3rd Nov 2005 07:00
Randgold Resources Ld03 November 2005 RANDGOLD RESOURCES LIMITEDIncorporated in Jersey, Channel IslandsReg. No. 62686LSE Trading Symbol: RRSNasdaq Trading Symbol: GOLD REPORT FOR THE QUARTER ENDED 30 SEPTEMBER 2005 * Profits up on last quarter and year on year* Loulo pours its first gold and Phase 1 commissioned* Loulo underground development project advances* Deep drilling at Loulo confirms orebody continuity to 870 metres below surface* Good quarter for Morila* New exploration season commences in West Africa and progresses in Tanzania* Equity offering to strengthen balance sheet Randgold Resources Limited has 59.8 million shares in issue as at 30 September2005 (excluding the equity offering) CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Unaudited Unaudited Unaudited quarter ended quarter quarter 9 months 9 months 30 Sept ended ended ended ended 2005 30 June 30 Sept 30 Sept 30 SeptUS$000 2005 2004 2005 2004 Gold sales revenue 31 000 27 963 12 181 90 949 39 655 Cost of salesProduction costs 9 341 6 953 9 474 27 132 26 485Transport and refinery costs 68 62 42 198 140Transfer from/(to) deferred stripping 2 374 2 664 (1 522) 5 247 (4 490)costs Cash operating costs* 11 783 9 679 7 994 32 577 22 135Royalties 2 158 1 959 863 6 279 2 805 Total cash costs* 13 941 11 638 8 857 38 856 24 940 Profit from mining activity* 17 059 16 325 3 324 52 093 14 715 Depreciation and amortisation 2 275 2 307 2 160 7 177 6 867Exploration and corporate expenditure 4 993 4 558 3 603 15 087 10 790 Profit/(loss) from operations* 9 791 9 460 (2 439) 29 829 (2 942) Interest received 308 364 242 997 764Interest expense (219) (300) (354) (864) (1 274)Profit/(loss) on financial instruments 54 - (347) 54 1 750Profit on sale of Syama - - - - 7 070Other (expenses) and income (149) (1 577) 533 124 (926)Share-based payments (S) (566) (825) (487) (1 679) (834) Profit/(loss) on ordinary activitiesbefore taxes and minority interests 9 219 7 122 (2 852) 28 461 3 608Income tax - - - - -Minority shareholders' interest - - - - - Net profit/(loss) 9 219 7 122 (2 852) 28 461 3 608 Basic earnings per share (US$) 0.15 0.12 (0.05) (S) 0.48 0.06 (S)Fully diluted earnings per share (US$) 0.15 0.11 (0.05) (S) 0.46 0.06 (S)Average shares in issue (000) 59 723 59 481 58 810 59 578 58 752 The results have been prepared in accordance with International FinancialReporting Standards (IFRS). * Refer to non-GAAP measures.(S) Reflects adoption of IFRS 2 : Share-based payment. CONSOLIDATED BALANCE SHEET Unaudited Audited Unaudited at at at 30 Sept 30 Dec 30 SeptUS$000 2005 2004 2004 AssetsNon-current assetsProperty, plant and equipment 188 392 129 854 109 361 Cost 217 354 151 639 129 275Accumulated depreciation and amortisation (28 962) (21 785) (19 914) Deferred stripping costs 5 513 8 514 8 690Long-term ore stockpiles 27 516 12 054 10 894 Total non-current assets 221 421 150 422 128 945 Current assetsDeferred stripping costs 4 124 6 370 6 501Inventories and stockpiles 10 370 9 762 5 835Receivables 50 491 23 667 23 542Cash and equivalents 45 022 78 240 52 886 Total current assets 110 007 118 039 88 764 Total assets 331 428 268 461 217 709 Total shareholders' equity 212 141 191 169 181 197 Non-current liabilitiesLong-term borrowings 58 848 40 718 7 128Loans from minority shareholders in subsidiaries 1 494 1 621 1 351Deferred financial liabilities 26 479 15 668 10 037 Provision for environmental rehabilitation 8 997 3 701 3 786Total non-current liabilities 95 818 61 708 22 302 Current liabilitiesAccounts payable and accrued liabilities 23 469 15 584 14 210 Total current liabilities 23 469 15 584 14 210 Total equity and liabilities 331 428 268 461 217 709 CONSOLIDATED CASHFLOW STATEMENT Unaudited Unaudited 9 months 9 months ended ended 30 Sept 30 SeptUS$000 2005 2004 Profit on ordinary activities before taxation and minority interest 28 461 3 608 (S)Adjustment for non-cash items 14 429 (531) (S)Working capital changes (26 639) ( 7 038) Net cash generated from/(utilised in) operations 16 251 (3 961)Net cash utilised in investing activitiesAdditions to property, plant and equipment (60 798) (57 409)Financing of contractors (17 930) -Movement in restricted cash - 3 882Disposal of Syama - net of cash disposed - 8 571Net cash generated by/(utilised in) financing activities Ordinary shares issued 1 696 1 996 Increase/(decrease) in long-term borrowings 27 563 (9 550) Net decrease in cash and cash equivalents (33 218) (56 471)Cash and cash equivalents at beginning of period 78 240 109 357 Cash and cash equivalents at end of period 45 022 52 886 (S) Reflects adoption of IFRS 2 : Share-based payment. