Published:
RANDGOLD RESOURCES LIMITED ANNOUNCES INTERIM RESULTS
RANDGOLD RESOURCES LIMITED
Incorporated in Jersey, Channel Islands
Reg. No. 62686
LSE Trading Symbol: RRS
Nasdaq Trading Symbol: GOLD
REPORT FOR THE QUARTER AND 6 MONTHS ENDED 30 JUNE 2005
* Randgold Resources delivers more profits and celebrates 10 'solid
gold' years
* Loulo Gold Mine builds run of mine stockpiles and starts commissioning
* Loulo underground development study doubles company's reserves
* Tongon prefeasibility update underpins growth prospects
Randgold Resources Limited has 59.5 million shares in issue as at 30 June 2005
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Unaudited
quarter quarter quarter
ended ended ended
30 Jun 31 Mar 30 Jun
US$000 2005 2005 2004
Gold sales revenue 27 963 31 986 12 200
Cost of sales
Production costs 6 953 10 839 8 243
Transport and
refinery costs 62 67 46
Transfer to
deferred stripping
costs 2 664 209 (580)
Cash operating costs* 9 679 11 115 7 709
Royalties 1 959 2 162 863
Total cash costs* 11 638 13 277 8 572
Profit from mining
activity* 16 325 18 709 3 628
Depreciation and
amortisation 2 307 2 595 2 286
Exploration and
corporate
expenditure 4 558 5 536 4 171
Profit/(loss) from
operations* 9 460 10 578 (2 829)
Interest received 364 325 230
Interest expense (300) (345) (455)
Profit on financial
instruments - - 7 653
Profit on sale of Syama - - 7 070
Other (expenses)
and income (1 577) 1 850 6
Share-based payments(S) (825) (288) (175)
Profit on ordinary
activities before
taxes and minority
interests 7 122 12 120 11 500
Income tax - - -
Minority shareholders'
interest - - -
Net profit 7 122 12 120 11 500
Basic earnings
per share (US$) 0.12 0.20 0.20(S)
Fully diluted earnings
per share (US$) 0.11 0.20 0.20(S)
Average shares
in issue (000) 59 481 59 394 58 547
CONSOLIDATED INCOME STATEMENT (continued)
Unaudited Unaudited
6 months 6 months
ended ended
30 Jun 30 Jun
US$000 2005 2004
Gold sales revenue 59 949 27 474
Cost of sales
Production costs 17 792 17 011
Transport and refinery costs 129 98
Transfer to deferred stripping
costs 2 873 (2 968)
Cash operating costs* 20 794 14 141
Royalties 4 121 1 942
Total cash costs* 24 915 16 083
Profit from mining activity* 35 034 11 391
Depreciation and amortisation 4 902 4 707
Exploration and corporate
expenditure 10 094 7 187
Profit/(loss) from operations* 20 038 (503)
Interest received 689 522
Interest expense (645) (920)
Profit on financial instruments - 1 806
Profit on sale of Syama - 7 070
Other (expenses) and income 273 (1 168)
Share-based payments(S) (1 113) (347)
Profit on ordinary activities
before taxes and minority
interests 19 242 6 460
Income tax - -
Minority shareholders' interest - -
Net profit 19 242 6 460
Basic earnings per share (US$) 0.32 0.11(S)
Fully diluted earnings per share
(US$) 0.31 0.11(S)
Average shares in issue (000) 59 448 58 547
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited
6 months 6 months
ended ended
30 Jun 30 Jun
US$000 2005 2004
Profit on ordinary activities
before taxation and
minority interest 19 242 6 460
Adjustment for non-cash items 14 060 (9 485)
Working capital changes (17 494) 1 779
Net cash generated/(utilised)
by operations 15 808 (1 246)
Net cash utilised in investing
activities
Additions to property,
plant and equipment (53 497) (24 442)
Financing of contractors (13 071) -
Movements in restricted cash - 3 882
Disposal of Syama - net of
cash disposed - 8 571
Net cash generated by
financing activities
Ordinary shares issued 637 58
Increase/(decrease) in
long-term borrowings 28 439 (9 162)
Net decrease in cash and
cash equivalents (21 684) (22 339)
Cash and cash equivalents
at beginning of period 78 240 105 475
Cash and cash equivalents
at end of period 56 556 83 136
