JERSEY, Channel Islands, Feb. 9, 2004 (PRIMEZONE) --
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 2003
-- Cash increased by US$46 million year on year
-- Net profit of US$47.5 million for the year
-- Development of Loulo given the green light and
construction begins
-- Attributable production of 317 597 ounces at a total
cash cost* of US$104/oz
-- Deep drilling at Loulo 0 and Yalea demonstrates
downdip continuity and confirms the upside
potential at depth
-- Loulo drilling results highlight the potential
for hidden mineralisation
-- Major gold bearing structure outlined in Senegal
-- Exploration footprint expanded in Tanzania and Mali
Randgold Resources Limited has 29.3 million shares in issue as at 31 December 2003
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Unaudited
quarter quarter quarter
ended ended ended
31 Dec 30 Sept 31 Dec
US$000 2003 2003 2002
Gold sales revenue 18 054 29 254 44 186
Cost of sales
Production costs 7 419 9 265 8 351
Transport and
refinery costs 76 104 185
Transfer to deferred
stripping (2 062) (1 978) (1 642)
Cash operating
costs* 5 433 7 391 6 894
Royalties 1 261 2 042 3 133
Total cash costs* 6 694 9 433 10 027
Profit from mining
activity* 11 360 19 821 34 159
Depreciation and
amortisation 3 570 2 162 2 333
Merger transaction
costs+ 2 401 711 -
Exploration and
corporate
expenditure 3 077 3 454 5 336
Profit from
operations* 2 312 13 494 26 490
Interest received 229 254 101
Interest expense (445) (432) (744)
(Loss)/gain on financial
instruments (2 232) 591 347
Other income and
(expenses) 355 (332) 126
Profit on ordinary
activities before taxes
and minority
interests 219 13 575 26 320
Income tax - - -
Minority shareholders'
interest - 77 122
Net profit 219 13 652 26 442
Basic earnings per
share (US$) 0.01 0.48 0.96
Fully diluted earnings
per share (US$) 0.01 0.47 0.95
Average shares in
issue (000) 29 099 28 754 27 659
CONSOLIDATED INCOME STATEMENT (continued)
Unaudited Audited
12 months 12 months
ended ended
31 Dec 31 Dec
US$000 2003 2002
Gold sales revenue 109 573 131 440
Cost of sales
Production costs 28 449 26 689
Transport and refinery costs 408 588
Transfer to deferred stripping (3 484) (5 043)
Cash operating costs* 25 373 22 234
Royalties 7 648 9 185
Total cash costs* 33 021 31 419
Profit from mining activity* 76 552 100 021
Depreciation and amortisation 10 269 8 765
Merger transaction costs+ 3 112 -
Exploration and corporate
expenditure 13 184 16 686
Profit from operations* 49 987 74 570
Interest received 999 225
Interest expense (1 895) (3 686)
(Loss)/gain on financial
instruments (1 969) (346)
Other income and (expenses) 53 (5 255)
Profit on ordinary activities
before taxes and minority
interests 47 175 65 508
Income tax - -
Minority shareholders' interest 351 220
Net profit 47 526 65 728
Basic earnings per share (US$) 1.66 2.61
Fully diluted earnings per
share (US$) 1.65 2.59
Average shares in issue (000) 28 721 25 148
The results have been prepared in accordance with International
Financial Reporting Standards (IFRS).
* Refer to pro forma information provided.
+ Expenses incurred on the Ashanti Goldfields merger proposal.
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
at at at
31 Dec 30 Sept 31 Dec
US$000 2003 2003 2002
Assets
Cash and equivalents 105 475 107 842 59 631
Restricted cash** 3 882 4 555 4 526
Receivables 15 196 11 316 14 262
Inventories 17 165 12 927 11 601
Total current assets 141 718 136 640 90 020
Property, plant and
equipment
Cost 175 195 172 043 168 540
Accumulated
Depreciation (102 373) (98 803) (92 104)
Net property, plant
and equipment 72 822 73 240 76 436
Other long-term
assets 10 885 8 824 7 402
Total assets 225 425 218 704 173 858
Bank overdraft 1 550 1 245 1 170
Accounts payable and
accrued liabilities 21 614 15 568 20 564
Total current
liabilities 23 164 16 813 21 734
Provision for
environmental
rehabilitation 5 962 5 308 4 972
Liabilities on
financial instruments 8 488 6 475 7 530
Long-term loans 9 666 14 786 19 307
Loans from outside
shareholders
in subsidiaries 958 958 1 330
Total long-term
liabilities 25 074 27 527 33 139
Total liabilities 48 238 44 340 54 873
Shareholders'
equity 177 187 174 364 118 985
Total liabilities
and shareholders'
equity 225 425 218 704 173 858
** Note: This is the amount relating to the N.M. Rothschild & Sons Limited debt service reserve account. The amount is held in escrow for the partial repayment of the Morila project loan.
