| Thu 9 May 2002, 0:00 | | Randgold Resources |
|
REPORT FOR THE QUARTER ENDED 31 MARCH 2002
Randgold Resources Limited
Incorporated in Jersey, Channel Islands - Reg. No. 62686
HIGHLIGHTS OF THE QUARTER
* Operating profit from mining up by US$4.8 million to US$11.2 million
* Attributable production of 59 598 ounces at a cash operating cost of
US$80/oz
* Updated Loulo feasibility study indicates a more economically viable
project
* Next phase of drilling commences following positive pre-feasibility
results at Tongon
* Further consolidation of permits around Morila
* RGE has announced receipt of South African Reserve Bank permission to
reduce RRL shareholding
Randgold Resources has 22.6 million shares in issue as at 31 March 2002
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Unaudited
Quarter Quarter Quarter
ended ended ended
31 March 31 December 31 March
US$000 2002 2001 2001
Gold sales revenue 17 423 15 953 28 454
Cost of sales
Production costs 6 259 9 676 15 730
Transport and refinery
costs 108 108 53
Transfer to deferred
stripping costs (1 361) (1 429) 253
Cash operating costs 5 006 8 355 16 036
Royalties 1 210 1 217 1 822
Cash costs 6 216 9 572 17 858
Operating profit from
mining activity 11 207 6 381 10 596
Depreciation and
amortisation 1 948 2 901 1 455
Exploration and corporate
expenditure 2 101 2 493 2 126
Profit from operations 7 158 987 7 015
Interest received 35 96 853
Other income 49 4 429 207
Interest expense (968) (1 156) (1 724)
Loss on financial
instruments (1 131) (244) (301)
Other expenses (1 655) (266) (2 751)
Profit on ordinary
activities before
taxes and minority
interests 3 488 3 846 3 299
Income tax - (11) (89)
Minority shareholders'
interest 21 13 469
Net profit 3 509 3 848 3 679
Basic earnings per
share (US$) 0.16 0.17 0.11
Fully diluted earnings
per share (US$) 0.15 0.16 0.10
Average shares in
issue 22 521 727 22 461 630 33 077 861
CONSOLIDATED BALANCE SHEET
Unaudited Audited Unaudited
at at at
31 March 31 December 31 March
US$000 2002 2001 2001
Assets
Cash and equivalents 15 094 11 157 68 007
Receivables 13 775 16 558 24 128
Inventories 10 460 9 743 12 936
Total current assets 39 329 37 458 105 071
Property, plant and
equipment
Cost 165 092 163 076 162 856
Accumulated depreciation (85 287) (83 339) (77 697)
Net property, plant and
equipment 79 805 79 737 85 159
Other long-term assets 3 721 2 359 114
Total assets 122 855 119 554 190 344
Bank overdraft 1 954 1 708 2 500
Accounts payable and
accrued liabilities 18 982 22 075 28 218
Total current liabilities 20 936 23 783 30 718
Provision for environmental
rehabilitation 4 412 4 340 3 739
Liabilities on financial
instruments 7 498 2 452 5 148
Long-term loans 58 009 57 147 46 749
Loans from outside
shareholders in
subsidiaries 1 522 1 335 2 631
Total long-term
liabilities 71 441 65 274 58 267
Total liabilities 92 377 89 057 88 985
Shareholders' equity 30 478 30 497 101 359
Total liabilities and
shareholders' equity 122 855 119 554 190 344
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited
Quarter Quarter
ended ended
31 March 31 March
US$000 2002 2001
Net cash generated from
operations 4 464 5 802
Net cash utilised by investment
activities (2 016) (8 466)
Net cash generated by financial
activities 1 243 6 533
Net increase in cash and
equivalents 3 691 3 869
Cash and cash equivalents at
beginning of period 9 449 61 638
Cash and cash equivalents at
end of period 13 140 65 507
Note:
* Included in cash and cash equivalents is an attributable amount of
US$4.4 million relating to the N.M. Rothschild & Sons Limited debt
service reserve account. This amount is held in escrow for partial
repayment of the Morila project loan.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Number
of Share Share
ordinary capital premium
shares US$000 US$000
Balance -
31 December 2000 33 076 629 3 307 240 742
Prior year adjustment
Restated balance -
1 January 2001 33 076 629 3 307 240 742
Net profit
Movement on financial
instruments
Balance -
31 March 2001 33 076 629 3 307 240 742
Net profit April -
December 2001 - - -
Movement on financial
Instruments - - -
Share options exercised 997 404 100 1 639
Share buyback and
related expenses (11 612 403) (1 161) (80 551)
Balance -
31 December 2001 22 461 630 2 246 161 830
Net profit
Movement on financial
instruments
Share options exercised 136 194 12 353
Balance -
31 March 2002 22 597 824 2 258 162 183
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont'd)
Accu-
Other mulated Total
