TIDMRRS
RNS Number : 2341X
Randgold Resources Ld
09 August 2018
RANDGOLD RESOURCES LIMITED
Incorporated in Jersey, Channel Islands
Reg. No. 62686
LSE Trading Symbol: RRS
NASDAQ Trading Symbol: GOLD
KIBALI'S RECORD RESULTS LEAD GROUPWIDE IMPROVEMENT
London, 9 August 2018 - Another robust performance by Kibali
highlighted a quarter in which Randgold Resources posted
across-the-board advances.
Results for the quarter to June show gold production up 9%
quarter on quarter at 313 302 ounces, total cash cost per ounce
down 3% at $697 and gold sales of $411.5 million up 5% despite a
lower gold price. Profit from mining was up 6% at $190.6 million
and net cash generated by the operations rose by 49% to $95.5
million.
Kibali ramped up underground mining as planned and continued
improvements in throughput and recovery helped to boost production
to a record 201 742 ounces, up 17% on the previous quarter. Total
cash cost per ounce decreased by 11% to $651, reflecting the higher
grade as well as lower power costs from increased hydropower. The
mine's third and last hydropower station is currently being
commissioned.
At the end of the quarter, Kibali's underground operation
successfully transitioned from contractor mining to owner mining,
following the example of the Loulo mines. As at Loulo, the move is
expected to deliver cost reductions and efficiency improvements.
Kibali remains on track to beat its 2018 production forecast.
The Loulo-Gounkoto complex performed in line with plan,
increasing production by 4% to 150 117 ounces while progressing the
Gounkoto super pit project. Since the quarter, Randgold and the
Malian government have agreed on a revised investment convention
for Gounkoto to support the development of the super pit.
Tongon recovered well from a series of work stoppages in the
first quarter which carried over to the start of the second quarter
to increase production by 12% to 65 259 ounces. Since the end of
the quarter, however, a new work stoppage halted operations and the
mine is working on a recovery plan to get back to full production
with expected annual production revised to around 250koz.
Morila's results were also in line with plan as it moves towards
closure. Its agripole project, designed to mitigate the
socio-economic impact of closing the mine, is awaiting final
government endorsement. While the operation is mainly processing
tailings, it has also started mining the Ntiola satellite pit.
In Senegal, an updated base case on the Massawa project has
confirmed the robustness of the project and the upside potential as
it progresses through the final feasibility study to an investment
decision expected by the end of the year. In addition to the
potential benefits of ongoing drilling below the central zone, the
government's electrification roll-out plan, which envisages grid
power access at Massawa by 2022, could have a significant impact on
the project's economics.
On the exploration front, Randgold's brownfields reserve
replacement teams made significant progress at Kibali, Yalea and
Tongon which will reinforce the robustness of the group's 10-year
business plan which is profitable at a long term gold price of $1
000/oz. Greenfields exploration, including airborne and ground
geophysical surveys, continued to advance the exploration portfolio
which also includes the new Bambadji permit across the border from
Loulo in Senegal.
Chief executive Mark Bristow said the quarter's results
highlighted the Randgold team's ability to deal effectively with
multiple challenges, including the work stoppages, continuing
negotiations with the DRC government about its new mining code, the
sequencing of the Gounkoto pit pushback and Ntiola's permitting
delay.
"The Tongon work stoppage is obviously a challenge, but we take
comfort from the government's leadership in ensuring measures are
taken to protect the assets and that they are dealing with the
situation. We are still assessing its impact but at this stage we
still believe that, given Kibali's strong performance, we are on
track to be within the group production and cost guidance for
2018," he said.
RANDGOLD ENQUIRIES:
Chief Executive Financial Director Investor & Media
Mark Bristow Graham Shuttleworth Relations
+44 788 071 +44 1534 735 Kathy du Plessis
1386 333 +44 20 7557 7738
+44 779 775 +44 779 771 Email: randgold@dpapr.com
2288 1338
Website: www.randgoldresources.com
------------------------------------------------------------------------------
Report for the second quarter ended 30 June 2018
Randgold Resources Limited ('Randgold') had 94.4 million shares
in issue as at 30 June 2018.
HIGHLIGHTS
-- GROUP PRODUCTION UP 9%(1)
-- KIBALI POSTS RECORD QUARTER
-- GROUP TOTAL CASH COST PER OUNCE DOWN 3%(1)
-- NET CASH GENERATED FROM OPERATIONS UP 49%(1)
-- $189 MILLION DIVID PAID IN Q2
1 Q2 2018 compared with Q1 2018.
Key Performance Indicators
-- Group gold production up 9% quarter on quarter
-- Group total cash cost per ounce down 3% quarter on
quarter
-- Gold sales up 5% quarter on quarter, despite lower average
gold price
-- Profit from mining up 6% quarter on quarter
-- Net cash generated from operations up 49% quarter on
quarter
-- Kibali posts record quarter and stays ahead of plan
-- Loulo-Gounkoto performs in line with guidance
-- Tongon production up 12% quarter on quarter
-- Morila has steady quarter; mining starts at Ntiola
-- Preliminary economic update confirms Massawa
profitability
-- Mercator target offers opportunity to extend Tongon mine
life
-- Deep drillhole in Yalea central zone returns high grade
intersection
-- Kibali exploration shows potential for underground and
opencast resource expansion
-- $188.8 million dividend paid in Q2
SUMMARISED FINANCIAL INFORMATION
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
$000 2018 2018 2017 2018 2017
-------------------------------------------- -------- -------- -------- --------- ---------
Average gold price received ($/oz) 1 299 1 331 1 254 1 314 1 237
-------------------------------------------- -------- -------- -------- --------- ---------
Gold sales(1) 411 513 391 814 422 137 803 327 831 740
-------------------------------------------- -------- -------- -------- --------- ---------
Total cash costs(1) 220 958 211 880 192 441 432 838 400 164
-------------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) 190 555 179 934 229 696 370 489 431 576
-------------------------------------------- -------- -------- -------- --------- ---------
Exploration and corporate expenditure 14 949 15 802 12 823 30 751 23 731
-------------------------------------------- -------- -------- -------- --------- ---------
Profit for the period 58 372 66 520 102 788 124 892 187 712
-------------------------------------------- -------- -------- -------- --------- ---------
Profit attributable to equity shareholders 51 973 57 537 84 031 109 510 153 849
-------------------------------------------- -------- -------- -------- --------- ---------
Net cash generated from operations 95 544 63 974 132 346 159 518 265 457
-------------------------------------------- -------- -------- -------- --------- ---------
Cash and cash equivalents(2) 603 673 739 457 572 838 603 673 572 838
-------------------------------------------- -------- -------- -------- --------- ---------
Gold on hand at period end(3) 16 383 21 930 19 082 16 383 19 082
-------------------------------------------- -------- -------- -------- --------- ---------
Group production (oz) 313 302 286 890 341 316 600 192 663 786
-------------------------------------------- -------- -------- -------- --------- ---------
Group sales(1) (oz) 316 804 294 428 336 516 611 232 672 119
-------------------------------------------- -------- -------- -------- --------- ---------
Group total cash cost per ounce(1) ($) 697 720 572 708 595
-------------------------------------------- -------- -------- -------- --------- ---------
Group cash operating cost per ounce(1) ($) 636 656 508 646 533
-------------------------------------------- -------- -------- -------- --------- ---------
Basic earnings per share ($) 0.55 0.61 0.89 1.16 1.64
-------------------------------------------- -------- -------- -------- --------- ---------
1 Refer to explanation of non-GAAP measures provided.
Randgold consolidates 100% of Loulo, Gounkoto and Tongon,
40% of Morila and 45% of Kibali in the consolidated
non-GAAP measures.
2. Cash and cash equivalents excludes $8.6 million at
30 June 2018 ($5.0 million at 31 March 2018 and $17.9
million at 30 June 2017) that relates to the group's
attributable cash held in Morila, Kibali and the group's
asset leasing companies which are equity accounted.
3 Gold on hand represents gold in doré at the mines
(attributable share) multiplied by the prevailing spot
gold price at the end of the period.
The results in this report have been neither
reviewed nor audited. All financial numbers
are in US dollars ($) unless otherwise stated.
COMMENTS
Gold sales for the quarter of $411.5 million increased by 5%
from $391.8 million in the previous quarter. The number of gold
ounces sold for the quarter was up 8% on the previous quarter
following improved production at the Loulo-Gounkoto complex, Tongon
and Kibali. The average gold price received of $1 299/oz decreased
by 2% quarter on quarter (Q1 2018: $1 331/oz). Gold sales decreased
by 3% from the corresponding quarter of 2017, reflecting the 6%
lower ounces sold in the current quarter, offset by a 4% higher
average gold price received (Q2 2017: $1 254/oz).
Total cash costs for the quarter of $221.0 million were 4%
higher than prior quarter and up 15% from the corresponding quarter
of 2017. Costs were higher at Kibali, Tongon and at the
Loulo-Gounkoto complex, on the back of higher throughput. Total
cash cost per ounce of $697 decreased by 3% quarter on quarter and
increased by 21% compared to the corresponding quarter in 2017. The
decrease quarter on quarter is mainly the result of higher gold
production and slightly offset by costs related to the increased
throughput.
Profit from mining increased by 6% to $190.6 million from the
previous quarter, but decreased by 17% on the corresponding quarter
of 2017. The increase from the prior quarter reflects the increased
production during the current quarter partially offset by higher
costs of production. The decrease from the corresponding quarter of
2017 reflects the drop in production and increased costs as
explained above.
Exploration and corporate expenditure of $14.9 million was in
line with the previous quarter (Q1 2018: $15.8 million), however it
increased by 17% compared to the corresponding quarter in 2017,
principally due to increased greenfields exploration expenditure
during the quarter, especially drilling.
Depreciation and amortisation of $50.9 million increased by 9%
from the previous quarter and increased by 21% against the
corresponding quarter of 2017. The increase quarter on quarter is
due to higher throughput at Tongon and Loulo offset by lower
throughput at Gounkoto. The increase on the corresponding quarter
of 2017 was due to higher throughput at Loulo as well as increases
in the asset bases of both Loulo (capitalised underground
development) and Gounkoto (deferred stripping asset), offset by
lower throughput at Gounkoto and Tongon.
Other income in the quarter of $3.0 million decreased from the
previous quarter, as well as the corresponding quarter of the prior
year. Management fees from Kibali and Morila of $1.6 million were
in line with the previous quarter and the corresponding quarter of
the prior year. The decrease from the prior quarter, as well as the
corresponding quarter in 2017, is the result of net operational
foreign exchange gains of $7.1 million and $6.2 million that were
included in other income during the previous quarter and
comparative quarter respectively, compared to a net operational
foreign exchange loss in the current quarter of $11.4 million
included in other expenses. These gains and losses arise largely
from the translation of balances denominated in currencies such as
CFA, euro and South African rand to the US dollar rate, especially
in relation to TVA (value added tax) receivables and prepaid tax
balances, as well as from the settlement of invoices in currencies
other than the US dollar and reflects the movements in these
currencies and timing of payments during the respective
quarter.
Share of profits from equity accounted joint ventures was $20.9
million compared to share of profits of $13.8 million in the
previous quarter and to share of losses of $3.4 million in Q2 2017.
Kibali's share of equity accounted joint venture profits was $22.0
million in the current quarter compared to a profit of $12.7
million in Q1 2018. Profit from mining (attributable) for Kibali
for Q2 2018 was $59.8 million compared to a profit of $48.0 million
in Q1 2018, reflecting higher gold sales, higher grade, slightly
improved recovery and lower cash costs. The share of profits from
the Kibali joint venture is stated after depreciation of $38.1
million (Q1 2018: $39.4 million), foreign exchange losses of $0.3
million (Q1 2018: $0.3 million) and a deferred tax charge of $1.0
million (Q1 2018: credit of $3.2 million). The movement in the tax
charge in the current quarter compared to a credit in the previous
quarter was a result of a decrease in the deferred tax asset
associated with tax losses/allowances carried forward.
Morila's share of equity accounted joint venture profits
decreased to a loss of $1.0 million compared to a profit of $0.9
million in Q1 2017 and a profit of $0.9 million in Q2 2017,
following lower gold sales and higher input costs.
