Resolute Mining Limited - Annual Report 2018

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FINANCIAL REPORT 30 JUNE 2018

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Table of Contents
Corporate Directory	3
Directors’ Report	4
Auditor’s Independence Declaration	21
Financial Report 2018	22
Director’s Declaration	74
Independent Auditor’s Report	75
Shareholder Information	83

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Corporate Directory

Directors

Non-Executive Chairman Managing Director and CEO Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director

Martin Botha John Welborn Henry Price Peter Sullivan Mark Potts Yasmin Broughton

Company Secretary

Amber Stanton

Registered Office and Business Address

Level 2, Australia Place 15-17 William Street Perth, Western Australia 6000

Postal

PO Box 7232 Cloisters Square Perth, Western Australia 6850 Telephone: + 61 8 9261 6100 Facsimile: + 61 8 9322 7597 Email: [email protected] ABN 39 097 088 689

Share Registry

Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, Western Australia 6000

Home Exchange

Australian Securities Exchange Level 40, Central Park 152-158 St George's Terrace Perth, Western Australia 6000

Quoted on the official lists of the Australian Securities Exchange: ASX Ordinary Share Code: “RSG”

Securities on Issue [30/06/2018]

Ordinary Shares 741,477,595 Performance Rights 11,307,704

Auditor

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

Website

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

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

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

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 2018.

Corporate Information

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

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 the entire period unless otherwise stated.

Names, qualifications, experience and special responsibilities

Marthinus (Martin) Botha (Non-Executive Chairman)

BScEng

Mr Martin Botha was appointed Chairman in June 2017 after being appointed to the board in February 2014. Mr Botha is an Engineering Surveyor by training with 30 years’ experience in international investment banking. A founding director in Standard Bank Plc’s London-centred international operations, Mr Botha established and led the development of the core global natural resources trading and financing franchises, as well as various geographic operations, including those in the Russian Commonwealth of Independent States, Turkey and the Middle East. Mr Botha is currently non-executive Chairman of Sberbank CIB (UK) Ltd, a securities broker regulated by the UK Financial Services Authority, and is a non-executive director of Zeta Resources Limited (appointed 2013). Mr Botha graduated with first class honours from the University of Cape Town and is based in London.

Mr Botha is Chair of the Nomination Committee, and a member of the Audit and Risk Committee and the Remuneration Committee.

John Welborn (Managing Director and Chief Executive Officer)

BCom, FCA, FAIM, MAICD, MAusIMM, SAFin, JP

Mr John Welborn was appointed Managing Director and Chief Executive Officer on 1 July 2015. Mr Welborn is a Chartered Accountant with a Bachelor of Commerce degree from the University of Western Australia and is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow of the Australian Institute of Management and is a member of the Australian Institute of Mining and Metallurgy, the Financial Services Institute of Australasia, and the Australian Institute of Company Directors.

Mr Welborn is a Director of the World Gold Council (appointed 2017) and is a non-executive director of Equatorial Resources Limited (appointed 2010), Kilo Goldmines Limited (appointed 2017), and is Chairman of Orbital Corporation Limited (appointed 2014). Mr Welborn is Chair of the Environment and Community Development Committee and the Safety, Security and Occupational Health Committee.

Peter Sullivan (Non-Executive Director)

BEng, MBA

Mr Peter Sullivan was appointed Managing Director and Chief Executive Officer of the Company in 2001 and retired as Chief Executive Officer on 30 June 2015 at which point he became a Non-Executive Director of the Company. Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies and projects for over 25 years. Mr Sullivan is also a director of GME Resources Limited (appointed 1996), Zeta Resources Limited (appointed 2013), Panoramic Resources Limited (appointed 2015) and Bligh Resources Limited (appointed 2017).

Mr Sullivan is Chair of the Remuneration Committee and a member of the Audit and Risk Committee.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Directors (continued)

Henry (Bill) Price (Non-Executive Director)

BCom, FCA, MAICD

Mr Bill Price is a Non-Executive Director and was appointed to the board in 2003. Mr Price is a Fellow of Chartered Accountants Australia and New Zealand 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 of Tennis West.

Mr Price is a member of the Audit and Risk Committee (resigned as Chair in July 2017), the Remuneration Committee and the Nomination Committee.

Mark Potts (Non-Executive Director)

BSc (Hons)

Mr Mark Potts is a Non-Executive Director and was appointed to the board in June 2017. Mr Potts has held senior executive and board positions, in start-ups and large corporate environments, over a 30-year career. Most recently Mr Potts was the worldwide CTO and VP for Corporate Strategy at Hewlett Packard Enterprise. Prior to Hewlett Packard, Mr Potts was the founder of several successful, venture backed start-ups, that have driven technology disruption and business innovation in varied industries. Mr Potts is the non-executive chairman of Decimal Software Limited (appointed 2016), a non-executive director of Virtual Gaming World (appointed 2017) and board adviser to Advara (appointed 2014) and Modis Australia (appointed 2010).

Mr Potts is a member of the Audit and Risk Committee and the Nomination Committee.

Yasmin Broughton (Non-Executive Director)

BComm PG Law GAICD

Ms Yasmin Broughton is a Non-Executive Director and was appointed to the board in June 2017. Ms Broughton is a corporate lawyer with significant experience working as both a director and an executive in a diverse range of industries. Ms Broughton has over 14 years’ experience working with ASX-listed companies as an officer and has a deep understanding of corporate governance, including compliance and managing complex legal issues. Ms Broughton is also a non-executive director of Synergy, the Insurance Commission of Western Australia and Edge Employment Solutions Inc.

Ms Broughton is Chair of the Audit and Risk Committee, and a member of the Remuneration Committee and the Nomination Committee.

General Counsel / Company Secretary

Amber Stanton

LLB

Ms Amber Stanton is a corporate lawyer and was appointed as General Counsel / Company Secretary in August 2017. Prior to joining Resolute, Ms Stanton was a partner at two international law firms, specialising in mergers and acquisitions, capital markets, energy and resources and general corporate and commercial matters. Ms Stanton was the WA winner of the 2011 Telstra Business Women's Award (Corporate and Private Sector) and is a director of the Liver Foundation of Western Australia.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Interests in the shares and options of Resolute and related bodies corporate

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

	Fully Paid Ordinary Shares	Performance Rights
J. Welborn	2,600,000	4,666,500
M. Botha	-	-
H. Price	194,745	-
P. Sullivan	2,840,674	-
M. Potts	26,825	-
Y. Broughton	-	-
	5,662,244	4,666,500

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.

Significant Changes in the State of Affairs

There have been no significant changes in the state of affairs of the Company other than those stated throughout this Report.

Significant Events after Reporting Date

On 13 July 2018, Resolute entered into a US$100m Revolving Loan Facility agreement with Investec Australia Limited. The first drawdown under the facility was made on 20 August 2018 for US$30m. Resolute also completed the below strategic investments on 13 July 2018:

Acquisition of 16,182,480 shares in Orca Gold Inc via the issue of 8,953,421 Resolute shares
Acquisition of 79,290,000 shares in Manas Resources Limited via the issue of 317,160 Resolute shares
Resolute issued 2,012,466 Resolute Shares to Arnold Kondrat in consideration for the acquisition of 25,000,000 shares in Loncor Resources Inc.

On 23 August 2018, the Company declared a final dividend on ordinary shares in respect of the 2018 financial year of 2.0 cents per share. The dividend has not been provided for in the 30 June 2018 financial statements.

Financial Position and Performance

Cash, bullion and listed investments of A$112m (FY17: A$290m)
FY18 net profit after tax of A$78m (FY17: A$166m)
Revenue from gold and silver sales of A$446m (FY17: A$541m)
Gross profit from operations of A$69m (FY17: A$177m)
Return on equity of 12% (FY17: 49%)
Diluted earnings per share of 8.72 cents (FY17: 18.61 cents)
Net cash flows from operations of A$28m (FY17: A$186m).
Net investing cash outflows of A$269m (FY17: A$128m).
Net financing cash outflows of A$15m (FY17: A$136m inflow).

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Operations

Gold production of 284koz at All-in Sustaining Cost (AISC) of A$1,355/oz (US$1,052/oz) ahead of revised guidance (280koz at A$1,360/oz)
Gold production from the Syama Gold Mine in Mali (Syama) in FY18 was 194koz at an AISC of A$1,286/oz (US$998/oz)
The current financial year represents the last period where production at Syama is sourced from a variety of different sources including the low grade Syama sulphide open pit ore stockpiles
In future, the Syama sulphide circuit will exclusively operate on higher grade sulphide material sourced from the new Syama Underground which is on track to commence sub-level caving in December 2018 and will then ramp-up to throughput rate of 2.4 million tonnes per annum in 2019. Oxide production will be from the new Namakan satellite open pit at the Tabakoroni Project adjacent to Syama
Gold production from the Ravenswood Gold Mine in Australia (Ravenswood) in FY18 was 90koz at an AISC of A$1,394/oz (US$1,071/oz)
Mine life at the Mt Wright underground mine has continued beyond expectations with ore production supplemented by ore open pit mining from Nolans East and low grade stockpiles

FY18 Summary	Units	Syama Sulphide	Syama	Syama	Ravenswood	GROUP Total
			Oxide	Total
UG lateral development	m	6,690	-	6,690	-	6,690
UG vertical development	m	1,567	-	1,567	238	1,805
Total UG lateral development	m	8,257	-	8,257	238	8,495
UG ore mined	t	168,601	-	168,601	525,803	694,404
UGgrade mined	g/t	2.88	-	2.88	2.40	2.52
OP operatingwaste	BCM	289,818	2,697,67	2,987,496	763,465	3,750,96
OP ore mined	BCM	374,341	775,677	1,150,018	703,794	1,853,81
OPgrade mined	g/t	2.32	2.09	2.18	0.66	1.54
Total ore mined	t	1,210,204	1,594,64	2,804,851	2,459,319	5,264,17
Total tonnesprocessed	t	1,967,503	1,396,80	3,364,308	2,445,010	5,809,31
Gradeprocessed	g/t	2.00	2.16	2.07	1.19	1.70
Recovery	%	72.0	82.0	77.7	94.4	82.8
Gold recovered	oz	91,322	78,891	170,213	88,355	258,568
Gold in circuit drawdown/(addition)	oz	13,073	10,925	23,998	1,620	25,617
Goldproduced(poured)	oz	104,395	89,816	194,211	89,975	284,185
Gold bullion in metal account movement (increase)/decrease	oz	(7,624)	(5,005)	(12,629)	(9,176)	(21,804)
Gold sold	oz	96,771	84,811	181,582	80,799	262,381
Ahid ld i	A$/oz	1,699	1,699	1,699	1,710	1,703
ceve go prce	US$/oz	1,317	1,317	1,317	1,321	1,318
Cost Summary
Mining	A$/oz	910	493	717	573	671
Processing	A$/oz	617	355	496	562	517
Administration	A$/oz	240	182	213	211	212
StockpileAdjustments	A$/oz	129	(78)	33	(77)	(2)
GoldinCircuitMovement	A$/oz	123	93	109	16	79
Amortisation/(Deferral) ofstripping costs	A$/oz	(1)	129	59	45	55
Transfer of underground development costs to development	A$/oz	(804)				(294)
			-	(431)	-

	A$/oz	1,214	1,174	1,196	1,330	1,238
Cash Cost	US$/oz	942	911	928	1,019	960
Royalties	A$/oz	95	95	95	77	92
By-product credits	A$/oz	(2)	(2)	(2)	(9)	(5)
Amortisation/(Deferral)of strippingcosts	A$/oz	1	(128)	(59)	(46)	(55)
Sustainingcapital + others	A$/oz	37	27	32	31	33
Overhead costs	A$/oz	24	24	24	11	9
Administration Costs	A$/oz					43
All-In Sustaining Cost (AISC)	A$/oz	1,369	1,190	1,286	1,394	1,355
AISC is calculated ongoldproduced(poured)	US$/oz	1,062	924	998	1,071	1,052
Depreciation and amortisation	A$/oz	88	30	61	29	28

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Development: Study Updates

Resolute progressed studies across its portfolio in FY18 culminating in the release of updates for Syama, Ravenswood and Bibiani in early July 2018
At Syama, the Definitive Feasibility Study (DFS) Update delivered a significant reduction in the Life of Mine (LOM) AISC to US$746/oz (from US$881/oz)
Mine life extended by 4 years from 2028 to 2032
Syama Underground Probable Reserve increased by 38% to 3.0Moz (35.2Mt at 2.7 g/t)
Expanded cave footprint; targeting annual production in excess of 300,000oz per annum
Fully automated loading and haulage of underground ore
At Ravenswood, significant enhancements were identified for the Ravenswood Expansion Project as part of study work  LOM AISC lowered to US$823/oz ($A1,097/oz)
Production of c.115,000oz annually through to 2032
Major expansion capital deferred through changes in mine sequencing
At Bibiani, a Feasibility Study Update demonstrates a potential low cost, long life operation with robust economics
Targeting 100,000oz per annum over a 10 year LOM at an AISC of c.US$750/oz

Exploration

Drilling results from Nafolo, Syama and Tabakoroni continue to demonstrate potential expansions to the existing Syama mine plan from underground mining; multi-rig exploration drilling programs continue
Nafolo is a major discovery which remains open in all directions
Potential for a standalone high grade underground mine at Tabakoroni
Substantial increases in Resolute’s Ore Reserves and Mineral Resources as at 30 June 2018 as a result of outstanding exploration success and positive equity investments
Global Mineral Resources increased 35% to 16.5 million ounces (Moz)
Group Ore Reserves increased by 17% to 5.9Moz
Total Syama Underground Indicated and Inferred Resources increased to 5.7Moz; this was a 39% increase from the previous total underground resource of 1.6Moz
A maiden Inferred Resource for Nafolo discovery of 400,000 ounces was also established
Bibiani Indicated and Inferred Resources increased by 40% to 2.5Moz
Discovery cost of A$36.5 per Reserve ounce and A$14.5 per Resource ounce

Corporate

Strategic investment made in various African gold explorers including Oklo Resources Limited and Mako Gold Limited which are listed on the ASX and Orca Gold Inc and Loncor Resources Inc which are listed on the TSX
US$100m Revolving Loan Facility was established with Investec Australia Limited to enhance financial flexibility allow Resolute to pursue growth opportunities as they arise

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. Levels of sulphate and some trace elements have been measured above license limits at the Ravenswood operation. The operation is cooperating with the Queensland Department of Environment and Science to evaluate and control surface and groundwater quality.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report

The following information has been audited.

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. The following information has been audited as required by section 308(c) of the Corporations Act 2001.

The remuneration report is presented under the following sections:

Introduction
Remuneration governance
Executive remuneration arrangements and outcomes for 2018
Non-executive director remuneration arrangements and outcomes for 2018
Additional disclosures relating to options and shares
Loans to key management personnel and their related parties

1. Introduction

The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who 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.

For the purposes of this report, the term “executive” includes the Chief Executive Officer (CEO), executive directors and other senior executives of the Company and the Group.

Key management personnel

(i) Directors

Name Position held during the financial year J. Welborn Managing Director and Chief Executive Officer M. Botha Non-Executive Director (Non-Executive Chairman) H. Price Non-Executive Director P. Sullivan Non-Executive Director Y. Broughton Non-Executive Director M. Potts Non-Executive Director

(ii) Executives

Name Position held during the financial year

P. Beilby Chief Operating Officer L. de Bruin Chief Financial Officer A. Stanton General Counsel and Company Secretary (appointed 4 August 2017) G. Fitzgerald Company Secretary (resigned 4 August 2017)

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

2. Remuneration Governance

Remuneration Committee

The Remuneration Committee is responsible for determining and reviewing the compensation arrangements for directors, the Chief Executive Officer and the executive team. 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 Committee is comprised solely of non-executive directors.

Nomination Committee

The Nomination Committee is responsible for Board and Board Committee membership, succession planning and performance evaluation.

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

Remuneration Structure

In accordance with best practice governance, the structure of non-executive director and senior executive remuneration is separate and distinct.