CONSOLIDATED BALANCE SHEET
Unaudited Audited Unaudited
at at at
30 Jun 30 Dec 30 Jun
US$000 2005 2004 2004
Assets
Non-current assets
Property, plant and
equipment 178 449 129 854 89 891
Cost 205 136 151 639 103 977
Accumulated depreciation
and amortisation (26 687) (21 785) (14 086)
Deferred stripping
costs 6 871 8 514 8 301
Long-term ore
stockpiles 23 813 12 054 8 669
Total non-current
assets 209 133 150 422 106 861
Current assets
Deferred stripping
costs 5 140 6 370 6 211
Inventories and
stockpiles 10 089 9 762 5 272
Receivables 41 949 23 667 16 907
Cash and equivalents 56 556 78 240 83 136
Total current assets 113 734 118 039 111 526
Total assets 322 867 268 461 218 387
Total shareholders'
equity 213 800 191 169 186 428
Non-current liabilities
Long-term borrowings 68 755 40 718 7 439
Loans from minority
shareholders in
subsidiaries 1 487 1 621 1 343
Deferred financial
liabilities 14 030 15 668 4 680
Provision for
environmental
rehabilitation 8 872 3 701 3 552
Total non-current
liabilities 93 144 61 708 17 014
Current liabilities
Accounts payable
and accrued
liabilities 15 923 15 584 14 945
Total current
liabilities 15 923 15 584 14 945
Total equity and
liabilities 322 867 268 461 218 387
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS).
* Refer to other financial measures provided.
(S) Reflects adoption of IFRS2: Share-based payment.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Number of Share Share
ordinary capital premium
shares US$000 US$000
Balance -
31 December 2003 29 260 385 2 926 200 244
March 2004 quarter
Net loss - - -
Share-based payments - - -
Share options exercised 3 000 - 13
Share split (a) 29 263 385 - -
Capital reduction (b) - - (100 000)
June 2004 quarter
Net profit - - -
Share-based payments - - -
Movement on cash flow hedges - - -
Share options exercised 20 600 1 44
Balance -
30 June 2004 58 547 370 2 927 100 301
Balance -
31 December 2004
(as previously
reported) 59 226 694 2 961 102 342
Adoption of IFRS2
share-based payments - - -
Balance -
31 December 2004 59 226 694 2 961 102 342
March 2005
Net profit - - -
Share-based payments - - -
Movement on cash flow hedges - - -
Share options exercised 176 800 9 538
June 2005
Net profit - - -
Share-based payments - - -
Movement on cash flow hedges - - -
Share options exercised 35 400 2 88
Restricted shares
issued as remuneration # 161 735 8 -
Treasury shares
held by company # (107 825) (5) -
Shares vested # - - 735
Balance -
30 June 2005 59 492 804 2 975 103 703
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
Other Accumulated Total
Reserves Profits equity
US$000 US$000 US$000
Balance -
31 December 2003 (7 403) (18 580) 177 187
March 2004 quarter
Net loss - (5 040)(S) (5 040)(S)
Share-based payments - 172(S) 172(S)
Share options exercised - - 13
Share split (a) - - -
Capital reduction (b) - 100 000 -
June 2004 quarter
Net profit - 11 500(S) 11 500(S)
Share-based payments 175(S) - 175(S)
Movement on cash
flow hedges 2 376 - 2 376
Share options
exercised - - 45
Balance -
30 June 2004 (4 680)(S) 87 880(S) 186 428
Balance -
31 December 2004
(as previously
reported) 15 668 101 534 191 169
Adoption of IFRS2
share-based payments 1 321 (1 321) -
Balance -
31 December 2004 (15 668)(S) 101 534(S) 191 169
March 2005
Net profit - 12 120 12 120
Share-based payments 288 - 288
Movement on cash
flow hedges 1 690 - 1 690
Share options
exercised - - 547
June 2005
Net profit - 7 122 7 122
Share-based payments 823 - 823
Movement on cash
flow hedges (52) - (52)
Share options
exercised - - 90
Restricted shares
issued as
remuneration # - - 8
Treasury shares
held by company # - - (5)
Shares vested # (735) - -
Balance -
30 June 2005 (12 333) 119 455 213 800
(S) Reflects adoption of IFRS2: Share-based payment.