reserves losses equity
US$000 US$000 US$000
Balance -
31 December 2000 - (150 108) 93 941
Prior year adjustment 2 388 515 2 903
Restated balance -
1 January 2001 2 388 (149 593) 96 844
Net profit 3 679 3 679
Movement on financial
instruments 834 834
Balance -
31 March 2001 3 222 (145 914) 101 359
Net profit April -
December 2001 14 080 14 080
Movement on financial
instruments (4 967) (4 967)
Share options exercised - - 1 739
Share buyback and related
Expenses - - (81 712)
Balance -
31 December 2001 (1 745) (131 834) 30 497
Net profit 3 509 3 509
Movement on financial
Instruments (3 893) (3 893)
Share options exercised - - 365
Balance -
31 March 2002 (5 638) (128 325) 30 478
COMMENTS
The Company made an operating profit of US$11.2 million, compared with
US$6.4 million in the previous quarter and US$10.6 million for the
corresponding quarter in 2001. Increased gold sales of US$1.5 million
during the current quarter and lower cash costs of US$3.4 million mainly
as a result of the cessation of the Syama operation, resulted in the
improvement in operating profits as compared to the December quarter.
The March 2001 quarter figures include revenue and costs from the Syama
operation which was placed on care and maintenance in December 2001.
The current quarter's net profit of US$3.5 million is slightly lower than
the previous quarter mainly due to two items. The results for the
December quarter contained US$4.4 million of other income which was write-
backs of previously written off Malian tax reimbursements now recovered.
The current quarter also contains a charge of US$1.1 million which is the
movement on the mark-to-market on financial instruments attributable to
the unmatched portion of the hedge book.
The main balance sheet movements are an increase in cash resulting from
cash generated by Morila and an increase in deferred liabilities on
financial instruments resulting from a movement on the mark-to-market
value of the hedge book.
The operating joint venture, Morila, benefits from a five-year tax
holiday in Mali. The tax accounting for the Group on a consolidated
basis reflects the tax accounting for its discontinued operation, Somisy.
The reduction in revenues from the corresponding period in 2001 is due to
the inclusion of Syama's final operating results in the first quarter of
2001.
Randgold Resources received its second distribution from Morila amounting
to US$4 million in January 2002.
ACCOUNTING POLICIES
The abridged financial statements included in this report have been
prepared in accordance with the Group's accounting policies which are in
terms of International Accounting Standards and except for as noted below
are consistent with the prior period.
As at 1 January 2001 the Group adopted International Accounting Standards
39 ("IAS 39"). The effect of the adoption has been disclosed in the
consolidated statement of equity.
The consolidated financial information includes the financial statements
of the Company, its subsidiaries and the joint venture.
Joint ventures are those investments in which the Group has joint control
and are accounted for under the proportional consolidated method and
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. Intercompany accounts and transactions are
eliminated on consolidation.
OPERATIONS MORILA
Morila has started off the year with a satisfactory quarter with gold
production of 148 996 ozs. Cash operating cost for the quarter at
US$80/oz and a cash cost of US$104/oz were in line with forecast. The
net profit for the quarter was US$20.3 million.
Infill drilling to date within the northern high-grade pit, has confirmed
earlier projections. Exploration drilling is still in progress to define
possible extensions to the orebody.
MORILA RESULTS
Quarter Quarter Quarter
ended ended ended
31 March 31 December 31 March
US$000 2002 2001 2001
Mining
Tons mined (000) 8 096 7 677 4 142
Ore tons mined (000) 975 754 962
Milling
Tons processed (000) 733 775 590
Ore grade milled (g/t) 6.51 6.64 8.89
Recovery (%) 92.0 91.8 93.3
Ounces produced 148 996 144 189 159 428
Average price received
(US$/ounce) 291 277 265
Cash operating cost
(US$/ounce) 80 95 72
Cash costs (US$/ounce) 104 114 90
Cash profit (US$000) 28 018 19 655 27 900
Attributable (40%)
Ounces produced 59 598 57 676 63 771
Cash profit (US$000) 11 207 7 862 11 160
The focus of the operation in the short term will be optimisation of mill
throughput and increased waste stripping to further expose the high grade
ore in Pit 2.