Remuneration Report Approval at 2017 AGM

The 30 June 2017 remuneration report received positive shareholder support at the 2017 AGM with a vote of more than 99% in favour.

3. Executive Remuneration arrangements and outcomes for 2018

RML Remuneration Policy

The Board recognises that the performance of the Company depends upon the quality of its 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; and
Aligns executive incentive rewards with the creation of value for shareholders.

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 Committee uses an external consultant’s Remuneration Report to determine market levels of remuneration for comparable executive roles in the mining industry. An external advisor has been used to assist in the design and implementation of a Remuneration Framework that is in line with industry practice.

It is the 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.

Remuneration consists of the following key elements:

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

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is established for each executive by the Remuneration Committee and for the year ended 30 June 2018 was as follows:

		Variable remuneration	Variable remuneration
CEO	Fixed Remuneration (40%)	Target STI (20%)	Target LTI (40%)
Other Executives	Fixed Remuneration (47%)	Target STI (23%)	Target LTI (30%)

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 Committee. The process consists of a review of individual performance, relevant experience, and relevant comparable remuneration in the mining industry and more broadly across other sectors.

Structure

Executives receive a base salary and statutory superannuation as part of their Fixed Remuneration.

Variable Remuneration – Short Term Incentive (“STI”)

Objective

The objective of the STI is to generate greater alignment between performance and remuneration levels for the purpose of driving operational excellence.

Structure

The STI is an annual “at risk” component of remuneration for executives. 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 executives 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 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. For the executives, a below “threshold” performance delivers a nil STI, a “threshold” performance delivers a STI equal to 12.5% of fixed remuneration, a “target” performance delivers a STI equal to 50% of fixed remuneration, and a “stretch” performance delivers a STI equal to 75% of fixed remuneration. Pro-rata payment applies on a straight line basis between “threshold” and “target” and from “target” to “stretch” Performance.

Target performance represents challenging 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 KPIs to the Board for each executive and then later assessing the extent to which the KPIs of the executive have been achieved, and the amount to be paid to each executive. 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.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

The STI measures comprise:

Improved safety performance – measured by:
a lag indicator in the form of a specified reduction in the Total Recordable Injury Frequency Rate in comparison to prior years; and
specified lead indicators designed to be proactive and influence future events with measures being put in place to prevent incidents and injury. As part of this process, a Safety Action Performance list is prepared each year outlining a set of actions and deliverables.
The achievement of defined targets relative to budget relating to:
operating cash flow;
gold poured; and
cost per tonne milled.
A set of personal performance metrics designed to drive optimum operational performance as specifically related to each executive portfolio.

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.

Actual STI performance for the year ending 30 June 2018

Actual performance for the year ending 30 June 2018 was an average of 78% of target performance for Executives.

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 provided to executives who are able to influence the generation of shareholder value and thus have an impact on the Company’s performance against the relevant long-term performance hurdles.

a) Selecting the right plan vehicle

Under a Performance Rights Plan, executives are granted a right to be issued a share in the future subject to performance based vesting conditions being met.

b) Grant Frequency and LTI quantum

Upon Board instigation, Executives receive a new grant of performance rights every year and the LTI forms a key component of the executive’s Total Annual Remuneration.

The LTI dollar value that executives are entitled to receive is set at a fixed percentage of their fixed remuneration and equates to 100% of fixed remuneration for the Chief Executive Officer and 65% of fixed remuneration for the other executives.

c) Performance Conditions

Performance conditions have been selected that reward executives for creating shareholder value as determined via the change in the Company’s share price (Relative Total Shareholder Return) and via reserves/resources growth over a 3 year period.

The LTI performance is 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 total shareholder return (“RTSR”) measure over a 3 year period; and,
25% of the Rights will be performance tested against the reserve/resource growth over a 3 year period.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

Reflecting on market practice the Board has decided that the most appropriate performance measure to track share price performance is via a relative TSR measure. The Company’s TSR is updated each year and is measured against a customised peer group comprising the following companies:

Alacer Gold Corporation
Beadell Resources Ltd
Endeavour Mining Corporation
Evolution Mining Ltd
Kingsgate Consolidated Ltd
Medusa Mining Ltd
Northern Star Resources Limited
OceanaGold Corporation
Perseus Mining Ltd
Ramelius Resources Ltd
Regis Resources Ltd
Saracen Mining Ltd
Silver Lake Resources Ltd
St Barbara Ltd
Teranga Gold Corporation
Troy Resources Limited

For the year ending 30 June 2018, in order for performance rights to vest, the Company’s performance must be at or above the 50th percentile in relation to TSR as compared to its peer companies. The following table sets out the vesting schedule based on the Company’s relative TSR performance for the year ending 30 June 2018:

Relative TSR performance	Performance Vesting Outcomes
Less than 50thpercentile	0% vesting
At the 50thpercentile	50% vesting
Between 50thand 75thpercentile	Linear vesting
75th percentile and above	100% vesting

The second performance condition is resource and reserve growth net of depletion over a 3 year period. Broadly, the quantum of the increase in resources and reserves will determine the number of performance rights to vest.

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

Resource and Reserve Growth Performance	Performance Vesting Outcomes
R&R depleted	0% vesting
R&R maintained	50% vesting
R&R between maintain and 30% growth	Linear vesting
R&R grown by 30% 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.

e) Change of Control Provisions

On the occurrence of a change of control event of Resolute Mining Limited, the Board will determine, in its sole and absolute discretion, the manner in which all unvested and vested awards will be dealt with.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

Actual LTI performance for the 3 year period ending 30 June 2018

For the year ending 30 June 2018 the Company’s LTI was tested against the relative TSR performance measure and the resource and reserve growth measure. The Company achieved a TSR of above the 75[th] percentile relative to companies in the customised peer group. There was 16% actual growth in resource and reserve performance resulting in a 69% vesting outcome for this measure. Overall when accounting for both measures, the vesting outcome for performance rights due to vest is 92%.

Company Performance

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

		30 June 2018	30 June 2017	(Restated) 30 June 2016	30 June 2015	30 June 2014
Net profit/(loss) after tax	$'000	77,837	166,096	200,732	(568,760)	29,156
Basic earnings/(loss) per share	cents/share	8.85	19.05	26.79	(78.39)	5.20

Executive Employment Contracts

Remuneration arrangements for KMP are formalised in employment agreements. The following table outlines the details of contracts with key management personnel:

Name	Title	Term of Agreement	Notice Period by Executive	Notice Period by Company	Termination Benefit¹
John Welborn	Managing Director and Chief Executive Officer	Open	6 months	12 months	Redundancy as per NES
Peter Beilby	Chief Operating Officer	Open	3 months	6 months	Redundancy as per NES
Lee-Anne de Bruin	Chief Financial Officer	Open	3 months	3 months	Redundancy as per NES
Greg Fitzgerald	Company Secretary (resigned 4 August 2017)	Open	3 months	6 months	Redundancy as per NES
Amber Stanton	General Counsel and Company Secretary	Open	3 months	3 months	Redundancy as per NES

¹ NES is the National Employment Standards.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

		SHORT TERM BENEFITS	SHORT TERM BENEFITS	SHORT TERM BENEFITS	SHORT TERM BENEFITS		LONG TERM BENEFITS	SHARE BASED PAYMENTS		PERFORMANCE RELATED	PERFORMANCE RELATED
						POST
						EMPLOY-
						MENT

						BENEFITS

	Financial Year	Base Remuneration	Non Monetary Benefits (i)	Short Term Incentive (ii)	Annual Leave Expense	Superannuation	Long Service Leave Expense	Performance Rights	Total	Short Term Incentive, Options and Performance Rights	Options and Performance Rights
		$	$	$	$	$	$	$	$	%	%
J. Welborn	2018	648,615	5,070	312,199	56,058	25,000	34,184	1,408,339	2,489,465	69	57
	2017	649,037	-	394,274	54,005	30,000	12,682	864,239	2,004,237	63	43
P. Beilby	2018	395,438	5,070	154,608	34,397	25,000	18,495	234,761	867,769	45	27
	2017	365,407	-	180,485	34,260	35,000	15,656	176,279	807,087	44	22
L. de Bruin (iii)	2018	363,462	5,070	191,895	31,096	25,000	13,582	195,286	825,391	47	24
	2017	145,509	-	76,698	11,083	14,094	-	39,931	287,315	41	14
G. Fitzgerald (iv)	2018	19,600	5,639	-	2,818	20,012	1,082	-	49,151	-	-
	2017	319,260	5,271	197,422	29,393	35,000	9,553	(193,475)	402,424	1	-
A. Stanton (v)	2018	240,658	5,070	99,486	9,432	20,049	6,716	43,658	425,069	34	10
Total	2018	1,667,773	25,919	758,188	133,801	115,061	74,059	1,882,044	4,656,845
	2017	1,479,213	5,271	848,879	128,741	114,094	37,891	886,974	3,501,063

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. The Short Term Incentives for the year ended 30 June 2018 will be paid in cash in September 2018. The Short Term Incentives for the year ended 30 June 2017 were paid in cash on 15 September 2017.
iii. Ms de Bruin was appointed on 27 February 2017.
iv. Mr Fitzgerald resigned as Chief Financial Officer on 27 February 2017 and as Company Secretary on 4 August 2017. v. Ms Stanton was appointed on 4 August 2017.
vi. The total for 2017 of $3,501,063 in this table is less than the total for 2017 in the Remuneration Report for the year ended 30 June 2017 of $5,389,202 as it does not include $1,888,139 for the following personnel who were included in the remuneration report for the year ended 30 June 2017. As they are no longer classified as key management personnel, they have not been included in the remuneration report for the year ended 30 June 2018 above:
P. Henharen – General Manager – Project Delivery (up until 4 April 2018)
V. Hughes – General Manager – People, Culture and Information (resigned 22 December 2017)
D. Kelly – General Manager – Corporate Strategy
B. Mowat – General Manager – Exploration

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

4. Non-Executive Director Remuneration Arrangements and Outcomes for 2018

Objective

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 29 November 2016 when the shareholders approved an aggregate remuneration of $1,000,000 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. The fee size is commensurate with the workload and responsibilities undertaken.

Non-executive directors do not participate in any incentive programs.

The remuneration for non-executive directors for the year ended 30 June 2018 and 30 June 2017 is detailed in the table below.

Non-executive director remuneration for the years ended 30 June 2018 and 30 June 2017

					POST
				SHARE BASED
		SHORT TERM BENEFITS			EMPLOYMENT
				PAYMENTS	BENEFITS
	Financial
	Year	Remuneration	Non-Monetary	Performance	Superannuation	Total
			Benefits	Rights

		$	$	$	$

Non-executivedirectors
M. Botha P. Huston (i) P. Sullivan H. Price M. Potts Y. Broughton (ii)	2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017	175,000 - - - 175,000 90,000 - - - 90,000 - - - - - 192,500 - - - 192,500 68,592 13,600 - 7,808 90,000 68,591 13,600 (54,012) 7,808 35,987 65,000 - - 25,000 90,000 55,000 - - 35,000 90,000 90,000 - - - 90,000 550 - - - 550 118,000 - - - 118,000 550 - - - 550
Total	2018	516,592 13,600 - 32,808 563,000
	2017	407,191 13,600 (54,012) 42,808 409,587

i. Mr Huston resigned on 29 June 2017.

ii. $28,000 included in Ms Broughton’s remuneration relates to company secretarial consultancy services provided during the 2018 financial year.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

5. Additional Disclosures Relating to Options and Shares

No options were held by key management personnel during the year.

Details of performance rights holdings of key management personnel are as follows:

2018	Balance at the start of the year									Lapsed during the year	Vested during the year	Balance at the end of the year
			Granted during the year as compensation

		Number	Issue date	Fair value of performance rights at grant date	Total Fair value of performance rights at grant date	Vesting period (years)	Vesting date	Expiry of performance rights	Exercise price of performance rights granted during the year
				$	$				$
Directors
P. Sullivan	351,297	-	-	-	-	-	-	-	-	(182,674)	(168,623)	-
J. Welborn	4,079,000	587,500	28 Nov 2017	0.74	437,100	3	30 Jun 2020	1 Jul 2022	$nil	-	-	4,666,500
Other key management personnel
P. Beilby	1,552,352	238,880	17 Oct 2017	0.81	192,357	3	30 Jun 2020	1 Jul 2022	$nil	(229,325)	(211,684)	1,350,223
L. de Bruin	208,000	216,667	17 Oct 2017	0.81	174,633	3	30 Jun 2020	1 Jul 2022	$nil	-	-	424,667
A. Stanton	-	162,500	17 Oct 2017	0.81	130,975	3	30 Jun 2020	1 Jul 2022	$nil	-	-	162,500

iii. Performance rights vest in accordance with the Resolute Mining Limited Remuneration Policy and Equity Incentive Plan which outline the key performance indicators that need to be satisfied. The percentage of performance rights granted during the financial year that also vested during the financial year is nil.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Remuneration Report (continued)

5. Additional Disclosures Relating to Options and Shares

Details of shareholdings of key management personnel are as follows:

2018	Balance at the start of theyear	Received during the year on the vesting of performance rights	Purchased on market during theyear	Other changes during the year	Shares sold on market during the year	Balance at the end of the year
Directors
P. Sullivan	3,072,051	168,623	-		(400,000)	2,840,674
H. Price	194,745	-	-		-	194,745
J. Welborn (i)	1,990,000	-	480,000	30,000	-	2,500,000
M. Potts	26,825	-	-		-	26,825
Other key managementpersonnel
P. Beilby	354,883	211,684	-		(200,000)	366,567
G. Fitzgerald (ii)	235,902	-	-	(235,902)	-	-

(i) Refer to Appendix 3Y released on 8 September 2017.

(ii) These were the number of shares held by Mr Fitzgerald when he ceased employment on 4 August 2017.

6. Loans to Key Management Personnel and their Related Parties

There were no loans to key management personnel during the years ended 30 June 2018 and 30 June 2017.

This is the end of the audited information.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Performance Rights

Outstanding performance rights at the date of this report are as follows:

Grant date	Vesting date	Exerciseprice	Number on issue
24/10/16	30/06/19	-	2,305,137
29/11/16	30/06/19	-	600,000
29/11/16	30/06/20	-	1,000,000
17/10/17	30/06/20	-	1,506,454
28/11/17	30/06/20	-	587,500
07/03/18	30/06/20	-	319,571
			6,318,662

Indemnification and Insurance of Directors and Officers

RML maintains an insurance policy for its directors and officers against certain liabilities arising as a result of work performed in the capacity as directors and officers. The company has paid an insurance premium for the policy. The contract of insurance prohibits disclosure of the amount of the premium and the nature of the liabilities insured.

Indemnification of Auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

Auditor Independence

Refer to page 21 for the Auditor’s Independence Declaration to the Directors of Resolute Mining Limited.

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 attended by each director were as follows:

	Full Board	Audit	Remuneration	Nomination
M. Botha 10 5 3 3
P. Sullivan 10 5 3 n/a
J. Welborn 10 n/a n/a n/a
H. Price 10 5 3 3
M. Potts 10 5 1* 3
Y. Broughton 10 5 3 3
Number of meetings held 10 5 3 3

Mr Potts was present at all Remuneration Committee meetings held until he ceased to be a member of the Remuneration Committee on 26 October 2017.

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

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Report

Rounding

RML is a Company of the kind specified in Australian Securities and Investments Commission Corporations (Rounding in Financial Directors’ Reports) Instrument 2016/191. 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.

Non-Audit Services

Non-audit services were provided by the entity’s auditor, Ernst & Young for the year ended 30 June 2018. 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 $20,000 for the provision of sustainability services in the year ended 30 June 2018 (2017: $0).

Signed in accordance with a resolution of the directors.

==> picture [154 x 28] intentionally omitted <==

J.P. Welborn

Managing Director and CEO

Perth, Western Australia 23 August 2018

Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au

Auditor’s independence declaration to the Directors of Resolute Mining Limited

As lead auditor for the audit of Resolute Mining Limited for the year ended 30 June 2018, I declare to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Resolute Mining Limited and the entities it controlled during the financial period.

==> picture [154 x 45] intentionally omitted <==

Ernst & Young

==> picture [157 x 45] intentionally omitted <==

Gavin Buckingham Partner 23 August 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

GB:EH:RSG:250

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Financial Statements

Notes to the Financial Statements

Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement

About this Report

A Earnings for the Year A.1 Segment revenue and expenses A.2 Dividends paid or proposed A.3 Earnings per share A.4 Taxes B Production and Growth Assets B.1 Mine properties and property, plant and equipment B.2 Exploration and evaluation assets B.3 Impairment of non-current assets B.4 Segment expenditure, assets and liabilities C Debts and Capital C.1 Cash C.2 Interest bearing liabilities C.3 Financing facilities C.4 Contributed equity C.5 Other reserves D Other Assets and Liabilities D.1 Receivables D.2 Inventories D.3 Other financial assets and liabilities D.4 Prepayments D.5 Payables D.6 Provisions

E Other Items

E.1 Contingent liabilities E.2 Leases and other commitments E.3 Auditor remuneration E.4 Investments in associates E.5 Subsidiaries and non-controlling interests E.6 Joint operations E.7 Subsequent events E.8 Related party disclosures E.9 Parent entity information E.10 Employee benefits and share based payments

E.11 Other accounting policies

Other

Director’s Declaration Independent Auditor’s Report Shareholder Information

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Statement of Comprehensive Income

	Note	2018	2017
		$'000	$'000

Revenue fromgold and silver sales	A.1	445,555	541,177
Costs ofproduction relatingtogold sales	A.1	(329,676)	(309,323)
Grossprofit before depreciation, amortisation and other operating costs		115,879	231,854

Depreciation and amortisation relatingtogold sales	A.1	(14,417)	(19,727)
Other operatingcosts relatingtogold sales	A.1	(32,138)	(35,222)
Grossprofit from operations		69,324	176,905

Other income	A.1	2,999	2,052
Other expenses	A.1	(2,449)	(202)
Exploration and business development expenditure	A.1	(15,686)	(8,430)
Administration and other corporate expenses	A.1	(14,133)	(10,913)
Share-basedpayments expense	A.1	(1,782)	(1,184)
Treasury- realisedgains	A.1	2,096	4,039
Fair value movements and unrealised treasurytransactions	A.1	43,396	9,039
Share of associates’ losses	A.1/E.4	(1,500)	(1,799)
Depreciation of non-mine site assets	A.1	(130)	(83)
Finance costs	A.1	(4,298)	(3,328)

Profit before tax		77,837	166,096

Tax expense		-	-

Profit for theyear		77,837	166,096

Profit attributable to:
Members of theparent		65,570	136,371
Non-controllinginterest	E.5	12,267	29,725
		77,837	166,096

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Statement of Comprehensive Income (continued)

	Note	2018	2017
		$'000	$'000
Profit for theyear(brought forward)		77,837	166,096

*Other comprehensive income/(loss)*

Items that may be reclassified subsequently toprofit or loss

Exchange differences on translation of foreign operations:
- Members of theparent		(1,759)	2,501
Changes in the fair value/realisation of available for sale financial assets, net of tax		(989)	281

Items that may not be reclassified subsequently toprofit or loss

Exchange differences on translation of foreign operations:
- Non-controllinginterest		(1,253)	1,120

Other comprehensive(loss)/income for theyear, net of tax		(4,001)	3,902

Total comprehensive income for theyear		73,836	169,998

Total comprehensive income attributable to:
Members of theparent		62,823	139,153
Non-controllinginterest		11,013	30,845
		73,836	169,998

Earnings per share for net profit attributable to the ordinary equity holders of theparent:
Basic earningsper share	A.3	8.85 cents	19.05 cents
Diluted earningsper share	A.3	8.72 cents	18.61 cents

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Statement of Financial Position

		2018	2017
	Note	$'000	$'000
Current assets
Cash	C.1	42,445	282,060
Receivables	D.1	45,097	5,748
Inventories	D.2	234,720	202,074
Available for sale financial assets	D.3	22,859	3,595
Prepayments and other assets		5,299	2,679
Current tax asset		20,811	-
Financial derivative assets	D.3	-	2,214
Total current assets		371,231	498,370

Non current assets
Prepayments	D.4	15,862	-
Investments in associates	E.4	6,994	5,840
Deferred tax assets	A.4	9,456	15,333
Other financial assets	D.3	3,751	3,651
Exploration and evaluation	B.2	53,162	64,879
Development	B.1	302,158	159,612
Property, plant and equipment	B.1	172,656	90,068
Total non current assets		564,039	339,383
Total assets		935,270	837,753

Current liabilities
Payables	D.5	92,488	65,152
Interest bearingliabilities	C.2	47,282	34,558
Provisions	D.6	21,171	18,726
Current tax liabilities		-	3,979
Total current liabilities		160,941	122,415

Non current liabilities
Provisions	D.6	65,687	66,140
Total non current liabilities		65,687	66,140
Total liabilities		226,628	188,555
Net assets		708,642	649,198

Equity attributable to equity holders of theparent
Contributed equity	C.4	544,972	544,987
Reserves	C.5	37,011	38,408
Retained earnings		134,073	83,333
Total equity attributable to equity holders of theparent		716,056	666,728
Non-controlling interest	E.5	(7,414)	(17,530)
Total equity		708,642	649,198

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Statement of Changes in Equity

	Contributed equity	Net unrealised gain/(loss) reserve	Convertible notes/ Share options equity reserve	Non-controlling interests reserve	Employee equity benefits reserve	Foreign currency translation reserve	Retained earnings/ (accumulated losses)	Non-controlling interest	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
At 1 July 2017	544,987	213	6,371	-	14,291	17,533	83,333	(17,530)	649,198

Profit for theyear	-	-	-	-	-	-	65,570	12,267	77,837
Other comprehensive loss,net of tax	-	(989)	-	-	-	(1,759)	-	(1,253)	(4,001)
Total comprehensive (loss)/income for the year, net of tax	-	(989)	-	-	-	(1,759)	65,570	11,014	73,836

Share issue costs	(15)	-	-	-	-	-	-	-	(15)
Dividendspaid	-	-	-	-	-	-	(14,830)	-	(14,830)
Non-controlling interest arising from change in ownershipinterest	-	-	-	(934)	-	-	-	(898)	(1,832)
Share-based payments to employees	-	-	-	-	2,285	-	-	-	2,285
At 30 June 2018	544,972	(776)	6,371	(934)	16,576	15,774	134,073	(7,414)	708,642

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Statement of Changes in Equity (continued)

	Contributed equity	Net unrealised gain/(loss) reserve	Convertible notes/ Share options equity reserve	Employee equity benefits reserve	Foreign currency translation reserve	Retained earnings/ (accumulated losses)	Non-controlling interest	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
At 1 July 2016	395,198	(68)	6,371	12,092	15,032	(41,836)	(48,375)	338,414

Profit for theyear	-	-	-	-	-	136,371	29,725	166,096
Other comprehensive loss, net of tax	-	281	-	-	2,501	-	1,120	3,902
Total comprehensive (loss)/income for the year, net of tax	-	281	-	-	2,501	136,371	30,845	169,998

Shares issued	152,697	-	-	-	-	-	-	152,697
Share issue costs	(2,908)	-	-	-	-	-	-	(2,908)
Dividendspaid	-	-	-	-	-	(11,202)	-	(11,202)
Share-based payments to employees	-	-	-	2,199	-	-	-	2,199
At 30 June 2017	544,987	213	6,371	14,291	17,533	83,333	(17,530)	649,198

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

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Consolidated Cash Flow Statement

	Note	2018	2017
		$'000	$'000
Cash flows from operating activities
Receipts from customers		447,495	545,159
Payments to suppliers,employees and others		(391,955)	(339,181)
Exploration expenditure		(15,686)	(8,430)
Interestpaid		(2,410)	(1,818)
Interest received		2,166	2,022
Income taxpaid		(11,251)	(11,368)
Net cash flows from operating activities	C.1	28,359	186,384

Cash flows used in investing activities
Payments forproperty, plant & equipment		(88,421)	(37,326)
Payments for development activities		(138,565)	(61,809)
Payments for evaluation activities		(11,747)	(20,602)
Proceeds from sale ofproperty, plant & equipment		510	2,233
Payments for other financial assets		(22,878)	(7,492)
Acquisition of a share of a non-controllinginterest		(1,832)	-
Loans advanced to otherparties		(5,133)	-
Other investingactivities		(890)	(2,757)
Net cash flows used in investing activities		(268,956)	(127,753)

Cash flows used in financing activities
Proceeds from issuingordinaryshares		-	150,000
Costs of issuingordinaryshares		(15)	(2,849)
Repayment of lease liability		-	(234)
Dividendpaid		(14,830)	(11,202)
Net cash flows(used in)/from financing activities		(14,845)	135,715

Net(decrease)/increase in cash and cash equivalents		(255,442)	194,346

Cash and cash equivalents at the beginningof the financialyear		247,502	53,417
Exchange rate adjustment		3,103	(261)
Cash and cash equivalents at the end of theperiod		(4,837)	247,502

Cash and cash equivalents comprise the following:
Cash at bank and on hand	C.1	42,445	282,060
Bank overdraft	C.2	(47,282)	(34,558)
		(4,837)	247,502

The above consolidated cash flow statement should be read in conjunction with the accompanying notes.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

About this Report

The financial report of Resolute Mining Limited and its controlled entities (“Resolute”, “consolidated entity” or the “Group”) for the year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on 23 August 2018.

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 nature of the operations and principal activities of the Group are described in the directors’ report and in the segment information in Note A.1. There has been no significant change in the nature of those activities during the year.

Statement of Compliance

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. 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. The accounting policies are consistent with those disclosed in the 30 June 2017 Financial Report, except for the impact of all new or amended Standards and Interpretations. The adoption of these Standards and Interpretations did not result in any significant changes to the Group’s accounting policies.

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.

Basis of Preparation

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities at fair value.

The financial report comprises the financial statements of the Group and its subsidiaries as at 30 June each year. Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date at which control is transferred out of the Group. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Interests in associates are equity accounted and are not part of the consolidated Group.

Rounding of Amounts

The financial report has been prepared in Australian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated.

Currency

Items in the financial statements of each of the Group’s entities are measured in their respective functional currencies. Resolute Mining Limited’s functional and presentation currency is Australian dollars.

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items classified as net investment in a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in OCI.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

About this Report (continued)

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.

Financial and Capital 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 Audit and Risk Committee under policies approved by the Board of Directors. The Audit and Risk 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, and derivative financial instrument risk.

Foreign exchange risk management

The Group receives multiple currency proceeds on the sale of its gold production and significant costs for the Syama Gold Project and the Bibiani Project are denominated in AUD, EUR, USD and the local currencies of those projects, 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 Audit and Risk 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.

Diesel price risk management

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 Audit and Risk 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.

The below risks arise in the normal course of the Group’s business. Risk information can be found in the following sections:

Section C Capital risk Section C Interest rate risk Section C Liquidity risk Section D Credit risk

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

In this section

Results and the performance of the Group, with segmental information highlighting the core areas of the Group’s operations. It also includes details about the Group’s tax position.

A.1 Segment revenues and expenses

Operating segment information

The Group has identified three operating segments based on the internal reports that are reviewed and used by the Chief Executive Officer and his executive team (the Chief Operating Decision Maker) in assessing performance and in determining the allocation of resources.

Operating segments are identified by management as being operating mine sites and are managed separately and operate in different regulatory and economic environments.

Performance is measured based on gold poured and cost of production per ounce poured. The accounting policies used by the Group in reporting segments are the same as those used in the preparation of financial statements.

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;
Share of associates’ losses and,
Net gains/losses on disposal of available-for-sale investments.

Recognition and measurement

Revenue from gold and other 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.

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

Interest

Interest revenue is recognised as interest accrues using the effective interest method.

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.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.1 Segment revenues and expenses (continued)

For the year ended 30 June 2018	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Unallocated(b)	Unallocated(b)	Total
				Corporate/ Other	Treasury
	$'000	$'000	$'000	$'000	$'000	$'000
Revenue
Gold and silver sales at spot to external customers(a)	138,463	307,092	-	-	-	445,555
Total segment gold and silver sales revenue	138,463	307,092	-	-	-	445,555
Costs of production	(120,011)	(237,453)	-	-	-	(357,464)
Gold in circuit inventories movement	12,478	15,310	-	-	-	27,788
Costs of production relating to gold sales	(107,533)	(222,143)	-	-	-	(329,676)
Royalty expense	(6,915)	(19,309)	-	-	-	(26,224)
Operational support costs	(256)	(5,651)	-	(7)	-	(5,914)
Other operating costs relating to gold sales	(7,171)	(24,960)	-	(7)	-	(32,138)
Administration and other corporate expenses	(4,664)	(2,497)	-	(6,972)	-	(14,133)
Share-based payments expense	-	-	-	(1,782)	-	(1,782)
Exploration and business development expenditure	(7,364)	(1,044)	(2,381)	(4,897)	-	(15,686)
Earnings/(loss) before interest, tax, depreciation and amortisation	11,731	56,448	(2,381)	(13,658)	-	52,140
Amortisation of evaluation, development and rehabilitation costs	(1,297)	(3,498)	-	-	-	(4,795)
Depreciation of mine site properties, plant and equipment	(1,274)	(8,348)	-	-	-	(9,622)
Depreciation and amortisation relating to gold sales	(2,571)	(11,846)	-	-	-	(14,417)
Segment operating result before treasury, other income/(expenses) and tax	9,160	44,602	(2,381)	(13,658)	-	37,723

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.1 Segment revenues and expenses (continued)

For the year ended 30 June 2018	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Unallocated(b)	Unallocated(b)	Total
				Corporate/ Other	Treasury
	$'000	$'000	$'000	$'000	$'000	$'000
Segment operating result before treasury, other income/(expenses) and tax(brought forward)	9,160	44,602	(2,381)	(13,658)	-	37,723
Interest income	-	-	-	-	2,595	2,595
Other income	-	-	-	-	80	80
Gain on sale of property, plant and equipment	324	-	-	-	-	324
Total other income	324	-	-	-	2,675	2,999
Interest and fees	-	-	-	-	(2,793)	(2,793)
Rehabilitation and restoration provision accretion	(899)	(606)	-	-	-	(1,505)
Finance costs	(899)	(606)	-	-	(2,793)	(4,298)
Realised foreign exchange gain	-	-	-	-	2,311	2,311
Realised loss on forward contracts	-	-	-	-	(215)	(215)
Treasury - realised gains	-	-	-	-	2,096	2,096
Inventories net realisable value movements and obsolete consumables	1,283	11,542	-	(3)	-	12,822
Unrealised foreign exchange gain	-	-	-	-	287	287
Unrealised foreign exchange gain on intercompanybalances	-	-	-	-	30,287	30,287
Fair value movements and unrealised treasurytransactions	1,283	11,542	-	(3)	30,574	43,396
Other expenses	-	(675)	(1,774)	-	-	(2,449)
Share of associates' losses	-	-	-	-	(1,500)	(1,500)
Depreciation of non mine site assets	-	-	-	(130)	-	(130)
Profit/(loss) for the year	9,868	54,863	(4,155)	(13,791)	31,052	77,837

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.1 Segment revenues and expenses (continued)

For the year ended 30 June 2017	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Unallocated(b)	Unallocated(b)	Total
				Corporate/ Other	Treasury
	$'000	$'000	$'000	$'000	$'000	$'000
Revenue
Gold and silver sales at spot to external customers(a)	158,032	381,293	-	-	1,852	541,177
Total segment gold and silver sales revenue	158,032	381,293	-	-	1,852	541,177
Costs of production	(115,285)	(213,947)	-	-	-	(329,232)
Gold in circuit inventories movement	(4,113)	24,022	-	-	-	19,909
Costs of production relating to gold sales	(119,398)	(189,925)	-	-	-	(309,323)
Royalty expense	(7,912)	(24,687)	-	-	-	(32,599)
Operational support costs	(196)	(2,427)	-	-	-	(2,623)
Other operating costs relating to gold sales	(8,108)	(27,114)	-	-	-	(35,222)
Administration and other corporate expenses	(2,561)	(2,182)	-	(6,170)	-	(10,913)
Share-based payments expense	-	-	-	(1,184)	-	(1,184)
Exploration and business development expenditure	(3,993)	(1,643)	(1,053)	(1,741)	-	(8,430)
Earnings/(loss) before interest, tax, depreciation and amortisation	23,972	160,429	(1,053)	(9,095)	1,852	176,105
Amortisation of evaluation, development and rehabilitation costs	(7,807)	(3,238)	-	-	-	(11,045)
Depreciation of mine site properties, plant and equipment	(2,025)	(6,657)	-	-	-	(8,682)
Depreciation and amortisation relating to gold sales	(9,832)	(9,895)	-	-	-	(19,727)
Segment operating result before treasury, other income/(expenses) and tax	14,140	150,534	(1,053)	(9,095)	1,852	156,378

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.1 Segment revenues and expenses (continued)

For the year ended 30 June 2017	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Unallocated(b)	Unallocated(b)	Total
				Corporate/ Other	Treasury
	$'000	$'000	$'000	$'000	$'000	$'000
Segment operating result before treasury, other income/(expenses) and tax(brought forward)	14,140	150,534	(1,053)	(9,095)	1,852	156,378
Interest income	-	-	-	-	1,983	1,983
Profit on sale of available for sale financial assets	-	-	-	-	-	-
Other income	-	-	-	-	69	69
Total other income	-	-	-	-	2,052	2,052
Interest and fees	-	-	-	-	(2,146)	(2,146)
Rehabilitation and restoration provision accretion	(694)	(488)	-	-	-	(1,182)
Finance costs	(694)	(488)	-	-	(2,146)	(3,328)
Realised foreign exchange loss	-	-	-	-	(841)	(841)
Realised gains on forward contracts	-	-	-	-	4,016	4,016
Realised gain on available for sale investments	-	-	-	-	864	864
Treasury - realised gains	-	-	-	-	4,039	4,039
Inventories net realisable value movements and obsolete consumables	1,132	10,292	224	-		11,648
Unrealised foreign exchange gain					446	446
Unrealised gains on forward contracts	-	-	-	-	2,629	2,629
Unrealised foreign exchange loss on intercompanybalances	-	-	-	-	(5,684)	(5,684)
Fair value movements and unrealised treasurytransactions	1,132	10,292	224	-	(2,609)	9,039
Gain/(loss) on sale of property, plant and equipment	(45)	-	(170)	22	-	(193)
Withholding tax expenses	-	-		(9)	-	(9)
Other expenses	(45)	-	(170)	13	-	(202)
Share of associates' losses	-	-	-	-	(1,799)	(1,799)
Depreciation of non mine site assets	-	-	-	(83)	-	(83)
Profit/(loss) for the year	14,533	160,338	(999)	(9,165)	1,389	166,096

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.1 Segment revenues and expenses (continued)

(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.

A.2 Dividends paid or proposed

	2018	2017
	$'000	$'000
Proposed dividends on ordinary shares:
Final dividend for 2018: 2.0 cents per share (2017: 2.0 cents per share)	14,830	14,740

The dividend has not been provided for in the 30 June 2018 financial statements.

A.3 Earnings per share

	2018	2017
Basic earnings per share
Profit attributable to ordinary equity holders of the parent for basic earnings per share ($'000)	65,570	136,371
Weighted average number of ordinary shares outstanding during the period used in the calculation of basic EPS	740,664,832	716,015,281
Basic earnings per share (cents per share)	8.85	19.05

Diluted earnings per share
Profit used in calculation of diluted earnings per share ($'000)	65,570	136,371
Weighted average number of ordinary shares outstanding during the period used in the calculation of basic EPS	740,664,832	716,015,281
Weighted average number of notional shares used in determining diluted EPS	11,307,704	16,653,016
Weighted average number of ordinary shares outstanding during the period used in the calculation of diluted EPS	751,972,536	732,653,297
Number of potential ordinary shares that are not dilutive and hence not included in calculation of diluted EPS	-	-
Diluted earnings per share (cents per share)	8.72	18.61

Measurement

Basic earnings per share (“EPS”) is calculated as net profit attributable to members, adjusted to exclude preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

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

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.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.3 Earnings per share (continued)

Information on the classification of securities

Options and performance rights granted to employees (including Key Management Personnel) as described in E.10 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 and performance rights have not been included in the determination of basic earnings per share.

A.4 Taxes

	2018	2017
	$'000	$'000
a) Income tax expense
Current tax expense	(5,877)	15,333
Deferred tax benefit	5,877	(15,333)
Total tax expense	-	-

b) Numerical reconciliation of income tax expense to prima facie tax expense
Profit from continuing operations before income tax expense	77,837	166,096
Profit before income tax expense	77,837	166,096
Prima facie income tax expense at 30% (2017: 30%)	23,351	49,829
(Deduct)/add:
- (unrecognised tax losses and other temporary differences utilised)	(19,907)	(35,323)
- effect of different rates of tax on overseas income	-	(15,705)
- effect of share based payments expense not deductible	705	526
- other permanent differences	(4,149)	673
Income tax expense attributable to net profit	-	-

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.4 Taxes (continued)

	2018	2017
	$'000	$'000
c) Tax losses (tax effected)
Revenue losses
Australia	11,997	12,767
Mali	-	-
Ghana	23,158	36,676
	35,155	49,443
Capital losses
Australia	52,314	50,084
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) (tax effected)	87,469	99,527

d) Movements in the deferred tax assets balance
Balance at the beginningof theyear	15,333	-
(Charged)/credited to the income statement	(5,877)	15,333
Balance as at the end of theyear	9,456	15,333

The deferred tax assets balance comprises temporary differences attributable to:
Receivables	82,958	84,715
Inventories	1,008	1,009
Available for sale financial assets	9,320	9,154
Mineral exploration and development interests	137,472	150,377
Property, plant and equipment	53,731	54,729
Payables	30	11
Provisions	9,504	21,844
Temporarydifferences not recognised	(267,616)	(289,257)
	26,407	32,582
Set off of deferred tax liabilitiespursuant to set offprovisions	(16,951)	(17,249)
Net deferred tax assets	9,456	15,333

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.4 Taxes (continued)

	2018	2017
	$'000	$'000
e) Movements in the deferred tax liabilities balance
The deferred tax liabilities balance comprises temporary differences attributable to:
Receivables	1,553	889
Inventories	8,191	8,191
Mineral exploration and development interests	7,207	8,169
Property, plant and equipment	-	-
	16,951	17,249
Set off of deferred tax liabilitiespursuant to set offprovisions	(16,951)	(17,249)
Net deferred tax liabilities	-	-

f) The equity balance comprises temporary differences attributable to:
Convertible notes equityreserve	194	194
Option equityreserve	2,566	2,566
Unrealised loss reserve	64	64
Net temporarydifferences in equity	2,824	2,824
Set-off of deferred tax liabilitiespursuant to set-offprovisions	(64)	(64)
Total temporarydifferences in equity	2,760	2,760

FRANKING CREDITS
The amount of franking credits available for subsequent financial years is as follows. The amount has been determined usinga tax rate of 30%.	108	108

Recognition and measurement

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 tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences, unused tax losses and unused tax credits only if it is probable that sufficient future taxable income will be available to utilise those temporary differences and losses.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements A: Earnings for the Year

A.4 Taxes (continued)

Recognition and measurement (continued)

Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither taxable profit or loss; or the accounting profit or loss arising from taxable differences related to investment in subsidiaries, associates and interests in joint ventures to the extent that:

the Group is able to control the reversal of the temporary difference; and
the temporary difference is not expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period. Deferred tax assets and liabilities are offset only if certain criteria are met. Income taxes relating to items recognised directly in equity are recognised in equity.

Tax consolidation

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

Key estimates and judgements

The Group records its best estimate of these items based upon the latest information available and management’s interpretation of enacted tax laws. Whilst the Group believes it has adequately provided for the outcome of these matters, future results may include favourable or unfavourable adjustments as assessments are made, or resolved.

The recognition basis of deductible temporary differences and unused tax losses in the form of deferred tax assets is reviewed at the end of each reporting period and de-recognised to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

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 was an income tax holiday for 5 years post the declaration of “first commercial production” at Syama, which commenced on 1 January 2012. The tax holiday came to an end on 31 December 2016 and taxable profits arising after that date are subject to tax in accordance with the Establishment Convention.

A deferred income tax asset of $9.5 million has been recognised at 30 June 2018 in relation to deductible temporary differences. Realisation of sufficient taxable profit in future periods is 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 have been continued to be complied with; and,

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

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

In this section

Included in this section is relevant information about recognition, measurement, depreciation, amortisation and impairment considerations of the core producing and growth (exploration and evaluation) assets of Resolute.

B.1 Mine properties and property, plant and equipment

Recognition and measurement

Stripping activity asset

The Group incurs waste removal costs (stripping costs) in the creation of improved access and mining flexibility in relation to ore to be mined in the future. The costs are capitalised as a stripping activity asset, where certain criteria are met. Once the Group has identified its production stripping for each surface mining operation, it identifies the separate components for the ore bodies in each of its mining operations. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity. The costs of each component are amortised on a units of production basis in applying a stripping ratio.

Development expenditure

g) Areas in Development

Costs incurred in preparing mines for production including the required plant infrastructure.

h) Areas in Production

Represent the accumulation of all acquired exploration, evaluation and development expenditure in which economic mining of a mineral reserve has commenced. Amortisation of costs is provided on the unit-of-production method.

Property, plant and equipment

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.

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	3 years	Straight line
Office equipment	3 years	Straight line
Plant and equipment	Life of mine years / unit of production	Straight line

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.1 Mine properties and property, plant and equipment (continued)

Key estimates and judgements

Stripping activity assets

Judgement is required to identify a suitable production measure to be used to allocate production stripping costs between inventory and any stripping activity asset(s) for each component. The Group considers that the ratio of the expected volume of waste to be stripped for an expected volume of ore to be mined for a specific component of the ore body, to be the most suitable production measure.

An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity.

Judgement is also required to identify and define these components, and also to determine the expected volumes (e.g. tones) of waste to be stripped and ore to be mined in each of these components. These assessments are based on the information available in the mine plan which will vary between mines for a number of reasons, including, the geological characteristics of the ore body, the geographical location and/or financial considerations.

Stripping ratio

The Group has adopted a policy of deferring production stage stripping costs and amortising them on a units-of-production basis. Significant judgement is required in determining the contained ore units 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.

Determining the beginning of production

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 specific asset becomes ‘available for use’ as intended by management which includes consideration of 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/feasibility study levels;
the ability to produce gold into a saleable form (where more than an insignificant amount is produced); and,
the achievement of continuous production.

Estimation of mineral reserves and resources – refer to B.3

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.1 Mine properties and property, plant and equipment (continued)

30 June 2018			Plant and Equipment	Plant and Equipment	Plant and Equipment		Development Expenditure	Development Expenditure	Development Expenditure
	Buildings	Plant & Equipment	Motor Vehicles	Office Equipment	Leased Assets	Total	Mine Properties	Striping Activity Asset	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Opening write down value	7,637	77,543	750	2,845	1,293	90,068	143,641	15,971	159,612
Additions	-	88,004	246	112	-	88,362	122,117	33,307	155,424
Disposals	-	(20)	-	(46)	(207)	(273)	-	-	-
Depreciation expense	(167)	(9,284)	(22)	(174)	(429)	(10,076)	-	-	-
Transfers from exploration and evaluation	-	-	-	-	-	-	23,368	-	23,368
Amounts amortised to costs of production relating to gold sales	-	-	-	-	-	-	-	(48,936)	(48,936)
Amortisation expense	-	-	-	-	-	-	(4,471)	-	(4,471)
Adjustments to rehabilitation and restoration obligations	-	-	-	-	-	-	6,856	-	6,856
Foreign currency translation	307	4,142	26	101	(1)	4,575	9,878	427	10,305
At 30 June net of accumulated depreciation	7,777	160,385	1,000	2,838	656	172,656	301,389	769	302,158
Cost	17,199	553,642	5,705	9,724	21,928	608,198	669,230	49,705	718,935
Accumulated depreciation and impairment	(9,422)	(393,257)	(4,705)	(6,886)	(21,272)	(435,542)	(367,841)	(48,936)	(416,777)
Net carrying amount	7,777	160,385	1,000	2,838	656	172,656	301,389	769	302,158

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.1 Mine properties and property, plant and equipment (continued)

30 June 2017			Plant and Equipment	Plant and Equipment	Plant and Equipment		Development Expenditure	Development Expenditure	Development Expenditure
	Buildings	Plant & Equipment	Motor Vehicles	Office Equipment	Leased Assets	Total	Mine Properties	Striping Activity Asset	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Opening write down value	8,016	46,787	811	2,744	3,298	61,656	88,116	29,074	117,190
Additions	-	40,032	-	306	-	40,338	62,245	42,111	104,356
Reversal of impairment	-	408	11	-	-	419	-	-	-
Disposals	-	(662)	(13)	-	(963)	(1,638)	-	-	-
Depreciation expense	(160)	(7,876)	(40)	(125)	(1,638)	(9,839)	-	-	-
Amounts amortised to costs of production relating to gold sales	-	-	-	-	-	-	-	(54,818)	(54,818)
Amortisation expense	-	-	-	-	-	-	(9,198)	-	(9,198)
Adjustments to rehabilitation and restoration obligations	-	-	-	-	-	-	1,327	-	1,327
Foreign currency translation	(219)	(1,146)	(19)	(80)	596	(868)	1,151	(396)	755
At 30 June net of accumulated depreciation	7,637	77,543	750	2,845	1,293	90,068	143,641	15,971	159,612

Cost	15,582	435,206	3,319	7,216	24,813	486,136	507,011	70,789	577,800
Accumulated depreciation and impairment	(7,945)	(357,663)	(2,569)	(4,371)	(23,520)	(396,068)	(363,370)	(54,818)	(418,188)
Net carrying amount	7,637	77,543	750	2,845	1,293	90,068	143,641	15,971	159,612

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.2 Exploration and evaluation assets

Exploration and evaluation (at cost)	2018	2017
	$’000	$’000
Balance at the beginning of the year	64,879	46,292
Expenditure during the year	14,592	19,835
Adjustments to rehabilitation obligations	(4,743)	(17)
Transfers to areas in development	(23,368)	-
Foreign currency translation	1,802	(1,231)
Balance at the end of the year	53,162	64,879

Recognition and measurement

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. 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.

Exploration commitments

It is 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 can be reduced by selective relinquishment of exploration tenure or by the renegotiation of expenditure commitments. The level of exploration expenditure expected in the year ending 30 June 2019 for the consolidated entity is approximately $21.438m (2018: $34.178m). This includes the minimum amounts required to retain tenure. There are no material exploration commitments further out than one year.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.3 Impairment of non-current assets

Recognition and measurement

Impairment testing

The carrying values of non-current assets are reviewed for impairment when indicators of impairment or a reversal of a prior period impairment may exist or changes in circumstances indicate the carrying value may not be recoverable. At a minimum the Group makes this assessment twice annually at 30 June and 31 December. No indicators of impairment or indicators for reversal of prior period impairment loss were identified.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of an asset 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.

Recognised Impairment

No impairment loss or reversal of prior period impairment loss was recognised in 2018.

Key estimates and judgements

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 which 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.

Impairment of mine properties, plant and equipment

The future recoverability of capitalised mine properties and plant and equipment is dependent on a number of key factors including; gold price, discount rates used in determining the estimated discounted cash flows of Cash Generating Units (“CGUs”), foreign exchange rates, the level of proved and probable reserves and measured, indicated and inferred mineral resources that may be included in the determination of fair value less cost to dispose (“fair value”), future technological changes which could impact the cost of mining, and future legal changes (including changes to environmental restoration obligations). The costs to dispose are estimated by management based on prevailing market conditions.

When applicable, fair value is estimated based on discounted cash flows using market based commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, based on CGU life ‐ of ‐ mine (LOM) plans. Consideration is also given to analysts’ valuations, and the market value of the Company’s securities. The fair value methodology adopted is categorised as Level 3 in the fair value hierarchy (in accordance with Australian Accounting Standards).

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements B: Production and Growth Assets

B.3 Impairment of non-current assets (continued)

Key estimates and judgements

Impairment of mine properties, plant and equipment (continued)

In determining the recoverable amount of CGUs at 30 June 2017, future cash flows were discounted using rates based on the Group’s estimated weighted average cost of capital. When it is considered appropriate to do so, an additional premium is applied with regard to the geographic location and nature of the CGU. LOM operating and capital cost assumptions are based on the Group’s latest budget and LOM plans.

Key Assumptions:

The table below summarises the key assumptions used in the carrying value assessments in prior year:

Gold price (US$ per 2018: N/A Commodity price and foreign exchange rates were estimated with reference to external market forecasts, and updated at least twice annually. The rates ounce): (2017: $1,210 - $1,270) applied to the valuation had regard to observable market data. In determining the fair value of CGUs, the future cash flows were discounted Discount rate % 2018: N/A using rates based on the Group’s estimated real weighted average cost of (post tax) (2017: 9% - 11%) capital, with an additional premium applied having regard to the geographic location of the CGU.

Operating and Life-of-mine operating and capital cost assumptions are based on the Group’s latest budget and life-ofcapital costs: mine plans.

B.4 Segment expenditure, assets and liabilities

For the year ended 30 June 2018	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Corp/ Other	Treasury	Total
	$’000	$’000	$’000	$’000	$’000	$’000
Capital expenditure	21,162	161,855	9,822	29,204	-	222,043
Segment assets of continuingoperations	98,435	638,125	87,337	111,371	-	935,268
Segment liabilities of continuing operations	63,068	137,287	10,503	15,770	-	226,628

For the year ended 30 June 2017	Ravenswood (Australia)	Syama (Mali)	Bibiani (Ghana)	Corp/ Other	Treasury	Total
	$’000	$’000	$’000	$’000	$’000	$’000
Capital expenditure	13,797	87,665	17,731	3,225	-	122,418
Segment assets of continuingoperations	77,314	385,712	78,405	296,322	-	837,753
Segment liabilities of continuing operations	58,228	105,623	16,221	8,483	-	188,555

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

In this section

Cash, debt and capital position of the Group at the end of the reporting period.

C.1 Cash

	2018	2017
	$'000	$'000
Cash at bank and on hand	42,445	282,060
Reconciliation to cash flow statement
For thepurpose of the cash flow statement,cash and cash equivalents comprise the followingat 30 June:
Cash at bank and on hand	42,445	282,060
Bank overdraft	(47,282)	(34,558)
	(4,837)	247,502

The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

Cash at bank and short term deposits
_Counterparties with external credit ratings _
AA-	495	191,881
A	40,269	89,155
B	-	75
Counterparties without external credit ratings	1,681	949
Total cash at bank and short term deposits	42,445	282,060

Recognition and measurement

Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term deposits with an original maturity of three months or less. Cash and cash equivalents are stated at face value in the statement of financial position.

Fair value and foreign exchange risk

The carrying amount of cash and cash equivalents approximates their fair value.

The Group held A$30.4 million of cash and cash equivalents at 30 June 2018 (2017: A$5.8 million) in currencies other than Australian dollars or a different currency to that of the functional currency of the company which holds the item. These exposures are predominantly US dollars (2018: A$11.9 million; 2017: A$3.8 million equivalent) and Euro (2018: A$5.0 million; 2017: A$1.5 million equivalent).

Average interest rates earned on cash and cash equivalents during the period was 2.4% (2017: 2.2%).

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.1 Cash (continued)

Reconciliation of net profit from continuing operations after income tax to the net operating cash flows

	2018	2017
	$'000	$'000
Net profit from ordinary activities after income tax	77,837	166,096
Add/(deduct):
Share based payments including employee long term incentive costs	1,782	1,184
Loss on sale of property, plant and equipment	587	193
Profit on sale of available for sale financial assets	-	(200)
Rehabilitation and restoration provision accretion	1,505	1,182
Rehabilitation and restoration cash expenditure	(1,223)	(1,783)
Depreciation and amortisation	14,547	19,811
Foreign exchange (gains)/losses	(30,574)	5,238
Inventory net realisable value movements	(12,822)	(11,424)
Share of associates’ losses	1,500	1,799
Non cash finance costs	42	61
Realised gain on investment in associate	-	(864)
Unrealised gain on forwards contracts	-	(2,629)

Changes in operating assets and liabilities:
(Increase)/decrease in receivables	(32,949)	1,557
Increase in inventories	(8,905)	(15,610)
(Increase)/decrease in prepayments	(2,577)	1,196
Decrease in stripping activity asset	15,681	12,645
Increase in payables	24,112	27,678
(Increase)/decrease in current tax balances	(24,488)	3,118
Decrease/(increase) in deferred tax balances	6,751	(15,333)
Decrease in operating provisions	(2,447)	(7,531)
Net operating cash flows	28,359	186,384

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.1 Cash (continued)

Cash flow by segment

	Rd	S	Bibii	Unallocated(b)	Unallocated(b)	Total
	avenswoo	yama	an (Ghana)	Corp/ Other	T
	(Australia)	(Ghana)
					reasury

	$’000	$’000	$’000	$’000	$’000	$’000
For the year ended 30 June 2018
Cash flow by segment, including gold bullion, and gold shipped but unsold and held in metal accounts	(12,074)	(112,182)	(17,550)	(47,887)	(14,424)	(204,117)
Reconciliation of cash flow by segment to the cash flow statement:
Movement in gold poured but unsold at market value						(40,726)
Mark to market movement in gold unsold						(605)
Movement in bank overdraft, including foreign exchange movements						(12,724)
Exchange rate adjustment in cash on hand						2,730
Movement in cash and cash equivalents per consolidated cash flow statement						(255,442)

For the year ended 30 June 2017
Cash flow by segment, including gold bullion, and gold shipped but unsold and held in metal accounts	16,646	48,160	(16,089)	(20,460)	151,903	180,160
Reconciliation of cash flow by segment to the cash flow statement:
Movement in gold poured but unsold at market value						22,071
Mark to market movement in gold unsold						(31)
Movement in bank overdraft, including foreign exchange movements						(8,102)
Exchange rate adjustment in cash on hand						248
Movement in cash and cash equivalents per consolidated cash flow statement						194,346

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.2 Interest bearing liabilities

	2018	2017
	$’000	$’000
Bank overdraft - ref C3.1	47,282	34,558
	47,282	34,558

Recognition and measurement

All loans and borrowings are initially recognised at fair value less transaction costs and subsequently at amortised cost. Any difference between the proceeds received and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method.

Resolute has a Security Trust Deed in place with various banks. The total assets of the entities over which security exists amounts to $875m (2017: $806m). $152m (2017: $88m) of these assets relate to property plant and equipment.

Finance 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.

Interest bearing liabilities

The Group’s interest bearing liabilities have a fair value equal to the carrying value.

The Group held no interest bearing liabilities at 30 June 2018 (2017: Nil) in currencies other than Australian dollars or a different currency to that of the functional currency of the company which holds the item. Average interest rates charged on interest bearing liabilities at period end was 8.0% (2017: 8.0%).

During the 2018 year, the overdraft which is denominated in CFA increased during the period due to cash drawdowns of $10.6m AUD after the facility limit was increased by AUD$12m (5 billion CFA) to AUD$47m (20 billion CFA) and unrealised foreign exchange movements of $2.1m AUD.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.2 Interest bearing liabilities (continued)

Maturity profile of interest-bearing liabilities

The maturity profile of the Group’s interest-bearing liabilities in total and for finance leases is as follows:

	2018	2017
	$'000	$'000
Borrowings
Due within 1 to 3 months	-	-
Due within 4 months to oneyear	49,184	35,918
Due between one and fiveyears	-	-
Total contractual repayments	49,184	35,918
Less finance charges	(1,902)	(1,360)
Total interest bearing liabilities	47,282	34,558

C.3 Financing facilities

C3.1 Bank overdraft

The current facility with the Bank Du Mali SA is in place and is subject to an annual revision in approximately September 2018. As at 30 June 2018 nil of the facility was unused.

C3.2 Syndicated facilities

RML has entered into the following Letter of Credit Facility Agreements:

A A$35.0m Letter of Credit Facility Agreement with Citibank N.A. relating mainly to Environmental Performance Bonds for the Ravenswood Project. A$29.4m of this facility has been drawn and expires on 31 December 2019;
A A$9.5m (US$7m) Letter of Credit Facility Agreement with Sociêtê General Ghana Limited relating to Environmental Performance Bonds for the Bibiani Project. This facility is fully drawn and expires on 31 December 2019.

The Citibank N.A. Letter of Credit Facility Agreement and hedging facilities provided by Investec Bank Plc and Citibank N.A. are secured by the following:

(iii) Cross Guarantee and Indemnity given by RML (“the Borrower”), Carpentaria Gold Pty Ltd, Resolute (Somisy) Limited, Resolute (Treasury) Pty Ltd and Resolute (Bibiani) Limited;
(iv) Share Mortgage granted by RML over all of its shares in Carpentaria Gold Pty Ltd;
(v) Share Mortgage granted by the Borrower over all of its shares in Resolute (Bibiani) Limited and Resolute (Somisy) Limited;
(vi) Fixed and Floating Charge granted by Resolute (Treasury) Pty Ltd over all its current and future assets including bank accounts and an assignment of all Hedging Contracts;
(vii) Mining Mortgage and Fixed and Floating Charge granted by Carpentaria Gold Pty Ltd, including mining mortgage over key Carpentaria Gold Pty Ltd mining tenements and charge over all the current and future assets of Carpentaria Gold Pty Ltd including bank accounts and an assignment of all Hedging Contracts;
(viii) Mortgage of Contractual Rights granted by Resolute Mining Limited in favour of the Security Trustee over a loan provided to Sociêtê des Mines de Syama SA;
(ix) Mortgage of Contractual Rights granted by Resolute (Bibiani) Limited in favour of the Security Trustee over a loan provided to Drilling and Mining Services Limited, Mensin Gold Bibiani Limited and Noble Mining Ghana Limited; and,
(x) Mortgage of Contractual Rights granted by Resolute (Treasury) Pty Ltd in favour of the Security Trustee over a loan provided to Mensin Gold Bibiani Limited.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.3 Financing facilities (continued)

C3.2 Syndicated facilities (continued)

Pursuant to the Syndicated Facilities Agreement and Letter of Credit Facility Agreement with Citibank N.A, the following ratios are required:

(xi) (Interest Cover Ratio): the ratio of EBITDA to Net Interest Expense will be greater than 5.00 times;

(xii) (Net Debt to EBITDA): the ratio of Net Debt to EBITDA will be less than 2.00 times;

(xiii) (Consolidated Gearing): the ratio of Net Debt to Equity will be less than 1.00 times;

(xiv) (Loan Life Cover Ratio): will be equal to or greater than 1.50:1; and,

(xv) (Reserve Tail Ratio): will exceed 30%.

There have been no breaches of these ratios. The Sociêtê General Ghana Limited Letter of Credit Facility Agreement is supported by a guarantee provided by Resolute Mining Limited.

C.4 Contributed Equity

	2018	2017
	$'000	$'000
Ordinaryshare capital:	544,972	544,987
741,477,595 ordinaryfully paid shares(2017: 736,982,768)

Movements in contributed equity,net of issuingcosts:
Balance at the beginningof theyear	544,987	395,198
Issue of shares to Level 1 and 2 employees(net of costs)	(15)	-
Placement of shares to institutional investors(net of costs)	-	147,092
Shares issuedpursuant to the Osisko Share Purchase Agreement(net of costs)¹	-	2,544
Exercise of 130,000 unlisted options at $1.18per share	-	153
Balance at the end of the year	544,972	544,987

¹This relates to the purchase of 21,868,000 shares in Kilo Goldmines which resulted in the issue of 1,457,867 Resolute shares.

Recognition and measurement

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.

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.

Rights of employee share based payment recipients

Refer to E.10 for details of the employee share based payment plans which includes option and performance rights plans. Each option entitles the holder to purchase one share. The names of all persons who currently hold employee share options or performance rights, 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 and holders of performance rights 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 | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements C: Cash, Debt and Capital

C.5 Other reserves

Reserve	Nature and purpose
Net unrealised gain/(loss) reserve	This reserve records fair value changes on available for sale investments.
Convertible notes/ Share options equityreserve	This reserve records the value of the equity portion (conversion rights) of the convertible notes and records the fair value of share options issued.
Employee benefits equity reserve	This reserve is used to recognise the fair value of options and performance rights granted over the vesting period of the securitiesprovided to employees.
Foreign currency translation reserve	Represents exchange differences arising on translation of foreign controlled entities.
Non-controlling interest’s reserve	This reserve records the difference between the fair value of the amount by which the non-controlling interests were adjusted to record their initial relative interest and the considerationpaid for Resolute’s acquisition for that share of the interest.

Key financial and capital risks associated with Cash, Debt and Capital

Liquidity risk management

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.

Interest rate risk management

Borrowings issued at variable rates expose the Group to cash flow interest rate risk. 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.

Capital risk 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 at 30 June 2018 is 0% (2017: 0%). The Group is not subject to any externally imposed capital requirements.

The gearing ratio is calculated as net debt divided by total capital. Net debt is defined as interest bearing liabilities less cash, cash equivalents and market value of bullion on hand. Total capital is calculated as ‘equity’ as shown in the Consolidated Statement of ‐ Financial Position (including non controlling interest) plus net debt.

The following table summarises the post-tax effect of the sensitivity of the Group’s debt, cash and capital items on profit and equity at reporting date to movements that are reasonably possible in relation to interest rate risk and foreign exchange currency risk.

Carrying Amount	Interest	Interest	rate risk	rate risk	Foreign exchange risk	Foreign exchange risk	Foreign exchange risk	Foreign exchange risk
	-1%		+1%		-10%		+10%
	Profit	Equity	Profit	Equity	Profit	Equity	Profit	Equity
$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000

42,445	(279)	(279)	279	279	2,260	2,260	(1,849)	(1,849)
	(279)	(279)	279	279	2,260	2,260	(1,849)	(1,849)

282,060	(1,965)	(1,965)	1,965	1,965	560	560	(458)	(458)
	(1,965)	(1,965)	1,965	1,965	560	560	(458)	(458)

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

In this section

Other assets and liabilities position at the end of the reporting period.

D.1 Receivables

	2018	2017
	$'000	$'000
Trade receivables	1,783	1,542
Taxation debtors ¹	38,181	4,206
Loans advanced to otherparties ²	5,133	-
	45,097	5,748

¹ The taxation debtors primarily relate to indirect taxes owing to the group by the State of Mali.

² Relates to loan advanced to a supplier which is secured over assets that the loan was used to purchase. Interest at the rate of 10% per annum is charged on the balance outstanding and the loan is repayable by the supplier by way of deduction from future amounts payable under the contract. The balances outstanding at 30 June 2018 is expected to be repaid within the next 12 months and therefore the loan has been classified as current.

The credit quality of receivables can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

	2018	2017
	$'000	$'000
Counterparties with external credit ratings
AA+	1,061	511
Counterparties without external credit ratings *
Group1	43,689	5,192
Group2	347	45
	45,097	5,748

*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.

Recognition and measurement

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.

Fair value and foreign exchange risk

The carrying amount of receivables approximates their fair value.

The Group held $1.8m receivables at 30 June 2018 (2017: $5.3m) in currencies other than Australian dollars or in a different currency to that of the functional currency of the company which holds the item.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

D.1 Receivables (continued)

As at 30 June, the aging analysis of current and non-current sundry debtors is as follows:

	2018	2017
	$'000	$'000
Neither past due nor impaired	18,300	5,327
0-30 days (Past due but not impaired)	7,117	-
31-60 days (Past due but not impaired)	6,032	-
61-90 days (Past due but not impaired)	5,114	-
+91 days (Past due but not impaired)	8,187	376
+91 days (Considered impaired)	347	45
	45,097	5,748

Payment terms on amounts past due but not impaired have not been re-negotiated, however the Group maintains direct contact with the relevant debtor and is satisfied that net receivables will be collected in full.

