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Randgold Resources (RRS)

  Print      Mail a friend       Annual reports

Thursday 02 August, 2001

Randgold Resources

Results Ended 30 June 2001

Randgold Resources Ld
2 August 2001

For further details please contact:
(Chairman) Roger Kebble on +27 (0) 83-444-3030 or 
+27 (11) 309-6037
(Randgold Resources CEO) Mark Bristow on +44 (0) 779-775-2288


London, 2 August  -  Despite the increased cost of an intensified exploration
programme, Randgold Resources boosted its net profit for the June quarter by
19% to US$4.7 million on the back of another sound performance by the Morila
gold mine in Mali.

Morila, in which Randgold Resources has a 40% stake, produced 163 702 ounces
of gold in the three months to June at a cash operating cost of US$80/oz.  The
company said the mine, which went into full production last October, was
settling down to a steady operation on competent ore, and was meeting all
production expectations. 

Exploration activities were stepped up in May and June, and drilling
programmes have been completed in Burkina Faso and Cote d'Ivoire, and on the
Loulo and Morila projects in Mali.   The feasibility study on Loulo, which was
pended while Morila was being fast-tracked, is being updated.

Meanwhile care and maintenance procedures are being wound up at the Syama mine
in Mali with a plant clean-up that is scheduled for completion in September
this year.  The company said today it was considering options for the sale of
its interest in Syama.

After getting the green light from shareholders last week, Randgold Resources
is proceeding with a buyback of 34% of its issued shares by 28 September this
year.  It said that last year's sale of part of Morila left it with a
substantial cash surplus, and that its share of the cash flow generated by
Morila was expected to be well in excess of future working capital
requirements.  In line with its strategy of creating value and sustaining
superior returns on equity, and in keeping with its tradition of using its
balance sheet efficiently, the company therefore decided to return value
equally to all shareholders through a buyback.

The London-listed company also said today that it was considering a secondary
listing in North America to meet investor demand for facilitated trading in
its shares in that market.

Issued on behalf of Randgold & Exploration Company Limited and Randgold
Resources Limited by du Plessis Associates. 
dPA contact Kathy du Plessis: 
Tel +27 (11) 728 4701, Fax +27 (11) 728-2547 
Mobile (0) 83-266-5847,  E-mail [email protected]


Incorporated in Jersey, Channel Islands Reg. no. 62686


* Net profit increases by 19% to US$4.7 million
* Shareholders approve repurchase of 34% of
  shares at US$7 per share
* First tranche of Morila project finance
  repaid; Syama loan settled
* Intensive drilling programmes on four
  projects completed

Randgold Resources Limited has 33 million shares issued as at 30 June 2001.


                 Unaudited      Unaudited     Unaudited
                   Quarter        Quarter      6 months
                     Ended          ended         ended
                   30 June       31 March       30 June
US$000                2001           2001          2001
Gold sales          17 909         28 454        46 363
   received            714            853         1 567
   recovered            12             13           25
Profit related to 
   sale of half
   of interest 
   in Morila
Other income           264            203          467 
                    18 899         29 523       48 422
Cost and 
   costs             5 301         16 289       21 590
Transport and 
   refinery costs      (93)             -          (93)
Transfer to deferred
   stripping costs      12           (253)        (241)
Cash operating 
   costs             5 220         16 036       21 256
Royalties            1 229          1 822        3 051
Total cash costs     6 449         17 858       24 307
Profit before other
   charges          12 450         11 665       24 115
   expense             957          1 724        2 681
Depreciation and 
   amortisation      1 355          1 455        2 810
Write-down due to 
   impairment of 
   long-term assets      -              -            -
Exploration and 
   expenditure       3 231          2 126        5 357
   provision            48             75          123
Other expenses       2 168          2 685        4 853
Total costs         14 208         25 923       40 131
Profit/(loss) on 
   before taxes
   and minority 
   interests         4 691          3 600        8 291
Income tax               -            (89)         (89)
Net profit on
   before minority 
   interest          4 691          3 511        8 202
Minority shareholders' 
   interest             50            469          519
Net profit           4 741          3 980        8 721
Dividends                                          Nil
   per share                                      0.26
Average shares in issue                     33 092 962


