unlisted options at $1.09 per share 153 -
Exercise of 18,000 unlisted options at $1.21 per share 22 -
Exercise of 125,000 unlisted options at $1.32 per share 165 -
Exercise of 40,001 unlisted options at $1.43 per share 55 -
Exercise of 500,000 unlisted options at $0.74 per share 370 -
Exercise of 500,000 unlisted options at $1.00 per share 500 -
Conversion of 136,670,429 convertible notes to shares at $0.50 per share 70,937 -
On market buy-back of 20,827,839 shares at an average price of $1.50 per share (31,272) -
Conversion of 14,289,793 convertible notes to shares at $0.50 per share - 6,833
Exercise of 359,001 unlisted options at $0.42 per share - 151
Exercise of 44,917,993 listed options at $0.60 per share - 25,015
Exercise of 55,000 unlisted options at $1.12 per share - 62
Exercise of 65,000 unlisted options at $1.09 per share - 71
Issue of 3,603,264 shares to Convertible Note holders in lieu of interest payable at $1.24 per share - 4,446
Placement of 11,762,463 shares at $1.24 per share - 13,464
Balance at the end of the year 368,047 287,125
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(C) TERMS AND CONDITIONS OF CONTRIBUTED EQUITY

Ordinary shares have the right to receive dividends as declared and in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

(D) EMPLOYEE SHARE OPTIONS

Refer to Note 31 for details of the Employee Share Option Plan. Each option entitles the holder to purchase one share. The names of all persons who currently hold employee share options, granted at any time, are entered into the register kept by the Company, pursuant to Section 215 of the Corporations Act 2001. Persons entitled to exercise these options have no right, by virtue of the options, to participate in any share issue by the parent entity or any other body corporate.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 21: Contributed equity (continued)

(E) CAPITAL MANAGEMENT

The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure that is appropriate for the Group’s current and/or projected financial position.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders (if any), return capital to shareholders, buy back its shares, issue new shares, borrow from financiers or sell assets to reduce debt.

The Group monitors the adequacy of capital by analysing cash flow forecasts over the term of the Life of Mine for each of its projects. To a lesser extent, gearing ratios are also used to monitor capital. Appropriate capital levels are maintained to ensure that all approved expenditure programs are adequately funded. This funding is derived from an appropriate combination of debt and equity.

The gearing ratio is calculated as net debt divided by total capital. Net debt is defined as interest bearing liabilities less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the Consolidated statement of financial position (including non-controlling interest) plus net debt.

debt.
	CONSOLIDATED
	12	11
	$'000	$’000
Gearing ratio	nil	25%

The Group is not subject to any externally imposed capital requirements.

Note 22: Reserves

(A) MOVEMENTS IN RESERVES

(A) MOVEMENTS IN RESERVES
CONSOLIDATED	FOREIGN	UNREALISED	EMPLOYEE	CONVERTIBLE	SHARE OPTIONS	TOTAL
	CURRENCY	GAIN/(LOSS)	EQUITY BENEFITS	NOTES EQUITY	EQUITY RESERVE
	TRANSLATION	RESERVE	RESERVE	RESERVE
	RESERVE
	$’000	$’000	$’000	$’000	$’000	$’000
As at 1 July 2010	285	164	2,021	14,233	5,987	22,690
Currency translation diferences	(23,826)	-	-	-	-	(23,826)
Unrealised gain/(loss) reserve, net of tax	-	(52)	-	-	-	(52)
Share based payments to employees	-	-	1,215	-	-	1,215
Value of options issued to convertible note
and share holders, net of tax	-	-	-	(469)	-	(469)
As at 30 June 2011	(23,541)	112	3,236	13,764	5,987	(442)
Currency translation diferences	15,604	-	-	-	-	15,604
Unrealised gain/(loss) reserve, net of tax	-	(364)	-	-	-	(364)
Share based payments to employees	-	-	1,390	-	-	1,390
Equity portion of compound fnancial instruments, net of tax and transaction costs	-	-	-	(13,764)	-	(13,764)
As at 30 June 2012	(7,937)	(252)	4,626	-	5,987	2,424

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 22: Reserves (continued)

(B) NATURE AND PURPOSE OF RESERVES

(i) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, refer Note 1(d) (ii).

(ii) Net unrealised gain/(loss) reserve

This reserve records fair value changes on available for sale investments, refer Note 1(l)(iv).

(iii) Employee equity benefits reserve

The share based payments reserve is used to recognise the fair value of options granted over the vesting period of the option, refer Note 1(y)(iv).

(iv) Convertible notes equity reserve

This reserve records the value of the equity portion (conversion rights) of the convertible notes.

(v) Share options equity reserve

The equity reserve records transactions between owners as owners.

Note 23: Retained Earnings

CONSOLIDATED

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12 11
$'000 $’000
Retained profits at the beginning of the year 100,758 41,058
Net profit attributable to members of the parent 105,103 59,700
Retained profits at the end of the financial year 205,861 100,758
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Note 24: Exploration and development Commitments

Exploration commitments:

Due to the nature of the consolidated entity’s operations in exploring and evaluating areas of interest, it is very difficult to accurately forecast the nature or amount of future expenditure, although it will be necessary to incur expenditure in order to retain present interests in mineral tenements. Expenditure commitments on mineral tenure for the parent entity and consolidated entity can be reduced by selective relinquishment of exploration tenure or by the renegotiation of expenditure commitments.

The approximate level of exploration expenditure expected in the year ending 30 June 2012 for the consolidated entity is approximately $22.853m (2012: $15.881m). This includes the minimum amounts required to retain tenure. There are no material exploration commitments further out than one year.

The remaining interest in the Finkolo Joint Venture is expected to be acquired in the next 12 months by way of a US$20.000m payment to Endeavour Mining Corporation. The acquisition is subject to Malian Ministerial consent.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 25: Lease Commitments

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CONSOLIDATED
12 11
$'000 $’000
A) FINANCE LEASES
Lease expenditure contracted and provided for:
Due within one year 3,019 3,829
Due between one and five years 3,244 4,513
Total minimum lease payments 6,263 8,342
Less finance charges (505) (800)
Present value of minimum lease payments 5,758 7,542
Reconciled to:
Current liability (Note 18) 2,616 3,353
Non current liability (Note 18) 3,142 4,189
5,758 7,542
B) OPERATING LEASES (NON-CANCELLABLE)
Due within one year 786 787
Due between one and five years 1,254 2,040
Aggregate lease expenditure contracted for at balance date but not provided for 2,040 2,827
The operating lease expenditure mainly relates to the rental of office premises and is fixed.
C) OTHER EXPENDITURE COMMITMENTS
Due within one year 1,108 1,116
Due between one and five years - -
Aggregate expenditure contracted for at balance date but not provided for 1,108 1,116
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a) Other expenditure commitments represent the expected minimum expenditure required under the electricity supply agreement between Carpentaria Gold Pty Ltd and Momentum Energy Pty Ltd (2011: AGL Energy Limited) up until 31 December 2012.

Note 26: Related party transactions

(i) Refer to Note 34 for directors’ indirect and direct interests in securities.

(ii) RML is the ultimate Australian holding company and there is no controlling entity of RML at 30 June 2012.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 27: Interests in joint ventures

The consolidated entity has an interest in the following material joint ventures, whose principal activities are to explore for gold. The Group’s interests in the assets employed in the joint venture are included in the consolidated statement of financial position, in accordance with the accounting policy as described in Note 1(b)(ii).

There are no commitments relating to the joint ventures (2011: nil).

Jointly controlled assets

Jointly controlled assets
ENTITY HOLDING INTEREST	OTHER PARTICIPANT/JOINT VENTURE		PERCENTAGE OF INTEREST HELD
		2012	2011
		%	%
Mabangu Mining Limited	Sub Sahara/Nyakafuru JV	49%	49%
Mabangu Mining Limited	Yellowstone/Mega JV	49%	49%
Mabangu Mining Limited	Yellowstone/Kanegele JV	65%	65%
Resolute Pty Ltd	Etruscan/Finkolo JV	60%	60%
Carpentaria Gold Pty Ltd	Denjim/Welcome Breccia JV	100%	87%
Resolute (Tanzania) Limited	Sub Sahara/Kahama JV	49%	49%

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 28: Notes to the cash flow statements

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CONSOLIDATED
12 11
$'000 $’000
(A) RECONCILIATION OF NET PROFIT FROM CONTINUING OPERATIONS AFTER INCOME TAX
TO THE NET CASH FLOWS:
Net profit from ordinary activities after income tax 101,859 42,930
Add/(deduct):
Share based payments expense 1,390 1,215
Share in associate's loss 1,285 800
Loss/(profit) on sale of property, plant and equipment 196 (139)
Impairment of investment in associate 1,584 -
Rehabilitation provision discount adjustment 1,525 985
Rehabilitation provision adjustment from non operating mine sites (258) (1,073)
Depreciation and amortisation of property, plant and equipment 37,075 38,929
Amortisation of exploration, development and rehabilitation costs 36,342 23,712
Foreign exchange (losses)/gains 43,194 (730)
Non-cash realised loss on gold put options 4,014 3,909
Realised loss on close-out of hedgebook - (34,742)
Impairment of accounts receivable 1,201 1,361
Write-off of obsolete spares and consumables 2,116 -
Rehabilitation and restoration cash expenditure (5,249) (2,650)
Realised FX gain on repayments of Senior Debt Facility (2,157) -
Impairment of exploration and evaluation expenditure 45 362
Non cash finance costs 4,785 14,331
Other 589 258
Changes in operating assets and liabilities:
Decrease/(increase) in receivables 14,702 (1,989)
Increase in inventories (49,337) (19,840)
Decrease in financial liabilities - 979
(Increase)/decrease in prepayments (1,297) 596
Increase in deferred mining costs (9,101) (9,117)
(Decrease)/increase in payables (7,573) (2,162)
Change in current tax balances (3,346) (729)
Change in deferred tax balances 1,176 (1,924)
Increase in operating provisions 4,412 3,368
Net operating cash flows 179,172 58,640
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 28: Notes to the cash flow statements (continued)

(B) FINANCE LEASES

Refer to Note 18(a) for additions to finance leases and for terms and conditions.