D.2 Inventories

	2018	2017
	$'000	$'000
Ore stockpiles
-At cost	38,296	37,411
-At net realisable value	35,946	20,829
Total ore stockpiles	74,242	58,240

Gold bullion on hand - at cost¹	28,675	209
Gold in circuit - at cost²	72,830	90,527
Consumables at cost	58,973	53,098
	234,720	202,074

¹ Resolute retains 21,962oz of gold bullion on hand at 30 June 2018 with a market value of $37.1m (2017: 244oz with a market value of $0.4m). ² Included in gold in circuit is inventory with carrying value of $54m that is expected to be processed after 12 months.

Recognition and measurement

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-infirst-out basis.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

D.3 Other financial assets and liabilities

	2018	2017
	$'000	$'000
*Available for sale financial assets(current)*
Shares at fair value - listed	22,859	3,595

*Financial derivative assets(current)*
Gold forwards at fair value	-	2,214

*Other financial assets(non-current)*
Environmental bond - restricted cash(face value approximates fair value)	3,707	3,570
Other	44	81
	3,751	3,651

Recognition and measurement

Available-for-sale financial assets

Available for sale financial assets consist of investments in ordinary shares, comprising principally of marketable equity securities. Investments are initially recognised at fair value plus transaction costs. Unrealised gains and losses arising from changes in the fair value of classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve. A significant or prolonged decline in the fair value of a security results in the impairment charge being removed from equity and recognised in the consolidated statement of comprehensive income.

The fair value of the listed securities are based on quoted market prices and accordingly is a level 1 measurement basis on the fair value hierarchy.

Financial derivative assets

The gold forward contracts were valued using the valuation techniques with market observable inputs such as credit quality of counterparties, forward rate curves of the underlying commodity etc. The fair value methodology adopted was categorised as Level 2 in the fair value hierarchy.

Restricted cash

The environmental bond represents a receivable carried at amortised cost using the effective interest method. The Ghanaian Environmental Protection Authority holds $3.703m (AUD equivalent) of restricted cash as security for the rehabilitation and restoration provision of Mensin Gold Bibiani Limited’s Bibiani project. There is no external credit rating basis for the Ghanaian Environmental Protection Authority. The average interest rate earned on the environmental bond during the period was 0.0% (2017: 0.0%).

Use of derivative instruments to assist in managing gold price risk

As part of the Group’s risk management practices, selected financial instruments (such as gold forward sales contracts, gold call options and gold put options) may be used from time to time to reduce the impact a declining gold price has on project life revenue streams. Within this context, the programs undertaken are project specific and structured with the objective of retaining as much upside to the gold price as possible, and in any event, 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 hedging facilities provided by the Group's counterparties do not contain margin calls. The Group did not hedge account for these instruments.

Movements in fair value are accounted for through the consolidated statement of comprehensive income.

D.4 Prepayments

Non-current prepayments relate to payments made for the acquisition of plant and equipment.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

D.5 Payables

	2018	2017
	$'000	$'000
Trade creditors	36,234	36,331
Accruals	56,254	28,821
	92,488	65,152

Recognition and measurement

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. 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.

D.6 Provisions

Current Site restoration Employee entitlements ¹ Dividendpayable Withholdingtaxes Otherprovisions Non-Current Site restoration Employee entitlements	2018	2017
	$'000	$'000

	5,330	715
	12,517	16,806
	135	135
	473	262
	2,716	808
	21,171	18,726

	64,257	64,710
	1,430	1,430
	65,687	66,140

¹ Resolute Mining’s 80% owned subsidiary Société des Mines de Syama SA (“SOMISY”) received notifications from the Institut National de Prévoyance Sociale (“INPS”) alleging SOMISY owed contributions to the INPS on salaries paid by SOMISY to its expatriate employees between January 2005 and July 2013. Malian Legislation requires the remittance of 24% of an employee’s gross salary and a mandatory health insurance levy to the INPS department and is a form of social tax. In accordance with the Establishment Convention between SOMISY and the State of Mali, SOMISY is exempt from paying INPS contributions and the mandatory health insurance levy on expatriate employees during the Syama Mine Development Period. In accordance with the Establishment Convention, SOMISY did not remit INPS on expatriate salaries during the Mine Development Period, and then commenced remitting INPS on expatriate salaries after the cessation of the Mine Development Period. SOMISY has acted in accordance with the Establishment Convention at all times. The INPS department’s claims are for the period during the Mine Development Period only and SOMISY’s position is that it is not liable for payments during that period.

SOMISY unsuccessfully appealed against this INPS assessment, with a Malian Court of Appeal ruling in favour of the INPS department on the basis that it was not a government department and hence not a party to the Establishment Convention, so it was not obliged to follow its terms and conditions. In June 2016, a Settlement Agreement was executed by the parties to record an agreed instalment plan under which SOMISY fully discharges this disputed liability by paying A$11.5m (CFA 5,157,144,561) to INPS in instalments between 1 July 2016 and 30 June 2018. These instalments have now been paid in full.

A further demand for A$2.1m was received from INPS in February 2018 relating to the period August 2013 to September 2017. SOMISY is currently contesting this demand and negotiations are ongoing as at 30 June 2018.

Resolute continues to strongly dispute the validity of the INPS assessments and negotiations with the State of Mali are ongoing to recover the INPS contributions demanded by the State of Mali in breach the terms of the Establishment Convention. Successful negotiations will see the monies paid to date in breach of the Establishment Convention returned to SOMISY.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

D.6 Provisions (continued)

Recognition and measurement

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.

Employee benefits

The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting date. The Group recognises a liability for long service leave and annual leave 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 high quality corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflow s.

Restoration obligations

The Group records the present value of the estimated cost of 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.

	2018	2017
	$'000	$'000
Site restoration
Balance at the beginningof theyear	65,425	65,367
Rehabilitation and restorationprovision accretion	1,505	1,182
Change in scope of restorationprovision	2,113	1,310
Utilised duringtheyear	(1,223)	(1,783)
Foreign exchange translation	1,767	(651)
Balance at the end of theyear	69,587	65,425

Reconciled as:
Currentprovision	5,330	715
Non-currentprovision	64,257	64,710
Totalprovision	69,587	65,425

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements D: Other assets and liabilities

D.6 Provisions (continued)

Key estimates and judgements

Restoration

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.

Key financial risks associated with other assets and liabilities

Interest rate risk, diesel price risk and foreign exchange risk management

Refer to About this Report (page 29) and Section C (page 48) for details of how these risks are managed.

Credit risk management

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 (refer to C1), 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 Audit and Risk Committee approval. With the exception of those items disclosed in C3 and a Resolute Mining parent company guarantee provided to Macquarie Bank Limited relating to their provision of a hedging facility, no guarantees have been provided to third parties as at the 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.

Foreign exchange risk management

The following table summarises the sensitivity to a reasonably possible change in foreign exchange rates with all other variables held constant:

	Carrying Amount	Foreign exchange risk	Foreign exchange risk	Foreign exchange risk	Foreign exchange risk
		-10%		+10%
		Profit	Equity	Profit	Equity
	$'000	$'000	$'000	$'000	$'000
30 June 2018
Other financial assets	3,751	288	288	(236)	(236)
Loans advanced to otherparties	5,133	243	243	(199)	(199)
Loans to subsidiaries	574,677	44,697	44,697	(36,570)	(36,570)
Payables	92,278	(1,123)	(1,123)	919	919
Total(decrease)/increase		44,105	44,105	(36,086)	(36,086)
30 June 2017
Other financial assets	3,651	288	288	(227)	(227)
Loans to subsidiaries	389,797	30,318	30,318	(24,805)	(24,805)
Payables	65,152	(446)	(446)	365	365
Total(decrease)/increase		30,160	30,160	(24,667)	(24,667)

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

In this section

Information on items which require disclosure to comply with Australian Accounting Standards and the Australian Corporations Act 2001.This section includes group structure information and other disclosures.

E.1 Contingent liabilities

Contingent liabilities

Amounts Potentially Payable to historical Bibiani Creditors

In June 2014, Mensin Gold Bibiani Limited, Drilling and Mining Services Limited and Noble Mining Ghana Limited (collectively referred to as the “Companies”) entered into court approved Schemes of Arrangement (“Scheme”) with their creditors and employees (“Scheme Creditors”). The Scheme enabled Resolute to secure, with the endorsement of the Ghanaian government, ultimate ownership of the Bibiani gold mine with protection from those liabilities which had been incurred at a time when the mine was owned by Noble. The Scheme outlines the timing and amounts of payments to be made by the Companies to a Scheme Fund and a Future Fund who in turn are responsible for making payments to the Scheme Creditors. The Scheme Creditors arise from transactions that occurred prior to the Companies becoming part of the Resolute group. The Scheme Fund and the Future Fund are administered by Ferrier Hodgson.

The implementation of the Scheme has had the effect of removing from the Companies’ balance sheets all historical liabilities relating to amounts payable to Scheme Creditors and replacing this with an obligation to fund the Scheme Fund and Future Fund as and when necessary. The unconditional obligations to make payments to the Scheme Fund have been paid prior to 30 June 2018. In addition to those recorded payments and liabilities, the following contingent liabilities to provide funding to the Scheme Fund and Future Fund exist at year end:

Potential payment to the Scheme Fund of US$3.600m ($4.854m) if, following receipt of the Feasibility Study, the board of Resolute, in its absolute discretion, makes a decision to proceed with the development of Bibiani; and;
Potential payment to a Future Fund of up to US$7.800m ($10.516m) conditional upon the generation of Free Cashflow from Bibiani mine operations for the period of 5 years from the date that Commercial Production is declared. Free Cashflow means 25% of the sum of Project Revenue for that period less Permitted Payments for that period, which includes:
operational expenses and capital costs paid in connection with the mining operations; and,
repayment of principal and interest relating to funds advanced by Resolute up to the commencement of mining operations.

Notwithstanding the Scheme’s approval by the court, the creditors, and the Ghanaian Minister of Mines, a Ghanaian creditor has sought to circumvent the operation of the Scheme and is seeking to enforce a winding up order against Mensin, on the basis of a debt incurred by Noble prior to implementation of the Scheme. Resolute is defending Mensin’s right to unencumbered ownership of Bibiani which was a key element of the Scheme supported by both Resolute and the Ghanaian government.

E.2 Leases and other commitments

Operating leases

	2018	2017
	$'000	$'000
Due within one year	3,253	691
Due between one and five years	12,917	12,911
Aggregate lease expenditure contracted for at balance date but not provided for	16,170	13,602

Commitments

Other commitments not disclosed elsewhere in this report include:

Randgold/ Syama Royalty

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. As at 30 June 2018, Resolute’s 80% attributable share of Syama’s project to date gold production was 1,234,640 ounces of gold, therefore the royalty is currently US$5 per ounce.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.2 Leases and other commitments (continued)

Commitments (continued)

Other contracted expenditure commitments

	2018	2017
	$'000	$'000
Due within oneyear	8,780	2,180
Aggregate lease expenditure contracted for at balance date but notprovided for	8,780	2,180

Gold forward contracts

As part of its risk management policy, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated sales of gold. During the period, the Group entered into three gold forward contracts totalling 168,000 ounces. As at 30 June 2018, 84,000 ounces remains outstanding.

The gold forward contracts disclosed below did not meet the criteria of financial instruments for accounting purposes on the basis that they met the normal purchase/sale exemption because physical gold would be delivered into the contract. Accordingly, the contracts were accounted for as sale contracts with revenue recognised in the period in which the gold commitment was met.

	Gold for Physical Delivery Ounces	Contracted Gold Sale Price per Ounce ($A)	Value of Committed sales $’000
30 June 2018
USD
Withinone year	36,000	1,796.90	64,688,400
	36,000		64,688,400

AUD
Within one year	48,000	1,715.00	82,320,000
	48,000		82,320,000

E.3 Auditor remuneration

	2018	2017
	$	$
Auditing	175,500	179,360
Taxationplanningadvice and review and other services	20,000	-
	195,500	179,360
Amounts received or due and receivable by a related overseas office of Ernst & Young, from entities in the consolidated entityor related entities:
Auditing (Ernst & Young,Ghana and Tanzania)	27,860	52,894
Total amounts received or due and receivable by Ernst & Young globally	223,360	232,254
Amounts received or due and receivable bynon Ernst & Youngfirms for auditing	47,446	35,690

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.4 Investments in associates

	2018	2017	2018	2017	2018	2017
Continuing Operations	Kilo Goldmines Ltd		Manas Resources Ltd		Loncor Resources Inc
Shares held in associates (No. of shares)	46,568,000	46,568,000	523,899,835	523,899,835	51,000,000	-
CA$0.135 warrants, expiring 25 August 2018(No. of warrants)	24,700,000	24,700,000	-	-	-	-
Percentage of ownership (%)	27.44%	27.44%	19.90%	19.90%	27.22%	-

	$'000	$'000	$'000	$'000	$'000	$'000
Listed	3,077	3,986	1,263	1,854	2,654	-

(b) Movements in the carrying amount of the Group's investment in associates
At 1 July	3,986	-	1,854	-	-	-
Purchase of investment	-	5,485	-	2,155	2,654	-
Share of loss after income tax	(909)	(1,499)	(591)	(301)	-	-
At 30 June	3,077	3,986	1,263	1,854	2,654¹	-
¹ On 13 July 2018, Resolute paid Loncor Resources Inc for 25 million shares acquired during the year, via the issue 2,012,466 Resolute shares.						of
(c) Fair value of investment in listed associates
Market value of the Group's investment as at 30 June	1,195	1,627	3,143	2,096	3,927	-

(d) Summarised financial information
The followingtable illustrates summarised financial information relatingto the Group's associates:
Extract from the associates' statement of financialposition
Current assets	388	3,485	9,500	10,666	2,539	-
Non-current assets	742	4,856	244	1,913	37,998	-
Total assets	1,130	8,341	9,744	12,579	40,537	-
Current liabilities	253	123	169	161	1,745	-
Non-current liabilities	2	675	-	-	11	-
Total liabilities	255	798	169	161	1,756	-
Net assets	875	7,543	9,575	12,418	38,781	-
Share of associates' net assets	240	2,070	1,905	2,471	10,555	-
Extract from the associates' statement of comprehensive income:
Revenue	-	-	-	-	-	-
(Loss)/profit before tax, (loss)/profit for the year and total comprehensive loss	(3,248)	(6,781)	(2,844)	(5,498)	30	-

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.5 Subsidiaries and non-controlling interests

Subsidiaries

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.

