The Resolute Mining Limited (ASX: RSG) share price has avoided the market selloff and is edging higher today.
In afternoon trade, the gold miner's shares are up 1% to 65 cents.
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Why is the Resolute share price rising?
Investors have been buying Resolute shares for a couple of reasons on Friday.
One is the heightened demand for safe haven assets because of the market selloff, the other is the release of its full year results this afternoon.
In respect to the latter, Resolute reported revenue of US$618.3 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$269.7 million. This represents a 15.4% and 87% increase, respectively, over the prior corresponding period.
This was driven by a 2.7% increase in production to 395,136 ounces, a small reduction in its all-in sustaining cost (AISC) to US$1,074 per ounce, and a 16.2% jump in the average price received to US$1,562 per ounce.
It is, however, worth noting that this was well short of its original guidance of production of 500,000 ounces with an AISC of US$980 per ounce. Which goes some way to explaining why the Resolute share price is trading just a touch above its 52-week low right now.
On the bottom line, Resolute recorded a small net profit after tax of US$5 million. This compares to a loss of US$78.5 million a year earlier.
Management commentary
Resolute's Interim CEO, Stuart Gale, was pleased with the performance given the numerous challenges it faced in 2020.
He said: "I'm very proud of the way that the team at Resolute has responded to the 2020 challenges of COVID-19, a Malian political Coup d'Etat and industrial action at Syama. We have kept our operations running safely and are now well positioned to capitalise on the investments in our assets to deliver on 2021 production targets, focus on operational efficiencies and generate cash flows."
"Balance sheet improvement remains a key objective for us and cash flows from operations together with proceeds from asset sales will be prioritised to repay debt. Pleasingly, we were able to complete a number of corporate transactions during 2020 which reduced net debt by $92 million and simplified the balance sheet."
Outlook
Unfortunately, the company isn't expecting to grow its production or cut costs in FY 2021.
It is forecasting total gold production of 350,000 ounces to 375,000 ounces at an AISC of US$1,200 to US$1,275 per ounce.
Once again, this probably explains why the Resolute share price is down a disappointing 42% over the last 12 months.
