Randgold Resources > Financials > Quarterly reports > 2011 > Quarterly Report 30 September 2011
Operations
The combined Loulo and Gounkoto gold production for the third quarter was 87 070 ounces. Production this quarter increased by 9% (Q2 2011: 79 639 ounces) due to an increased contribution from Gounkoto as it ramped up production, notwithstanding the flooding experienced in August.
Plant tonnes treated at 864kt was down 9% on the previous quarter. This was due to downtime associated with the tie-in of the new tailings pipeline which was installed to overcome the pipe burst issues previously experienced. The lower throughput was offset by higher grades and recoveries from Gounkoto ore which is a higher grade than Gara and Yalea at this stage of the mine plan.
Erection work started this quarter for the installation of an additional mill at Loulo. The civil work is nearing completion and the mill is on site. The mill will be tied in to the existing circuit as a primary mill. Commissioning work will start at the end of the year and will continue into the first quarter of next year, building up to its increased design throughput by mid-2012.
In anticipation of increased Gounkoto production and the additional third mill, the power plant is being upgraded. The upgrade comprises the installation of four more 3.5MW medium speed gensets, two of which have already been commissioned to provide power for the mill expansion. A further two have now arrived on site to provide power for the next phase of the underground development.
Total cash costs per ounce was US$818/oz for the quarter, a reduction of US$21/oz on the previous quarter. This is despite an increase in the royalty (6% of net revenue paid to the State of Mali) of US$11/oz due to the higher gold price received. The drop in costs is due to the increasing proportion of higher grade, lower cost Gounkoto ore. The received gold price for the quarter was US$1 691/oz compared to US$1 508/oz in Q2. The higher gold price and production combined with lower costs resulted in a 52% rise in profit from mining for the quarter to US$77.9 million (Q2 2011: US$51.4 million).
During the quarter, one Lost Time Injury (LTI) was recorded at Loulo relating to a fractured finger. The LTIFR continues to improve and was 0.70 per million hours worked versus 0.73 for the previous quarter.
|
LOULO-GOUNKOTO COMPLEX RESULTS |
|||||
|
|
Quarter |
Quarter |
Quarter |
9 months |
9 months |
|
|
ended |
ended |
ended |
ended |
ended |
|
|
30 Sept |
30 Jun |
30 Sept |
30 Sept |
30 Sept |
|
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
Mining |
|
|
|
|
|
|
Tonnes mined (000) |
9 612 |
9 024 |
9 217 |
26 133 |
30 172 |
|
Ore tonnes mined (000) |
1 284 |
1 119 |
1 003 |
2 862 |
3 442 |
|
Milling |
|
|
|
|
|
|
Tonnes processed (000) |
864 |
951 |
824 |
2 706 |
2 329 |
|
Head grade milled (g/t) |
3.5 |
3.0 |
3.1 |
3.0 |
3.4 |
|
Recovery (%) |
89.0 |
86.2 |
94.8 |
87.7 |
93.1 |
|
Ounces produced |
87 070 |
79 639 |
78 198 |
228 858 |
236 206 |
|
Ounces sold |
88 481 |
76 706 |
77 865 |
232 873 |
233 366 |
|
Average price received+ (US$/oz) |
1 698 |
1 508 |
1 137 |
1 539 |
1 109 |
|
Cash operating costs* (US$/oz) |
721 |
752 |
669 |
777 |
620 |
|
Total cash costs* (US$/oz) |
818 |
839 |
732 |
866 |
682 |
|
Gold on hand at period end# (US$000) |
3 178 |
5 683 |
6 623 |
1 962 |
6 623 |
|
Profit from mining activity* (US$000) |
77 859 |
51 355 |
31 562 |
156 742 |
99 663 |
|
Gold sales* (US$000) |
150 242 |
115 710 |
88 540 |
358 390 |
258 917 |
+ Includes the effect of 15 664 ounces delivered at US$504/oz in the quarter ended 30 September 2010. There is no impact of
hedge positions on the group during the current year as the group is now fully exposed to the spot gold price on all gold sales
following the completion of the Loulo hedge programme in Q4 2010.
* Refer to explanation of non-GAAP measures provided, including the change in the basis of the measurement of costs per ounce.