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
12 months 12 months
ended ended
31 Dec 31 Dec
US$000 2003 2002
Net cash generated from
operations 51 574 70 633
Net cash utilised in investing
activities (6 011) (5 516)
Net cash generated by
financing activities
Ordinary shares issued 9 786 33 203
Movement on financial
instruments (121) (1 816)
Share issue expenses - (3 895)
Decrease in long-term
borrowings (9 764) (39 123)
Increase/(decrease) in bank
overdraft 380 (538)
Net increase in cash and
cash equivalents 45 844 52 948
Cash and cash equivalents at
beginning of period 59 631 6 683
Cash and cash equivalents at
end of period 105 475 59 631
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Number Accum-
of Share Share Other ulated Total
ordinary capital premium reserves losses equity
shares US$000 US$000 US$000 US$000 US$000
Balance - 31 Dec 2001
22 461 630 2 246 161 830 (1 745) (131 834) 30 497
Jan - Sept 2002
Net profit
39 306 39 306
Movement on cash flow hedges
(4 845) (4 845)
Share options exercised
187 110 17 524 541
Oct - Dec 2002
Net profit
26 422 26 422
Movement on cash flow hedges
(1 703) (1 703)
Share options exercised
15 000 3 159 162
Nasdaq listing 11 July 2002 and related expenses
5 000 000 500 28 105 28 605
Balance - 31 Dec 2002
27 663 740 2 766 190 618 (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
1 112 899 111 7 068 7 179
Oct - Dec 2003
Net profit
219 219
Movement on cash flow hedges
(2) (2)
Share options exercised
483 746 49 2 558 2 607
Balance - 31 Dec 2003
29 260 385 2 926 200 244 (7 403) (18 580) 177 187
PRO FORMA INFORMATION
The Company uses the following pro forma disclosures as it believes that this information is relevant to the mining industry:
- Total cash costs per ounce are calculated by dividing total cash costs, as determined using the Gold Institute Industry Standard, by gold ounces produced for all periods presented. - Total cash costs as defined in the Gold Institute Industry Standard, includes mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpile, transfers to and from deferred stripping and royalties. - Cash operating costs are defined as total cash costs excluding royalties. - Total cash operating costs per ounce are calculated by dividing cash operating costs by gold ounces produced for all periods presented. - Profit from mining activity is calculated by subtracting total cash costs from gold sales revenue for all periods presented. - Profit from operations is calculated by subtracting depreciation and amortisation charges, merger transactions and exploration and corporate expenditure from profit from mining activity.
RECONCILIATION TO US GAAP
The preliminary interim condensed financial statements presented in this report have been prepared in accordance with International Financial Reporting Standards (IFRS), which differ in certain significant respects from Generally Accepted Accounting Principles in the United States (US GAAP). The effect of applying US GAAP to net income and shareholders' equity is set out in the following table:
12 months 12 months
Reconciliation of net 31 Dec 31 Dec
income (US$000) 2003 2002
Net income under IFRS 47 526 65 728
Share option compensation
adjustment (4 780) (5 991)
Provision for rehabilitation - (76)
Net income under US GAAP before
cumulative effect of change
in accounting principle 42 746 59 661
Cumulative effect of change
in accounting principle* 214 -
Net income under US GAAP 42 960 59 661
Movement in cash flow hedges
during the period 890 (6 548)
Comprehensive income under
US GAAP 43 850 53 113
Basic earnings per share
under US GAAP (US$) 1.50 2.37
Fully diluted earnings per
share under US GAAP (US$) 1.49 2.35
Reconciliation of Shareholders'
equity (US$000)
Shareholders' equity under
IFRS 177 187 118 985
Provision for rehabilitation - (214)
Shareholders' equity under
US GAAP 177 187 118 771
Roll forward of shareholders'
equity under US GAAP
Balance as at 1 January 118 771 30 359
Net income under US GAAP 42 960 59 661
Movement on cash flow hedges 890 (6 548)
Nasdaq Listing 11 July 2002 - 28 605
Share options exercised 9 786 703
Share option compensation
adjustment 4 780 5 991
Shareholders' equity under
US GAAP at 31 Dec 177 187 118 771
* The cumulative effect of change in accounting
principle relates to the implementation of FAS
143 "accounting for obligations associated with
the retirement of long-lived assets" on 1 January
2003 which aligns US GAAP to IFRS.
