3rd Aug 2005 16:40
Randgold Resources Ld03 August 2005 RANDGOLD RESOURCES LIMITEDIncorporated in Jersey, Channel IslandsReg. No. 62686LSE Trading Symbol: RRSNasdaq 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 JunUS$000 2005 2005 2004 Gold sales revenue 27 963 31 986 12 200Cost of salesProduction costs 6 953 10 839 8 243Transport andrefinery costs 62 67 46Transfer todeferred strippingcosts 2 664 209 (580)Cash operating costs* 9 679 11 115 7 709Royalties 1 959 2 162 863Total cash costs* 11 638 13 277 8 572Profit from miningactivity* 16 325 18 709 3 628Depreciation andamortisation 2 307 2 595 2 286Exploration andcorporateexpenditure 4 558 5 536 4 171Profit/(loss) fromoperations* 9 460 10 578 (2 829)Interest received 364 325 230Interest expense (300) (345) (455)Profit on financialinstruments - - 7 653Profit on sale of Syama - - 7 070Other (expenses)and income (1 577) 1 850 6Share-based payments(S) (825) (288) (175)Profit on ordinaryactivities beforetaxes and minorityinterests 7 122 12 120 11 500Income tax - - -Minority shareholders'interest - - -Net profit 7 122 12 120 11 500Basic earningsper share (US$) 0.12 0.20 0.20(S)Fully diluted earningsper share (US$) 0.11 0.20 0.20(S)Average sharesin issue (000) 59 481 59 394 58 547 CONSOLIDATED INCOME STATEMENT (continued) Unaudited Unaudited 6 months 6 months ended ended 30 Jun 30 JunUS$000 2005 2004 Gold sales revenue 59 949 27 474Cost of salesProduction costs 17 792 17 011Transport and refinery costs 129 98Transfer to deferred strippingcosts 2 873 (2 968)Cash operating costs* 20 794 14 141Royalties 4 121 1 942Total cash costs* 24 915 16 083Profit from mining activity* 35 034 11 391Depreciation and amortisation 4 902 4 707Exploration and corporateexpenditure 10 094 7 187Profit/(loss) from operations* 20 038 (503)Interest received 689 522Interest expense (645) (920)Profit on financial instruments - 1 806Profit on sale of Syama - 7 070Other (expenses) and income 273 (1 168)Share-based payments(S) (1 113) (347)Profit on ordinary activitiesbefore taxes and minorityinterests 19 242 6 460Income tax - -Minority shareholders' interest - -Net profit 19 242 6 460Basic earnings per share (US$) 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 JunUS$000 2005 2004 Profit on ordinary activitiesbefore taxation andminority interest 19 242 6 460Adjustment for non-cash items 14 060 (9 485)Working capital changes (17 494) 1 779Net cash generated/(utilised)by operations 15 808 (1 246)Net cash utilised in investingactivities 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 571Net cash generated byfinancing activities Ordinary shares issued 637 58 Increase/(decrease) in long-term borrowings 28 439 (9 162)Net decrease in cash andcash equivalents (21 684) (22 339)Cash and cash equivalentsat beginning of period 78 240 105 475Cash and cash equivalentsat end of period 56 556 83 136 CONSOLIDATED BALANCE SHEET Unaudited Audited Unaudited at at at 30 Jun 30 Dec 30 JunUS$000 2005 2004 2004AssetsNon-current assetsProperty, plant andequipment 178 449 129 854 89 891Cost 205 136 151 639 103 977Accumulated depreciationand amortisation (26 687) (21 785) (14 086)Deferred strippingcosts 6 871 8 514 8 301Long-term orestockpiles 23 813 12 054 8 669Total non-currentassets 209 133 150 422 106 861Current assetsDeferred strippingcosts 5 140 6 370 6 211Inventories andstockpiles 10 089 9 762 5 272Receivables 41 949 23 667 16 907Cash and equivalents 56 556 78 240 83 136Total current assets 113 734 118 039 111 526Total assets 322 867 268 461 218 387Total shareholders'equity 213 800 191 169 186 428Non-current liabilitiesLong-term borrowings 68 755 40 718 7 439Loans from minorityshareholders insubsidiaries 1 487 1 621 1 343Deferred financialliabilities 14 030 15 668 4 680Provision forenvironmentalrehabilitation 8 872 3 701 3 552Total non-currentliabilities 93 144 61 708 17 014Current liabilitiesAccounts payableand accruedliabilities 15 923 15 584 14 945Total currentliabilities 15 923 15 584 14 945Total equity andliabilities 322 867 268 461 218 387 The results have been prepared in accordance with International FinancialReporting 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$000Balance -31 December 2003 29 260 385 2 926 200 244March 2004 quarterNet loss - - -Share-based payments - - -Share options exercised 3 000 - 13Share split (a) 29 263 385 - -Capital reduction (b) - - (100 000)June 2004 quarterNet profit - - -Share-based payments - - -Movement on cash flow hedges - - -Share options exercised 20 600 1 44Balance -30 