Name of Controlled Entity and Country of Incorporation	Consolidated Entity Company Holding the Investment	Percentage of Shares Held by Consolidated Entity	Percentage of Shares Held by Consolidated Entity
		2018	2017
		%	%
ACN 627 384 098 PtyLtd,Australia6	Resolute MiningLimited	100	-
Amber Gold Cote d’Ivoire SARL,Cote d'Ivoire	Resolute(CDI Holdings)PtyLimited	100	100
Carpentaria Gold PtyLtd,Aust.	Resolute MiningLimited	100	100
Drillingand MiningServices Limited,Ghana	Resolute(Bibiani)PtyLimited	100	100
Excalibur Cote d’Ivoire SARL,Cote d'Ivoire	Resolute(CDI Holdings)PtyLimited	100	100
Geb and Nut Resources SARL,Cote d'Ivoire	Resolute Cote D’Ivoire SARL	80	80
Resolute Corporate Services PtyLtd,Aust.1 (a)	Resolute(Treasury)PtyLtd	100	100
Mensin Gold Bibiani Limited,Ghana	Resolute(Bibiani)PtyLimited	90	90
Nimba Resources SARL,Cote d'Ivoire	Resolute(CDI Holdings)PtyLimited	100	100
Noble MiningGhana Limited,Ghana	Resolute(Bibiani)PtyLimited	100	100
Resolute(Bibiani)PtyLimited,Aust.2 (a)	Resolute MiningLimited	100	100
Resolute Burkina Faso PtyLtd,Australia6	Resolute MiningLimited	100	-
Resolute Canada PtyLtd,Australia6	Resolute MiningLimited	100	-
Resolute Canada 2 PtyLtd,Australia6	Resolute MiningLimited	100	-
Resolute(CDI Holdings)PtyLtd,Aust.3 (a)	Resolute MiningLimited	100	100
Resolute Cote D’Ivoire SARL,Cote d'Ivoire	Resolute(CDI Holdings)PtyLimited	100	100
Resolute Egypt(Australia)PtyLtd,Aust.	Resolute MiningLimited	100	100
Resolute Egypt(Australia)2 PtyLtd,Aust.	Resolute MiningLimited	100	100
Resolute Egypt Pty Ltd, Egypt	Resolute Egypt (Australia) Pty Ltd Resolute Egypt(Australia)2 PtyLtd	50 50	50 50
Resolute Exploration SARL,Mali	Resolute(Finkolo)PtyLimited	100	100
Resolute(Finkolo)PtyLimited,Aust.4 (a)	Resolute MiningLimited	100	100
Resolute(Ghana)Limited,Ghana	Resolute MiningLimited	100	100
Resolute Mali S.A.,Mali	Resolute(Somisy)PtyLimited	100	100
Resolute(Somisy)PtyLimited,Aust.5 (a)	Resolute MiningLimited	100	100
Resolute Sudan PtyLtd,Australia6	Resolute MiningLimited	100	-
Resolute Sudan 2 PtyLtd,Australia6	Resolute MiningLimited	100	-
Resolute(Treasury)PtyLtd,Aust.(a)	Resolute MiningLimited	100	100
RSG Tanzania PtyLtd,Australia6	Resolute MiningLimited	100	-
RSG Tanzania 2 PtyLtd,Australia6	Resolute MiningLimited	100	-
Sociêtê des Mines de Finkolo S.A,Mali	Resolute(Finkolo)PtyLimited	90	85
Sociêtê des Mines de Syama S.A.,Mali	Resolute(Somisy)PtyLimited	80	80

(a) Entities not separately audited. Entity’s audit scope is limited to the purpose of inclusion in the consolidated entity's accounts. 1 Previously Goudhurst Pty Ltd, Aust.

2 Previously Resolute (Bibiani) Limited, Jersey
3 Previously Resolute (CDI Holdings) Limited, Jersey
4 Previously Resolute (Finkolo) Limited, Jersey
5 Previously Resolute (Somisy) Limited, Jersey
6 Incorporated during the year

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.5 Subsidiaries and non-controlling interests (continued)

Material partly owned subsidiaries

	2018	2017
	$'000	$'000
*Accumulated share of (deficiency)/equity attributable to material Non-Controlling* *Interest:*
Sociêtê des Mines de Syama SA("SOMISY")	(7,510)	(18,372)
Mensin Gold Bibiani Limited("Mensin")	(1,700)	(2,203)
Sociêtê des Mines de Finkolo SA("Finkolo")	1,796	3,045
Total Non-Controlling Interest	(7,414)	(17,530)
Profit/(loss)allocated to material Non-ControllingInterest:
SOMISY	12,775	29,732
Mensin	(183)	5
Finkolo	(325)	(12)
Total Non-Controlling Interest	12,267	29,725

The summarised financial information of subsidiaries with non-controlling interests is provided below. This information is based on amounts before inter-company eliminations.

	2018	2017	2018	2017	2018	2017
	$'000	$'000	$'000	$'000	$'000	$'000
	SOMISY		Mensin		Finkolo
*Statement of Comprehensive Income*
Revenue	306,626	381,293	-	-	-	-
Gain/(loss)for theperiod	64,659	136,740	(1,734)	50	(3,219)	(934)
Total comprehensive income/(loss)for theperiod	64,659	136,740	(1,734)	50	(3,219)	(934)
*Summarised Statement of Financial Position*
Current assets	293,236	214,194	4,086	4,030	5,857	305
Non-current assets	395,841	230,255	84,695	73,569	26,363	23,218
Current liabilities	(110,494)	(80,518)	(2,694)	(1,845)	(8,492)	(1,083)
Non-current liabilities - External	(37,946)	(32,520)	(9,502)	(13,984)	-	-
Non-current liabilities - Intra Resolute Mining Limited Group	(550,974)	(389,291)	(457,440)	(427,281)	(55,125)	(28,187)
Total deficiency	(10,337)	(57,880)	(380,855)	(365,511)	(31,397)	(5,747)
*Summarised Statement of Cash Flow*
Operating	82,298	126,159	(1,550)	939	(8,076)	(897)
Investing	(176,896)	(77,999)	(12,829)	(17,028)	(13,480)	(1,368)
Net (decrease)/increase in cash and cash equivalents	(94,598)	48,160	(14,379)	(16,089)	(21,556)	(2,265)

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.6 Joint operations

The consolidated entity has an interest in the following joint operations whose principal activities are to explore for gold.

Entity Holding Interest	Other Participant/Joint Operation	Percentage of Interest Held	Percentage of Interest Held
		2018	2017
		%	%
Resolute Mining Limited	Etruscan Resources Bermuda Ltd/N’Gokoli Est JV¹	60%	60%

¹ Interests in joint operations greater than 50% have been accounted for as joint operations as all decision making requires unanimous agreement.

E.7 Subsequent events

Acquisition of 16,182,480 shares in Orca Gold Inc via the issue of 8,953,421 Resolute shares
Acquisition of 79,290,000 shares in Manas Resources Limited via the issue of 317,160 Resolute shares
Resolute issued 2,012,466 Resolute Shares to Arnold Kondrat in consideration for the acquisition of 25,000,000 shares in Loncor Resources Inc.

E.8 Related party disclosures

RML is the ultimate Australian holding company and there is no controlling entity of RML at 30 June 2018.

E.9 Parent entity information

	2018	2017
	$'000	$'000
Current assets	181	152
Total assets	460,338	463,578
Current liabilities	(1,323)	(1,214)
Total liabilities	(1,329)	(1,219)
Net assets	459,009	462,359
Issued capital	545,014	545,029
Accumulated losses	(97,710)	(94,404)
Convertible note equityreserve	549	549
Share option equityreserve	5,793	5,793
Employee equitybenefits reserve	5,364	5,364
Reserves - unrealised(loss)/gain	(1)	28
Total shareholders equity	459,009	462,359
Profit of Resolute MiningLimited	8,035	6,743
Total comprehensiveprofit of Resolute MiningLimited	8,035	6,743

Refer to E1 for the contingent liabilities and commitments of Resolute Mining Limited. The parent company guarantees provided by Resolute Mining Limited as outlined in C3 have a nil written down value as at 30 June 2018 (2017: nil).

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.10 Employee benefits and share based payments

	2018	2017
	$'000	$'000
Salaries	58,523	55,453
Superannuation	2,714	3,029
Share basedpayments expense	2,307	2,129
Total employee benefits charged toprofit and loss	63,544	60,611

Share based payments

Equity-based compensation benefits are provided to employees via the Group’s share option plan and performance rights plan. The Group determines the fair value of securities issued as an expense in the profit and loss over the vesting period with a corresponding increase in equity.

Key management personnel

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

	2018	2017
	$	$
Short-term employee benefits	3,115,873	4,295,562
Post-employment benefits	147,869	240,858
Long-term employment benefits	74,058	50,089
Share-basedpayments	1,882,044	1,212,280
	5,219,845	5,798,789

The following personnel were included in the remuneration report for the year ended 30 June 2017 and, as they are no longer classified as key management personnel, have not been included in the remuneration report for the year ended 30 June 2018:

P. Henharen – General Manager – Project Delivery (up until 4 April 2018)
V. Hughes – General Manager – People, Culture and Information (resigned 22 December 2017)
D. Kelly – General Manager – Corporate Strategy
B. Mowat – General Manager – Exploration

Key estimates and judgements

Share based payments

The Group measures the cost of equity settled share based payment transactions with reference to the fair value at the grant date using a Black Scholes formula or Monte Carlo simulation. The valuations take into account the terms and conditions upon which the instruments were granted such as the exercise price, the term of the option or performance right, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option or performance right, 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 or performance right.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.10 Employee benefits and share based payments (continued)

Employee share option plan

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.

Employees will only be able to exercise the options allocated to them if they meet certain performance criteria.

Option Category		2018	2018			2017	2017		Fair value of option at grant date
	Opening Number of Options	Lapsed During	Exercised During the	Closing Number	Opening Number	Lapsed		Closing
							Exercised	Number
		the	Year	of	of	During the Year	During the Year	of Options
		Year		Options	Options
M	-	-	-	-	130,000	-	(130,000)	-	0.66
N	-	-	-	-	545,400	(545,400)	-	-	0.98
	-	-	-	-	675,400	(545,400)	(130,000)	-
Weighted average exercise price	-	-	-	-	1.52	1.52	1.18	-

The weighted average remaining contractual life for the share options outstanding as at 30 Jun 2018 is 0 years (2017: 0 years).

Refer to the 2015 Annual Report for details around the option categories above.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.10 Employee benefits and share based payments (continued)

Performance rights plan

The performance rights plan is broken down between:

Performance Rights Plan Category	Type of employee
Level 1	Managing Director and CEO
Level 2	Executive Team reporting to MD
Level 3	Site General Managers
Level 4	Other Participants as recommended by the MD
Special	Special, one-off awards as recommended by the MD

Plan category	Grant and frequency	Performance measures	Performanceperiod
Level 1	Annually set at 100% of fixed remuneration for the Managing Director & CEO	 75% of the rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and  25% of the rights will be performance tested against the reserve/ resource growth over a 3 year period.	3 years
Level 2	Annually set at 65% of fixed remuneration	 75% of the rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and  25% of the rights will be performance tested against the reserve/ resource growth over a 3 year period.	3 years
Level 3	Annually set between 30% and 50% of fixed remuneration	 75% of the rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and  25% of the rights will be performance tested against the reserve/ resource growth over a 3 year period.	3 years
Level 4	Annually set between 10% and 20% of fixed remuneration	 75% of the rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and  25% of the rights will be performance tested against the reserve/ resource growth over a 3 year period.	3 years
Special	Varies	 75% of the rights will be performance tested against the relative total shareholder return (“TSR”) measure over a 3 year period; and  25% of the rights will be performance tested against the reserve/ resource growth over a 3 year period.	3 years

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.10 Employee benefits and share based payments (continued)

	Issue Date	Total Number	Fair Value per Right at Grant Date	Vesting Date
Performance rights on issue
Level 1	01/07/15			30/06/181
		4,151,047	$0.25
Level 2	31/08/16	421,482	$1.89	30/06/181
Band 1 to 4	24/10/16	2,305,137	$1.27	30/06/19
Band 1	29/11/16			30/06/181
		400,000	$1.21
Band 1	29/11/16	600,000	$1.20	30/06/19
Band 1	29/11/16	1,000,000	$1.18	30/06/20
Band 1 to 4	17/10/17			30/06/20
		1,522,967	$0.81
Band 1	28/11/17	587,500	$0.74	30/06/20
Band 1 to 4	07/03/18	319,571	$0.85	30/06/20
As at 30 June 2018		11,307,704	$0.80

1 The actual number of performance rights vested will be determined post 30 June 2018.

	Date of Change	Total Number	Fair Value per Right at Grant Date	Vesting Date
Openingnumber ofperformance rights		16,653,016
Increase through issue of performance rights to eligible employees (Band 1 to 4)	17/10/17	1,926,629	$0.81	30/06/20
Increase through issue of performance rights to eligible employees (Band 1)	28/11/17	587,500	$0.74	30/06/20
Decrease through lapsingofperformance rights(Level 1)	04/08/17	(774,366)	$0.25	30/06/18
Decrease through lapsingofperformance rights(Level 1)	04/08/17	(158,582)	$0.25	30/06/18
Decrease through lapsingofperformance rights(Level 1)	04/08/17	(386,833)	$0.50	30/06/17
Decrease through lapsingofperformance rights(Band 1 to 4)	04/08/17	(201,588)	$1.27	30/06/19
Decrease through conversion of shares upon vesting of performance rights(Level 1)	05/09/17	(894,607)	$0.50	30/06/17
Decrease through lapsingofperformance rights(Level 1)	05/09/17	(969,157)	$0.50	30/06/17
Decrease through conversion of shares upon vesting of performance rights(Level 2)	05/09/17	(3,600,220)	$0.25	30/06/17
Decrease through lapsingofperformance rights(Level 2)	05/09/17	(222,404)	$0.25	30/06/17
Decrease through lapsingofperformance rights(Level 2)	07/03/18	(28,385)	$1.89	30/06/18
Decrease through lapsingofperformance rights(Band 1 to 4)	07/03/18	(285,348)	$1.27	30/06/19
Decrease through lapsingofperformance rights(Band 1 to 4)	07/03/18	(181,973)	$0.81	30/06/20
Increase through issue of performance rights to eligible employees (Band 1 to 4)	07/03/18	319,571	$0.85	30/06/20
Decrease through lapsing of performance rights (Band 1 to 4)	29/03/18	(62,776)	$1.27	30/06/19
Decrease through lapsing of performance rights (Band 1 to 4)	04/04/18	(126,737)	$1.27	30/06/19
Decrease through lapsingofperformance rights(Band 1 to 4)	04/04/18	(162,500)	$0.81	30/06/20
Decrease through lapsingofperformance rights(Band 1 to 4)	06/04/18	(16,508)	$1.27	30/06/19
Decrease through lapsingofperformance rights(Band 1 to 4)	06/04/18	(16,954)	$0.81	30/06/20
Decrease through lapsingofperformance rights(Level 2)	06/04/18	(20,611)	$1.89	30/06/18
Decrease through lapsingofperformance rights(Band 1 to 4)	23/04/18	(19,802)	$1.27	30/06/19
Decrease through lapsingofperformance rights(Band 1 to 4)	23/04/18	(18,068)	$0.81	30/06/20
Decrease through lapsingofperformance rights(Band 1 to 4)	30/06/18	(24,167)	$0.81	30/06/20
Decrease through lapsingofperformance rights(Band 1 to 4)	30/06/18	(7,426)	$1.27	30/06/19
Closing number ofperformance rights		11,307,704

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.10 Employee benefits and share based payments (continued)

The following table lists the key variables used in the valuation of performance rights:

			2018	2018	2018
	17 October 2017 Issue		28 November 2017 Issue			7 March 2018 Issue

Hurdle	Reserve and resources rights	TSR rights	Reserve and resources rights	TSR rights		Reserve and resources rights	TSR rights		Total
Number of performance rights issued	481,658	1,444,976	146,875	440,625		79,893	239,678		2,833,705
Underlyingshareprice($)	1.19	1.19	1.04	1.04		1.21	1.21
Exerciseprice($)	-	-	-	-		-	-
Risk free rate	1.92%	1.92%	1.82%	1.82%		2.04%	2.04%
Volatilityfactor	78%	78%	78%	78%		36%	36%
Dividendyield	1.80%	1.80%	1.80%	1.80%		1.42%	1.42%
Period of the rights from grant date(years)	3	3	2.59	2.59		2.32		2.32

Effect of performance hurdles			Not reflected in valuation due to non- market condition		Reflected in valuation through Monte Carlo simulation			Weighted average
Value ofperformance right atgrant date(Band 1 to 4)			$1.13		$0.70			$0.81
Value ofperformance right atgrant date(Band 1)			$0.99		$0.66			$0.74
Value ofperformance right atgrant date(Band 1 to 4)			$1.17		$0.75			$0.85

		2017	2017

Hurdle	Reserve and resources rights	TSR rights	Service rights	Total
Number of performance rights issued	777,097	2,331,292	575,145	3,683,534
Underlyingshareprice($)	1.68	1.68	1.89
Exerciseprice($)	-	-	-
Risk free rate	1.85%	1.85%	1.44%
Volatilityfactor	80%	80%	76%
Dividendyield	1.10%	1.10%	0%
Period of the rights from grant date(years)	3	3	2

Effect of performance hurdles	Not reflected in valuation due to non- market condition	Reflected in valuation through Monte Carlo simulation
Value of performance right at grant date(Band 1 to 4)	$1.63	$1.15
Value of performance right at grant date(Level 2)	$1.89	n/a

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.11 Other accounting policies

Derivatives

Derivatives are categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets or liabilities if they are either held for trading or are expected to be realised within 12 months of the consolidated statement of financial position date. Items of this nature are recorded at their fair values through profit or loss.

