| Thu 16 Sep 2004, 17:07 | | Resultsfor the six months ended 30 June 2004 |
|
RANDGOLD - INTERIM REPORT for the six months ended 30 June 2004
RANDGOLD & EXPLORATION COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1992/005642/06)
Share code: RNG ISIN: ZAE000008819
(`Randgold`)
INTERIM REPORT for the six months ended 30 June 2004
Net profit of R106,7 million
Proposed acquisition of The AfLease shares
5% interest in Western Areas acquired
Additional Angolan diamond interests secured
Proposed acquisition of 14,6% of Pan Palladium
Randgold Resources developing Loulo and commissioning underground feasibility
study
ABRIDGED GROUP INCOME STATEMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
R000 2004 2003 2003
Dividends and interest received 15 955 1 571 9 357
Interest expense (6 727) (5 673) (6 447)
Depreciation and amortisation (921) (76) (994)
Impairment of goodwill - - (24 398)
Foreign exchange loss (41 921) - (132 067)
Exploration and corporate
Expenditure (12 747) (11 052) (27 972)
Profit on sale of portion of
investment in associate 150 367 81 771 241 429
Profit/(loss) on sale of investments 5 787 3 142 (34 151)
Other income 3 793 4 468 14 987
Profit/(loss) on ordinary
activities 113 586 (7 620) 39 744
Equity income from associate 15 787 126 471 166 351
Profit on ordinary activities before
taxes and minority interest 129 373 200 622 206 095
Taxation (22 076) - (29 593)
Profit on ordinary activities
before minority interest 107 297 200 622 176 502
Minority interest (576) - 702
Net profit for the period 106 721 200 622 177 204
Ordinary shares in issue (000s) 63 254 44 354 55 281
Earnings per share (cents) 201 452 367
Fully diluted earnings per
share (cents) 200 450 366
Headline earnings/(loss) per
share (cents) (46) 268 (12)
Fully diluted headline earnings/
(loss) per share (cents) (46) 267 (12)
Reconciliation between earnings
and headline earnings
Earnings for the period 106 721 200 622 177 204
Add back:
Profit on sale of portion of
investment in associate (150 367) (81 771) (241 429)
Impairment of goodwill - - 24 398
Tax effect of adjustments 19 148 - 33 810
Headline (loss)/earnings for
the period (24 498) 118 851 (6 017)
ABRIDGED GROUP BALANCE SHEETS
Unaudited Unaudited Audited
30 June 30 June 31 December
R000 2004 2003 2003
ASSETS
Current assets
Cash and cash equivalents 2 298 97 177 11 202
Amounts receivable 291 382 9 540 3 466
Total current assets 293 680 106 717 14 668
Property, mineral rights and
prospecting permits 277 247 15 184 79 133
Investments 407 524 85 380 431 209
Investment in associate 364 035 521 744 432 339
Other long-term assets 128 272 - 200 871
Total assets 1 470 758 729 025 1 158 220
LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities
Accounts payable and
accrued liabilities 207 548 21 882 6 736
Tax liability 60 628 - 39 170
Total current liabilities 268 176 21 882 45 906
Long-term liabilities
Provision for post-retirement
benefits 58 670 52 000 58 670
Total liabilities 326 846 73 882 104 576
Shareholders` equity
Share capital 633 448 553
Share premium 775 550 307 094 614 120
Other reserves 439 071 549 264 632 077
Accumulated losses (118 360) (201 663) (225 081)
Total shareholders` equity 1 096 894 655 143 1 021 669
Outside shareholders` interest 47 018 - 31 975
Total liabilities and equity 1 470 758 729 025 1 158 220
ABRIDGED GROUP CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
R000 2004 2003 2003
Cash (utilised in)/provided
by operations (16 665) (8 040) (4 267)
Dividends and interest received 1 204 1 571 8 198
Interest paid (254) (5 673) (6 447)
Taxation paid (618) - (3 029)
Net cash (utilised in)/ provided
by operations (16 333) (12 142) (5 545)
Net cash provided by/(utilised in)
