Quarterly Report 30 June 2017

3 August 2017

Overview

STRONG FIRST-HALF PERFORMANCE POSITIONS RANDGOLD TO DELIVER ON 2017 TARGETS

London, 3 August 2017  –  Randgold Resources has sustained its strong performance record with second-quarter results that have positioned it well to achieve its guidance for 2017.

Results for the quarter and the half-year to June, published today, show continuing growth in production and profit and a further reduction in total cash cost per ounce.  The company’s cash pile rose over the first 6 months to $572.8 million despite the payment of the 2016 dividend of $94.0 million.

The Q2 profit of $102.8 million was up 21% on the previous quarter and the half-year profit of $187.7 million was up 53% on the corresponding period in 2016.  Production of 341 316 ounces for the quarter and 663 786 ounces for the half year were 6% and 16% higher respectively, while total cash cost per ounce of $572 for the quarter and $595 for the half-year were down 8% and 13%.  Earnings per share of $0.89 for the quarter and $1.64 for the half-year were up 20% and 49%.

Chief executive Mark Bristow said the second quarter had been a good one for Randgold, both operationally and on the exploration and new business front.

The flagship Loulo-Gounkoto complex delivered another robust performance, Tongon increased its production and Kibali finalised preparations for its underground ramp-up later this year while significantly improving its plant stability and recoveries.  Morila’s numbers were in line with plan and it completed the permitting process for mining the Domba satellite deposit.

“At this stage the outlook is positive, and Randgold is trending towards the top end of its 2017 production guidance range at a total cash cost below $600 per ounce,” Bristow said.

Brownfields and greenfields exploration again made significant advances, with the former continuing to extend the known reserves at Randgold’s mines and projects and the latter hunting for the company’s next world-class discovery within its extensive target portfolio.

“Our greenfields work continued to focus on identifying major structures capable of hosting multi-million ounce orebodies.  A number of these structures have already been defined across the portfolio and we are making significant progress in prioritising targets that could meet our criteria.  I believe we are well on our way to achieving our goal of defining three new projects that pass our investment filters within five years,” Bristow said.

He said the extension drilling at Loulo, Gounkoto and Kibali, should replace and, in some cases, add to the group’s reserve base at similar grades.  On the greenfield front, Bristow highlighted the progress at the Fonondara and Gbongogo targets in Côte d’Ivoire, as well as the potential for the Saba structure, north of Gara, and the Domain Boundary structure, south of Gounkoto, to become advanced drill targets.  Latest results from the Sofia satellite deposit have also confirmed its potential to increase in size and add to the Massawa project in Senegal, he said.  A feasibility study on the project is currently underway.

Quarterly Report 30 June 2017

3 August 2017

Key Performance Indicators
  • Profit up 21% quarter on quarter and 53% on corresponding 6 months of prior year
  • Production up 6% quarter on quarter and 16% on corresponding 6 months of prior year
  • Earnings per share up 20% quarter on quarter and 49% on the corresponding 6 months of prior year
  • Total cash cost per ounce down 8% quarter on quarter and 13% on corresponding 6 months of prior year
  • Net cash of $572.8 million up 11% during the first 6 months of the year, after paying $94.0 million annual dividend
  • Loulo-Gounkoto delivers strong first half performance
  • Morila performs in line with plan and completes Domba permitting
  • Tongon production up 15% quarter on quarter and 38% on corresponding 6 months of prior year
  • Process plant upgrades produce results as Kibali prepares for underground ramp-up
  • Ongoing brownfields exploration highlights reserve extensions at Yalea, Gara and Kibali
  • Exploration along Fonondara trend in Côte d’Ivoire extends mineralisation and leads a portfolio of targets with +5km strike lengths
  • Randgold keeps busy with new business initiatives

Randgold Resources Limited ("Randgold") had 94.1 million shares in issue at 30 June 2017.

Quarterly Report 30 June 2017

3 August 2017

Downloads

Quarterly Report 30 June 2017

3 August 2017

Summarised Financial Information

Quarterly Report 30 June 2017

3 August 2017

Comments

Gold sales for the quarter of $422.1 million increased by 3% from $409.6 million in the previous quarter.  Group sales for the quarter of 336 516oz was in line with the previous quarter.  The average gold price received of $1 254/oz increased by 3% quarter on quarter (Q1 2017: $1 220/oz).  Gold sales increased by 19% from the corresponding quarter of 2016, reflecting the 20% increase in ounces sold in the quarter, while the average gold price received was in line with the corresponding quarter of 2016.