# Gold on hand represents gold in doré at the mines multiplied by the prevailing spot gold price at the end of the period.
| LOULO STANDALONE RESULTS | |||||
|
|
Quarter |
Quarter |
Quarter |
9 months |
9 months |
|
|
ended |
ended |
ended |
ended |
ended |
|
|
30 Sept |
30 Jun |
30 Sept |
30 Sept |
30 Sept |
|
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
Mining |
|
|
|
|
|
|
Tonnes mined (000) |
3 468 |
4 609 |
9 217 |
13 196 |
30 172 |
|
Ore tonnes mined (000) |
844 |
725 |
1 003 |
2 022 |
3 442 |
|
Milling |
|
|
|
|
|
|
Tonnes processed (000) |
602 |
871 |
824 |
2 364 |
2 329 |
|
Head grade milled (g/t) |
2.9 |
2.7 |
3.1 |
2.7 |
3.4 |
|
Recovery (%) |
88.6 |
86.0 |
94.8 |
87.5 |
93.1 |
|
Ounces produced |
51 080 |
65 578 |
78 198 |
178 807 |
236 206 |
|
Ounces sold |
52 491 |
62 645 |
77 864 |
182 822 |
233 366 |
|
Average price received+ (US$/oz) |
1 715 |
1 507 |
1 137 |
1 514 |
1 109 |
|
Cash operating costs* (US$/oz) |
848 |
858 |
669 |
863 |
620 |
|
Total cash costs* (US$/oz) |
943 |
945 |
732 |
949 |
682 |
|
Gold on hand at period end# (US$000) |
3 178 |
5 683 |
6 623 |
3 178 |
6 623 |
|
Profit from mining activity* (US$000) |
40 533 |
35 237 |
31 562 |
103 298 |
99 663 |
|
Gold sales* (US$000) |
90 019 |
94 426 |
88 540 |
276 883 |
258 917 |
Randgold owns 80% of Loulo with the State of Mali owning 20%. The State’s share is not a free carried interest. Randgold has funded the State portion of the 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.
+ Includes the effect of 15 664 ounces delivered at US$504/oz in the quarter ended 30 September 2010. There is no impact
of hedge positions on the group during the current year as the group is now fully exposed to the spot gold price on all gold
sales following the completion of the Loulo hedge programme in the fourth quarter of 2010.
* Refer to explanation of non-GAAP measures provided, including the change in the basis of the measurement of costs per ounce.
# Gold on hand represents gold in doré at the mines multiplied by the prevailing spot gold price at the end of the period.
Yalea underground mine
During this quarter, a total of 2 789 metres of development was completed (including 887 metres of Yalea pit decline) and 118 842 tonnes of ore at 3.72g/t was hauled to surface. The development project to date is 22 097 metres.
The table below shows the improving performance this year in development metres and total tonnes mined.
|
YALEA UNDERGROUND PERFORMANCE |
||||
|
|
Development |
Ore |
Grade |
Total tonnes mined |
|
Q1 2011 |
1 869 |
91 588 |
4.0 |
196 007 |
|
Q2 2011 |
2 155 |
78 113 |
3.5 |
235 385 |
|
Q3 2011 |
2 789 |
118 842 |
3.7 |
288 764 |
|
Total 2011 YTD |
6 813 |
288 543 |
3.7 |
720 156 |
* Hoisted ore
The Yalea decline has now advanced to a distance of 2 362 metres from surface and a vertical depth of 369 metres. Overall development has again shown a steady improvement this quarter. An additional 634 metres were developed this quarter, representing a 29% improvement on Q2.
The ‘purple patch’ development of 188L has been completed to the limit line of the transverse zone, where the orebody width is greater than 15 metres. The second leg of the declines has exposed the 208L which is targeting the purple patch second level and is advancing according to plan.
Two primary stopes were developed on 113L North, to expose block 3 and block 5 in order to proceed stoping with pillars in the succession block. Stoping in these two blocks was carried out according to plan and 118 842 tonnes at 3.72g/t was mined.
The Yalea pit decline has now holed into the main Yalea South decline.
Technical design of the mine stoping method and layout have been reviewed and the revised design concept, capital schedules and mining rates are currently being re-evaluated and optimised along with a series of trade-off studies. Testing of the fill material and further detailed work on the paste backfill plant and fill reticulation is in progress and should be complete by the end of the year.