(C) NON CASH OPERATING, FINANCING AND INVESTING ACTIVITIES

2012

During the year 136,670,429 convertible notes were converted into ordinary shares resulting in a reduction in convertible note debt of $64.663m. This amount was transferred into contributed equity, along with the associated equity reserves of $13.764m. Refer to note 18(c).

2011

The consolidated entity issued 3,603,264 shares at an issue price of $1.24 each to raise proceeds of $4.469m which was simultaneously paid to convertible note holders in lieu of interest owing.

Note 29: Controlled entities

The following were controlled entities during the year and have been included in the consolidated accounts. All entities in the consolidated entity carry on business in their place of incorporation.

carry on business in their place of incorporation.
NAME OF CONTROLLED ENTITY AND COUNTRY OF	CONSOLIDATED ENTITY COMPANY HOLDING THE	PERCENTAGE OF SHARES HELD
INCORPORATION	INVESTMENT	BY	CONSOLIDATED ENTITY
		2012	2011
		%	%
Broken Hill Metals Pty Ltd, Aust. (a)	Resolute (Treasury) Pty Ltd	100	100
Carpentaria Gold Pty Ltd, Aust.	Resolute Mining Limited	100	100
Goudhurst Pty Ltd, Aust. (a)	Resolute (Treasury) Pty Ltd	100	100
Mabangu Exploration Limited, Tanzania	Resolute (Tanzania) Limited	100	100
Mabangu Mining Limited, Tanzania	Resolute (Tanzania) Limited	100	100
Resolute (CDI Holdings) Limited, Jersey (a)	Resolute Mining Limited	100	100
Resolute CI SARL, Cote d'Ivoire	Resolute (CDI Holdings) Limited	100	100
Resolute (Finkolo) Limited, Jersey (a)	Resolute Mining Limited	100	100
Resolute (Ghana) Limited, Ghana	Resolute Mining Limited	100	100
Resolute Mali S.A.,Mali	Resolute (Somisy) Limited	100	100
Resolute (Somisy) Limited, Jersey (a)	Resolute Mining Limited	100	100
Resolute (Tanzania) Limited, Tanzania	Resolute Pty Ltd	100	100
Resolute (Treasury) Pty Ltd, Aust. (a)	Resolute Mining Limited	100	100
Resolute Pty Ltd, Aust.	Resolute Mining Limited	100	100
Resolute Resources Pty Ltd, Aust. (a)	Resolute Pty Ltd	100	100
Societe des Mines de Syama S.A., Mali	Resolute (Somisy) Limited	80	80
Resolute Exploration SARL, Mali	Resolute (Finkolo) Limited	100	-

a) These entities are not required to be separately audited. An audit of the entity’s results and position is performed for the purpose of inclusion in the consolidated entity’s accounts.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 30: Auditor remuneration

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CONSOLIDATED
12 11
$ $
Amounts received or due and receivable by Ernst & Young Australia, from entities in the consolidated
entity or related entities:
Auditing (i) 308,615 306,180
Taxation planning advice and review 155,715 102,890
464,330 409,070
i) Included in the current year is $5,175 (2011: $9,000) pertaining to additional work performed in
relation to the audit of the prior year.
Amounts received or due and receivable by a related overseas office of Ernst & Young, from entities in
the consolidated entity or related entities:
Auditing (Ernst & Young, Tanzania) 5,175 -
Tax Advice (Ernst & Young, Ghana and Tanzania) 989 12,111
6,164 12,111
Total amounts received or due and receivable by Ernst & Young globally 470,494 421,181
Amounts received or due and receivable by non Ernst & Young firms for auditing 35,137 40,149
Note 31: Employee benefits
A) EMPLOYEE ENTITLEMENTS
The aggregate employee entitlement liability is comprised of:
Provisions (current) (Note 20) 11,662 6,197
Provisions (non current) (Note 20) 756 764
12,418 6,961
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B) EMPLOYEE SHARE OPTION PLAN

An employee share option plan has been established where executives and members of staff of the consolidated entity are issued with options over the ordinary shares of RML. The options, issued for nil consideration, are issued in accordance with the terms and conditions of the shareholder approved RML Employee Share Option Plan and performance guidelines established by the directors of RML.

The maximum number of options that can be issued under the Employee Share Option Plan is capped at 5% of the ordinary shares on issue. The options do not provide any dividend or voting rights. The options are not quoted on the ASX. One third of the options issued pursuant to the Plan are able to be exercised 6 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue. The only exception to these exercise periods is for Options G.

During the year the remaining 125,000 options (Options D) were exercised. These options were issued on 25 October 2006 with an exercise price of $1.32 and an expiry date of 24 October 2011.

Outstanding at reporting date are 195,000 options (Options E) which are comprised of the opening balance of 213,000, less 18,000 options which lapsed during the year. There was no change in the balance outstanding during the year. These options were issued on 25 March 2008 with an exercise price of $2.13 and an expiry date of 23 May 2013. Pursuant to the rights issues in the years ended 30 June 2008 and 30 June 2009, the strike price reduced by 1 cent per option in accordance with the RML Share Option Plan. The strike price is now $2.12.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

Notes to the Financial Statements

for the year ended 30 June 2012

Note 31: Employee benefits (continued)

Also outstanding at reporting date are 51,000 options (Options F). There was no change in the balance outstanding during the year. These options were issued on 29 August 2008 with an exercise price of $1.63. Pursuant to the rights issues in the year ended 30 June 2009, the strike price reduced by 1 cent per option in accordance with the RML Share Option Plan. The strike price is now $1.62.

Also outstanding at reporting date are 517,333 options (Options G) which are comprised of the opening balance of 680,667 less 163,334 options exercised during the year. These options were issued on 31 January 2009 with an exercise price of $0.42 and an expiry date of 31 January 2014. One third of the options were able to be exercised 12 months after issue, a further one third 18 months after issue and the remaining one third 30 months after issue.

Also outstanding at reporting date are 556,000 options (Options H) which are comprised of the opening balance of 739,000, less 138,334 options exercised during the year and 44,666 options which lapsed during the year. These options were issued on 15 February 2010 with an exercise price of $1.09 and an expiry date of 14 February 2015.

Also outstanding at reporting date are 81,000 options (Options I) which are comprised of the opening balance of 99,000 options less 18,000 options which were exercised during the year. These options were granted under the employee share option plan on 30 June 2010 and subsequently issued on 16 July 2010. These options were comprised of 179,000 options with an exercise price of $1.21 and an expiry date of 15 July 2015.

Also outstanding at reporting date are 135,000 options (Options J). There was no change in the balance outstanding during the year. These options were granted under the employee share option plan on 27 October 2010 and subsequently issued on 16 November 2010. These options were comprised of 135,000 options with an exercise price of $1.43 and an expiry date of 15 November 2015.

Also outstanding at reporting date are 2,000,000 options (Options K) which were granted under the employee share option plan on 2 December 2010 and subsequently issued on 5 January 2011. These options were comprised of 2,000,000 options with an exercise price of $1.36 and an expiry date of 4 January 2016.

Also outstanding at reporting date are 996,000 options (Options L) which are comprised of the opening balance of 1,163,000 options less 40,001 options which were exercised during the year and 126,999 options which lapsed during the year. These options were granted under the employee share option plan on 23 December 2010 and subsequently issued on 25 January 2011. These options were comprised of 1,338,000 options with an exercise price of $1.43 and an expiry date of 24 January 2016.

Also outstanding at reporting date are 130,000 options (Options M). There was no change in the balance outstanding during the year. These options were granted under the employee share option plan on 29 June 2011 and subsequently issued on 30 June 2011. These options were comprised of 130,000 options with an exercise price of $1.18 and an expiry date of 15 July 2016.

During the year 823,200 options (Options N) were granted under the employee share option plan on 4 January 2012 and subsequently issued on 27 January 2012, with an exercise price of $1.85 and an expiry date of 26 January 2017. The balance of these options is 782,400 at reporting date, with 40,800 options lapsing during the year.

