Randgold Resources a leading partnership with the Mali mining industry

Transcription

1 Randgold Resources a leading partnership with the Mali mining industry Overview Loulo-Gounkoto Mine Complex, Mali Equity 8% Loulo: Total reserves 5.3Moz Total resources 9.8Moz Gounkoto: Total reserves 3.1Moz Total resources 4.3Moz Loulo-Gounkoto 216 production oz Morila Gold Mine Mali Equity 4% Total reserves.27moz Total resources.41moz 216 production 54,22oz Kibali Gold Mine DRC Equity 45% Total reserves 9.2Moz Total resources 17.4Moz 216 production oz Senegal Mali Democratic Republic of Congo Massawa Feasibility Project, Senegal Equity 83% Total Reserves 2.6Moz Total Resources 4.4Moz Côte d Ivoire Tongon Gold Mine Côte d Ivoire Equity 89% Total reserves 1.5Moz Total resources 3.Moz 216 production oz

2 Fiscal parameters summary Parameters MORILA LOULO GOUNKOTO TONGON MASSAWA Royalty on gold sales Corporate tax rate Corporate tax minimum Corporate tax holiday Import duty holiday 6% 6% 6% 3% 3% 3% 3% 3% 25% 25%.75% of revenue 5 years 2-25 from first production 3 years Fuel and lubricants exempted for LOM.75% of revenue 5 years 2-25 from first production 3 years Fuel and lubricants exempted for LOM.75% of revenue 2 years can extend on further investment from first production 3 years Fuel and lubricants exempted for LOM.5% of revenue 5 years from first production Construction period duty free.5% of revenue 7 years from award of mining permit 7 years from issue of mining permit State participation Tax stabilisation 2% 2% 2% 1% 1% Indefinite Indefinite Indefinite Indefinite Indefinite Randgold Resources, Mali Management and Employees PDG Dr DM Bristow Bamako Regional Office N golo Sanogo DO West -Afrique Chiaka Berthe Executive Committee DG Complex Loulo Tahirou Ballo Dir Mine Gounkoto Cheick Sangare DG Morila Adama Kone Operations Mine Employees Total Contractuals Total Grand Total Expats Nat Expats Nat Loulo Gounkoto Morila Total

3 Successful skills development Operator training for nationals on loaders, trucks and drills - Trainer taught by 5DT in South Africa and certified to conduct training Every employee taken through dozer test and only those who score an A or B progress to simulator training Approximately 4 people per week for refresher and new courses in simulator training Focus to move majority of the expat trainers to new owner mining project in the next months Competent technicians undergoing supervision training by expats in both maintenance and mining Fully competent nationals trained - 1 jumbo operator 3 at solo drilling 1 on tele remote loading 1 senior and 4 junior in maintenance planning on fleet and fixed plant All development loaders, trucks operated by nationals. Executive Development Programme 5 out of 18 selected candidates attended the MDP (Management Development Programme) at the Graduate School of Business in Cape Town during May. 1 others have been enrolled to attend the September session at the same institution. The remaining three will be attending the Accelerated Development Program at the London School of Business from September to November HODs and 2ICs attended our In- House Finance for Business Leaders course 6 Geologists attended a course in Resources Evaluation/Leapfrog software 21 Geologists attended courses in Optiro Resource Estimation, Excel Skills, Sampling Theory, Reporting 2 decades of delivery in West Africa 212 Record production Morila mine life extended 213 Loulo Complex record production 214 Production exceeds 1Moz LTIFR down 18% Moz group production Moz group production 217 Gounkoto super pit starts 211 Gounkoto first gold 211 Record Production Market cap at $11b Join NASDAQ Yalea discovery Morila discovery IPO raises $83m Randgold incorporated 1996 BHP Mali acquired BHP Mali assets including Syama 21 Tongon first gold Gara UG starts Gounkoto mine build starts 2 Morila pours first gold 21 Syama on care and maintenance 29 Gounkoto discovery Kibali acquired stake at 45% 23 Syama sold to Resolute 24 Loulo construction starts 28 Tongon stake at 89% Market Cap at $3b Join FTSE 1 25 Loulo UG feasibility approved Loulo Loulo UG pours mine starts first gold 27 Massawa discovery