DISCONTINUED OPERATION
Rehabilitation and monitoring activities continue at Syama. Sales of
stores and consumables are continuing. Phased disposal of the plant and
infrastructure remains under consideration, as discussions are pursued
with parties interested in acquiring the mine. The consolidated income
statement for the quarter contains US$689 000 of care and maintenance
costs.
PROJECTS AND EVALUATION
Loulo Project - Updated Feasibility Study
Pit optimisations and scheduling has been completed for the Loulo 0 and
Yalea pits by external consultants, RSG. Pit design was carried out at a
flat gold price of US$300/oz. Particular focus was paid to the choice of
optimum pits in order to reduce the amount of waste stripping. The ore
reserve is tabulated below.
RESERVE CLASSIFICATION
Tons (Mts) Grade (g/t) Gold (Mozs)
Loulo 0
Proven 5.9 3.5 0.66
Probable 0.3 2.4 0.03
Sub total 6.2 3.4 0.69
Yalea
Proven 5.2 4.1 0.68
Probable 0.7 3.4 0.07
Sub total 5.9 4.0 0.75
Loulo total 12.1 3.7 1.44
Attributable 9.7 3.7 1.15
This reserve includes a 10% dilution at zero grade, 5% mining loss and an
allowance of 5% for extra waste estimated to allow for the pit design
parameters. More detailed drilling has allowed for better definition and
more efficient pit design especially in the case of
Loulo 0. Strip ratios for both pits have been reduced significantly over
previous estimates and stand at 5.7:1 for the Loulo pit (was 9.8:1) and
5.6:1 for the Yalea pit
(was 6.7:1).
While the revised reserve figures are lower than previously stated, the
study's reported decrease in the amount of waste to be removed indicates
an overall more economically viable project.
The updated feasibility study is now reliant on discussions with
government relating to fiscal parameters for the future and provision of
infrastructure. The potential for underground exploitation will form
part of an optimised and expanded project design. The Loulo 0 pit now
bottoms at approximately 160 metres below surface rather than 210 metres
and drilling has already defined a considerable depth extent to depths
greater than 300 metres below surface.
Tongon Prefeasibility
Results from the Type II Prefeasibility Study have been positive.
Indications are that the orebody as defined to date could support an
economically viable operation. Metallurgical test work indicates that a
conventional milling / CIL followed by a fine-grind, flotation circuit
would be the optimal processing route.
As a consequence of the positive results a 15 borehole drilling programme
has commenced in order to better define the continuity of the high-grade
zones. This will form part of the next stage of evaluation work which
will culminate in a Type III Feasibility Study.
FINANCIAL INSTRUMENTS
Details of financial instruments at 31 March 2002.
Randgold Resources' share of gold which has been sold forward at a fixed
price of US$275/oz over the period April 2002 to December 2004 amounts to
162 998 ounces. The Company's share of purchased call options for the
same period amounts to 57 698 ounces at prices between US$340/oz and
US$360/oz and sold call options of 148 500 ounces at US$353/oz.
Morila also has some additional hedging for 2002 of which the Company's
share is 18 000 ounces of put options bought at US$275/oz and 18 000
ounces of call options sold at US$310/oz.
EXPLORATION ACTIVITIES
Randgold Resources continues to consolidate its holding position in the
Morila region with approval of conventions for Morila (289km2) and
Tiorola (257km2) permits and the signing of a joint venture with Japanese
company OMRD for the Segala and Kekoro permits (combined 1 000km2)
locating west of the Morila Mine. The Company's ground holdings in the
Morila region outside of the mining lease now exceed 3 000km2. The OMRD
portfolio hosts multiple gold plus arsenic soil anomalies locating in
similar geological settings to Morila.
In the Morila JV diamond drilling commenced on the mining lease in mid-
April. The programme is designed to test the north-east and southern
extensions to the current orebody and evaluate blind targets highlighted
from the airborne EM survey.
At the Tongon Project in Cote d'Ivoire the next phase of definition
drilling has commenced as part of the Type III Feasibility programme.