ACCOUNTING POLICIES
The preliminary condensed financial statements in this report have been prepared in accordance with the Group's accounting policies, which comply with International Financial Reporting Standards and are consistent with the prior period.
The consolidated financial information includes the quarterly financial statements of the Company, its subsidiaries and the Morila joint venture.
Joint ventures are those investments in which the Group has joint control and are accounted for under the proportional consolidation method. Under this method, the proportion of assets, liabilities, income and expenses and cash flows of each joint venture attributable to the Group are incorporated in the consolidated financial statements under appropriate headings. Inter-company accounts and transactions are eliminated on consolidation.
No segmental information has been provided, as the source and nature of the enterprise's risks and returns are not governed by more than one segment.
FINANCIAL INSTRUMENTS
As part of the Company's preparations for the development of Loulo, Randgold Resources' has taken advantage of the favourable market conditions to secure some price protection for Loulo. At the end of December 2003, 200 000 ounces had been sold forward at an average spot price of US$404/oz. Subsequent to the year-end, a further 100 000 ounces were sold forward at US$418/oz. This was done at Randgold Resources level, short dated, and will be rolled down, longer dated, into the Loulo company once the project financing has been completed. At that time the longer contango will become effective which will significantly enhance the average spot price. In addition, in order to capture the benefit of the current low gold borrowing costs, the Company entered into fixed rate agreements fixing the gold lease rate on 200 000 ounces at 1.64%. Subsequent to the year-end, fixed rate agreements have been entered into for a further 100 000 ounces at an average rate of 1.75%. Management has a board mandate to secure protection on a total of 350 000 ounces which represents 39% of planned production over a four year period. The price protection mitigates capital and debt risk in developing the project, maintaining returns which pass the Company's hurdle rates should the gold price move to significantly lower levels.
The remaining financial instruments at 31 December 2003 are held by the Morila company and relate to derivatives taken out as part of the project finance arrangements. Randgold Resources' attributable share is as follows:
* 51 941 ounces sold forward at a fixed price of US$275/oz over the period January 2004 to December 2004; * 18 384 ounces of purchased call options for the same period at a price of US$360/oz.
At present prices, the percentage of attributable production, which is hedged, is approximately 15% for the next 12 months. After 2004, all Morila sales will be fully exposed to the spot gold price.
The facilities are margin free.
COMMENTS
Net profit for the year was US$47.5 million which compares to US$65.7 million in 2002 and US$17.8 million in 2001.
Profit from mining activity for 2003 was US$76.6 million compared to US$100.0 million in 2002. Prior year profits were buoyed by the exceptionally high grades from Morila which averaged 13.4 g/t in 2002 as compared to 8.3 g/t in 2003. The effect of the lower grades, partially offset by an improved average gold price received of US$345/oz in 2003 compared to US$308/oz for 2002, resulted in revenue from gold sales reducing from US$131 million in 2002 to US$109 million in 2003. The higher international fuel prices and the longer supply route due to the continued situation in Cote d'Ivoire, which started in September 2002, negatively impacted on total cash costs. A lower deferral of waste stripping costs further reduced the profit from mining activity.
Depreciation costs increased year on year to US$10.3 million. This includes US$0.7 million resulting from an one-off adjustment to take account of the reclassification of certain assets at Morila.
The Company has continued to invest substantially in its future growth and profit from operations of US$50 million is after expensing US$13.2 million on exploration and corporate activity as well as US$3 million on the merger proposal with Ashanti Goldfields.
The loss on financial instruments of US$2 million is a non-cash item resulting from the mark-to-market valuation of the forward sales taken out as part of the Loulo project financing. These have been taken out at the corporate level and are therefore currently classified as speculative for accounting purposes and as such are accounted for wholly through the income statement.
