OPERATIONS

LOULO

Loulo produced 70 826 ounces of gold during the quarter, at a total cash cost of US$501/oz compared to 60 495 ounces in the previous quarter at US$523/oz. The increase in production was mainly attributable to higher ore grades at 3.7g/t (Q4 2008: 3.1g/t) plus slightly higher throughput offset by the effect of lower recoveries. Tonnes processed from the higher grade Yalea underground mine of 101 922 tonnes at 5.4g/t during the current quarter (Q4 2008: 60 140 tonnes at 4.4g/t) impacted positively on the overall recovered grade from the mine. Throughput was maintained despite an extended planned shutdown of nine days in March for the crusher expansion project which is anticipated to significantly increase throughput going forward as the mine ramps up to 300 000 tpm. This was achieved by utilising the stockpile created during the last quarter in 2008 for this purpose. The commissioning of the additional oxygen plant and Aachen reactors was delayed due to shipping problems and impacted negatively on the recovery, but has now been completed.

Total tonnes mined were higher than the previous quarter but in line with the plan. The decrease in total cash cost per ounce is mainly attributable to higher ounces produced. This was partially offset by an increase in the consumables used in the metallurgical process resulting from the change in the mix of ore processed through the plant and an increase in waste tonnes mined.
 

Randgold Resources owns 80% of Loulo with the Government of Mali owning 20%. The Government’s share is not a free carried interest. Randgold Resources has funded the Government 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 Resources consolidates 100% of Loulo and shows the non-controlling interest separately.

* Refer to explanation of non-GAAP measures provided.

+ Includes the impact of 23 748 ounces delivered at US$441/oz in the quarter ended 31 March 2009 and 22 749 ounces delivered at US$429/oz in the quarter ended 31 December 2008. Also includes the impact of 17 499 ounces for the quarter ended 31 March 2008 at US$429/oz and 80 496 ounces delivered at US$429/oz for the year ended 31 December 2008.


Reserve Update

During the quarter, the group released its annual resource and reserve declaration and the relevant extract relating to the Loulo reserves is shown in the table below, including a comparison with 2007 figures:

MORILA

At Morila, the mine produced 98 718 ounces of gold which was 16% below the previous quarter (Q4 2008: 117 066 oz) but in line with the Life of Mine plan as the mine nears the end of in pit mining. Total cash operating cost for the quarter was slightly up (2%) on the previous quarter, while total cash cost of US$388/oz was only 3% higher (Q3: US$377/oz), despite the significant decrease in production resulting from the lower grade ore mined. The drive to reduce costs has been a major focus for the mine over the past few quarters and the results are encouraging.

Tonnes processed for the quarter of 1 035 000 tonnes were 4% below previous quarter (Q1 2009: 1 101 000 tonnes) due to a major SAG mill relining during the quarter. Process plant recovery for the quarter at 92.3% was 2% higher than Q4 2008 (90.5%) as a result of management’s focus on gravity gold recovery and oxygen addition to the circuit, thus improving overall plant recovery.
 

* Refer to explanation of non-GAAP measures provided.


During the quarter, the mine took another major step in its strategy to rightsize the Morila operations in line with the pit closure in April 2009 and the transition to stockpile treatment to ensure that the operation remains a strong cash generator for the remaining mine life. Notice was given to the mining contractor employees and Morila employees affected by the rightsizing. To reduce the impact of the rightsizing on the community and employees the company has carried out soil tests and is busy with an agri business feasibility study in a region between the mine and the Bengue river. This forms part of a study to ensure sustainable development after the cessation of the stockpile treatment, currently scheduled for 2013.

The mine carried out further drilling as part of the study into the mining of near pit high grade mineralisation at the northern end of the pit by underground methods. These indicated less contained ounces than previously estimated and will be included in subsequent studies to evaluate the viability of the proposed project.


Reserve Update

The reserve base for Morila as at end of 2008 is tabulated below with a comparison to figures at the end of 2007: