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RANDGOLD & EXPLORATION COMPANY LIMITED
Reg No 1992/005642/06
Sharecode : RNG
ISIN: ZAE000008819
NASDAQ trading symbol: RANGY
PRELIMINARY REPORT FOR THE YEAR ENDED 31 DECEMBER 2002
RANDGOLD
* Profit for year increased substantially
* Share price up by 127% year-on-year
* Significant increase in value of investment in Randgold Resources
* Black Economic Empowerment structure for Minrico
CONSOLIDATED INCOME STATEMENT
Reviewed Audited
year year
ended ended
31 Dec 31 Dec
R000 2002 2001
Revenue
Gold sales 404 064 709 440
Cost and expenses
Cash operating costs (116 095) (390 042)
Royalties (27 220) (49 330)
Total cash costs (143 315) (439 372)
Profit from mining activities 260 749 270 068
Interest received 2 822 18 924
Interest expense (40 139) (72 343)
Depreciation and amortisation (42 009) (66 808)
Exploration and corporate
expenditure (75 182) (92 532)
Loss on sale of investments (1 493) (11 386)
Other 27 077 (60 212)
Profit/(loss) on ordinary activities
before taxes, equity income and
minority interest 131 825 (14 289)
Income and mining taxes - (1 016)
Profit/(loss) on ordinary activities
before equity income and minority
interest 131 825 (15 305)
Equity income from associates 282 606 -
Minority interest (38 594) (54 747)
Net profit/(loss) for the period 375 837 (70 052)
Ordinary shares in issue (000s) 43 696 41 702
Earnings/(loss) per share (cents) 873 (168)
Headline earnings/(loss) per share
(cents) 873 (168)
Fully diluted earnings/(loss)
per share (cents) 865 (168)
CONSOLIDATED BALANCE SHEET
Reviewed Audited
at at
31 Dec 31 Dec
R000 2002 2001
ASSETS
Current assets
Cash and equivalents* 21 279 142 535
Receivables 3 859 202 452
Inventories - 116 721
Total current assets 25 138 461 708
Property, plant, equipment and
other long-term assets 14 713 980 190
Investments in associate 495 673 -
Investments 148 167 105 482
Total assets 683 691 1 547 380
LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities
Accounts payable and accrued
liabilities 89 323 385 457
Bank overdraft - 20 463
Total current liabilities 89 323 405 920
Long-term liabilities
Provision for post retirement benefits 53 077 53 077
Long-term loans - 684 621
Provision for rehabilitation - 51 993
Loans from outside shareholders - 259 044
Liabilities on financial instruments - 29 375
Total long-term liabilities 53 077 1 078 110
Total liabilities 142 400 1 484 030
Shareholders` equity
Share capital 437 417
Share premium 292 929 271 576
Other reserves 659 671 679 662
Accumulated losses (411 746) (787 583)
Total shareholders` equity 541 291 164 072
Minority interest - (100 722)
Total liabilities and equity 683 691 1 547 380
* Included in cash and equivalents at 31 December 2001 was R53.6 million
relating to a debt service reserve account, held in escrow for partial repayment
of the Morila project loan.
CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited
year year
ended ended
31 Dec 31 Dec
R000 2002 2001
Net cash provided by operations 38 950 319 055
Net cash utilised in investing
activities (49 282) (144 302)
Net cash utilised in financing
activities (90 461) (524 597)
Net decrease in cash and cash
equivalents (100 793) (349 844)
Cash and cash equivalents at
beginning of period 122 072 471 916
Cash and cash equivalents at end
of period 21 279 122 072
MOVEMENT IN SHAREHOLDERS` EQUITY
Reviewed Audited
year year
ended ended
31 Dec 31 Dec
R000 2002 2001
Balance at beginning of period 164 072 26 295
Change in accounting policy - 13 599
Restated balance at beginning of
period 164 072 39 894
Share options exercised 21 373 1 584
Other reserves (19 991) 192 646
Net profit/(loss) for the period 375 837 (70 052)
Closing balance 541 291 164 072
NET ASSET VALUE
Net Asset Value for Randgold & Exploration Company Limited (Unaudited)
Market
Price value
per 31 Dec
Units share Percent 2002
DESCRIPTION held R held R000
Listed investments
Durban Roodepoort
Deep, Limited 3 500 000 32.80 2.0% 114 800
Western Areas
Limited 179 891 44.00 0.2% 7 915
JCI Gold Limited 36 916 300 0.57 2.1% 21 042
JCI Debentures 2 565 600 1.04 1.3% 2 668
Kelgran Limited 2 321 115 0.75 2.7% 1 741
Randgold Resources
Limited 13 312 480 125.53 48.2% 1 671 166
1 819 332
Other assets 78 745
Liabilities (142 400)
Net assets 1 755 677
Shares in issue (000) 43 696
NAV per share (cents) 4 018
COMMENTS
Randgold & Exploration has through its substantial holding in Randgold Resources
Limited and other gold mining ventures continued to deliver value for its
investors over the past year. Following the undertaking to address negative
structural issues within the Group, the listing of Randgold Resources on Nasdaq
in July 2002 has proven to be highly successful. The increased share liquidity,
as well as Randgold Resources` threefold increase in profits year on year, have
resulted in its share price more than doubling. This impacted positively on
Randgold & Exploration`s net asset value, which has doubled from 2 036 cents to
4 018 cents over the year. Its share price increased by 127% year-on-year.