Income tax expense of $16.0 million was 23% lower than the
charge in the previous quarter (Q1 2018: $20.7 million) and
decreased by 66% from the corresponding quarter in 2017, mainly due
to decreased profits at Loulo, Gounkoto and Tongon.
Profit for the quarter of $58.4 million was down 12% from the
previous quarter and down 43% from the corresponding quarter of
2017. The movement quarter on quarter reflects the increase in
profit from mining offset by increased depreciation and other
charges during the quarter, as explained above. The decrease from
the corresponding quarter of 2017 mainly reflects the decrease in
profit from mining.
Basic earnings per share decreased by 10% quarter on quarter to
$0.55 (Q1 2018: $0.61) and decreased by 38% compared to the
corresponding quarter in 2017 (Q2 2017: $0.89) reflecting the lower
profits in the current quarter.
Net cash generated from operating activities for the quarter of
$95.5 million increased by 49% from the previous quarter but
decreased by 28% from the corresponding quarter in 2017. The change
quarter on quarter primarily reflects the movement in profits from
operations.
OPERATIONS
LOULO-GOUNKOTO COMPLEX
The combined quarterly gold production for the Loulo-Gounkoto
complex was 150 117oz (Loulo 101 075oz and Gounkoto 49 042oz), an
increase of 4% compared to the previous quarter (Q1 2018: 144
056oz), on the back of improved throughput, while the grade and
recovery remained in line with the prior quarter. The total cash
cost per ounce was $691 (Q1 2018: $693/oz), slightly lower than the
prior quarter.
Sustainability
The complex continued contributing to community development with
$0.9 million invested in the ongoing development of the
agribusiness project, financing of a bursary programme for 52 local
students, rehabilitation of an important community road linking
four villages at the international border and support for the
school improvement programme in conjunction with the World
Education NGO. As part of our rehabilitation programme, 100ha of
land was identified to be rehabilitated this year, with 686 trees
planted. No major environmental incident was recorded and the mines
remain ISO 14001: 2015 certified. The agribusiness continues to
perform well with its second batch of 69 students enrolled. A
graduation ceremony was held for the first batch, with their
introduction to farming having started and planned for completion
in Q3 2018.
LOULO-GOUNKOTO COMPLEX RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 9 326 9 805 8 574 19 131 16 056
Ore tonnes mined (000) 1 583 1 478 1 771 3 061 2 922
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 1 317 1 273 1 223 2 591 2 386
Head grade milled (g/t) 3.8 3.8 5.4 3.8 5.4
Recovery (%) 92.9 93.4 92.3 93.1 92.4
Ounces produced 150 117 144 056 194 091 294 173 380 457
Ounces sold 153 747 144 690 192 948 298 437 378 954
Average price received ($/oz) 1 303 1 331 1 258 1 316 1 241
Cash operating costs(1) ($/oz) 613 614 382 613 420
Total cash costs(1) ($/oz) 691 693 458 692 495
Gold on hand at period end(2) ($000) 9 878 15 263 8 362 9 878 8 362
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 94 055 92 205 154 427 186 260 282 901
--------------------------------------- -------- -------- -------- --------- ---------
Gold sales(1) ($000) 200 317 192 547 242 776 392 864 470 283
--------------------------------------- -------- -------- -------- --------- ---------
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
LOULO
One Lost Time Injury (LTI) was recorded during the quarter with
a Lost Time Injury Frequency Rate (LTIFR) of 0.66 per million hours
worked compared to 1.36 per million hours worked recorded in the
previous quarter. The Total Injury Frequency Rate (TIFR) also
decreased quarter on quarter from 7.46 to 4.65 per million hours
worked. No major environmental incident occurred during the
quarter.
On a standalone basis, Loulo produced 101 075oz of gold (Q1
2018: 77 298oz) at a total cash cost of $664/oz (Q1 2018: $706/oz).
The increase in production was mainly due to 28% higher tonnes
processed and 2% higher grade while the recovery was in line with
the previous quarter. Total cash cost per ounce decreased by 6%
compared to the previous quarter as a result of the increased
production and lower mining costs.
Higher grades from Yalea underground were offset by the lower
grade ore from the Baboto satellite pit resulting in higher plant
throughput and head grade in line, compared to the previous
quarter.
Profit from mining of $65.8 million was 34% higher than the
previous quarter as a result of the higher production at lower
cost, notwithstanding the slightly lower average gold price
received.
Capital expenditure
Total capital expenditure for Q2 2018 was $23.4 million, which
related mainly to the underground development ($12.4 million) and
ongoing surface and exploration capital ($9.0 million), including
drilling at Gara South, Yalea and Baboto ($6.1 million), and
brownfields exploration expenditure ($1.2 million). Underground
capital was focused on development at Yalea ($7.8 million) and Gara
($4.6 million).
LOULO STANDALONE RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 1 132 996 681 2 129 1 320
Ore tonnes mined (000) 878 746 670 1 624 1 302
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 821 639 644 1 460 1 242
Head grade milled (g/t) 4.1 4.0 6.5 4.1 6.2
Recovery (%) 92.9 93.4 92.3 93.1 92.3
Ounces produced 101 075 77 298 123 969 178 373 229 308
Ounces sold 102 703 78 353 122 168 181 056 227 166
Average price received ($/oz) 1 304 1 331 1 258 1 316 1 242
Cash operating costs(1) ($/oz) 586 626 404 603 433
Total cash costs(1) ($/oz) 664 706 479 682 508
Gold on hand at period end(2) ($000) 6 028 9 295 6 030 6 028 6 030
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 65 756 48 972 95 116 114 728 166 769
--------------------------------------- -------- -------- -------- --------- ---------
Gold sales(1) ($000) 133 935 104 250 153 671 238 185 282 118
--------------------------------------- -------- -------- -------- --------- ---------
Randgold owns 80% of Société des Mines
de Loulo SA (Loulo) and the State of Mali owns
20%. Randgold has funded the whole investment
in Loulo by way of shareholder loans and therefore
controls 100% of the cash flows from Loulo until
the shareholder loans are repaid.
Randgold consolidates 100% of Loulo and shows
the non-controlling interest separately.
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
Loulo underground
Underground ore production was higher than the previous quarter
and in line with plan. Development of the Yalea South lower incline
and advancing the South decline improved Jumbo efficiency and
heading availability. The Gara Striker Belt project which is
designed to improve the ore extraction capacity, was completed at
the end of May 2018, as per schedule.
LOULO UNDERGROUND RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
-------------------- -------- -------- -------- --------- ---------
YALEA
Ore tonnes mined 371 248 361 283 384 260 732 531 747 158
Development metres 1 112 1 474 1 782 2 586 3 492
-------------------- -------- -------- -------- --------- ---------
GARA
Ore tonnes mined 276 508 283 727 286 171 560 235 554 972
Development metres 1 504 1 566 1 974 3 070 3 883
-------------------- -------- -------- -------- --------- ---------
GOUNKOTO
No LTI was recorded during the quarter with an LTIFR of zero, as
in the previous quarter. The TIFR decreased by 61% compared from
the prior quarter to 3.28 per million hours worked. No major
environmental incident occurred during the quarter.
On a standalone basis, Gounkoto produced 49 042oz of gold (Q1
2018: 66 758oz) at a total cash cost per ounce of $746 (Q1 2018:
$679/oz). The lower production was mainly due to the planned
decrease in tonnes processed and lower head grade milled as the
pushback for the super pit progressed, while the recovery was in
line with the previous quarter. Total cash cost per ounce increased
by 10% compared to the previous quarter, mainly due to the lower
grade and production.
Profit from mining for the quarter of $28.3 million was lower
than the previous quarter (Q1 2018: $43.2 million), reflecting the
lower gold production and gold sold, higher cash costs as well as
slightly lower average gold price received.
Capital expenditure
Total capital expenditure for Q2 2018 was $5.3 million,
primarily relating to the mining fleet rebuild activities ($3.6
million), deferred stripping ($1.3 million) and conversion
drilling.
GOUNKOTO STANDALONE RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 8 193 8 809 7 893 17 002 14 735
Ore tonnes mined (000) 705 732 1 101 1 437 1 620
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 497 634 579 1 131 1 144
Head grade milled (g/t) 3.3 3.5 4.1 3.4 4.4
Recovery (%) 92.9 93.4 92.3 93.2 92.4
Ounces produced 49 042 66 758 70 122 115 800 151 149
Ounces sold 51 044 66 337 70 780 117 381 151 788
Average price received ($/oz) 1 300 1 331 1 259 1 318 1 240
Cash operating costs(1) ($/oz) 668 599 345 629 400
Total cash costs(1) ($/oz) 746 679 421 708 475
Gold on hand at period end(2) ($000) 3 850 5 968 2 332 3 850 2 332
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 28 299 43 233 59 311 71 532 116 132
--------------------------------------- -------- -------- -------- --------- ---------
Gold sales(1) ($000) 66 382 88 296 89 105 154 678 188 165
--------------------------------------- -------- -------- -------- --------- ---------
Randgold owns 80% of Société des Mines
de Gounkoto SA (Gounkoto) and the State of Mali
20%. Randgold consolidates 100% of Gounkoto
and shows the non-controlling interest separately.
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
MORILA
No LTI was recorded in the quarter and the LTIFR was zero (Q1
2018: 2.14). No major environmental incident occurred during the
quarter.
Gold production amounted to 17 856oz, a 2% decrease on the
previous quarter (Q1 2018: 18 257oz), with a slightly lower grade
and recovery partially offset by slightly higher throughout.
Mining of the Ntiola deposit started in May 2018 after
completion of all required processes for the inclusion of both the
Ntiola and Viper deposits into the Morila permit. A total of 161kt
of ore was treated from the pit material mined at a grade of
1.52g/t with a strip ratio of 8.0.
The TSF de-capping operation is progressing well and a total of
2.1Mt of waste material was hydrosluiced to the pit.
The total cash costs for the quarter was $1 109/oz, representing
a 14% increase on the previous quarter (Q1 2018: $969/oz). This was
due to the lower production and higher mining costs associated with
the start-up of mining the Ntiola pit.
Sustainability
The Morila Agripole project endorsement process remains ongoing,
and following feedback received from the Prime Minister's office,
some changes to the application will be required. These are being
undertaken with the concerned ministries before resubmission to the
Prime Minister for approval. The rehabilitation programmes
continued during the quarter, including at the Domba mining area,
with the focus on controlling erosion. A trial project of 1ha of
Jatropha trees has been planted on a portion of the TSF that has
already been cleared.
Capital expenditure
Capital expenditure amounted to $2.2 million for the quarter and
relates mainly to the Ntiola-Viper road construction and other
preparation works.
MORILA RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 1 454 1 299 - 2 753 -
Ore tonnes mined (000) 161 223 - 384 -
TSF material processed (000) 1 173 994 1 451 2 167 2 900
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 1 334 1 253 1 482 2 588 2 916
Head grade milled (g/t) 0.6 0.6 0.6 0.6 0.6
Recovery (%) 70.6 71.5 61.1 71.1 59.4
Ounces produced 17 856 18 257 16 057 36 113 29 626
Ounces sold 15 777 21 350 16 422 37 127 30 189
Average price received ($/oz) 1 281 1 329 1 268 1 309 1 254
Cash operating costs(1) ($/oz) 1 033 890 850 951 919
Total cash costs(1) ($/oz) 1 109 969 927 1 029 994
Profit from mining activity(1) ($000) 2 724 7 674 5 611 10 398 7 842
Attributable (40%)
Gold sales(1) ($000) 8 086 11 348 8 330 19 434 15 138
Ounces produced 7 142 7 303 6 423 14 445 11 851
Ounces sold 6 311 8 540 6 568 14 851 12 075
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 1 090 3 069 2 244 4 159 3 136
--------------------------------------- -------- -------- -------- --------- ---------
Gold on hand at period end(2) ($000) 1 546 484 578 1 546 578
--------------------------------------- -------- -------- -------- --------- ---------
Randgold owns 40% of Société des Mines
de Morila SA (Morila) with the State of Mali
and joint venture partner owning 20% and 40%
respectively. The group equity accounts for
its 40% joint venture holding in Morila.
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
TONGON
No LTI occurred in Q2 2018 with an LTIFR of zero, as in the
previous quarter. No major environmental incident occurred during
Q2 2018.
