Resolute Mining Limited — Capital/Financing Update 2012

Jun 7, 2012

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ACN 097 088 689 01
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DEFINITIVE FEASIBILITY STUDY SUPPORTS A MAJOR EXPANSION OF THE SYAMA GOLD MINE

• Definitive Feasibility Study completed for multifaceted expansion of Syama operation confirms its technical and economic viability

• The Study investigated an expansion of the current Syama sulphide open pit and establishment of a parallel 1Mtpa oxide processing circuit

• Total Proved and Probable Reserves at Syama will increase to 3.68Moz of gold including 557,000oz of oxide material

• An expansion of the open pit will extend the project life to 15 years with potential for further extensions through an underground operation

• Post expansion annual production is estimated to average 270,000oz at cash costs of US$720/oz over the first nine years of operations

• Life of Mine Pre-Tax Net Cash Flow for expansion estimated at US$1,902M with payback period less than 30 months at US$1,650/oz gold price

• Initial Capital for the expansion is estimated at US$241M including the oxide plant, additional infrastructure, pre-production mining costs and construction of the High Voltage Grid Power Interconnection

• Potential for numerous further improvements in expansion economics from various areas including; operating cost reductions from further optimisation of mine design, metallurgical/processing enhancements and likely future additions to Resources/Reserves

• Prompt consideration by the Resolute Board could see the project completed as early as June quarter 2014

Commenting on the DFS outcome Resolute Chief Executive Officer Peter Sullivan said:

“The extremely robust results of the expansion DFS confirm Syama as a highly profitable, long-life operation. We look forward to presenting the Board with this compelling and fully funded growth option for consideration later this month,” Mr Sullivan said.

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

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Resolute Mining Limited (ASX:RSG) (“Resolute”) is pleased to provide the details of the Definitive Feasibility Study for the expansion of its flagship Syama Mining Gold Operation in Mali, West Africa.

The Syama Expansion Definitive Feasibility Study (DFS), which was managed on behalf of Resolute by GR Engineering Services (“GRES”), considered two major elements:

1. Establishment of a new parallel 1Mtpa oxide processing circuit, and

2. Infrastructure upgrades required to support the oxide processing plant and the expansion of the Syama open pit to maintain current levels of gold production from the existing sulphide processing operations for the next 10+ years.

Addition of Oxide Circuit

Resolute’s 675km[2] landholding surrounding Syama contains substantial near surface Oxide Gold Resources with excellent potential to expand the existing inventory with future exploration.

Infill drilling north and south of the Syama mine has led to the completion of a number of new pit designs and Oxide Ore Reserves which total 8Mt grading 2.2g/t Au for 557,000oz (Table 1 and Figure 1).

OXIDE ORE RESERVE INVENTORY	OXIDE ORE RESERVE INVENTORY	Tonnes	Grade(g/t)	Ounces Gold
SYAMA	Probable(Stockpile)	1,400,000	1.2	54,000
A21	Proven	916,000	2.2	64,000
	Probable	2,273,000	2.2	157,000
Alpha	Proven	14,000	1.4	600
	Probable	204,000	1.7	11,000
Beta	Proven	131,000	2.3	10,000
	Probable	555,000	2.4	43,000
Tabakoroni	Proven	993,000	2.8	89,000
	Probable	1,521,000	2.6	128,000
TOTAL OXIDE RESERVES(Proven +Probable)		8,007,000	2.2	557,000

Table 1 Oxide Ore Reserve Inventory

The ore reserves support the establishment of a new parallel oxide circuit incorporating a single stage jaw crusher and SAG mill designed to process a nameplate 1Mtpa of oxide ore. This conventional CIL plant would be commissioned in the June quarter 2014 and deliver approximately 65,000oz per annum for an estimated eight year mine life at average cash costs of US$575/oz.

Start-up capital of US$123.1M (Table 2) will be required to establish the oxide circuit including US$23.5M for pre-strip mining costs. The DFS has estimated the project will generate pre-tax net cash flow of US$394M assuming a gold price of US$1,650/oz which equates to a payback period of 2.4 years.

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OXIDE AREA	**Total US$M **
TREATMENT/ INFRASTRUCTURE PRE-STRIP MINING COSTS OWNERS COSTS/ EPCM CONTINGENCY	60.4 23.5 31.3 7.9
TOTAL	123.1

Table 2 Oxide Circuit Capital Costs

Syama Pit Expansion

The results of the DFS confirm Resolute’s view that significant value can be created through the expansion of the existing sulphide open pit, extending Syama’s life to 15 years and capturing additional ounces.

