| Thu 2 Aug 2001, 0:00 | | Randgold & Exploration Company Ltd - Report For Th |
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ENDED 30 JUNE 2001
Randgold Resources
Incorporated in Jersey, Channel Islands Reg. no. 62686
Highlights Of The Quarter
* Net profit increases by 19% to US$4.7 million
* Shareholders approve repurchase of 34% of
shares at US$7 per share
* First tranche of Morila project finance
repaid; Syama loan settled
* Intensive drilling programmes on four
projects completed
Randgold Resources Limited has 33 million shares issued as at 30 June 2001.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Unaudited
Quarter Quarter 6 months
Ended ended ended
30 June 31 March 30 June
US$000 2001 2001 2001
Revenues
Gold sales 17 909 28 454 46 363
Interest
received 714 853 1 567
Exploration
expenditure
recovered 12 13 25
Profit related to
sale of half
of interest
in Morila
Other income 264 203 467
18 899 29 523 48 422
Cost and
expenses
Production
costs 5 301 16 289 21 590
Transport and
refinery costs (93) - (93)
Transfer to deferred
stripping costs 12 (253) (241)
Cash operating
costs 5 220 16 036 21 256
Royalties 1 229 1 822 3 051
Total cash costs 6 449 17 858 24 307
Profit before other
charges 12 450 11 665 24 115
Interest
expense 957 1 724 2 681
Depreciation and
amortisation 1 355 1 455 2 810
Write-down due to
impairment of
long-term assets - - -
Exploration and
corporate
expenditure 3 231 2 126 5 357
Rehabilitation
provision 48 75 123
Other expenses 2 168 2 685 4 853
Total costs 14 208 25 923 40 131
Profit/(loss) on
ordinary
activities
before taxes
and minority
interests 4 691 3 600 8 291
Income tax - (89) (89)
Net profit on
ordinary
activities
before minority
interest 4 691 3 511 8 202
Minority shareholders'
interest 50 469 519
Net profit 4 741 3 980 8 721
Dividends Nil
Earnings/(loss)
per share 0.26
Average shares in issue 33 092 962
CONSOLIDATED INCOME STATEMENT
Unaudited Audited
6 months 12 months
ended ended
30 June 31 Dec
US$000 2000 2000
Revenues
Gold sales 26 050 63 781
Interest received 100 2 167
Exploration expenditure
recovered 252 139
Profit related to sale of
half of interest in Morila 124 979 124 979
Other income 7 899 14 060
159 280 205 126
Cost and expenses
Production costs 28 022 56 405
Transport and refinery
costs 99 237
Transfer to deferred
stripping costs - (367)
Cash operating costs 28 121 56 275
Royalties 1 472 3 718
Total cash costs 29 593 59 993
Profit before other charges 129 687 145 133
Interest expense 11 453 14 874
Depreciation and
amortisation 8 145 12 208
Write-down due to impairment
of long-term assets 40 000 74 606
Exploration and corporate
expenditure 4 002 10 870
Rehabilitation provision 150 1 903
Other expenses 6 079 7 569
Total costs 99 422 182 023
Profit/(loss) on ordinary
activities before taxes
and minority interests 59 858 23 103
Income tax (194) (363)
Net profit on ordinary
activities before
minority interest 59 664 22 740
Minority shareholders'
interest 526 1 621
Net profit 60 190 24 361
Dividends Nil Nil
Earnings/(loss) per share 1.82 0.74
Average shares in issue 33 056 416 33 062 209
Consolidated Balance Sheet
Unaudited Unaudited
At At
30 June 31 March
US$000 2001 2001
Assets
Cash and equivalents 58 175 68 007
Receivables 13 624 23 687
Inventories 11 805 12 936
Total current assets 83 604 104 630
Property, plant and equipment
Cost 166 098 162 856
Accumulated depreciation (79 052) (77 697)
Net property, plant
and equipment 87 046 85 159
Other long-term assets 608 114
Total assets 171 258 189 903
Bank overdraft 1 467 2 500
Accounts payable and
accrued liabilities 24 598 28 218
Total current liabilities 26 065 30 718
Provision for environmental
rehabilitation 3 657 3 739
Deferred liabilities on
financial instruments 1 000 8 069
Long-term loans 36 589 46 749
Loans from outside
shareholders in
subsidiaries 21 746 23 042
Total long-term liabilities 62 992 81 599
Total liabilities 89 057 112 317
Interest of outside
shareholders in
subsidiaries' losses (20 461) (20 411)
Shareholders' equity 102 662 97 997
Total liabilities and
shareholders' equity 171 258 189 903
Consolidated Balance Sheet
Audited Unaudited
At At
31 Dec 30 June
US$000 2000 2000
Assets
Cash and equivalents 63 505 92 314
Receivables 26 769 18 618
Inventories 10 534 25 800
Total current assets 100 808 136 732
Property, plant and
equipment
Cost 153 537 162 217
Accumulated depreciation (76 242) (72 178)
Net property,
plant and equipment 77 295 90 039
Other long-term assets 368 353
Total assets 178 471 227 124
Bank overdraft 1 867 3 281
Accounts payable and
accrued liabilities 28 292 31 018
Total current liabilities 30 159 34 299
Provision for environmental
rehabilitation 3 616 1 863
Deferred liabilities on
financial instruments 4 368 6 445
