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Randgold & Exploration Company Limited - Provisional Results And Withdrawal Of
Release Date: 30/03/2004 16:00:24 Code(s): RNG
Randgold & Exploration Company Limited - Provisional Results And Withdrawal Of
Cautionary Announcement
Randgold & Exploration Company Limited
("Randgold & Exploration")
Reg No 1992/005642/06
Share code RNG ISIN number ZAE000008819
Nasdaq trading symbol RANGY
Provisional Results And Withdrawal Of Cautionary Announcement
for the year ended 31 December 2003
Increase in cash resources and elimination of debt
Foreign exchange losses now recognised in the income statement - decrease
profits by R167 million
Acquisition of 55,1% of
Free State Development
and Investment Corporation Limited
Randgold Resources Limited announces decision to develop the Loulo project in
Mali
CONDENSED GROUP INCOME STATEMENTS
Reviewed Audited
Year ended Year ended
31 December 31 December
R000 2003 2002
Revenue
Gold sales - 404 064
Total cash costs - (154 599)
Cash operating costs - (127 379)
Royalties - (27 220)
Profit from mining activities - 249 465
Dividends and interest received 9 357 3 766
Interest expense (6 447) (40 139)
Depreciation and amortisation (994) (42 009)
Impairment of goodwill (24 398) -
Foreign exchange (loss)/profit (132 067) 56 401
Loss on financial instruments - (13 034)
Rehabilitation provision - (1 586)
Exploration and corporate expenditure (27 972) (63 121)
Profit on sale of portion of investment
in associate 241 429 -
Loss on sale of investments (34 151) (1 493)
Other income/expenses 14 987 (9 985)
Profit on ordinary activities before taxes,
equity income and minority interest 39 744 138 265
Taxation (29 593) -
Profit on ordinary activities before equity
income and minority interest 10 151 138 265
Equity income from associate 166 351 285 627
Minority interest 702 (38 594)
Net profit for the year 177 204 385 298
Ordinary shares in issue (000s) 55 281 43 696
Earnings per share (cents) 367 895
Fully diluted earnings per share (cents) 366 887
Headline (loss)/earnings per share (cents) (12) 895
Fully diluted headline (loss)/earnings per
share (cents) (12) 887
Reconciliation between earnings and headline earnings:
Earnings for the year 177 204 385 298
Add back:
Profit on sale of portion of investment
in associate (241 429) -
Impairment of goodwill 24 398 -
Tax effect of adjustments 33 810 -
Headline (loss)/earnings for the year (6 017) 385 298
CONDENSED GROUP BALANCE SHEETS
Reviewed Audited
31 December 31 December
R000 2003 2002
ASSETS
Current assets
Cash and cash equivalents 11 202 22 003
Receivables 3 466 6 219
Total current assets 14 668 28 222
Property, mineral rights and
prospecting permits 79 133 14 713
Investment in associate 432 339 495 798
Investments 431 209 150 028
Other long-term assets 200 871 159
Total assets 1 158 220 688 920
LIABILITIES AND SHAREHOLDERS" EQUITY
Current liabilities
Accounts payable and accrued liabilities 6 736 89 291
Income and mining taxation 39 170 -
Total current liabilities 45 906 89 291
Long-term liabilities
Provision for post-retirement benefits 58 670 52 000
Total liabilities 104 576 141 291
Shareholders" equity
Share capital 553 437
Share premium 614 120 292 929
Other reserves 632 077 656 548
Accumulated losses (225 081) (402 285)
Total shareholders" equity 1 021 669 547 629
Outside shareholders" interest 31 975 -
Total liabilities and equity 1 158 220 688 920
CONDENSED GROUP CASH FLOW STATEMENTS
Reviewed Audited
Year ended Year ended
31 December 31 December
R000 2003 2002
Cash (utilised in)/provided by operations (4 267) 106 681
Dividends and interest received 8 198 2 822
Interest paid (6 447) (36 027)
Taxation paid (3 029) -
Net cash (utilised in)/provided by operations (5 545) 73 476
Net cash from/(utilised in) investing
activities 93 459 (74 554)
Net cash utilised in financing activities (98 715) (98 991)
Net decrease in cash and cash equivalents (10 801) (100 069)
Cash and cash equivalents at beginning
of year 22 003 122 072
Cash and cash equivalents at end of year 11 202 22 003
NET FAIR ASSET VALUE (REVIEWED)
Price Fair value
Per 31 December
Shares share Percent 2003
DESCRIPTION held R held R000
Listed investments
The Afrikander Lease Limited 7 300 000 3,25 3,46 23 724
Anglo American Platinum
Corporation Limited 235 000 291,5 0,11 68 503
Durban Roodepoort
Deep, Limited 500 000 20,6 0,23 10 300
Harmony Gold Mining
Company Limited 315 000 108,5 0,12 34 178