investing activities 6 974 141 628 93 459
Net cash (utilised in)/provided by
financing activities 455 (54 312) (98 715)
Net (decrease)/increase in cash
and cash equivalents (8 904) 75 174 (10 801)
Cash and cash equivalents at
beginning of period 11 202 22 003 22 003
Cash and cash equivalents at
end of period 2 298 121 093 11 202
NET FAIR ASSET VALUE (UNAUDITED) FOR RANDGOLD & EXPLORATION
Price Market value
Per Percent- 30 June
Units share age 2004
DESCRIPTION held R held R000
Listed investments
The Afrikander Lease Limited 7 300 000 1,48 3,42 10 804
Anglo American Platinum
Corporation Limited 235 000 235,00 0,11 55 225
Durban Roodepoort
Deep, Limited 500 000 15,70 0,22 7 850
Harmony Gold Mining
Company Limited 315 000 65,25 0,13 20 554
JCI Limited debentures 50 651 1,02 0,02 52
JCI Limited ordinary shares 37 560 613 0,45 1,79 16 902
Kelgran Limited 2 324 830 0,19 2,47 442
Simmer and Jack
Mines, Limited 40 000 000 0,28 19,66 11 200
Western Areas Limited 9 311 300 26,99 8,84 251 312
Randgold Resources Limited 18 358 000 54,04 31,36 992 037
1 366 378
Other assets 677 041
Liabilities (326 846)
Net assets 1 716 573
Shares in issue (000) 63 254
NAV per share (cents) 2 714
ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY
Share Share Accumulated Other
R000 capital premium losses reserves Total
Balance at
1 January 2003 437 292 929 (402 285) 656 548 547 629
Net profit for the period - - 200 622 - 200 622
Share options exercised 11 14 165 - - 14 176
Net dilution due to
share capital move-
ments in associate - - - (73 015) (73 015)
Listed investments -
marked to market - - - (46 219) (46 219)
Movement on cash
flow hedges - - - 11 950 11 950
Balance at
30 June 2003 448 307 094 (201 663) 549 264 655 143
Net profit for the period - - (23 418) - (23 418)
Share options exercised 2 2 541 - - 2 543
Shares issued during
the period 103 304 485 - - 304 588
Net dilution due to
share capital move-
ments in associate - - - 78 056 78 056
Listed investments
- marked to market - - - 10 622 10 622
Revaluation of investments
on acquisition
of subsidiary - - - 3 590 3 590
Movement on cash
flow hedges - - - (9 455) (9 455)
Balance at
31 December 2003 553 614 120 (225 081) 632 077 1 021 669
Net profit for the period - - 106 721 - 106 721
Share options exercised - 165 - - 165
Shares issued during
the period 80 161 265 - - 161 345
Net dilution due to
share capital move-
ments in associate - - - (51) (51)
Listed investments
- marked to market - - - (200 616)(200 616)
Movement on cash
flow hedges - - - 7 661 7 661
Balance at
30 June 2004 633 775 550 (118 360) 439 071 1 096 894
SEGMENTAL ANALYSIS OF THE NET PROFIT/(LOSS)
Randgold Randgold &
Resources Minrico Exploration
R000 Limited Limited Corporate Total
FOR THE SIX MONTHS ENDED 30 JUNE 2004
Net dividends and interest - (30) 9 258 9 228
Depreciation and
Amortisation - (38) (883) (921)
Exploration and
corporate expenditure (21) (1 085) (11 641) (12 747)
Foreign exchange loss (41 921) - - (41 921)
Other income - 301 3 492 3 793
Profit on sale
of investments 150 367 - 5 787 156 154
Profit/(loss) before tax,
equity income and
minority interest 108 425 (852) 6 013 113 586
Equity income from
Associate 15 787 - - 15 787
Minority interest - 224 (800) (576)
Taxation (21 506) (8) (562) (22 076)
Net profit/(loss) 102 076 (636) 4 651 106 721
Randgold Randgold &
Resources Minrico Exploration
R000 Limited Limited Corporate Total
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Net dividends and interest - - (4 102) (4 102)
Depreciation and
Amortisation - (26) (50) (76)
Exploration and
corporate expenditure - (878) (10 174) (11 052)
Other income - 231 4 237 4 468
Profit on sale
of investments 81 771 - 3 142 84 913
Profit/(loss) before
taxation and
