• Robust financial and operational achievement in challenging year
• Promoted to FTSE 100 and best performing stock for the year
• Balance sheet strength ensures funding for new growth projects

The year under review was probably the most exacting in the history of Randgold Resources. The company had to contend with the multiple challenges of expanding the Loulo complex, initiating the construction of the new Tongon mine and preparing Morila for conversion to a stockpile retreatment operation - in a market where the rise in the gold price was dwarfed by cost escalations and in a global economy which reeled to the brink of collapse.

That it was able to improve its net profit by 26% (excluding a non-cash provision against investments in auction rate securities), achieve a significant improvement in production and costs in the last quarter, and maintain its operational and exploration advances at the planned rate is a tribute to the quality of the company and its people. It underlines again the soundness of a strategy which is focused on long term goals, based on organic growth and directed at sustainable profitability. It also shows the value of the company’s continuing investment in its future: not only in physical assets but also in its skills base and its partnerships.

These sound results enabled the board to declare an increased dividend for the third year in a row.

During the year, the gold price rose by 5.8%, outperforming all asset classes. At the same time, however, gold shares lost their traditional linkage to the gold price, becoming more undervalued against bullion than at any point over the past 25 years. One shining exception to this trend was Randgold Resources: its share price increased by 60%, making it the year’s top performer in the FTSE 100, the blue chip index it was promoted to, and one of the top stocks on Nasdaq. Clearly, investors recognised it as the gold company that offers what they want: leverage on the bullion price.

This positioning is the product of thestrategy I have outlined over the years, a plan once criticised as overly conservative by analysts but now acknowledged for its foresight. In an industry where many were seduced by diversification into other metals, Randgold Resources has remained a pure gold play.

While the industry’s output continues to decline, Randgold Resources is projecting a 50% increase in production over the next three years on the back of a steadily growing resource base and new or expanded mines. Its record of delivery through successful discovery and development, followed by profitable operation, gives the stamp of confidence to this forecast.

Randgold Resources’ growth has historically been generated organically but it has always remained alert to corporate opportunities, measuring them against its own projects and strategy. The past decade’s flood of mergers and acquisitions offered little of real value but in the current market there are some more attractive opportunities, which the company is examining closely.

In the year ahead, the global economy will stay on the critical list and gold is likely to remain the hedge of choice for prudent investors, fearful not only of the immediate financial crisis but of the longer term consequences of their governments’ accelerating currency debasement. Most observers accordingly expect a gold price at or above the past year’s levels.

While it will be another challenging year for Randgold Resources, with much to do on the development front, the company is securely placed to benefit from gold’s continued strength. Its robust balance sheet, with available cash of more than US$250 million, gives it the capacity to self-fund its growth projects - a very considerable advantage in the current climate. In addition, the pressure of cost inflation is easing, as already evident in the last quarter of 2008, with the drop in the oil price and a generally more competitive supply situation. The company’s continued quest for excellence and its determination to achieve should therefore produce another creditable performance.

Crucial to this performance is Randgold Resources’ ability to attract, motivate and retain people of the highest calibre. In this regard, I would like to thank shareholders for supporting the new restricted share scheme, which will help the company to keep incentivising its executive team in the most effective way.

Randgold Resources’ strong focus on profitability does not exclude a highly developed sense of duty to its stakeholders, in the widest sense of that term. The company’s social responsibility and environmental policies and activities are spelled out in detail elsewhere in this report but it is worth noting here that they are being demonstrated in action at both ends of the operational spectrum: Morila, which is being prepared for conversion to a stockpile retreatment operation, and Tongon, where construction recently started.

Morila is currently being converted from a mining to a stockpile treatment operation but will close down completely in another two to three years. To provide the local community with an alternative and sustainable source of economic activity when that happens, the company is investigating the development of a cooperative agribusiness which will use some of the mine’s infrastructure and facilities. At Tongon, there has been a lengthy and extensive process of engagement with the community which has gone well beyond the requirements of the environmental impact assessment. As at the company’s other operations, a community forum has now been established there for free and frank discussion of all issues related to the new mine, especially those dealing with the protection of the environment and improving the quality of life. In line with the company’s phased succession plan, Aubrey Paverd and Bernard Asher have indicated they will retire as non-executive directors at our next annual general meeting. I should like to express my gratitude and that of my fellow directors on the board for their counsel and wisdom during their more than 11 years of service to the company. Two new non-executive directors were appointed during the year: they are Christopher Coleman, a director of N M Rothschild & Sons where he is cohead of banking, and Jon Walden, the managing director of Lex, a subsidiary of HBOS. I welcome them to the board, which is strengthened by their stature and experience.

In conclusion, it is a great pleasure to see the strategy of the company deliver on its objectives, and to report that 2008 has produced another outstanding set of results for Randgold Resources. I would like to congratulate Mark Bristow and his team on posting such a pleasing operational and corporate performance in a difficult year and on passing a number of significant milestones in the process. My personal thanks are due also to my fellow directors on the board for their contribution and commitment through the year. On behalf of all at Randgold Resources, I also wish to express our most sincere thanks for their continued support to our shareholders, the governments and people of our host countries, and our many business partners.

/s/ Philippe Liétard
Chairman