June 2004 58 547 370 2 927 100 301Balance -31 December 2004(as previouslyreported) 59 226 694 2 961 102 342Adoption of IFRS2share-based payments - - -Balance -31 December 2004 59 226 694 2 961 102 342March 2005Net profit - - -Share-based payments - - -Movement on cash flow hedges - - -Share options exercised 176 800 9 538June 2005Net profit - - -Share-based payments - - -Movement on cash flow hedges - - -Share options exercised 35 400 2 88Restricted sharesissued as remuneration # 161 735 8 -Treasury sharesheld by company # (107 825) (5) -Shares vested # - - 735Balance -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$000Balance -31 December 2003 (7 403) (18 580) 177 187March 2004 quarterNet loss - (5 040)(S) (5 040)(S)Share-based payments - 172(S) 172(S)Share options exercised - - 13Share split (a) - - -Capital reduction (b) - 100 000 -June 2004 quarterNet profit - 11 500(S) 11 500(S)Share-based payments 175(S) - 175(S)Movement on cashflow hedges 2 376 - 2 376Share optionsexercised - - 45Balance -30 June 2004 (4 680)(S) 87 880(S) 186 428Balance -31 December 2004(as previouslyreported) 15 668 101 534 191 169Adoption of IFRS2share-based payments 1 321 (1 321) -Balance -31 December 2004 (15 668)(S) 101 534(S) 191 169March 2005Net profit - 12 120 12 120Share-based payments 288 - 288Movement on cashflow hedges 1 690 - 1 690Share optionsexercised - - 547June 2005Net profit - 7 122 7 122Share-based payments 823 - 823Movement on cashflow hedges (52) - (52)Share optionsexercised - - 90Restricted sharesissued asremuneration # - - 8Treasury sharesheld 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 ofthe ordinary shares of US$0.10 in the company into two ordinary shares ofUS$0.05 each. 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. # Restricted shares were issued to directors as remuneration. Of theseshares, only 53 910 have vested, while the remainder of the shares are stillheld by the company as treasury shares. The US$0.7 million represents the costsof 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 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, includemine 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 AcceptedAccounting Principles in the United States (US GAAP). The effect of applying USGAAP to net income and shareholder's equity is set out below. 6 months 6 months 30 June 30 JuneReconciliation of net income(US$000) 2005 2004Net income under IFRS 19 242 6 460Share-based payment compensation# 637 1 622Development costs* (3 186) -Net income under US GAAP 16 693 8 082Movement in cash flow hedgesduring the period 1 638 2 376Comprehensive income underUS GAAP 18 331 10 458Basic earnings per share underUS GAAP (US$) 0.28 0.14Fully diluted earnings per shareunder US GAAP (US$) 0.27 0.14Shareholders' equity underIFRS 213 800 186 428Development costs* (7 102) -Shareholders' equity underUS GAAP 206 698 186 428 * Drilling costs of US$3.2 million relating to the underground developmentstudy 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 tothe addition of reserves as defined in SEC Industry Guide 7. # 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. 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$1.1 million for the six months ended 30June 2005 and a charge of US$1.3 million for the year ending 31 December 2004. FINANCIAL INSTRUMENTS No further ounces have been hedged during this quarter. The group's hedging position which all relates to the Loulo project financing,was as follows at 30 June 2005: Forward Forward Sales salesMaturity date Ounces US$/ozDecember 2005 12 504 430December 2006 93 498 431December 2007 103 500 435December 2008 80 498 431December 2009 75 000 430Total 365 000 432 This represents approximately 36% of planned open pit production at Loulo forthe period that the project finance is in place. The financial instruments area matched hedge and any movements in marked-to-market valuation are accountedfor 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 thecomparative period ended June 2004 improved by 208%, mainly as a result ofincreased revenues from higher grades and better recoveries. The lowerrecoveries in 2004 were due to the commissioning of the plant expansion atMorila in 2004. The quarter on quarter decrease in profit from mining isattributable to higher ounces sold in the March quarter resulting from salesfrom gold that was in inventory at December 2004. Profit from mining activity for the current quarter of US$16.3 million wassignificantly higher than the corresponding