The Tongon project is located within the Nielle exploration permit in the north of Côte d’Ivoire, 55 kilometres south of the border with Mali.

Randgold Resources holds an effective 84% interest in the project. The Côte d’Ivoire state holds a carried interest of 10% with the option to acquire a further 10% participatory right at market rates. New Mining CI, (NMCI), by virtue of a joint venture agreement with Randgold Resources, holds a 6% interest. Funding for their interest in the project will be provided by Randgold Resources and repaid from project cashflows, as will the state’s carried interest of 10%.

Following the approval of the environmental impact assessment, the company has fulfilled all the prerequisites for the mining licence and awaits its issuance. The fiscal regime governing the mine has been agreed and incorporated in a mining convention which is progressing through the inter-ministerial approval process.

GEOLOGY AND MINERAL RESOURCES
The Tongon deposits are located within the Lower Proterozoic Senoufo Belt, which is a 200 kilometres long, volcanisedimentary belt of greenschist grade metamorphism bounded on either side by variably tectonised granitoid gneiss terranes.

Mineralisation at Tongon is defined in two zones. In the Northern Zone, the major part of the mineralisation is located within volcaniclastic rocks which have been intruded by granodiorite and diorite intrusives and is bounded by sheared footwalland hangingwall shale units. The mineralised zone varies in thickness from 3 metres to 35 metres and averages 25 metres in zones of dilation. The mineralisation is associated with increased silicification, sulphidation and fine brecciation.

1) A group of investment analysts from USA, Canada, UK and South Africa joined Randgold Resources geologists to inspect core results at a drill site on the Tongon project.

2)Geologists Sarah Herbert and Lynette Greyling logging and sampling trenches at Tongon.

The Southern Zone is more complex, with mineralisation controlled by multiple north-east trending, north-west dipping shears that occur adjacent to a granodiorite intrusive body. Mineralisation extends for 2 kilometres along strike and consists of a number of individual lodes. Host rocks include a package of volcaniclastics and intermittent carbonaceous shale units. Alteration is similar to the Northern Zone, being located adjacent to shears and within the predominantly brittle deformed ore zones. Sulphide mineralisation includes arsenopyrite, pyrrhotite and pyrite.

Resource estimation is based on the results of 275 drillholes (252 diamond drillholes and 23 RC drillholes) for a total of 52 686 metres. Fifty-eight additional trenches have been excavated for a total of 8 608 metres. Average drillhole spacing is 50 x 50 metres and in parts of the Southern Zone is reduced to 25 x 25 metres.

A mineral resource for the Northern Zone of 15.74 Mt at a grade of 2.58g/t for a total of 1.31 Mozs has been estimated. This includes ore within an US$850 pit shell and ore which is potentially mineable by underground methods. For the Southern Zone, a total open pit mineral resource of 32.74 Mt at a grade of 2.97g/t is estimated for 3.13 Mozs.

MINING
Mining at Tongon will be by open pit and pit optimisation has been based on a spot gold price of US$650 per ounce. Pit designs have been completed using 10 metre bench es for waste rock and 5 metre benches for ore. Ramps are 25 metre wide for double lane and 12 metre wide for single lane. Dilution of 15% at zero grade and an ore loss of 2% has been modelled for the Southern Zone, and for the Northern Zone, dilution has been set at 10% with ore loss at 3%. Based on the pit optimisation, design and schedule, an ore reserve amounting to 38.25 Mt at a grade of 2.57g/t for gold content of 3.16 Mozs has been estimated.

A mining schedule based on 3.6 Mt per annum plant throughput has been developed. Preference has been given to mining the larger, higher grade Southern Zone pit followed by the Northern Zone pit. The Life of Mine strip ratio is estimated at 4.3:1. The peak mining rate is estimated to reach 25 Mt per annum of waste and ore.

The ore from the pits will be hauled to the crushing point on the ROM (run of mine) pad and will be tipped directly into the crusher bin or stockpiled on the ROM pad in the vicinity of the bin for blending. The ROM pad will have an estimated capacity of some 700 000 tonnes of ore. The load and haul fleet will consist of three 250 to 300 tonne class excavators, assisted by smaller 125 tonne excavators, loading 90 tonne dump trucks. Mining activities at Tongon, including grade control drilling, drill and blast, load and haul and crusher feeding will be contracted out. Negotiations with potential contractors are expected to be concluded around the middle of the year with the chosen contractor scheduled to start mining early in 2010.

Prior to start of mining we have initiated a 433 hole, 39 099 metre, advanced grade control programme over the planned pits of the Southern and Northern Zones. Approximately half the holes have been completed and results to date confirm the existing grade model.

METALLURGY AND PLANT DESIGN
As noted above, the plant is designed to process 3.6 Mt per annum with ores being treated through a primary, secondary and tertiary crushing circuit. Milling will comprise two ball mills with the discharge from each mill being pumped into separate cyclone feed pump and classifier systems.