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Number of Share Share Other Accumulated Total ordinary capital premium reserves profits equity shares US$000 US$000 US$000 US$000 US$000 Balance -31 December 2004 (as previously reported) 59 226 694 2 961 102 342 (15 668) 101 534 191 169 Adoption of IFRS2 share-basedpayments - - - 1 321 (1 321) - Balance -31 December 2004 59 226 694 2 961 102 342 (14 347) 100 213 (S) 191 169 (S)March 2005Net profit - - - - 12 120 12 120 Share-based payments - - - 288 - 288 Movement on cash flow hedges - - - 1 690 - 1 690 Share options exercised 176 800 9 538 - - 547 June 2005Net profit - - - - 7 122 7 122 Share-based payments - - - 823 - 823Movement on cash flow hedges - - - (52) - (52) Share options exercised 35 400 2 88 - - 90 Restricted shares issued asremuneration # 161 735 8 - - - 8Treasury shares held by company # (107 825) (5) - - - (5) Shares vested # - - 735 (735) - - Balance -30 June 2005 59 492 804 2 975 103 703 (12 333) 119 455 213 800 September 2005 - - - - 9 219 9 219Net profit Share-based payments - - - 566 - 566 Movement on cash flow hedges - - - (12 503) - (12 503) Share options exercised 345 160 17 1 042 - - 1 059 Balance - 59 837 964 2 992 104 745 (24 270) 128 674 212 14130 September 2005 # 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 thecompany as treasury shares. The US$0.7 million represents the costs of theshares which have vested, previously charged to other reserves. (S) Reflects adoption of IFRS 2 : Share-based payment. NON-GAAP MEASURES The following measures are not prepared in accordance with GAAP. Total cashcosts and total cash costs per ounce should not be considered by investors as analternative to operating profit or net profit attributable to shareholders, asan alternative to other IFRS or US GAAP measures or an indicator of theCompany's performance. The data does not have a meaning prescribed by IFRS orUS GAAP and therefore amounts presented may not be comparable to data presentedby gold producers who do not follow the guidance provided by the Gold Institute. Total cash costs, are calculated using the guidance provided by the GoldInstitute. The guidance was first provided in 1996 and revised in November1999. Total cash costs, as defined in the Gold Institute's guidance, includemine production, transport and refinery costs, general and administrative costs,movement in production inventories and ore stockpiles, transfers to and fromdeferred stripping, and royalties. Cash operating costs are defined as total cash costs excluding royalties. Total cash costs per ounce are calculated by dividing total cash costs, asdetermined using guidance issued by the Gold Institute, by gold ounces producedfor all periods presented. The company believes that total cash cost per ounceis a useful indicator to investors and management of a mining company'sperformance as it provides an indication of a company's profitability andefficiency, the trends in costs as the company's operations mature, and abenchmark of performance to allow for comparison against other companies. Totalcash costs and total cash costs per ounce should not be considered by investorsas an alternative to operating profit or net profit attributable toshareholders, as an alternative to other IFRS or US GAAP measures or anindicator of our performance. Total cash operating costs per ounce are calculated by dividing cash operatingcosts by gold ounces produced for all periods presented. Profit from mining activity is calculated by subtracting total cash costs fromgold sales revenue for all periods presented. Profit from operations is calculated by subtracting depreciation andamortisation charges and exploration and corporate expenditure from profit frommining activity. RECONCILIATION TO US GAAP The preliminary condensed financial statements presented in this report havebeen prepared in accordance with International Financial Reporting Standards(IFRS), which differ in certain significant respects from Generally AcceptedAccounting Principles in the United States (US GAAP). The effect of applying USGAAP to net income and shareholders' equity is set out below. 