Other income and expenses include an unrealised exchange gain of US$0.9 million resulting from the Group's treasury activities for the 12 months ended December 2003, as well as abnormal indirect tax and royalty payments at Morila of US$1.2 million attributable relating to prior years and offset by other income from option fees received and inventory adjustments.
Merger transaction costs of US$2.4 million, the mark-to-market adjustment of US$2 million, the Morila indirect tax settlement, as well as the drop in grade to 5.0 g/t impacted on the quarter's net profit which reduced to US$0.2 million.
The healthy profits for the year further strengthened the balance sheet. The main balance sheet movements for the 12 months ended 31 December 2003 are an increase in cash and shareholders' equity reflecting the attributable earnings from Morila. The increase in liabilities on financial instruments is the result of the movement on the mark-to-market value of the financial instruments.
The decrease in long-term loans reflects the repayment of our attributable portion of the Morila project loan, as well as the payment of the Syama Rolls-Royce Power Venture Loan. The attributable balance of the Morila loan as at the end of December 2003 was US$7.2 million. This will be fully paid by June 2004.
The Company's return on equity for 2003 was 32%.
OPERATIONS - MORILA
Results for the year from Morila were slightly below previous forecasts with 793 992 ounces being produced at a cash operating cost of US$80/oz and total cash cost of US$104/oz, slightly above the January 2003 forecast but in line with last quarter's forecast. The performance maintains Morila's position as one of the lower cost and larger producers in the world.
Production for the quarter from Morila was down from 199 585 ounces to 119 537 ounces as a result of a drop in grade from 8 g/t to 5 g/t as lower grade ore is accessed as well as delays in commissioning of the plant expansion. An extended rainy season which impacted on water management in the pit also negatively affected the mix of inpit and stockpiled ore sent to the plant. Although the reported recoveries were lower in the quarter, Morila achieved an average of 91% for the year, which was in line with forecasted plant recoveries. Cost per ounce increased markedly as a result of decreased production as well as increases in diesel and mining contractor costs. However, unit costs per ton milled showed a decrease and more focus will be placed on reducing them further.
The new plant expansion programme is currently being commissioned.
MORILA RESULTS
Quarter ended
31 Dec 30 Sept 31 Dec
US$000 2003 2003 2002
Mining
Tons mined (000) 5 955 6 170 6 063
Ore tons mined (000) 956 602 542
Milling
Tons processed (000) 842 822 669
Head grade milled (g/t) 5.0 8.2 17.1
Recovery (%) 87.4 91.8 88.4
Ounces produced 119 537 199 585 325 273
Average price received
(US$/ounce) 367 348 316
Cash operating costs*
(US$/ounce) 114 85 54
Total cash costs*
(US$/ounce) 139 111 78
Cash profit (US$000) 28 400 49 553 85 398
Attributable (40%)
Ounces produced 47 815 79 834 130 109
Cash profit (US$000) 11 360 19 821 34 159
MORILA RESULTS (continued)
12 months ended
31 Dec 31 Dec
US$000 2003 2002
Mining
Tons mined (000) 23 470 26 321
Ore tons mined (000) 4 056 3 230
Milling
Tons processed (000) 3 266 2 735
Head grade milled (g/t) 8.3 13.4
Recovery (%) 91.0 89.3
Ounces produced 793 992 1 052 816
Average price received
(US$/ounce) 345 308
Cash operating costs* (US$/ounce) 80 52
Total cash costs* (US$/ounce) 104 74
Cash profit (US$000) 191 380 250 052
Attributable (40%)
Ounces produced 317 597 421 126
Cash profit (US$000) 76 552 100 021
* Refer pro forma information provided above.