Share split: A special resolution was passed on 26 April 2004 to divide
each of the ordinary shares of US$0.10 in the company into two ordinary
shares of US$0.05 each.
Capital reduction: A special resolution was passed at the annual general
meeting in April 2004, which was subsequently approved by the Court in
Jersey, to extinguish accumulated losses by reducing the company's share
premium account by US$100 million in order to permit future dividend payments.
# Restricted shares were issued to directors as remuneration. Of these
shares, only 53 910 have vested, while the remainder of the shares
are still held by the company as treasury shares. The
US$0.7 million represents the costs of the shares which have vested,
previously charged to other reserves.
OTHER FINANCIAL MEASURES
The company uses the following pro forma disclosures as it believes that
this information is relevant to the mining industry.
Total cash costs per ounce are calculated by dividing total cash costs, as
determined using the Gold Institute Industry Standard, by gold ounces
produced for all periods presented.
Total cash costs, as defined in the Gold Institute Industry Standard,
include mine production, transport and refinery costs, general and
administrative costs, movement in production inventories and ore
stockpile, transfers to and from deferred stripping and royalties. Total
cash cost per ounce should not be considered by investors as an
alternative to operating profit or net profit attributable to
shareholders, as an alternative to other IFRS or US GAAP measures or an
indicator of the company's performance. The company believes that total
cash cost per ounce is a useful indicator to investors and management of
a mining company's performance as it provides an indication of a company's
profitability and efficiency, the trends in costs as the company's
operations mature, a measure of a company's gross margin per ounce, by
comparison of total cash cost per ounce to the spot price of gold, and a
benchmark of performance to allow for comparison against other companies.
Cash operating costs are defined as total cash costs excluding royalties.
Total cash operating costs per ounce are calculated by dividing cash
operating costs by gold ounces produced for all periods presented.
Profit from mining activity is calculated by subtracting total cash costs
from gold sales revenue for all periods presented.
Profit from operations is calculated by subtracting depreciation and
amortisation charges and exploration and corporate expenditure from
profit from mining activity.
RECONCILIATION TO US GAAP
The preliminary condensed financial statements presented in this report
have been prepared in accordance with International Financial Reporting
Standards (IFRS), which differ in certain significant respects from
Generally Accepted Accounting Principles in the United States (US GAAP).
The effect of applying US GAAP to net income and shareholder's equity is
set out below.
6 months 6 months
30 June 30 June
Reconciliation of net income
(US$000) 2005 2004
Net income under IFRS 19 242 6 460
Share-based payment compensation# 637 1 622
Development costs* (3 186) -
Net income under US GAAP 16 693 8 082
Movement in cash flow hedges
during the period 1 638 2 376
Comprehensive income under
US GAAP 18 331 10 458
Basic earnings per share under
US GAAP (US$) 0.28 0.14
Fully diluted earnings per share
under US GAAP (US$) 0.27 0.14
Shareholders' equity under
IFRS 213 800 186 428
Development costs* (7 102) -
Shareholders' equity under
US GAAP 206 698 186 428
* Drilling costs of US$3.2 million relating to the underground
development study at Loulo have been capitalised under IFRS for 2005
(2004: US$3.9 million). Under US GAAP, these costs may not be
capitalised since they do not relate to the addition of reserves as
defined in SEC Industry Guide 7.
# These adjustments include differences between accounting for share-
based compensation under IFRS and US GAAP. Prior to 1 January 2005,
there was no requirement to recognise share option compensation
expenses under IFRS, although there was such a requirement under US
GAAP and APB 25. The group adopted IFRS 2, accounting for share-based
payment from 1 January 2005, in accordance with the Standard's
transitional provisions. The method of calculation of the expenses is
different under IFRS and US GAAP, and an adjustment for US GAAP has
accordingly been made.
ACCOUNTING POLICIES
The preliminary condensed financial statements in this report have been
prepared in accordance with the group's accounting policies, which are in
terms of IFRS and are consistent with the prior period.