9 months 9 months 30 Sept 30 SeptReconciliation of net income (US$000) 2005 2004 Net income under IFRS 28 461 3 608Share-based payment compensation # 772 1 875Exploration and evaluation costs * (3 179) (2 043) Net income under US GAAP 26 054 3 440Movement in cash flow hedges during the period (10 865) (2 428) Comprehensive income under US GAAP 15 189 1 012 Basic earnings per share under US GAAP (US$) 0.44 0.06Fully diluted earnings per share under US GAAP (US$) 0.42 0.06 Reconciliation of shareholders' equity (US$000) Shareholders' equity under IFRS 212 141 181 197 Exploration and evaluation costs * (7 095) (2 043) Shareholders' equity under US GAAP 205 046 179 154 * Drilling costs of US$3.2 million relating to the underground developmentstudy at Loulo have been capitalised under IFRS in the first half of 2005 (2004:US$3.9 million). Under US GAAP, these costs may not be capitalised since theydo not relate to the addition of reserves as defined in SEC Industry Guide 7. Afinal feasibility study was completed in July 2005 which resulted in thecreation of additional reserves. Following this final feasibility study, theaccounting treatment under IFRS and US GAAP will be the same. # These adjustments include differences between accounting for share-basedcompensation under IFRS and US GAAP. Prior to 1 January 2005, there was norequirement to recognise share option compensation expenses under IFRS, althoughthere was such a requirement under US GAAP and APB 25. The group adopted IFRS2, accounting for share-based payment from 1 January 2005, in accordance withthe Standard's transitional provisions. The method of calculation of theexpenses is different under IFRS and US GAAP, and an adjustment for US GAAP hasaccordingly been made. ACCOUNTING POLICIES The preliminary condensed financial statements in this report have been preparedin accordance with the group's accounting policies, which are in terms of IFRSand are consistent with the prior period, except for the adoption of IFRS 2. Joint ventures are those investments in which the group has joint control andare accounted for under the proportional consolidation method. Under thismethod, the proportion of assets, liabilities, income and expenses and cashflows of each joint venture attributable to the group are incorporated in theconsolidated financial statements under appropriate headings. Inter-companyaccounts and transactions are eliminated on consolidation. No segmental information has been provided, as the source and nature of theenterprise's risks and returns are not governed by more than one segment. The group adopted IFRS 2, accounting for share-based payment from 1 January2005, in accordance with the Standard's transitional provisions. The Standardrequires an entity to recognise share-based payment transactions in itsfinancial statements. The comparatives have been adjusted accordingly. Theeffect of the change is a charge of US$1.7 million for the nine months ended 30September 2005 and a charge of US$1.3 million for the year ended 31 December2004. FINANCIAL INSTRUMENTS In the third quarter, given the high gold price environment, 12 504 ouncespreviously sold forward at US$430/oz for 2005 were rolled out to 2007 to furtherprotect the Loulo project finance loan covenant ratios at that point. The priceobtained was US$461.75/oz. The group's hedging position which all relates to the Loulo project financing,was as follows at 30 September 2005: Forward Forward sales salesMaturity date ounces average US$/ozYear ended 2006 93 498 431Year ended 2007 116 004 438Year ended 2008 80 498 431Year ended 2009 75 000 430Total 365 000 433 This represents approximately 37% of planned open pit production at Loulo forthe period that the project finance is in place. A portion of the 12 504 ouncesrolled forward was deemed speculative under IAS 39 and realised a credit to theincome statement of US$54 000. The rest of the financial instruments are amatched hedge and any movements in marked-to-market valuation are accounted forin the other comprehensive income reserve. Morila's production is completely exposed to spot gold prices. COMMENTS Profit from mining activity for the quarter ended September 2005 compared to thecorresponding period ended September 2004 improved by 413% mainly as a result ofhigher throughput, improved grades and improved recoveries, plus the effect of ahigher gold price resulting in revenues increasing by US$18.8 million, partiallyoffset by the effect of deferred stripping charges in the current quarter andhigher royalties payable on the increase in revenues. Net profit for the quarter ended