JCI Limited 55 867 389 0,78 2,67 43 577
Kelgran Limited 2 321 115 0,11 2,47 255
Simmer and Jack
Mines Limited 40 000 000 0,24 18,57 9 600
Western Areas Limited 4 042 500 41,5 3,84 167 764
Randgold Resources Limited 10 785 000 184,23 36,86 1 986 970
2 344 871
Other assets 339 760
Current assets 14 668
Property, mineral rights and prospecting permits 97 658
Afrikander Lease shares in Kabusha Mining and
Finance (Pty) Limited (75% of fair value) 54 944
Other long-term assets (Group"s holding) 172 490
Liabilities (104 576)
Net assets 2 580 055
Shares in issue (000) 55 281
NAV per share (cents) 4 667
CONDENSED STATEMENTS OF CHANGES IN EQUITY
Share Share Accumulated Other
R000 capital premium losses reserves Total
Balance at
1 January 2002 417 271 576 (787 583) 679 662 164 072
Net profit for
the year - - 385 298 - 385 298
Share options
exercised 20 21 353 - - 21 373
Exchange difference
arising on translation
of foreign subsidiary - - - (179 221) (179 221)
Net dilution gain due
to share capital
movements in
subsidiary/associate - - - 98 065 98 065
Listed investments -
marked to market - - - 88 416 88 416
Movement on cash
flow hedges - - - (30 374) (30 374)
Currency translation
differences
- transfer from foreign
currency translation
reserve - - - (28 328) (28 328)
transfer to
distributable reserve - - - 28 328 28 328
Balance at
31 December 2002 437 292 929 (402 285) 656 548 547 629
Net profit for the year - - 177 204 - 177 204
Share options exercised 13 16 706 - - 16 719
Shares issued during
the year 103 304 485 - - 304 588
Net dilution due to
share capital movements
in subsidiary/associate - - - 5 041 5 041
Listed investments
- marked to market - - - (35 597) (35 597)
Revaluation of investments
on acquisition
of subsidiary - - - 3 590 3 590
Movement on cash
flow hedges - - - 2 495 2 495
Balance at
31 December 2003 553 614 120 (225 081) 632 077 1 021 669
CONDENSED SEGMENTAL ANALYSIS
Geographical Non-South
Segments African South African
Business gold Investments
Segments mining Exploration & corporate
R000 activities activities activities Total
YEAR ENDED 31 DECEMBER 2003
Profit for the year
Gold sales - - - -
Total cash cost - - - -
Cash profit/(loss) - - - -
Net dividends and interest - (167) 3 077 2 910
Depreciation and
Amortisation - (63) (931) (994)
Impairment of goodwill - - (24 398) (24 398)
Foreign exchange
differences (132 067) - - (132 067)
Loss on sale of investment - - (34 151) (34 151)
Profit due to decrease
in holding in associate 241 237 - 192 241 429
Exploration and
corporate expenditure (1 294) (2 172) (24 506) (27 972)
Other income/
(expenditure) - 3 481 11 506 14 987
Profit/(loss) before tax,
equity income and
minority interest 107 876 1 079 (69 211) 39 744
Equity income from
associate 166 351 - - 166 351
Minority interest - (261) 963 702
Taxation - (74) (29 519) (29 593)
Net profit/(loss) 274 227 744 (97 767) 177 204
Capital expenditure - 225 215 440
Assets 433 363 329 724 528 1 158 220
External liabilities - - 104 576 104 576
Geographical Non-South
Segments African South African
Business gold Investments
Segments mining Exploration & corporate
R000 activities activities activities Total
YEAR ENDED 31 DECEMBER 2002
Profit for the year
Gold sales 404 064 - - 404 064
Total cash cost (143 315) - (11 284)(154 599)
Cash profit/(loss) 260 749 - (11 284) 249 465
Net dividends
and interest (21 967) - (14 406) (36 373)
Depreciation and
amortisation (41 947) - (62) (42 009)
Foreign exchange
differences (13 034) - - (13 034)
Loss on financial
instruments - - 56 401 56 401
Loss on sale
of investments - - (1 493) (1 493)
Exploration and
corporate expenditure (63 121) - - (63 121)
Other expenditure/
(income) (19 877) (1 141) 9 447 (11 571)
Profit/(loss) before tax,
equity income and
minority interest 100 803 (1 141) 38 603 138 265
Equity income from
associate 285 627 - - 285 627
Minority interest (38 594) - - (38 594)
Taxation - - - -
Net profit/(loss) for
the year 347 836 (1 141) 38 603 385 298
Capital expenditure 167 503 - 245 167 748
Assets 1 414 467 - 132 895 1 547 362
External liabilities 1 307 316 - 176 714 1 484 030
COMMENTS
The Group disposed of 2,5 million of its shares in Randgold Resources Limited
("Randgold Resources") during the year to repay all of its loans, including R32
million to Consolidated Mining Management Services Limited and the balance of a
R40 million loan to ABSA, and to improve cash resources. The Group"s interest in
Randgold Resources is at present 37%.