Employees will only be able to exercise the options allocated to them if they meet certain performance criteria. Details of the employee share option plan for both the parent and the consolidated entity are as follows:

			12		11
		NUMBER OF	WEIGHTED AVERAGE	NUMBER OF	WEIGHTED AVERAGE
		EMPLOYEE	EXERCISE PRICE	EMPLOYEE	EXERCISE PRICE
		OPTIONS		OPTIONS
			$		$
Balance at the beginning of the year		5,335,667	1.22	2,835,002	0.90
-	granted	823,200	1.85	3,782,000	1.37
-	exercised	(484,669)	0.96	(479,001)	0.59
-	lapsed	(230,465)	1.49	(802,334)	1.17
	Balance at end of year (a)	5,443,733	1.35	5,335,667	1.22
	Vested and exercisable at the end of the year	2,320,000	1.18	1,079,111	1.00

a) The weighted average remaining contractual life for the share options outstanding as at 30 June 2012 is 3.29 years (2011: 3.94 years).

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

100

Notes to the Financial Statements

for the year ended 30 June 2012

Note 31: Employee benefits (continued)

The following tables summarises information about options exercised by employees during the year:

12

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NUMBER OF GRANT DATE EXERCISE DATE EXPIRY DATE WEIGHTED PROCEEDS NUMBER OF ISSUE DATE OF FAIR VALUE OF
OPTIONS AVERAGE FROM SHARES SHARES ISSUED THE SHARES SHARES ISSUED
EXERCISE PRICE ISSUED
$ $ $
75,000 25 Oct 06 12 Sep 11 24 Oct 11 1.32 99,000 75,000 12 Sep 11 1.74
50,000 25 Oct 06 20 Oct 11 24 Oct 11 1.32 66,000 50,000 20 Oct 11 1.67
118,334 31 Jan 09 4 Aug 11 31 Jan 14 0.42 49,700 118,334 4 Aug 11 1.37
25,000 31 Jan 09 19 Aug 11 31 Jan 14 0.42 10,500 25,000 19 Aug 11 1.38
20,000 31 Jan 09 20 Oct 11 31 Jan 14 0.42 8,400 20,000 20 Oct 11 1.67
16,000 15 Feb 10 19 Aug 11 14 Feb 15 1.09 17,440 16,000 19 Aug 11 1.38
6,000 15 Feb 10 12 Sep 11 14 Feb 15 1.09 6,540 6,000 12 Sep 11 1.74
8,000 15 Feb 10 20 Oct 11 14 Feb 15 1.09 8,720 8,000 20 Oct 11 1.67
55,000 15 Feb 10 23 Nov 11 14 Feb 15 1.09 59,950 55,000 23 Nov 11 1.92
53,334 15 Feb 10 24 Feb 12 14 Feb 15 1.09 58,134 53,334 24 Feb 12 2.00
6,000 16 Jul 10 20 Oct 11 15 Jul 15 1.21 7,260 6,000 20 Oct 11 1.67
12,000 16 Jul 10 23 Nov 11 15 Jul 15 1.21 14,520 12,000 23 Nov 11 1.92
6,000 25 Jan 11 12 Sep 11 24 Jan 16 1.43 8,580 6,000 12 Sep 11 1.74
4,667 25 Jan 11 20 Oct 11 24 Jan 16 1.43 6,674 4,667 20 Oct 11 1.67
6,667 25 Jan 11 23 Nov 11 24 Jan 16 1.43 9,534 6,667 23 Nov 11 1.92
22,667 25 Jan 11 24 Feb 12 24 Jan 16 1.43 32,414 22,667 24 Feb 12 2.00
484,669 0.96 463,366 484,669 1.67
11
149,999 31 Jan 09 11 Aug 10 31 Jan 14 0.42 63,000 149,999 11 Aug 10 0.76
137,335 31 Jan 09 14 Sep 10 31 Jan 14 0.42 57,681 137,335 14 Sep 10 1.20
21,667 31 Jan 09 6 Oct 10 31 Jan 14 0.42 9,100 21,667 6 Oct 10 1.40
50,000 31 Jan 09 23 Nov 10 31 Jan 14 0.42 21,000 50,000 23 Nov 10 1.32
50,000 15 Feb 10 23 Nov 10 14 Feb 15 1.09 54,500 50,000 23 Nov 10 1.32
45,000 24 Mar 06 23 Nov 10 23 Mar 11 1.12 50,400 45,000 23 Nov 10 1.32
15,000 15 Feb 10 10 Feb 11 14 Feb 15 1.09 16,350 15,000 10 Feb 11 1.38
10,000 24 Mar 06 10 Feb 11 23 Mar 11 1.12 11,200 10,000 10 Feb 11 1.38
479,001 0.59 283,230 479,001 1.12
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Fair value of the shares issued is estimated to be the market price of the shares of Resolute Mining Limited on the ASX as at close o f trading on their respective issue dates.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

101

Notes to the Financial Statements

for the year ended 30 June 2012

Note 31: Employee benefits (continued)

The following table lists the key variables used in the option valuation:

	OPTIONS E	OPTIONS F	OPTIONS G	OPTIONS H	OPTIONS I	OPTIONS J	OPTIONS K	OPTIONS L	OPTIONS M	OPTIONS N
Number of options
at year end	195,000	51,000	517,333	556,000	81,000	135,000	2,000,000	996,000	130,000	782,400
Dividend yield (%)	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Expected volatility
(%)	40%	40%	50%	50%	64%	63%	63%	63%	63%	65%
Risk free interest
rate (%)	8.30%	7.00%	7.00%	7.00%	6.25%	6.25%	6.25%	6.25%	6.25%	3.50%
Expected life of
options (years)	5	5	5	5	5	5	5	5	5	5
Original option
exercise price ($)	2.13	1.63	0.42	1.09	1.21	1.43	1.36	1.43	1.18	1.85
Share price at
grant date ($)	1.94	1.48	0.38	0.99	1.08	1.28	1.22	1.27	1.13	1.75
Value per option
at grant date ($)	0.88	0.64	0.20	0.49	0.61	0.73	0.70	0.72	0.66	0.98

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

The fair value of the options is measured at the grant date using the Black and Scholes option pricing model taking into account the terms and conditions upon which the instruments were granted. The services received and liabilities to pay for those services are recognised over the expected vesting period.

The weighted average fair value of options granted during the year was $0.98 per option (2011: $0.70).

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

102

Notes to the Financial Statements

for the year ended 30 June 2012

Note 32: Contingent liabilities & commitments

CONTINGENT LIABILITIES

(a) Native Title Claims

Native title determination applications have been lodged with the National Native Title Tribunal established under the Native Title Act 1993 over areas of interest currently leased by the consolidated entity. Some of those claims have been accepted by the Tribunal. Acceptance of an application by the Tribunal is merely a preliminary step in the procedure established by the Native Title Act to determine whether or not native title exists. The final effect of these claims is not known and the claims are not currently affecting the mining and exploration projects of the consolidated entity.

(b) Tanzanian Tax Authorities

i) General

The operations and earnings of the Group continue, from time to time, to be affected to varying degrees by fiscal, legislative, regulatory and political developments, including those relating to environmental protection, in the countries in which the Group operates.

The industry in which the Group is engaged is also subject to physical risks of various types. The nature and frequency of these developments and events, not all of which are covered by insurance, as well as their effect on future operations and earnings, are unpredictable.

ii) Indirect Taxes

1) As reported in prior periods, in February 2009 and again in April 2011, Mabangu Mining Limited (“MML”) received an assessment for US$4.700m from the Tanzanian Revenue Authority (“TRA”) who claim that MML has entered into a tax avoidance scheme by not following through with its initial intention of liquidating MML in 2006. The TRA claim that MML ceased the liquidation of MML to avoid paying withholding tax that they believe would have been payable if MML had been liquidated and its retained profits distributed to RTL in the form of a dividend. In MML’s opinion, the TRA assessment is fundamentally flawed and has no substance or foundation in fact. MML strongly disputes the validity of the assessment and believes there is no amount of withholding tax owing by MML to the TRA. MML has received professional advice confirming that even if MML were liquidated and its profits were distributed to RTL, no withholding tax is payable on dividends paid by one Tanzanian entity to another. MML will vigorously defend its position and has applied for a waiver of any deposit payable to the TRA ordinarily required to defend the claim. A letter of objection was sent to the TRA in March 2009 and again in April 2011 and a request to the Commissioner General for a waiver of the one third tax deposit was submitted. A response to this request is yet to be received. In May 2011, a hearing before the Tax Revenue Appeals Board was successful in barring the TRA taking any recovery measures while the issue is before the court.

2) The TRA has changed its interpretation on the tax legislation relating to the fuel levy and fuel excise and duties (“fuel taxes”). The amount paid by Resolute (Tanzania) Limited (“RTL”) when it purchases fuel includes this payment of fuel taxes. The fuel supplier remits the fuel tax to the TRA, and as in a similar manner as is done with a Goods and Services Tax or a Value Added Tax, RTL would then lodge a claim to claim back from the TRA the fuel taxes it has paid to the supplier.

Up until December 2005, the TRA refunded all of the fuel taxes paid by RTL. From January 2006 onwards, the TRA has changed its interpretation and has denied further refunding of fuel taxes if the fuel is used by a sub-contractor.