An updated mine design and schedule was completed for a proposed cut back and deepening of the Syama open pit in 2012. Under the proposed expansion the current Syama open cut will be deepened to an overall depth of 400m in two further stages (Figure 2) with an overall strip ratio of 8.9:1 :

• Stage 2; 110mRL to 70mRL

• Stage 3; 70mRL to 0m RL

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Figure 2. Proposed Syama Pit Expansion and Underground Potential

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This will increase the sulphide ore reserves to 33.6Mt at an average grade of 2.9 g/t and extend the operations life to 15 years. In order to optimise the mine’s future development and maximise reserve recoveries, the existing refractory crushing circuit located on the north-eastern side of the pit needs to be replaced outside of the pit development exclusion zone. The capital costs for a new three stage crushing circuit, related infrastructure works, establishment of mining infrastructure and fleet mobilisation for the pit development and associated owners costs is estimated at $55.3 million (Table 3).

SULPHIDE AREA	**Total US$M **
SULPHIDE CRUSHING INFRASTRUCTURE MINING OWNERS COSTS CONTINGENCY	17.7 11.5 12.4 7.0 6.7
TOTAL	55.3

Table 3. Syama Pit Expansion Capital Costs

This investment will deliver an additional 21.6Mt grading 2.7g/t Au for 1.88Moz above the original Stage 1 pit design. As a result the open cut alone will produce on average 210,000oz per annum for the next ten years at cash costs of US$811/oz. Table 4 provides details of the sulphide ore reserves.

SULPHIDE ORE RESERVE INVENTORY	SULPHIDE ORE RESERVE INVENTORY	Tonnes	Grade	Oz Gold
SYAMA	Proved + Probable	31,294,000	2.9	2,907,000
A21	Proved + Probable	617,000	3.1	60,000
Alpha	Proved + Probable	877,000	2.2	63,000
Beta	Proved + Probable	222,000	1.7	12,000
Tabakoroni	Proved + Probable	642,000	3.8	79,000
TOTAL SULPHIDE(Proved +Probable)		33,652,000	2.9	3,121,000

Table 4. Sulphide Ore Reserve Inventory

Other Key Syama Project Infrastructure

The High Voltage Grid Interconnection from Sikasso to Syama will replace onsite diesel power generation and significantly lower cash costs. Operating cost savings using conservative tariff assumptions, are estimated to be in the order of US$75/oz. This equates to a payback period of less than 30 months.

A significant amount of the water required for the Syama operation is delivered by a pipeline from the Bagoe River in accordance with the conditions of a water permit negotiated with the State of Mali. This pipeline, built in the early 1990s by BHP, will not meet forecast requirements because of its relatively small diameter and poor condition in some sections. To meet forecast requirements a new purpose built pipeline will be installed.

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OTHER AREA	**Total US$M **
BAGOE PIPELINE POWERLINE	13.6 48.9
TOTAL	62.5

Table 5 Other Infrastructure Capital Costs

Additional Opportunities

A number of opportunities exist to enhance the already robust economics of the proposed expansion. Resolute intends to explore the full range of opportunities including:

• A significant decrease in mining costs through refinements to the DFS mine design and scheduling of the expanded Syama pit

• High potential for further oxide and sulphide discoveries within the 70km strike extent of the Company’s permits surrounding Syama

• Potential to produce additional gold from the oxide circuit by exceeding the conservative oxide milling schedules incorporated in the DFS

• Potential to lower processing costs and improve sulphide ore recoveries by replacing the sulphide crushing circuit, upgrading the floatation plant and further debottlenecking of the circuit

• Potential for down-dip extensions to support a future underground operation with previous drill intersections of 105m @ 3.65g/t Au and 140m @ 3.43g/t Au within and below the expanded pit

Future Goals

The Resolute Board will meet before the end of the June quarter to consider the results of the DFS and make a final decision on the Expansion.

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Figure 3. Syama Expansion – Proposed Project Schedule

Subject to Board approval Resolute will proceed with design engineering and procurement activities leading to construction and practical completion as early as the

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June quarter 2014 (Figure 3). Orders for certain long-lead items of equipment including a SAG mill have already been placed. A new mining contract is proposed to be awarded in October 2012. Further details will be provided in due course.

Resolute has the capacity to internally fund an expansion of Syama from its existing cash and bullion holdings (A$116 million at 31 March 2012) and future cash flows from its three existing operations.

The proposed expansion has been designed to be executed without disrupting ongoing operations at Syama. The operation produced a record 41,823oz at an average cash cost of US$836/oz in the March quarter 2012. Resolute remains confident of breaking this record in the June quarter as plant reliability and throughput continue to improve.

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PETER SULLIVAN

Chief Executive Officer

About Resolute:

Resolute is an unhedged gold miner with three operating mines in Africa and Australia. The Company is the second largest gold producer by volume listed on the ASX. Resolute is targeting an increase in production from its flagship Syama project in Mali to 250,000oz of gold a year after an extended ramp-up and commissioning period. Resolute is currently investigating a number of opportunities to add value by increasing gold production and lowering operating costs at Syama and its Ravenswood operations in Queensland. The Company controls an extensive footprint along the highly prospective Syama Shear and Greenstone Belts in Mali and Cote d’Ivoire. Resolute has also identified a number of highly promising exploration targets at its Ravenswood operations and holds a number of exploration projects in Tanzania surrounding its Golden Pride mine.

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Figure 1 Syama Deposits, Tenements and Simplified Geology

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