Total cash costs for the quarter of $192.4 million was down 7% from the prior quarter and down 6% from the corresponding quarter of 2016.  The drop in cash costs largely reflects lower mining costs at the Loulo-Gounkoto complex, in particular a reduced strip ratio, and lower processing costs at Kibali. 

Total cash cost per ounce of $572/oz dropped by 8% quarter on quarter and by 21% compared to the corresponding quarter in 2016.  The decrease was driven by the reduced costs and increased production at the Loulo-Gounkoto complex following increased throughput, as well as an increase in production at Tongon with increases in throughput, grade and recovery.

Profit from mining increased by 14% to $229.7 million from the previous quarter, and was up 53% on the corresponding quarter of 2016.  The increase from the prior quarter reflects the increase in production and decreased costs as explained above.  The increase from the corresponding quarter of 2016 reflects increased sales and costs savings, as explained above.

Exploration and corporate expenditure of $12.8 million increased by 18% quarter on quarter, and was in line with the corresponding quarter in 2016, principally due to increase greenfields exploration expenditure during the quarter, especially drilling.

Depreciation and amortisation of $42.2 million increased by 8% from the previous quarter and by 17% from the corresponding quarter of 2016, due to increases in throughput at the Loulo-Gounkoto complex and at Tongon. 

Other income in the quarter of $7.5 million increased from the previous quarter, as well as the corresponding quarter of the prior year.  Management fees from Kibali and Morila, were in line with the previous quarter and the corresponding quarter of the prior year.  The increase from the prior quarter, as well as the corresponding quarter in 2016, is the result of a net operational foreign exchange gain of $6.2 million that was included in other income during the current quarter.  These gains and losses arise from the settlement of invoices in currencies other than the US dollar, as well as the translation of balances denominated in currencies such as the CFA franc, euro and South African rand to the US dollar rate and reflects the movements in these currencies during the respective quarter. 

Share of losses from equity accounted joint ventures was $3.4 million compared to losses from joint ventures of $5.2 million in the previous quarter and a $6.1 million profit in Q2 2016.  Kibali’s share of equity accounted joint venture losses decreased from a loss of $5.1 million in Q1 2017 to a loss of $4.3 million in the current quarter.  Profit from mining for Kibali for Q2 2017 was $23.8 million compared to a profit of $26.2 million in Q1 2017, reflecting lower gold sales, noting the timing of production and sales in the previous quarter, and slightly higher strip ratios.

The share of profits from the Kibali joint ventures is stated after depreciation of $31.4 million (Q1 2017: $32.2 million), foreign exchange losses of $6.4 million (Q1 2017: $7.3 million), a time value of money discount on the outstanding TVA (value added tax) balance of $2.7 million (Q1 2017: nil) and a tax credit value of $17.8 million (Q1 2017: $6.6 million) related to a deferred tax asset associated with tax losses/allowances carried forward.

The foreign exchange losses incurred are the result of the continued depreciation in the Congolese franc compared to the US dollar and the conversion of TVA balances owed to Kibali which are denominated in Congolese franc.  Morila’s share of equity accounted joint venture profits increased from a loss of $0.2 million in Q1 2017 to a profit of $0.9 million in Q2 2017, following increased production on the back of improved grades, recoveries and throughput.

Income tax expense of $47.4 million increased by 37% from the charge in Q1 and by 120% from the charge in the corresponding quarter of 2016.  The increases are mainly due to increased profits at Loulo, Gounkoto and Tongon.

Profit for the quarter was up 21% from the previous quarter and up 75% from the corresponding quarter of 2016.  The movement quarter on quarter reflect the increase in profit from mining, the decrease in the share of losses of equity accounted joint ventures, partially offset by the increased depreciation and other charges during the quarter as explained above.  The increase from the corresponding quarter of 2016 mainly reflects the increase in profit from mining, partially offset by the increased depreciation charge.

Basic earnings per share increased by 20% to $0.89 quarter on quarter (Q1 2017: $0.74), reflecting higher profits.  Compared to Q2 2016, basic earnings per share increased by 71%.

Net cash generated from operating activities for the quarter of $132.3 million was in line with the previous quarter, and increased by 30% from the corresponding quarter in 2016, primarily reflecting the movement in profits from operations.

