London, 3 November 2005 (LSE:RRS)(Nasdaq:GOLD) - London and Nasdaq listed gold miner Randgold Resources' new mine at Loulo in Mali will ship its first commercial consignment of bullion later this month after the successful commissioning of the first phase of the plant, the company said today.
Reporting an increased profit of US$9.2 million for the third quarter (Q2: US$7.1 million) and of US$28.5 million for the nine months to September (2004: US$3.6 million) the company said throughput at the Loulo plant was currently being raised to design levels and the mine was steadily being brought into commercial production. Selective mining and ore stockpiling has been in progress since May, ahead of the mill start-up, and the first gold was poured on 27 September. Work on the second phase of the development is underway, with the completion of the hard rock crushing circuit scheduled for the first quarter of 2006.
Meanwhile the Randgold Resources board has approved the development of an underground mine at Loulo to complement the original open-pit operation. An integrated plan to optimise the value of the combined open-pit and underground operations is scheduled for completion within the next three months.
The company's other mine, the Morila joint-venture in Mali, posted good results for the September quarter. Tonnage and grade were maintained in spite of a strike by the mining contractor's workers, and plant throughput exceeded one million tonnes - up 60 000 tonnes on the previous quarter. The consistent plant performance enabled Morila to produce 172 901 ounces of gold, a 7 542-ounce improvement on the June quarter.
On the exploration front, fieldwork in West Africa has resumed after the annual break for the wet season. In East Africa, field activities were accelerated during this period and good progress has been made. The company has recently concluded a joint-venture agreement with the government of Tanzania to develop new mineral deposits in the Kiabakari Maji-Moto region. Included in the agreement are the Buhemba South and Kiabakari prospecting licences. The latter includes the old Kiabakari mine and adds an advanced project to Randgold Resources' portfolio.
A busy final quarter has been planned, with drilling at Loulo, Sitakili, Selou and Morila as well as in Senegal and Tanzania. At Loulo the focus is on resource conversion and on identifying new resources. At nearby Sitakili, a firstphase reconnaissance drilling programme has been designed to probe significant gold in porphyry intrusives identified through field mapping and sampling.
In the Morila region, a hyperspectral study is being undertaken for the development of a three-dimensional model and the identification of drilling targets for 2006. In Senegal, four permits now consolidate the company's groundholding on the Sabodala belt, where two targets have been earmarked for further work.
In Burkina Faso, the emphasis has been on building a country model and in Ghana, fieldwork will start once government has approved pending applications.
The company said that in view of the postponement of elections in Côte d'Ivoire, it did not expect to start work on the final feasibility study on its Tongon project until the political situation stabilises.
On 1 November 2005, the company priced a fully marketed global equity offering of 7 500 000 ordinary shares and American Depositary Shares (""ADSs"") at US$13.50 per share. The underwriters have been granted an over-allotment option by Randgold Resources to purchase up to 1 125 000 additional ordinary shares. The funds will be used for the development of the Loulo underground mine, the Tongon pre-feasiblity study and new business opportunities.
With its extensive exploration portfolio, and a strengthened balance sheet, the company is now well-placed to continue with its development projects.