5th May 2005 07:01
Randgold Resources Ld05 May 2005 RANDGOLD RESOURCES LIMITEDIncorporated in Jersey, Channel IslandsReg. No. 62686LSE Trading Symbol: RRSNasdaq Trading Symbol: GOLD REPORT FOR THE QUARTER ENDED 31 MARCH 2005* Strong year on year improvement in operating results* Net profit of US$12 million for the quarter* Loulo approaches Phase 1 commissioning* Significant growth in attributable resources on the back of Loulo deep drilling* Exploration defines new targets in Senegal and Burkina Faso CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Unaudited quarter quarter quarter ended ended ended 31 Mar 31 Dec 31 MarUS$000 2005 2004 2004 Gold sales revenue 31 986 33 675 15 274Cost of salesProduction costs 10 839 9 457 8 768Transport and refinery costs 67 93 52Transfer from/(to) deferred stripping 209 307 (2 388)Cash operating costs* 11 115 9 857 6 432Royalties 2 162 2 499 1 079Total cash costs* 13 277 12 356 7 511Profit from mining activity* 18 709 21 319 7 763Depreciation and amortisation 2 595 1 871 2 421Exploration and corporate expenditure 5 536 4 739 3 016Profit from operations* 10 578 14 709 2 326Interest received 325 269 292Interest expense (345) (349) (465)Gain/(loss) on financial instruments - 680 (5 847)Other income and (expenses) 1 850 363 (1 174)Share-based payments(S) (288) (288) (172)Profit on ordinary activities before taxes and minority interests 12 120 15 384 (5 040)Income tax - - -Minority shareholders' interest - - -Net profit/(loss) 12 120 15 384 (5 040)Basic earnings per share (US$) 0.20 0.26(S) (0.09)+(S)Fully diluted earnings per share (US$) 0.20 0.25(S) (0.09)+(S)Average shares in issue (000) 59 394 59 212 58 524 The results have been prepared in accordance with International FinancialReporting Standards (IFRS). * Refer to other financial measures provided on page 3. + Reflects adjustments resulting from sub-division of shares. (S) Reflects adoption of IFRS 2: Share-based payment. CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited 3 months 3 months ended ended 31 Mar 31 MarUS$000 2005 2004Profit/(loss) on ordinary activities before taxation and minority interest 12 120 (5 040)(S)Adjustment for non-cash items 3 220 7 740(S)Working capital changes (18 557) (2 136)Net cash (utilised)/generated from operations (3 217) 564Net cash utilised in investing activities (21 116) (8 479)Net cash generated by financing activities Ordinary shares issued 547 13 Movement on financial instruments - (1 308) Increase/(decrease) in long-term borrowings 14 972 (381) Increase in bank overdraft - 185Net decrease in cash and cash equivalents (8 814) (9 406)Cash and cash equivalents at beginning of period 78 240 105 475Cash and cash equivalents at end of period 69 426 96 069 (S) Reflects adoption of IFRS 2: Share-based payment. CONSOLIDATED BALANCE SHEET Unaudited Audited Unaudited at 31 Mar at 31 Dec at 31 MarUS$000 2005 2004 2004 AssetsNon-current assetsProperty, plant and equipment 148 375 129 854 78 874Cost 172 755 151 639 183 668Accumulated depreciation and amortisation (24 380) (21 785) (104 794)Deferred stripping costs 8 394 8 514 7 488Long-term ore stockpiles 16 857 12 054 8 203Total non-current assets 173 626 150 422 94 565Current assetsDeferred stripping costs 6 281 6 370 5 602Inventories and stockpiles 8 658 9 762 8 341Receivables 33 549 23 667 14 219Cash and equivalents** 69 426 78 240 99 957Total current assets 117 914 118 039 128 119Total assets 291 540 268 461 222 684Total shareholders' equity 205 814 191 169 172 332Non-current liabilitiesLong-term borrowings 55 798 40 718 7 487Loans from minority shareholders in subsidiaries 1 498 1 621 958Deferred financial liabilities 13 978 15 668 13 027Provision for environmental rehabilitation 3 829 3 701 5 946Total non-current liabilities 75 103 61 708 27 418Current liabilitiesAccounts payable and accrued liabilities 10 623 15 584 21 199Bank overdraft - - 1 735Total current liabilities 10 623 15 584 22 934Total equity and liabilities 291 540 268 461 222 684 ** Note: These amounts include US$3 888 at 31 March 2004 