7th Feb 2005 07:01
Randgold Resources Ld07 February 2005 RANDGOLD RESOURCES LIMITED Incorporated in Jersey, Channel Islands Reg. No. 62686 LSE Trading Symbol: RRS Nasdaq Trading Symbol: GOLD REPORT FOR THE QUARTER AND YEAR ENDED 31 DECEMBER 2004 * Solid net profit of US$20.1 million for the year * Morila ends year making significant contribution to bottom line * Loulo construction steps up a gear * Deep drilling takes Loulo resource past 7 million ounces * Commitment to organic growth sees exploration and drilling in six countries * Randgold Resources claims its place as a fully independent gold mining company Randgold Resources Limited has 59.2 million shares in issue as at 31 December2004. CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Unaudited quarter quarter quarter ended ended endedUS$000 31 Dec 2004 30 Sept 2004 31 Dec 2003 Gold sales revenue 33 675 12 181 18 054 Cost of sales Production costs 9 457 9 474 6 035 Transport and refinery costs 93 42 76 Transfer from/(to) deferred stripping 307 (1 522) (2 062) Cash operating costs* 9 857 7 994 4 049 Royalties 2 499 863 1 261 Total cash costs* 12 356 8 857 5 310 Profit from mining activity* 21 319 3 324 12 744 Depreciation and amortisation 1 871 2 160 3 570 Exploration and corporate expenditure 4 739 3 603 5 478 Profit from operations* 14 709 (2 439) 3 696 Interest received 269 242 229 Interest expense (349) (354) (445) (Loss)/gain on financial instruments 680 (347) (1 996) Other income and (expenses) 363 533 (1 265) Profit on ordinary activities before taxes and minority interests 15 672 (2 365) 219 Income tax - - - Minority shareholders' interest - - - Net profit 15 672 (2 365) 219 Basic earnings per share (US$) 0.26 (0.04) 0.004+ Fully diluted earnings per share (US$) 0.26 (0.04) 0.004+ Average shares in issue (000) 59 212 58 810 58 198 CONSOLIDATED INCOME STATEMENT continued Unaudited Audited 12 months 12 months ended endedUS$000 31 Dec 2004 31 Dec 2003 Gold sales revenue 73 330 109 573 Cost of sales Production costs 35 942 26 074 Transport and refinery costs 233 408 Transfer from/(to) deferred stripping (3 999) (3 483) Cash operating costs* 32 176 22 999 Royalties 5 304 7 648 Total cash costs* 37 480 30 647 Profit from mining activity* 35 850 78 926 Depreciation and amortisation 8 738 10 269 Exploration and corporate expenditure 15 529 17 007 Profit from operations* 11 583 51 650 Interest received 1 033 999 Interest expense (1 623) (1 895) (Loss)/gain on financial instruments 2 232 (1 733) Other income and (expenses) 6 889 (1 846) Profit on ordinary activities before taxes and minority interests 20 114 47 175 Income tax - - Minority shareholders' interest - 351 Net profit 20 114 47 526 Basic earnings per share (US$) 0.34 0.83+ Fully diluted earnings per share (US$) 0.34 0.82+ Average shares in issue (000) 58 871 57 442 The results have been prepared in accordance with International FinancialReporting Standards (IFRS). * Refer to pro forma information provided on page 3. + Reflects adjustments resulting from sub-division of shares. CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited 12 months 12 months ended ended 31 Dec 31 DecUS$000 2004 2003 Profit on ordinary activities before taxation and minority interest 20 114 47 175 Adjustment for non-cash items (5 677) 9 394 Working capital changes (10 684) (5 346) Net cash generated from operations 3 753 51 223 Net cash utilised in investing activities (60 250) (6 011) Net cash generated by financing activities Ordinary shares issued 2 133 9 786 Increase/(decrease) in long-term borrowings 23 247 (5 652) (Decrease)/increase in bank overdraft - 380 Net (decrease)/increase in cash and cash equivalents (31 117) 49 726 Cash and cash equivalents at beginning of period 109 357 59 631 Cash and cash equivalents at end of period 78 240 109 357 CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited at 31 Dec at 30 Sep at 31 DecUS$000 2004 2004 2003 Assets Non-current assets Property, plant and equipment 129 854 109 361 72 822 Cost 240 965 218 601 175 195 Accumulated depreciation and amortisation (111 111) (109 240) (102 373) Other