RANDGOLD RESOURCES TO DEVELOP NEW MINE IN MALI
Bamako, Mali, 3 February 2004 - London (RRS) and Nasdaq (GOLD) listed
Randgold Resources announced today that it had decided to proceed with the
development of a new gold mine at Loulo in Western Mali.
Chief executive Dr Mark Bristow said this was the latest step in a strategy
which had grown the company from a zero-base origin in 1995 into a
substantial gold mining and exploration business which ranked as one of the
leaders in this field in Africa. He noted that this strategy was based on
consistent investment in the creation of organic growth opportunities
through aggressive exploration programmes such as the one that has
progressed Loulo to this point. Randgold Resources' previous major
discovery and development was Morila, also in Mali, which went into
production in October 2000 and is now rated as one of the largest and
lowest-cost gold mines in the world. Loulo will be the fourth significant
new gold mine established in Mali in the last 10 years.
The Loulo open-pit operation, which will be developed at a capital cost of
US$80 million, is scheduled to go into production in July 2005 and is
expected to average 200 000 ounces of gold per year over a six-year period,
with a throughput of 180 000 tons per month and an estimated average head
grade of 3.7g/t. A project team has been established on site to expedite
the civil works programme and the infrastructural preparation for the main
plant equipment is due to be completed before the start of the rainy season.
The Company has mandated NM Rothschild & Sons Limited and Société Générale
to arrange a project financing loan of up to US$60 million for Loulo. As
part of the financing strategy, it has taken advantage of current favourable
market conditions to hedge 300 000 ounces of Loulo's production at an
average of US$409/oz.
Bristow said this price protection would mitigate capital and debt risk
while maintaining returns which pass the company's hurdle rate. With the
forward sales the mine is projected to deliver an internal rate of return of
33% at a gold price of US$350 and 46% at US$400.
The current production forecast is based on reserves of 1.4 million ounces
identified in the two main scheduled pits at Loulo 0 and Yalea. “The
feasibility study does not include the satellite ore bodies or the
underground,” Bristow said today. “Current resources are 4.3 million ounces
and exploration results from deep-drilling programmes under the open-pit
reserves are demonstrating the strike and depth continuity of these
orebodies, confirming the potential for extending Loulo's life as an
underground operation. There is a strong indication that Loulo can be grown
into a long-life, medium-sized producer with total cash costs in the US$200
to US$230 per ounce range.”
Loulo is situated some 350 km west of the capital Bamako, near the border
with Senegal. It is owned by Société des Mines de Loulo (SOMILO) in which
Randgold Resources has an 80% interest with the government of Mali holding
the rest.
In the Loulo region, the Company continues to pursue new opportunities, the
most significant and recent project being the co-operative agreement with
the Sitakili artisanal community. The Sitakili prospect shows similarities
to the mineralisation occurrences at Segala and Tabakoto and is scheduled
for detailed follow-up exploration.
For further details contact Randgold Resources:
Dr Mark Bristow - CEO
Roger Williams - CFO
+2232 21 8232 (office)
+223 675 2040 (cell)
+27 82 800 4293 (cell)
Sam Samake - GM Mali
+223 675 6136 (cell)
Kathy du Plessis – Investor relations
+27 11 728 4701 (office)
+27 (0) 83 266 5847 (cell)
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