6th Feb 2007 10:00
Randgold Resources Ld06 February 2007 RANDGOLD RESOURCES LIMITEDIncorporated in Jersey, Channel IslandsReg. No. 62686LSE Trading Symbol: RRSNasdaq Trading Symbol: GOLD ARE GOLD PRODUCERS DEVELOPING OR EXPLOITING? Cape Town, 6 February 2007 - Is the gold industry being buoyed up byspeculative sentiment rather than by the creation of real value? RandgoldResources chief executive Mark Bristow asked the Mining Indaba here today. Bristow said the growth in the industry's market capital was attributable tomergers and acquisitions at the top end and a flurry of new listings at thebottom. Many producers were apparently concentrating on the exploitation ofmarket opportunities rather than the development of profitable businesses, whileinvestors were largely focused on the short term. Despite the spectacular rise in the gold price, the industry's modest profitmargin had not increased at the same rate because cash costs had also increasedsharply, and due to a lack of exploration investment, the new gold supply wasstatic and possibly declining. There was therefore no strong underlying supportfor the present value of the market. Bristow noted that of Africa's "big six" gold mines developed since 1995, onlythree had as yet generated real returns. "Because we're in a bull market which rewards production rather than profits,nobody is focusing too much on this financial underperformance but ultimatelyit's not a sustainable situation. Stakeholders expect rewards and theirpatience is not infinite. When host governments, for example, see that minesare not producing the promised profits, and therefore not paying the anticipatedtaxes, it prompts them to tax through royalties," he said. "Successful operations support profitability, and profitability in turn supportssustainability. We don't manage Randgold Resources with one eye on the nextquarter and the other on the whims of the market - we manage it for thelong-term benefit of all its stakeholders. The question remains: are we as anindustry building profitable businesses or are we merely exploiting short-termopportunities. For Randgold Resources the answer is clear: we've built and wecontinue to build." Randgold Resources discovered and developed the world-class Morila and Loulodeposits in Mali. Its Tongon project in the Cote d'Ivoire is currently atbankable feasibility stage. RANDGOLD RESOURCES ENQUIRIES: Chief Executive Financial Director Investor & Media RelationsDr Mark Bristow Roger Williams Kathy du Plessis+44 779 775 2288 +44 791 709 8939 +27 11 728 4701+223 675 0122 +223 675 0109 Fax: +27 11 728 2547 Cell: +27 83 266 5847 Email: [email protected] Website: www.randgoldresources.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 2005 annual report notes that the financial statements do not reflectany provisions or other adjustments that might arise from the claims and legalprocess initiated by Loulo against MDM. Other potential risks and uncertaintiesinclude risks associated with: fluctuations in the market price of gold, goldproduction at Morila, the development of Loulo and estimates of resources,reserves and mine life. For a discussion on such other risk factors refer to theannual report on Form 20-F for the year ended 31 December 2005 which was filedwith the United States Securities and Exchange Commission (the 'SEC') on 29 June2006. Randgold Resources assumes no obligation to update information in thisrelease. Cautionary note to US investors: the 'SEC' permits companies, in theirfilings with the 'SEC', to disclose only proven and probable ore reserves. Weuse certain terms in this release, such as "resources", that the 'SEC' does notrecognise and strictly prohibits us from including in our filings with the 'SEC'. Investors are cautioned not to assume that all or any parts 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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