Tongon produced 65 259oz of gold in Q2 2018, up 12% from the
previous quarter (Q1 2018: 58 155oz) mainly as a result of resuming
operations after Q1 work stoppages due to industrial action. This
industrial action continued into Q2 until 10 April 2018, after
which all employees resumed work and the unions entered into
negotiations with management. A government led protocol agreement
was signed between the Tongon mine, its mining contractor and the
unions which made provision for all strike activities to end for a
period of two months while management and unions negotiated a
lasting solution.
Tonnage throughput into the mills increased by 14%. Plant
runtime improved from 75.3% in Q1 to 82.0% in Q2 2018. Tonnes fed
to the mills were negatively impacted by a mechanical failure of
one of the mill's gearbox drive shafts, which subsequently damaged
the mill motor at the end of Q2, but this has subsequently been
addressed. Head grade milled of 2.4g/t was marginally down from the
previous quarter following the continued addition of low grade
scats to augment the lower plant feed at the beginning of Q2.
Recovery was 84.1% in Q2, down 1% from the previous quarter, as a
result of a coarser mill grind.
Early in Q3 2018, the government-led process to resolve
industrial relations issues at Tongon was interrupted when
employees went on strike again before the negotiations were
concluded. Consequently, operations at the mine were suspended from
13 July 2018 for three weeks. The mine is working on a recovery
plan to get back to full production with expected annual production
revised from 280koz to approximately 250koz. Management continues
to engage with the authorities and the unions to resolve the
situation on a sustainable basis.
TONGON RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 5 470 3 385 5 873 8 855 11 322
Ore tonnes mined (000) 931 561 1 104 1 492 2 250
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 1 019 891 1 126 1 910 2 159
Head grade milled (g/t) 2.4 2.4 2.5 2.4 2.5
Recovery (%) 84.1 84.7 84.3 84.4 84.0
Ounces produced 65 259 58 155 77 260 123 414 144 480
Ounces sold 64 682 60 612 75 052 125 294 147 725
Average price received ($/oz) 1 288 1 332 1 253 1 310 1 240
Cash operating costs(1) ($/oz) 753 734 601 744 597
Total cash costs(1) ($/oz) 791 774 639 783 634
Gold on hand at period end(2) ($000) 720 - 3 545 720 3 545
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 32 160 33 809 46 066 65 969 89 580
--------------------------------------- -------- -------- -------- --------- ---------
Gold sales(1) ($000) 83 342 80 731 94 018 164 073 183 223
--------------------------------------- -------- -------- -------- --------- ---------
Randgold owns 89.7% of Société des
Mines de Tongon SA (Tongon) with the State of
Côte d'Ivoire and outside shareholders
owning 10% and 0.3% respectively. Randgold consolidates
100% of Tongon and shows the non-controlling
interest separately.
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
Sustainability
Nine new community projects were selected and started in Q2 2018
at a total cost of $0.5 million, while progress was made with the
previously approved 10 additional special projects at a cost of
$0.9 million. The primary focus has been on health, water supply
and education with emphasis on nursery and secondary school
construction. The Mbengue village surgical unit equipment was
shipped and received on site for installation. The first
construction phase of the Tongon village water supply has been
completed by the mine which has partnered with government to start
the second phase of the water supply project. This will see water
distributed from the water tower to the community households.
Development of the agribusiness project continued with the
initiation of a 540ha maize farm project at a cost of $0.2
million.
The mine successfully made the transition to, and was awarded
certification for the new ISO 14001: 2015 environmental management
system in Q2 2018.
Capital expenditure
Total capital expenditure for the quarter amounted to $1.6
million (Q1 2018: $4.0 million), relating primarily to fleet
rebuild activities, TSF standby line installations and TSF
upgrading works.
KIBALI
No LTI occurred during the quarter at Kibali and the LTIFR was
zero, compared with one LTI and an LTIFR of 0.3 in Q1 2018. There
was also no major environmental incident during the quarter.
Kibali produced a record 201 742oz of gold in Q2, up 17% from
the previous quarter and up 43% from the same period in 2017.
Underground mining and the shaft delivery ramped-up as planned, and
together with continued improvements in throughput and recovery,
resulted in the increased production. Total cash cost per ounce
decreased by 11% to $651 compared to the previous quarter,
reflecting the benefits from the improved grade as well as lower
power costs from increased hydropower with the higher rainfall
quarter. Total cash cost per ounce was also 24% down on the same
period of the prior year.
Profit from mining activity increased to $133.0 million in Q2
2018, reflecting the improved gold sales and lower unit operating
costs, notwithstanding the slightly lower average gold price
received.
Sustainability
Kibali continued its focus on education during the quarter,
training teachers and supporting final examination participation
for the academic year end. The first class of vocational training
was also completed, with students gaining skills in masonry,
carpentry and welding. In addition, pilot maize and cocoa trials
were initiated to assess commercial viability and support
alternative economic development. $0.7 million was spent on
community development projects, including clinics, school supplies,
infrastructure and potable water.
KIBALI RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
--------------------------------------- -------- -------- -------- --------- ---------
Mining
Tonnes mined (000) 8 639 7 862 7 827 16 501 17 981
Ore tonnes mined (000) 2 033 1 399 1 262 3 432 2 929
--------------------------------------- -------- -------- -------- --------- ---------
Milling
Tonnes processed (000) 2 060 1 994 1 854 4 054 3 775
Head grade milled (g/t) 3.4 3.1 2.8 3.3 2.8
Recovery (%) 89.2 85.8 84.3 87.6 82.7
Ounces produced 201 742 171 948 141 204 373 690 282 217
Ounces sold 204 588 179 079 137 661 383 667 296 367
Average price received ($/oz) 1 301 1 330 1 243 1 315 1 223
Cash operating costs(1) ($/oz) 602 685 803 641 792
Total cash costs(1) ($/oz) 651 735 859 690 848
Profit from mining activity(1) ($000) 132 964 106 642 52 956 239 606 111 093
Attributable (45%)
Gold sales(1) ($000) 119 768 107 188 77 013 226 956 163 096
Ounces produced 90 784 77 377 63 542 168 161 126 998
Ounces sold 92 064 80 586 61 947 172 650 133 365
--------------------------------------- -------- -------- -------- --------- ---------
Profit from mining activity(1) ($000) 59 834 47 981 23 830 107 823 49 992
--------------------------------------- -------- -------- -------- --------- ---------
Gold on hand at period end(2) ($000) 4 239 6 183 6 597 4 239 6 597
--------------------------------------- -------- -------- -------- --------- ---------
Randgold owns 45% of Kibali Goldmines SA (Kibali)
with the Democratic Republic of Congo (DRC)
State and joint venture partner owning 10% and
45% respectively. The group equity accounts
for its 45% joint venture holding in Kibali.
1 Refer to explanation of non-GAAP measures provided.
2 Gold on hand represents gold in doré at the mines
multiplied by the prevailing spot gold price at the
end of the period.
Underground
Underground mining produced 909kt of ore in Q2 2018, up 18% from
the previous quarter. Ore delivery from the declines continued to
decrease as production shifted from trucking to the higher
efficiency shaft with 704kt hoisted, up 44% from the previous
quarter. 2 818m of development was also completed during the
quarter, further expanding the underground mine.
KIBALI UNDERGROUND DECLINE RESULTS
Quarter Quarter Quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
2018 2018 2017 2018 2017
----------------------- -------- -------- -------- ---------- ---------
Ore tonnes mined 908 927 767 509 391 790 1 676 436 714 778
Development metres 2 818 2 181 3 066 4 999 6 260
Off shaft development - - 524 - 1 141
----------------------- -------- -------- -------- ---------- ---------
Capital expenditure
Commissioning has begun on Azambi, the third hydropower station,
which should be fully operational before the end of Q3 2018.
Construction of the next phase of the TSF to provide additional
capacity for carbon in leach (CIL) tails, progressed during the
quarter and remains on schedule for completion in Q3 2018. Capital
expenditure for the quarter amounted to $41.5 million, mainly
related to Azambi ($9.5 million), underground development ($16.8
million), mining fleet rebuild activities ($3.2 million), TSF
expansion ($2.8 million) and deferred stripping activities ($2.4
million).
DEVELOPMENT PROJECTS
SENEGAL
Massawa feasibility project
Work continued on the Massawa feasibility project during the
quarter.
Due to the coarse nature of the gold in the Massawa Central Zone
(CZ) structures, the larger RC drill sample gives a more
representative result than the significantly smaller diamond drill
sample. The infill RC programme was completed during the quarter
and a portion of the results were received. An interim resource
model update was completed on partial results and this has shown a
significant shift in the grade distribution within the CZ orebody,
with higher grades being confirmed in the southern portion of the
pit and lower grades in the northern portion. In conjunction with
the grade changes, the metallurgical modelling has confirmed higher
metallurgical recovery in the higher grade material. The net result
is that the revised CZ pit has more gold in the southern half than
previous models due to higher grades, but has lost ounces in the
northern half due to lower grades and lower recovery. The current
CZ pit shell stops at the base of existing feasibility RC drilling,
despite the structures continuing down dip. A conceptual model
completed on the pit has simulated the projection of the current
resources to depth. The $1 000/oz whittle pit run on this simulated
model shows a potential gain of up to 500koz. This exercise
justified a deep RC programme to confirm the continuation of the
high grade with depth, which started in the quarter and is still in
progress.
Recent feasibility RC drilling to the east of the Gabbro and
Porphyry of the main Massawa CZ shear zone has identified
additional footwall structures which have been included in the
latest interim model. Highlights include 22m @ 3.79g/t from 18m
(MWRCGC1340), 16m @ 12.2g/t from 20m (MWRCGC1341), 14m @ 27.26g/t
from 46m (MWRCGC1342) and 17m @ 2g/t from 53m (MWRCGC1343).
Drilling observations indicate a strike potential of at least 285m.
Results are pending.
The current mine schedule has utilised a minimum selective
mining unit (SMU) of 4.5m on the current CZ model which has
incurred higher dilution than previously assumed during the update
to the prefeasibility in 2017. This, together with the updated
geological and metallurgical models, has resulted in revised
financial models which support a robust internal rate of return
(IRR) at current gold prices. The base case proposes the current
mine schedule using an option of installed HFO power on site while
an upside option utilises slightly lower upfront capital by
relocating the current Morila crushing and mill circuit with the
potential of introducing grid power after two years of
operation.
NPV (5%) AND IRR SENSITIVITIES TO GOLD PRICE
Option $1 000/oz $1 200/oz $1 400/oz
----------- ---------- ---------- ----------
Base case $154m $414m $670m
-----------
15% 29% 41%
----------- ---------- ---------- ----------
Upside $223m $481m $736m
-----------
19% 33% 45%
----------- ---------- ---------- ----------
Drilling will continue to test the CZ deeps in Q3 2018 where a
conceptual model has shown the potential to boost the IRR by up to
4% through the potential of additional high grade resources at the
base of the current $1 000/oz pit. A final updated resource model
including all drill results is expected by the end of the quarter.
Further mining optimisation studies are underway on the effects of
SMU on dilution and ore loss, while also looking at options of
phasing the stripping to improve the waste mining schedule.
Concurrent to this, final capital estimates are in progress to
confirm if there are capital benefits to utilising portions of the
Morila plant, principally in the areas of comminution, gravity and
thickening. Other aspects of the capital design, namely Tailings
Storage is progressing well and expected to be complete in the
third quarter.
EXPLORATION ACTIVITIES
In brownfields exploration the teams continue to deliver strong
results from around Massawa, at Yalea and along the KZ trend at
Kibali. Greenfields exploration has been active ahead of the wet
season in West Africa with the completion of airborne and ground
geophysical programmes in Côte d'Ivoire and encouraging results
from Bakolobi in Mali and Tongon in Côte d'Ivoire. This quarter's
work has established a number of exciting targets across our
portfolio to be tested in the second half of the year.
SENEGAL
Massawa
Outside of the principal deposits incorporated within the
feasibility study, exploration continues to test surrounding
targets for incremental ounce potential. The principal goal of the
exploration team at Massawa is to demonstrate clear potential to
deliver a mineable reserve of over 3Moz.
