London, 8 May 2007 (LSE:RRS)(NASDAQ:GOLD) - Another good production performance from its Loulo operation in Mali boosted London and Nasdaq listed gold miner Randgold Resources' quarter-on-quarter net profit for the three months to March by 18% to US$12.7 million.
Loulo sustained the momentum generated in the previous quarter, with higher plant throughput and a steady feed grade delivering 67 908 ounces at a total cash cost of US$320/oz. The company's overall attributable production of 109 198 ounces was down from the previous quarter's 118 821 ounces, mainly because of lower output at its Morila joint venture in line with the 2007 mine plan. Both Loulo and Morila turned in satisfactory unit cost performances.
Meanwhile work on the Loulo underground development has continued to advance steadily. At Yalea, the first of the two underground mines to be developed, the boxcut construction and excavation work has been completed and the twin declines leading from the boxcut were well established by the end of the quarter. The design of Gara, the second of the mines, has been updated, resulting in the doubling of its underground reserve to 1.65 million ounces.
Chief executive Mark Bristow said the potential for the further expansion of reserves at Gara continued to grow with the identification of new high grade zones at Gara South.
"Drilling during the past quarter has confirmed the geological model of a blind high grade target at Gara South and all intersections indicate that the mineralised QT unit - which forms the main Gara orebody - is open both along strike to the south and down dip. A number of drill holes have returned intersections with an average grade of over 10g/t and work is continuing to infill between these encouraging results, further defining high grade pods. The extension of the QT target at Gara South has been tested up to 400 metres south of the existing wireframe and holds significant potential for the addition of high grade ounces to the Gara operation," he said.
Also on the Loulo permit, further drilling at the Faraba target where a resource of 567 000 ounces has been inferred, has so far not extended mineralisation beyond the currently defined 360 metres. However, with every hole intersecting sulphide mineralisation and strong alteration with anomalous gold values, Faraba's footprint has been extended and further drilling is planned. At Baboto, diamond drilling is testing the continuity of the mineralised structures identified within the five kilometre target area.
At the company's Tongon project in the Côte d'Ivoire, considerable progress is being made on a 30 000 metre drilling programme which will form the basis for a final feasibility study. Infill drilling along a 1.5 kilometre long structure in the northern zone during the past quarter, has confirmed continuity of the geology and mineralisation. Bristow noted that the first set of results covering some 600 metres of the strike had shown continuity and good grades over widths of between 20 and 30 metres, underlining the exciting potential of the northern zone. He also said the improving political situation in Côte d'Ivoire augured well for the future of Tongon and paved the way for the development of other opportunities in the region.
Elsewhere in Africa, additional drilling continued to define a broad zone of low grade mineralisation at the Kiaka target in Burkina Faso, while in Senegal the RAB drilling programme has also returned positive results. Diamond drilling is planned for the new target Massawa, where over three kilometres of bedrock mineralisation has been identified, as well as for Delya, Sofia, Bambaraya and other targets which may be identified by RAB drilling. In Tanzania, a new joint venture agreement has been concluded with African Eagle on the Miyabi gold project located in the south western part of the Lake Victoria Gold Belt.
Randgold Resources also announced that Kankou Moussa, its Malian gold bank initiative, had been officially launched. The bank - a partnership between Randgold Resources, the Malian government and the Malian gold companies, notably Loulo - has been designed to provide local jewellers with easy access to refined gold.