long-term assets 14 884 15 191 10 885 Total non-current assets 144 738 124 552 83 707 Current assets Inventories 21 816 16 729 17 165 Receivables 23 667 23 542 15 196 Cash and equivalents** 78 240 52 886 109 357 Total current assets 123 723 93 157 141 718 Total assets 268 461 217 709 225 425 Total shareholders' equity 191 169 181 197 177 187 Non-current liabilities Long-term borrowings 40 718 7 128 7 723 Loans from minority shareholders in subsidiaries 1 621 1 351 958 Deferred financial liabilities 15 668 10 037 8 488 Provision for environmental rehabilitation 3 701 3 786 5 962 Total non-current liabilities 61 708 22 302 23 131 Current liabilities Accounts payable and accrued liabilities 15 584 14 210 23 557 Bank overdraft - - 1 550 Total current liabilities 15 584 14 210 25 107 Total equity and liabilities 268 461 217 709 225 425 ** Note: These amounts include US$3 882 at 31 December 2003 which relate to theN.M. Rothschild & Sons Limited debt service reserve account. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Number Share Share of ordinary capital premium shares US$000 US$000 Balance - 31 Dec 2002 27 663 740 2 766 190 618 Jan - Sept 2003 Net profit - - - Movement on cash flow hedges - - - Share options exercised 1 112 899 111 7 068 Oct - Dec 2003 Net profit - - - Movement on cash flow hedges - - - Share options exercised 483 746 49 2 558 Balance - 31 Dec 2003 29 260 385 2 926 200 244 Jan - Sept 2004 Net profit - - - Movement on cash flow hedges - - - Share split (a) 29 263 385 - - Capital reduction (b) - - (100 000) Oct - Dec 2004 Net profit - - - Share options exercised 702 924 35 2 098 Balance - 31 Dec 2004 59 226 694 2 961 102 342 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY continued Other Accumulat- Total reserves ed profits equity US$000 US$000 US$000 Balance - 31 Dec 2002 (8 293) (66 106) 118 985 Jan - Sept 2003 Net profit - 47 307 47 307 Movement on cash flow hedges 892 - 892 Share options exercised - - 7 179 Oct - Dec 2003 Net profit - 219 219 Movement on cash flow hedges (2) - (2) Share options exercised - - 2 607 Balance - 31 Dec 2003 (7 403) (18 580) 177 187 Jan - Sept 2004 Net profit - 4 442 4 442 Movement on cash flow hedges (8 265) - (8 265) Share split (a) - - - Capital reduction (b) - 100 000 - Oct - Dec 2004 Net profit - 15 672 15 672 Share options exercised - - 2 133 Balance - 31 Dec 2004 (15 668) 101 534 191 169 (a) Share split: A special resolution was passed on 26 April 2004 to divide eachof the ordinary shares of US$0.10 in the company into two ordinary shares ofUS$0.05 each. (b) Capital reduction: A special resolution was passed at the Annual GeneralMeeting in April 2004, which was subsequently approved by the Court in Jersey,to extinguish accumulated losses by reducing the company's share premium accountby US$100 million in order to permit future dividend payments. OTHER FINANCIAL MEASURES The company uses the following pro forma disclosures as it believes that thisinformation is relevant to the mining industry. Total cash costs per ounce are calculated by dividing total cash costs, asdetermined using the Gold Institute Industry Standard, by gold ounces producedfor all periods presented. Total cash costs, as defined in the Gold Institute Industry Standard, includesmine production, transport and refinery costs, general and administrative costs,movement in production inventories and ore stockpile, transfers to and fromdeferred stripping and royalties. Total cash cost per ounce should not beconsidered by investors as an alternative to operating profit or net profitattributable to shareholders, as an alternative to other IFRS or US GAAPmeasures or an indicator of the company's performance. The company believesthat total cash cost per ounce is a useful indicator to investors and managementof a mining company's performance as it provides an indication of a company'sprofitability and efficiency, the trends in costs as the company's operationsmature, a measure of a company's gross margin per ounce, by comparison of totalcash cost per ounce to the spot price of gold, and a benchmark of performance