Infill trenching over the central and northern portions of the southern
zone returned good intercepts with widths of between 14 - 60 metres
grading at 3.2 g/t to 6.1 g/t. The trenching has confirmed the 045
degree strike of mineralised zones and improved continuity prior to
drilling. The next phase of diamond drilling consists of fifteen holes
focused on the high-grade portion of the southern zone. This programme
is designed to test depth extensions and will reduce interhole spacing
and consequently further improve the definition of the orebody
morphology. Elsewhere within the Boundiali permit the Company continues
with focused work on the Tiasso target and other untested soil anomalies.
Generative programmes in the north of the country have resulted in the
definition and acquisition of three new permits.
At Loulo focused exploration work on the Feasibility project is complete
and exploration activities will now be directed towards defining new
opportunities with a view to increasing our position in the region. In
Senegal the Company has completed a generative study of the Sabodala Belt
and continues to negotiate finalisation of the Kanourmering convention
with the government.
Following receipt of results from diamond drilling at the Gougre target
and the completion of a country review the Company has decided to cease
active exploration in Burkina Faso. The Company's local representative
will continue to monitor new opportunities on the ground.
CORPORATE AND NEW BUSINESS
Shareholders are referred to Randgold & Exploration Company Limited's
announcement of 8 May relating to permission from the South African
Reserve Bank to reduce its shareholding in Randgold Resources to a
minimum of 36%.
On behalf of Randgold Resources Limited
RAR Kebble DM Bristow
Chairman Chief Executive
9 May 2002
DISCLAIMER:
Statements made in this release 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,
estimates of reserves and mine life and liabilities arising from the
closure of the Syama. Randgold Resources assumes no obligation to update
information in this release.
Registered office:
La Motte Chambers, La Motte Street, St Helier,
Jersey JE1 1BJ, Channel Islands
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
Investor and media relations:
For further information and media contact Kathy du Plessis on Telephone
+27(11) 728-4701,
Fax +27(11) 728-2547, e-mail: randgoldresources@dpapr.com
Web-site: www.randgoldresources.com
RANDGOLD RESOURCES INCREASES OPERATING PROFIT AND PROGRESSES
FEASIBILITY STUDIES AT LOULO AND TONGON
London, 9 May 2002 - Randgold Resources, the London listed
resources company, today reported an operating profit of US$11.2
million for the March quarter, up US$4.8 million from the three
months to December. The improvement is due to an increase in
production (attributable ounces of 59 598 against 57 676 for the
previous quarter) and a decrease in cash operating costs. Net
profit was slightly down at US$3.5 million, following the
previous quarter's non-cash adjustments.
At the Loulo gold project, an updated feasibility study indicates
a more economically viable project owing to a decrease in the
amount of waste to be removed. More detailed drilling at the
project has facilitated better definition and more efficient pit
design.
Results from the pre-feasibility study at the Tongon project in
the C te d'Ivoire have also been positive. While no decisions
have been made, indications are that the orebody could support a
viable operation. The next phase of the drilling programme,
already in progress, is designed to provide a clear definition of
the continuity of the high-grade zones. The company also
outlined an expanded portfolio of exploration opportunities in
that country.
In the meantime, Randgold Resources has continued to consolidate
its holdings in the Morila region, which now exceed 3 000 km2,
not including the mining lease area. It is also pressing ahead
with exploration work in Senegal but has terminated active
exploration in Burkina Faso following a review of the country and
the latest drilling results from the Gougre target.
"Randgold Resources has always been a company with sufficient
confidence in itself to keep investing substantially in its
future," Chief Executive Dr Mark Bristow said. "Thanks to that
consistent effort, we now have a great mine - Morila, an option
on the gold price in Syama, the Loulo project, Tongon which is
making excellent progress, and a solid base of exploration
targets."
For further information call:
(CEO) Mark Bristow +44 (0) 779-775-2288
Issued on behalf of Randgold Resources Limited by du Plessis
Associates.
dPA contact Kathy du Plessis on Tel: 27-11- 728 4701,
cell: +27(0)83 266 5847 or e-mail: randgoldresources@dpapr.com
DISCLAIMER :
Certain of the statements made in this document are forward-
looking in nature and are based on certain assumptions which
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. Randgold
Resources undertakes no obligation to update any forward-looking
statements. Mining and exploration by its very nature, is a
risky business and one in which the producers have little
influence over the price of their product. Consequently
investors should be mindful of the inherent risks associated with
all mineral development projects.