Gara underground mine development
During this quarter a total of 1 968 metres of development was completed.
The table below shows the improving performance of the underground section this year.
|
GARA UNDERGROUND PERFORMANCE |
||||
|
|
Development |
Ore |
Grade |
Total mined |
|
Q1 2011 |
1 196 |
- |
- |
119 665 |
|
Q2 2011 |
1 529 |
28 126 |
4.6 |
142 020 |
|
Q3 2011 |
1 968 |
47 885 |
4.7 |
184 012 |
|
Total 2011 YTD |
4 694 |
76 011 |
4.7 |
445 697 |
* Hoisted ore
The Gara declines have now been advanced to a distance of 1 391 metres from surface and a vertical depth of 212 metres. Q3 development showed an improvement of 439 metres against Q2, representing a 29% increase. Development remains on schedule and the orebody has been exposed on the 40L and 65L, preparing the ground for the start-up of the stoping production build-up planned for Q4.
A total of 47 885 tonnes of development ore at a grade of 4.68 per tonne was hoisted to surface. Minable reserves, three primary with three secondary stopes, 320 metres in strike length have been developed on 65L, with 40L nearing the northern limit of the ore.
The decline is moving steadily to expose 85L which will be the stoping ground for 2012. As with Yalea, the mine has undertaken a review of the technical design and is evaluating the options to optimise the development.
Gounkoto
Following the start of toll treating ore from Gounkoto through the Loulo plant in June, Gounkoto standalone produced 35 990 ounces of gold at a total cash cost of US$636/oz this quarter, compared to 14 061 ounces at US$367/oz in Q2. The main contributor to the rise in costs is the drop in grade from 6.3 g/t in Q2 to 4.6 g/t this quarter, more in line with the reserve grade. Production was lower than planned due to the abnormally high rainfall in August, a one in 100 year rainfall event. The flood that occurred on 22 August blocked the haul road, disrupting the trucking of ore and forcing the mine to use an alternative, longer road to supply fuel to the mine. Haulage operations between Gounkoto and Loulo were further hampered by limited contractor truck availability. The mine’s own fleet of 50 tonne Volvo trucks arrived on site and was commissioned at the end of the quarter. Mining and hauling rates have picked up and production volumes are planned to increase in the dry season in Q4 this year.
Negotiations for a separate mining permit and convention, including a period of exoneration from corporate income tax, are progressing with the State of Mali and the group results have been prepared on this basis.
Development of the infrastructure continued this quarter. The upgrade of the haul road with the final wearing course is in progress, as well as raising the level of the bridge where the flooding occurred, both scheduled for completion by the end of this year. Most of the mechanical and structural items for the permanent crushing plant have reached site. Civil works are in progress and erection of the steel structure has started. Construction is on track and the crusher is expected to be operational by the end of this year.
During the quarter, two LTIs were recorded against zero LTI for Q2. Regrettably, one was a fatality, a drowning caused by the abnormal rainfall described above, and the second case was a finger fracture of a mining contractor employee. The Lost Time Injury Frequency Rate (LTIFR) was 3.46 per million hours worked compared to 0.01 for the previous quarter. Remedial action has been taken by management to target zero LTIs for the rest of the year.
|
GOUNKOTO STANDALONE RESULTS |
||||
|
|
Quarter |
Quarter |
9 months |
9 months |
|
|
ended |
ended |
ended |
ended |
|
|
30 Sept |
30 Jun |
30 Sept |
30 Sept |
|
|
2011 |
2011 |
2011 |
2010 |
|
Mining |
|
|
|
|
|
Tonnes mined (000) |
6 144 |
4 415 |
12 937 |
- |
|
Ore tonnes mined (000) |
440 |
394 |
840 |
- |
|
Milling |
|
|
|
|
|
Tonnes processed (000) |
262 |
80 |
342 |
- |
|
Head grade milled (g/t) |
4.8 |
6.3 |
5.1 |
- |
|
Recovery (%) |
89.5 |
87.0 |
88.8 |
- |
|
Ounces produced |
35 990 |
14 061 |
50 051 |
- |
|
Ounces sold |
35 990 |
14 061 |
50 051 |
- |
|
Average price received (US$/oz) |
1 673 |
1 514 |
1 628 |
- |
|
Cash operating costs* (US$/oz) |
536 |
277 |
463 |
- |
|
Total cash costs* (US$/oz) |
636 |
367 |
561 |
- |
|
Profit from mining activity* (US$000) |
37 326 |
16 118 |
53 444 |
- |
|
Gold sales* (US$000) |
60 223 |
21 284 |
81 507 |
- |
Randgold has created a new company, Gounkoto, to hold the Gounkoto mining permit and mining assets. Randgold is currently in negotiations with the State of Mali in respect of the fiscal regime that will be applicable to Gounkoto. The current results of the group have been prepared on the basis that Gounkoto will be eligible for a corporate tax holiday, with the State of Mali holding 20% of the share capital and Randgold holding the balance. Shareholders will be advised in due course when these negotiations are complete.
