9th Feb 2006 16:51
Randgold Resources Ld09 February 2006 RANDGOLD RESOURCES LIMITED Incorporated in Jersey, Channel IslandsReg. No. 62686LSE Trading Symbol: RRSNasdaq Trading Symbol: GOLD RANDGOLD RESOURCES UPDATE LOULO PHASE II BACK ON TRACK Delay not expected to affect planned production Despite the disruption caused by a defaulting contractor, the final phase of theLoulo plant will be completed during the second quarter and the delay in thecommissioning of the hard-rock crushing circuit is not expected to impact onthis year's planned gold production from the mine. The plant was originally scheduled for completion by December but in JanuaryRandgold Resources took the project back from contractor MDM and turned it overto its own team. "At that stage we'd already had to intervene on a number of occasions and withincreasing frequency to keep the project on track," says capital projectsmanager John Steele. "Fortunately our team has an enormous breadth and depth ofexperience, having already built two other mines in Mali, so we're comfortablethat it will be relatively plain sailing from here on." MDM has been cooperating, and Randgold Resources has brought in additionalskills to the site, where the project team now numbers some 300. "The penultimate scheduled breakbulk shipment has just arrived and the lastscheduled shipment is on the water. In taking over the project, we caught up onsome items that hadn't been ordered so there will be one additional breakbulkconsignment still to come, and we've also been flying in some equipment to keepthe civils on track. Our main focus now is on completing the project civils andearthworks to keep the crushing circuit on track, as well as completion of thepiping for the water storage and tailings storage facilities," Steele said. "Due to the late start-up of the first phase, our oxide stockpile is larger thananticipated and we still have some oxide ore to mine. We have also put a planin place to screen off the lumps from the semi-hard transitional material andwhere required, put this through a mobile crusher so being able to feed thisthrough the oxide circuit. This means that we expect to have enough feed forthe plant until the start-up of the hard-rock circuit in the second quarter." LOULO UNDERGROUND PROJECT HEADING FOR START-UP Start-up of the Loulo underground project is scheduled for the second quarter of2006 with the construction of the surface mining infrastructure close to theportal position at Yalea. Mining contractors have visited the site and tenders for the decline developmentare to be submitted shortly. "Main decline development will be starting laterthis year and we expect to access first ore from development next year," saidgeneral manager exploration and evaluation Adrian Reynolds. "We have taken the feasibility study design and looked at ways of both speedingup production and allowing increased production: This has led to theintroduction of a conveyor system for ore transport as well as a simpler declinedesign. Since the previous mine layout was done, continued exploration successat depth has led to five additional levels being added to the areas availablefor stoping. We have no doubt that adding to the mine layout will be acontinual part of ongoing mine planning at Loulo as exploration continues to addto this world-class ore body." EXPLORATION CONTINUES TO DELIVER The hunt for new ounces continues to bear fruit and the Randgold Resourcesportfolio now holds 159 quality targets and a land position of 13 427 km(2)covering the most prospective belts of West and East Africa. Loulo continues to be a great success story for the company. In addition to theknown deposits of Yalea and Loulo 0, Faraba and P64 in the greater lease areaare beginning to look very promising. Elsewhere in Mali West, exploration hasstarted at Sitakili with a first phase of reconnaissance drilling underway. AtSelou, two targets returning bedrock mineralisation have been highlighted forfurther work. At Morila there are four areas of focus in terms of evaluation and exploration:infill drilling on the western margin of the pit; infill drilling on theSamacline target; infill and step-out drilling on the south Tonalite target; anda regional exploration drilling programme aimed at providing a full assessmentof the global upside resource potential within the lease area. In South Mali, where the search continues for another Morila, we have started ahyperspectral study over the mine and surrounding area and are remodelling ourgeophysical data to develop a three-dimensional exploration model. Conceptualdrilling is planned for the second quarter of 2006. In Senegal over the field season to date we have brought in seven new targetsand rejected six leaving us with a portfolio of 31 targets to evaluate; of theseBambaraya has over 800 metres of surface mineralisation defined and furtherinfill drilling is required on the plus three kilometre Sofia target. In Burkina Faso, we have established a footprint covering the southern part ofthe Markoye fault system and this coming year we shall be getting our handsdirty with on-the-ground exploration. Looking ahead, we are preparing to restart exploration in Ghana, where we arewaiting for approval from the Minister of Mines on three applications andfinalisation of an agreement with a local Ghanaian company. In Tanzania we are ready for our first phase of drilling at Kiabakari and wecontinue drill-testing conceptual targets below complex regolith. The Ivory Coast presents a very exciting opportunity and we are looking forwardto restarting field activities there. The Tongon deposit on the Nielle permitoffers the chance to fast-track Randgold Resources' third mining project in lessthan 10 years. In addition to Tongon, there are 11 other targets on the Niellepermit which have seen only limited work. On the Boundiali permit we have theadvanced target of Tiasso which has gold-in-soil for over two kilometres andsignificant gold-in-trench and pits ready for drill testing. In this quarter, we plan to have drill rigs busy in the field with a focus onthe next discovery. In addition, the generative teams are looking for newopportunities both within countries where we already have a presence andelsewhere. BALANCE SHEET PROVIDES STRONG BASE FOR GROWTH Randgold Resources ended 2005 with the strongest balance sheet in its historyand is well-positioned to finance the next stage of its growth, including theLoulo underground development. The equity exercise completed in November raised some US$103 million after costsand with the revenue generated by Morila and the recently commissioned open-pitoperation at Loulo, the company now has cash resources of US$150 million. These funds will be used firstly for the Loulo underground project, a five-yearprogramme which starts in 2006 and for which US$20 million has been budgeted forthis year. Waiting in the wings is the Tongon project, where a final feasibilitystudy will be completed once the political situation in the Cote d'Ivoire hasreturned to normal. Financial director Roger Williams said the company would also be using itsrobust balance sheet to negotiate more competitive financing terms. In thisregard it was discussing the possibility of converting the Loulo project financeinto a corporate facility to reduce interest charges and increase flexibility. "The advantage of a healthy cash position is that it also negates the need tosell forward to hedge capital risk. We have a small hedge for Loulo and ourintention is to deliver into the current high spot prices and roll the hedgesout over the period of the underground development to cover that capital risk,"he said. 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+27 82 800 4293 Cell: +27 83 266 5847+223 675 0122 Email: [email protected] : 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 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 2004 which was filed in amended form withthe United States Securities and Exchange Commission (the 'SEC') on 27 October2005. 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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