Overview

Quarterly Report 30 June 2017

3 August 2017

Overview

STRONG FIRST-HALF PERFORMANCE POSITIONS RANDGOLD TO DELIVER ON 2017 TARGETS

London, 3 August 2017  –  Randgold Resources has sustained its strong performance record with second-quarter results that have positioned it well to achieve its guidance for 2017.

Results for the quarter and the half-year to June, published today, show continuing growth in production and profit and a further reduction in total cash cost per ounce.  The company’s cash pile rose over the first 6 months to $572.8 million despite the payment of the 2016 dividend of $94.0 million.

The Q2 profit of $102.8 million was up 21% on the previous quarter and the half-year profit of $187.7 million was up 53% on the corresponding period in 2016.  Production of 341 316 ounces for the quarter and 663 786 ounces for the half year were 6% and 16% higher respectively, while total cash cost per ounce of $572 for the quarter and $595 for the half-year were down 8% and 13%.  Earnings per share of $0.89 for the quarter and $1.64 for the half-year were up 20% and 49%.

Chief executive Mark Bristow said the second quarter had been a good one for Randgold, both operationally and on the exploration and new business front.

The flagship Loulo-Gounkoto complex delivered another robust performance, Tongon increased its production and Kibali finalised preparations for its underground ramp-up later this year while significantly improving its plant stability and recoveries.  Morila’s numbers were in line with plan and it completed the permitting process for mining the Domba satellite deposit.

“At this stage the outlook is positive, and Randgold is trending towards the top end of its 2017 production guidance range at a total cash cost below $600 per ounce,” Bristow said.

Brownfields and greenfields exploration again made significant advances, with the former continuing to extend the known reserves at Randgold’s mines and projects and the latter hunting for the company’s next world-class discovery within its extensive target portfolio.

“Our greenfields work continued to focus on identifying major structures capable of hosting multi-million ounce orebodies.  A number of these structures have already been defined across the portfolio and we are making significant progress in prioritising targets that could meet our criteria.  I believe we are well on our way to achieving our goal of defining three new projects that pass our investment filters within five years,” Bristow said.

He said the extension drilling at Loulo, Gounkoto and Kibali, should replace and, in some cases, add to the group’s reserve base at similar grades.  On the greenfield front, Bristow highlighted the progress at the Fonondara and Gbongogo targets in Côte d’Ivoire, as well as the potential for the Saba structure, north of Gara, and the Domain Boundary structure, south of Gounkoto, to become advanced drill targets.  Latest results from the Sofia satellite deposit have also confirmed its potential to increase in size and add to the Massawa project in Senegal, he said.  A feasibility study on the project is currently underway.

Key Performance Indicators

Quarterly Report 30 June 2017

3 August 2017

Key Performance Indicators
  • Profit up 21% quarter on quarter and 53% on corresponding 6 months of prior year
  • Production up 6% quarter on quarter and 16% on corresponding 6 months of prior year
  • Earnings per share up 20% quarter on quarter and 49% on the corresponding 6 months of prior year
  • Total cash cost per ounce down 8% quarter on quarter and 13% on corresponding 6 months of prior year
  • Net cash of $572.8 million up 11% during the first 6 months of the year, after paying $94.0 million annual dividend
  • Loulo-Gounkoto delivers strong first half performance
  • Morila performs in line with plan and completes Domba permitting
  • Tongon production up 15% quarter on quarter and 38% on corresponding 6 months of prior year
  • Process plant upgrades produce results as Kibali prepares for underground ramp-up
  • Ongoing brownfields exploration highlights reserve extensions at Yalea, Gara and Kibali
  • Exploration along Fonondara trend in Côte d’Ivoire extends mineralisation and leads a portfolio of targets with +5km strike lengths
  • Randgold keeps busy with new business initiatives

Randgold Resources Limited ("Randgold") had 94.1 million shares in issue at 30 June 2017.

Downloads

Quarterly Report 30 June 2017

3 August 2017

Downloads

Summarised financial information

Quarterly Report 30 June 2017

3 August 2017

Summarised Financial Information

Comments

Quarterly Report 30 June 2017

3 August 2017

Comments

Gold sales for the quarter of $422.1 million increased by 3% from $409.6 million in the previous quarter.  Group sales for the quarter of 336 516oz was in line with the previous quarter.  The average gold price received of $1 254/oz increased by 3% quarter on quarter (Q1 2017: $1 220/oz).  Gold sales increased by 19% from the corresponding quarter of 2016, reflecting the 20% increase in ounces sold in the quarter, while the average gold price received was in line with the corresponding quarter of 2016.