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$000Balance - 31 Dec 2003 29 260 385 2 926 200 244Jan - Mar 2004Net loss - - -Share-based payments - - -Movement on cash flow hedges - - -Share options exercised 3 000 - 13Balance - 31 Mar 2004 29 263 385 2 926 200 257Balance - 31 Dec 2004 59 226 694 2 961 102 342Jan - Mar 2005Net profit - - -Share-based payments - - -Movement on cash flow hedges - - -Share options exercised 176 800 9 538Balance - 31 Mar 2005 59 403 494 2 970 102 880 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY cont'd Other Accumulated Total reserves profits equity US$000 US$000 US$000Balance - 31 Dec 2003 (7 403) (18 580) 177 187Jan - Mar 2004Net loss - (5 040)(S) (5 040)(S)Share-based payments 172(S) - 172(S)Movement on cash flow hedges - - -Share options exercised - - 13Balance - 31 Mar 2004 (7 231)(S) (23 620)(S) 172 332Balance - 31 Dec 2004 (14 747)(S) 100 613(S) 191 169Jan - Mar 2005Net profit - 12 120 12 120Share-based payments 288(S) - 288(S)Movement on cash flow hedges 1 690 - 1 690Share options exercised - - 547Balance - 31 Mar 2005 (12 769) 112 733 205 814 * 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. * 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 AcceptedAccounting Principles in the United States (US GAAP). The effect of applying USGAAP to net income and shareholders' equity is set out in the following table: 3 months 3 monthsReconciliation of net income 31 Mar 31 Mar(US$000) 2005 2004Net income under IFRS 12 120 (5 040)(S)Change in accounting principle, net of tax (adoption of IFRS 2) 288 172Share option compensation adjustment (979) 1 022Development costs* (1 431) -Net income under US GAAP 9 998 (3 846)Movement in cash flow hedges during the period 1 690 -Comprehensive income under US GAAP 11 688 (3 846)Basic earnings per share under US GAAP (US$) 0.17 (0.07)+Fully diluted earnings per share under US GAAP (US$) 0.16 (0.07)+Reconciliation of shareholders' equity (US$000)Shareholders' equity under IFRS 205 814 172 332Shareholders' equity under US GAAP 205 814 172 332Roll forward of shareholders' equity under US GAAP (US$000)Balance as at 1 January 2005 191 169 177 187Net income under US GAAP 9 998 (3 846)Movement on cash flow hedges 1 690 -Share options exercised 547 13Share option compensation adjustment 979 (1 022)Development costs* 1 431 -Shareholders' equity under US GAAP at 31 March 2005 205 814 172 332 + Reflects adjustments resulting from sub-division of shares. * Drilling costs of US$1.4 million relating to the underground developmentstudy at Loulo have been capitalised under IFRS. Under US GAAP, these costs maynot be capitalised since they do not relate to the addition of reserves asdefined in SEC Industry Guide 7. (S) Reflects adoption of IFRS 2: Share-based payment. 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. 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. 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$0.3 million in the current quarter and acharge of US$0.9 million for the year ending 31 December 2004. FINANCIAL INSTRUMENTS No further hedging has been carried out this quarter. The group's hedging position which all relates to the Loulo Project financing,remains as follows: Forward sales Forward salesMaturity date ounces price US$/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 production at Loulo for the periodthat the project finance is in place. The financial instruments are a matchedhedge and any movements in marked-to-market valuation are accounted for in theother comprehensive income reserve. Morila's production is completely exposed to spot gold prices. COMMENTS Profit from mining activity for the current quarter of US$18.7 million wassubstantially up from the corresponding quarter in 2004 and down US$2.6 millionfrom the previous quarter. This was mainly as a result of a decrease inthroughput this quarter and the high grades mined last quarter, partially offsetby higher gold prices achieved at US$428/oz compared to US$410/oz. Production costs include an accounting adjustment which arises from