Resolute Mining, a gold mining company operating primarily in Africa, recently released its Q1 2024 earnings transcript, painting a picture of steady growth and robust cash flow. While analysts have focused on the impressive financial performance and promising developments at the Syama and Mako mines, a closer look at the transcript reveals a potentially game-changing story unfolding in Guinea – one that seems to have slipped under the radar.

The transcript reveals a palpable excitement surrounding Resolute's exploration efforts in the Mansala prospect in Guinea. Terry Holohan, Resolute's CEO, stated, "We are drilling at the Mansala prospect and expect to produce an initial estimate in the second half of this year." Later, in response to an analyst's probing, he described the drilling efforts, stating, "We are actually modeling it now on the computer...The drilling is there. We're drilling over a kilometer. We've done some GFS there, but it looks like it bifurcates it splits at the top. So, there should be maybe 1.5, maybe 2 kilometers of strikes, close to surface." He concluded, " I just don't want to come out with any numbers now, but I think you won't have to wait too long...we're excited about it."

While Holohan refrained from revealing specific numbers, his cautious optimism and the sheer scale of the drilling program hint at a potentially significant discovery. The fact that the mineralization is located close to the surface, possibly indicating favorable strip ratios, further adds to the potential economic viability of this prospect.

Here's where things get intriguing. Resolute has laid out an ambitious plan to achieve 500,000 ounces of annual gold production within the next five years. The company's growth strategy chart, prominently displayed in the presentation, highlights four key areas: the ongoing sulfide conversion at Syama, mine life extensions at Mako, the Phase II Syama expansion, and, notably, the contribution from Guinea.

Resolute Mining's Projected Gold Production

Reference: Resolute Mining Limited Q1 2024 Earnings Call Transcript

Now, consider this. The company projects achieving 250,000 ounces at Syama upon completion of the Phase I sulfide conversion and a further 150,000 ounces from Mako, bringing the total to 400,000 ounces. The Phase II Syama expansion is expected to contribute "400,000 ounces or more." This implies a minimum production target of 800,000 ounces from these three sources alone, exceeding the stated overall target of 500,000 ounces.

Possible Explanations for Guinea's Inclusion

One hypothesis is that Resolute is deliberately downplaying the potential of the Mansala prospect, perhaps to avoid premature speculation or to strategically time its announcements for maximum impact. The transcript suggests that the company is already modeling the initial resource estimate, which implies they have substantial data in hand. This further supports the idea that Resolute may be holding back on revealing the true scale of the discovery.

If this hypothesis holds true, the Mansala prospect could be far more significant than currently perceived. It could be the key driver that propels Resolute beyond the 500,000-ounce target, unlocking substantial future growth and shareholder value.

Another possibility is that the inclusion of Guinea in the growth chart is a strategic move to diversify the company's portfolio and mitigate potential geopolitical risks associated with operating solely in Mali and Senegal. Guinea, with its vast mineral potential, presents an attractive opportunity for Resolute to expand its footprint and secure a long-term strategic position in West Africa.

However, this does not negate the possibility of a significant discovery at Mansala. In fact, a substantial resource in Guinea could be the cornerstone of Resolute's future, providing a stable and profitable platform for continued growth and expansion beyond the current five-year horizon.

Projected Quarterly Gold Production in 2024

Reference: Resolute Mining Limited Q1 2024 Earnings Call Transcript

The coming months will be crucial for Resolute Mining. The release of the initial mineral resource estimate for the Mansala prospect in H2 2024 will be a defining moment for the company, potentially revealing the true scale of the "Unseen Gold Rush" in Guinea.

"Fun Fact: Did you know Resolute Mining played a pivotal role in the development of the world's first fully automated underground gold mine at Syama in Mali? This groundbreaking technology not only enhances safety and efficiency but also positions Resolute at the forefront of innovation in the gold mining industry."