London, 2 November 2006 - Randgold Resources (LSE:RRS) (Nasdaq:GOLD) posted a profit from mining of US$30.7 million for the September quarter, taking its total for the nine months to date to US$99.4 million - up 90% on the corresponding period in 2005 thanks to the contribution from its new Loulo mine and the higher gold price.
Gold sales revenue for the quarter was US$63.2 million, in line with that of the previous quarter in spite of a lower received gold price. Production at Loulo increased by 11% to 57 123 ounces but was down 8% to 124 698 ounces (49 879 ounces attributable) at the company's Morila joint venture. Total cash costs at both operations were slightly up but on a group basis, are still in line with the overall target for the year.
At Loulo, the difficulties caused by the delay in the commissioning of the hard rock crusher spilled over into this quarter but throughputs increased steadily in August and September, with higher grades and improved recoveries boosting production. At Morila, operational problems resulted in a lower head grade and reduced plant throughput. These are being addressed and the mine is still on track to exceed 500 000 ounces for the year as planned.
In the meantime, excavation and construction of the boxcut for the Yalea underground mine at Loulo are well underway. The design and schedule for the second underground mine - Gara (formerly known as Loulo 0) - are currently being completed. Continued underground drilling has expanded the total Loulo resource base to more than 10 million ounces.
In the Côte d'Ivoire, the company is gearing up for a 30 000 metre diamond core feasibility drilling programme on the back of favourable results from the recently completed tactical drilling exercise there. The feasibility programme is due to start in January 2007, assuming political stability and safe working conditions in the region.
Elsewhere in West Africa, Randgold Resources' exploration teams are heading back into the field after the rainy season. In Mali, exploration continues to be focused on and around Loulo and Morila, while in Senegal, 15 targets have been prioritised for RAB drilling while three advanced targets have been modelled for further diamond drilling. In Ghana, completion of the first phase of exploration across all the company's permits will generate follow-up targets. In Burkina Faso, a first-pass exploration programme has been completed on all nine permits and targets in the Kiaka permit have been tested through RAB and RC drilling.
In East Africa, the status of the Kiabakari project in Tanzania is currently being re-evaluated. Other opportunities are currently being pursued in that country.
Chief executive Mark Bristow said the company's sustained sound performance reflected the benefits of balance and integration in the business and of its strong emphasis on organic growth.
"Loulo has effectively settled some start-up problems that were not of our making and, considering the circumstances, had a very solid quarter. Even more important, it is steadily evolving into a world-class mining complex encompassing open-pit and underground operations. Morila had a bit of a wobble but is still delivering the goods and Tongon is heading into the feasibility phase," he said.
"Our exploration teams are starting the new field season with plenty of prospects on their plate. We will also be looking at opportunities beyond our current six-country portfolio."