Joint ventures are those investments in which the group has joint control
and are accounted for under the proportional consolidation method. Under
this method, the proportion of assets, liabilities, income and expenses
and cash flows of each joint venture attributable to the group are
incorporated in the consolidated financial statements under appropriate
headings. Inter-company accounts and transactions are eliminated on
consolidation.
No segmental information has been provided, as the source and nature of
the enterprise's risks and returns are not governed by more than one
segment.
The group adopted IFRS 2, accounting for share-based payment from 1
January 2005, in accordance with the Standard's transitional provisions.
The Standard requires an entity to recognise share-based payment
transactions in its financial statements. The comparatives have been
adjusted accordingly. The effect of the change is a charge of
US$1.1 million for the six months ended 30 June 2005 and a charge of
US$1.3 million for the year ending 31 December 2004.
FINANCIAL INSTRUMENTS
No further ounces have been hedged during this quarter.
The group's hedging position which all relates to the Loulo project
financing, was as follows at 30 June 2005:
Forward Forward
Sales sales
Maturity date Ounces US$/oz
December 2005 12 504 430
December 2006 93 498 431
December 2007 103 500 435
December 2008 80 498 431
December 2009 75 000 430
Total 365 000 432
This represents approximately 36% of planned open pit production at Loulo
for the period that the project finance is in place. The financial
instruments are a matched hedge and any movements in marked-to-market
valuation are accounted for in the other comprehensive income reserve.
Morila's production is completely exposed to spot gold prices.
COMMENTS
Profit from mining activity for the six months ended June 2005 compared
to the comparative period ended June 2004 improved by 208%, mainly as a
result of increased revenues from higher grades and better recoveries.
The lower recoveries in 2004 were due to the commissioning of the plant
expansion at Morila in 2004. The quarter on quarter decrease in profit
from mining is attributable to higher ounces sold in the March quarter
resulting from sales from gold that was in inventory at December 2004.
Profit from mining activity for the current quarter of US$16.3 million was
significantly higher than the corresponding quarter in 2004 and down US$2
million from the previous quarter.
Production costs of US$6.9 million in the current quarter were down
compared to the quarter ended 31 March 2005 mainly as a result of an over
provision for diesel consumption at Morila in the previous quarter which
was corrected in the current quarter.
Exploration and corporate expenditure for the six months is
US$10 million, up from US$7 million for the corresponding period in 2004
and is a reflection of increased exploration activity in 2005,
particularly drilling.
The other expenses of US$1.6 million in the current quarter relate to the
correction of a previous misallocation at Morila.
Main balance sheet movements for the quarter ended 30 June 2005 are
increases in property, plant and equipment, which relate to costs
incurred on the development of the Loulo mine, an increase in ore
stockpiles and an increase in receivables. The increase in receivables is
due to further payments in advance relating to the Loulo construction
contract to ensure that the contract stays on track. A provision for the
Loulo closure cost obligation and matching closure cost asset has also
been recognised.
The decrease in cash and cash equivalents also relates to the continued
funding of the Loulo project. Increases in long-term borrowings result
from the drawdown of the Loulo project finance loan amounting to US$15
million in the first quarter and a further US$10 million in the second
quarter, as well as a partial draw down on the Caterpillar finance
facility. The Loulo project finance loan is now fully drawn.
Working capital changes on the cash flow statement reflect an increase in
the ore stockpile balance at Morila, in line with the mine plan, as well
as an increase in receivables such as reimbursable fuel duties at Loulo.
The financing of contractors relate to the advances made to Loulo
contractors.
OPERATIONS
Morila Gold Mine
We have continued to work with the operators of the mine in order to
return the mine to full production capacity. The strategy has been to
achieve consistent sustainable production and by the end of the quarter
this approach appeared to be producing the desired results with plant
throughput rising by almost 100 000 tonnes over the quarter, which is a
12% increase quarter on quarter. Gold produced for the quarter of 165
359 ounces, was in line with forecast and was only slightly lower than
the previous quarter when higher grades were fed to the mill. Costs
continue to be a concern and we are monitoring this very closely.