Randgold consolidates 100% of Gounkoto and shows the non-controlling interest separately.
* Refer to explanation of non-GAAP measures provided, including the change in the basis of the measurement of costs per ounce.
MORILA
Morila produced 60 955 ounces of gold, down slightly on the previous quarter (Q2 2011: 62 230 ounces) but slightly ahead of the mine’s plan. Profit from mining of US$55.3 million is up on the previous quarter’s US$44.5 million, mainly as a result of the higher average gold price received of US$1 701/oz, an increase of12% on the previous quarter (Q2 2011: US$1 515/oz). Total cash costs per ounce of US$795/oz was in line with the previous quarter’s US$799/oz. No LTIs were recorded during this quarter, as in the previous quarter and the year to date. The mine OHSAS 18001 v 2007 internal safety audit No 1 was completed and no major non-conformity was found.
Rehabilitation activities on waste rock stockpiles are in progress. Six hectares were rehabilitated during the quarter, as planned.
|
MORILA RESULTS |
Quarter |
Quarter |
Quarter |
9 months |
9 months |
|
|
ended |
ended |
ended |
ended |
ended |
|
|
30 Sept |
30 Jun |
30 Sept |
30 Sept |
30 Sept |
|
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
Mining |
|
|
|
|
|
|
Tonnes mined (000) |
- |
- |
- |
16 |
- |
|
Ore tonnes mined (000) |
- |
- |
- |
16 |
- |
|
Milling |
|
|
|
|
|
|
Tonnes processed (000) |
1 130 |
1 141 |
1 108 |
3 415 |
4 303 |
|
Head grade milled (g/t) |
1.8 |
1.9 |
1.8 |
1.8 |
1.9 |
|
Recovery (%) |
91.8 |
90.5 |
90.4 |
90.6 |
90.4 |
|
Ounces produced |
60 955 |
62 230 |
58 174 |
178 900 |
179 504 |
|
Ounces sold |
60 955 |
62 230 |
56 269 |
178 900 |
177 599 |
|
Average price received (US$/oz) |
1 701 |
1 515 |
1 233 |
1 540 |
907 |
|
Cash operating costs* (US$/oz) |
692 |
708 |
666 |
700 |
582 |
|
Total cash costs* (US$/oz) |
795 |
799 |
740 |
793 |
653 |
|
Profit from mining activity* (US$000) |
55 260 |
44 525 |
27 748 |
133 785 |
93 800 |
|
Stockpile adjustment** (US$/oz) |
263 |
293 |
296 |
280 |
251 |
|
Attributable (40% proportionately |
|
|
|
|
|
|
Gold sales (US$000) |
41 484 |
37 703 |
27 763 |
110 237 |
83 902 |
|
Ounces produced |
24 382 |
24 892 |
23 270 |
71 560 |
71 802 |
|
Ounces sold |
24 382 |
24 892 |
22 507 |
71 560 |
71 040 |
|
Profit from mining activity* (US$000) |
22 104 |
17 810 |
11 099 |
53 514 |
37 520 |
* Refer to explanation of non-GAAP measures provided, including the change in the basis of the measurement of costs per ounce.
** The stockpile adjustment per ounce reflects the charge expensed in respect of stockpile movements during the period divided
by the number of ounces sold. Total cash costs per ounce includes non-cash stockpile adjustments.
During the quarter worked continued on the tailings storage facility material retreatment project. The project scoping was revised to integrate the potential pit push-back option and a detailed schedule and financial model will be completed next quarter, once the push-back design is complete. A decision on these projects is expected by the end of the year.