                            Unaudited          Audited
                             6 months        12 months
                                ended            ended
                              30 June           31 Dec
US$000                           2000             2000
Gold sales                     26 050           63 781
Interest received                 100            2 167
Exploration expenditure
   recovered                      252              139
Profit related to sale of 
   half of interest in Morila 124 979          124 979
Other income                    7 899           14 060
                              159 280          205 126
Cost and expenses
Production costs               28 022           56 405
Transport and refinery 
   costs                           99              237
Transfer to deferred
   stripping costs                  -             (367)
Cash operating costs           28 121           56 275
Royalties                       1 472            3 718
Total cash costs               29 593           59 993
Profit before other charges   129 687          145 133
Interest expense               11 453           14 874
Depreciation and 
   amortisation                 8 145           12 208
Write-down due to impairment
   of long-term assets         40 000           74 606
Exploration and corporate
   expenditure                  4 002           10 870
Rehabilitation provision          150            1 903
Other expenses                  6 079            7 569
Total costs                    99 422          182 023
Profit/(loss) on ordinary 
   activities before taxes
   and minority interests      59 858           23 103
Income tax                       (194)            (363)
Net profit on ordinary 
   activities before
   minority interest           59 664           22 740
Minority shareholders' 
   interest                       526            1 621
Net profit                     60 190           24 361
Dividends                         Nil              Nil
Earnings/(loss) per share        1.82             0.74
Average shares in issue    33 056 416       33 062 209


                            Unaudited        Unaudited 
                                   At               At
                              30 June         31 March
US$000                           2001             2001
Cash and equivalents           58 175           68 007
Receivables                    13 624           23 687
Inventories                    11 805           12 936
Total current assets           83 604          104 630
Property, plant and equipment
Cost                          166 098          162 856
Accumulated depreciation      (79 052)         (77 697)
Net property, plant 
   and equipment               87 046           85 159
Other long-term assets            608              114
Total assets                  171 258          189 903
Bank overdraft                  1 467            2 500
Accounts payable and 
   accrued liabilities         24 598           28 218
Total current liabilities      26 065           30 718
Provision for environmental
   rehabilitation               3 657            3 739
Deferred liabilities on
   financial instruments        1 000            8 069
Long-term loans                36 589           46 749
Loans from outside 
   shareholders in
   subsidiaries                21 746           23 042
Total long-term liabilities    62 992           81 599
Total liabilities              89 057          112 317
Interest of outside 
   shareholders in
   subsidiaries' losses       (20 461)         (20 411)
Shareholders' equity          102 662           97 997
Total liabilities and 
   shareholders' equity       171 258          189 903


                              Audited        Unaudited
                                   At               At
                               31 Dec          30 June
US$000                           2000             2000

Cash and equivalents           63 505           92 314
Receivables                    26 769           18 618
Inventories                    10 534           25 800
Total current assets          100 808          136 732
Property, plant and 
Cost                          153 537          162 217
Accumulated depreciation      (76 242)         (72 178)
Net property, 
   plant and equipment         77 295           90 039
Other long-term assets            368              353
Total assets                  178 471          227 124
Bank overdraft                  1 867            3 281
Accounts payable and 
   accrued liabilities         28 292           31 018
Total current liabilities      30 159           34 299
Provision for environmental
   rehabilitation               3 616            1 863
Deferred liabilities on 
   financial instruments        4 368            6 445
Long-term loans                44 071           50 832
Loans from outside shareholders
   in subsidiaries             22 258           22 838
Total long-term liabilities    74 313           81 978
Total liabilities             104 472          116 277
Interest of outside 
   shareholders in
   subsidiaries' losses       (19 942)         (18 848)
Shareholders' equity           93 941          129 695
Total liabilities and 
   shareholders' equity       178 471          227 124


                   Unaudited     Unaudited     Audited
                    6 months      6 months   12 months
                       ended         ended       ended
US$000               30 June       30 June      31 Dec
                        2001          2000        2000
Cash flow from 
Profit before taxes    8 291        59 858      23 103
Profit related to 
   sale of interest 
   in Morila               -             -    (124 979)
Costs transferred 
   to deferred 
   stripping            (240)            -        (368)
Depreciation and 
   impairment          2 810        48 145      86 814
Increase in 
   provision              41           150       1 903
Taxes                    (89)            -           -
Working capital 
   movement            8 180         8 977     (20 013)
Net cash generated 
   from (utilised in) 
   operations         18 993       117 130     (33 540)
Fixed assets 
   additions         (12 561)      (50 992)    (65 850)
Proceeds on disposal
   of interest in 
   Morila (net)           -         49 974     130 737
Net financing 
   raised/(repaid)  (11 362)       (23 397)     33 973
Net increase/
   (decrease) in 
   cash and
   equivalents       (4 930)        92 715      65 320