Quarter Quarter Quarter
Ended ended ended
30 June 31 Mar 30 June
US$000 2005 2005 2004
Morila Results
Mining
Tonnes mined (000) 6 964 7 815 5 261
Ore tonnes mined (000) 2 002 1 646 889
Milling
Tonnes processed (000) 951 857 867
Head grade milled (g/t) 5.9 6.6 3.8
Recovery (%) 92.0 92.4 80.0
Ounces produced 165 359 167 272 85 081
Average price received
(US$/ounce) 430 428 332
Cash operating costs*
(US$/ounce) 146 166 213
Total cash costs*
(US$/ounce) 176 198 238
Cash profit (US$000) 40 813 46 773 9 070
Attributable (40%)
Ounces produced 66 144 66 908 34 032
Ounces sold 65 030 74 731 35 026
Cash profit (US$000) 16 325 18 709 3 628
(continued) 6 Months 6 Months
ended ended
30 June 30 June
US$000 2005 2004
Morila Results
Mining
Tonnes mined (000) 14 779 11 886
Ore tonnes mined (000) 3 612 1 776
Milling
Tonnes processed (000) 1 808 1 662
Head grade milled (g/t) 6.2 4.3
Recovery (%) 92.2 83.2
Ounces produced 332 631 192 196
Average price received
(US$/ounce) 427 360
Cash operating costs*
(US$/ounce) 156 183
Total cash costs*
(US$/ounce) 187 208
Cash profit (US$000) 87 585 28 478
Attributable (40%)
Ounces produced 133 052 76 878
Ounces sold 139 761 76 411
Cash profit (US$000) 35 034 11 391
* Refer other financial measures provided above.
One week into the 3rd quarter, the staff of the mining contractor,
Somadex, commenced an unprocedural strike. With assistance from national
union officials, talks have continued to resolve the situation. At the
time of going to print, a settlement had been proposed. Production
forecasts have not been materially affected because of the availability
of significant full grade ore stockpiles on the run of mine pad.
The operator of the mine, AngloGold Ashanti, through its subsidiary
Anser, has undergone a re-structuring and major staff changes have been
implemented. An independent CEO has been appointed at Morila, answering
directly to the Morila SA Board.
Loulo Gold Mine
Construction
The Loulo mine Phase I development made steady progress over the quarter
with the initiation of dry commissioning of certain items. The various
phases of commissioning (dry, wet and finally, the feeding of low-grade
ore) are expected to progress through end July - August. The
commissioning programme will run into August because of delays
experienced with break-bulk shipping schedules in June and early July.
The early onset of rains and associated construction issues necessitated
the rescheduling of the Gara River dam wall and diversion earthworks.
This is not expected to significantly impact on the Phase I commissioning
and in turn has allowed the focus to remain on the completion of the
tailings storage facility which is critical to complete before the onset
of production.
The oxide crushing circuit is 95% complete and dry commissioning of this
part of the plant has commenced. The first feed conveyor is complete
ahead of schedule. Attention has focussed on the milling circuit and with
mills and associated cyclone clusters installed, the installation of
girth gears, gear boxes and mill motors are scheduled through July, which
will allow both mills to be commissioned on oxide material and enhance
the oxide processing capacity allowing the mine to meet its production
build up to year end.
The commissioning of the carbon in leach circuit will commence in the
last week of July. Final process water storage and supply remains on a
critical path with some temporary piping and pumping measures required
again due to the late arrival of certain freight. To ensure the
commissioning programme starts in July, certain items have been air-
freighted to site.
All 15 Caterpillar generator sets are on site and commissioning of the
first seven engines has commenced ensuring the availability of adequate
power supply for Phase I. In parallel with the Phase 1 commissioning
programme, construction of the Phase II (hard rock circuit) has started.
Infrastructure projects focussing on roads, auxiliary facilities, housing
and other amenities are advanced and scheduled to be completed over the
rest of the year.
Manpower build-up along with the selection and training of people is well
advanced.
Operations
At Loulo 0 mining activities focussed on building the soft ore run of
mine pad with Loulo 0 waste. Advanced grade control drilling at Loulo 0
has been completed in the upper 80 metres of the pit. Results show a
shallow northerly plunge to high-grade mineralisation that is parallel to
lineations mapped in the hanging wall sediments. Results from below the
Garra sediments, immediately north of the pit, indicate moderate
mineralisation that could extend the pit some 50 metres. Mining of the
Loulo 0 orebody is scheduled to commence following the completion of the
hard rock run of mine pad and ahead of the commissioning of the Phase II
(hard rock) circuit. Until then waste rock will be mined to build up the
run of mine pad extensions.