4 West African operations gold production 12 Production Oz Total cash cost/oz Capex $m Grade g/t Oz actual Oz forecast Total Cash Cost/oz Capital Grade Mali looking ahead Objectives Deliver +6koz p.a. over the next 1 years at Loulo-Gounkoto Successful self-funding closure of Morila in 219 leaving a legacy for the surrounding communities Improve cost control and cost effectiveness Maintain our social licence Run our operations as businesses Opportunities Gounkoto Super Pit Gara and Yalea UG extensions Domba, Ntiola and Viper deposits Satellite pits Baboto, Faraba, Loulo 3, Agribusinesses Actions Continue hunt for next world class discovery Understand and own our current orebodies Deliver Ntiola and Viper Mine Domba with success Work with agribusiness partners to make projects economic

5 The Loulo-Gounkoto Complex Loulo-Gounkoto organogram COO West Africa Chiaka Berthe GM Loulo/Gounkoto Tahirou Ballo OPS Loulo/Gounkoto Abbas Coulibaly Human Resources Samba Diallo Health & Safety Dr Mama Kanta Security Bruno Dakouo Engineering Cheick G Diarra Mineral Resources Ousmane Traore Environment /Community Moussa I Kante UG Mining Mahamadoun Cisse Financial & Admin Daouda Dembele Open pit Mining Cheick A K Sangare Supply Chain Zoumana Gakou Processing Abdoulaye Kone

6 Loulo-Gounkoto Complex...employees Nationals: 95% Expats: 5% Contractors Expats 59 (1%) Mine Expats 152 (4%) Mine Nationals 1714 (42%) Contractors Nationals 1966 (48%) Temporary Nationals 28 (5%) Loulo-Gounkoto safety, health and environment No major environmental incident recorded 12ha to be rehabilitated this year 89% of TSF water recycled Proactive management of health and safety risks with a 23% decrease in LTIFR at Loulo year on year Malaria eradication plan being implemented; 37% decrease in incidence rate year on year Health programme for Hepatitis B launched HIV/AIDS programme continues, with intensification of outreach awareness and Voluntary Counseling and Testing (VCT) of employees and the local communities Both operations OHSAS 181: 27 certified 2 1,5 1, Loulo LTIFR Malaria incidence rate Gounkoto

7 Loulo-Gounkoto Randgold investment US$ Capital invested cumulative (excluding working capital) $ million Taxes, duties, royalties paid to State cumulative $ million Annual production oz Loans provided by Randgold Group cumulative $ million Loulo-Gounkoto gold production Production oz Grade g/t Q1 217 Loulo koz Gounkoto koz Loulo (standalone) g/t Gounkoto g/t

8 Loulo-Gounkoto Complex operating results Quarter 12 months 31 Mar Dec Mar Dec Dec 215 Mining Tonnes mined () Ore tonnes mined () Milling Tonnes processed () Head grade milled (g/t) Recovery (%) Ounces produced Ounces sold Average price received ($/oz) Cash operating costs 1 ($/oz) Total cash costs 1 ($/oz) Gold on hand at period end 2 ($) Profit from mining activity 1 ($) Gold sales 1 ($) Refer to Q1 217 quarterly report for footnotes Loulo reserves and resources added to Gara mine Gold g/t >8g/t 5 8g/t 3 5g/t.5 3g/t <.5g/t Gara Far South: +657koz probable reserves (excluding 216 depletion) Gara Far South Extension: +461koz inferred resources

9 Loulo Yalea new high grade targets YDH278 YaDH9 5.66g/t YaDH6 8.16g/t YaDH g/t N HW Carbonate Intersection Priority Target Carbonates in FW to Purple Patch Purple Patch YaDH2 Z1: 5.72g/t Z2: 1.38g/t Dip Change Yalea Model 3D Isometric Gram.Metre >1 g.m 5 1 g.m Priority Targets Planned drilling HW Carbonate Intersection YDH279 Concept Z1: 3.66g/t Target Z2: 2.44g/t 75m YDH277 Z1: 6.5g/t incl 11.6g/t Z2: 4.43g/t incl 7.5g/t YDH271 Z1: 4.45g/t Z2: 1.4g/t 13.4g/t YDH269 Z1: 4.6g/t incl 5.59g/t Z2: not observed 277koz Probable Reserves (excluding 216 depletion) Transfer Zone Fluid Pathway FW Carbonate Purple Patch in Transfer Zone Loulo 3 deposit drilling confirming underground target and model L3RC27 4.6g/t L3RC g/t L3DH67 2.3g/t L3DH39 6.3g/t L3DH g/t L3DH42 L3DH19 5.7g/t Loulo 3 Model (3D Isometric) QT Unit Loulo 3 Structure Dolerite L3DH114 3g/t (Expected) Dilational Jog NW Bend Dilational Jog L3DH g/t Yalea Structure Loulo 3 Structure QT Terminates Intersection L3DH112 89g/t UG Target $15 Pit Shell RL 2 RL L3DH g/t L3DH115 (in progress) 2m N 9m VD L3RC25 5.9g/t L3DH58 Gram.Metre >5 g.m 1 5 g.m Alteration & Min. Styles Si-Carb, Shear / Breccia Min. Hematite, with Vein Min. Si-Carb + Hematite

