At the closing bell, Resolute shares finished the afternoon at 53 cents, down 2.75%.
What did Resolute announce?
In its statement to the ASX, Resolute advised it has made an early debt repayment of US$20 million. The voluntary repayment was ahead of the first schedule debt instalment and reduces the RCF balance to US$130 million.
The early repayment will have a positive impact on Resolute’s balance sheet, with the company incurring lower interest costs.
Resolute says the $150 million RCF threshold provides management more room to pursue growth opportunities. The remaining US$130 million is not due until March 2023, giving the company plenty of time to service the loan.
In addition, Resolute also has a term loan facility with the first scheduled repayment of US$25 million in September 2021. The company noted it intends to pay the bi-annual instalments of US$25 million, concluding March 2024, with its operating cash flows. Further free cash flows to clear the debt could also be applied in future.
Resolute CEO Stuart Gale commented:
This early repayment strengthens Resolute’s balance sheet and reduces ongoing borrowing costs. Our teams remain focused on improving operational performance and, with that, cash generation. The flexibility of the RCF then provides us with the option to continue repaying debt ahead of maturities with operating cash flow and proceeds from potential non-core asset sales.
Resolute Mining share price review
Resolute shares have lost close to 50% of their value in the past 12 months. Year to date, the share price hasn’t fared much better, down by roughly 33%.
On a positive note though, the gold spot price has begun to regain ground, sitting at US$1,892 per ounce. The gold spot price reached a 52-week high of US$2,070 per ounce in August last year.
Based on valuation metrics, Resolute commands a market capitalisation of about $585 million, with around 1.1 billion shares outstanding.