equity income 81 771 (673) (6 947) 74 151
Equity income from
Associate - - 126 471 126 471
Taxation - - - -
Net profit/(loss) 81 771 (673) 119 527 200 622
COMMENTS
During March 2004, Randgold & Exploration exercised an option to acquire the
shares of Lunda Alluvial Operations (Pty) Limited, which through its
subsidiaries holds alluvial diamond rights in Angola. The purchase consideration
of R56,7 million was settled through the issue of 2 268 000 new ordinary shares
in Randgold & Exploration. This acquisition was in line with the Company`s
strategy of acquiring an interest in the mineral resource industry where
promising new opportunities are available. Randgold & Exploration followed this
transaction with the acquisition of further alluvial diamond prospecting and
mining licences in Angola, together with the acquisition of mining equipment and
movable assets valued at a total purchase consideration of R105,3 million
through the issue of 5,69 million new Randgold & Exploration ordinary shares to
the vendors.
In June 2004, Randgold & Exploration acquired 5,3 million Western Areas Limited
(`Western Areas`) shares from Anglo South Africa Capital (Pty) Limited
(`Anglo`), a wholly-owned subsidiary of Anglo American plc, for a consideration
of R197,6 million. Inkwenkwezi Gold Mining Consortium (`Inkwenkwezi`), a broad-
based empowerment consortium, agreed to acquire 13,7 million Western Areas
shares from Anglo. Simultaneously, Randgold & Exploration granted Inkwenkwezi a
12-month option to acquire the 5,3 million Western Areas shares at cost plus
interest. Randgold & Exploration has undertaken to Anglo that should Inkwenkwezi
fail to complete the Inkwenkwezi acquisition by not later than 1 November 2004,
Anglo has the right to require Randgold & Exploration to sell back to Anglo the
5,3 million Western Areas shares for a consideration of R70 million less than
the consideration paid for by Randgold & Exploration for such shares including
interest.
Following the Western Areas rights issue in July 2004, the Company acquired a
further 505 313 Western Areas shares for R15,3 million.
During February 2004, Randgold & Exploration entered into an agreement with The
Afrikander Lease Limited (`Aflease`) to subscribe for 24 million Aflease shares
and the right to subscribe for additional Aflease shares, which would have
increased Randgold & Exploration`s shareholding in Aflease to +/- 34%. In July
2004, this agreement has been re-negotiated and a new agreement reached in terms
of which Randgold & Exploration will acquire 94 million Aflease shares in
exchange for 9,4 million new Randgold & Exploration ordinary shares. Randgold &
Exploration has also extended loan facilities of R50 million to Aflease that
will be settled through the issue of Aflease shares. This transaction will
increase Randgold & Exploration`s participation in Aflease to +/- 33%. Aflease
will use the proceeds of the Randgold & Exploration loan and shares to fund its
gold projects at its Bonanza South mine and Modder East project, including a pre
feasibility study on its uranium resources.
Minrico Limited`s platinum joint ventures have progressed further with
additional drilling taking place at its Aurora joint venture with Pan Palladium
Limited (`Pan Palladium`) in the northern Bushveld. Subject to the South African
Reserve Bank approval, Randgold & Exploration has entered into a share swap
agreement with Pan Palladium that will see Randgold & Exploration acquire a
14,6% shareholding in Pan Palladium in exchange for the issue of 2,15 million
new Randgold & Exploration ordinary shares to Pan Palladium. At the Doornbosch
joint venture, mapping has been completed and drilling will commence during the
current quarter.