10 Saba target folded Gara extension confirmed over 4km strike from Gara pit Loulo Permit Gara Loulo 3 Yalea 385m strike of +5m QT Lithosamples ave 1.9g/t GNTR12* 1.7g/t (2.8m) Incl. 3.37g/t GNTR7* 1.4g/t (9.6m) +4g/t Lithosample 2-4g/t Lithosample 1-2g/t Lithosample Soil Au +1ppb Soil Au 3-99ppb IP Resistivity Gara Pit N PQ1 Pit Plant 4m Open Section 8 PQ1NRC1 (Legacy) 1.1g/t (72m) PQ1NRC9 (Legacy) 2.2g/t (41m) GNEXRC1 (Legacy) 2g/t (16m) +4km Strike GNTR14* 1.6g/t (29.2m) incl 6.69g/t PQ1S4 (Legacy) 2.8g/t (18m) Kossanto-Sitakili Dyke GNRC2 (Legacy) 1.8g/t (2m) Mineralisation (surface trace) * Q1 Results are shown in bold Geological model: Gara style folds plunge SW Section 8: West HW SQR QT 1m 1m Greywacke host unit Quartz Tourmaline GNDH1 GNDH2 FW SQR East m RL Greywacke -5m RL Gounkoto super pit feasibility study completed Approved by both Gounkoto and Randgold boards Super pit option shown to be more economically viable than smaller pit and underground option Block model of Gounkoto orebody with super pit design $1/oz Super Pit design Other benefits including Lower operational risk in managing grade variability Ore flexibility for Loulo-Gounkoto complex Additional smaller underground opportunity still exists Gold g/t 8g/t 4 8g/t 3 4g/t 1.3 3g/t <1.3g/t 1 km Awaiting approval of feasibility study and additional tax holiday Further capital investment of +$2 million

11 Gounkoto MZ4 Plunge drilling confirms model and continuity MZ4: Long section (looking West) MZ2 / MZ3 Transfer Area MZ4DH8 g/t (17m) N Super Pit Gold g/t >8g/t 5 8g/t 3 5g/t 1 3g/t.5-1g/t MZ4DH7 (133.2m) MZ4DH5 3.56g/t (56.2m) incl 7.74g/t 1m Intersection Lineation MZ4DH6 1.11g/t (11.5m) incl 2.1g/t Q1 Progress on near mine targets P64 MZ2 Footwall MZ3 Drilling commences MZ4 MZ2 MZ4 Plunge Drilling completed, assays pending Iron Structure Gap analysis on long section planned in Q2 MZ1 Footwall Target Removed (low continuity and grade) HW MZ1 Loulo district Q1 exploration highlights Saba Fieldwork extends strike to 4km. Drilling confirms folded system to 4vm Gara Conversion drilling continues to confirm model Results include LOCP257: 3.69g/t LOCP263: 4.3g/t LOCP278: 7.3g/t LOCP261: 2.5g/t Goldfinger West Trenching confirms 1.8km of altered DK structure Gounkoto System Review Four DDH confirm MZ4 Plunge model. Other targets tested and downgraded Far West Structure DK Structure Gara Gounkoto Yalea N Waraba Structure Loulo 3 3 DDH drilled in Q1 to test HG jog Baboto zone - results to date: L3DH112: 89.g/t L3DH113: 9.18g/t Loulo 3 2km Yalea System Review Relogging validates PP style target in south for drilling in Q2 Domain Boundary Mapping Trenching underway Faraba Structure Trenching confirms north trending system at Faraba. Southern extension mapped in Q1 Priority Targets Rank 1 Rank 2 Rank 3 Target Removed

12 Loulo-Gounkoto complex actual and forecast production Production Oz Total cash cost/oz Capex $m Grade g/t Oz actual Oz forecast Total Cash Cost/oz Capital Grade CSR governance and stakeholder engagement Monthly community committee meeting Quarterly mass meeting with employees CEO meeting chiefs and employees Annual sustainability report feedback to community and authorities Materiality assessment GM courtesy visits Radio broadcasting Training of local authorities in governance Zero unresolved grievances Zero grievances recorded in 216 Illegal mining Baboto target evacuated with no incident Citizen company of the year reward received from a Kayes radio