The resource and reserve base for Morila as at year-end 2003 is tabulated below with a comparison to last year's figures:
MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
Tons (Mt) Grade (g/t)
Category 2003 2002 2003 2002
Measured 13.09 5.34 3.49 5.52
Indicated 17.47 27.00 3.82 4.32
Sub-total
Measured and
Indicated 30.56 32.34 3.68 4.52
Inferred 2.06 4.74 2.96 3.40
Total
Measured, indicated
and inferred 32.62 37.08 3.63 4.37
MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
(continued)
Attributable
Gold (Mozs) Gold
Category 2003 2002 (Mozs)
40%
Measured 1.47 0.95
Indicated 2.15 3.75
Sub-total
Measured and indicated 3.62 4.70 1.4
Inferred 0.20 0.52 0.08
Total
Measured, indicated
and inferred 3.81 5.21 1.53
PROVEN AND PROBABLE MINERAL RESERVES
Tons (Mt) Grade (g/t)
Category 2003 2002 2003 2002
Proven 11.01 4.67 3.55 6.23
Probable 14.73 23.08 3.88 4.42
Total 25.74 27.74 3.74 4.72
PROVEN AND PROBABLE MINERAL RESERVES (continued)
Attributable
Gold (Mozs) Gold
Category 2003 2002 (Mozs)
Proven 1.26 0.94
Probable 1.84 3.28
Total 3.09 4.22 1.24
* Resources are reported within the US$400/oz pit
shell and reserves at a gold price of US$350/oz.
* Dilution of 10% and ore loss of 5% are
incorporated into the calculation of reserves.
* Resources and reserves are calculated in
accordance with the J.O.R.C. code.
Decreases in the total resources and reserves are due to depletion by mining in 2003 as well as re-estimation of the orebody gold content. The estimate of gold content within the orebody has decreased as a result of increased drilling coverage in the lower grade fringe areas as well as a difference in the estimation methodology. A significant change is the increase in the higher confidence measured resource from 14% at 2002 year-end to 40% currently. At the same time, proven reserves have increased from 17% of the total to 43% of the total reserve.
DISCONTINUED OPERATION - SYAMA
Resolute Mining Limited continued with their 12 month evaluation process, having completed their due diligence drilling programme. A legal and financial due diligence is currently being undertaken to finalise the evaluation process prior to the option expiry deadline of 17 April 2004. For further information refer to Resolute's quarterly announcement on 28 January 2004.
Care and maintenance activities continued as normal during the quarter, with the focus on retaining the value of the assets.
SYAMA INCOME STATEMENT
Quarter ended
31 Dec 30 Sept 31 Dec
US$000 2003 2003 2002
Loss on financial
instruments - - -
Other expenses (1 127) (648) (1 489)
Loss on ordinary
activities before
taxes (1 127) (648) (1 489)
Income tax - - -
Net loss (1 127) (648) (1 489)
SYAMA INCOME STATEMENT (continued)
12 months ended
31 Dec 31 Dec
US$000 2003 2002
Loss on financial instruments - (775)
Other expenses (2 069) (4 777)
Loss on ordinary
activities before taxes (2 069) (5 552)
Income tax - -
Net loss (2 069) (5 552)
PROJECTS AND EVALUATION
Loulo Project
The development of the 80% held Loulo Project has been approved by the boards of Societe des Mines de Loulo S.A. and Randgold Resources.
Preparation and negotiations for orders with long lead times have been initiated and site establishment has commenced to ensure the advancement of the civil works which need to be established prior to the onset of the rainy season in July 2004.
Procurement of the long lead time items and the early civils programme are essential elements of the Loulo construction programme, which forecasts first production for July 2005.
Output based only on the reserves identified in the two open pits of Loulo 0 and Yalea is expected to average approximately 200 000 ounces per annum over a six year period.
Exploration results from deep drilling under the open pit reserves continue to demonstrate the strike and depth continuity of these orebodies and confirm the potential for underground operations. Feasibility study work on the underground potential at Loulo 0 and Yalea to extend the life of the operations is continuing.
The current resource and reserve base is tabulated on the following page:
MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
Tons (Mt) Grade (g/t)
Category 2003 2002 2003 2002
Measured 16.33 17.77 4.14 3.88
Indicated 8.91 8.70 3.69 4.37
Sub-total
Measured and
indicated 25.24 26.47 3.98 4.04
Inferred 10.89 7.66 3.13 3.26
Total
Measured,
indicated
and inferred 36.13 34.13 3.72 3.88
MEASURED, INDICATED AND INFERRED MINERAL RESOURCES
(continued)
Attributable
Gold (Mozs) Gold
Category 2003 2002 (Mozs)
80%
Measured 2.17 2.24
Indicated 1.06 1.13
Sub-total
Measured and
indicated 3.23 3.37 2.6
Inferred 1.10 0.80 0.9
Total
Measured, indicated
and inferred 4.32 4.17 3.5
PROVEN AND PROBABLE MINERAL RESERVES
Tons (Mt) Grade (g/t)
Category 2003 2002 2003 2002
Proven 11.50 11.80 3.78 3.70
Probable 0.19 1.10 3.46 3.00
Total
Proven and
Probable 11.69 12.90 3.77 3.60
PROVEN AND PROBABLE MINERAL RESERVES (continued)
Attributable
Gold (Mozs) Gold
Category 2003 2002 (Mozs)
Proven 1.40 1.41
Probable 0.02 0.11
Total
Proven and probable 1.42 1.52 1.14
* Reserves are calculated at a gold price of
US$350/oz.