TONGON
During the quarter, Tongon produced 70 910 ounces compared to 80 180 ounces in the previous quarter. The drop in production reflects a decrease in mill throughput, partly associated with the commissioning of the hard rock crushing circuit during the rainy season. A total of 2 933kt was mined, inclusive of 607kt of ore. Milled throughput tonnes were 755kt at a grade of 3.2g/t and a gold recovery of 90.9%.
Mining and mill throughput was hampered by the challenges associated with mining in wet and poor underfoot conditions and with crushing and conveying a blend of transitional wet saprolite and sulphide rock ore. Ore tonnes mined and ore tonnes treated decreased by 35% and 16% respectively on the Q2 figures. The flotation and fine-grind processing circuits were put into operation as the proportion of sulphide ore in the mill feed rose in the latter half of the quarter. Both phases of the secondary and tertiary crusher installations have been completed, with only minor mechanical and process optimisation items to be completed on the second crushing circuit.
The drop in gold sold for the quarter of 68 154 ounces (Q2 2011: 111 608 ounces) reflects the inclusion last quarter of previously unsold gold due to the conflict in the country earlier in the year. All operations have now returned to normal. Total cash costs per ounce increased to US$637/oz (Q2 2011: US$477/oz) partially reflecting the lower production mentioned above. Poor performance by the mining contractor also pushed up unit costs per tonne mined by 24%. Work on the connection to the national electricity grid continued. Test runs have taken place and final connection is expected by the end of November. Power costs are expected to reduce significantly once the connection has been completed.
No environmental incidents and no LTIs occurred this quarter, in line with the previous quarter. Extensive environmental aspect identification and risk-based assessments were conducted towards the mine’s goal to achieve its ISO 14001 environmental and OHSAS 18001 safety accreditation.
All mine and contractor personnel required to operate the mine have been recruited. The mine is currently negotiating a Mine Level Agreement (MLA) with the recognised union on site.
The mine was officially opened on 24 October by the Côte d’Ivoire President, His Excellency Alassane Ouattara.
|
TONGON RESULTS |
Quarter |
Quarter |
Quarter |
9 months |
9 months |
|
|
ended |
ended |
ended |
ended |
ended |
|
|
30 Sept |
30 Jun |
30 Sept |
30 Sept |
30 Sept |
|
|
2011 |
2011 |
2010 |
2011 |
2010 |
|
Mining |
|
|
|
|
|
|
Tonnes mined (000) |
2 933 |
5 034 |
2 460 |
12 676 |
4 377 |
|
Ore tonnes mined (000) |
607 |
927 |
283 |
2 480 |
483 |
|
Milling |
|
|
|
|
|
|
Tonnes processed (000) |
755 |
901 |
- |
2 358 |
- |
|
Head grade milled (g/t) |
3.2 |
2.9 |
- |
2.9 |
- |
|
Recovery (%) |
90.9 |
94.1 |
- |
92.3 |
- |
|
Ounces produced |
70 910 |
80 180 |
- |
206 058 |
- |
|
Ounces sold |
68 154 |
111 608 |
- |
226 057 |
- |
|
Average price received (US$/oz) |
1 730 |
1 507 |
- |
1 545 |
- |
|
Cash operating costs* (US$/oz) |
585 |
431 |
- |
465 |
- |
|
Total cash costs* (US$/oz) |
637 |
477 |
- |
511 |
- |
|
Gold on hand at period end# (US$000) |
5 570 |
1 027 |
- |
5 570 |
- |
|
Gold sales (US$000) |
117 884 |
168 242 |
- |
349 148 |
- |
|
Profit from mining activity* (US$000) |
74 500 |
115 040 |
- |
233 532 |
- |
Randgold owns 89% of Tongon with the State of Côte d’Ivoire and outside shareholders owning 10% and 1% respectively. Randgold has funded all the investments in Tongon by way of shareholder loans and therefore controls 100% of the cash flows from Tongon until the shareholder loans are repaid.
Randgold consolidates 100% of Tongon and shows the non-controlling interest separately.
* Refer to explanation of non-GAAP measures provided, including the change in the basis of the measurement of costs per ounce.
# Gold on hand represents gold in doré at the mines multiplied by the prevailing spot gold price at the end of the period.
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