quarter in 2004 and down US$2million from the previous quarter. Production costs of US$6.9 million in the current quarter were down compared tothe quarter ended 31 March 2005 mainly as a result of an over provision fordiesel consumption at Morila in the previous quarter which was corrected in thecurrent quarter. Exploration and corporate expenditure for the six months is US$10 million, upfrom US$7 million for the corresponding period in 2004 and is a reflection ofincreased exploration activity in 2005, particularly drilling. The other expenses of US$1.6 million in the current quarter relate to thecorrection of a previous misallocation at Morila. Main balance sheet movements for the quarter ended 30 June 2005 are increases inproperty, plant and equipment, which relate to costs incurred on the developmentof 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 tothe Loulo construction contract to ensure that the contract stays on track. Aprovision for the Loulo closure cost obligation and matching closure cost assethas also been recognised. The decrease in cash and cash equivalents also relates to the continued fundingof the Loulo project. Increases in long-term borrowings result from thedrawdown of the Loulo project finance loan amounting to US$15 million in thefirst quarter and a further US$10 million in the second quarter, as well as apartial draw down on the Caterpillar finance facility. The Loulo projectfinance loan is now fully drawn. Working capital changes on the cash flow statement reflect an increase in theore stockpile balance at Morila, in line with the mine plan, as well as anincrease in receivables such as reimbursable fuel duties at Loulo. Thefinancing 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 themine to full production capacity. The strategy has been to achieve consistentsustainable production and by the end of the quarter this approach appeared tobe producing the desired results with plant throughput rising by almost 100 000tonnes over the quarter, which is a 12% increase quarter on quarter. Goldproduced for the quarter of 165 359 ounces, was in line with forecast and wasonly slightly lower than the previous quarter when higher grades were fed to themill. Costs continue to be a concern and we are monitoring this very closely. Quarter Quarter Quarter Ended ended ended 30 June 31 Mar 30 JuneUS$000 2005 2005 2004Morila ResultsMiningTonnes mined (000) 6 964 7 815 5 261Ore tonnes mined (000) 2 002 1 646 889MillingTonnes processed (000) 951 857 867Head grade milled (g/t) 5.9 6.6 3.8Recovery (%) 92.0 92.4 80.0Ounces produced 165 359 167 272 85 081Average price received(US$/ounce) 430 428 332Cash operating costs*(US$/ounce) 146 166 213Total cash costs*(US$/ounce) 176 198 238Cash profit (US$000) 40 813 46 773 9 070Attributable (40%)Ounces produced 66 144 66 908 34 032Ounces sold 65 030 74 731 35 026Cash profit (US$000) 16 325 18 709 3 628 (continued) 6 Months 6 Months ended ended 30 June 30 JuneUS$000 2005 2004Morila ResultsMiningTonnes mined (000) 14 779 11 886Ore tonnes mined (000) 3 612 1 776MillingTonnes processed (000) 1 808 1 662Head grade milled (g/t) 6.2 4.3Recovery (%) 92.2 83.2Ounces produced 332 631 192 196Average price received(US$/ounce) 427 360Cash operating costs*(US$/ounce) 156 183Total cash costs*(US$/ounce) 187 208Cash profit (US$000) 87 585 28 478Attributable (40%)Ounces produced 133 052 76 878Ounces sold 139 761 76 411Cash 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 unionofficials, talks have continued to resolve the situation. At the time of goingto print, a settlement had been proposed. Production forecasts have not beenmaterially affected because of the availability of significant full grade orestockpiles on the run of mine pad. The operator of the mine, AngloGold Ashanti, through its subsidiary Anser, hasundergone a re-structuring and major staff changes have been implemented. Anindependent CEO has been appointed at Morila, answering directly to the MorilaSA Board. Loulo Gold Mine Construction The Loulo mine Phase I development made steady progress over the quarter withthe initiation of dry commissioning of certain items. The various phases ofcommissioning (dry, wet and finally, the feeding of low-grade ore) are expectedto progress through end July - August. The commissioning programme will runinto August because of delays experienced with break-bulk shipping schedules inJune and early July. The early onset of rains and associated constructionissues necessitated the rescheduling of the