ouncesproduced but not sold at the end of the fourth quarter 2004. Related revenuesand costs have been brought into this quarter's results in line with ouraccounting policy. The costs incurred in the quarter, before this adjustment,are in line with the previous quarter. Net profit for the current quarter of US$12.1 million compares favourably to theUS$20.1 million reported for the entire 2004 year. Depreciation of US$2.6 million for the current quarter reflects an increase overthe previous quarter's US$1.9 million due to asset adjustments made at Morilawhich affected the December 2004 quarter. Exploration and corporate expenditure is higher than usual in the quarter due toextensive drilling and the payment of annual bonuses. The other income of US$1.9 million in the current quarter reflects thecorrection of previous misallocations at Morila. The main balance sheet movements for the quarter ended 31 March 2005 areincreases in property, plant and equipment, which represents the costs incurredon the development of the Loulo Mine, and increased receivables which is mainlydue to payments in advance relating to the Loulo construction contract. The decrease in cash and equivalents is attributable to the funding of the LouloProject. Increases in long-term borrowings results from the draw down in thequarter of US$15 million from the Loulo Project loan. US$10 million remains tobe drawn. The decrease in accounts payable and accrued liabilities results from thereversal of Morila provisions which are no longer required. The financial instruments liability decreased to US$14 million which reflectsthe marked-to-market valuation of the hedged ounces at 31 March 2005 at a spotprice of US$428/oz. Working capital changes on the cashflow statement reflect an increase in advancepayments related to the Loulo construction contract, as well as a sharp decreasein the Morila payables. OPERATIONS - MORILA Gold production for the quarter at Morila slightly exceeded that planned andamounted to 167 272 ounces at a total cash cost of US$198/oz. Plant throughputwas disappointing and the total for the quarter was 857 000 tonnes, far short ofthe design capacity of the upgraded plant's 350 000 tonnes per month. Plantthroughput was constrained by operational issues exacerbated by mechanicalfailures as well as the planned re-lining and repairs of the SAG mill. This wasameliorated by the throughput of higher than planned grades. We have beenassured by the operator that no significant negative impact will be caused tothe value of the operation by the early throughput of these higher than plannedgrades. Our senior management is working with our partners, AngloGold Ashantito understand and address the issues of returning the plant to full productioncapacity. A strong focus is also being maintained on controlling costs. Morila results Quarter Quarter Quarter ended ended ended 31 Mar 31 Mar 31 DecUS$000 2005 2004 2004MiningTonnes mined (000) 7 815 6 605 7 820Ore tonnes mined (000) 1 646 887 2 209MillingTonnes processed (000) 857 795 1 012Head grade milled (g/t) 6.6 4.9 7.5Recovery (%) 92.4 86.0 92.6Ounces produced 167 272 107 115 226 679Average price received (US$/oz) 428 369 410Cash operating costs* (US$/oz) 166 160 109Total cash costs* (US$/oz) 198 185 136Cash profit (US$000) 46 773 19 408 53 298Attributable (40%)Ounces produced 66 908 42 846 90 672Cash profit (US$000) 18 709 7 763 21 319 * Refer to other financial measures provided on page 3. PROJECTS AND EVALUATION Loulo Gold Mine Project Construction continues apace with the arrival on site of the first ball mill.The mill will be installed in position this month in line with the goldproduction target of July. Given the critical stage of the project, we havetaken over more of the detailed logistical and procurement management from ourmain contractor at Loulo. Material deliveries are now coming in steadily andsite manpower numbers have been increased to achieve our deadlines. Freightingof goods to site has become the critical path. Plant steelwork erection isprogressing with the initial focus