FINANCIAL REVIEW
The results for the six months ended 30 June 2004 have been prepared in terms of
South African Statements of Generally Accepted Accounting Practice, including
accounting standard AC127, `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 2003.
The Group`s consolidated results reflect a net profit of R106,7 million for the
six months ended 30 June 2004, which is a decrease of 47% from the corresponding
net profit for the six months ended 30 June 2003.
As previously advised in March 2004, Randgold Resources (Holdings) Limited,
which was previously treated as an investment in a foreign entity, has been
viewed as integral to the operations of Randgold & Exploration and therefore the
classification has changed to that of an integral foreign operation. As a result
of the change in classification the financial impact on profit amounted to a
decrease of R41,9 million which primarily contributes to the 47% decrease in net
profit from the previous six months.
Equity income from the Group`s associate, Randgold Resources Limited (`Randgold
Resources`), decreased substantially to R15,8 million from R124,5 million for
the comparative reporting period. The main reasons for the decrease were due to
the reducing of the Group`s interest in Randgold Resources over the past year
from 42,9% at 30 June 2003 to 31,36% on 30 June 2004, through the disposal of
Randgold Resources shares, a 80% decrease in Randgold Resources` net profit to
US$6,8 million compared with the net profit of US$33,7 million for the
corresponding period, and due to the strengthening of the Rand over the past
year.
The profit on the sale of portion of investment in associate of R150,4 million
relates to the sale of 1,6 million Randgold Resources shares for a consideration
of R200,2 million. Capital gains tax of R19,1 million was provided for on the
sale of these shares. Randgold & Exploration has the option to claw back 3
million Randgold Resources shares to increase the Group`s holding in Randgold
Resources to 36,49%.
The profit on the sale of investments relates to the sale of approximately 60,5
million JCI Limited shares during March 2004.
No dividends have been declared for the period under review.
CHANGE OF AMERICAN DEPOSITARY SECURITIES RATIO (`ADS`)
In April 2004, Randgold & Exploration changed the ratio of its ADSs from 1:3 to
1:1. The purpose of the ratio change was to create further stock liquidity and
to enhance the marketability of the ADSs without diluting the current ADR
holders.
PROSPECTS
The proposed acquisition of a substantial shareholding in Aflease will allow
Randgold & Exploration to participate in Aflease`s gold projects at its Bonanza
South mine and its Modder East project. In addition, Aflease has the largest
uranium resources in South Africa, for which Aflease will commence a pre-
feasibility study shortly.
As announced in June 2004, the Angolan diamond opportunities are being rapidly
developed and plant and equipment is being moved to site and will be
commissioned during the third quarter of 2004.
The platinum prospects held through joint ventures with Pan Palladium and
Eurasia are progressing, and encouraging drilling results have been declared by
our partners on the Aurora prospect, where further drilling has been initiated.
On the farm Doornbosch, the UG2 reef will be drilled in the forthcoming quarter
for reserve estimation purposes.
Randgold Resources has concluded the sale of the Syama mine in Mali, and is
progressing well with the development of the Loulo mine, which is planned to
commence production in mid-2005, as an opencast operation. A feasibility study
to develop an underground mine at Loulo has also been commissioned by Steffen,
Robertson and Kirsten (South Africa) (Pty) Limited.
With its new focus on becoming an active mining entity, the Company will
continue to seek out promising opportunities in the future.
For and on behalf of the board
RB Kebble HC Buitendag
Chief Executive Officer Financial Director
Johannesburg 16 September 2004
Randgold & Exploration Company Limited
(`Randgold & Exploration` or `the Company`)
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 Investor Services 2004 (Pty) 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
Sponsor Sasfin Corporate Finance a division of Sasfin Bank Limited
Date: 16/09/2004 05:01:36 PM
Produced by the JSE SENS Department
