RG&E Reports Profit In Difficult Year
Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number1992/005642/06)
Share code: RNG
ISIN: ZAE000008819
Nasdaq trading symbol: RANGY
(`Randgold` or `the Company` or `the Group`)
In a year that has been extremely challenging because of prevailing market
circumstances, Randgold & Exploration (RG&E) reported a profit of R120-million
for the year ending December 31 2004, against a profit of R177-million in the
previous year.
The lower profit stems largely from reduced gold production by Randgold
Resources, where gold production dropped to 204 194 ounces in 2004 from 317 597
in 2003.
In the course of the year RG&E disposed of 3.2-million Randgold Resources shares
at a net profit of R133-million. RG&E however maintains a significant stake in
Randgold Resources with 31 per cent of the shares. Including in this holding are
9.9 million shares that were lent by the company to Bookmark Holdings, an
empowerment vehicle set up to help fund the acquisition by Inkwenkwezi Gold of a
15% stake in Western Areas from Anglo American. Inkwenkwezi is presently
finalizing the purchase of the stake and Bookmark is due to return the shares in
June 2006. RG&E also entered into various transactions with Aflease and Pan
Palladium during the year and at year-end held 54 million shares directly in
Aflease worth R75-million, which have subsequently been sold.
Despite a difficult start in Angola, the Angolan ventures are now coming on
stream which will certainly benefit the bottom line. RG&E chief executive Brett
Kebble said that RG&E now effectively owns a 45.5% interest in the Cassanguidi
alluvial diamond mining venture, in the Lunda Norte area of Angola, a concession
with a history of successful mining. Operations began in December 2004 following
significant investment in infrastructure, plant and equipment by Randgold, and
already profitable. In addition, work has started on further concessions at
Luxinge and Dando Cuanza, which has several known kimberlite pipes. `Exploration
and geological work is underway to develop these high quality deposits, and both
concessions are expected to start producing in excess of 10 000 carats per month
by the end of 2005,` said Kebble. `The diamond potential of Angola is well
documented and Randgold, together with its strategic partners in Angola, is
ideally positioned to benefit directly in the expansion of formal mining
operations in the country.`
RG&E`s earnings from interest increased to R30 million, up from R9- million in
2003 because of funding advanced to RG&E`s joint-venture partners in Angola,
Inkwenkwezi, a BEE company headed by former Transnet head Mafika Mkwanazi. RG&E
has also assisted and continues to assist the acquisition by Inkwenkwezi of 19
million shares in Western Areas.
Through the funding of Inkwenkwezi which is beneficial to both the empowerment
consortium and the company, RG&E continues to be exposed to Randgold Resources
and Western Areas. Kebble says the South Deep mine is a long-term asset of
considerable quality, nearing the end of its development stage and about to
increase production. `The unveiling of the South Deep Twin Shafts in February
this year should see gold production double over the next few years,` he said.
The board is mindful of the current discount to net asset value and is examining
methods of unlocking shareholder value.
Kebble said that within two weeks an announcement would be made regarding the
replacement of two current RG&E directors with independent directors.
FOR FURTHER INFORMATION PLEASE CONTACT DAVID BARRITT ON 082 603 3981 OR LUCY
CORKIN ON 082 850 4774
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