The TRA had previously refunded 9.100b Tanzanian Shillings (“Tsh”) (or US$5.917m) of fuel taxes to RTL during the period from 1999 to 2005, but due to their new interpretation are now arguing they should not have. As a result, they demanded that the refunded amount be returned by RTL to the TRA by 3 October 2008, which did not occur.

RTL strongly disagrees with the TRA revised interpretation and it will continue to vigorously defend its position. The majority of the amounts sought by the TRA are “time barred” and can only be claimed from RTL if RTL has acted in a fraudulent manner. RTL has acted in accordance with the law. In addition, further protection is provided to RTL by its Mining Development Agreement, which limits the amount of fuel taxes to be paid by RTL.

In October 2008, RTL lodged an appeal against this demand and was ordered to pay a deposit equal to one third of the amount in dispute for the case to be heard by the Tax Revenue Appeals Board (expected to be in 20121/13). Up until 30 June 2012, RTL has paid 3.030b Tsh (or US$1.970m) as a deposit to have its appeal heard. These deposits are treated as a non-current receivable.

3) A 9.327b Tanzanian Shillings (“Tsh”) (US$6.081m) assessment was issued by TRA to RTL on 16 July 2012 comprising Tsh 3.935b of alleged under remittance of withholding tax over the 2003 to 2010 period and Tsh 5.392b of related penalties / interest. In accordance with Tanzanian tax law, RTL withheld tax at the rate of 3% for payments made to offshore companies of a technical and managerial nature whilst the TRA has the view these services were “professional” in nature and hence attract the higher 15% or 20% rate. RTL strongly disputes the validity of the assessment and believes there is no amount of withholding tax owing by RTL to the TRA. RTL has received professional advice confirming the position taken by RTL is compliant with Tanzanian tax law. RTL will vigorously defend its position and has applied for a waiver of any deposit payable to the TRA ordinarily required to appeal an assessment.

4) A Tsh 2.968b (US$1.935m) assessment was issued by the TRA to RTL on 16 July 2012 comprising Tsh 2.181b of PAYE allegedly owing and Tsh 0.787b of penalties / interest. The dispute relates to the amount of PAYE remitted by RTL on the employment contracts for its expatriates working in Tanzania. The TRA alleges that the PAYE remitted by RTL on expatriate salaries is a fringe benefit and should also be taxed. RTL grosses up the expatriates’ net salaries to arrive at the correct gross salary and calculates the PAYE to be remitted to the TRA on the grossed up salary. The TRA’s position effectively double taxes a portion of the expatriates’ salaries. RTL strongly disputes the validity of the assessment and believes there is no amount of tax owing by RTL to the TRA. RTL has received professional advice confirming the position taken by RTL is compliant with Tanzanian tax law. RTL will vigorously defend its position and has applied for a waiver of any deposit payable to the TRA ordinarily required to appeal an assessment.

The financial effects of all of the above TRA assessments have not been recognised within the accounts.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

103

Notes to the Financial Statements

for the year ended 30 June 2012

Note 32: Contingent liabilities & commitments (continued)

COMMITMENTS

(a) Randgold/Syama Royalty

(c) Tanesco Electricity Supply Contract

Tanesco (the Tanzanian national electricity provider) provides electricity to RTL pursuant to an Electricity Supply Agreement. The Agreement refers to an annual price escalation formula containing escalation factors that are open to interpretation. Pursuant to Tanesco’s interpretation of the escalation formula, 4.700b Tsh (USD$3.064m) relating to amounts in excess of the general Tanzanian public rate covering the period from 1 January 2008 to 30 June 2008 was invoiced to RTL. The rates charged by Tanesco in their invoice were significantly higher than the general Tanzanian public rate. The amount recognised by RTL reflected the amounts payable to Tanesco by RTL if it had terminated the Agreement and elected to receive and pay for electricity under the general Tanzanian public rate. Contract discussions are continuing and both parties have confirmed their commitment to find a fair and reasonable solution.

Pursuant to the terms of the Syama Sale and Purchase agreement, Randgold Resources Limited will receive a royalty on Syama production, where the gold price exceeds US$350 per ounce, of US$10 per ounce on the first million ounces of gold production attributable to Resolute Mining Limited (“RML”) and US$5 per ounce on the next three million attributable ounces of gold production.

(b) Nyakafuru Royalty

Resolute will be required to pay a royalty of US$10 per ounce for each additional resource ounce, attributable to the former Iamgold 34% interest that is proven up on the project, up to a total cap of US$3.75m.

Since 1 July 2008, RTL has continued to pay (or accrue) the electricity costs at the general Tanzanian public rate, as both Tanesco and RTL have agreed that while rate negotiations are ongoing, RTL will continue to pay the general Tanzanian public rate. The difference between the billed rate and the general Tanzanian public rate for electricity used by RTL between 1 July 2008 to 30 June 2009, which has not been accrued for or paid, is approximately 3.800b Tsh (or US$2.478m), bringing the total unrecognised amount in dispute to 8.500b Tsh (US$5.542m).

(d) INPS claim

In a prior reporting period, the Institut National de Prevoyance Sociale (“INPS”) in Mali issued Societe des Mines de Syama (“SOMISY”) with a CFA3.895b ($7.408m) assessment in relation to SOMISY allegedly owing taxes to INPS on salaries paid by SOMISY to its expatriate employees between January 2005 and July 2010. Malian legislation requires the remittance of 24% of an employee’s gross salary to the government’s INPS department and is a form of social tax. In accordance with the Establishment Convention between the State of Mali and SOMISY, SOMISY is exempt from paying INPS on expatriate employees during the Syama mine Development Period. The Development Period is defined in the Establishment Convention as being the period up to first commercial production. “First commercial production” (in terms of the Establishment Convention, not accounting rules) is defined as the date on which the Syama mine reaches 60 uninterrupted days of production at 90% of its design capacity of production as established in the submitted feasibility study. In accordance with the requirements of the Establishment Convention, SOMISY declared 1 January 2012 as the date of first commercial production. The INPS assessment, which infers a first production date of January 2005, which is before the Syama redevelopment had even commenced, is considered to be fundamentally flawed and is being strongly disputed by SOMISY. The dispute was heard by the Malian Labour Tribunal in August 2011, which ruled that SOMISY owes CFA3.895b ($7.408m) to INPS. SOMISY has received formal notification of this decision together with the requirement to pay 50% of the assessed amount in instalments. An appeal against this decision has been lodged. Due to 50% of the assessed amount now being legally due and payable, SOMISY has provided for 50% of this assessment as a liability, but has not provided for the remaining 50%, as it is confident that it will ultimately win its appeal against the Labour Tribunal’s decision when the matter is elevated for consideration at a higher level within the judicial system. As at 30 June 2012, SOMISY had paid INPS CFA0.500b ($0.951m) of the CFA3.895b ($7.408m) assessment.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

104

Notes to the Financial Statements

for the year ended 30 June 2012

Note 33: Earnings per share (EPS)

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CONSOLIDATED
12 11
BASIC EARNINGS PER SHARE
Profit attributable to ordinary equity holders of the parent for basic earnings per share ($'000) 105,103 59,700
Weighted average number of ordinary shares outstanding during the period used 564,360,652 444,809,350
in the calculation of basic EPS
Basic EPS (cents per share) 18.62 13.42
DILUTED EARNINGS PER SHARE
Profit used in calculation of basic earnings per share ($'000) 105,103 59,700
Tax effected interest on convertible notes ($'000) - 8,305
Net profit attributable to ordinary equity holders of the parent adjusted for the effect of 105,103 68,005
convertible notes ($'000)
Weighted average number of ordinary shares outstanding during the period used in the 564,360,652 444,809,350
calculation of basic EPS
Weighted average number of notional shares used in determining diluted EPS 87,044,675 175,133,158
Weighted average number of ordinary shares outstanding during the period used in the 651,405,327 619,942,508
calculation of diluted EPS
Number of potential ordinary shares that are not dilutive and hence not included 977,400 1,873,000
in calculation of diluted EPS
Diluted EPS (cents per share) 16.13 10.97
----- End of picture text -----

Between the reporting date and the date of completion of these financial statements there have been the following transactions involving ordinary shares or potential ordinary shares:

(a) 5,800,000 ordinary shares at an average price of $1.27 per share were bought back and cancelled pursuant to the on market share buy-back plan.

INFORMATION ON THE CLASSIFICATION OF SECURITIES

(i) Options

Options granted to employees (including KMP) as described in Note 31 are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent they are dilutive. These options have not been included in the determination of basic earnings per share.