toallow 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 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 Accepted AccountingPrinciples in the United States (US GAAP). The effect of applying US GAAP tonet income and shareholders' equity is set out in the following table: 12 months 12 months ended ended 31 Dec 31 DecReconciliation of net income (US$000) 2004 2003 Net income under IFRS 20 114 47 526 Share option compensation adjustment 690 (4 780) Development costs* (3 916) - Net income under US GAAP before cumulative effect of change in accounting principle 16 888 42 746 Cumulative effect of change in accounting principle - 214 Net income under US GAAP 16 888 42 960 Movement in cash flow hedges during the period (8 265) 890 Comprehensive income under US GAAP 8 623 43 850 Basic earnings per share under US GAAP (US$) 0.29 0.75+ Fully diluted earnings per share under US GAAP (US$) 0.29 0.74+ Reconciliation of shareholders' equity (US$000) Shareholders' equity under IFRS 191 169 177 187 Shareholders' equity under US GAAP 191 169 177 187 Roll forward of shareholders' equity under US GAAP (US$000) Opening balance 177 187 118 771 Net income under US GAAP 16 888 42 960 Movement on cash flow hedges (8 265) 890 Share options exercised 2 133 9 786 Share option compensation adjustment (690) 4 780 Development costs* 3 916 - Shareholders' equity under US GAAP closing balance 191 169 177 187 * US$3.9 million of drilling costs relating to the underground development studyat Loulo have been capitalised under IFRS. Under US GAAP, these costs may not becapitalized since they do not relate to the addition of reserves as defined inSEC Industry Guide 7. + Reflects adjustments resulting from sub-division of shares. 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 accounting policy fordevelopment costs and mine plant facilities. The wording of this accountingpolicy has been amended to clarify the treatment of costs relating to thedefinition of mineralisation in existing orebodies or the expansion of theproductive capacity of existing operating mines. The effect of the change isthe capitalisation of US$3.9 million of drilling costs relating to theunderground development study at Loulo. This treatment of the costs betterreflects industry practice. The consolidated financial information includes the quarterly financialstatements of the company, its subsidiaries and the Morila joint venture, whichcomply with IAS 34. Joint ventures are those investments in which the group has joint control andare accounted for under the proportional consolidation method. Under thismethod, the proportion of assets, liabilities, income and expenses and cashflows of each joint venture attributable to the group are incorporated in theconsolidated financial statements under appropriate headings. Inter-companyaccounts and transactions are eliminated on consolidation. No segmental information has been provided, as the source and nature of theenterprise's risks and returns are not governed by more than one segment. FINANCIAL INSTRUMENTS As part of the Loulo project financing, the group has put in place the followingfinancial instruments which match production over the repayment period of theloan: Forward sales Forward sales ounces price Maturity date US$/oz 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 The hedging has enabled us to develop the project and achieve acceptable ratesof return whilst still exposing 64% of production to the spot gold price. Thefacilities are margin free. The Morila hedge book was closed out at 31 December 2004. COMMENTS Improvements in grade, recoveries and throughput during the quarter resulted ina significant increase in profit from mining activity to US$21.3 millioncompared to the previous quarter's US$3.3 million. Attributable ounces producedincreased by 147% to 90 672 ounces resulting from higher grades being accessedin the pit. The increase in profits furthermore reflects an increase in thereceived gold price to US$410/oz for the quarter. Total production costs for the quarter, excluding the adjustment to therehabilitation