Long-term loans 44 071 50 832
Loans from outside shareholders
in subsidiaries 22 258 22 838
Total long-term liabilities 74 313 81 978
Total liabilities 104 472 116 277
Interest of outside
shareholders in
subsidiaries' losses (19 942) (18 848)
Shareholders' equity 93 941 129 695
Total liabilities and
shareholders' equity 178 471 227 124
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
US$000 30 June 30 June 31 Dec
2001 2000 2000
Cash flow from
operations
Profit before taxes 8 291 59 858 23 103
Profit related to
sale of interest
in Morila - - (124 979)
Costs transferred
to deferred
stripping (240) - (368)
Depreciation and
impairment 2 810 48 145 86 814
Increase in
rehabilitation
provision 41 150 1 903
Taxes (89) - -
Working capital
movement 8 180 8 977 (20 013)
Net cash generated
from (utilised in)
operations 18 993 117 130 (33 540)
Fixed assets
additions (12 561) (50 992) (65 850)
Proceeds on disposal
of interest in
Morila (net) - 49 974 130 737
Net financing
raised/(repaid) (11 362) (23 397) 33 973
Net increase/
(decrease) in
cash and
equivalents (4 930) 92 715 65 320
INTERIM RESULTS
The net profit for the six months ended June 2001 was US$8.7 million. This
includes the company's 40% share of Morila's net profit amounting to US$17.8
million, corporate and exploration expenditure of US$5.4 million, and
expenses and write-downs relating to Syama's care and maintenance programme
of US$6.5 million. This compares to US$60 million for the comparative
period in the previous year which included US$125 million profit on the sale
of half of the company's interest in Morila.
The net profit for the second quarter of the year at US$4.7 million was 19%
up from the previous quarter's US$4 million, despite increased exploration
costs due to the intense drilling programmes which took place in May and
June.
Gold sales are down quarter on quarter due to the winding down of Syama,
which from 1 April, have been accounted for in other expenses, net of
revenue, which includes the profit on closing Syama's hedge.
The first tranche of the Morila project finance and the Syama US$15 million
IFC loan have been repaid during the quarter. The long-term loans remaining
are the company's share of the balance of the project financing in Morila
and the Morila power plant finance lease.
The figures included in this report have been prepared on the basis of the
accounting policies set out in the audited financial statements for the year
ended
31 December 2000.
OPERATIONS - MORILA
Quarter Quarter Unaudited
Ended to 6 months
30 June 31 March to 30 June
US$000 2001 2001 2001
Mining
Tons mined (000) 5 974 4 142 10 116
Ore tons mined (000) 874 962 1 836
Milling
Tons processed (000) 737 590 1 327
Ore grade milled (g/t) 7.47 8.89 8.15
Recovery (%) 92.5 93.3 92.9
Ounces produced 163 702 159 428 323 130
Average price received
(US$/ounce) 274 265 270
Cash operating cost
(US$/ounce) 80 72 76
Cash profit/(loss)
(US$000) 28 529 27 900 56 429
Attributable (40%)
Ounces produced 65 481 63 771 129 252
Cash profit (US$000) 11 412 11 160 22 572
OPERATIONS - MORILA continued
Unaudited Audited
6 months 12 months
to 30 June to 31 Dec
US$000 2000 2000
Mining
Tons mined (000) - 4 205
Ore tons mined (000) - 541
Milling
Tons processed (000) - 500
Ore grade milled (g/t) - 9.41
Recovery (%) - 96.3
Ounces produced - 141 615
Average price received(US$/ounce) - 268
Cash operating cost(US$/ounce) - 71
Cash profit/(loss) (US$000) - 25 495
Attributable (40%)
Ounces produced - 56 646
Cash profit (US$000) - 10 198
Note: Production at Morila commenced in October 2000.
Morila continues to meet expectations, achieving
163 702 ozs of production for the quarter at a cash operating cost of
US$80/oz and a total cash cost of US$99/oz. The mine is now settling down
to a steady operation on competent ore. Plant design throughput and
recoveries have been achieved.
A potential power shortage caused by a design failure of two Allens engines
has been averted by the installation of temporary high speed generating
sets. While some production downtime was experienced, impact on production
was minimised by accessing high grade stockpiles. Throughput has returned
to normal.
The second phase of the pit to facilitate early access to the higher grade
section of the orebody, in the north, is progressing well.
The Morila operation is currently meeting its completion test parameters for
the conversion of the project loans to non-recourse finance. The completion
test period ends on 31 August 2001.
DISCONTINUED OPERATION
Syama
In line with the decision to place the mine on care and maintenance, roaster
operations were shut down in May and clean-up of the plant commenced in
June. Clean-up is scheduled to be completed by September 2001.