In December 2003, Randgold & Exploration acquired 55,1% in Free State
Development and Investment Corportion Limited ("FSD") for the issue of 1,5
million new Randgold & Exploration shares. This transaction has enhanced the
mineral rights portfolio of the Group.
Minrico Limited ("Minrico") continues its search for suitable partners to
develop its mineral portfolio. As reported previously, Minrico has two platinum
joint ventures, one with Pan Palladium in the northern Bushveld and the other
with Eurasia plc on Doornbosch in the eastern Bushveld. Minrico is also
negotiating a joint venture to explore a part of its diamond portfolio as well
as considering dimension stone and other base mineral opportunities.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement that accompanied the
recent trading update published on 26 March 2004. With the publication of these
results, the cautionary announcement is hereby withdrawn.
FINANCIAL REVIEW
The provisional results for the year ended 31 December 2003 have been prepared
in terms of the South African Statements of Generally Accepted Accounting
Practice, including accounting standard AC 127, "Interim Financial Reporting",
and in accordance with the Group"s accounting policies which are consistent with
those used in the audited financial statements for the year ended 31 December
2002.
The provisional results have been reviewed by our auditors,
PricewaterhouseCoopers Inc., and a copy of their unmodified review report on
the condensed financial statements contained in this provisional report is
available for inspection at the Company"s registered office.
The consolidated results reflect a net profit of R177 million for the year ended
31 December 2003, which is a decrease of 54% from the net profit of R385 million
for the previous year. Earnings per share for the year ending 31 December 2003
were R3,67 (2002: R8,95).
Randgold & Exploration"s investment in Randgold Resources (Holdings) Limited
("RRH") was previously treated as an investment in a foreign entity. As at the
commencement of the current reporting period, RRH has been viewed as integral to
the operations of Randgold & Exploration and therefore the classification has
changed to an integral foreign operation.
RRH is the vehicle through which Randgold & Exploration holds its equity stake
in Randgold Resources. Previously, RRH operated independently, but due to the
nature of its operations and the manner in which these are now financed, its
operations are now considered to be integral to those of Randgold & Exploration.
As a result of the change in classification the financial impact on shareholders
equity amounted to R167 million, which largely contributed to the 54% decrease
in net profit from the previous year.
With the available opportunities to expand and to pursue potential acquisitions,
the directors have decided not to declare a dividend at this time.
PROSPECTS
Randgold & Exploration has agreed to support the proposed share offers of The
Afrikander Lease Limited ("Afrikander Lease"), which, if fully concluded, will
result in Randgold & Exploration becoming a substantial shareholder in
Afrikander Lease. In terms of this agreement, Randgold & Exploration will:
* For a total consideration of R82,5 million, subscribe for 24 million
Afrikander Lease shares ("the initial subscription"), and receive a 3-year
American option to subscribe for a further 24 million Afrikander Lease shares at
R5 each.
* After a period of 18 months from the initial subscription, be entitled, at a
further consideration of R88,5 million, to subscribe for a second tranche of 24
million Afrikander Lease shares and receive another 3-year American option to
subscribe for a further 24 million Afrikander Lease shares at R5 each.
* Provide a R15 million short-term facility available to Afrikander Lease
which, if drawn, will be repayable in Afrikander Lease shares or in cash.
In addition, Randgold & Exploration has agreed to underwrite a proposed R100
million rights offer by Afrikander Lease.
Randgold Resources has recently announced the go-ahead for the development of
its Loulo project in Mali. The first gold production is forecast for July 2005.
The Group continues to pursue new opportunities for growth in terms of its
stated intention of becoming an active mining corporation.
For and on behalf of the board
RB Kebble HC Buitendag
Chief Executive Officer Financial Director
Johannesburg 30 March 2004
Randgold & Exploration Company Limited ("Randgold & Exploration")
Reg No 1992/005642/06 Share code RNG ISIN number ZAE000008819
Nasdaq trading symbol RANGY
Registered office 28 Harrison Street Johannesburg 2001
PO Box 11165 Johannesburg 2000 Republic of South Africa
Tel +27 (11) 688 5011 Fax +27 (11) 834 5086
South African Transfer Secretaries Computershare Limited 70 Marshall Street
Johannesburg 2001 PO Box 61051 Marshalltown 2107 Republic of South Africa
Tel +27 (11) 370 5000 Fax +27 (11) 834 2446
United States Depository American Depository Receipts The Bank of New York
Shareholder Relations Department 101 Barclay Street New York NY 10286 Tel
+91 212 815 3326 Fax +91 212 571 3050
Investor relations For further information contact George Poole
on Tel +27 (11) 688 5012 Fax +27 (11) 836 3757 e-mail gpoole@jci.co.za
Website www.randgold.co.za