At KB, a five-hole diamond and sixteen-hole RC drilling
programme have continued to yield positive results over a 400m
strike at the priority ENE-1 target and at the western margin of
the Tinkoto Granite. Mineralisation is predominantly hosted in
mafic volcanics with multiple structures on subvertical E-W to
ENE-striking trends that are intersected by flat to moderately
dipping shears and steep to subvertical dilatational vein and fault
breccias. Highlights include 63m @ 2.4g/t from 29m (KBRC041), 60m @
5.22g/t from 15m including 10m @ 11.93g/t, 8m at 12.78g/t and 5m @
9g/t (KBRC089), 7m @ 5.16g/t from 86m (KBRC084), 12m @ 3.59g/t from
0m (KBRC042), 9m @ 4.25g/t from 133m (KBRC076), 25m @ 1.72g/t from
122m including 10m @ 3.65g/t from 137m (KBRC077) and 7m @ 6.46g/t
from 52m (KBRC030) in the Tinkoto Granite. The drilling at ENE-1
has initially defined one continuous mineralised zone over a 240m
strike at an 80m RC drill spacing and is open to the west and at
depth.
RC scoping holes were drilled to the immediate south of the high
grade zone in an attempt to test for additional subparallel zones
thought to be the source of a wide +1 000ppb soil anomalism. This
was confirmed with KBRC112 returning 59m @ 1.55g/t from 20m
including 7m @ 3.59g/t from 20m, 7m @ 2.82g/t from 33m and 6m @
3.52g/t from 61m. Drilling is ongoing.
At Delya, 12km NE of the Massawa deposit, field mapping and
trenching aimed to delineate the strike extents of the NE trending
Delya shear system over 5km strike on three primary targets. At
Delya South, RC results received this quarter continued to confirm
continuity over 800m strike as reported in Q1.
At Samina, mapping and a six-trench programme confirmed the
continuity of the NE trending shear zone over 600m of strike at an
average spacing of 50-100m. Key results are 2.8m @ 4.83g/t from
35.3m (DLTR011A), 2.6m @ 4.11g/t from 23.4m and 2.8m @ 4.49g/t from
29.9m (DLTR056), 5.1m @ 2.49g/t from 81.1m including 0.9m @ 9.73g/t
from 83.6m (DLTR047). The results highlight two narrow but high
grade mineralised zones that manifest in the Delya shear. The next
phase of work is an RC drill programme to test both the oxide and
fresh mineralisation potential and geometry at depth.
Four trenches were completed at Delya North over a 600m strike
to test the strike and width of the main Delya structure. As at
Samina, the mineralisation is narrow but at a weaker grade: 2.9m
@1.69g/t from 36.9m and 4.94m @ 1g/t from 48m (DLTR053), 6m @
1.63g/t from 6.7m (DLTR054), and 2.6m @ 1.02g/t from 36.9m
(DLTR055). The structure remains open over 1km northwards to the
limit of the permit and is currently being mapped to identify
exploration vectors on this structure at depth and along
strike.
MALI
Loulo
Drilling continues to infill the Far South Extension of Yalea
with seven holes completed this quarter which continue to confirm
its high grade potential with intersections in the target now
averaging 9.5m true width @ +10g/t over 500m strike. While results
from the central conversion target below Yalea were generally low
grade, one result received this quarter of 8.8m @ 10.01g/t (YaDH68)
is very interesting and indicates that further drilling work is
required to understand the potential of high grade shoots at depth
in the Yalea block model.
At Loulo 3, 12 infill holes which were drilled down to 50m
spacing confirmed the continuity in the MZ1 and MZ2 shoots, as well
as defining the upper and lower boundaries of these targets ahead
of a final block model and economic analysis trading off open
pit/underground mining scenarios in Q3.
The updated geological model at Gara West was completed during
the quarter. In addition to the more robust model the work also
highlighted a zone of high grade drill intersections at the
southern end of the pit which averages 7m @ 5.64g/t and which
remains open to the south and represents a plunging target for
further exploration drilling.
Surface mapping has been integrated with drill data at Gara and
has confirmed upside potential that is open along strike both to
the north and south of the Gara system, in particular at depth
beneath mapped abilities beyond the Gara Far South Extension target
area. Scout drilling to test these opportunities is planned in
Q3.
Gounkoto
Drilling on the Domain Boundary Plunge and MZ4 Plunge target at
Gounkoto confirmed additional high grade mineralisation within or
immediately adjacent to the super pit.
At Faraba North the base case scenario of a 300m long conceptual
pit on the Main Zone structure only, contains +60koz @ +6g/t to a
depth of 85vm at a strip ratio of 1:12.5. Analysis this quarter
shows the potential for open mineralisation at depth over +1km of
strike length and the potential for this system to continue
southwards into the Faraba FW target. Scout drilling to test the
high grade opportunity at depth in Faraba North will take place in
Q3. On the Domain Boundary target, diamond and RC drilling has
confirmed the extension of the domain boundary with mineralisation
and alteration beyond the limits of the Gounkoto deposit and work
is focused on extending this along strike to the South.
Bakolobi JV (Taurus Gold)
A regional, shallow aircore drilling programme has started on
the Bakolobi permit to test the remaining prospective structures. A
total of 14km of drilling is planned and first results confirm
strong mineralisation associated with the Dioula West structure.
The AC line located 400m to the north of BKTR024 (21m @ 0.81g/t,
including 9.7m @ 1.61g/t) returned, in two adjacent holes, 9m @
4.32g/t including 5m @ 7.36g/t (BKAC020), and 31m @ 1.44g/t
including 5m @ 3.53g/t and 4m @ 4.37g/t (BKAC021). The drilling is
ongoing with completion expected before the wet season pause.
CÔTE D'IVOIRE
Nielle
Previous scoping RC drilling results at Mercator confirmed a
target with an average grade of 2.3g/t over 220m strike and an
average true width of 20m. Work continued in Q2 with six trenches
and nine DDH holes drilled to test the lateral and depth extensions
of mineralisation. Only two results have been returned to date,
confirming the presence of the system down to a vertical depth of
184m and a strike extension of 650m, with the system open both to
the north and at depth. Results returned to date are 25.60m @
2.70g/t (NEDH001) and 30m @ 1.20g/t (NEDH002).
Work was also accelerated on the Djinni target, which lies 4km
north and along strike from Mercator on the Badenou Structure.
Twelve trenches and nine RC holes drilled this quarter indicate
there is an 8m wide (true width) mineralised zone with an average
grade of 2.1g/t over a defined strike of 300m. The system remains
open north, south and at depth and is being tested by a series of
follow-up DDH holes which aim to extend the strike to over 500m. An
aircore programme in progress along this structure is successfully
highlighting multiple zones of alteration along the Badenou
Structure. Results are pending.
Boundiali
Infill drill results from Q1 confirmed a continuous high grade
zone over 150m in the southern portion of Fonondara main. This has
positively impacted the potential of this area and the strong
alteration and sulphides associated with that mineralisation imply
it could extend further north and south of the drilled area. An RC
programme has been designed to infill and extend the high grade
Lode over 500m strike in Q3.
This quarter the remote regolith interpretation over the full
strike length of the Fonondara corridor along with the infill VTEM
survey over 40km of the Fonondara structure were completed along
with infill soil geochemistry and mapping. Final products of this
VTEM are expected in August, but initial observations identify
extensions of mineralised structures which are untested by current
drilling. The new interpretation of the Fonondara corridor
integrating all the new data will be completed during the wet
season and a set of targets will be prioritised for testing after
the wet season.
Mankono
A recent RC hole testing the structures around Gbongogo
intersected 89m @ 3.06g/t including 6m @ 4.98g/t and 7m @ 18.27g/t
in the Gbongogo Main intrusion, suggesting that RC drilling may be
the best method to sample and provide a more representative grade
of the quartz veined intrusive and a shallow RC programme has been
designed to further test this.
Shallow RC drilling on the NS Corridor, next to the main
intrusive, confirmed a broad, low grade hydrothermal system up to
250m width, composed of multiple mineralised structures over a
strike length of +950m. The zone will add low grade mineralisation
to the project resource. However, it is open to the south and any
further work will focus on testing this open southern
extension.
During the quarter the VTEM survey over the Sissedougou and
Sisseple permits was completed. Final data from this work is still
pending, however initial interpretations have identified additional
mineralised intrusion targets in the Koban-Gbongogo corridor. Work
over this corridor is nearing completion. Additional soil samples
have been collected, regolith and geological interpretations have
been updated this quarter and a ground IP survey is in progress.
These layers will be integrated to generate a portfolio of targets
to be tested after the wet season.
DEMOCRATIC REPUBLIC OF CONGO
Kibali
At KCD, drill testing of the footwall of the 9000 Lode (12000
Lode) started this quarter with four holes completed over two
fences spaced 50m apart. Observations support the model of the
folded BIF with a recumbent fold verging southeast. Results of
KCDU1742 drilled on the first section (1.7km up plunge from the
deepest hole DDD602) were received and did not intersect any
significant mineralisation associated with the inferred 12000 Lode,
however zones of weak alteration and mineralisation were noted
through the ironstone and at its lower contact. The 12000 Lode
concept represents a large target area (2.6km x 700m) with only
limited testing but which has so far confirmed the geological
model. Further work aims to identify mineralised targets for
further drilling.
The Ngyoba target is an 800m gap between the KCD deposit and the
Kibali River. One fence of historical RC data in the south of this
area intersected a flat, low grade mineralised zone which dips to
the NE. The four diamond holes completed this quarter intersected
the mineralised zones associated with altered meta-conglomerates
with pyrite/arsenopyrite mineralisation. First results from hole
NYDD001 returned 43m @ 1.86g/t from 77m including 16.8m @ 3.15g/t
which is a significant result in this exploration target.
At Kalimva Ikamva, drilling this quarter was designed to infill
on the higher grade portions of the model in order to de-risk the
project. Fifty-eight reverse circulation and two diamond holes (on
10 fences) were completed within the $1 200/oz pit shell to infill
previous fences. Observations highlight no major changes in the
lithology and mineralisation model with high grade zones still open
down dip and down plunge. Results were received for nine holes at
Kalimva and a comparison against the block model of all results
received to date indicates they are in line or better than the
model. At Ikamva, observations confirm the mineralisation and
lithology as per the model, but no results have been received to
date.
At Birindi, between Zakitoko and Zambula, mapping of a
limonitic, brecciated chert with steep fabrics returned results up
to 8.51g/t and confirmed continuity along a dilational right hand
flexure. At Zakitoko, the trenching programme continued to test the
mineralised chert along the main shear, with eight trenches
completed during the quarter. Observations from the trenches show
the mineralised cherts to be up to 70m thick with moderate to
strong limonite and boxworks with higher grades in narrow expected
zones estimated up to 5g/t. Assay results were received for six
trenches and show the cherts to be generally anomalous with more
strongly mineralised zones up to 20m wide. Trench ZKTR0001 returned
16m @ 1.17g/t including 5m @ 3.43g/t, while trench ZKTR0009
returned 50m @ 0.72g/t including 11.15m @ 2.25g/t. The programme
aims to locate zones of high grade mineralisation along the
target.
Ngayu JV (Loncor Resources)
Work in Ngayu this quarter focused on the Imva fold area in the
west of the belt where Randgold's generative team previously
identified the most prospective targets around a KZ Trend-type
domain boundary at the belt/basin contact. The field team has now
established access to the area, even in the current wet season, and
is currently building an exploration camp and working through the
process to re-license an old airstrip in the area.
During the quarter, the programme has been the initial mapping
and sampling over the priority targets in the area. All targets
feature altered and mineralised BIFs with extensive folding along
with altered shears and breccia zones observed in the field. Assay
results from this field work are pending.
Moku JV (SMB)
Following the suspension of activities at the Moku exploration
project which were reported in February 2018, the joint venture
arrangements with Société Miniére Moku-Beverendi SA (Moku JV) have
now been terminated in accordance with the terms of the agreement.