The net profit for the six months ended June 2001 was US$8.7 million.  This
includes the company's 40% share of Morila's net profit amounting to 
US$17.8 million, corporate and exploration expenditure of US$5.4 million, and
expenses and write-downs relating to Syama's care and maintenance programme of
US$6.5 million.  This compares to US$60 million for the comparative period in
the previous year which included US$125 million profit on the sale of half of
the company's interest in Morila. 

The net profit for the second quarter of the year at US$4.7 million was 19% up
from the previous quarter's US$4 million, despite increased exploration costs
due to the intense drilling programmes which took place in May and June.

Gold sales are down quarter on quarter due to the winding down of Syama, which
from 1 April, have been accounted for in other expenses, net of revenue, which
includes the profit on closing Syama's hedge.

The first tranche of the Morila project finance and the Syama US$15 million
IFC loan have been repaid during the quarter.  The long-term loans remaining
are the company's share of the  balance of the project financing in Morila and
the Morila power plant finance lease.

The figures included in this report have been prepared on the basis of the
accounting policies set out in the audited financial statements for the year
ended 31 December 2000.


                       Quarter    Quarter    Unaudited
                         Ended         to     6 months
                       30 June   31 March   to 30 June
US$000                    2001       2001          2001
Tons mined (000)         5 974      4 142        10 116
Ore tons mined (000)       874        962         1 836
Tons processed (000)       737        590         1 327
Ore grade milled (g/t)    7.47       8.89          8.15
Recovery (%)              92.5       93.3          92.9
Ounces produced        163 702    159 428       323 130
Average price received
   (US$/ounce)             274        265           270
Cash operating cost
   (US$/ounce)              80         72            76
Cash profit/(loss) 
   (US$000)             28 529     27 900        56 429
Attributable (40%)
Ounces produced         65 481     63 771       129 252
Cash profit (US$000)    11 412     11 160        22 572

                           Unaudited        Audited
                            6 months      12 months
                          to 30 June      to 31 Dec
US$000                          2000           2000
Tons mined (000)                   -          4 205
Ore tons mined (000)               -            541
Tons processed (000)               -            500
Ore grade milled (g/t)             -           9.41
Recovery (%)                       -           96.3
Ounces produced                    -        141 615
Average price received(US$/ounce)  -            268
Cash operating cost(US$/ounce)     -             71
Cash profit/(loss) (US$000)        -         25 495
Attributable (40%)
Ounces produced                    -         56 646
Cash profit (US$000)               -         10 198

Note: Production at Morila commenced in October 2000.

Morila continues to meet expectations, achieving 163 702 ozs of production for
the quarter at a cash operating cost of US$80/oz and a total cash cost of
US$99/oz.  The mine is now settling down to a steady operation on competent
ore.  Plant design throughput and recoveries have been achieved.

A potential power shortage caused by a design failure of two Allens engines
has been averted by the installation of temporary high speed generating sets. 
While some production downtime was experienced, impact on production was
minimised by accessing high grade stockpiles.  Throughput has returned to

The second phase of the pit to facilitate early access to the higher grade
section of the orebody, in the north, is progressing well.

The Morila operation is currently meeting its completion test parameters for
the conversion of the project loans to non-recourse finance.  The completion
test period ends on 31 August 2001.


In line with the decision to place the mine on care and maintenance, roaster
operations were shut down in May and clean-up of the plant commenced in June. 
Clean-up is scheduled to be completed by September 2001.

Another phase of the retrenchment programme was conducted in June and further
reductions of the work force are planned during the current quarter to reduce
the manning levels to a care and maintenance crew only.

The company is currently considering options for the disposal of its interest
in Syama.


Details of hedging financial instruments at 30 June 2001 are:

The company's share of gold which has been sold forward at a fixed price of
US$275/oz over the period July 2001 to December 2004 amounts to 229 913 ozs. 
Randgold Resources' share of purchased call options for the same period
amounts to 81 384 ozs at prices between US$330/oz and US$360/oz and sold call
options of 148 500 ozs at US$353/oz.


During the quarter the company completed drilling programmes in Burkina Faso,
Cote d'Ivoire and on the Loulo and Morila Projects in Mali.

