| Wed 13 Aug 2003, 10:22 | | Randgold & Exploration Company Limited - Randgold |
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Randgold & Exploration Company Limited - Randgold Resources Posts Threefold
Release Date: 13/08/2003 08:22:02 Code(s): RNG
Randgold & Exploration Company Limited - Randgold Resources Posts Threefold
Increase In Interim Profits, Steps Up
Exploration And New Business Evelopment
Randgold & Exploration Company Limited
Reg No 1992/005642/06
Sharecode : RNG
ISIN: ZAE000008819
NASDAQ trading symbol: RANGY
RANDGOLD RESOURCES POSTS THREEFOLD INCREASE IN INTERIM PROFITS, STEPS UP
EXPLORATION AND NEW BUSINESS DEVELOPMENT
UPDATE ON INDICATIVE MERGER PROPOSAL
London, 12 August 2003 - The London and Nasdaq listed gold mining and
exploration company Randgold Resources Limited ("Randgold Resources") (LSE: RRS)
(NASDAQ: GOLD) has boosted its net profit for the half-year to June by US$25
million to US$33.6 million. Net profit for the June quarter was US$16.6
million.
Reporting these results today, the Company said the sustained profit flow had
further strengthened its balance sheet, and it now had cash and cash equivalents
of some US$100 million. It had stepped up exploration spending during the past
quarter with encouraging results from its major programmes, and was also
progressing its pursuit of external growth opportunities.
The Morila gold mine in Mali, in which Randgold Resources has a 40% interest,
again delivered good results, producing 236 449 ounces at a head grade of
10.5g/t. In spite of higher fuel prices and the impact of a mill motor failure
on throughput, total cash operating cost still averaged US$70/oz and total cash
cost US$93/oz. A capital expansion programme designed to increase the
production level to 350 000 tons per month is on track for completion by the
year-end, and the drilling programme along the high-grade axis at the mine is
returning better-than-expected results.
At the Company"s Loulo project, also in Mali, good progress was made in
advancing the project to a final development decision. In the meantime,
negotiations with the government regarding permitting of a potential mine and
regional infrastructure issues moved ahead. Five boreholes drilled at depth
below the open pittable reserve have also produced good results. These
boreholes form the first phase of a drilling programme designed to convert the
large resource below the scheduled pit into an underground reserve.
On the Baboto prospect, 10km north of the Loulo deposit, trenching has outlined
a high-grade area and returned encouraging intercepts. Geological modelling is
currently in progress and further drilling is scheduled for Loulo, Baboto, other
satellites and the depth extension to the 1.5 million ounce Yalea deposit during
the last quarter of this year.
Initial drilling of conceptual targets on Randgold Resources" properties in the
Morila region have intercepted significant gold mineralisation and further
exploration work will be undertaken after the rainy season to determine the
extent of the mineralised system.
In Senegal, trenching over an 800 metre strike length has confirmed the
continuity of mineralisation on the TA target and pitting is now in progress to
test for mineralised extensions. In Tanzania, the Company has secured six
exploration licences within the Victoria Lake goldfields and field exploration
has started. Randgold Resources and the Tanzanian government have formed a
collaborative venture focused on exploration in the Musoma greenstone belt.
"Our portfolio of projects reflects our overriding objective, which is to build
sustainable mining projects with significant returns. These projects range from
embryonic prospects to those which are near production. Our immediate aim is to
drive them up to the production stage through the delineation and development of
economically exploitable resources," said chief executive Dr Mark Bristow.
"At the same time, we are also looking at external growth opportunities with a
view to participating in the current rationalisation of the global gold mining
industry. A number of these opportunities are currently being subjected to due
diligence investigations."
Indicative merger proposal
As announced on Friday 8 August, Randgold Resources has submitted an indicative
merger proposal to Ashanti Goldfields Company Limited ("Ashanti") proposing the
merger of Ashanti and Randgold Resources by way of a scheme of arrangement at
the following ratio:
For every two Ashanti shares or Global Depository Receipts : one Randgold
Resources ordinary share or American Depository Receipt (the "Indicative Merger
Proposal").
Randgold Resources believes that the Indicative Merger Proposal represents an
attractive alternative to the proposed acquisition of Ashanti by AngloGold
Limited. In particular, following the merger, Ashanti shareholders would hold
approximately 70 per cent. of the enlarged company, with existing Randgold
Resources shareholders retaining approximately 30 per cent., allowing each
company"s shareholders to retain a substantial interest in the strong growth
prospects of the merged business and to maintain a significant participation in
the upside potential already contained within both Ashanti and Randgold
Resources.
(The announcement released on the London Stock Exchange regarding the Ashanti
merger proposal is included at the end of this release.)
Rationale for the merger
Randgold Resources" vision is the creation of a major independent pan-African
gold business, focused on creating value and with ready access to the world"s
leading capital markets, and its strategy is one of growth and continued
development.