Consequently, no further work will be done on this project and as
advised the previously deployed employees and resources at this
project have been relocated to other projects in the DRC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited Unaudited Unaudited
quarter quarter quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
$000 2018 2018 2017 2018 2017
REVENUES
Gold sales on spot 283 659 273 278 336 794 556 937 653 506
Total revenues 283 659 273 278 336 794 556 937 653 506
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Share of profits/(losses) of equity accounted joint
ventures 20 886 13 810 (3 434) 34 696 (8 651)
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Other income 2 967 8 525 7 529 11 492 9 935
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total income 307 512 295 613 340 889 603 125 654 790
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
COST AND EXPENSES
========== ========== ========== ========== ==========
Mine production costs 136 186 120 084 117 162 256 270 228 727
Movement in production inventory and ore stockpiles (9 826) (2 467) (14 390) (12 293) (12 288)
Depreciation and amortisation 50 898 46 703 42 190 97 601 81 199
Other mining and processing costs 16 590 15 689 16 162 32 279 30 913
========== ========== ========== ========== ==========
Mining and processing costs 193 848 180 009 161 124 373 857 328 551
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Royalties 14 494 13 957 17 367 28 451 33 673
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Exploration and corporate expenditure 14 949 15 802 12 823 30 751 23 731
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Other expenses 11 376 - - 11 376 -
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total costs 234 667 209 768 191 314 444 435 385 955
========== ========== ========== ========== ==========
Finance income 2 132 1 972 1 019 4 104 1 788
Finance costs (636) (556) (437) (1 192) (847)
========== ========== ========== ========== ==========
Finance income/(costs) - net 1 496 1 416 582 2 912 941
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit before income tax 74 341 87 261 150 157 161 602 269 776
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Income tax expense (15 969) (20 741) (47 369) (36 710) (82 064)
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit for the period 58 372 66 520 102 788 124 892 187 712
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Other comprehensive income
Share of equity accounted joint ventures other
comprehensive loss/(profit) - - (9) - (18)
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total other comprehensive expense/(income) - - (9) - (18)
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total comprehensive income 58 372 66 520 102 779 124 892 187 694
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit attributable to:
Owners of the parent 51 973 57 537 84 031 109 510 153 849
Non-controlling interests 6 399 8 983 18 757 15 382 33 863
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
58 372 66 520 102 788 124 892 187 712
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total comprehensive income attributable to:
Owners of the parent 51 973 57 537 84 022 109 510 153 831
Non-controlling interests 6 399 8 983 18 757 15 382 33 863
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
58 372 66 520 102 779 124 892 187 694
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Basic earnings per share ($) 0.55 0.61 0.89 1.16 1.64
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Diluted earnings per share ($) 0.54 0.60 0.88 1.14 1.62
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Average shares in issue (000) 94 428 94 292 94 047 94 428 93 996
---------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited Unaudited
at 30 Jun at 31 Mar at 31 Dec at 30 Jun
$000 2018 2018 2017 2017
Assets
Non-current assets
Property, plant and equipment 1 562 136 1 572 820 1 577 284 1 566 151
------------------------------------------------ ============ ============ ============ ===========
Cost 2 744 198 2 703 984 2 661 745 2 548 911
Accumulated depreciation and amortisation (1 182 062) (1 131 164) (1 084 461) (982 760)
------------------------------------------------ ============ ============ ============ ===========
Long-term ore stockpiles 152 435 152 435 159 534 177 477
Trade and other receivables 52 654 55 052 55 052 -
============ ============ ============ ===========
Investments in equity accounted joint ventures 1 427 552 1 443 302 1 440 610 1 420 466
Other investments in joint ventures 53 061 50 226 50 109 40 736
============ ============ ============ ===========
Total investments in joint ventures 1 480 613 1 493 528 1 490 719 1 461 202
------------------------------------------------ ------------ ------------ ------------ -----------
Total non-current assets 3 247 838 3 273 835 3 282 589 3 204 830
------------------------------------------------ ------------ ------------ ------------ -----------
Current assets
Inventories and ore stockpiles 135 742 125 215 116 797 124 889
Trade and other receivables 208 978 212 517 184 275 254 134
Cash and cash equivalents 603 673 739 457 719 808 572 838
Total current assets 948 393 1 077 189 1 020 880 951 861
------------------------------------------------ ------------ ------------ ------------ -----------
Total assets 4 196 231 4 351 024 4 303 469 4 156 691
------------------------------------------------ ------------ ------------ ------------ -----------
Equity attributable to owners of the parent 3 642 147 3 771 793 3 706 355 3 573 863
Non-controlling interests 297 031 292 811 285 914 278 963
------------------------------------------------ ------------ ------------ ------------ -----------
Total equity 3 939 178 4 064 604 3 992 269 3 852 826
------------------------------------------------ ------------ ------------ ------------ -----------
Non-current liabilities
Loans from minority shareholders 2 765 2 765 2 765 2 765
Deferred tax 58 087 55 967 52 781 49 332
Provision for rehabilitation 55 738 55 738 55 738 55 455
------------------------------------------------ ------------ ------------ ------------ -----------
Total non-current liabilities 116 590 114 470 111 284 107 552
------------------------------------------------ ------------ ------------ ------------ -----------
Current liabilities
Trade and other payables 127 780 128 530 149 288 133 959
Current income tax payable 12 683 43 420 50 628 62 354
Total current liabilities 140 463 171 950 199 916 196 313
------------------------------------------------ ------------ ------------ ------------ -----------
Total equity and liabilities 4 196 231 4 351 024 4 303 469 4 156 691
------------------------------------------------ ------------ ------------ ------------ -----------
These results are presented as the second quarter ended 30 June
2018. They have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRS) on a basis that is consistent with the accounting policies
applied by the group in its audited consolidated financial
statements for the year ended 31 December 2017, and which formed
the basis of the 2017 annual report. The company has adopted IFRS 9
'Financial Instruments' and IFRS 15 'Revenue from Customers' in the
six month period ending 30 June 2018, following the standards
becoming effective for periods commencing on or after 1 January
2018. IFRS 9 'Financial instruments' addresses the classification
and measurement of financial assets and financial liabilities and
replaces the guidance in IAS 39 that relates to the classification
and measurement of financial instruments. IFRS 9 retains but
simplifies the mixed measurement model and establishes three
primary measurement categories for financial assets: amortised
cost, fair value through other comprehensive income (OCI) and fair
value through profit or loss. The basis of classification depends
on the entity's business model and the contractual cash flow
characteristics of the financial asset. There is now a new expected
credit loss model that replaces the incurred loss impairment model
used in IAS 39. The adoption of IFRS 9 did not result in any
material change to the consolidated results of the group from the
beginning of the earliest period presented. Following an assessment
of the consolidated financial assets no changes to classification
of those financial assets was required. The group has applied the
expected credit loss impairment model to its financial assets,
focused in particular on its long-term loans to its asset leasing
joint ventures which hold mining equipment and no material credit
losses are considered to apply. The group's VAT receivables
detailed below are excluded from the scope of IFRS 9. IFRS 15
introduced a single framework for revenue recognition and clarify
principles of revenue recognition. This standard modifies the
determination of when to recognise revenue and how much revenue to
recognise. The core principle is that an entity recognises revenue
to depict the transfer of promised goods and services to the
customer of an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or
services. The adoption of IFRS 15 did not result in any material
change to the group's revenue recognition, from the beginning of
the earliest period presented, following analysis of the gold sales
contracts held by its mining operations. The company enters into a
contract for the sale of gold at each of its mining operations. The
group's performance obligation under each of the contracts is to
supply such gold to the customer subject to minimum quality
specifications with the consideration for such gold sales
determined by the market spot price for each ounce of gold at the
point of sale and gold content. As the sales from gold contracts
are subject to customer survey adjustment, sales are
initially recorded based on the results of tests on the material
prior to shipment to determine the gold content and specification
with such estimates subsequently adjusted to reflect the final gold
content determined by the customer shortly after period end.
Revenue is recorded to the extent that it is highly probable that
there will be no subsequent reversal of such revenue due to gold
content or quality specifications. Historical adjustments of this
nature have been insignificant. The performance obligations are
considered to be satisfied and control of the gold transferred as
the gold leaves the gold room upon collection by the customer, with
title, possession and significant risks and rewards transferred at
this point with revenue recorded accordingly. This announcement has
been prepared in compliance with IAS 34 - Interim Financial
Reporting. These results do not include all the notes of the type
normally included in an annual financial report. Accordingly, this
condensed report is to be read in conjunction with the annual
report for the year 31 December 2017, and any public announcements
made by the group during the reporting period. While the
information included in this announcement has been prepared in
accordance with the recognition and measurement criteria of IFRS,
this announcement does not itself contain sufficient information to
comply with IFRS. The auditors' report for the year ended 31
December 2017 was unqualified and did not include references to any
matters which the auditor drew attention to by way of emphasis
without qualifying their report.
Property, plant and equipment cost increased by $40.2 million
for the three months ended 30 June 2018 and was mainly attributable
to capital expenditure at the Loulo-Gounkoto complex of $28.7
million. Of this amount, $12.4 million was spent on the development
of the Yalea and Gara underground mines, $9.0 million on ongoing
capital including the underground grade control and engineering
upgrades and $5.3 million at Gounkoto relating to ongoing capital,
rebuild of assets and deferred stripping ($1.3 million). Ongoing
capital expenditure at Tongon was $14.6 million, while $8.0 million
was spent at the Massawa project during the quarter.
The group's capital commitments (including its share of equity
accounted joint ventures) at 30 June 2018 amounted to $47.7
million, with the majority relating to the Loulo-Gounkoto complex
($18.5 million), Kibali ($14.9 million attributable) and RAL 1
Limited ($10.9 million attributable).
The long term ore stockpiles balance of $152.4 million was in
line with the balance at 31 March 2018 and relates to the portion
of ore stockpiles at Loulo, Gounkoto and Tongon which are expected
to be processed after more than one year, in line with the
respective mine plans.
Investments in equity accounted joint ventures reflects the
group's share of its equity accounted investments, mainly Kibali as
well as Morila, and the group's asset leasing joint ventures. Other
investments in joint ventures reflect the group's loans advanced to
the group's asset leasing joint ventures.
The balances of $1.48 billion in total investment in joint
ventures at 30 June 2018 decreased by $12.9 million against the
balances at 31 March 2018 and the movement in the quarter mainly
reflects the group's share of the profits from equity accounted
joint ventures ($20.9 million) and advances to joint ventures ($2.5
million) offset by dividends received in the quarter from joint
ventures ($36.3 million).
Current inventories and ore stockpiles of $135.7 million
increased by $10.5 million from the balances at 31 March 2018. The
increase is mainly as a result of an increase of $7.8 million in
the current portion of ore stockpiles mainly at Gounkoto in line
with mine plans, an increase of $2.4 million in gold in process at
Loulo and Gounkoto and a $1.9 million increase in consumable stores
at Loulo, offset by a decrease of $1.6 million in the balances of
gold on hand balances at the Loulo-Gounkoto complex.
Trade and other receivables at 30 June 2018 of $209.0 million
decreased by 2% from the balances at 31 March 2018, which mainly
reflects decreases in trade balances at Loulo and Gounkoto.
Included within non-current trade and other receivables is the
portion of TVA balances at Loulo and Gounkoto that are expected to
be recovered in more than one year.
The total outstanding refundable TVA balances in Mali amount to
$132.8 million (31 March 2018: $128.8 million) and include 100% of
the Loulo and Gounkoto TVA receivables and the attributable portion
of the Morila TVA receivable of $7.6 million (31 March 2018: $6.7
million). Morila, Loulo and Gounkoto have the legal right, under
the terms of their respective mining conventions, to offset other
taxes payable to the State of Mali against these refundable TVA
balances. Management continues to pursue the cash settlement of
these TVA balances.
The group's share of the TVA balance at Kibali amounted to $70.0
million (31 March 2018: $69.1 million) (at 45% attributable share).
The Morila and Kibali TVA balances are included in the group's
investment in joint ventures line.
The group has received various tax claims from the State of Mali
in respect of its Mali operations, which totalled $200.5 million at
the end of the current quarter. Having taken professional advice,
the group considers material elements of the claims to be without
merit or foundation and is strongly defending its position in
relation to these claims and following the appropriate legal
process. Accordingly, no provision has been made for the material
claims and the likelihood of a material outflow of economic
benefits in respect of such claims is considered improbable under
IFRS. Loulo, Gounkoto and Morila each have legally binding
establishment conventions which guarantee fiscal stability, govern
the taxes applicable to the companies and allow for international
arbitration in the event a dispute cannot be resolved in the
country. Management continues to engage with the Malian authorities
at the highest level to resolve these outstanding fiscal issues.
During 2016, the group received payment demands in respect of these
disputed amounts, and consequently the group paid tax advances to
the State of Mali in the amount of $25.0 million, to ensure that it
could continue to engage with the Malian authorities to resolve the
tax disputes, noting that any amounts which were legally not due
would be refunded. These amounts are shown in trade and other
receivables.