on Phase 1 oxide completion. Current focusis also on the construction earthworks programmes at the water storage dam andthe tailings storage facility, ahead of commissioning and the annual rains.Preparations for the rainy season have commenced with the upgrading of the mainaccess road to the site. With the start-up of mining operations last quarter and the build-up of ouroperating personnel, the occupation of the permanent accommodation at the minevillage, as well as our mine offices has commenced. On the operation side the ROM pad is still being constructed using wastestripped from the Loulo 0 pit. Mining focus will shift next month to the Yaleapit to advance the mining of the soft ore at Yalea ahead of the plantcommissioning. Site clearing operations at Yalea are complete and the haul roadto the plant from Yalea is nearing completion. Loulo Resource Update and Underground Development Study The Yalea resource has been updated including all advanced grade control, infilland deep drilling results to December 2004. The total Yalea resource now standsat 34.10Mt at 4.74g/t for 5.2 Moz, bringing the total Loulo resource to 8.04Mozs. The Yalea orebody was remodeled in agreement with SRK Consulting, betterdelineating the high-grade area. Underground mine design, planning andscheduling is presently underway using the updated model and results of thegeotechnical studies. Ore reserves have also increased at Loulo to 1.85 millionounces, based on new US$375 pit designs. Optimisation of the pit - undergroundinterface is currently underway. At the same time deep drilling programmes to depths of 800 metres below surfaceare in progress to further define the extent of the higher grade areas as wellas providing more information to assist with stope layout and design. At Yalea, nine deep drillholes were completed of which three form part of a 10drilhole programme extending over 1 000 metres of strike at depths between 500metres and 800 metres below surface targeting the depth extent of the northerndeep high-grade zone. These three drillholes confirmed the continuity of thehigh-grade mineralised structure to a depth of 780 metres below surface albeitthinner than shallower intersections. These results confirm our model of an "Obuasi style" dilationary payshoot geometry. At Loulo 0, six deep drillholes were completed and confirmed the over-fold atdepth as well as indicating potential for the development of extensions toexisting payshoots. Results from the north of the orebody have indicated thepresence of high-grade material with intercepts of L0CP54: 8 metres at 17.27g/t,L0CP58: 4.95 metres at 11.35g/t and L0CP59: 9.87 metres at 7.54g/t beingobtained. Further drilling is planned in this area to delineate the extent andcontinuity of this high-grade material. Inter- section Grade SelectedHole ID From To width (m) (g/t) unit*YALEAYDH194 432.55 448.50 15.8 5.72 5.98m @ 7.90g/t 10.45 4.55m @ 8.80g/tYDH195 405.50 408.40 2.90YDH226 437.50 464.27 26.77 2.74 8.05m @ 6.53g/tYDH227 396.55 419.20 22.65 3.37 13.85m @ 5.15g/tYDH196 596.00 625.50 29.50 3.46 3.20m @ 8.71g/tYDH197 398.10 407.00 8.90 4.45 4.10m @ 6.13g/tYDH198 433.08 437.07 3.99 1.68 455.65 459.06 3.41 1.62YDH192 788.00 794.00 6.00 4.62 1.00m @ 14.50g/t 799.00 806.00 7.00 1.00 1.00m @ 3.18g/tYDH193 765.64 770.43 4.79 3.17 0.83m @ 12.20g/tYDH184 899.96 901.80 1.84 4.73 0.80m @ 8.85g/tLOULO 0L0CP55 266.00 277.78 11.78 1.90 277.78 284.04 dolerite 284.04 295.53 11.49 2.10 2.08m @ 6.28g/tL0CP56 - - - Did not intersectL0CP57 340.12 342.44 2.32 1.51 345.80 348.50 2.70 1.78L0CP54 350.20 365.60 15.40 9.17 8.00m @ 14.27g/tL0CP58 496.00 502.50 6.50 4.37 0.83m @ 14.80g/t 520.20 525.15 4.95 11.35 1.62m @ 29.47g/tL0CP59 533.00 542.87 9.87 7.54 3.08m @ 16.31g/tL0CP61 619.06 627.00 7.94 2.43 5.00m @ 3.41g/tL0CP60 605.94 621.20 15.26 2.91 3.20m @ 6.44g/t * Selection based on geology and grade Results from the underground development study which is being led by SRKConsulting are expected by the end of the June quarter. Tongon Project A new agreement has been reached by all parties