September 2005 of US$9.2 million was up 30%from US$7.1 million for the previous quarter. Exploration and corporate expenditure for the quarter ended September 2005 ofUS$5.0 million was in line with the previous quarter but up on the comparativequarter ended September 2004 by US$1.4 million which reflects the increasedexploration activity in 2005. Main balance sheet movements for the 9 months ended September 2005 include thefollowing : * Increases in property, plant and equipment principally relate to the costsincurred on the development of the Loulo Mine. The original budget for theLoulo capital project was US$87 million including working capital and financingcosts, but excluding power plant, pre-production and exploration. There havebeen changes in scope following the initial budget which resulted in a revisionto US$101 million. The initial plant design was for 180 000 tonnes per monthand this has been increased to 200 000 tonnes per month. This includes fouradditional CIL tanks. The other main element of the revised budget has been anacceleration in pre-production mining to allow for a more conservative stockpilebuild-up amounting to some US9.9 million additional capital. Actual costsincurred are some 12% in excess of this revised budget and total approximatelyUS$113 million. The project was commissioned later than the accelerated startdate resulting in additional owners' costs of US$3.9 million which have beenincluded in the capital costs. Working capital costs of US$0.8 million abovebudget have been incurred. The balance of the extra cost is mainly shipping andexchange losses. The bulk of the capital expenditure has now been completed.* An increase in ore stockpiles in line with the Morila life of mine plan.* An increase in receivables comprising advances to the main Loulo contractor,as well as an increase in reimbursable fuel duties and TVA at Morila and Loulo.Reimbursable fuel duties and TVA amounted to US$17 million at 30 September 2005. The Company is working with the Mali Government to expedite re-payment of theseamounts. Advances to contractors total US$17 million. A large part of this issecured and the remainder relates to project variations which are still to beagreed.* The decrease in cash and cash equivalents relates to the continued funding ofthe Loulo project and the working capital tied up as referred to above.* Increases in long-term borrowings results from the drawdown of the Louloproject finance loan amounting to US$25 million in 2005, offset by the shortterm portion of the loan of US$8.4 million included in accounts payable. Thefirst repayment is due in June 2006.* The increase in deferred financial liabilities reflects an increase in thenegative marked-to-market valuation of the derivative financial instruments heldas at 30 September 2005, due to the significant increase in the gold spot price,which was US$473.25 at 30 September 2005.* The increase in the provision for environmental rehabilitation reflects theprovision for the Loulo closure cost obligation of US$4.9 million which has beenrecognised. OPERATIONS Morila The quarterly results from Morila were encouraging. While tonnes mined wereaffected by industrial action by the mining contractor's staff, a focus onmining ore combined with blending of higher grade stockpiles allowed tonnage andgrade to be maintained. Plant throughput exceeded 1 million tonnes for thequarter exceeding last quarter's production by 60 000 tonnes and almostachieving design capacity of the expanded plant. Gold production exceeded lastquarter's figures by 7 542 ounces as a result of this consistent plantperformance. Morila Results Quarter Quarter Quarter 9 months 9 months ended ended ended ended ended 30 Sept 30 June 30 Sept 30 Sept 30 SeptUS$000 2005 2005 2004 2005 2004 MiningTons mined (000) 2 976 6 964 6 910 17 755 18 776Ore tons mined (000) 1 194 2 002 1 350 4 807 3 126 MillingTons processed (000) 1 010 951 839 2 817 2 500Head grade milled (g/t) 5.8 5.9 3.9 6.1 4.2Recovery (%) 91.4 92.0 87.2 91.9 84.5Ounces produced 172 901 165 359 91 685 505 061 283 806Average price received (US$/ounce) 443 430 355 437 358Cash operating costs* (US$/ounce) 166 146 218 152 195Total cash costs* (US$/ounce) 197 176 242 182 220 Cash profit 42 648 40 813 8 309 130 233 36 789 Attributable (40%) Ounces produced 69 160 66 144 36 674 202 024 113 522 Ounces sold 69 616 65 030 34 377 198 542 110 789 Cash profit 17 059 16 325 3 324 52 093 14 716 * Refer to non-GAAP