liability of US$0.7 million at year end, increased by 7%, mainlyas a result of increased tonnes mined, along with increased costs relating tothroughput and fuel. The total cash cost per ounce was materially lower atUS$136/oz due to the higher grades processed, as well as increased recoveries. Depreciation of US$1.9 million was lower than in the previous quarter, due toasset adjustments made by Morila. Net profit for the year ended 31 December 2004 totalling US$20.1 million, islargely the result of an increase in output from mining activities in the secondhalf of the year. This is however lower than the profit for the previous year,due to exceptionally high grades and recoveries achieved during the first halfof 2003. Other income of US$7 million for the year includes the profit realised on thesale of Syama to Resolute Mining Limited. The main balance sheet movements for the year ended 31 December 2004 areincreases in property, plant and equipment, receivables, long-term borrowings,and financial instruments. The increase in property, plant and equipment mainly represents developmentcosts incurred in the construction of the Loulo Mine. The receivables arehigher due to a substantial increase in outstanding VAT claims and reimbursablefuel duties at Morila. Long-term borrowings increased, as a result of the first draw down of US$35million on the Loulo Project loan in December 2004. The financial instruments liability also increased to US$15.7 million andreflects the marked-to-market valuation of the hedged ounces at the year endspot price of US$437/oz. OPERATIONS - MORILA Gold production for the year at Morila, while not achieving the forecast made atthe beginning of the year, exceeded last quarter's guidance largely because ofthe higher grade processed. In total 510 485 ounces for the year were producedat a total cash cost of US$184/oz due mainly to a significant increase inproduction in the last quarter when 226 679 ounces were produced at a total cashcost of US$136/oz. Mill throughput for the quarter was just short of design capacity for theexpanded plant, averaging 337 000 tonnes per month because of the latecommissioning in October as well as an earlier than planned mill reline, agearbox failure and various maintenance issues. The significantly better gold production for the quarter resulted from higherthan planned mill feed grades, averaging 7.5g/t. The challenge facing the mine,and in particular the processing plant, is to settle the plant throughput to thedesign of 350 000 tons per month and then to seek ways of optimisingperformance. Settlement was achieved with the union representatives in the dispute over thepayment of a productivity bonus. Morila results Quarter Quarter Quarter 12 months 12 months ended ended ended ended ended 31 Dec 30 Sept 31 Dec 31 Dec 31 DecUS$000 2004 2004 2003 2004 2003 Mining Tonnes mined (000) 7 820 6 910 5 955 26 596 23 470 Ore tonnes mined (000) 2 209 1 350 956 5 335 4 056 MillingTonnes processed (000) 1 012 839 842 3 512 3 266 Head grade milled (g/t) 7.5 3.9 5.0 5.2 8.3 Recovery (%) 92.6 87.2 87.4 87.9 91.0 Ounces produced 226 679 91 685 119 537 510 485 793 992 Average Price Received (US$/oz) 410 355 367 382 345 Cash operating costs* (US$/oz) 109 218 85 158 76 Total cash costs* (US$/oz) 136 242 111 184 100 Cash profit (US$000) 53 298 8 309 31 860 89 625 197 315 Attributable (40%)Ounces produced 90 672 36 674 47 815 204 194 317 597 Cash profit (US$000) 21 319 3 324 12 744 35 850 78 926 * Refer pro forma information provided on page 3. The resource base for Morila as at year end 2004 is tabulated below with acomparison to the figures as at end 2003. Measured, indicated and inferred mineral resources Tonnes Tonnes Grade Grade (Mt) (Mt) (g/t) (g/t)Category 2004 2003 2004 2003 Measured 17.32 13.09 2.95 3.49 Indicated 11.96 17.47 3.56 3.82 Sub-total Measured and indicated 29.28 30.56 3.20 3.68 Inferred 4.47 2.06 3.79 2.96 Total Measured, indicated and inferred 33.75 32.62 3.28 3.63 Measured, indicated and inferred mineral resources - continued Gold Gold Attributable (Mozs) (Mozs) goldCategory 2004 2003 (Mozs) Measured 1.64 1.47 40% Indicated 1.37 2.15 Sub-total Measured and indicated 3.01 3.62 1.20 Inferred 0.54 0.20 Total Measured, indicated and inferred 3.55 3.81 1.42 The resource depletion as a result of mining during the year was partiallyreplaced by extra mineral resources defined in the Morila Shear Zone westextension albeit at a lower grade. Total resources decreased by 260 000 ouncesafter adjustments. Indicated resources now total 46% of the resource base,representing a higher level of confidence in the estimates over 2003 (39%). Anupdated reserve table will be included along with the group's annual resource/reserve statement in our annual report to be published at the end of the currentquarter. PROJECTS AND EVALUATION Loulo Gold Mine Project Progress on the Loulo Mine stepped up a gear in the last few months with thecommencement of mining operations at the site and the shipment of the ball millsfrom South Africa. The first waste material was moved in December 2004 from the Loulo 0 pit toestablish the Run-Of-Mine Pad ahead of the process plant. The ball mills, which have been fabricated to a Krupp Polysius design began thefirst leg of their journey to Loulo, travelling by road to the port of RichardsBay in South Africa. Each of the mill shells is being transported in a singlepiece measuring 5.5 metres in diameter and 8.0 metres in length, and weighs 103tonnes. The mills will travel by ship from Richards Bay to Dakar and completethe final leg of the trip to Loulo by road from Dakar. Loulo drew down the first tranche of its project finance in December 2004. On site at Loulo, approximately 2 500m(3) of concrete have been poured, withthree tower cranes and four mobile cranes operating. A significant amount ofthe mine infrastructure such as housing and offices is complete and operatingpersonnel have been mobilised. Expenditure on the project to December 2004 isUS$62.2 million. Activities on site remain focused on producing gold in July2005. The annual ore resource and reserve table will be published in the annualreport. Loulo Underground Development Study The next phase of the infill deep drilling programme has been completed forYalea and results have been received. These results are tabulated within theexploration report. The Yalea orebody is currently being remodelled and thiswill be completed shortly. The results confirm the higher grades at depth andoutline a significant payshoot which appears to dip gently from north to south.It is at least 800 metres - 1 000 metres in lateral extent, currently extends200 metres virtually down dip and is still open at depth. The orebody is alsoopen along strike to the north and south. The underground development study willbe done in an "open-ended" fashion which can be updated with the results ofongoing drilling programmes. A deep drilling programme at the Loulo 0 depositis continuing with three boreholes having been completed. No results have yetbeen obtained as geotechnical testwork is being carried out on the core. Tongon Project Discussions have continued between the Government and rebel forces under theauspices of the African Union. Mediation by South African President Thabo Mbekihas contributed to progress made by the parties. We continue to monitor the situation and are updating the prefeasibility studywith current cost structures. All our permits in Cote d'Ivoire are subject to a "standstill" agreement andtherefore they remain in good standing. EXPLORATION ACTIVITIES During the quarter exploration activities were accelerated across the projectportfolio with the commencement of the dry season in West Africa and prior tothe annual rains in East Africa. The development of the company's second mining project at Loulo is well underwayand exploration continues to add long-term value to the project. At the Yaleaorebody a 22 hole, 10 872 metre infill drilling programme was completed, theresults are tabulated below. The drilling has confirmed the continuity of highgrade material (plus 12g/t) over a strike length of 800 metres commencing atvertical depths of 425 metres below the surface, which