involved in the Cote d'Ivoireconflict. Whilst awaiting implementation of the agreement, we will continue tomonitor the situation and are currently updating the prefeasibility work carriedout to date with a view to rapid commencement of exploration and feasibilityactivities when the situation allows. EXPLORATION ACTIVITIES During the quarter exploration activities advanced on all project areasthroughout both West and East Africa. At Loulo five drill rigs were in operation, three diamond core rigs testing theorebodies of Yalea and Loulo 0, an RC rig completing advanced grade control anda RAB rig testing targets within the resource triangle. In addition to theresource conversion and underground development drilling a dedicated brownfieldsexploration team has been established to better focus on the upside potential ofnot only the permit but the whole of the Kedougou - Kenieba Inlier, coveringWestern Mali and Eastern Senegal. In the north of the permit further work was carried out at PQ10 North, Far NorthWest and Baboto West with trenching, pitting, mapping and follow-up RAB underwayto test the potential of these targets. Results have returned up to 40 metrewide zones of plus 100ppb anomalism surrounding mineralised intersections of 6metres at 3g/t. In the south of the permit, geological validation and groundtruthing is in progress at Faraba, where trenching along a 4 kilometre soilanomaly has returned 24 metres at 4.32g/t and 26 metres at 3.34g/t. Theseresults are associated with north-south gossanous shears. At P64 previousdrilling returned 28 metres at 3.20g/t and 35.50 metres at 8.85g/t coincidentwith a folded and faulted quartz tourmaline unit, which has similarities toLoulo 0. On the Selou permit, south of the exploitation lease, work hasidentified multiple north-south shears coincident with a 1.8 kilometre soilanomaly. Rock chip samples have returned values up to 40.6g/t and RAB drillingis currently in progress. In southern Mali at Morila, exploration has concentrated around the pit withinfill drilling in the Morila Shear Zone Extension now providing the necessarydata for a full resource estimate, pit optimisation and detailed mine plan.Further drilling has enhanced and better defined the Samacline target, while apermit scale exploration initiative is underway to identify additional drilltargets. In the Morila region a generative study has highlighted several targetareas with the potential for flat lying bedding/foliation, similar to Morila.However a lack of outcrop and therefore structural data results in large gaps inthe understanding of the area and a programme of diamond drilling will commenceshortly. In Senegal, six targets out of a total of 32 have now been the subject ofreconnaissance drilling and have intersected an array of different styles ofmineralisation from shear zone, through quartz vein type to intrusive related.The most advanced of these targets is Sofia where gold mineralisation has beenconfirmed over a strike of 3 400 metres. Mineralisation locates within a widehydrothermally altered shear zone at the contact with a highly magneticultramafic unit. The broad mineralised zone is up to 44 metres in width withdrill hole intercepts from six metres at 9.5g/t to 44 metres at 2g/t. In Burkina Faso, a three hole reconnaissance diamond drilling programme has beencompleted along a two kilometre segment of an overall 4.5 kilometre northeasttrending mineralised structure within the Kiaka permit. Results from thesouthern part indicate a thin mineralised zone albeit with moderate to highgrades. To the north, where the zone is open along strike, we have outlined abroad zone with generally a lower tenor of mineralisation. Furtherreconnaissance drilling is planned to explore the three kilometres stilluntested. In Ghana, the Adansi Asaasi joint venture was terminated and efforts continue ona generative study of the country to identify areas of interest for permitapplications, joint ventures and/or acquisitions. In Tanzania, reconnaissance exploration has concentrated on understanding thegeology