Sydney, Sept 6, 2006 (ABN Newswire) - Resolute Mining Limited's (ASX: RSG)(PNK: RMGGF) consolidated net profit before tax and unrealised treasury losses for the year ended 30 June 2006 is $11.5m (year ended 30 June 2005 : $12.3m profit).

The profit result was enhanced by a strong spot gold price, but this was offset by lower head grades and higher costs at both the Golden Pride and Ravenswood gold mines.

The total Resolute Mining group gold production for the year was 290,749 ounces (2005 :315,388 ounces) at an average cash cost of $518/oz (2005 : $428/oz). The Golden Pride gold mine in Tanzania, produced 145,043 ounces of gold in the 12 months ended 30 June 2006 at a cash cost of $418/oz (or US$312/oz) and the Ravenswood gold mine in Queensland, Australia, produced 145,706 ounces of gold at a cash cost of $617/oz (or US$461/oz).

The average accounting revenue price achieved per ounce of gold shipped during the year was $657/oz compared to the average gold spot price for the year of $708/oz.

The consolidated net profit before tax and unrealised treasury losses for the half-year ended 30 June 2006 was $13.5m (compared to the $2.0m loss for the half-year ended 31 December 2005). The second half was far more profitable than the first half primarily as a result of the higher average spot price of gold in the second half of the financial year.

The consolidated net loss after tax and unrealised treasury losses for the year ending 30 June 2006 of $77.4m has been adversely impacted by the $114.5m charge relating to unrealised treasury losses. As previously announced on 3 January 2006, due to the introduction on 1 July 2005 of the new Australian equivalents to International Financial Reporting Standards (AIFRS), Resolute has been required to charge to its Income Statement the change in the fair value of certain of its financial instruments. This is a non-cash charge to the Income Statement that will predominantly reverse in future reporting periods.

CASH AND BORROWINGS

As at 30 June 2006, Resolute Mining had $14.0m of cash, and liquid investments (including its 83% interest in Valhalla Uranium Ltd) with a market value at that time of $138m. Borrowings at period end totalled $23.6m.

The net operating cashflow reported in the Cash Flow Statement of $5.3m was after an outflow of $10m relating to the cut backs at Ravenswood and Golden Pride, and a further investment of $6m purchasing longer term gold put options. Cash reserves were reinvested into growth opportunities associated with the feasibility work at Syama, exploration in Australia, Tanzania, Mali and Ghana, and capital expenditure at Ravenswood and Golden Pride.

HEDGING

Details of Resolute's financial instruments have been provided in the recent June 2006 quarterly report. Approximately 20% of Resolute's gold reserves have been committed to hedging contracts, meaning that approximately 80% of its gold reserves fully participate in upward movements in the gold price.

Resolute, at this stage, does not propose to increase its committed gold hedging positions.

PALADIN OFFER TO ACQUIRE VALHALLA URANIUM SHARES

Under the terms of the offer, Valhalla Uranium shareholders will receive one Paladin Resources ordinary share in exchange for every 3.16 Valhalla Uranium shares held. Resolute has resolved to accept the offer in respect of its 83.3% Valhalla shareholding, subject to the release of its shares from escrow from the ASX, and no better offer being received. The Paladin offer is due to close on 15 September 2006.

OUTLOOK
Operations

Golden Pride is a mature operation that has consistently delivered above or in line with expectation over the life of the project. The re-optimisation of the Golden Pride pit during the year indicated a potential increase of around 0.7m ounces to the mineable gold resources and extended the mine life out to approximately eight years. The coming year is expected to deliver increased gold production as mining initially concentrates on the deeper, higher grade western end of the pit. Mill throughput is expected to be a bit lower in 2006/07 (compared to 2005/06) as a result of the ore to be treated being predominantly fresh (and harder) material. The increased input costs being experienced by the mining industry as a whole, combined with the higher cost per ounce associated with the additional ounces (which have a higher stripping ratio) arising from the pit re-optimisation are expected to cause an increase in cash costs per ounce in the coming and future years at Golden Pride.

Ravenswood's gold production and cash costs for the coming year are expected to be better than that achieved in the previous financial year. This expectation is related to the better grade "Area 5" zone ore body being mined in the coming year. In addition, further upside exists if early access to the higher grade Mt Wright underground ore can be gained during the coming year. The decision during the year to commit to the development of the Mt Wright underground deposit has given the Ravenswood operation a significant extension to its mine life. Results from Ravenswood continue to remain very sensitive to grade mined.

Based on current information, the Company is forecasting total production from the Golden Pride and Ravenswood mines of approximately 300,000 ounces of gold in the year ending 30 June 2007 and is targeting to keep cash costs at or below $570/oz.

Project Development

During the year, the Resolute Mining board gave the go ahead for the redevelopment of the Syama gold mine in Mali. This will deliver a third long life gold mine to the Resolute group. An update of the 2005 feasibility study was completed during the year which confirmed the robustness of the Syama project at current gold prices. The Syama project is based on a substantial ore body with a proven and probable reserve of 1.7m ounces and a further resource of 4.3m ounces beneath and adjacent to the open pit. GRD Minproc has been appointed to provide the Engineering, Procurement and Construction Management services, and Resolute has recruited its key personnel for the construction phase of the project. Resolute continues to work on a number of options to fund the Syama redevelopment. Subject to funding being finalised, the US$120m project is on track to deliver its first gold production in the second half of calendar 2008.

The development of the Mt Wright underground deposit commenced during the year following the successful completion of a Feasibility Study earlier in the year. The project shows a strongly cash positive project with around 650,000 ounces of gold recoverable over an eight year mine life at an average cash cost of approximately $336 per ounce. Design work, equipment procurement and major site works have commenced and the decline is now 200m below surface, with progress currently in line with schedule and costs below budget. Subject to the continuation of the good progress made to date, first production ore is anticipated in the June 2007 quarter.

Exploration

The company continues to invest strongly in exploration of the very prospective tenure around each of its key assets. This continued investment has been driven by the success of the exploration program in the 2005/06 financial year which delivered resource increases at Golden Pride, the Tabakoroni Project in Mali and the Akoase Project in Ghana. The exploration programs will continue in thecoming year with a number of promising targets around Golden Pride, Ravenswood and Syama still to be fully tested.

Overall, reserve increases and mine life extensions at Golden Pride and Ravenswood and the pending development ofthe Syama gold mine leave Resolute well placed to benefit from the strong gold price.

This report together with other general information on the Company and Quarterly Reports are available at www.resolute-ltd.com.au

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