(ii) Convertible notes

Convertible notes are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. The convertible notes have not been included in the determination of basic earnings per share.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

105

Notes to the Financial Statements

for the year ended 30 June 2012

Note 34: Key management personnel

(A) KEY MANAGEMENT PERSONNEL

(i) Directors

P. Huston Non-Executive Chairman P. Sullivan Director and Chief Executive Officer T. Ford Non-Executive Director H. Price Non-Executive Director

(ii) Executives

G. Fitzgerald General Manager - Finance & Administration and Company Secretary P. Venn General Manager - Business Development P. Beilby General Manager - Operations

(B) COMPENSATION OF KEY MANAGEMENT PERSONNEL

Details of remuneration provided to key management personnel are as follows:

CONSOLIDATED

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----- Start of picture text -----

12 11
$ $
Short-term employee benefits 2,298,045 1,878,136
Post-employment benefits 255,951 264,157
Long-term employment benefits 102,104 72,776
Share-based payments 666,817 860,340
3,322,917 3,075,409
----- End of picture text -----

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

106

Notes to the Financial Statements

for the year ended 30 June 2012

Note 34: Key management personnel (continued)

(A) DETAILS OF OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL ARE AS FOLLOWS

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----- Start of picture text -----

OPTIONS TYPE BALANCE AT GRANTED GRANT DATE FAIR VALUE OF TOTAL FAIR FIRST EXERCISE
THE START OF DURING THE OPTIONS AT VALUE OF DATE OF
THE YEAR YEAR AS GRANT DATE OPTIONS AT OPTIONS
COMPENSATION GRANT DATE GRANTED
(iv) DURING THE
12 YEAR
Directors $ $
P. Huston (i) Listed 26,761 - - - - -
P. Sullivan Unlisted 2,000,000 - - - - -
P. Sullivan (ii) Listed 133,333 - - - - -
T. Ford (ii) Listed 133,333 - - - - -
H. Price (iii) Listed 67,554 - - - - -
Officers
G. Fitzgerald Unlisted 415,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Beilby Unlisted 190,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Venn Unlisted 415,000 60,000 27 Jan 2012 0.98 58,800 27 Jul 2012
P. Venn Listed 5,000 - - - - -
11
Directors
P. Huston Listed 26,761 - - - - -
P. Sullivan Unlisted - 2,000,000 2 Dec 2010 0.70 1,390,904 5 Jul 2011
P. Sullivan Listed 133,333 - - - - -
T. Ford Listed 133,333 - - - - -
H. Price Listed 67,554 - - - - -
Officers
G. Fitzgerald Unlisted 315,000 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Beilby Unlisted - 90,000 27 Oct 2010 0.73 65,546 16 May 2011
P. Beilby Unlisted - 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Venn Unlisted 315,000 100,000 23 Dec 2010 0.72 71,980 25 Jul 2011
P. Venn Listed 5,000 - - - - -
A. King (v), (vi) Unlisted 190,000 - - - - -
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

107

Notes to the Financial Statements

for the year ended 30 June 2012

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EXPIRY & LAST EXERCISE PRICE EXERCISED LAPSED ACQUIRED BALANCE GRANTED & VESTED AND EXERCISABLE VALUE OF
EXERCISE DATE OF OPTIONS DURING THE DURING DURING THE AT THE END VESTED AT THE END OF THE YEAR OPTIONS
OF OPTIONS GRANTED YEAR THE YEAR YEAR OF THE YEAR DURING THE EXERCISED
GRANTED DURING THE YEAR DURING THE
DURING THE YEAR YEAR
YEAR
$ No. No. % $
- - (26,761) - - - - - - 28,099
- - - - - 2,000,000 - 666,667 33.33 -
- - (133,333) - - - - - - 140,000
- - (133,333) - - - - - - 140,000
- - (67,554) - - - - - - 70,932
26 Jan 2017 1.85 - - - 475,000 - 318,333 67.02 -
26 Jan 2017 1.85 - - - 250,000 - 93,333 37.33 -
26 Jan 2017 1.85 - - - 475,000 - 318,333 67.02 -
- - (5,000) - - - - - - 5,250
- - - - - 26,761 - 26,761 100.00 -
4 Jan 2016 1.36 - - - 2,000,000 - - - -
- - - - - 133,333 - 133,333 100.00 -
- - - - - 133,333 - 133,333 100.00 -
- - - - - 67,554 - 67,554 100.00 -
24 Jan 2016 1.43 - - - 415,000 - 205,000 49.40 -
15 Nov 2015 1.43 - - - 90,000 30,000 30,000 33.33 -
24 Jan 2016 1.43 - - - 100,000 - - - -
24 Jan 2016 1.43 - - - 415,000 - 205,000 49.40 -
- - - - - 5,000 - 5,000 100.00 -
- - (50,000) (140,000) - - - - - 16,500
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(vi) The value of options at the date of lapse was $69,900.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

108

Notes to the Financial Statements

for the year ended 30 June 2012

Note 34: Key management personnel (continued)

(B) DETAILS OF SHARE HOLDINGS OF KEY MANAGEMENT PERSONNEL ARE AS FOLLOWS:

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BALANCE AT THE RECEIVED DURING OTHER CHANGES BALANCE AT THE
START OF THE YEAR THE YEAR ON THE DURING THE YEAR END OF THE YEAR
12 EXERCISE OF OPTIONS
Directors
P. Huston 401,421 - 26,761 428,182
P. Sullivan (i) 3,174,115 - 333,333 3,507,448
T. Ford (i) 131,315 - 333,333 464,648
H. Price (i) 27,191 - 167,554 194,745
Officers
G. Fitzgerald - - - -
P. Beilby 8,000 - 12,000 20,000
P. Venn - - 5,000 5,000
BALANCE AT THE RECEIVED DURING OTHER CHANGES BALANCE AT THE
START OF THE YEAR THE YEAR ON THE DURING THE YEAR END OF THE YEAR
EXERCISE OF OPTIONS
11
Directors
P. Huston 401,421 - - 401,421
P. Sullivan (ii) 3,169,277 - 4,838 3,174,115
T. Ford (ii) 26,477 - 104,838 131,315
H. Price (ii) 24,772 - 2,419 27,191
Officers
G. Fitzgerald - - - -
P. Beilby 8,000 - - 8,000
P. Venn - - - -
A. King (iii) 70,000 - (70,000) -
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(i) In the year ended 30 June 2012, the directors were issued the following shares as a result of the conversion of convertible notes and/or the exercise of listed options. The convertible notes had a face value of $0.50 each, and were convertible on a 1 for 1 basis. The listed options had a strike price of $0.60 each.

DIRECTORS	CONVERSION OF	EXERCISE OF
	CONVERTIBLE NOTES	LISTED OPTIONS

P. Huston	-	26,761
P. Sullivan	200,000	133,333
T. Ford	200,000	133,333
H. Price	100,000	67,554
	500,000	360,981

(ii) These shares were issued by the Company in lieu of interest owing on convertible notes held by the director.

(iii) A. King’s shares are no longer held in the capacity as a member of key management personnel.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

109

Notes to the Financial Statements

for the year ended 30 June 2012

Note 34: Key management personnel (continued)

12	BALANCE AT THE START OF THE YEAR	ACQUIRED DURING THE YEAR	CONVERSIONS DURING THE YEAR	BALANCE AT THE END OF THE YEAR
Directors
P. Huston	-	-	-	-
P. Sullivan	200,000	-	(200,000)	-
T. Ford	200,000	-	(200,000)	-
H. Price	100,000	-	(100,000)	-
Ofcers
G. Fitzgerald	-	-	-	-
P. Beilby	-	-	-	-
P. Venn	-	-	-	-

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BALANCE AT THE ACQUIRED DURING BALANCE AT THE
11 START OF THE YEAR THE YEAR END OF THE YEAR
Directors
P. Huston - - -
P. Sullivan 200,000 - 200,000
T. Ford 200,000 - 200,000
H. Price 100,000 - 100,000
Officers
G. Fitzgerald - - -
P. Beilby - - -
P. Venn - - -
A. King - - -
----- End of picture text -----

These convertible notes were acquired through participation in a capital raising.

Note 35: Operating segments

The Group has identified three operating segments based on the internal reports that are reviewed and used by the chief executive officer and his management team (the chief operating decision maker) in assessing performance and in determining the allocation of resources.

The operating segments are identified by management as being operating mine sites. Each of the mine sites are managed separately and they operate in different regulatory and economic environments.

The principal activities of each operating segment are gold mining and prospecting and exploration for minerals.

Information regarding the operations of each reportable segment is included below. Performance is measured based on ounces delivered and cost of production per ounce. Management believe that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within the gold mining industry.

The accounting policies used by the Group in reporting segments are the same as those used in the preparation of financial statements.

Inter-entity gold sales are recognised based on the prevailing spot price. The price is aimed to reflect what the segment would have achieved if it sold its gold to external parties at arm’s length.

Income tax expense is calculated based on the segment operating net profit using a notional charge of the respective tax jurisdiction. No effect is given for taxable or deductible temporary differences.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

110

Notes to the Financial Statements

for the year ended 30 June 2012

Note 35: Operating segments (continued)

The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

Realised and unrealised treasury transactions, including derivative contract transactions;
Finance costs - including adjustments on provisions due to discounting; and,
Net gains/losses on disposal of available-for-sale investments.

