Randgold Resources Ld
05 August 2004
CONSTRUCTION PROGRESSING RAPIDLY AT LOULO AS UNDERGROUND EXPANSION PROJECT GETS
London, 5 August 2004 (LSE:RRS) (Nasdaq:GOLD) - The London and Nasdaq listed
gold miner Randgold Resources reported today that the development of its new
open-pit mine at Loulo in Mali, scheduled to go into production in July next
year, was making rapid progress and said it was also proceeding with a full
feasibility study on long-life underground operations at the mine.
The Company said with some 700 construction workers on site, excavations and
earthworks had already been completed and the key concrete foundations were
above terrace level ahead of the rainy season. The first of the water storage
dams had been completed, the aggregate crushing and concrete batching facilities
were operational, and a road system had been established to ensure full access
to the site during the rainy season. Meanwhile, the US$60 million project
financing had almost been finalised.
While the open-pit mine is being built, aggressive drilling has continued at
Loulo to test the continuation of high-grade payshoots within the project area.
A prefeasibility study by SRK Consulting has confirmed the potential for the
development of long-life underground operations exploiting the extensions to the
Yalea and Loulo 0 orebodies. A full feasibility study along with another phase
of infill drilling, has now been commissioned.
Elsewhere in Mali the Morila mine - 40% owned by Randgold Resources - was
still feeling the effects of the operational difficulties experienced with the
recently commissioned plant expansion project. Throughput and recoveries were
lower than planned and consequently production for the quarter dipped to 85 081
ounces from the previous quarter's 107 115 ounces.
Chief executive Dr Mark Bristow said correcting the operational efficiencies and
returning Morila to planned production levels was now management's top priority.
'In conjunction with our joint venture partners, we have developed a technical
action plan and timetable to achieve this as a matter of urgency. The operator
is committed to this plan and progress will be reviewed at short intervals by
the two partners' senior managements. We expect a significant performance
improvement in the third quarter, but we've scaled the production forecast for
the year down to 500 000 ounces,' he said.
The sale of Syama, the Company's other mine in Mali, was completed during the
June quarter, realising a profit of US$7.1 million, not including future royalty
The Company posted a net profit of US$11.7 million for the quarter (March
quarter: net loss of US$4.9 million) but the impact of the below-plan production
at Morila reduced its profit from mining from US$7.8 million to US$3.6 million.
Exploration and corporate expenditure was up 38% at US$4.2 million, reflecting
the Company's intensive exploration campaign.
During the quarter, this campaign focused on the completion of exploration
programmes in West Africa ahead of the rainy season and on implementing the
results of its generative work in East Africa.
Aside from the ongoing exploration at Loulo, drilling continued on the Morila
joint venture's north western extension of the orebody as well as other very
promising targets in the lease area. In the Morila region, surface work and
ground geophysics have highlighted eight new targets for drill testing.
Reconnaissance drilling started in Senegal and at the Adansi Asaasi joint
venture in Ghana, soil sampling, field mapping and adit identification have been
completed on 37% of the permit area. In Tanzania, exploration in the Mara Belt
is concentrating on mineralisation similar to that being exploited by Placer
Dome on the adjoining permits, while in the Musoma area trenching has
highlighted new surface mineralisation. Randgold Resources recently extended
its presence in the Musoma and Mara regions through a joint venture with Barrick
and now holds 19 licences in Tanzania. In Burkina Faso, a gold-bearing shear
zone is being explored on the Danfora permit, and the company has acquired a
second permit known as Kiaka.
'We said at the outset that 2004 was going to be a year of consolidation and
construction for Randgold Resources. As is evidenced by our high level of
exploration activity, however, we remain a return-driven business committed to
organic growth. While our focus is therefore firmly on discovery and
development, we also continue to search for value or strategic leverage in
merger and acquisition opportunities,' Bristow said.
Full results available at : http://www.randgoldresources.com/cws/mvcServlet/
RANDGOLD RESOURCES ENQUIRIES:
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, email@example.com
DISCLAIMER: Statements made in this document 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, the development of Loulo and estimates of reserves and mine life. For a
discussion on such risk factors, refer to the annual report on Form 20-F for the
year ended 31 December 2003, which was filed with the Securities Exchange
Commission on 30 June 2004. Randgold Resources assumes no obligation to update
information in this release. Cautionary Note to US Investors: The United States
Securities Exchange Commission (the 'SEC') permits companies, in their filings
with the SEC, to disclose only proven and probable ore reserves. We use certain
terms in this release, such as 'resources', that the SEC does not recognise and
strictly prohibits us from including in our filings with the SEC. Investors are
cautioned not to assume that all or any part of our resources will ever be
converted into reserves which qualify as 'proven and probable reserves' for the
purposes of the SEC's industry guide number 7.
This information is provided by RNS
The company news service from the London Stock Exchange