HomeGoldRandgold posts 79% year-on-year profit

Randgold posts 79% year-on-year profit

The stockpile at
Randgold’s flagship
Loulo project in Mali
London, England — MININGREVIEW.COM — 08 February 2010 – International gold mining and exploration company Randgold Resources Limited crowned a year in which it expanded its flagship Loulo operation, progressed the development of a new mine at Tongon, advanced two major new discoveries and completed the Moto acquisition, by posting a 79% year-on-year profit increase on the back of record production at Loulo.

Results for 2009 published here today show a profit of US$84.3 million (R632 million), compared to US$47 million (R358 million) for 2008. The fourth quarter profit of US$38.7 million (R290 million) was up 185% quarter-on-quarter and 315% up on the corresponding quarter in 2008. Given the profit increase, the board increased the annual dividend by 30% to 17 US cents per share. The company’s balance sheet remains strong, with US$590 million R4.4 billion) in cash and no net debt.

The results statement added that attributable group gold production for the year was up 14% at 488 255 ounces, boosted by a strong fourth quarter performance from Loulo, where the recently completed plant expansion significantly increased throughput. Loulo’s production for the year was 351 591 ounces (2008: 258 095 ounces), of which 106 564 ounces came in the last quarter. The Morila joint venture “’ successfully converted to a stockpile re-treatment operation at the beginning of 2009 “’ produced 341 661 ounces, slightly higher than forecast due to better than planned recoveries and grade.

The pre-feasibility study on the Massawa project in Senegal was completed, delivering a reserve of 1.5 million ounces at a grade of 4.6g/t and pointing to more upside. The board approved the study which demonstrated that even without the underground resources it meets the company’s investment hurdle rates. It has now moved into the feasibility phase, while the pre-feasibility study on the Gounkoto project near Loulo in Mali is on track for completion in the first quarter of 2010. The initial scoping study on Gounkoto defined a robust resource at a significant grade.

The new projects, combined with a resource conversion drive, have increased attributable group reserves by an estimated 60%. An updated reserve and resource statement will be published with the company’s annual report in March.

In the meantime, the development of the Tongon project in Côte d’Ivoire has continued to make good progress and the new mine is on track to start production in the fourth quarter of this year. At Loulo, the Yalea underground mine is still being developed but contributed a record 57 000 tonnes of ore in the December month. Work on Gara, the second underground mine at Loulo, is scheduled to start during the first half of 2010.

The company today also announced that it was moving the target date for first production at the recently acquired Kibali project in the Democratic Republic of Congo ahead to January 2014. Randgold will manage the project “’ a joint venture with AngloGold Ashanti “’ in which it has a 45% interest, with the DRC parastatal OKIMO holding the remaining 10%.

An update of the existing data on Kibali has produced a 23% increase in the indicated resource, which now stands at 13.93 million ounces, while the reserves have grown by 67% to 9.2 million ounces. The company is now focusing on the relocation programme, the environmental and social impact baseline studies, and the optimisation of the development schedule.