measures. The unprocedural strike which involved some 60% of the employees of the Morilamining contractor Somadex, was resolved over a period of some eight weeks withthe assistance of the National Union, the Labour Inspectorate and Government.No concessions were made by the mining contractor. The strike will have noeffect on planned production for the year. Resource extension drilling in the south of the pit and in the pit wall hasreturned significant values extending the wireframe of the orebody. Furtherdrilling is planned to define the additional resources. Stronger emphasis is being placed on continued greenfields exploration aroundthe mine. The team's main goal is to find another Morila within the 200km(2)mining lease area. A regional diamond drilling programme is being planned forcommencement during the final quarter of 2005. Loulo Construction First gold was poured on 27 September 2005. This event represents thesuccessful conclusion of the first phase of construction of the Loulo plant.Continuous operations have been established on the Phase I development with millthroughput regularly exceeding 5 000 tonnes per day. All soft ore productionareas have been brought into operation. The current focus is on steadilyraising the throughput to design levels. It is planned to bring the second millon stream early in November. The CIL circuit is in operation. All circuit systems for reagent control andservices to ensure efficient gold recovery are functioning well. The elutionand electro-winning circuits are being commissioned currently as the mine buildsup gold inventory. The first commercial shipment of bullion is due in November.This shipment will initiate a five-year tax holiday for the mine as prescribedby Mali's mining code. All 15 generator sets have been fully commissioned and there is sufficient,stable and consistent power for mill startup and all other operationalrequirements. Civil works on the Phase II development are progressing with the completion ofthe crushing circuit expected in the first quarter of 2006. The main equipmentitems for the Phase II circuit, comprising primary, secondary and tertiarycrushers are due for delivery to site during November and December 2005. Operations Mining operations focused on the northern and southern parts of the Yalea pitduring the first part of the quarter to build up a substantial ore stockpileahead of the mill start-up. A total of 538 508 tonnes at 2.95 g/t for 69 880ounces were mined from Yalea. A selective mining and stockpiling strategy wasimplemented in August which allows for the stockpiling of ore according tohardness and grade. Ore is currently being stockpiled at the Run-Of-Mine (ROM)pad prior to feeding to the process plant. Current ROM grade stockpilescomprise 360 261 tons at 3.72 g/t. Manpower build-up is continuing as the mine is brought into commercialproduction and will continue through Phase II. Further on-the-job training isbeing given to local employees in the plant area. PROJECTS AND EVALUATION Loulo Mine - underground development The board has approved the development of the underground project on the back ofa bankable mining feasibility which was completed by SRK Consulting lastquarter. An experienced underground manager has been appointed to advance the developmentof the underground project and a review of critical issues is under way. Thisthree month review will culminate in an integrated plan designed to optimise thevalue of the combined open pit and underground operations. At the end of thisperiod,decisions will be made regarding such issues as:* Contract vs owner operator mining;* Review of capital requirements and scheduling;* Fast-tracking the access to the high-grade areas of Yalea;* Alternative access and ore transport facilities; and* Simultaneous or staggered development of the declines; A total of 14 drillholes and two deflections were completed to further delineatethe orebody at Yalea. Hole ID From To Intersection Grade Selected width (m) (g/t) unit*YDH185 771.60 778.80 7.20 4.71 3.40m @ 6.70 g/tYDH185w 660.50 678.85 18.35 8.20YDH186 985.00 990.40 5.40 3.99 1.12m @ 10.10 g/tYDH189 582.00 598.88 16.88 13.13YDH191 676.00 698.38 22.38 7.79 16.30m @ 8.81 g/tYDH212 234.60 237.17 2.57 2.56YDH224 559.80 578.95 19.05 2.39 2.80m @ 4.93 g/t 589.05 607.00 17.95 10.57 10.15m @ 17.16 g/tYDH231 463.00 468.90 5.90 6.56YDH233 539.70 540.85 1.15 14.23YDH233w 530.30 534.15 3.85 6.99YDH228 557.55 590.00 32.45 1.01 604.50 619.05 