Total cash costs for the quarter of $192.4 million was down 7% from the prior quarter and down 6% from the corresponding quarter of 2016.  The drop in cash costs largely reflects lower mining costs at the Loulo-Gounkoto complex, in particular a reduced strip ratio, and lower processing costs at Kibali. 

Total cash cost per ounce of $572/oz dropped by 8% quarter on quarter and by 21% compared to the corresponding quarter in 2016.  The decrease was driven by the reduced costs and increased production at the Loulo-Gounkoto complex following increased throughput, as well as an increase in production at Tongon with increases in throughput, grade and recovery.

Profit from mining increased by 14% to $229.7 million from the previous quarter, and was up 53% on the corresponding quarter of 2016.  The increase from the prior quarter reflects the increase in production and decreased costs as explained above.  The increase from the corresponding quarter of 2016 reflects increased sales and costs savings, as explained above.

Exploration and corporate expenditure of $12.8 million increased by 18% quarter on quarter, and was in line with the corresponding quarter in 2016, principally due to increase greenfields exploration expenditure during the quarter, especially drilling.

Depreciation and amortisation of $42.2 million increased by 8% from the previous quarter and by 17% from the corresponding quarter of 2016, due to increases in throughput at the Loulo-Gounkoto complex and at Tongon. 

Other income in the quarter of $7.5 million increased from the previous quarter, as well as the corresponding quarter of the prior year.  Management fees from Kibali and Morila, were in line with the previous quarter and the corresponding quarter of the prior year.  The increase from the prior quarter, as well as the corresponding quarter in 2016, is the result of a net operational foreign exchange gain of $6.2 million that was included in other income during the current quarter.  These gains and losses arise from the settlement of invoices in currencies other than the US dollar, as well as the translation of balances denominated in currencies such as the CFA franc, euro and South African rand to the US dollar rate and reflects the movements in these currencies during the respective quarter. 

Share of losses from equity accounted joint ventures was $3.4 million compared to losses from joint ventures of $5.2 million in the previous quarter and a $6.1 million profit in Q2 2016.  Kibali’s share of equity accounted joint venture losses decreased from a loss of $5.1 million in Q1 2017 to a loss of $4.3 million in the current quarter.  Profit from mining for Kibali for Q2 2017 was $23.8 million compared to a profit of $26.2 million in Q1 2017, reflecting lower gold sales, noting the timing of production and sales in the previous quarter, and slightly higher strip ratios.

The share of profits from the Kibali joint ventures is stated after depreciation of $31.4 million (Q1 2017: $32.2 million), foreign exchange losses of $6.4 million (Q1 2017: $7.3 million), a time value of money discount on the outstanding TVA (value added tax) balance of $2.7 million (Q1 2017: nil) and a tax credit value of $17.8 million (Q1 2017: $6.6 million) related to a deferred tax asset associated with tax losses/allowances carried forward.

The foreign exchange losses incurred are the result of the continued depreciation in the Congolese franc compared to the US dollar and the conversion of TVA balances owed to Kibali which are denominated in Congolese franc.  Morila’s share of equity accounted joint venture profits increased from a loss of $0.2 million in Q1 2017 to a profit of $0.9 million in Q2 2017, following increased production on the back of improved grades, recoveries and throughput.

Income tax expense of $47.4 million increased by 37% from the charge in Q1 and by 120% from the charge in the corresponding quarter of 2016.  The increases are mainly due to increased profits at Loulo, Gounkoto and Tongon.

Profit for the quarter was up 21% from the previous quarter and up 75% from the corresponding quarter of 2016.  The movement quarter on quarter reflect the increase in profit from mining, the decrease in the share of losses of equity accounted joint ventures, partially offset by the increased depreciation and other charges during the quarter as explained above.  The increase from the corresponding quarter of 2016 mainly reflects the increase in profit from mining, partially offset by the increased depreciation charge.

Basic earnings per share increased by 20% to $0.89 quarter on quarter (Q1 2017: $0.74), reflecting higher profits.  Compared to Q2 2016, basic earnings per share increased by 71%.

Net cash generated from operating activities for the quarter of $132.3 million was in line with the previous quarter, and increased by 30% from the corresponding quarter in 2016, primarily reflecting the movement in profits from operations.

Quarterly Report 30 June 2017

3 August 2017

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