* Dilution of 10% and ore loss of 3% are
incorporated into the calculation of reserves.
* Resources and reserves are calculated in
accordance with the J.O.R.C. code.
Contained gold within mineral resources increased marginally to 4.32 million ounces from last year's estimates. The percentage of the proven ore reserve has increased from 91% to 98% of the total reserve. Drilling programmes designed to raise the level of confidence in inferred and indicated resources are proceeding.
Tongon Project
The situation in the Cote d'Ivoire is continually being monitored. Despite some encouraging signs in the political situation, no further work has been carried out. The Company has maintained its presence in the country and is capable of recommencing feasibility and exploration work without delay once the political and security environment returns to acceptable levels.
EXPLORATION ACTIVITIES
During the quarter the Company continued to invest in growth opportunities effecting an aggressive drilling campaign in Loulo, defining new drill targets in Senegal and the Morila region and expanding our footprints in Mali and Tanzania.
At Loulo, 42 holes from a 70 hole, 14 000 metre programme were completed during the quarter. Drilling confirmed good continuity of geology and mineralisation returning grades of 4 to 10 g/t over acceptable mining widths from between depths of 200 metres and 400 metres at the Yalea and Loulo 0 deposits. At the P125 satellite target, continuity of mineralisation over a 220 metre strike length was confirmed with the last hole returning 25.6 metres at 28.9 g/t and highlighting the potential to close the 200 metre gap between P125 and Yalea. The Loulo, Yalea and P125 drilling confirms the geological model of hidden, high grade payshoots that do not come to surface. At Loulo 2, a relatively narrow but high grade zone of +/-100 metres strike was defined which is still open. A plus 100 metre wide zone of silicification and multiple gold zones (14 to 99 metres) was outlined over 250 metres strike at Baboto with grades of 1 to 4 g/t. A ground geophysical survey highlights that the zone extends southwards for a further two kilometres. Drilling continues this year with further definition of the Yalea depth extensions and other known orebodies as well as testing of satellites and new targets based on our geological models.
In the Loulo region, the Company continues to pursue new opportunities, the most significant and recent project being the co-operative agreement with the Sitakili artisanal community. The Sitakili prospect shows similarities to the mineralisation occurrences at Segala and Tabakoto and is scheduled for detailed follow up exploration.
LOULO DRILL INTERCEPTS
From Width Grade
Hole (m) (m) (g/t)
LOCP33 236 4.5 6.3
LOCP34 251 5.0 6.2
LOCP35* 76 7.4 4.1
95 6.6 4.5
184 3.8 6.5
LOCP36 5.4 1.8
LOCP37 Stopped in hanging wall
LOCP38 338 6.0 4.6
LOCP39 273 6.2 12.1
LOCP40 260 20.4 10.7
LOCP41 214 12.0 10.6
LOCP42* 91 9.1 4.4
527 7.0 4.83
* Multiple intercepts in fold fault zone.
YALEA DRILL INTERCEPTS
From Width Grade Including
Hole (m) (m) (g/t) (m) (g/t)
YDH123 329 22.0 7.4 5.0 7.4
YDH125 336 8.0 4.1
YDH127 357 15.0 5.2
YDH129 329 20.0 2.6 10.0 3.9
YDH131 278 19.0 5.4
At the Morila Mine our updated geological model outlined three new conceptual targets for drill testing in the Domba corridor. On the Segala permit 50km due west of Morila Mine and held in joint venture with OMRD, follow up work on a 3km by 2km plus 50 ppb Nemala soil anomaly returned a trench intercept of 20 metres grading 2.3 g/t and lithosamples of up to 5 g/t from silicified outcrop. The anomalous area is coincident with a major regional structure. The structural zone will be subjected to a detailed helicopter magnetic survey to define further target areas. In the Morila region, and including the exploitation lease, a total of six new targets have been defined for drill testing and an area of 580km(2) relinquished from the mineral rights inventory. Based on interpretation of new regional geophysical data two new reconnaissance permits have been acquired in southern Mali.