During the quarter, ore mining of oxide material in the Yalea pit
commenced. Topsoil stripping exposed the ore zone, with low grade topsoil
being used to line the run of mine pad and build a low-grade stockpile
for commissioning, while the high-grade material was stored separately.
Grade control trenches have been dug to help delineate the ore contacts
within the saprolite. Sampling of these trenches has shown the ore/waste
contact to be visible and sharp in most cases. A total of 220 000 tonnes
at 4.5g/t for 32 000 ounces was stockpiled by quarter end.
PROJECTS AND EVALUATION
Loulo Project
Underground Development Study
SRK Consulting have completed a study examining the feasibility of
mining, as two operations, the down-dip extensions of the Yalea and Loulo
0 open pit orebodies from underground.
The results have exceeded our expectations. The project is robust and as
the potential to add significant mine life and value.
Mining method chosen is sub-level open stoping with or without post-fill
depending on the grade of the area. The study does not incorporate any
data subsequent to the end of March, although further drilling has since
taken place, the results of which are tabulated at the end of this
section. The following ore reserves form the basis for the current
estimates relating to the two underground operations.
Million tonnes Grade Mozs
Yalea 8.40 6.88 1.86
Loulo 0 5.14 3.98 0.66
Total 13.54 5.81 2.52
Operating costs have been based on a comparison to "mines of this type"
with appropriate adjustments for local conditions. Metallurgical
testwork has confirmed that the deeper ore is no different from the
shallower ore and that the current plant will be able to process the
underground ore.
Initial capital estimate to steady state production (4 years) amounts to
approximately US$100 million.
Currently the schedule anticipates commencing the decline development in
2006 and full production being achieved in 2009. Combined, and on a
stand alone basis, the two underground mines are estimated to produce
approximately 1.8 Mozs (recovered) over a 10 year period with production
subsequently continuing from Yalea. Work is continuing to optimise the
opencast to underground interface and mining schedules.
Subsequent to the data cut-off for the underground development study,
further drilling was undertaken to both infill and extend the known
mineralisation. At Yalea, 20 diamond drillholes were completed of which
the results of 13 have been received. Deflections drilled off original
holes into the high-grade bonanza material continue to return impressive
results. Three holes were drilled below the present geological model in
the south and central portions of the orebody. These three drillholes
confirmed the continuity of the mineralised structure to a depth of 830
metres below surface. However, access to these depths would require a
vertical shaft system.
Inter-
Section Select-
Hole width Grade ed
ID From To (m) (g/t) unit*
Yalea YDH165w 554.44 559.66 5.22 9.29
Yalea YDH159w 591.98 597.11 5.13 26.69
Yalea YDH215 321.90 325.57 3.67 3.90
Yalea YDH188 837.10 839.82 2.72 2.64
Yalea YDH229 351.00 371.85 20.85 4.17 9.47m
@ 6.27g/t
Yalea YDH210 240.68 250.35 9.67 2.78
259.80 267.12 7.32 4.72 4.03m
@ 5.76g/t
Yalea YDH211 199.00 205.90 6.90 3.85
Yalea YDH219 299.15 302.65 3.50 5.52
Yalea YDH214 331.10 333.30 2.20 7.64
Yalea YDH218 313.80 330.16 16.36 3.04
Yalea YDH216 405.65 425.20 19.55 1.87 4.05m
@ 3.18g/t
Yalea YDH187 923.61 925.36 1.75 3.19
Yalea YDH220 662.00 672.00 10.00 1.68
* Selection based on geology and grade
Tongon Project
Progress continues to be made towards resolution of the conflict in Cote
d'Ivoire and elections are planned for October 2005. Field work remains
on hold and will recommence following peaceful elections.
The June 2002 prefeasibility study on Tongon has been updated to reflect
current market conditions.
The updated resource base now stands at 35.98 million tonnes at a grade
of 2.77g /t for a total of 3.2 million ounces.
