RSG: Expanded La Debo Resource Will Drive Stronger Long-Term Earnings Potential

Analysts have trimmed their price target on Resolute Mining by 1 GBp to 64 GBp, reflecting a modestly higher discount rate and slightly softer long term growth expectations, partially offset by incremental improvement in projected profitability and valuation multiples.

Analyst Commentary

Recent research updates suggest that sentiment around Resolute Mining remains generally constructive, with the latest adjustment in price target viewed more as a fine tuning of assumptions rather than a fundamental change in outlook. Bullish analysts continue to see upside potential from operational delivery and improving balance sheet strength, while more cautious voices focus on execution risk and sensitivity to the gold price.

Bullish Takeaways

• Bullish analysts highlight that the new 64 GBp target still implies meaningful upside from current levels, supported by improved cost discipline and better than previously expected profitability.
• Expectations for steady production and operational improvements underpin the view that Resolute can sustain higher valuation multiples than it has historically commanded.
• The recent sequence of upward target revisions prior to this small trim is seen as evidence that the company has structurally improved its asset quality and earnings power.
• Stronger free cash flow generation, if delivered, is expected to provide additional support for the equity story through potential deleveraging and capital returns over time.

Bearish Takeaways

• Bearish analysts point to the marginal target cut as a sign that long term growth assumptions are being moderated, with less room for disappointment in the current valuation.
• Reliance on continued operational outperformance leaves the investment case vulnerable to any setbacks in project delivery, cost control, or grade variability.
• Exposure to gold price volatility is viewed as a key external risk, with a softer metal price environment likely to compress margins and constrain valuation upside.
• Some caution that, after a strong rerating in prior months, further multiple expansion may be harder to justify without a clear catalyst for step change growth.

What's in the News

• Announced an initial Mineral Resource Estimate at the La Debo Project in Cote d'Ivoire of 17.6 Mt at 1.14 g/t Au for 643 koz, significantly above the historic 400 koz estimate, with mineralisation remaining open at depth and along strike and with further drilling planned into 2026 (Key Developments).
• Detailed an extensive 2024 to 2025 drilling campaign at La Debo, including over 10,000 m of RC and 6,600 m of diamond drilling, plus auger programs that confirmed a strong gold anomaly at the G1 prospect, which is to be drill tested in early 2026 (Key Developments).
• Signalled upcoming exploration and mine extension updates in Senegal before year end, highlighting a broader strategy to extend mine life and grow resources across the portfolio (Key Developments).
• Narrowed 2025 group production guidance to 275 to 285 koz, at the lower end of the original range, and lifted group AISC guidance to 1,750 to 1,850 dollars per ounce due to higher royalties and lower output at Syama (Key Developments).
• Reported unaudited Q3 2025 gold production of 59,857 ounces and nine month production of 211,318 ounces, both down versus the prior year, reflecting operational headwinds (Key Developments).

Valuation Changes

• Fair Value per share has risen slightly from A$1.38 to A$1.40, reflecting marginally higher assessed intrinsic value.
• The Discount Rate has increased modestly from 7.67 percent to 7.77 percent, implying a slightly higher required return and risk adjustment.
• Revenue Growth assumptions have edged down fractionally from 18.42 percent to 18.33 percent, indicating a small tempering of long term growth expectations.
• Net Profit Margin has improved slightly, rising from 31.85 percent to 31.96 percent, pointing to a minor uplift in expected profitability.
• The future P/E multiple has increased from 4.94x to 5.17x, suggesting a modestly higher valuation being applied to forward earnings.