Loulo Gold Mine

Loulo Gold Mine Operations

Société des Mines de Loulo (SOMILO) S.A. which owns the 372km2 Loulo mining lease in western Mali, is the 80% owned subsidiary of Randgold Resources Limited. The remaining 20% is owned by the Government of Mali. The project is being developed as both an open pit and underground operation by Randgold Resources to exploit two main orebodies; Gara and Yalea, as well as a number of satellite deposits. The initial open pit mine was financed, developed and then commissioned by Randgold Resources in September 2005. The development of the underground phase is expected to be financed from internal cashflow and by Randgold. The original Gara orebody, was discovered by Syndicate d'Or in 1981 and the Yalea orebody, the principal orebody, by Randgold Resources in 1996/1997. The mining lease still boasts a significant portfolio of prospective targets which are being explored and evaluated through an ongoing exploration programme.

Project Update to 31 March 2009...

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. 

 

LOULO RESULTS        

Quarter

Quarter

Quarter

12 months

 

ended

ended

ended

ended

 

31 Mar

31 Dec

31 Mar

31 Dec

 

2009

2008

2008

2008

Mining

 

 

 

 

Tonnes mined (000)

5 728

5 434

7 846

26 231

Ore tonnes mined (000)

633

978

869

3 403

Milling

 

 

 

 

Tonnes processed (000)

685

676

701

2 721

Head grade milled (g/t)

3.7

3.1

3.1

3.2

Recovery (%)

87.1

90.5

90.9

91.2

Ounces produced

70 826

60 495

63 249

258 095

Average price received+ (US$/oz)

765

669

787

738

Cash operating costs* (US$/oz)

459

484

429

469

Total cash costs* (US$/oz)

501

523

470

511

Profit from mining activity* (US$000)

16 137

8 853

19 876

58 521

Gold sales*+ (US$000)

51 648

40 464

49 589

190 336


* 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.


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.

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:

 

LOULO ORE RESERVES

Attributable

 

 

 

 

 

 

 

gold

 

Tonnes

Tonnes

Grade

Grade

Gold

Gold

 (80%)

 

(Mt)

(Mt)

(g/t)

(g/t)

(Moz)

(Moz)

(Moz)

Category

2008

2007

2008

2007

2008

2007

2008

Proved

7.08

8.95

3.38

3.36

0.77

0.97

0.62

Probable

43.51

45.47

4.60

4.40

6.43

6.43

5.14

Total

50.59

54.42

4.42

4.23

7.20

7.40

5.76