In the DRC, the Mining Code and Regulations have been amended
with an updated Mining Code which came into effect on 9 March 2018
(2018 Mining Code) and the related amended Mining Regulations which
came into effect on 8 June 2018, although the regulations were only
actually published in July 2018 so have only recently started being
enforced. Kibali Goldmines SA is considering all its options to
protect its vested rights under the 2002 Mining Code, as well as
the specific state guarantees it previously received, including
preparing for international arbitration. In addition, it continues
to engage with the government to find alternative solutions which
would be mutually acceptable to both parties, including through the
application of Article 220 of the 2018 Mining Code, which affords
benefits to mining companies in landlocked infrastructurally
challenged provinces, such as where Kibali is located.
The decrease in cash of $135.8 million since 31 March 2018
largely reflects the group's continued investment in capital
expenditure in its subsidiaries ($37.9 million), tax paid ($53.1
million) and the payment of the group dividend to shareholders
($188.8 million) offset by the strong operational cash flows from
the Loulo-Gounkoto complex and the Tongon mine ($112.3 million) and
dividends from equity accounted joint ventures ($36.3 million).
Deferred tax of $58.1 million increased by 4% from the balance
at 31 March 2018, mainly due to the effects of the Life of Mine
(LoM) units of production depreciation adjustments at the
Loulo-Gounkoto complex and at Tongon during the quarter.
Trade and other payables of $127.8 million were in line with the
balance at 31 March 2018 of $128.5 million and mainly relate to
trade and other payables amounts at Loulo, Gounkoto and Tongon.
Current income tax payable of $12.7 million decreased by 71%
from the balance at 31 March 2018 due to corporate tax payments
being made during the current quarter.
Subsequent to the June quarter end, on 31 July 2018, the Malian
government agreed to grant Gounkoto a 50% corporate tax reduction
over a four year period, effective from 1 January 2018 until 31
December 2021, to support the development of a super pit at the
mine. The agreement which reduces the corporate tax rate is a
concession under Gounkoto's mining convention that gives Gounkoto
the right to apply for the additional tax exoneration should it
make additional investments. The effect of the 50% reduction in the
corporate tax rate has not been reflected in the financial results
for the six months ending 30 June 2018 contained within this
quarterly report. The impact of the reduced tax rate will be to
apply an effective 15% tax for the current year including
associated reversals of the additional charges recorded to date
during the next quarter.
This report has been prepared on a going concern basis as the
directors believe that based on the company's current cash
resources and facilities, projected operating cash flows and
capital expenditure, the company will be able to meet its
obligations at the prevailing gold price for the foreseeable
future, a period of not less than 12 months from the date of this
report.
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Unaudited Unaudited
quarter quarter 6 months 6 months
ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun
$000 2018 2018 2018 2017
Profit after tax 58 372 66 520 124 892 187 712
Income tax expense 15 969 20 741 36 710 82 064
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Profit before income tax 74 341 87 261 161 602 269 776
Share of (profits)/losses of equity accounted joint ventures (20 886) (13 810) (34 696) 8 651
Adjustment for non-cash items 63 868 56 851 120 719 106 054
Effects of change in operating working capital items (5 023) (48 750) (53 773) (48 433)
========== ========== ========== ==========
Receivables (4 989) (27 972) (32 961) (35 092)
Inventories and ore stockpiles (10 527) (1 319) (11 846) (18 633)
Trade and other payables 10 493 (19 459) (8 966) 5 292
-------------------------------------------------------------- ========== ========== ========== ==========
Cash generated from operations 112 300 81 552 193 852 336 048
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Dividends received from equity accounted joint ventures 36 306 11 000 47 306 -
Income tax paid (53 062) (28 578) (81 640) (70 591)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Net cash generated from operating activities 95 544 63 974 159 518 265 457
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Additions to property, plant and equipment (37 904) (42 239) (80 143) (85 503)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Funds invested in equity accounted joint ventures (2 505) - (2 505) (21 992)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Loans repaid by equity accounted joint ventures - - - 746
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Net cash used by investing activities (40 409) (42 239) (82 648) (106 749)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Proceeds from issue of ordinary shares 90 - 90 33
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Dividends paid to company's shareholders (188 830) - (188 830) (94 046)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Dividends paid to non-controlling interests (2 179) (2 086) (4 265) (8 158)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Net cash generated by financing activities (190 919) (2 086) (193 005) (102 171)
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Net (decrease)/increase in cash and cash equivalents (135 784) 19 649 (116 135) 56 537
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Cash and cash equivalents at beginning of period 739 457 719 808 719 808 516 301
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Cash and cash equivalents at end of period 603 673 739 457 603 673 572 838
-------------------------------------------------------------- ---------- ---------- ---------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Total
equity
Number attributable Non-
of Share Share Other Retained to owners controlling Total
ordinary capital premium reserves(1) earnings of parent interests equity
shares $000 $000 $000 $000 $000 $000 $000
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Balance - 31 Dec
2016 - audited 93 803 752 4 690 1 537 326 63 141 1 893 542 3 498 699 253 258 3 751 957
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share of other
comprehensive
income of joint
ventures(1) - - - (18) - (18) - (18)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Other
comprehensive
income - - - (18) - (18) - (18)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Net profit for
the period - - - - 153 849 153 849 33 863 187 712
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Total
comprehensive
income for the
period - - - (18) 153 849 153 831 33 863 187 694
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share-based
payments - - - 12 979 - 12 979 - 12 979
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share options
exercised 500 - 33 - - 33 - 33
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Reserves
transfer on
exercise of
options
previously
expensed under
IFRS 2 - - 9 (9) - - - -
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Shares vested(2) 254 464 13 21 783 (19 429) - 2 367 - 2 367
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Dividend
relating to
2016 - - - - (94 046) (94 046) - (94 046)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Non-controlling
interest share
of Gounkoto and
Tongon dividend - - - - - - (8 158) (8 158)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Balance - 30 Jun
2017 -
unaudited 94 058 716 4 703 1 559 151 56 664 1 953 345 3 573 863 278 963 3 852 826
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Balance - 31 Dec
2017 - audited 94 124 872 4 707 1 563 361 60 774 2 077 513 3 706 355 285 914 3 992 269
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share of other
comprehensive
income of joint
ventures(1) - - - - - - - -
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Other
comprehensive
income - - - - - - - -
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Net profit for
the period - - - - 109 510 109 510 15 382 124 892
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Total
comprehensive
income for the
period - - - - 109 510 109 510 15 382 124 892
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share-based
payments - - - 12 741 - 12 741 - 12 741
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Share options
exercised 2 000 - 90 - - 90 - 90
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Reserves
transfer on
exercise of
options
previously
expensed under
IFRS 2 - - 28 (28) - - - -
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Shares vested(2) 300 774 15 24 388 (22 122) - 2 281 - 2 281
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Dividend
relating to
2017 - - - - (188 830) (188 830) - (188 830)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Non-controlling
interest share
of Gounkoto
dividend - - - - - - (4 265) (4 265)
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
Balance - 30 Jun
2018 -
unaudited 94 427 646 4 722 1 587 867 51 365 1 998 193 3 642 147 297 031 3 939 178
----------------- ----------- --------- ---------- ------------- ---------- -------------- ------------- ----------
1 Other reserves includes the cumulative charge
recognised under IFRS 2 in respect of share
option schemes (net of amounts transferred
to share capital and share premium) as well
as the foreign currency translation reserve
and the movements in available-for-sale financial
assets.
2 Restricted shares were issued as remuneration
to executive directors and senior management.
Shares were also issued to executive directors
following approval of their annual bonuses
and to non-executive directors as fees. The
transfer between 'other reserves' and 'share
premium' in respect of the shares vested represents
the cost calculated in accordance with IFRS
2.
NON-GAAP MEASURES
Randgold has identified certain measures that it believes will
assist understanding of the performance of the business. As the
measures are not defined under IFRS they may not be directly
comparable with other companies' adjusted measures. The non-GAAP
measures are not intended to be a substitute for, or superior to,
any IFRS measures of performance but management has included them
as these are considered to be important comparables and key
measures used within the business for assessing performance.
These measures are explained further below:
Total cash costs and cash cost per ounce are non-GAAP measures.
Total cash costs and total cash cost per ounce are calculated using
guidance issued by the Gold Institute. The Gold Institute was a
non-profit industry association comprising leading gold producers,
refiners, bullion suppliers and manufacturers. This institute has
now been incorporated into the National Mining Association. The
guidance was first issued in 1996 and revised in November 1999.
Total cash costs, as defined in the Gold Institute's guidance,
include mine production, transport and refinery costs, general and
administrative costs, movement in production inventories and ore
stockpiles, and royalties. Total cash costs exclude costs
associated with capitalised stripping activities. Total cash costs
and total cash cost per ounce also include our share of our equity
accounted joint ventures' total cash costs and total cash cost per
ounce.
Total cash cost per ounce is calculated by dividing total cash
costs, as determined using the Gold Institute guidance, by gold
ounces sold for the periods presented. Total cash costs and total
cash cost per ounce are calculated on a consistent basis for the
periods presented. Total cash costs and total cash cost per ounce
should not be considered by investors as an alternative to
operating profit or net profit attributable to shareholders, as an
alternative to other IFRS measures or an indicator of our
performance. The data does not have a meaning prescribed by IFRS
and therefore amounts presented may not be comparable to data
presented by gold producers who do not follow the guidance provided
by the Gold Institute. In particular depreciation and amortisation
would be included in a measure of total costs of producing gold
under IFRS, but are not included in total cash costs under the
guidance provided by the Gold Institute.
Furthermore, while the Gold Institute has provided a definition
for the calculation of total cash costs and total cash cost per
ounce, the calculation of these numbers may vary from company to
company and may not be comparable to other similarly titled
measures of other companies. However, Randgold believes that total
cash cost per ounce is a useful indicator for investors and
management of a mining company's performance as it provides an
indication of a company's profitability and efficiency, the trends
in cash costs as the company's operations mature, and a benchmark
of performance to allow for comparison against other companies.
Cash operating costs and cash operating cost per ounce are
calculated by deducting royalties from total cash costs. Cash
operating cost per ounce is calculated by dividing cash operating
costs by gold ounces sold for the periods presented.
Gold sales is a non-GAAP measure. It represents the sales of
gold at spot and the gains/losses on hedge contracts which have
been delivered into at the designated maturity date. It excludes
gains/losses on hedge contracts which have been rolled forward to
match future sales. This adjustment is considered appropriate
because no cash is received/paid in respect of these contracts.
Randgold currently does not have any hedge positions. Gold sales
include our share of our equity accounted joint ventures' gold
sales.
Profit from mining activity is calculated by subtracting total
cash costs from gold sales for all periods presented. Profit from
mining includes our share of our equity accounted joint
ventures.
Gold on hand represents gold in doré at the mines multiplied by
the prevailing spot gold price at the end of the period. Gold on
hand includes our share of our equity accounted joint ventures'
gold on hand.
The group non-GAAP measures presented in the 'Summarised
financial information' in the accompanying table include the
group's share of each operating mine, together with adjustments to
eliminate intergroup transactions.
The accompanying table reconciles gold sales, total cash costs
and profit from mining activity as non-GAAP measures, to the
information provided in the statement of comprehensive income,
determined in accordance with IFRS, for each of the periods set out
therein.
NON-GAAP
Unaudited Unaudited Unaudited Unaudited Unaudited
quarter quarter quarter 6 months 6 months
ended ended ended ended ended
30 Jun 31 Mar 30 Jun 30 Jun 30 Jun
$000 2018 2018 2017 2018 2017
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Gold sales per IFRS(1) 283 659 273 278 336 794 556 937 653 506
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Gold sales adjustments for joint ventures(2) 127 854 118 536 85 343 246 390 178 234
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Gold sales(3) 411 513 391 814 422 137 803 327 831 740
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Mine production costs 136 186 120 084 117 162 256 270 228 727
Movement in production inventory and ore stockpiles(1) (9 826) (2 467) (14 390) (12 293) (12 288)
========== ========== ========== ========== ==========
Royalties including adjustment for joint ventures 19 509 18 602 21 330 38 111 42 102
Royalty adjustment for joint ventures(3) (5 015) (4 645) (3 963) (9 660) (8 429)
========== ========== ========== ========== ==========
Total royalties(1) 14 494 13 957 17 367 28 451 33 673
Other mining and processing costs(1) 16 590 15 689 16 162 32 279 30 913
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Cash costs adjustments for joint ventures(2) 63 514 64 617 56 140 128 131 119 139
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total cash costs(3) 220 958 211 880 192 441 432 838 400 164
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Profit from mining activity(3) 190 555 179 934 229 696 370 489 431 576
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Ounces sold 316 804 294 428 336 516 611 232 672 119
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Total cash cost per ounce sold(3) 697 720 572 708 595
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Cash operating cost per ounce sold(3) 636 656 508 646 533
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
Gold on hand at period end(3) 16 383 21 930 19 082 16 383 19 082
-------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
1 Figures extracted from IFRS results.
2 The group includes the gold sales and cash costs associated
with the joint venture results in its non-GAAP measures.