13 Community development projects Education 1 schools built School enrolment improved to >3 pupils as opposed to 5 before the mine Open day organised with local students Partnership with specialised NGO Excellency bursary offered to 26 local students 1 village -1 school 1 borehole objective reached at Loulo Before After Food Security 11 Tractors donated Annual support in fertilizer and seeds 5 x 1ha gardens with water source for women Construction of 4 water dams and rehabilitation of 3 Agribusiness project Regular follow-up with state technical services Potable water 45 boreholes and 4 water supply systems built Regular quality analysis and feedback given to locals Water management committee created 17 boreholes rehabilitated Community development > $6.4m invested to date Health 1% Economic Projects 5% Education 18% Potable Water 7% Agriculture 15%

14 Loulo-Gounkoto agricultural development Update: Capital of $2.2 million over 5 years financed by Loulo-Gounkoto First year of operation completed Incubation launched Infrastructure Accomodation, classrooms; conference room, store, fishponds, poulty, admin, canteen Water sources Energy sources Staff 2 boreholes with solar pumps Solar power + 1 back up generator 1 Coordinator + 3 trainers Students 57 Poultry Area Capital Catering Capacity 2 5 chickens per cycle 5 ha $2.2 Millions in 5 years Local company Loulo-Gounkoto agricultural development Plans to achieve: Conversion rate of 75% of students into qualified and motivated agrientrepreneurs Conversion rate of 25% of students into competent agri-engineers, managers and technicians 5 farms of at least 5ha each (25ha) 12 direct jobs in operation and 6 direct jobs in local communities Hundreds of indirect and seasonal jobs through supply chain Contribution to local economic growth and rural development in line with the SDDR Attractive job opportunities as alternative to orpaillage An example to other multi-national companies for agriculture development Meet food demand in local communities and start exportation in 219

15 Community development projects Economic Development Micro-credit company brought in - $4k deposit and $183k credit offered; $2k lodged by Loulo mine for easy credit for start up initiatives 2 projects financed by micro-credit funds for local youth remaining 8 to be funded 2 Local businesses trained in management techniques 42 women trained in liquid and solid soap fabrication and local product transformation agreement made to supply the mine with those products A modern abattoir built to source meat from local community Local housekeeping GIEs created Local GIE created to secure Baboto target Health Malaria control measures extended to local communities 1 health centre built; 2 rehabilitated and equipped for +$3K Inter-mine committee created and chaired by Randgold to fight EBOLA Partnership with specialised NGO to fight HIV increase in VCTs The Morila Gold Mine

16 Morila an all Malian Team COO West Africa Chiaka Berthe GM Morila Drissa Arama Human Resources Mamadou Sanogo Health & Safety Dr Idrissa Coulibaly Asset Protection Famoussa Bagayoko Engineering Issiaka Diarra Mineral Resources Sama Diakite Processing Bakary Djire Financial & Admin Amadou Maiga Supply Chain Haidara Konate Environment & Community /Closure & AGB Jean Keita Morila Q1 217 update Gold production improved 2% to oz quarter on quarter following improved throughput as mine continued to optimise TSF reclamation operations 16% decrease in total cash cost per ounce quarter on quarter to $174/oz due to better control of TSF operations Decapping operation improved and 1692kt of low grade material hydrosluiced to pit Mining of Domba project expected to start in September 217 following protocol agreement with community representatives Option exercised in terms of agreement with Birimian to acquire portions of Ntiola and Viper permits following completion of phase 1 evaluation drilling Terms of reference developed for feasibility study to use existing assets to build an agribusiness centre in conjunction with Songhai

17 Mali Morila mine operating results Quarter 12 months 31 Mar Dec Mar Dec Dec 215 Mining Tonnes mined () Ore tonnes mined () TSF material processed () Milling Tonnes processed () Head grade milled (g/t) Recovery (%) Ounces produced Ounces sold Average price received ($/oz) Cash operating costs 1 ($/oz) Total cash costs 1 ($/oz) Profit/(loss) from mining activity 1 ($) (985) Attributable (4%) Gold sales 1 ($) Ounces produced Ounces sold Profit/(loss) from mining activity 1 ($) 892 (394) Gold on hand at period end 2 ($) Refer to Q1 217 quarterly report for footnotes Opportunities 44koz total reserves: Open pit mining project as satellite deposit within the Morila exploitation permit about 6km north west of plant 23koz total reserves resources 45koz total reserves Birimian Gold exploration targets near the Morila mine exploitation permit at about 25km north west of plant. Agreement with Birimian on 6 months option to complete feasibility study on the two deposits. VIPER Exploitation Permit DOMBA MORILA MINE 34