In Senegal, exploration on the Kounemba permit has highlighted a plus 6km gold-in-soil anomaly with values of up to 8.9 g/t which is referred to as Makana. The anomaly locates within the Sabodala structure south of the old Sabodala Mine. Makana is a new priority target hosting a large alteration zone from which preliminary prospecting has, in addition to the high grade soil results, highlighted bedrock samples up to 3.9 g/t. Makana can now be linked along the same structure with the KB drilling target locating 8km further south within the Kanoumering permit. A further two drill targets are being defined on the Tomboronkoto permit referred to as BA and TA. Drill rigs are planned to be mobilised into Senegal during this field season to test selected targets.
The Company has expanded its footprint in Tanzania and now holds twelve licences totalling 710km(2), ten of which locate in the Musoma-Mara region. A joint venture has been signed with Australian junior, Goldstream NL, whereby the Company can earn a 70% interest in the Nyati prospecting licence by completing a bankable feasibility study. Nyati locates within the Company's contiguous holdings which now covers 30km of strike along the Musoma Greenstone Belt. A previous helicopter magnetic survey at Nyati highlights untested structural zones associated with gold mineralisation which are predominantly concealed beneath cover rocks. Reconnaissance field exploration is currently defining new targets within the Company's licences.
Applications are pending on targets delineated from reconnaissance work and interpretation of a new aeromagnetic survey completed in western Burkina Faso. In Ghana, following on from our pursuit of Ashanti, generative work has identified new opportunities and subject to discussions, the Company is considering the establishment of a more permanent operating centre in Ghana.
CORPORATE AND NEW BUSINESS
Prospects
Life of Mine scheduling at Morila anticipates gold production of 1.8 mozs in the period 2004 - 2006. Total cash costs are expected to vary in the range of US$160/oz to US$190/oz for the next three years at Morila. Production for the current year is forecast to be 535 000 ounces, with increasing amounts being produced in the following two years. A focus on unit costs has been implemented in order to improve cost per ton. Discussions with the mining contractor are currently being finalised in order to conclude a new contract arrangement. Total cash costs are expected to be approximately US$190/oz in 2004.
The commissioning of Loulo in mid-2005 will also increase production levels. A feasibility study on the underground extensions is due for completion by year-end. Attractive financing terms have been agreed in principle with a group of commercial banks for project financing for the open cast project. The final terms of the financing are subject to completion of a satisfactory technical and legal due diligence which is currently in progress.
The production decision at Loulo underlines the Company's commitment to profitable organic growth. At the same time, the Company continues to pursue opportunities for joint venture and other corporate activities.
The Board of Directors has given approval to reconstitute the Company's balance sheet so that accumulated losses can be expunged through the share premium account. This is a once-off transaction which will allow the payment of dividends to begin. The change is subject to approval by the shareholders in general meeting and Jersey court sanction. The AGM is scheduled for April 2004.
R A R Kebble D M Bristow R A Williams Chairman Chief Executive Financial Director 9 February 2004 Registered office: La Motte Chambers, La Motte Street, St Helier, Jersey JE1 1BJ, Channel Islands Web-site: www.randgoldresources.com Registrars: Computershare Investor Services (Channel Islands) Limited, P.O. Box 83, Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Islands Transfer agents: Computershare Services Plc, P.O. Box 663, 7th Floor, Jupiter House, Triton Court, 14 Finsbury Square, London EC2A 1BR
DISCLAIMER: Statements made in this document with respect to Randgold Resources' current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Randgold Resources. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Randgold Resources cautions you that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. The potential risks and uncertainties include, among others, risks associated with: fluctuations in the market price of gold, gold production at Morila, the development of Loulo, estimates of reserves and mine life and liabilities arising from the closure of Syama. Randgold Resources assumes no obligation to update information in this release. For a discussion on such risk factors, refer to the annual report on Form 20/F for the year ended 31 December 2002, which was filed with the Securities Exchange Commission on 27 June 2003.
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