RANDGOLD RESOURCES LIMITED Incorporated in Jersey, Channel Islands Reg
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RANDGOLD RESOURCES LIMITED Incorporated in Jersey, Channel Islands Reg. No. 62686 LSE Trading Symbol: RRS Nasdaq Trading Symbol: GOLD FOCUS ON DELIVERY AS RANDGOLD RESOURCES ADVANCES NEW GROWTH PROJECTS London, 6 May 2010 - Randgold Resources has started mining at its new Tongon project in the Côte d’Ivoire and has also initiated the development of the second underground mine at its Loulo complex in Mali in line with its growth plan designed to boost attributable production to 1.2 million ounces in 2014. In a tough operational quarter, the company also made significant progress with the key issues related to the development of the Kibali project in the Democratic Republic of the Congo and continued to advance the feasibility studies on the Gounkoto project in Mali and the Massawa project in Senegal. During the past quarter, the previous quarter’s record throughput at Loulo took its toll on the plant in terms of a rise in wear rates and a consequent increase in downtime. This, together with plant breakdowns at Morila, had a negative impact on throughput and therefore on gold production, unit costs and net profit for the quarter. Attributable production of 112 663 ounces and profit of US$23.9 million, while down on the previous quarter’s record results, were nevertheless significantly up on the corresponding quarter in 2009. Chief executive Mark Bristow said that in spite of the time spent on remedial measures at Loulo, the company had continued to make solid progress on all its strategic objectives during the period. “Tongon wins the prize for performance this quarter, with our capital projects team staying ahead of the development schedule and within budget. The operating team has now moved on site to prepare for the plant commissioning and we’ve started open pit mining to stockpile ore for the commissioning phase. All in all, Tongon is steadily on track to pour its first gold later this year,” he said. “The Kibali team came a close second, making significant progress on all the critical fronts. These include the relocation action plan, the road upgrade, the power strategy, and the orebody definition and evaluation. This project, currently scheduled to start producing in 2014, continues to deliver exceptional drill results indicative of its enormous potential.” Bristow said the Massawa and Gounkoto feasibility studies were moving ahead, with various development options being tested. At Massawa, the metallurgical challenges associated with the orebody were being assessed, while the latest drill results from the fast-tracked Gounkoto pointed to further potential at depth and in extensions to an already spectacular orebody. At Loulo, further improvements have been achieved in ore tonnes mined and development metres advanced at the Yalea underground mine. The start-up plan for the Gara underground development is on track, with the portal establishment complete and work under way on the twin declines. “The most critical challenge we face over the next three quarters is delivering on our production and profit forecasts under very demanding conditions,” Bristow said. “Key to this is getting the expanded Loulo plant up to design capacity and running smoothly, and raising Yalea’s underground ore production to 120 000 tonnes per month. This will enable Loulo to reach its target of 400 000 ounces this year. Looking further ahead, we remain confident about achieving our goal of producing 1.2 million ounces in 2014.” RANDGOLD RESOURCES ENQUIRIES: Chief Executive Financial Director Investor & Media Relations Dr Mark Bristow Graham Shuttleworth Kathy du Plessis +44 788 071 1386 +44 779 614 4438 +44 20 7557 7738 +44 779 775 2288 +44 1534 735 333 Email: [email protected] Website: www.randgoldresources.com ------------------------------------------------------------------------------ REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2010 KEY PERFORMANCE INDICATORS • Profit up 83% on corresponding 2009 quarter but down on last quarter • Annual mineral reserves and mineral resources declaration underpins group’s growth plans with a 75% increase in attributable mineral reserves • Loulo delivers further improvements at Yalea underground and commences with Gara underground development • Mining commences at Tongon and both mills on foundations • Prefeasibility underscores significance of fast tracking Gounkoto development • Exploration highlights further potential at Massawa but metallurgy still a challenge • Kibali progresses with predevelopment programmes and mining optimisation studies • Robust balance sheet underscores project pipeline development Randgold Resources Limited (“Randgold”) had 90.2 million shares in issue as at 31 March 2010 SUMMARISED FINANCIAL INFORMATION Quarter Quarter Quarter 12 months ended ended ended ended 31 