Operations

LOULO

During the quarter, Loulo produced 78 198 ounces, at a total cash cost of US$729/oz compared to 70 385 ounces in the previous quarter at US$668/oz. The increased production resulted from a 16% increase in plant throughput resulting from the successful remedial action undertaken on the plant during the quarter to address the bottlenecks following the earlier expansion. The plant is now expected to be close to full capacity in the fourth quarter. The improved operation of the plant also resulted in an improved recovery of 94.8% for the quarter compared to 91.4% in the previous quarter.

Despite the increase in ounces produced, total cash costs per ounce increased by 9% quarter on quarter following a 9% decrease in the average grade of the ore mined of 3.1g/t (Q2 2009: 3.4g/t). 

Total tonnes mined decreased to 9 217kt, 14% lower than the previous quarter, which was higher than average due to increased tonnages from open pit mining, which provided increased flexibility for the mill feed to cover for the slower build up from the underground operation.  The reduction in the current quarter reflects the current average grade being mined from the open pits, without any material benefit from the higher grade underground section. However, the scheduled grade from the open pits is expected to improve in the fourth quarter which should also benefit from the continued steady improvement in underground production. 

Gold sales increased by 19% compared to the previous quarter as a result of the higher ounces sold and a higher average gold price received of US$1 137/oz (Q1 2010: US$1 078/oz). Profits from mining activity in the current quarter increased by 14% on the prior quarter following the higher production and revenues.

Loulo recorded zero Lost Time Injuries (LTI) during the quarter, and the mine achieved a significant 2 million LTI free hours following 157 consecutive days LTI free. Year to date the LTI frequency rate is 1.15 per million hours worked.

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

*        Refer to explanation of non-GAAP measures provided.

+       Includes the impact of 15 664 ounces delivered at US$504/oz in the quarter ended 30 September 2010 and 17 588 ounces delivered at US$498/oz in the quarter ended 30 June 2010 and 18 750 ounces delivered into the hedge at US$428/oz in the quarter ended 30 September 2009.

MORILA

During the quarter Morila produced 58 174 ounces, in line with the previous quarter of 58 737 ounces. Mill throughput, plant headgrade and recoveries were all broadly in line with the previous quarter. Total cash costs per ounce increased by 9% to US$716/oz due to the slightly lower ounces and an increase in gold inventory and stockpile adjustments. The average received gold price during the quarter of US$1 233/oz increased by 2.7% on the previous quarter, however the increased costs and lower gold sales resulted in a 4% drop in profit from mining.

A small scale mining operation, targeting 25kt of ore at 3.33g/t in the Pit4S area of the pit, is currently being contemplated for the fourth quarter, as a means of further enhancing the life and profitability of the mine.

Morila recorded zero LTI during the quarter, and has yet to record an LTI this year, another outstanding achievement.

*        Refer to explanation of non-GAAP measures provided.

#       The stockpile adjustment per ounce reflects the charge expensed/(credit deferred) in respect of stockpile movements during the period divided by the number of ounces produced.  The total cash cost per ounce include non-cash stockpile adjustments.