Gold
Grade content
Mt (g/t) (Mozs)
Northern zone 5.29 3.47 0.59
Southern zone 30.69 2.65 2.61
Total 35.98 2.77 3.20
All resources are in the inferred category. A mineable resource has been
estimated only for the southern zone of 13.05 million tonnes at a grade
of 3.54g /t for a total of 1.5 million ounces. This has formed the basis
of a preliminary economic assessment which indicates that the project
meets our hurdle rates for further investment.
We have designed a 27 000 metre drilling programme to close the interhole
spacing to a 50 metre x 50 metre grid which will allow the completion of
a final feasibility study and production decision within 2 years of re-
commencement of exploration and feasibility activities.
EXPLORATION ACTIVITIES
Our strategy this field season has been to hunt for new ounces with a
focus on identifying new targets and opportunities. As a result the main
emphasis has been on our generative function in west and east Africa.
This has led to the compilation of a new west African GIS (Geographic
Information System) study which has been cascaded down to a country by
country review and target generation exercise. The results of this study
have been the acquisition of seven new permits in three countries (2 021km
(2)) and the submission of an additional 15 applications (9 317km(2))
within five countries. In total, we now have a total land package of 11
537km(2) in six African countries and a portfolio of 141 targets.
At Loulo, five drill rigs continued to drill. Three diamond core rigs
tested Yalea, an RC rig completed advanced grade control and a RAB rig
tested targets along the extensions of the main mineralised structures.
In addition to the resource conversion and underground development
associated with the known resources, drilling focus has also been
on 'finding the next one' with further encouraging results being returned
from targets in the south of Loulo (Faraba) and the Selou area
(Sinsinko). At Faraba, trench and RAB drilling have so far delineated
2.5 kilometres of bedrock mineralisation within an overall four kilometre
surface anomaly. Recent RAB results include: 13 metres at 2.17g/t, 27
metres at 1.57g/t and nine metres at 1.75g/t, supporting trench results.
Geologically the target is similar to Yalea in that a north-south
striking shear is developed at the contact between argillaceous quartzite
and greywacke. At Selou, follow-up RAB drilling on a 1.8 kilometre soil
anomaly have returned anomalous values (plus 100ppb) over 30 metre
widths, associated with a north - south fault. At P64, a 1.5 kilometre
plus 100ppb north northwest soil anomaly characterises the target.
Previous work concentrated on only a 500 metre segment, which contains a
weakly tourmalinised greywacke outcrop within the overall 1.5 kilometre
target, where 16 diamond holes and 15 percussion holes were drilled.
This work identified a 145 metre long, strongly mineralised zone.
Work has started testing the full 1.5 kilometre anomaly with trenching
and RAB drilling, results were pending at the time of reporting.
Exploration has now commenced at Sitakili, 21 kilometres east of Loulo.
Geologically, mineralisation occurs within an antiformal sequence of
metasediments. To date, three structural corridors intruded by dykes
have been identified, each with a width of approximately 100 metre and
strike of three kilometres with values up to 19g/t from rock chips.
In southern Mali, at Morila, further drilling at the Samacline target
returned the following: SAM009 15 metres at 4.72g/t, SAM012 five metres
at 4.33g/t and three metres at 5.84g/t, SAM014 five metres at 5.13g/t,
and SAM019 two metres at 6.40g/t. A small high-grade resource has been
inferred. However, this is believed to be part of a much bigger system
which is open to the west.
In the Morila region, a diamond drilling programme has tested three
targets, confirming a flat lying structural architecture and sediments
with evidence of alteration similar to Morila but results received to
date have shown no significant gold grades. Elsewhere in southern Mali,
a generative study has led to further ground acquisition.
In Senegal, work at Bambaraya has identified a wide zone of iron carbonate
alteration associated with mineralisation and new trenches 100 metres
north and 150 metres southwest of the main zone have intersected
significant mineralisation (BBTR04: six metres at 1.76g/t, four metres at
5.48g/t and 12 metres at 4.06g/t; BBTR06: 12 metres at 2.34g/t). Infill
drilling at Sofia has increased our knowledge of the target. We see a
variation in the mineralisation from broad low-grade envelopes to narrow
high-grade intercepts along the 3 400 metre anomalous corridor.