is still open at depthand along strike. Inter- section True width width GradeHole ID From To (m) (m) (g/t) Including YDH153 647.00 654.22 7.22 5.18 5.38 YDH154 391.50 426.75 35.25 30.91 1.06 6.8m @ 2.85g/t YDH155 637.00 675.00 38.00 26.15 12.02 YDH156 404.03 424.25 20.22 16.57 2.75 11.97m @ 3.68g/t YDH157 277.70 284.70 7.00 6.73 2.04 YDH158 219.51 226.50 6.99 6.11 1.66 YDH159 614.30 630.81 16.51 12.74 11.28 YDH160 227.00 244.00 17.00 16.46 5.23 YDH161 506.00 524.00 18.00 13.01 12.06 YDH162 290.00 313.36 23.36 17.89 2.29 YDH163 468.67 491.28 22.61 17.21 3.38 11.83m @ 5.65g/t YDH164 598.83 627.80 28.97 21.43 17.49 YDH165 Faulted out YDH166 432.78 434.28 1.50 1.08 8.29 434.28 448.36 14.08 14.08 Dyke 448.44 458.15 9.71 6.97 4.36 YDH167 259.37 269.28 9.91 9.64 2.12 YDH168 360.20 365.00 4.80 4.49 3.62 YDH169 527.70 535.80 8.10 5.02 7.80 YDH172 584.00 587.00 3.00 2.38 2.29 YDH173 591.55 593.00 1.45 0.97 6.08 YDH174 377.99 397.85 19.86 17.14 2.35 9.51m @ 3.22g/t YDH175 433.70 458.78 25.08 15.63 4.73 14.17m @ 7.05g/t YDH176 123.72 128.16 4.44 3.99 9.97 Ground geophysical surveys to the south of the Yalea orebody have highlighted aplus one kilometre target for drill testing. A previous drillhole YSDH03confirmed the potential and intersected 1.47g/t over 11 metres from 107 metresand 1.33g/t over 20 metres from 169 metres. In southern Mali, a review of the data at Morila is leading to the developmentof a new model, where it is interpreted that the deposit locates within the highgrade metamorphic core of a contact thermal aureole. Drilling at Samaclinecontinues to return multiple gold intercepts and highlights the potential forfurther significant deposits. SAM001 the first follow-up hole drilled,confirmed the model and intersected 2 metres at 18.84g/t (from 283 metres downhole), 10 metres at 3.43g/t (from 482 metres) and 7 metres at 4.47g/t (from 485metres). A further three holes have been completed, (SAM002, SAM003 and SAM007)the results have returned multiple gold intercepts ranging in grade from 0.8g/tto 6g/t and widths of 2 to 26 metres. Outside of the Morila mining lease, drilling has returned anomalous gold resultsand settings similar to the Morila orebody. Non prospective ground is in theprocess of being dropped and new opportunities are being developed. In Senegal, drilling has commenced on four targets within the permit portfolio,these being Sofia, Kaviar, KB Main and Makana 2. Surface exploration continuesto evaluate additional targets within the resource triangle to providereplacement drill targets. In Burkina Faso, a five hole diamond drill programme has been completed on theDanfora Permit. The results returned a one kilometre, 60 - 80 metre wide zoneof shearing and strong alteration at the contact between basalts andvolcaniclastics. Within this zone multiple gold intercepts from 2 - 14 metres,grading 0.65g/t to 9.45g/t occur. A review of this work is underway to developfuture follow-up programmes. On the Kiaka Permit encouraging rock chip samples,averaging 7.3g/t gold have been returned from arsenopyrite bearing biotiteschists. The mineralised zone presently extends for more than 2.5 kilometresand modelling is underway to prioritise drill locations. In Ghana, the extension to the main Obuasi shear has been defined on surface andwithin adits. Results have returned anomalous gold values from 0.1g/t to 0.7g/twith widths up to 10 metres. Work is currently focusing on three dimensionalmodelling of the data. The outcome of this work will determine whether we willprogress to the next phase of deep reconnaisance drilling. Tanzania is another important area of focus outside of Mali and Senegal, wherewe hold the dominant land position in the Musoma Greenstone belt, one of themost underexplored areas in Tanzania. In the Mara belt we have a focusedapproach exploring for a known style of mineralisation beneath recent coverbasalts. Recent drilling has intersected sulphide bearing rocks and gold assayresults are pending. In the Musoma belt early stage reconnaissance work ishighlighting anomalous gold values on major regional structures, which