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UNALLOCATED
RAVENSWOOD GOLDEN PRIDE SYAMA CORP/OTHER TREASURY TOTAL
(AUSTRALIA) (TANZANIA) (MALI)
12
$’000 $’000 $’000 $’000 $’000 $’000
REVENUE
Gold sales at spot to external customers (a) 225,056 155,281 196,373 - - 576,710
Total segment gold sales revenue 225,056 155,281 196,373 - - 576,710
Cash costs (104,292) (84,953) (113,859) - - (303,104)
Depreciation and amortisation (29,637) (5,945) (37,639) - - (73,221)
Other operating costs (12,519) 8,089 9,958 (1,174) - 4,354
Other corporate/admin costs - - - (4,304) - (4,304)
Segment operating result before treasury,
other income/(expenses) and tax 78,608 72,472 54,833 (5,478) - 200,435
Other income - - - 87 1,504 1,591
Exploration expenditure (4,630) (3,971) (4,846) (1,844) - (15,291)
Finance costs - - - - (11,970) (11,970)
Abnormal and other items (2,307) - - (4,659) - (6,966)
Segment operating result before treasury
and tax 71,671 68,501 49,987 (11,894) (10,466) 167,799
Treasury - realised losses - - - - (175) (175)
Treasury - unrealised losses - - - - (43,194) (43,194)
Income tax (expense)/benefit - (22,661) - 90 - (22,571)
Profit/(loss) for the year 71,671 45,840 49,987 (11,804) (53,835) 101,859
Cash flow by segment, including
receivables - gold bullion sales, and gold
shipped but unsold and held in metal
accounts 72,613 54,043 46,236 (5,387) (59,212) 108,293
Reconciliation of cash flow by segment to
the cash flow statement:
Movement in receivables - gold bullion
sales 14,465
Movement in bank overdraft 2,280
Movement in gold shipped but unsold and
held in metal accounts (44,456)
Transfer to restricted cash and included in
Other Financial Assets (42,267)
Mark to market movement in unsold gold 1,156
Exchange rate adjustment 1,231
Movement in cash and cash equivalents
per consolidated cash flow statement 40,702
Capital expenditure 27,488 426 24,585 220 - 52,719
Segment assets 124,776 73,418 358,645 107,660 4 664,503
Segment liabilities 38,467 29,677 44,653 2,952 5,761 121,510
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

111

Notes to the Financial Statements

for the year ended 30 June 2012

Note 35: Operating segments (continued)

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UNALLOCATED
RAVENSWOOD GOLDEN PRIDE SYAMA CORP/OTHER TREASURY TOTAL
(AUSTRALIA) (TANZANIA) (MALI)
11
$’000 $’000 $’000 $’000 $’000 $’000
REVENUE
Gold sales at spot to external customers (a) 170,036 176,745 116,130 - - 462,911
Total segment gold sales revenue 170,036 176,745 116,130 - - 462,911
Cash costs (109,435) (87,710) (103,197) - - (300,342)
Depreciation and amortisation (24,791) (6,502) (31,098) - - (62,391)
Other operating costs (5,672) (9,383) (4,175) (682) - (19,912)
Other corporate/admin costs (64) - - (4,585) - (4,649)
Segment operating result before treasury,
other income/(expenses) and tax 30,074 73,150 (22,340) (5,267) - 75,617
Other income - - - 1,073 572 1,645
Exploration expenditure (2,374) (1,950) (2,933) (1,469) - (8,726)
Finance costs - - - - (19,597) (19,597)
Realised loss on gold forward contracts
delivered into with production - - - - (17,856) (17,856)
Abnormal and other items - - - (2,429) - (2,429)
Segment operating result before treasury
and tax 27,700 71,200 (25,273) (8,092) (36,881) 28,654
Treasury - gains on gold forward contracts
closed out - - - - 34,742 34,742
Treasury - realised losses - - - - (4,574) (4,574)
Treasury - unrealised gains - - - - 730 730
Income tax expense - (16,314) - (308) - (16,622)
Profit/(loss) for the year 27,700 54,886 (25,273) (8,400) (5,983) 42,930
Reconciliation of total segment revenue to
statement of comprehensive income:
Total segment gold sales revenue to
external customers 462,911
Realised loss on gold forward contracts (17,856)
Total revenue per statement of
comprehensive income 445,055
Cash flow by segment, including
receivables - gold bullion sales 23,541 60,409 (29,779) (3,193) (53,221) (2,243)
Reconciliation of cash flow by segment to
the cash flow statement:
Movement in receivables - gold bullion sales (4,803)
Movement in bank overdraft (1,183)
Exchange rate adjustment 822
Movement in cash and cash equivalents
per consolidated cash flow statement (7,407)
Capital expenditure 21,697 1,145 6,871 216 - 29,929
Segment assets 130,130 65,500 354,333 28,872 11 578,846
Segment liabilities 39,257 24,392 37,064 10,557 113,258 224,528
----- End of picture text -----

(a) Revenue from external sales for each reportable segment is derived from several customers.

(b) This information does not represent an operating segment as defined by AASB 8, however this information is analysed in this format by the Chief Operating Decision Maker, and forms part of the reconciliation of the results and positions of the operating segments to the financial statements.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

112

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management

The Group’s activities expose it to a variety of financial risks: market risk (including gold price risk, diesel fuel price risk, currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks, where considered appropriate, to minimise potential adverse effects on the financial performance of the Group. The Group may use derivative financial instruments to manage certain risk exposures. Derivatives have been used exclusively for managing financial risks, and not as trading or other speculative instruments.

Risk management is carried out by the Group’s Financial Risk Management Committee under policies approved by the Board of Directors. The Financial Risk Management Committee identifies, evaluates and manages financial risks as deemed appropriate. The Board provides guidance for overall risk management, including guidance on specific areas, such as mitigating commodity price, foreign exchange, interest rate and credit risks, by using derivative financial instruments.

(A) MARKET RISK

Use of derivative instruments to assist in managing gold price risk

The Group is exposed to movements in the gold price. As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s financiers, a variety of financial instruments (such as gold forward sales contracts, gold call options and gold put options) may be used from time to time to reduce exposure to unpredictable fluctuations in the project life revenue streams. Within this context, the programs undertaken are structured with the objective of retaining as much upside to the gold price as possible, but in any event, by limiting derivative commitments to no more than 50% of the Group’s gold reserves. The value of these financial instruments at any given point in time, will in times of volatile market conditions, show substantial variation over the short term. The facilities provided by the Group’s various counterparties do not contain margin calls. The Group does not hedge account for these instruments. No such instruments were in existence at reporting date.

No gold was delivered into forward sales contracts during the year (2011: 32,013 ounces of gold at an average price of A$797 per ounce).

Gold forwards and put options

12

There were no gold forward or gold put option contracts outstanding as at 30 June 2012.

	FORWARD SALES	FORWARD SALES	PUT OPTIONS BOUGHT	PUT OPTIONS BOUGHT	TOTAL
11	OUNCES	SALES PRICE $/OUNCE	OUNCES	STRIKE PRICE $/OUNCE	OUNCES	$/OUNCE
AUD Denominated Contracts
Maturity within 1 year	-	-	57,200	1,000	57,200	1,000

Movements in the fair value of these contracts were accounted for through the consolidated statement of comprehensive income. From 1 July 2007, no contracts satisfied the criteria for hedge accounting.

Diesel fuel price risk

The Group is exposed to movements in the diesel fuel price. The costs incurred purchasing diesel fuel for use by the Group’s operations is significant. The Group’s Financial Risk Management Committee continues to manage and monitor diesel fuel price risk. At present, the Group does not specifically hedge its exposure to diesel fuel price movements.

Foreign exchange currency risk

The Group receives multiple currency proceeds on the sale of its gold production and significant costs for the Syama Gold Project and the Golden Pride Project are denominated in AUD, USD and the local currencies of those operations, and as such movements within these currencies expose the Group to exchange rate risk.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk can be measured by performing a sensitivity analysis that quantifies the impact of different assumed exchange rates on the Group’s forecast cash flows.

The Group’s Financial Risk Management Committee continues to manage and monitor foreign exchange currency risk. At present, the Group does not specifically hedge its exposure to foreign currency exchange rate movements.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

113

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

The Group’s exposure to foreign exchange currency risk at the reporting date was as follows:

12	UNITED STATES DOLLARS	AUSTRALIAN DOLLARS	TANZANIAN SHILLINGS	POUNDS STIRLING	OTHER	NO FOREIGN CURRENCY RISK	TOTAL
	A$’000	A$’000	A$’000	A$’000	A$’000	A$’000	A$’000
Financial Assets
Cash	2,641	184	114	-	46	45,419	48,404
Other fnancial assets - restricted cash	-	-	-	42,267	-	-	42,267
Receivables	-	12	4,247	-	-	3,841	8,100
Available for sale fnancial assets	-	-	-	-	-	374	374
Financial derivative assets	-	-	-	2,364	-	-	2,364
	2,641	196	4,361	44,631	46	49,634	101,509
Financial Liabilities
Payables	4,675	3,043	16	-	2,251	32,963	42,948
Interest bearing liabilities (i)	-	-	-	-	-	11,020	11,020
	4,675	3,043	16	-	2,251	43,983	53,968

11	UNITED STATES DOLLARS	AUSTRALIAN DOLLARS	TANZANIAN SHILLINGS	OTHER	NO FOREIGN CURRENCY RISK	TOTAL
	A$’000	A$’000	A$’000	A$’000	A$’000	A$’000
Financial Assets
Cash	3,944	92	381	-	6,796	11,213
Receivables	129	12	3,914	-	18,212	22,267
Available for sale fnancial assets	-	-	-	-	692	692
Financial derivative assets	-	-	-	-	11	11
	4,073	104	4,295	-	25,711	34,183
Financial Liabilities
Payables	2,993	7,303	42	677	36,418	47,433
Interest bearing liabilities (i)	23,867	-	-	-	78,013	101,880
Financial derivative liabilities	-	-	-	-	18,910	18,910
	26,860	7,303	42	677	133,341	168,223

(i) Several of the intercompany balances between Group entities create foreign exchange differences which have historically been material and are not eliminated from the Group’s consolidated statement of comprehensive income (Refer to note 2(i)). Those intercompany balances are not shown here as they are eliminated from the Group’s consolidated statement of financial position. Refer to the table below for the significant intercompany balances outstanding at 30 June 2012.