14.55 3.25 3.05m @ 8.32 g/tYDH235 646.17 693.34 47.17 2.93 681.00 693.34 12.34 6.26 3.42m @ 13.33 g/tYDH238 571.70 586.00 14.30 12.73YDH240 536.15 547.36 11.21 6.38YDH241 591.40 596.20 4.80 9.22 607.00 609.20 3.80 11.38 2.20m @ 27.21 g/tYDH242 706.19 727.69 21.50 4.29 3.70m @ 12.80 g/t 830.50 834.80 4.30 7.90 2.70m @ 11.91 g/t * Selection based on geology and grade YDH 186 is now the deepest intersection with an approximate depth below surfaceof 870 metres and is demonstrating significant down-dip continuity of theorebody. The ore intersection width is 5.4 metres and the average grade 3.99g/t, and this contains a high-grade zone of 1.12 metres at a grade of 10.1g/t.Drilling conducted in the southern portion of Yalea has confirmed the predictedhigher grades with all three holes returning grades greater than 6g/t overintersection widths of between 4 and 22 metres. Of these, YDH191, whichreturned 22.38 metres at 7.79g/t including 16.30 metres at 8.81g/t, isparticularily significant in that it confirms the vertical trend of a high gradeshoot down to a vertical depth of 600 metres below surface. Drilling continuesto further delineate the shoot. Another recent discovery is that of a hangingwall splay to the main orebodydeveloped in the north at depth giving duplicate intersections of ore grade,separated by several to tens of metres of anomalous material. Tongon Project In Cote d'Ivoire, elections have been postponed until next year as a result ofadministrative difficulties and delays in disarmament. As a result, the companydoes not expect to commence with the final feasibility study drilling programmeon the Tongon Project until the political situation has stabilised. EXPLORATION ACTIVITIES The quarter saw a period of consolidation, data integration, interpretation,modelling and future planning in West Africa where the annual wet season boughta cessation to field activities. This work has formed the platform for thedevelopment of exploration programmes for the 2005/2006 field season.Conversely in East Africa field activities were accelerated and good progresshas been made with exploration and especially in the ratification of the Tangoldagreement, a joint venture with the government of Tanzania, to develop newmineral deposits covering a 2 692 km2 area of interest in the KiabakariMaji-Moto region. Included in the circa are the Buhemba South and Kiabakariprospecting licences. The latter incorporates the old Kiabakari mine and addsan advanced project to our portfolio. Aircore drilling is underway in theMusoma belt on six prospecting licenses to test conceptual targets, withinstructural corridors covered by thick transported regolith. Diamond drillinghas also commenced in the Mara belt, to test beneath recent cover basalts onextensions to mineralised structures hosting the Gokona, Nyabigena and Nyabiramagold deposits. The geological teams are back in the field in West Africa and a busy finalquarter to 2005 is scheduled with drilling at Loulo, Sitakili, Selou, Morila,Senegal and Tanzania all taking place. At Loulo, four drill rigs are back in operation following a short break duringthe annual wet season. As well as the resource conversion work, where threediamond core rigs continue to define the high-grade payshoots at both Yalea andLoulo 0, exploration is concentrating on identifying new resources with an RCrig drill testing targets within the Loulo permit. The Faraba target isassociated with a four kilometre, north-south striking plus 100ppb soil anomalywhich hosts three targets (Faraba Main, Faraba East and Faraba West). Only twoRC holes were completed prior to the rains as a follow-up to trench and RABdrill intersections. FARC002 drilled below trench FT009 (26 metres at 3.3g/t)returned 39 metres at 2.15g/t. FARC001 drilled 1.2 kilometres to the southreturning five metres at 0.45g/t with similar haematite-silica alteration.Further RAB drilling is planned to evaluate the full extent of the fourkilometre long soil anomaly and RC drilling will follow-up the trench and RABresults during the final quarter of 2005. RAB drilling returned anomalousresults (14 metres at 0.56g/t) 500 metres north of the known mineralisation atP64. At Sitakili, 21 kilometres east of Loulo field mapping and sampling haveidentified significant gold in porphyry intrusives over a 1.2 kilometre strike.A first phase reconnaissance drilling programme is planned for the finalquarter of 2005. In the Morila region, we are undertaking