Another phase of the retrenchment programme was conducted in June and
further reductions of the work force are planned during the current quarter
to reduce the manning levels to a care and maintenance crew only.
The company is currently considering options for the disposal of its
interest in Syama.
HEDGING
Details of hedging financial instruments at 30 June 2001 are:
Morila
The company's share of gold which has been sold forward at a fixed price of
US$275/oz over the period July 2001 to December 2004 amounts to 229 913 ozs.
Randgold Resources' share of purchased call options for the same period
amounts to 81 384 ozs at prices between US$330/oz and US$360/oz and sold
call options of 148 500 ozs at US$353/oz.
EXPLORATION ACTIVITIES
During the quarter the company completed drilling programmes in Burkina
Faso, C te d'Ivoire and on the Loulo and Morila Projects in Mali.
On the Loulo Project in Mali, drilling delineated extensions to the Yalea
and Loulo 0 orebodies and highlighted a new target referred to as Loulo 2.
At Yalea, mineralisation has been extended a further
400 metres northwards averaging 2.7 g/t over 12 metres and three flat zones
have been outlined over a 500 metre strike length in the footwall to Yalea
with widths of
7 - 10 metres grading 2.5 - 3 g/t. Drilling in the southern extension of
the Loulo 0 orebody has confirmed the fault-fold model and outlined
additional resources returning grades of 3.7 to 4.6 g/t over 7 - 9 metres.
Two reconnaissance diamond holes drilled into the Loulo 2 target returned
intercepts of 23 metres @ 5.7 g/t and
40 metres @ 2.3 g/t. Mineralisation is open in all directions. Resource
modelling is currently in progress which will precede a revision of the
feasibility study.
In the Morila region within Mali, a 1 429 hole
(31 336 metres) RAB programme and an airborne EM survey were completed on
the Morila Mine Lease; results are awaited. Multi-phased exploration
programmes over the company's eight permits around Morila Mine have defined
twelve gold targets and numerous anomalies for follow-up field work next
season.
On the Tongon Project in the C te d'Ivoire, drilling programmes, covering a
strike length of four kilometres over two mineralised zones, have been
completed. In the Southern Zone multiple mineralised units have been
intersected over a strike length of 1 400 metres. On receipt of all results
an updated resource model will be completed during the forthcoming quarter.
In Burkina Faso, reverse circulation drilling at the Gougr target returned
encouraging intercepts of 19 metres @ 5.6 g/t, 8 metres @ 4.6 g/t, 14 metres
@ 2.5 g/t and 15 metres @ 4.6 g/t within silica-magnetite altered basalt
with disseminated pyrite plus arsenopyrite. Additional drilling in a north-
west - south-east direction following a mineralised intrusive contact model
failed to yield significant results. Delta Gold have elected not to proceed
with the Joint Venture due to a corporate decision to refocus exploration
activities. A review of drilling information and geological modelling is
currently in progress.
SHARE BUYBACK
On 28 June 2001, the company announced a proposal to buy back 34.08% of its
shares held by each shareholder at a price of US$7 per share. The
shareholders voted in favour of the repurchase at an Extraordinary General
Meeting held on 23 July 2001. As part of the financing of this transaction,
Randgold Resources has reached agreement with NM Rothschild & Sons, Soci t
G n rale and Standard Bank London for a US$25 million four-year term
facility and a US$10 million four-year revolving credit facility. The
drawdown is subject to certain conditions precedent such as Morila passing
project financing completion tests, currently in progress. The share
buyback is expected to be completed by 28 September 2001.
PROSPECTS
Management expects Morila to continue to meet its budgets and plans.
Production from Syama's stockpiles is planned to cease towards the end of
the next quarter. The operation is now greatly reduced and its impact on
the company's results will lessen further as operations are wound down.
Corporate and exploration expenditure is budgeted at current levels.
Field exploration activities have now ceased due to the onset of the rainy
season. During this period all new data will be processed and targets
prioritised for the forthcoming field season.
Incorporating the results of the latest drilling programme a revision of the
Loulo feasibility study and a Type II feasibility study at Tongon will be
completed by March 2002. The company continues its focus on developing
exploration opportunities, as well as pursuing new acquisitions and
development projects that meet our strategic criteria.
Contact with investors during a recent roadshow highlighted the requirement
for management to address the issue of facilitating trading in the company's
shares in North America through a secondary listing in that market. This
issue is being investigated.
On behalf of Randgold Resources Limited
R A R Kebble D M Bristow
Chairman Chief Executive
2 August 2001
Registered office:
La Motte Chambers, La Motte Street, St Helier, Jersey JEI IBJ, Channel
Islands
Web-site: www.randgoldresources.com
Registrars:
Computershare Investor Services (Channel Islands) Limited,
P.O. Box 83, Ordinance 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
Investor & media relations:
For further information contact
Kathy du Plessis on Telephone +27(11) 728-4701,
Fax +27(11) 728-2547,
e-mail: randgoldresources@dpapr.com