The gold sales adjustments reflect our 40% share of
Morila's gold sales and 45% share of Kibali's gold
sales. The cash costs adjustments primarily reflect
our 40% share of Morila's cash costs, 45% of Kibali's
cash costs, as well as our 50.1% share in RAL 1 Limited's
(RAL 1) and RAL 2 Limited's (RAL 2) cash cost adjustments.
3 Refer to explanation of non-GAAP measures provided.
PRINCIPAL RISK FACTORS AND UNCERTAINTIES
The group is subject to a variety of risks and uncertainties
which are the result of not only the business environment in which
it operates but also of other factors over which it has little or
no control. The board, as part of its role in providing strategic
oversight and stewardship of the company, is responsible for the
group's systems of risk management and internal control as well as
reviewing their operational effectiveness on a regular basis. We
are continually evaluating risks to ensure the business achieves
its strategic objectives; however the principal risks and
uncertainties which could impact the group's long term performance
remain those detailed in the group's 2017 annual report and
financial statements, a copy of which is available on the group's
website www.randgoldresources.com.
The group's strategy takes into account known risks but there
may be additional risks unknown to the group and other risks,
currently believed to be immaterial, which could develop into
material risks. It is recognised that the group is exposed to risks
wider than those listed. However, we have disclosed those we
believe are likely to have the greatest impact on our business at
this moment in time and those that have been the subject of debate
at recent board or audit committee meetings. The principal risks
and uncertainties may materialise individually, simultaneously or
in combination and should be considered in connection with any
forward looking statements in this document, the 2017 annual report
and the information available on the group's website.
PRINCIPAL RISK FACTORS AND UNCERTAINTIES
EXTERNAL RISKS NATURE AND IMPACT
Gold price volatility Gold price volatility can result in material and adverse
movement in the group's operating
results, asset values, revenues and cash flows. Sustained
or significant declines in the gold
price will affect earnings and cash flow. Group planning,
forecasting and long term financial
strategy are subject to gold price assumptions and
therefore changes to the gold price may
have an adverse effect the group's ability to fund its
capital projects.
----------------------------------------------------------
Country risk The group operates in jurisdictions where changes may
occur to the political environment and
governments may seek a greater share of mineral wealth.
Inadequate monitoring of in-country
political instability and uncertainty or failure to adapt
to changes to terms applicable to
the group's operations may impact the ability to sustain
operations, prevent the group from
making future investments or result in increased costs
for the group.
----------------------------------------------------------
Corporate, social and environmental responsibility Some of the group's current and potential operations are
located near communities that may
regard these operations as being detrimental to them.
Poor management of stakeholder communication
and expectations with a lack of community development
activities or regard for environmental
responsibility may lead to the inability to sustain
operations in the area and impact the
group's ability to expand into other regions. Failure to
understand social and environmental
contexts can lead to insufficient planning, resourcing
and costing of projects. Failure to
comply with environmental regulations could lead to fines
and, in the extreme, loss of operating
licence.
----------------------------------------------------------
Supply routes Due to the remote location of the operations the
disruption of supply routes may cause delays
with construction and mine activities. Supply chain
failures, disruptions or significantly
increased costs within the supply chain could have an
adverse effect on the group's operations.
----------------------------------------------------------
FINANCIAL RISKS NATURE AND IMPACT
----------------------------------------------------------
Operating and capital cost control Operating cost and capital cost control are a key factor
in the group's profitability. Failure
to control operating cost of production or operational
objectives will result in reduced margins
and profitability. Failure or inability to monitor
capital expenditure and progress of capital
projects may result in financial losses, overspend on
projects and cause returns to be eroded.
General cost inflation in the mining sector could affect
the operations and projects resulting
in significant pressure on operating and capital costs.
----------------------------------------------------------
In-country tax regimes and the inability to enforce The group operates in jurisdictions which may change tax
fiscal stability arrangements at the group's or fiscal regimes and regulations,
mines and such issues may result in additional taxes or
negatively impact asset values leading to
financial losses. Inability to enforce legislation over
tax including relevant tax stability
arrangements in the event of changes to tax laws or
mining codes, incorrectly applied legislation
may result in lengthy arbitration and loss of profits or
company assets, and could impact
future investment opportunities. Failure to react to tax
notifications from authorities could
result in financial losses or the seizure of assets.
----------------------------------------------------------
OPERATIONAL RISKS NATURE AND IMPACT
----------------------------------------------------------
Production, reserves and resources The group's mining operations may yield less gold under
actual production conditions than
indicated by its gold reserve figures, which are
estimates based on a number of assumptions,
including mining and recovery factors, production costs
and gold price. In such instances
the group's profitability may be affected should actual
production be lower than indicated
reserves. Should the prevailing gold price not support or
sustain the valuation the carrying
value of assets may be impaired.
----------------------------------------------------------
Environmental, health, safety and security incident The mining sector is subject to extensive health, safety
and environmental laws, regulations
and standards alongside stakeholder expectations. Failure
to maintain environmental, health
and safety standards' may result in significant
environmental or safety incidents or deterioration
in safety performance standards leading to loss of life
or significant loss of time and disruption
or damage to operations. Evolving regulation and
standards could result in increased costs,
litigation or in extreme cases may threaten the viability
of an operation.
----------------------------------------------------------
Risks associated with underground mining and geotechnical The group has a number of underground projects which are
failure subject to the extensive risks associated
with underground mining. Failure to monitor or mitigate
such risks may affect the profitability
of the group and the operational performance. Failure to
consider geotechnical failure in
planning and then monitor the impact during operations
may impact the geotechnical stability
of pits and underground mining operations. Extreme
weather conditions such as high rainfall
may also impact the geotechnical stability of the pits
and therefore could impact mining operations.
----------------------------------------------------------
STRATEGIC RISKS NATURE AND IMPACT
----------------------------------------------------------
Lack of identification of new exploration targets and The replacement of reserves and resources is key to the
exploration failure long term delivery of the group's
exploration led growth strategy and therefore the lack of
identification of new exploration
targets may lead to a loss of revenue and an inability to
grow and meet strategic objectives.
Exploration and development are costly activities with no
guarantee of success, but are necessary
for future growth of the group.
----------------------------------------------------------
GENERAL
As highlighted earlier in this report, the group has had a good
operational quarter, especially at Kibali. Consequently, the
group's overall annual key performance indicators, set at the start
of the year, remain intact, notwithstanding the industrial
relations challenges at Tongon. As previously indicated, the group
is expecting higher production in the third quarter, followed by a
stronger fourth quarter, on the back of higher anticipated grades
at Loulo-Gounkoto and Kibali.
Exploration remains core to Randgold's growth strategy and the
company's exploration activities continue to make meaningful
progress, both in respect of brownfields extensions and across its
greenfields portfolio, in support of its organic growth objectives.
Notwithstanding this core strategy, the company is also examining
global growth opportunities, and regularly reviews corporate and
asset merger and acquisition opportunities.
The directors confirm to the best of their knowledge that:
a) These second quarter results have been prepared in
accordance with IAS 34 as adopted by the European Union;
and
b) The interim management report includes a fair review
of the information required by the FCA's Disclosure
and Transparency Rules (4.2.7R and 4.2.8R).
By order of the board
D M Bristow G P Shuttleworth
Chief Executive Financial
Director
9 August 2018
------------------------------------------------------------------------------
RANDGOLD RESOURCES NEWS UPDATES
OWNER MINING DELIVERS COST AND EFFICIENCY BENEFITS, OPENS WAY
FOR NEW TECHNOLOGIES
Following the highly successful transition from contract mining
to owner mining at Randgold's Loulo mines, the Kibali underground
mine has now also implemented this approach.
Group GM mining Glenn Heard says he is very confident that
Kibali will replicate the cost reduction and operational
efficiencies achieved at Loulo.
"To facilitate the transition, we have brought in the key
personnel involved in this process at Loulo to instil our operating
standards, provide mentoring and inject the Randgold DNA into the
predominantly Congolese workforce we took over from the
contractor," he said.
The mentors included Malian mining engineer Mohamed Cisse who,
as underground manager, oversaw the transition at Loulo and who has
been employed by Randgold since his university days.
"The purpose of moving to owner mining was ultimately to lower
operating costs and have more control over the day to day
operations," says Cisse. "At Loulo we achieved that and more. The
Randgold team, focused on the same goal and committed to the same
standards, is delivering better results."
Heard says while it's early days at Kibali, operational
standards and equipment availability are already improving, while
production and development are increasing week on week.
Upskilling the workforce to operate Kibali's advanced automation
systems was a key priority in preparing for the transition.
Randgold retained experts from Australia, which is generally
regarded as the world leader in mechanised mining, to assist with
this process. While the aim at Kibali, as at Randgold's other
operations, is to develop host-country managers and workers, a
limited number of international experts have remained on site as
'super operators' to ensure that the mine remains at the leading
edge of technology and performance.
Says Randgold CEO Mark Bristow: "We don't adapt to change, we
drive it, and a further benefit of owner mining is that it enables
us to incorporate advanced technologies which will keep us in the
lead of the industry as it moves to automation."
MALI AND RANDGOLD AGREE ON A REVISED INVESTMENT CONVENTION TO
SUPPORT SUPER PIT DEVELOPMENT
The Malian government has agreed to grant Randgold's Gounkoto
mine a 50% corporate tax reduction for the next four years to
support its development of a super pit which will be one of the
largest opencast gold mines in Africa.
The agreement, which is a concession under Gounkoto's original
mining convention that gave Gounkoto the right to apply for
additional tax exonerations should it make additional investments,
will see the mine's life extended by more than five years. Likewise
the super pit will make a significant contribution to the
Loulo-Gounkoto complex's 10-year plan, which envisages profitable
production in excess of 600 000 ounces annually at a gold price of
$1 000 per ounce. Depending on the gold price and input costs the
potential revenue to the State would increase by more than 100%
when compared with the original Gounkoto feasibility study
completed in 2009.
Randgold chief executive Mark Bristow said the deal was another
milestone in the mutually rewarding partnership between the company
and the Malian government.
"Over more than 20 years, that partnership has enabled us to
bring Syama to account, develop Morila and build Loulo-Gounkoto
into one of the world's largest gold mines. During that time, our
operations have contributed $5.9 billion to the Malian economy in
the form of taxes, royalties, dividends, salaries and payments to
local suppliers. The Malian government received $2.5 billion of
that amount, which represents more than 60% of the net cash
generated by the mines. Every year since 2010, Randgold's
operations in this country have accounted for some 6% of Mali's
GDP," he said.
Bristow noted that, in line with Randgold's policy of local
employment and empowerment, Loulo-Gounkoto and Morila were managed
entirely by Malians. In addition to their profitable results, he
said, the mines also ranked as world-class in terms of their
health, safety and environmental management.
During the past quarter, another robust performance from Loulo's
underground mines offset a reduced contribution from Gounkoto,
where the pushback for the super pit is in progress as planned.
Since moving to owner mining at Loulo in 2016, the underground
operations have delivered steady production increases and
efficiency improvements.
Morila has completed the mining of its Domba satellite pit and
is now processing the lower grade tailings material. The Ntiola and
Viper satellite deposits are scheduled for mining until early 2019
and closure of the Morila mine is planned for 2020. Its agripole
project, designed to mitigate the socio-economic impact of closure,
is awaiting final approval by the government.