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 arrangements. 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.

New and amended Accounting Standards and Interpretations issued but not yet effective

A number of new Standards, amendment of Standards and interpretations have recently been issued but are not yet effective and have not been adopted by the Group as at the financial reporting date. The potential effect of these Standards is yet to be fully determined. However, it is not expected that the new or amended Standards will significantly affect the Group’s accounting policies, financial position or performance, except for the following:

Title	Application Date for Group	Detail
AASB 9 – Financial Instruments	1 July 2018	AASB 9 which contains accounting requirements for financial instruments, replacing AASB 139 Financial Instruments: Recognition and Measurement. The standard contains requirements in the areas of classification and measurement, impairment, hedge accounting and de-recognition. Existing financial assets and liabilities of the Group were assessed in terms of the requirements of AASB 9. In this regard, the Group has determined that the adoption of AASB 9 will impact the classification of financial asset and liabilities as follows: Class of financial instrument presented in the statement of financial position Original measurement category under AASB 9 (i.e. prior to 1 July 2018) New measurement category under AASB 9 (i.e. from 1 July 2018) Cash and cash equivalents Loans and receivables Financial assets at amortised cost Trade and other receivables Loans and receivables Financial assets at amortised cost Available for sale financial assets Available for sale financial assets Financial assets will either be designated as fair value through other comprehensive income (when held for strategic investment reasons) or accounted for as financial assets at fair value through profit or loss Other financial assets Loans and receivables Financial assets at amortised cost Trade and other payables Financial liability at amortised cost Financial liability at amortised cost Interest bearing loans and borrowings Financial liability at amortised cost Financial liability at amortised cost The change in classification will not result in any re-measurement adjustments at 1 July 2018.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Notes to the Financial Statements E: Other items

E.11 Other accounting policies

New and amended Accounting Standards and Interpretations issued but not yet effective (continued)

Title	Application	Detail
	Date for
	Group
AASB 15 - Revenue from Contracts with Customers	1 July 2018	AASB 15 was issued in December 2015 and establishes a five-step model to account for revenue arising from contracts with customers. Under AASB 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Under AASB 15 the revenue recognition model will change from one based on the transfer of risk and reward of ownership to the transfer of control of ownership. The Group will adopt the new standard on the required effective date of 1 July 2018. Revenue from gold sales is recognised when gold is sold out of the metal account. The Group has no other performance obligations once revenue has been sold off the metal account and accordingly, adoption of AASB 15 is not expected to have a material impact on revenue recognition.
AASB 2016-5 - Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions	1 July 2018	This Standard amends AASB 2 Share-based Payment, clarifying how to account for certain types of share-based payment transactions. The amendments provide requirements on the accounting for: ► The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments. ► Share-based payment transactions with a net settlement feature for withholding tax obligations. ► A modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled. The Group will adopt the new standard on the required effective date of 1 July 2018. Adoption of AASB 2016-5 is not expected to have a material impact.
AASB Interpretation 23, and relevant amending standards – Uncertainty over Income Tax Treatments	1 July 2019	The Interpretation clarifies the application of the recognition and measurement criteria in AASB 112 Income Taxes when there is uncertainty over income tax treatments. The Interpretation specifically addresses the following: ► Whether an entity considers uncertain tax treatments separately ► The assumptions an entity makes about the examination of tax treatments by taxation authorities ► How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates ► How an entity considers changes in facts and circumstances. The Groupis in theprocess of assessingthe impact of the new interpretation.
AASB16 – Leases	1 July 2019	AASB 16 provides a new lessee accounting model which requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities. Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-cancellable lease payments (including inflation-linked payments), and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. AASB 16 contains disclosure requirements for lessees. The Groupis in theprocess of assessingthe impact of the new lease standard.

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Directors’ Declaration

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 2018 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 throughout this report;
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 2018.

On behalf of the Board

==> picture [154 x 29] intentionally omitted <==

J.P. Welborn

Managing Director and CEO

Perth, Western Australia 23 August 2018

Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au

Independent auditor's report to the Members of Resolute Mining Limited

Report on the audit of the financial report

Opinion

We have audited the financial report of Resolute Mining Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the Directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018 and of its consolidated financial performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Repor t section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.

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1. Physical existence and valuation of ore stockpiles and gold in circuit

Why significant

How our audit addressed the key audit matter

As at 30 June 2018 the Group had ore stockpiles and gold in circuit inventories of $74,242,000 and $72,830,000 respectively (refer to Note D2).

Critical to the determination of the carrying value of ore stockpiles and gold in circuit inventories is the cost and net realisable value assumptions adopted by the Group in measuring the ore stockpiles and gold in circuit and the determination of the physical existence of the ore stockpiles (tonnes) and gold in circuit (ounces).

We focused on this matter because of the:

Significant judgment required to assess the quantity of ore stockpiles and the quantity and recoverable metal content for gold in circuit. This includes determination of estimated grades, recovery rates and other geophysical properties.
Significant estimates and judgments involved in the valuation of ore stockpiles and gold in circuit including the allocation of operating costs to various stock types included in ore stockpiles and gold in circuit inventories.
Significant estimates involved in the determination of the net realisable value of ore stockpiles and gold in circuit, including the appropriateness of the estimated recoverable gold, selling price in the ordinary course of business and estimated costs of completion necessary to make the sale.

Our audit procedures included the following:

Obtained an understanding of the Group’s processes and controls in place in determining the physical quantities and metal contents of stockpiles and gold in circuit, which included physical inspection at both the Syama and Ravenswood mine sites during the financial year.
Assessed the qualifications, competence and objectivity of the Group’s internal experts involved in determining the quantity and recoverable metal content for ore stockpiles and gold in circuit.
Agreed the estimated grades, recovery rates and other geophysical properties against the underlying reports prepared by the Group’s internal experts and assessed the reasonableness of this information based on the current operations.
Assessed the accuracy of the inventory valuation models including assessing the nature of costs allocated to inventories in determining the unit cost of inventories.
Assessed the carrying value of inventories at 30 June 2018 to evaluate whether they were valued at the lower of cost and net realisable value. This included evaluating the assumptions and methodologies used by the Group, in particular, those relating to the forecast gold price, costs to complete and gold recoveries.

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2. Impairment assessment of non-current assets

Why significant

How our audit addressed the key audit matter

As at 30 June 2018 the Group had non-current assets totaling $527,976,000 comprising capitalised development expenditure, property, plant and equipment and capitalised exploration and evaluation expenditure (refer to notes B1 and B2).

At the end of each reporting period, the Group exercises judgment in determining whether there is any indication of impairment or indication that an impairment loss recognised in prior periods should be reversed. If any such indicators exists, the Group estimates the recoverable amount of that asset. No indicators of impairment or indicators of reversal of prior period impairment were identified in the current period ( refer to Note B3 )

We focused on this matter because of the significant judgment involved in considering if indicators of impairment or indicators that an impairment loss recognised in prior periods should be reversed, were present.

We evaluated the Groups' assessment as to the presence of any indicators of impairment or indicators that an impairment loss recognised in prior periods should be reversed. Our audit procedures included the following:

Comparison of the Group’s market capitalisation relative to its net assets.
Reading operational reports, board reports, minutes and market announcements.
Consideration of changes to reserves and resources and other macro-economic factors including the gold price.
Consideration of the status of capital projects via discussions with management, review of operational reports and minutes and site visits.

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3. Rehabilitation and restoration provisions

Why significant

As a consequence of its operations, the Group incurs obligations to rehabilitate and restore its mine sites. Rehabilitation activities are governed by local legislative requirements. As at 30 June 2018 the Group’s consolidated statement of financial position includes provisions of $69,587,000 in respect of these obligations (refer to Note D6).

We focused on this matter because estimating the costs associated with these future activities requires judgment and estimation for factors such as timing of when rehabilitation will take place, the extent of the rehabilitation and restoration activities and economic assumptions relating to inflation and discount rates are taken into account to determine the provision amount.

How our audit addressed the key audit matter

We evaluated the assumptions and methodologies used by the Group in determining their rehabilitation obligations. Our audit procedures included the following:

Assessed the qualifications, competence and objectivity of the Group’s external and internal experts, the work of whom, formed the basis of the Group’s rehabilitation cost estimates. We assessed the appropriateness of the cost estimates, including comparing these to historical rehabilitation costs incurred.
Considered the estimated timing of when the rehabilitation cash flows will be incurred based on the life of mine and the resultant inflation and discount rate assumptions used in the Groups cost estimates, having regard to available economic data relating to future inflation and discount rates.
Evaluated the adequacy of the Group’s disclosures relating to rehabilitation obligations and considered the appropriateness of the accounting for the changes in the rehabilitation and restoration provision.

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4. Taxation

Why significant

The Group has operations in multiple countries, each with its own taxation legislation. The nature of the Group’s activities give rise to various taxation obligations including corporate income tax, royalties, employment related taxes, and other indirect taxes.

As set out in the Consolidated Statement of Financial Position the Group has a current tax receivable of $20,811,000 and recognised deferred tax assets of $9,456,000 as at 30 June 2018.

In addition as set out in note A4 the Group has significant unrecognised tax assets at 30 June 2018.

We focused on this matter because the:

Group is required to exercise significant judgment with regards to interpretation of enacted tax laws in these multiple countries. The Group engages external independent tax advisors to assist with the interpretation of tax laws when appropriate.
Determination of the probability of the Group deriving taxable income in the future to utilise deferred tax assets is highly judgmental. This is subject to numerous assumptions around the future profitability of the Group’s mining assets, which in turn is primarily dependent upon assumptions including future production levels, gold prices and exchange rates, operating and capital development costs.

How our audit addressed the key audit matter

Our audit procedures in relation to current and deferred tax included the following:

Involved our tax specialists in the interpretation of enacted tax laws in these multiple jurisdictions, where necessary, including the related judgments and interpretations made by the Group.
Considered the appropriateness of the Group’s assumptions and estimates in relation to tax positions, assessed those assumptions and considered the advice the Group received from external experts to support the accounting for the tax positions in accordance with enacted laws.
Where external experts were engaged by the Group, we assessed their qualifications, competence and objectivity.

In respect of deferred tax assets recognised and unrecognised at 30 June 2018, our audit procedures included the following:

Evaluated the appropriateness of the Group’s assessment of the probability of the Group deriving assessable income in the future to utilise the recognised deferred tax assets.
Assessed the adequacy of the Group’s disclosures relating to current and deferred tax in the 30 June 2018 financial report.

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Information other than the financial report and auditor’s report thereon

The Directors are responsible for the other information. The other information comprises the information included in the Company’s 2018 Annual Report other than the financial report and our auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the date of this auditor’s report.

Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors 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 control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

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As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated to the Directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

GB:EH:RSG:249

Report on the audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the Directors' report for the year ended 30 June 2018.

In our opinion, the Remuneration Report of Resolute Mining Limited for the year ended 30 June 2018, complies with section 300A of the Corporations Act 2001.

Responsibilities

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.

Ernst & Young

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Gavin Buckingham Partner Perth 23 August 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

GB:EH:RSG:249

Resolute Mining Limited | Financial Report – for the year ended 30 June 2018

Shareholder Information

Substantial shareholders as at 31 July 2018	Substantial shareholders as at 31 July 2018	*Number held*	*Percentage*
Ordinaryshares
ICM Limited		148,288,154	19.70%
Van Eck Associates Corporation		87,423,962	11.61%
Dimensional Fund Advisors LP		50,828,501	6.75%

Distribution of equity securities as at 31 July 2018
Size of Holding		Ordinary Shares
1 - 1,000		1,644
1,001 - 5,000		2,518
5,001 - 10,000		1,208
10,001 - 100,000		1,757
100,001 - and over		215
Total equity security holders		7,342
Number of equity security holders with less than a marketableparcel		657

Voting rights
i) Ordinary shares
Under the Company's Constitution,all ordinaryshares issued bythe Companycarryone voteper share without restriction.

Twenty largest shareholders as at 31 July 2018
Name		*Number of ordinary* *shares*	*% of Issued* *Capital*
1	ICM Limited	148,288,154	19.70%
2	Van Eck Associates Corporation	87,423,962	11.61%
3	Dimensional Fund Advisors LP	50,828,501	6.75%
4	L1 Capital PtyLtd.	30,729,184	4.08%
5	The Vanguard Group,Inc.	24,414,045	3.24%
6	Wellington Management Company,LLP	23,372,012	3.10%
7	BlackRock,Inc.	18,938,570	2.52%
8	Oppenheimer Funds,Inc.	15,950,478	2.12%
9	LSV Asset Management	12,796,865	1.70%
10	Lemanik S.A.	11,796,233	1.57%
11	Ellerston Capital Limited	10,968,333	1.46%
12	Commonwealth Bank Group	10,737,877	1.43%
13	State Street Corporation	10,450,785	1.39%
14	Baker Steel Capital Managers LLP	9,901,000	1.32%
15	Investec Group	9,385,900	1.25%
16	Orca Gold Inc.	7,653,659	1.02%
17	UBS AG	5,364,930	0.71%
18	IFM Investors	5,166,776	0.69%
19	Truffle Hound Capital,LLC	5,000,000	0.66%
20	Accident Compensation Corporation	4,729,655	0.63%
		503,896,919	66.95%

AI assistant

Resolute Mining Limited — Annual Report 2018

10548_rns_2018-08-23_fc9f4ea5-0509-44ad-ad39-80e629cffd62.pdf

Table of Contents

Corporate Directory

Directors

Company Secretary

Registered Office and Business Address

Postal

Share Registry

Home Exchange

Securities on Issue [30/06/2018]

Auditor

Website

Directors’ Report

Corporate Information

Directors

Names, qualifications, experience and special responsibilities

Marthinus (Martin) Botha (Non-Executive Chairman)

BScEng

John Welborn (Managing Director and Chief Executive Officer)

BCom, FCA, FAIM, MAICD, MAusIMM, SAFin, JP

Peter Sullivan (Non-Executive Director)

BEng, MBA

Directors’ Report

Directors (continued)

Henry (Bill) Price (Non-Executive Director)

BCom, FCA, MAICD

Mark Potts (Non-Executive Director)

BSc (Hons)

Yasmin Broughton (Non-Executive Director)

BComm PG Law GAICD

General Counsel / Company Secretary

Amber Stanton

LLB

Directors’ Report

Interests in the shares and options of Resolute and related bodies corporate

Nature of Operations and Principal Activities

Significant Changes in the State of Affairs

Significant Events after Reporting Date

Financial Position and Performance

Directors’ Report

Operations

Directors’ Report

Development: Study Updates

Exploration

Corporate

Environmental Regulation performance

Directors’ Report

Remuneration Report

1. Introduction

Name Position held during the financial year

Directors’ Report

Remuneration Report (continued)

2. Remuneration Governance

Remuneration Committee

Nomination Committee

Remuneration Structure

Remuneration Report Approval at 2017 AGM

3. Executive Remuneration arrangements and outcomes for 2018

RML Remuneration Policy

Objective

Structure

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

Fixed Remuneration

Objective

Structure

Variable Remuneration – Short Term Incentive (“STI”)

Objective

Structure

Directors’ Report

Remuneration Report (continued)

3. Executive Remuneration arrangements and outcomes for 2018 (continued)

Actual STI performance for the year ending 30 June 2018

Variable Remuneration – Long Term Incentive (“LTI”)

Objective

a) Selecting the right plan vehicle

b) Grant Frequency and LTI quantum

Resolute Mining Limited Annual Report 2018