On the Loulo Project in Mali, drilling delineated extensions to the Yalea and
Loulo 0 orebodies and highlighted a new target referred to as Loulo 2.  At
Yalea, mineralisation has been extended a further 400 metres northwards
averaging 2.7 g/t over 12 metres and three flat zones have been outlined over
a 500 metre strike length in the footwall to Yalea with widths of 7 - 10
metres grading 2.5 - 3 g/t.  Drilling in the southern extension of the Loulo 0
orebody has confirmed the fault-fold model and outlined additional resources
returning grades of 3.7 to 4.6 g/t over 7 - 9 metres.  Two reconnaissance
diamond holes drilled into the Loulo 2 target returned intercepts of 23 metres
@ 5.7 g/t and 40 metres @ 2.3 g/t.  Mineralisation is open in all directions. 
Resource modelling is currently in progress which will precede a revision of
the feasibility study.

In the Morila region within Mali, a 1 429 hole (31 336 metres) RAB programme
and an airborne EM survey were completed on the Morila Mine Lease; results are
awaited.  Multi-phased exploration programmes over the company's eight permits
around Morila Mine have defined twelve gold targets and numerous anomalies for
follow-up field work next season.

On the Tongon Project in the Cote d'Ivoire, drilling programmes, covering a
strike length of four kilometres over two mineralised zones, have been
completed.  In the Southern Zone multiple mineralised units have been
intersected over a strike length of 1 400 metres.  On receipt of all results
an updated resource model will be completed during the forthcoming quarter.

In Burkina Faso, reverse circulation drilling at the Gougre target returned
encouraging intercepts of 19 metres @ 5.6 g/t, 8 metres @ 4.6 g/t, 14 metres @
2.5 g/t and 15 metres @ 4.6 g/t within silica-magnetite altered basalt with
disseminated pyrite plus arsenopyrite.  Additional drilling in a north-west -
south-east direction following a mineralised intrusive contact model failed to
yield significant results.  Delta Gold have elected not to proceed with the
Joint Venture due to a corporate decision to refocus exploration activities. 
A review of drilling information and geological modelling is currently in


On 28 June 2001, the company announced a proposal to buy back 34.08% of its
shares held by each shareholder at a price of US$7 per share. The shareholders
voted in favour of the repurchase at an Extraordinary General Meeting held on
23 July 2001.  As part of the financing of this transaction, Randgold
Resources has reached agreement with NM Rothschild & Sons, Societe Generale
and Standard Bank London for a US$25 million four-year term facility and a
US$10 million four-year revolving credit facility. The drawdown is subject to
certain conditions precedent such as Morila passing project financing
completion tests, currently in progress.  The share buyback is expected to be
completed by 28 September 2001.


Management expects Morila to continue to meet its budgets and plans. 
Production from Syama's stockpiles is planned to cease towards the end of the
next quarter.  The operation is now greatly reduced and its impact on the
company's results will lessen further as operations are wound down.  Corporate
and exploration expenditure is budgeted at current levels.

Field exploration activities have now ceased due to the onset of the rainy
season.  During this period all new data will be processed and targets
prioritised for the forthcoming field season.

Incorporating the results of the latest drilling programme a revision of the
Loulo feasibility study and a Type II feasibility study at Tongon will be
completed by March 2002.  The company continues its focus on developing
exploration opportunities, as well as pursuing new acquisitions and
development projects that meet our strategic criteria.

Contact with investors during a recent roadshow highlighted the requirement
for management to address the issue of facilitating trading in the company's
shares in North America through a secondary listing in that market.  This
issue is being investigated.

On behalf of Randgold Resources Limited

R A R Kebble                        D M Bristow
Chairman                        Chief Executive

2 August 2001

La Motte Chambers, La Motte Street, St Helier, Jersey JEI IBJ, Channel Islands
Computershare Investor Services (Channel Islands) Limited,
P.O. Box 83, Ordinance House, 31 Pier Road,
St Helier, Jersey JE4 8PW, Channel Islands
Computershare Services plc, P.O. Box 663, 7th Floor, Jupiter House, 
Triton Court, 14 Finsbury Square, 
London EC2A 1BR
For further information contact 
Kathy du Plessis on Telephone +27(11) 728-4701,
Fax +27(11) 728-2547,
e-mail: [email protected]


a d v e r t i s e m e n t