The company has also concluded an agreement in terms of which Marothodi
Resources Limited, a black empowerment company, will obtain a 26% interest in
Minrico Limited, Randgold & Exploration`s mineral rights management subsidiary.
It is envisaged that Minrico will apply for selected Randgold & Exploration
mineral rights under the recently promulgated Minerals and Petroleum Resources
Development Act. Both Randgold & Exploration and Marothodi have committed
themselves to developing Minrico into a profitable exploration, development and
mining company using the extremely successful formula applied to the development
of Randgold Resources. Minrico will restrict its activities to the Rand
Monetary Region.
On the exploration front the joint ventures with Rio Tinto and SouthernEra for
diamonds and that with Pan Palladium for platinum group metals are ongoing. Pan
Palladium has recently completed a high resolution aeromagnetic survey over the
Aurora Project area, the results of which are encouraging.
During the fourth quarter a joint venture agreement was entered into with
Eurasia Mining plc to explore for platinum group metals on Doornbosch 294 KT in
the Eastern Bushveld. At present an environmental management programme is being
prepared and it is anticipated that diamond drilling will commence within weeks
of the prospecting permit being issued.
The terms and conditions of the ABSA loan held by Randgold & Exploration were
renegotiated in September 2002. A further R10 million plus outstanding interest
of the original R70 million loan have been repaid, leaving an outstanding amount
of R30 million, at more favourable rates. The loan, which previously was in
place until 31 March 2003, has been extended for a further six months to
September 2003. A minimum of R10 million will become compulsorily repayable on
28 March 2003.
FINANCIAL REVIEW
The results for the year ended 31 December 2002 have been prepared in terms of
South African Statements of Generally Accepted Accounting Practice, and in
accordance with the Group`s accounting policies which are consistent with that
of the previous year. These results have been reviewed by our auditors,
PricewaterhouseCoopers Inc., and a copy of their report is available for
inspection at the Company`s registered office.
At the time of its listing on Nasdaq in July 2002, Randgold Resources issued 5
million new shares to new shareholders. This resulted in Randgold &
Exploration`s portion of the total Randgold Resources shareholding reducing from
59% to 48%. From July 2002 Randgold Resources is therefore not consolidated as a
subsidiary, but accounted for by the equity method as an associate company.
Subsequent to this date profits from Randgold Resources are shown as a single
line item in the consolidated income statement.
The consolidated results improved substantially from a net loss of R70.1 million
for the year ended 31 December 2001 to a net profit of R375.8 million for the
year ended 31 December 2002. Earnings per share for the year were R8.73
compared to a loss of R1.68 per share for the year ending 31 December 2001.
The increase in profitability is primarily the result of exceptionally high
grades mined during the September and December quarters at the Morila Mine in
Mali, in which Randgold Resources holds a 40% interest. Profits were further
enhanced by the elimination of operating losses from the Syama mine, placed on
care and maintenance one year ago, as well as a reduction in financing cost due
to substantially lower debt levels in the group.
Morila produced 1 052 816 ounces of gold for the year (year to 31 December 2001
: 631 650 ounces), at a total cash cost of US$74 per ounce (year to 31 December
2001 : US$103 per ounce). This achievement ranks Morila, on an annual
production basis, among the largest as well as the highest margin producers
worldwide.
Randgold Resources is currently reviewing a number of proposals received from
companies seeking to acquire its shareholding in the Syama mine. The Syama mine
is continuing to incur costs related to care and maintenance, as well as
rehabilitation work.
A segmental analysis of the net profit for the year is set out in a table below.
Shareholders are also referred to the announcement published today by Randgold
Resources for a more detailed review of results.