A flash flotation circuit will be used to recover floatable gold, with the balance gravitating to the ball mills for further size reduction. A thickener will be used to enhance the control around the milling and classification circuit, as well as ensuring constant feed density to the CIL (carbon in leach) circuit. The thickener underflow will be pumped to the leach/CIL circuit where gold will be dissolved and adsorbed onto activated carbon. The resultant CIL tailings slurry will be subjected to tailings thickening to recover the maximum amount of process water containing available unused cyanide, which will reduce the amount of fresh cyanide required for leaching as well as the amount of cyanide destruction required. A cyanide destruction process will be incorporated into the process design. The thickened underflow will be pumped to the tailings storage facility which will be located as a valley fill impoundment, approximately 6 kilometres to the west of the plant site.

Gold will be recovered from the flotation concentrates through a combination of fine grinding and cyanidation. Loaded carbon from the CIL circuit will be acid washed prior to elution, followed by regeneration of the eluted carbon. Gold will be deposited onto cathodes following electrowinning of the eluate. The dried gold sludge will be smelted to produce gold doré which will be shipped to the refinery. Average recoveries over the Life of Mine are expected to exceed 90%.

INFRASTRUCTURE
The footprint of the mine site has been delineated with the aim of keeping the project area to a minimum, thus reducing its impact on the environment and the local population. The design layout of the infrastructure has been completed. Electrical power will be supplied from the national grid via a dedicated overhead line. A full back-up power generation plant will also be installed. Water will be supplied via a stream diversion dam located approximately one kilometre upstream from the Southern Zone pit.

ENVIRONMENTAL IMPACT
A full environmental and social impact assessment study (ESIA) was carried out by independent consultants, Digby Wells & Associates, as required by Côte d'Ivoire legislation as well as the company’s compliance with Equator principles and the IFC performance standards on social and environmental sustainability. Project alternatives have been examined and a public participation process completed. The natural pre-mining environment has been described and the potential project impacts evaluated. No fatal flaws have been identified by the specialist studies on hydrology, geohydrology, flora, fauna or archaeology. A relocation action plan for affected farmers has been formulated and agreed with the local communities and state authorities. The ESIA was subjected to a public enquiry process and subsequently approved by the state, and the environmental permit to develop the mine has been issued.

HUMAN RESOURCES
Several hundred new job opportunities will be created in Northern Côte d'Ivoire. The highest number of workers, exceeding 800, will be employed during the construction phase. Subsequent to that, during the production phase, employment should total approximately 536 permanent employees of which 278 will be employed by Randgold Resources and 258 by contractors. Recruitment has already started through a labour broker.

FINANCIAL MODEL
While decreases in costs of diesel, steel, reagents and transport are expected to filter down in future, the financial analysis shown below is based on costs at September 2008, when the feasibility type 4 study was completed. The key parameters are summarised below:

• A flat gold price of US$800 per ounce has been used for modelling purposes, with sensitivities applied from US$600 to US$1 000 per ounce.
• Total ore mined of 38.25 Mt at a strip ratio of 4.3:1 to give total tonnes mined of 203 Mt and total contained gold of 3.16 Mozs.
• Mining costs average of US$3.03 per tonne over the Life of Mine.
• Mill throughput of 300 000 tonnes per month.
• Plant costs average of US$12.55 per tonne.
• G&A cost of US$2.90 per tonne over Life of Mine.
• Capital cost of US$280 million.

3 & 4)Construction of the infrastructure is underway at Tongon.

In order to illustrate the effect of costs reverting to pre-commodity-boom levels, we have detailed a comparison of the September 2008 cost estimates with input costs approximating those experienced in the third quarter of 2007.

PRODUCTION PROFILE
Gold production will build up to average over 290 000 ounces in the first two years of operation and then average over 270 000 ounces per annum over 10 years to give a total of 2.88 Mozs. First gold is expected to be poured during the fourth quarter of 2010.

CONSTRUCTION
SENET has been appointed as lead E(P)CM contractor, focused on the engineering design and construction management for the process plant. Civil works and procurements, with the initial focus on roads, accommodation and messing facilities, will be managed in house by Randgold Resources.

The civil earthworks contract for the project (outside of the mining earthmoving contract) has been awarded and mobilisation of equipment started with the primary focus being the site airstrip, which is now serviceable. Other activities are bushclearing
and plant site terracing to allow the main process plant construction to start on schedule. Water boreholes have been drilled for the supply of water for construction purposes. Additional water boreholes have also been drilled for the communities at the five villages surrounding the mine site.

Early construction of the main village is underway to allow its use for construction accommodation. Ten blocks of single quarter units have been completed together with kitchen, dining hall and laundry facilities. Initial power for construction purposes will be provided by a 265kW generator. The overhead line to the camp/village, crusher and batching plant has been completed together with a mini-substation and associated infrastructure. The geotechnical studies for the process plant area, water storage dam and tailings storage facility (TSF) dam walls have been completed. Design and operations strategy with respect to the process plant, water storage dam and TSF incorporating a return water dam has been finalised.

Orders for long lead-time equipment (both ball mills and mill motors) and key items (reinforcing bar and CIL tank steel) have been placed. A 45 tonne rough terrain mobile crane has been procured and has been commissioned on site.