hostknown gold deposits. A new concept is being developed whereby we areinvestigating similarities in banded iron formation hosted gold mineralisationto those observed in the Southern Lake Victoria goldfields. Generative workcontinues to develop this concept and identify further explorationopportunities. PROSPECTS The company continues to evaluate various opportunities both at the corporateand project level. We are focused on value creation through exploration,discovery and development, as well as strategic leverage in merger andacquisition opportunities. In this regard a number of due diligence reviews ofexploration and mining prospects have been undertaken during the quarter. Life of Mine scheduling at Morila anticipates gold production in excess of 600000 ounces and total cash costs are expected to be approximately US$200/oz forthe year 2005. Discussions with the mining contractor are currently beingfinalised in order to conclude a new contract arrangement. The commissioning of Loulo in mid-2005 will also increase production levels.Given the encouraging results to date, we will complete the current undergrounddevelopment study on data available to the end of March. Results from furtherdeep drilling programmes at Loulo 0 and Yalea will be used to update the studyas they become available. A busy exploration programme is planned for 2005 with work being undertaken insix African countries (Mali, Senegal, Burkina Faso, Ghana, Cote d'Ivoire andTanzania). At Loulo, in addition to the underground development studyexploration, will concentrate on follow-up programmes on defined targets.Drilling has commenced in Senegal on four targets. In Burkina Faso modelling ofthe recently completed drilling data is driving follow-up programmes on theDanfora Permit and motivations for drilling at Kiaka are in progress. In Ghanathe outcome of the current review of the work done to date is awaited. InTanzania, following a first pass reconnaissance drilling programme and earlystage field work data compilation and interpretation will guide future programmes. Finally work has commenced on reviewing the Tongon Prefeasibility in the Cote d'Ivoire. The company has significant cash resources of nearly US$80 million to fund theequity portion of the Loulo construction as well as to pursue opportunities forjoint venture and other corporate activities. D M Bristow R A WilliamsChief Executive Financial Director7 February 2005 Registered office: La Motte Chambers, La Motte Street, St Helier, Jersey JE11BJ, Channel Islands Web-site: www.randgoldresources.com Registrars: Computershare Investor Services (Channel Islands) Limited, PO Box83, Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Islands Transfer agents: Computershare Services plc, PO Box 663, 7th Floor, JupiterHouse, Triton Court, 14 Finsbury Square, London EC2A 1BR Investor and media relations: For further information contact Kathy du Plessison Telephone +27 (11) 728-4701, Fax +27 (11) 728-2547, e-mail:[email protected] 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 forwardlooking 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, the development of Loulo and estimates of resources, reserves and minelife. For a discussion on such risk factors, refer to the annual report on Form20-F for the year ended 31 December 2003, which was filed with the United StatesSecurities and Exchange Commission (the 'SEC') on 30 June 2004. RandgoldResources assumes no obligation to update information in this release.Cautionary Note to US Investors: The SEC permits companies, in their filingswith the SEC, to disclose only proven and probable ore reserves. We use certainterms in this release, such as "resources", that the SEC does not recognise andstrictly prohibits us from including in our filings with the SEC. Investors arecautioned not to assume that all or any part of our resources will ever beconverted into reserves which qualify as 'proven and probable reserves' for thepurposes of the SEC's industry guide number 7. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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