Following the merger, it is intended that the Ashanti name would be retained for
the merged business and that the Ashanti brand would be relaunched on the London
Stock Exchange with full UK index membership. The merged business would also
be listed in the US and Ghana. Accra would be retained as the operational
centre of the new Ashanti.
The merged business would benefit from substantial cash resources and cash-
generative assets. Its combined assets also offer significant upside potential,
particularly with regard to the mineralisation being outlined at depth in the
Obuasi Deeps orebody as well as Randgold Resources" own development projects.
Other benefits of Randgold Resources" proposal include:
* Enhanced access to major international capital markets (UK and US listings);
* a strengthened global presence through the relaunch of Ashanti in London, the
primary international mining market;
* a liquid stock which is expected to be included in the FTSE 250 index;
a strong, uncommitted cash flow from Randgold Resources" Morila mine to fund the
enlarged business"s growth strategy;
* a strong pan-African identity, reinforced by the strategic vision shared by
both companies; and
* enhanced asset and balance sheet quality.
Next steps
Randgold Resources and Ashanti are currently entering into a mutual due
diligence process, following which Randgold Resources would hope to be in a
position to make a definitive proposal as quickly as possible.
Discussions are at an early stage and there can be no guarantee that an
agreement between Randgold Resources and Ashanti will be reached. Further
announcements will be made in due course, as appropriate.
Enquiries:
RANDGOLD
Chief Executive
Dr Mark Bristow
+44 779 775 2288
Financial Director
Roger Williams
+44 779 771 9660
Investor & Media Relations
Kathy du Plessis
+27 11 728 4701
Cell : +27 (0) 83 266 5847
randgoldresources@dpapr.com
HSBC BANK PLC
Adrian Coates /
Tim Morgan-Wynne /
Jan Sanders
+44 207 991 8888
HSBC Bank plc, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Randgold Resources Limited, and no-one else in
connection with the matters referred to in this document and will not be
responsible to any person other than Randgold Resources Limited for providing
the protections afforded to customers of HSBC Bank plc, or for advising any such
person on the contents of this announcement or any transaction referred to in
this announcement.
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
Syama. For a discussion of important factors and risks involved in Randgold
Resources" business, refer to Randgold Resources" Annual Report on Form 20-F for
the year ended 31 December 2002, which was filed with the US Securities and
Exchange Commission on 27 June 2003.
Randgold Resources does not undertake any obligation to update any forward
looking statements discussed in this announcement, whether as a result of new
information, future events or otherwise.
Nothing in this announcement constitutes an offer, or the solicitation of an
offer, to buy or sell securities in any jurisdiction
Issued on behalf of Randgold Resources Limited by du Plessis Associates.
dPA contact Kathy du Plessis - Tel: +27 11 728 4701,
mobile:+27 (0) 83 266 5847 or e-mail randgoldresources@dpapr.com
website: www.randgoldresources.com
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
Syama. Randgold Resources assumes no obligation to update information in this
release.
The announcement released on the London Stock Exchange regarding the Ashanti
merger proposal is included below.
"London, 8 August 2003 - The Board of Randgold Resources Limited ("Randgold")
(LSE: RRS) (NASDAQ: GOLD), notes the recent press comment and confirms that it
has submitted an indicative merger proposal to the Board of Ashanti Goldfields
Company Limited ("Ashanti"). This indicative proposal envisages the acquisition
of the issued share capital of Ashanti through a scheme of arrangement at a
proposed ratio of one Randgold ordinary share or American Depository Receipt for
every two Ashanti ordinary shares. It also proposes to retain the Ashanti name
and is conditional on, amongst other things, further due diligence.
These discussions are at an early stage and may or may not lead to a formal
proposal being made or an agreement being reached.
A further announcement will be made in due course, as appropriate.
Enquiries:
RANDGOLD HSBC BANK PLC
Chief Executive Adrian Coates /
Dr Mark Bristow Tim Morgan-Wynne /
+44 779 775 2288 Jan Sanders
+27 (0) 82 800 4293 +44 207 991 8888
Financial Director
Roger Williams
+44 779 771 9660
Investor & Media Relations
Kathy du Plessis
+27 11 728 4701
Cell : +27 (0) 83 266 5847
randgoldresources@dpapr.com
HSBC Bank plc, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Randgold, and no-one else in connection with
the matters referred to in this document and will not be responsible to any
person other than Randgold for providing the protections afforded to customers
of HSBC Bank plc, or for advising any such person on the contents of this
announcement or any transaction referred to in this announcement.
DISCLAIMER: Statements made in this release with respect to Randgold"s current
plans, estimates, strategies and beliefs and other statements that are not
historical facts are forward-looking statements about the future performance of
Randgold. These statements are based on management"s assumptions and beliefs in
light of the information currently available to it. Randgold 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 Syama. For a discussion of
important factors and risks involved in Randgold"s business, refer to Randgold"s
Annual Report on Form 20-F for the year ended 31 December 2002, which was filed
with the US Securities and Exchange Commission on 27 June 2003.
Randgold does not undertake any obligation to update any forward looking
statements discussed in this announcement, whether as a result of new
information, future events or otherwise."
