Randgold Resources owns 80% of Loulo with the Government of Mali owning 20%. Randgold Resources consolidates 100% of Loulo and then adjusts the income statement for the minority interest.

*   Refer to explanation of non-GAAP measures provided.


The prior period results for Loulo have not been affected by the change in accounting policy relating to deferred stripping as there have been no transfers to deferred stripping since the mine became operational.

As reported last quarter Somilo S.A. continues to believe it is entitled to recover the funds referred to in the note to the balance sheet contained in our financial report for the quarter and year ended 31 December 2005.  Recovery of the full amount and other legal claims from MDM Ferroman (Pty) Ltd ("MDM") is dependent on the liquidation process and the successful conclusion of the legal action referred to in the same note, of which there can be no assurance.  The court has postponed considering the case for the order of final liquidation of MDM until 20 June 2006.

The mine has had to deal with many unfinished construction items, and with numerous challenges relating to structural construction delays due to required site alterations and repairs caused by inadequacies found in some of the original contractor material. Nevertheless, the Phase 1 circuit of the project is, subject to a few re-design issues relating to the CIL circuit, now substantially complete. All aspects of the plant are now performing well and the completion of Phase 2 on time is the key focus.

The hard ore circuit representing Phase 2 has seen excellent progress despite the disruption caused by taking back the contract from the main contractor. The secondary and tertiary crushers have been installed and the primary crusher is on site awaiting installation once the civil works are finished. These are scheduled for completion in the second quarter. 

The tailings return water pipeline has also been installed, allowing for the re-circulation of water back to the plant area.

Although challenging, the schedule still remains on track for the commissioning of Phase 2 towards the end of the second quarter.

Updating of the underground feasibility study allowed the conversion of 3.82 million more resource ounces into reserves.  

Full details of the group's reserves and resources are contained in the annual report for the year ended 31 December 2005. 


Morila

Morila made a good start to the year with plant throughput averaging 349 000 tonnes per month over the first quarter, in line with the design capacity of 350 000 tonnes. This 11% increase in throughput partially made up for the expected decrease in grade, and gold production for the quarter was 135 779 ounces. Costs decreased compared to the previous quarter's which were impacted by non-recurring accounting adjustments. Total cash costs for the quarter were US$231/ounce.