Mar 31 Dec 31 Mar 31 Dec US$000 2010 2009 2009 2009 Gold sales* 123 103 139 153 87 298 434 194 Total cash costs* 69 529 72 099 50 830 249 183 Profit from mining activity* 53 574 67 054 36 468 185 011 Exploration and corporate expenditure 12 854 14 232 11 036 51 111 Profit before income tax and financing activities 29 110 49 793 21 763 113 764 Profit for the period 23 894 38 679 13 092 84 263 Profit attributable to equity shareholders 18 749 32 080 11 052 69 400 Net cash generated from operations 18 733 7 413 28 312 63 747 Cash and cash equivalents 506 823 589 681 248 448 589 681 Attributable production+ (ounces) 112 663 137 332 110 313 488 255 Group total cash costs per ounce*+ (US$) 617 525 461 510 Group cash operating costs per ounce*+ (US$) 553 466 414 458 * Refer to explanation of non-GAAP measures provided. + Randgold consolidates 100% of Loulo and 40% of Morila. COMMENTS Gold sales decreased by 12% from the previous quarter due to an 18% reduction in attributable gold production for the quarter partially offset by a 10% increase in average gold price received of US$1 111/oz (Q4 2010: US$1 012/oz). Gold sales increased by 41% compared to the corresponding quarter in 2009, principally due to the average gold price received in the current quarter being 37% higher compared to the same quarter in 2009, as well as a small increase in attributable production quarter on quarter. Total cash costs per ounce for the group were 18% higher than the previous quarter as a result of increased costs at Loulo and reduced production at both Loulo and Morila. Increased costs at Loulo resulted from an increase in the volumes mined in addition to mobilisation costs related to the expanded production planned for the Loulo 3 pit and adjustments to the open pit contractor’s rise and fall provision. Decreased gold production at Loulo and Morila resulted from a drop in the average ore grade processed and a reduction in tonnes processed. Profit from mining decreased by 20% to US$53.6 million in the current quarter from US$67.1 million in the previous quarter, however increased by 47% when compared to the corresponding quarter in the prior year, mainly attributable to the explanations given above. Other expenses of US$3.3 million in the current quarter compared to US$0.2 million in the prior quarter are the result of operational foreign exchange differences as a result of the settling of invoices in currencies other than US Dollar, as well as the translation of balances denominated in currencies such as Rand, Canadian Dollars and Euro to the closing US Dollar rate. Corporation tax for the current quarter of US$3.8 million decreased by 44% compared to the previous quarter mainly as a result of lower profits from mining at Morila. Exploration and corporate expenditure of US$12.9 million was 9% lower compared with the previous quarter (US$14.2 million) mainly due to lower expenditure in the current quarter on drilling costs plus the impact of Massawa exploration costs now being capitalised following the successful completion of the prefeasibility study, in line with the group’s accounting policies. Profit for the quarter was US$23.9 million compared to a profit of US$38.7 million in the previous quarter (noting that the previous quarter included a gain of US$10.7 million on the sale of the Kiaka project in Burkina Faso to Volta Resources) and US$13.1 million in the corresponding quarter of 2009. During the quarter no provision was made against investments in Auction Rate Securities (‘ARS’) compared to provision of US$3.7 million in the previous quarter, and US$1.1 million in the corresponding quarter of the prior year. A settlement has been reached in relation to these investments. OPERATIONS LOULO During the quarter Loulo produced 87 625 ounces, at a total cash cost of US$631/oz compared to 106 564 ounces in the previous quarter at US$512/oz. Total cash costs per ounce increased by 23% quarter on quarter following a decrease in the ounces produced and an increase in the unit costs of mining. The decrease in production resulted from a reduction in the average ore grade processed, as planned, coupled with lower throughput, partially offset by higher recoveries. The increase in unit mining costs results from an increase in total tonnes mined and adjustments to the rise and fall provisions, additional mobilisation costs for opencast equipment and increased underground operating costs attributable to significant expenditure on equipment maintenance. The average gold price received during the quarter was US$1 110/oz, a 13% increase on the previous quarter (Q4 2009: US$984/oz) resulting primarily from no hedge positions being scheduled for the current quarter. This increase in the gold price received was offset by the reduced production and a higher cost base which resulted in a decrease in profits from mining activity of 19% to US$40.7 million (Q4 2009: US$50.4 million).