FACILITY CURRENCY DENOMINATION FUNCTIONAL CURRENCY OF THE BORROWER AUD EQUIVALENT 12 11 $'000 $’000	FACILITY CURRENCY DENOMINATION FUNCTIONAL CURRENCY OF THE BORROWER AUD EQUIVALENT 12 11 $'000 $’000
Resolute Mining Limited (benefciary)/Resolute (Somisy) Limited AUD Central African Francs 407,594	436,601
Resolute (Tanzania) Limited and its controlled entities (benefciary)/ Resolute Pty Ltd USD AUD 159,162	107,179
566,756	543,780

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

114

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

(B) INTEREST RATE RISK

The Group’s main interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. For the 2012 and 2011 financial years, the majority of the Group’s borrowings have been denominated in USD, AUD, and Central African Francs.

The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to the potential renewals of existing positions, alternative financing, alternative hedging positions and the mix of fixed and variable interest rates. There is no intention at this stage to enter into any interest rate swaps.

The following tables summarises the financial assets and liabilities of the Group, together with effective interest rates as at reporting date.

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FLOATING FIXED INTEREST RATE MATURING IN NON INTEREST TOTAL AVERAGE INTEREST RATE
INTEREST BEARING
12 RATE < 1 YEAR 1 TO 5 YEARS > 5 YEARS FLOATING FIXED
$’000 $’000 $’000 $’000 $’000 $’000
Financial Assets
Cash 8,404 40,000 - - - 48,404 2.0% 5.4%
Receivables - - - - 8,100 8,100 - -
Available for sale financial
assets - - - - 374 374 - -
Financial derivative assets - - - - 2,364 2,364 - -
Other financial assets -
restricted cash - - - - 42,267 42,267 - -
8,404 40,000 - - 53,105 101,509
Financial Liabilities
Payables - - - - 42,948 42,948 - -
Interest bearing liabilities - 7,878 3,142 - - 11,020 - 8.0%
- 7,878 3,142 - 42,948 53,968
11
Financial Assets
Cash 11,213 - - - - 11,213 3.6% -
Receivables - - - - 22,267 22,267 - -
Available for sale financial
assets - - - - 692 692 - -
Financial derivative assets - - - - 11 11 - -
11,213 - - - 22,970 34,183
Financial Liabilities
Payables - - - - 47,433 47,433 - -
Interest bearing liabilities 19,609 15,118 67,153 - - 101,880 4.2% 14.6%
Financial liabilities - 18,910 - - - 18,910 - 5.4%
19,609 34,028 67,153 - 47,433 168,223
----- End of picture text -----

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

115

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

(C) CREDIT RISK EXPOSURE

The Group’s exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount of the financial assets.

Credit risk is managed on a Group basis. Credit risk predominately arises from cash, cash equivalents, gold bullion held in metal accounts, derivative financial instruments, deposits with banks and financial institutions and receivables from statutory authorities. For derivative financial instruments, management mitigates some credit risk by using a number of different hedging counterparties.

Credit risk further arises in relation to financial guarantees given to certain parties. Such guarantees are only provided in exceptional circumstances and are subject to Financial Risk Management Committee approval. With the exception of those items disclosed in note 18(a) and 18(b), no guarantees have been provided to third parties as at reporting date.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

CONSOLIDATED

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----- Start of picture text -----

12 11
$’000 $’000
Cash at bank & short term deposits
Counterparties with external credit ratings
A 48,180 9,801
BBB - 1,282
Counterparties without external credit ratings
No rating 224 130
Total cash at bank & short term deposits 48,404 11,213
Trade receivables
Counterparties with external credit ratings
AA+ 1,067 1,218
AA 343 -
B- 497 -
Counterparties without external credit ratings
Group 1 2,524 3,029
Group 2 9,537 8,193
Total trade receivables 13,968 12,440
Other financial assets - restricted cash
Counterparties with external credit ratings
BBB- 42,267 -
Financial derivative assets
Counterparties with external credit ratings
A - 11
BBB- 2,364 -
Total financial derivative assets 2,364 11
----- End of picture text -----*

Group 1 refers to existing counterparties with no defaults in the past. Group 2 refers to existing counterparties where difficulty in recovering these debts in the past has been experienced.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

116

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

(D) LIQUIDITY RISK

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, or having the availability of funding through an adequate amount of undrawn committed credit facilities.

As at 30 June 2012, the Group had $4.783m (AUD equivalent) (2011: $13.964m (AUD equivalent)) in unused financing facilities.

The remaining contractual maturities of the Group’s financial liabilities, including future finance costs, are:

Liquidity analysis

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----- Start of picture text -----

LESS THAN 3 MONTHS 3 TO 12 MONTHS 1 TO 5 YEARS LESS FINANCE TOTAL
CHARGES
12
Payables 42,948 - - - 42,948
Interest bearing liabilities 6,238 2,043 3,244 (505) 11,020
49,186 2,043 3,244 (505) 53,968
11
Payables 47,433 - - - 47,433
Interest bearing liabilities 31,663 24,235 84,851 (19,959) 120,790
79,096 24,235 84,851 (19,959) 168,223
----- End of picture text -----

(E) INSTRUMENTS RECOGNISED AT AMOUNTS OTHER THAN FAIR VALUE

Except for the liability portion of the convertible notes (included in the comparative information), the fair value of all the Group’s financial instruments recognised in the financial statements approximates or equals their carrying amounts.

The fair value of the liability portion of the convertible notes is estimated using the market interest rate available to the issuer for an instrument with identical terms but without the conversion option.

(F) FAIR VALUES FOR INSTRUMENTS RECOGNISED AT FAIR VALUE

The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:

Level 1 - the fair value is calculated using quoted prices in active markets.
Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 - the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

117

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.

		AS AT 30	JUNE 2012			AS AT 30	JUNE 2011
	QUOTED	VALUATION	VALUATION	TOTAL	QUOTED	VALUATION	VALUATION	TOTAL
	MARKET	TECHNIQUE	TECHNIQUE		MARKET	TECHNIQUE	TECHNIQUE
	PRICE	- MARKET	- NON MARKET		PRICE	- MARKET	- NON MARKET
	(LEVEL 1)	OBSERVABLE	OBSERVABLE		(LEVEL 1)	OBSERVABLE	OBSERVABLE
		INPUTS	INPUTS			INPUTS	INPUTS
		(LEVEL 2)	(LEVEL 3)			(LEVEL 2)	(LEVEL 3)
Financial assets*	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Available for sale fnancial
assets	374	-	-	374	692	-	-	692
Financial derivative assets	-	2,364	-	2,364	-	11	-	11
	374	2,364	-	2,738	692	11	-	703

The above table only includes financial instruments that require one of the abovementioned valuation techniques to determine fair value.

Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without any deduction for transaction costs. The fair value of the listed equity investments are based on quoted market prices.

For financial instruments not quoted in active markets, the Group uses a valuation technique such as present value techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market participants. These valuation techniques use both observable and unobservable market inputs.

Financial instruments that use valuation techniques with only observable market inputs or unobservable inputs that are not significant to the overall valuation include forward commodity contracts.

The fair value of other debt and equity securities, as well as other investments that do not have an active market, are based on valuation techniques using market data that is not observable. Where the impact of credit risk on the fair value of a derivative is significant, and the inputs on credit risk are not observable, the derivative would be classified as based on non observable market inputs (Level 3).

(G) TRANSFER BETWEEN CATEGORIES

There were no transfers between Level 1 and Level 2 during the year.

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

118

Notes to the Financial Statements

for the year ended 30 June 2012

Note 36: Financial instruments and financial risk management (continued)

(H) SENSITIVITY ANALYSIS

The following table summarises the post tax effect of the sensitivity of the Group’s financial assets and financial liabilities on profit and equity at reporting date to interest rate risk, foreign exchange currency risk and gold price risk.

The sensitivity analysis below is based on movements that are reasonably possible in interest rates, foreign exchange currency rates and the gold price based on historical information and future expectations.