SEGMENTAL ANALYSIS OF THE NET PROFIT/(LOSS)
Corporate, Corporate,
explor- explor-
ation ation
and and
Group`s other: other:
40% share non-South South
Syama of Morila African African
mine* mine oper- oper-
R000 (Mali) (Mali) ations ations Total
YEAR ENDED
31 DECEMBER 2002
a. On an equity accounted basis
Gold sales - 404 064 - - 404 064
Total cash cost - (143 315) - (143 315)
Cash profit/(loss)- 260 749 - - 260 749
Interest - (12 422) (10 355) (17 362) (40 139)
Depreciation - (33 280) (8 667) (61) (42 009)
Loss on sale
of investment - - - (1 493) (1 493)
Exploration and
corporate
expenditure - (2 095) (61 026) (12 061) (75 182)
Other (27 436) (11 648) 1 775 67 207 29 899
Profit/
(loss)
before tax,
equity
income and
minority
interest (27 436) 201 304 (78 273) 36 230 131 825
Equity income
from
associate (13 421) 341 938 (45 911) - 282 606
Tax and
minority
interest 11 323 (83 048) 33 131 - (38 594)
Net profit/
loss) (29 534) 460 194 (91 053) 36 230 375 837
b. On a fully consolidated basis **
Gold sales - 1 369 476 - - 1 369 476
Total cash cost - (326 475) - - (326 475)
Cash profit/
(loss) - 1 043 001 - - 1 043 001
Interest - (24 706) (14 345)(17 362) (56 413)
Depreciation - (74 687) (17 342) (61) (92 090)
Loss on sale
of investment - - - (1 493) (1 493)
Exploration and
corporate
expenditure - (5 928)(165 064)(12 061) (183 053)
Other (59 628) (8 581) 8 408 67 207 7 406
Profit/(loss)
before tax,
and minority
interest (59 628) 929 099 (188 343) 36 230 717 358
Tax and
minority
interest 30 094 (468 905) 97 290 - (341 521)
Net profit/
(loss) (29 534) 460 194 (91 053) 36 230 375 837
**If Randgold Resources would have been consolidated for the whole year.
YEAR ENDED
31 DECEMBER 2001
Gold sales 140 979 568 461 - - 709 440
Total cash
cost (221 359) (218 013) - - (439 372)
Cash profit/
(loss) (80 380) 350 448 - - 270 068
Interest (8 571) (19 343) (6 635)(37 794) (72 343)
Depreciation - (62 783) (2 598) (1 427) (66 808)
Loss on sale
of investment - - - (11 386) (11 386)
Exploration
and corporate
expenditure - 601 (82 700)(10 433) (92 532)
Other 34 522 (3 799) 27 330 (99 341) (41 288)
Profit/(loss)
before tax
and minority
interest (54 429) 265 124 (64 603)(160 381) (14 289)
Tax and
minority
interest 20 207 (103 375) 27 405 - (55 763)
Net profit/
(loss) (34 222) 161 749 (37 198)(160 381) (70 052)
* Discontinued operation
PROSPECTS
Randgold & Exploration will continue its active support of Randgold Resources as
an independent, international, return-driven resource company with a gold focus.
It is also committed to the development of Minrico into a sustainable New South
African resource company in the same way as it successfully sponsored the
emergence of successful companies such as Harmony and Durban Roodepoort Deep.
Options to broaden the empowerment initiative to the Randgold & Exploration
level will be explored as part of the ongoing group restructuring initiatives.
R A R Kebble
Johannesburg
Chairman
Registered office :
5 Press Avenue, Selby, 2025, Johannesburg, PO Box 82291, Southdale, 2135,
Republic of South Africa,
Telephone +27(11) 309-6000, Telefax: +27(11) 837-2396, e-mail :
haddond@randgold.co.za
Share transfer secretaries :
Computershare Services Limited, 70 Marshall Street, Johannesburg, 2001, P.O Box
62391, Marshalltown, 2107, Republic of South Africa,
Telephone : 27(11) 370-7700, Telefax +27(11) 836-0792
Depository bank :
American Depository Receipts, The Bank of New York, Shareholder Relations
Department, 101 Barclay Street, New York, NY 10286,
Telephone: 1 (800) 524-4458
Investor and media relations :
For further information contact Kathy du Plessis on Telephone +27(11) 728-4701,
Telefax +27(11) 728-2547, e-mail : randgold@dpapr.com
Website : www.randgold.co.za
Date: 12/02/2003 01:45:00 PM Produced by the JSE SENS Department
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