and structural architecture of both the Mara and Musoma GreenstoneBelts. Previously work has focused on former colonial mines and known goldshowings which, in the majority of cases are narrow quartz vein systems. Thesurface regolith cover is complex with transported laterites, stripped profiles,recent lake sediments and volcanic ash which all impact on surface exploration.We are focussing on identifying the key geological features in the mineralisingenvironment and ensuring that our exploration remains guided by these. ANNUAL RESOURCES AND RESERVE DECLARATION Annual ore resources have increased significantly year on year and totalattributable resources now stand at 10.02 million ounces in the measured,indicated and inferred categories compared with 7.95 million ounces as at theend of 2003. The major contributor to this increase has been at Loulo wheredeep drilling of the underground extensions to the Yalea orebody has led to atotal resource inventory increase from 5.32 million ounces to a total of 8.04million ounces this year. Exploration at Morila was also successful inpartially replacing ore depleted by mining. Ore reserves have increased at Loulo from the 1.42 million ounces announced lastyear to a total of 1.85 million ounces and of this, proved ore reserves amountto 88% of the total. Annual Resource and Reserve declaration (at 31 December 2004) Attribut- Tonnes Grade Gold able GoldCategory (Mt) (g/t) (Mozs) (Mozs)Mineral ResourcesMorilaMeasured and Indicated 29.28 3.20 3.01 1.20Inferred 4.47 3.79 0.54 0.22Sub-totalMeasured, Indicated and Inferred 33.75 3.28 3.55 1.42LouloMeasured and Indicated 23.34 3.95 4.21 3.37Inferred 26.31 4.53 3.83 3.06Sub-totalMeasured, Indicated and Inferred 59.48 4.20 8.04 6.43TongonSub-totalInferred 34.00 2.65 2.89 2.17Total ResourcesMeasured and Indicated 52.62 4.27 7.22 4.57Inferred 64.79 3.49 7.27 5.45Measured, Indicated and Inferred 117.41 3.84 14.49 10.02Ore ReservesMorilaProved and Probable 25.79 3.11 2.58 1.03LouloProved and Probable 15.18 3.78 1.85 1.48Total Ore ReservesProved and Probable 40.97 3.36 4.42 2.51 * Randgold Resources reports its mineral resources and ore reserves inaccordance with the JORC code. The reporting of ore reserves is also inaccordance with Industry Guide 7. * Reserves are calculated at a gold price of US$375/oz. * Dilution and ore loss are incorporated into the calculation of reserves. * Cautionary note to US investors: The United States Securities and ExchangeCommission (the "SEC") permits mining companies, in their filings with the SEC,to disclose only those mineral deposits that a company can economically andlegally extract or produce. We use certain terms in this annual report, such as"resources" that the SEC guidelines strictly prohibit us from including in ourfilings with the SEC. PROSPECTS The company remains on track to achieve its announced production targets. It iswell-funded to complete the capital project at Loulo and invest in its futuregrowth. Whilst production of first gold at Loulo is an important milestone, thesuccessful commissioning of both oxide and sulphide phases of the project andproduction ramp-up to design throughput, remain our key focus for the next threequarters. The company continues to evaluate various opportunities both atcorporate and project levels, however it remains focused on generating its ownopportunities through an aggressive exploration and generative programme,concentrating on Africa's key gold belts. D M Bristow R A WilliamsChief Executive Financial Director 5 May 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 2003, which was filedwith the United States Securities and Exchange Commission (the 'SEC') on 30 June2004. 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. 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 part of our resources willever be converted into reserves which qualify as 'proven and probable reserves'for the purposes of the SEC's industry guide number 7. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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