On the exploration front, brownfields work at Loulo is
confirming the potential for reserve replenishment while further
afield the search for another world-class gold deposit continues
along a highly prospective 75 kilometre strike on the Mali-Senegal
shear zone.
TONGON WORKS TOWARDS FRESH START AFTER STOPPAGE
Randgold's Tongon gold mine is seeking to restart mining and
processing operations based on the agreement entered into between
the workers leadership, union representatives, local authorities,
mine management and the government's mining and labour
ministries.
"Given the ongoing social issues that have intermittently
affected the mine's operations over the past two years, and after
the latest work stoppage which halted production two weeks ago, we
have engaged with government who have taken measures to secure the
assets and are dealing with the situation," chief executive Mark
Bristow said at a media briefing in Abidjan.
Bristow said he was encouraged to note that the matter was
receiving attention at the highest level of the Ivorian government.
The government led a process which in April produced an agreement
between the mine and the unions that there would be a negotiation
period during which work would continue as usual. This was
progressing well until 13 July when the unions made new demands
that were outside the existing multi-party agreement as well as
Ivorian labour law, subsequently abandoning the negotiations and
halting the mine's operations.
"At that stage Tongon was recovering from a stumbling start to
the year and was on track to achieve its revised production
guidance. We will now have to review its forecast in the light of
the work stoppage and the time it will take to bring the operation
back on line and up to full production," he said.
"We are committed to working with government, local authorities
and those who want to be part of the Tongon employment family to
get this mine back up and running."
Bristow said despite this setback, Randgold remained committed
to investing in Côte d'Ivoire and participating in the development
of its fledgling mining industry.
"Brownfields exploration around Tongon has shown potential for
an extension of the mine's current life, and further afield our
exploration teams are searching for the next Tongon on our
extensive groundholdings in this country," he said.
KIBALI ACHIEVES RECORD QUARTER AS UNDERGROUND RAMP-UP
CONTINUES
Gold production at the Kibali mine in the Democratic Republic of
Congo is rising steadily on the back of the optimisation of its
automated underground operation, and it is on track to beat its
guidance of 730 000 ounces for this year, says Randgold chief
executive Mark Bristow. The record results for the second quarter
were achieved without a single lost-time injury.
Speaking at a media visit to the mine, Bristow said that,
following the example of Randgold's Loulo underground mines, Kibali
had successfully transitioned from contract mining to owner mining
earlier this month. As at Loulo, the move is expected to deliver
significant cost and efficiency benefits, while accelerating the
transfer of skills to the mine's Congolese workforce.
"Kibali hosts one of the world's largest underground gold mines
and the aim of owner mining is to give us complete control over the
day-to-day operations, with everyone focused on the same goal and
compliance with the mining plan. We're confident that we'll achieve
the same results here as we did at Loulo, but we've tweaked that
model a little to take into account the lessons we learned there as
well as Kibali's specific circumstances. We've also brought in
personnel who were involved in the Loulo transition to support
Kibali's Congolese workforce with the transition," he said.
"Another advantage of owner mining is that it has allowed us to
introduce 'Africa First' technology at Kibali, notably in the
automation of the underground materials handling system. We
continue to look at other technologies which could assist us in the
optimal development of this great asset."
A further major milestone is being passed with the current
commissioning of Azambi, Kibali's third and last hydropower station
and its only remaining significant capital project. Azambi is
expected to start delivering power into the grid within the next
month.
"It's worth noting that Azambi has been built by an
all-Congolese team of contractors, which is a further example of
Randgold's commitment to upskilling not only its own employees but
also its host country business partners. During the past quarter
alone we have spent $43.8 million with local contractors and
suppliers, and over the course of the mine's development, they have
received the bulk of our $2.4 billion in-country investment. This
has obviously had a direct positive impact on the Congolese
economy," he said.
Randgold also contributes to the local economy through its
investment in community projects, including the development of a
range of agribusinesses.
Despite the issues around the DRC's new mining code, Randgold
continues to advance its exploration work on a number of new
targets, but Bristow cautioned that in its current form the code
could deter future investment in the sector. The recently
established mining industry association is still engaging with the
government about the implementation of the code.
AZAMBI HYDROPOWER STATION INCREASES SELF-GENERATED POWER
CAPACITY, REDUCES POWER COSTS
The current commissioning of the Azambi hydropower station at
Kibali will raise the mine's self-generated power capacity to some
44MW and reduce the average power supply cost to around 9c/kwh when
the system is running at full efficiency.
Kibali GM Charles Wells says the availability of cheap
self-generated power is the key to the mine's long term
profitability and the completion of Azambi - which now joins its
Nzoro and Ambarau hydropower stations - represents the culmination
of a programme designed to achieve that objective.
"The DRC's water resources are so vast that it has the potential
to supply most of Africa's energy requirement. By harnessing the
Kibali and Nzoro rivers to power this enormous mine, we've shown
what can be achieved," he says.
Randgold has a comprehensive power management strategy which
includes the use of lower-cost heavy fuel oil generators at Loulo,
the combination of grid power with back-up diesel generators at
Tongon, the hydropower generation at Kibali and as part of this has
embarked on a feasibility programme to introduce solar power into
the mix on our microgrids as well explains John Steele, the group
capital projects, process and engineering executive.
ALL CONGOLESE TEAM LEADS CONSTRUCTION OF AZAMBI
The $50 million Azambi hydropower plant, currently being
commissioned, was built by an all-Congolese team led by Feni
Matsando Samuel's IOB (Inter Oriental Builders). IOB was
established in 2010 and the following year started producing bricks
for Kibali's resettlement housing. Its involvement with Kibali
expanded through various contracts for civil works and it was a key
subcontractor on the Amberau hydropower project before being
appointed as lead contractor for Azambi. IOB currently employs more
than 700 workers.
"A project of considerable magnitude has been successfully
completed by a Congolese team and the opportunity we gave them
represents real empowerment of our in-country stakeholders. Africa
needs more successful businessmen like them and Randgold will
continue to support their development," says chief executive Mark
Bristow.
RANDGOLD RETAINS HIGH RANKING IN FTSE4GOOD INDEX
Following its recent annual review the FTSE4GOOD Index has
confirmed that Randgold has been retained as a constituent for the
fifth consecutive year. The index measures the environmental,
social and governance practices of companies listed on the London
Stock Exchange to provide the investment community with a tool for
portfolio management. Out of a possible 5, Randgold scored 4.2 for
environmental management (with a 5 for both water use and
biodiversity), 4 for its handling of social issues and 5 for
governance, substantially exceeding the industry and country
averages in each of these categories. Randgold chief executive Mark
Bristow said these were key pillars of Randgold's overall strategy
and welcomed the official confirmation that the company was
continuing to head in the right direction.
IN THE YEAR OF THE WOMAN, KIBALI APPOINTS FEMALE BUILDING
CONTRACTOR
Randgold Resources' policy of helping to develop its host
countries' skills bases by supporting local businesses is building
a new entrepreneurial class of contractors and suppliers around its
mines.
It has now advanced that process further by encouraging tenders
for the construction of a new accommodation block at Kibali from
companies owned and operated by women. Seven companies submitted
tenders and following an adjudication process the $112 000 contract
was awarded to GABS (Groupema Business Services), owned by Aime
Migiya.
Ms Migiya, who grew up in the neighbouring Durba village, worked
for various contractors during Kibali's construction phase and was
handling housekeeping for the Azambi hydropower project before she
started her own business.
"I'm very happy to have been given this opportunity and I'm sure
it will open the door for other female contractors," she said.
Randgold chief executive Mark Bristow said the empowerment of
women was in line with the company's commitment to sharing the
value it creates with all stakeholders."
"This is the Year of the Woman at Randgold and the females-only
tender was one way in which we're celebrating it, " he said.
RANDGOLD MINES' SUPPORT DELIVERS QUALITY OF LIFE IMPROVEMENTS TO
LOCAL COMMUNITIES
Randgold Resources' policy of sharing the value it creates with
its in-country stakeholders, notably the communities around its
mines, continues to make a significant difference for the better
for these neighbours.
The company's multi-pronged development programmes range from
the provision of education and healthcare facilities to the
promotion of local economic development and food security.
IMPROVED EDUCATION BEARS FRUIT
At its flagship Loulo-Gounkoto complex in Mali, for example, it
has built 17 schools in an area when previously there had only been
two. From 297 pupils when Loulo opened, the area had more than 5
500 in 2018, almost half of them girls. Last year, the fundamental
school exam pass rate was 88.5% against 69.1% for the wider region.
A bursary programme funded by the company has helped 56 pupils to
continue their studies at university in the Malian capital
Bamako.
BETTER HEALTHCARE REDUCES INFECTION
The establishment of basic healthcare facilities and testing
programmes has reduced the HIV and malaria infection rates
significantly. The Loulo clinic provides free consultation to the
local community.
HIGH QUALITY POTABLE WATER FOR ALL MINE COMMUNITIES
The investment in boreholes and water supply systems has
provided improved access to potable water, regularly analysed for
quality, to people who previously had to walk long distances to
collect untreated water.
AGRIBUSINESS FOR A SECURE FUTURE
The donation of 14 tractors and annual supplies, seeds and
fertilisers has boosted the production of grains and vegetables,
and an agricultural college has been established to train 100
future commercial farmers over two-year periods.
CREATING EMPLOYMENT, IMPROVING OPPORTUNITIES
More than 72 local economic development projects, in an area
previously dependent on subsistence farming and artisanal mining,
have created more than 1 000 jobs generating total annual salaries
in excess of $3 million.
"Our approach is to initiate these projects and then to hand
over the responsibility for them to the communities, providing
support and guidance where needed, and monitoring progress," says
Randgold group community and environmental officer Hilaire
Diarra.
------------------------------------------------------------------------
REGISTERED OFFICE 3rd Floor, Unity Chambers, 28 Halkett Street,
St Helier, Jersey, JE2 4WJ, Channel Islands
REGISTRARS Computershare Investor Services (Jersey) Limited,
Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES,
Channel Islands
TRANSFER AGENTS Computershare Services PLC, PO Box 663, 7th
Floor, Jupiter House, Triton Court, 14 Finsbury Square, London EC2A
1BR
INVESTOR AND MEDIA RELATIONS For further information contact
Kathy du Plessis on telephone: +44 20 7557 7738, e-mail:
randgold@dpapr.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Except for
the historical information contained herein, the matters discussed
in this news release are forward-looking statements within the
meaning of Section 27A of the US Securities Act of 1933 and Section
21E of the US Securities Exchange Act of 1934, and applicable
Canadian securities legislation. Forward-looking statements
include, but are not limited to, statements with respect to the
future price of gold, the estimation of mineral reserves and
resources, the realisation of mineral reserve estimates, the timing
and amount of estimated future production, costs of production,
reserve determination and reserve conversion rates. Generally,
these forward-looking statements can be identified by the use of
forward-looking terminology such as 'will', 'plans', 'expects' or
'does not expect', 'is expected', 'budget', 'scheduled',
'estimates', 'forecasts', 'intends', 'anticipates' or 'does not
anticipate', or 'believes', or variations of such words and phrases
or state that certain actions, events or results 'may', 'could',
'would', 'might' or 'will be taken', 'occur' or 'be achieved'.
Assumptions upon which such forward-looking statements are based
are in turn based on factors and events that are not within the
control of Randgold Resources Limited ('Randgold') and there is no
assurance they will prove to be correct. Forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity,
performance or achievements of Randgold to be materially different
from those expressed or implied by such forward-looking statements,
including but not limited to: risks related to mining operations,
including political risks and instability and risks related to
international operations, actual results of current exploration
activities, conclusions of economic evaluations, changes in project
parameters as plans continue to be refined, as well as those
factors discussed in Randgold's filings with the US Securities and
Exchange Commission (the 'SEC'). Although Randgold has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Randgold does not undertake
to update any forward-looking statements herein, except in
accordance with applicable securities laws. CAUTIONARY NOTE TO US
INVESTORS: The SEC permits companies, in their filings with the
SEC, to disclose only proven and probable ore reserves. We use
certain terms in this report, 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 parts 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PPMJTMBBMBLP
(END) Dow Jones Newswires
August 09, 2018 02:00 ET (06:00 GMT)
Randgold Resources (LSE:RRS)
Historical Stock Chart
From Apr 2024 to May 2024
Randgold Resources (LSE:RRS)
Historical Stock Chart
From May 2023 to May 2024