Gara River dam wall and diversionearthworks. This is not expected to significantly impact on the Phase Icommissioning and in turn has allowed the focus to remain on the completion ofthe tailings storage facility which is critical to complete before the onset ofproduction. The oxide crushing circuit is 95% complete and dry commissioning of this part ofthe plant has commenced. The first feed conveyor is complete ahead of schedule.Attention has focussed on the milling circuit and with mills and associatedcyclone clusters installed, the installation of girth gears, gear boxes and millmotors are scheduled through July, which will allow both mills to becommissioned on oxide material and enhance the oxide processing capacityallowing the mine to meet its production build up to year end. The commissioning of the carbon in leach circuit will commence in the last weekof July. Final process water storage and supply remains on a critical path withsome temporary piping and pumping measures required again due to the latearrival of certain freight. To ensure the commissioning programme starts inJuly, certain items have been air-freighted to site. All 15 Caterpillar generator sets are on site and commissioning of the firstseven engines has commenced ensuring the availability of adequate power supplyfor Phase I. In parallel with the Phase 1 commissioning programme, constructionof the Phase II (hard rock circuit) has started. Infrastructure projectsfocussing on roads, auxiliary facilities, housing and other amenities areadvanced and scheduled to be completed over the rest of the year. Manpower build-up along with the selection and training of people is welladvanced. Operations At Loulo 0 mining activities focussed on building the soft ore run of mine padwith Loulo 0 waste. Advanced grade control drilling at Loulo 0 has beencompleted in the upper 80 metres of the pit. Results show a shallow northerlyplunge to high-grade mineralisation that is parallel to lineations mapped in thehanging wall sediments. Results from below the Garra sediments, immediatelynorth of the pit, indicate moderate mineralisation that could extend the pitsome 50 metres. Mining of the Loulo 0 orebody is scheduled to commencefollowing the completion of the hard rock run of mine pad and ahead of thecommissioning of the Phase II (hard rock) circuit. Until then waste rock willbe 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 toline the run of mine pad and build a low-grade stockpile for commissioning,while the high-grade material was stored separately. Grade control trencheshave been dug to help delineate the ore contacts within the saprolite. Samplingof these trenches has shown the ore/waste contact to be visible and sharp inmost cases. A total of 220 000 tonnes at 4.5g/t for 32 000 ounces wasstockpiled by quarter end. PROJECTS AND EVALUATION Loulo Project Underground Development Study SRK Consulting have completed a study examining the feasibility of mining, astwo operations, the down-dip extensions of the Yalea and Loulo 0 open pitorebodies from underground. The results have exceeded our expectations. The project is robust and has thepotential to add significant mine life and value. Mining method chosen is sub-level open stoping with or without post-filldepending on the grade of the area. The study does not incorporate any datasubsequent 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 followingore reserves form the basis for the current estimates relating to the twounderground operations. Million tonnes Grade MozsYalea 8.40 6.88 1.86Loulo 0 5.14 3.98 0.66Total 13.54 5.81 2.52 Operating costs have been based on a comparison to "mines of this type" withappropriate adjustments for local conditions. Metallurgical testwork hasconfirmed that the deeper ore is no different from the shallower ore and thatthe current plant will be able to process the underground ore. Initial capital estimate to steady state production (4 years) amounts toapproximately US$100 million. Currently the schedule anticipates commencing the decline development in 2006and full production being achieved in 2009. Combined, and on a stand alonebasis, the two underground mines are estimated to produce approximately 1.8 Mozs(recovered) over a 10 year period with production subsequently continuing fromYalea. Work is continuing to optimise the opencast to underground interface andmining schedules. Subsequent to the data cut-off for the underground development study, furtherdrilling was undertaken to both infill and