a hyperspectral study over Morila andsurrounding area with the aim of identifying spectral and structural signaturesassociated with mineralisation. This will be incorporated with the results fromremodelling of geophysical data and lead to the development of a threedimensional model and the identification of conceptual targets for drilling inearly 2006. In Senegal, four permits consolidate our groundholding on the Sabodala belt.Thirty-four targets are currently being evaluated of which two have beenearmarked for further work. Of these, Bambaraya has shown significant surfacemineralisation while further infill drilling is planned for Sofia. In Burkina Faso, the focus has been on building a geological country model. Theexploration emphasis has shifted to the Kiaka area which lies along an extensiveregional structure hosting six known deposits with a combined resource of morethan 8 million ounces. Nine applications have been submitted, seven of whichhave already been granted, covering the southern part of this fault system. In Ghana, government approval is awaited on four applications, after which fieldwork will commence. GENERAL On November 1, 2005, the Company priced a fully marketed global equity offeringof 7,500,000 ordinary shares and American Depositary Shares ("ADSs") at US$13.50per share. The underwriters have been granted an over-allotment option byRandgold Resources to purchase up to 1,125,000 additional ordinary shares. Thefunds will be used for the development of the Loulo underground mine, the Tongonpre-feasiblity study and new business opportunities. With its extensive exploration portfolio, and a strengthened balance sheet, thecompany is now well-placed to continue with its development projects. D M Bristow R A WilliamsChief Executive Financial Director 3 November 2005 Registered office : La Motte Chambers, La Motte Street, St Helier, Jersey JE11BJ, Channel Islands i Web-site : www.randgoldresources.com Registrars : Computershare Investor Services (Channel Islands) Limited, P.O. Box83, Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Islands Transfer agents : Computershare Services Plc, P.O. Box 663, 7th Floor, JupiterHouse, Triton Court, 14 Finsbury Square, London EC2A 1BR Investor and media relations : For further information and media contact Kathydu 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 arenot historical facts are forward-looking statements about the future performanceof Randgold Resources. These statements are based on management's assumptionsand beliefs in light of the information currently available to it. RandgoldResources cautions you that a number of important risks and uncertainties couldcause actual results to differ materially from those discussed in theforward-looking statements, and therefore you should not place undue reliance onthem. The potential risks and uncertainties include, among others, risksassociated with: fluctuations in the market price of gold, gold production atMorila, development of Loulo and estimates of resource, reserves and mine life.For a discussion on such risk factors, refer to the annual report on Form 20-Ffor the year ended 31 December 2004, which was field with the SecuritiesExchange Commission on 30 June 2004. Randgold Resources assumes no obligationto update information in this release. Cautionary Note to US Investor: TheUnited States Securities Exchange Commission (The "SEC") permits companies, intheir filings with the SEC, to disclosedisclose only proven and probable orereserves. We use certain terms in this release, such as "resources", that theSEC does not recognise and strictly prohibits us from including in our filingswith the SEC. Investors are cautioned not to assume that all or any part of ourresources will ever be converted into reserves which qualify as 'proven andprobable reserves' for the purposes of the SEC's industry guide number 7. A registration statement relating to the securities offered in the globaloffering has been declared effective by the Securities and Exchange Commission.This release shall not constitute an offer to sell or the solicitation of anoffer to buy nor shall there be any sale of these securities in any state orjurisdiction in which such offer, solicitation or sale would be unlawful priorto registration or qualification under the securities laws of any such state orjurisdiction. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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