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INTEREST RATE RISK
CONSOLIDATED
-1% +1%
CARRYING PROFIT EQUITY PROFIT EQUITY
AMOUNT
12
$’000 $’000 $’000 $’000 $’000
Financial Assets
Cash and cash equivalents 48,404 (313) (313) 313 313
Trade and other receivables 8,100 - - - -
Available for sale financial assets 374 - - - -
Financial derivative assets 2,364 - - - -
Other financial assets - restricted cash 42,267 - - - -
Financial Liabilities
Payables 42,948 - - - -
Interest bearing liabilities 11,020 - - - -
Total increase/(decrease) (313) (313) 313 313
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11

Financial Assets
Cash and cash equivalents	11,213	(78)	(78)	78	78
Trade and other receivables	22,267	-	-	-	-
Available for sale fnancial assets	692	-	-	-	-
Financial derivative assets	11	1	1	(1)	(1)
Financial Liabilities
Payables	47,433	-	-	-	-
Interest bearing liabilities	101,880	146	146	(146)	(146)
Financial liabilities	18,910	-	-	-	-
Total increase/(decrease)		69	69	(69)	(69)

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

119

Notes to the Financial Statements

for the year ended 30 June 2012

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FOREIGN EXCHANGE RISK GOLD PRICE RISK
-10% +10% -10% +10%
PROFIT EQUITY PROFIT EQUITY PROFIT EQUITY PROFIT EQUITY
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
216 216 (176) (176) - - - -
331 331 (271) (271) - - - -
- - - - - - - -
184 184 (150) (150) (2,959) (2,959) 2,959 2,959
3,052 3,052 (2,497) (2,497) - - - -
(720) (720) 590 590 - - - -
- - - - - - - -
3,063 3,063 (2,504) (2,504) (2,959) (2,959) 2,959 2,959
319 319 (261) (261) - - - -
315 315 (257) (257) - - - -
- - - - - - - -
- - - - 39 39 (6) (6)
(829) (829) 681 681 - - - -
(1,959) (1,959) 1,602 1,602 - - - -
- - - - - - - -
(2,154) (2,154) 1,765 1,765 39 39 (6) (6)
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RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

120

Notes to the Financial Statements

for the year ended 30 June 2012

Note 37: Subsequent events

Note 38: Parent entity information

Information relating to Resolute Mining Limited:

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CONSOLIDATED
12 11
$’000 $’000
Current Assets 103 1,754
Total Assets 413,006 454,223
Current Liabilities 455 14,105
Total Liabilities 460 88,702
Issued Capital 368,047 287,125
Retained Earnings 33,874 55,395
Convertible Note Equity Reserve - 13,764
Option Equity Reserve 5,987 5,987
Share Based Payments Reserve 4,626 3,236
Total Shareholders Equity 412,534 365,507
Loss of Resolute Mining Limited (21,521) (14,719)
Total comprehensive loss of Resolute Mining Limited (21,521) (14,719)
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Refer to Note 32 for the contingent liabilities and commitments of Resolute Mining Limited.

The parent company guarantee provided by the Resolute Mining Limited as outlined in Note 18(a) has a nil written down value as at 30 June 2012 (30 June 2011: five thousand dollars).

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

121

Directors’ Declaration

for the year ended 30 June 2012

In accordance with a resolution of the directors of Resolute Mining Limited, I state that:

In the opinion of the directors:

(a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and,
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ;

(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1(a);

(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and,
(d) this declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.

On behalf of the Board

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P.R. Sullivan Director

Perth, Western Australia 17 September 2012

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

122

Independent Audit Report

for the year ended 30 June 2012

Independent auditor's report to the members of Resolute Mining Limited

`Report on the financial report`

We have audited the accompanying financial report of Resolute Mining Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

`Directors' responsibility for the financial report`

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

`Auditor's responsibility`

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

`Independence`

In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report.

Liability limited by a scheme approved under Professional Standards Legislation

PM:MM:RESOLUTE:010

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

123

Independent Audit Report

for the year ended 30 June 2012

`Opinion`

In our opinion:

a. the financial report of Resolute Mining Limited is in accordance with the Corporations Act 2001, including:
i giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a).

`Report on the remuneration report`

We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

`Opinion`

In our opinion, the Remuneration Report of Resolute Mining Ltd for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001 .

Ernst & Young

Peter McIver Partner Perth 17 September 2012

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

124

Shareholder Information

for the year ended 30 June 2012

Substantial shareholders at 4 October 2012

Substantial shareholders at 4 October 2012
	NUMBER HELD	PERCENTAGE
ORDINARY SHARES
ICM Limited (formerly Alliance Life Common Fund Ltd)	197,109,976	31.4%
M&G Investment Management Limited (or Vanguard Precious Metals and Mining Fund)	94,308,214	15.0%
Vanguard Precious Metals and Mining Fund	51,965,029	7.9%
Van Eck Associates Corporation	31,464,294	5.0%

Distribution of equity securities as at 3 Oct 2012

Distribution of equity securities as at 3 Oct 2012
	ORDINARY SHARES
SIZE OF HOLDING
1 - 1,000	1,219
1,001 - 5,000	1,789
5,001 - 10,000	699
10,001 - 100,000	810
100,001 - and over	129
Total equity security holders	4,646
Number of equity security holders with less than a marketable parcel	436

Voting rights

(a) Ordinary shares

Under the Company’s Constitution, all ordinary shares issued by the Company carry one vote per share without restriction.

Twenty largest shareholders as at 3 October 2012

Twenty largest shareholders as at 3 October 2012
NAME	NUMBER OF	% OF ISSUED
	ORDINARY SHARES	CAPITAL
J P Morgan Nominees Australia Limited	223,543,792	35.56%
HSBC Custody Nominees Australia Limited	173,349,192	27.57%
National Nominees Limited	100,466,969	15.98%
JP Morgan Nominees Australia Limited (Cash income a/c)	13,132,365	2.09%
Citicorp Nominees Pty Ltd	12,302,375	1.96%
Citicorp Nominees Pty Ltd (Colonial First State)	3,795,896	0.60%
BNP Paribas Nominess Pty Ltd	3,516,431	0.56%
HSBC Custody Nominees Australia Limited	3,461,626	0.55%
NEFCO Nominees Pty Ltd	3,337,200	0.53%
AMP Life Limited	3,267,470	0.52%
BNP Paribas Nominess Pty Ltd	2,974,140	0.47%
Lim Sun Heng	2,623,735	0.42%
Zero Nominees Pty Ltd	2,518,000	0.40%
Mr Peter Sullivan	2,400,000	0.38%
Merrill Lynch Australia Nominees Pty Ltd	1,955,721	0.31%
Berhad Lyne Ching SDN	1,901,301	0.30%
UBS Nominess Pty Ltd	1,681,821	0.27%
Avanteos Investments Limited (Symetry Retire)	1,670,042	0.27%
QIC Ltd	1,517,800	0.24%
HSBC Custody Nominees Australia Limited	1,379,773	0.22%
	560,795,649	89.20%

RESOLUTE MINING LIMITED ANNUAL REPORT 2012 FINANCIAL REPORT

www.rml.com.au

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AI assistant

Resolute Mining Limited — Annual Report 2012

10548_rns_2012-10-24_49279437-3258-4434-a08e-0a2e79fd0135.pdf

Contents

Corporate Directory

Directors

Home Exchange

Legal Advisors

Auditors

Bankers

Web Site

Share Registry

Financial

Operations

Corporate

Development

Exploration

Highlights

Operating cashflow

Reserves and Resources Statement

Gold Resources[1]

Reserves and Resources Statement Continued

at 30 june 2012

Group Production Summary

Group Project Summary

Syama

Operations

OperatiOns Overview

Outlook

Operating Performance at a glance

Satellite Deposits - Ore Reserves as at 30 june 2012

Ravenswood

Operations

Outlook

OperatiOns Overview

Golden Pride

Operations

Outlook

Mali

Syama Expansion Study (Resolute 80%)

High voltage Grid Interconnection to Syama (Resolute 80%)

DEvELOPMEnT OvERvIEW

Australia

Satellite Deposit Resource Evaluation (Resolute 80%)

Sarsfield Expansion Study (Resolute 100%)

Mt Wright Project (Resolute 100%)

ExPLORATIOn OvERvIEW

Mali

Syama Permit (Resolute 80%)

SYAMA SOUTH

n’Golopene - Robex Resources jv (Resolute earning 70%)

Tiagole and Sindi (Resolute 100%)

Borokoba Project (Resolute 100%)

ExPLORATIOn OvERvIEW

Tanzania

Australia

nolans Project (Resolute 100%)

Welcome Project (Resolute 100%)

Mt Success Project (Resolute 100%)

MT DOUGLAS PROSPECT (70KM NW OF RAVENSWOOD)

Ravenswood Project (Resolute 100%)

QUEEN OF SHEBA (15KM SSE OF RAVENSWOOD)

Mt Wright Project (Resolute 100%)

MT WRIGHT (11KM NTH OF RAVENSWOOD)

Côte d’Ivoire

Environment

REHABILITATION

WATER MANAGEMENT

Golden Pride Mine – Tanzania

STATUTORY MINE CLOSURE PLAN

EMISSIONS TO AIR

TAILINGS MANAGEMENT

COMPLIANCE AND RISK MANAGEMENT

Syama Mine – Mali

REHABILITATION

WATER MANAGEMENT

WASTE MANAGEMENT

AIR QUALITY

COMPLIANCE AND RISK MANAGEMENT

Ravenswood Mine – Queensland

Resolute Mining Limited Annual Report 2012