extend the known mineralisation. AtYalea, 20 diamond drillholes were completed of which the results of 13 have beenreceived. Deflections drilled off original holes into the high-grade bonanzamaterial continue to return impressive results. Three holes were drilled belowthe present geological model in the south and central portions of the orebody.These three drillholes confirmed the continuity of the mineralised structure toa depth of 830 metres below surface. However, access to these depths wouldrequire 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 9.29Yalea YDH159w 591.98 597.11 5.13 26.69Yalea YDH215 321.90 325.57 3.67 3.90Yalea YDH188 837.10 839.82 2.72 2.64Yalea YDH229 351.00 371.85 20.85 4.17 9.47m @ 6.27g/tYalea YDH210 240.68 250.35 9.67 2.78 259.80 267.12 7.32 4.72 4.03m @ 5.76g/tYalea YDH211 199.00 205.90 6.90 3.85Yalea YDH219 299.15 302.65 3.50 5.52Yalea YDH214 331.10 333.30 2.20 7.64Yalea YDH218 313.80 330.16 16.36 3.04Yalea YDH216 405.65 425.20 19.55 1.87 4.05m @ 3.18g/tYalea YDH187 923.61 925.36 1.75 3.19Yalea 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 Coted'Ivoire and elections are planned for October 2005. Field work remains on holdand will recommence following peaceful elections. The June 2002 prefeasibility study on Tongon has been updated to reflect currentmarket 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 0.59Southern zone 30.69 2.65 2.61Total 35.98 2.77 3.20 All resources are in the inferred category. A mineable resource has beenestimated 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 apreliminary economic assessment which indicates that the project meets ourhurdle rates for further investment. We have designed a 27 000 metre drilling programme to close the interholespacing to a 50 metre x 50 metre grid which will allow the completion of a finalfeasibility study and production decision within 2 years of re-commencement ofexploration and feasibility activities. EXPLORATION ACTIVITIES Our strategy this field season has been to hunt for new ounces with a focus onidentifying new targets and opportunities. As a result the main emphasis hasbeen on our generative function in west and east Africa. This has led to thecompilation of a new west African GIS (Geographic Information System) studywhich has been cascaded down to a country by country review and targetgeneration exercise. The results of this study have been the acquisition ofseven new permits in three countries (2 021km(2)) and the submission of anadditional 15 applications (9 317km(2)) within five countries. In total, we nowhave a total land package of 11 537km(2) in six African countries and aportfolio of 141 targets. At Loulo, five drill rigs continued to drill. Three diamond core rigs testedYalea, an RC rig completed advanced grade control and a RAB rig tested targetsalong the extensions of the main mineralised structures. In addition to theresource conversion and underground development associated with the knownresources, drilling focus has also been on 'finding the next one' with furtherencouraging results being returned from targets in the south of Loulo (Faraba)and the Selou area (Sinsinko). At Faraba, trench and RAB drilling have so fardelineated 2.5 kilometres of bedrock mineralisation within an overall fourkilometre surface anomaly. Recent RAB results include: 13 metres at 2.17g/t, 27metres 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 shearis developed at the contact between argillaceous quartzite and greywacke. AtSelou, follow-up RAB drilling on a 1.8 kilometre soil anomaly have returnedanomalous values (plus 100ppb) over 30 metre widths, associated with a north -south fault. At P64, a 1.5 kilometre plus 100ppb north northwest soil anomalycharacterises the target. Previous work concentrated on only a 500 metresegment, which contains a weakly tourmalinised greywacke outcrop within theoverall 1.5 kilometre target, where 16 diamond holes and 15 percussion holeswere drilled. This work identified a 145 metre long, strongly mineralised zone. Work has started testing the full 1.5 kilometre anomaly with trenching and RABdrilling, 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 ofmetasediments. To date, three structural corridors intruded by dykes have beenidentified, each with a width of approximately 100 metre and strike of threekilometres with values up to 19g/t from rock chips. In southern Mali, at Morila, further drilling at the Samacline target returnedthe following: SAM009 15 metres at 4.72g/t, SAM012 five