Presently the inter-hole spacing is 400 metres and between the best holes
drilled in terms of results (44 metres at 2g/t and six metres at 9.5g/t),
there is a combined strike of 1 600 metres untested. At Tombo, a small
low-grade resource has been identified with limited upside potential. In
addition one new permit has been granted consolidating our groundholding
around Sabodala. Two further permits have been applied for and
negotiations are being finalised with a Senegalese company on a new joint
venture opportunity.
In Burkina Faso, exploration has continued in the Kiaka and Danfora
regions. However over the quarter, the emphasis has shifted to the Kiaka
area. This area lies along a regional structure which controls six known
deposits containing combined resources of eight million ounces of gold.
Nine applications have been submitted, three of which have been granted
covering the southern part of this fault system.
In Ghana, work continued on generating new regional targets. As a result,
applications have been made for four reconnaissance permits and due
diligences have been undertaken on a number of joint venture
opportunities.
In Tanzania, reconnaissance exploration continues both in the Mara and
Musoma reenstone belts to understand the geology and structural
architecture leading to the identification of targets. This regional
information combined with the acquisition and processing of geophysics
over both areas of activity during the last quarter has enhanced our
structural understanding and our ability to focus follow up work. RAB
drill programmes are being motivated to test beneath complex regolith
profiles in favourable structural locations. A new permit, Buhemba
South, surrounding the Buhemba mine, has been granted to Randgold
Resources.
PROSPECTS
Loulo remains on track to produce its first gold in the third quarter,
and it is anticipated that the company will meet its announced production
targets for the year. Results from the Loulo underground study confirms
the long term growth potential of the mine.
With the updated economic review at Tongon, the company is now properly
positioned to proceed with a planned 'bankable feasibility' programme
when the political situation in the Cote d'Ivoire returns to normal.
The company continues to evaluate value creating opportunities through
exploration, discovery and development, as well as leverage from
acquisition opportunities.
The Company celebrates its 10th anniversary in August 2005.
D M Bristow R A Williams
Chief Executive Financial Director
4 August 2005
Registered office: La Motte Chambers, La Motte Street, St Helier,
Jersey JE1 1BJ, Channel Islands
Web-site: www.randgoldresources.com
Registrars: Computershare Investor Services (Channel Islands) Limited,
PO Box 83, Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW,
Channel Islands
Transfer agents: Computershare Services plc, PO Box 663, 7th Floor,
Jupiter House, Triton Court, 14 Finsbury Square, London EC2A 1BR
Investor and media relations: For further information contact
Kathy du Plessis on Telephone +27 (11) 728-4701, Fax +27 (11) 728-2547,
e-mail: randgoldresources@dpapr.com
DISCLAIMER: Statements made in this document with respect to Randgold
Resources' current plans, estimates, strategies and beliefs and other
statements that are not historical facts are forward-looking statements
about the future performance of Randgold Resources. These statements are
based on management's assumptions and beliefs in light of the information
currently available to it. Randgold Resources cautions you that a number
of important risks and uncertainties could cause actual results to differ
materially from those discussed in the forward-looking statements, and
therefore you should not place undue reliance on them. The potential
risks and uncertainties include, among others, risks associated with:
fluctuations in the market price of gold, gold production at Morila, the
development of Loulo and estimates of resources, reserves and mine life.
For a discussion on such risk factors refer to the annual report on Form
20-F for the year ended 31 December 2004 which was filed with the United
States securities and exchange commission (The 'SEC') on 29 June 2005.
Randgold Resources sees no obligation to update information in this
release. Cautionary note to US investors; the SEC permits companies, in
their filings with the SEC, to disclose only proven and probable ore
reserves. We use certain terms in this release, such as "resources",
that the SEC does not recognise and strictly prohibits us from including
in our filings with the SEC. Investors are cautioned not to assume that
all or any parts of our resources will ever be converted into reserves
which qualify as 'proven and probable reserves' for the purposes of the
SEC's industry guide number 7.
This information is provided by RNS
The company news service from the London Stock Exchange
Distributed by Market Wire
Copyright © 2008, MarketWire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,Manufacturing and Production:MiningandMetals, ,NASDAQ01,NV,Jersey, Channel Islands
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