metres at 4.33g/t andthree metres at 5.84g/t, SAM014 five metres at 5.13g/t, and SAM019 two metres at6.40g/t. A small high-grade resource has been inferred. However, this isbelieved 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 ofalteration similar to Morila but results received to date have shown nosignificant gold grades. Elsewhere in southern Mali, a generative study has ledto further ground acquisition. In Senegal, work at Bambaraya has identified a wide zone of iron carbonatealteration associated with mineralisation and new trenches 100 metres north and150 metres southwest of the main zone have intersected significantmineralisation (BBTR04: six metres at 1.76g/t, four metres at 5.48g/t and 12metres at 4.06g/t; BBTR06: 12 metres at 2.34g/t). Infill drilling at Sofia hasincreased our knowledge of the target. We see a variation in the mineralisationfrom broad low-grade envelopes to narrow high-grade intercepts along the 3 400metre anomalous corridor. Presently the inter-hole spacing is 400 metres andbetween the best holes drilled in terms of results (44 metres at 2g/t and sixmetres at 9.5g/t), there is a combined strike of 1 600 metres untested. AtTombo, a small low-grade resource has been identified with limited upsidepotential. In addition one new permit has been granted consolidating ourgroundholding around Sabodala. Two further permits have been applied for andnegotiations are being finalised with a Senegalese company on a new jointventure 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 arealies along a regional structure which controls six known deposits containingcombined resources of eight million ounces of gold. Nine applications have beensubmitted, three of which have been granted covering the southern part of thisfault system. In Ghana, work continued on generating new regional targets. As a result,applications have been made for four reconnaissance permits and due diligenceshave been undertaken on a number of joint venture opportunities. In Tanzania, reconnaissance exploration continues both in the Mara and Musomagreenstone belts to understand the geology and structural architecture leadingto the identification of targets. This regional information combined with theacquisition and processing of geophysics over both areas of activity during thelast quarter has enhanced our structural understanding and our ability to focusfollow up work. RAB drill programmes are being motivated to test beneath complexregolith profiles in favourable structural locations. A new permit, BuhembaSouth, 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 isanticipated that the company will meet its announced production targets for theyear. Results from the Loulo underground study confirms the long term growthpotential of the mine. With the updated economic review at Tongon, the company is now properlypositioned to proceed with a planned 'bankable feasibility' programme when thepolitical situation in the Cote d'Ivoire returns to normal. The company continues to evaluate value creating opportunities throughexploration, discovery and development, as well as leverage from acquisitionopportunities. The Company celebrates its 10th anniversary in August 2005. D M Bristow R A WilliamsChief Executive Financial Director 4 August 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 RandgoldResources' current plans, estimates, strategies and beliefs and other statementsthat are not historical facts are forward-looking statements about the futureperformance of Randgold Resources. These statements are based on management'sassumptions and beliefs in light of the information currently available to it.Randgold Resources cautions you that a number of important risks anduncertainties could cause actual results to differ materially from thosediscussed in the forward-looking statements, and therefore you should not placeundue reliance on them. The potential risks and uncertainties include, amongothers, 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 risk factors refer to theannual report on Form 20-F for the year ended 31 December 2004 which was filedwith the United States securities and exchange commission (The 'SEC') on 29 June2005. Randgold Resources sees 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. We usecertain 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 our resourceswill ever be converted into reserves which qualify as 'proven and probablereserves' 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:
Randgold Resources