18 Morila mine actual and forecast production 14 Production Oz Total cash cost/oz Capex $m Grade g/t Oz actual Oz forecast Total Cash Cost/oz Capital Grade Randgold/Songhai integrated Agro- Industrial Model Developed as an alternative for economic development after the morila mine closes

19 Morila after closure current projects > $2m spent to develop Morila into a commercial agricultural hub Poultry farming Fish farming Fish farming Honey farming Initiative in partnership with Songhai, can be organised around diversive stakeholders groups Current Situation Mali Government Technical and Financing Partners Songhaï Morila SA Shareholding: 2% Mali Government 4% Randgold 4% Anglogold Strategic Commiittee Composed of 1 members of which: Government Morila Association CNPM UN Women Kledu Selection Committee 1 local agricultural leaders trained in Benin Asset company Group of Agricultural Enterprises 38 SOURCE: Feasibility study

20 In addressing the main institutional, infrastructural and services challenges, the Government has an important role to play 1 A feasibility plan will be submitted to Government for endorsement Main challenges Role of the Government Institutionnel Size of the land : very few commercial farms Access to land: increasing pressure for access to agricultural land, conflicts between the customary rights and modern laws, inequality between gender Cooperation: very few professional associations Coordination of value chain: risk of procurement due to the lack of contracts between producers and others Legal framework for agropoles/zes Environmental & Social Simplifying the administrative procedures for private sector 2 Infrastructures Rural Road: maintenance and reliability issues Irrigation: small scale vs water demanding crops Stocking: only 3% of communes with storing center Transformation : very few productions unit for grains, issue with mangoes supply chain. Low quality for small units Energy : high cost and low availability preventing industrial investment Investment plan Public Private Partnership Energy, control of costs and volumes 39 3 Services Loan :nolongtermloanduetothesmallsizeofthefarms,no starting capital, and difficulties to seize the assets Research & development : lack of means for research, and to find seeds adapted to the soils Pesticides : access to pesticides and other means to combat difficult diseases Quality standards : no standards in place Commercialisation : packaging constraints Export : export too focused on European market, lack of diversification Information : low level of information flux between producers, distributors and buyers SOURCE: World Bank Analysis, Authors' Analysis Accompanying services for SMEs Project financing of projects Synergy between a rehb site and external agricultural zones Integrate Morila agropole with Loulo college in Kayes US $1.4m Agricultural college at Loulo Accommodation Class rooms Canteen

21 Randgold Resources contribution to Malian economy Randgold Resources contribution to Mali Randgold operations have contributed FCFA 2773 milliards (US$ 5.2 billion) to the Malian economy in the form of taxes, royalties, salaries and payments to local suppliers over the last 21 years GOUNKOTO FCFA 392 milliards US$.8 Bn LOULO FCFA 1331 milliards US$ 2.4 Bn MORILA FCFA 15 milliards US$ 2 Bn

22 Contribution to Malian GDP % of GDP 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Contribution of Randgold Resources managed mines to Malian GDP Loulo Gounkoto Morila Investment to date Capital and Exploration Total investment in Capital and Exploration of FCFA 151 milliards (US$ 2.8 billion) EXPLORATION FCFA 82 milliards US$.16 Bn GOUNKOTO FCFA 16 milliards US$.3 Bn SYAMA FCFA 93 milliards US$.2 Bn MORILA FCFA 161 milliards US$.3 Bn LOULO FCFA 14 milliards US$ 1.9 Bn

23 Dividends and Taxes paid to State of Mali Randgold operated mines have paid FCFA 1182 milliards (US$ 2.2 billion) in the form of Dividends and Taxes to the State over 21 years DIVIDENDS TO RANDGOLD FCFA 479 milliards US$ 917 million DIVIDENDS TO STATE FCFA 191 milliards US$ 367 million DIRECT AND INDIRECT TAXES TO STATE FCFA 653 milliards US$ 1.2 billion ROYALTIES TO STATE FCFA 335 milliards US$ 633 million A sustainable mining industry needs a committed partnership Communities Employees Governments NGOs and Regulators Mining Companies and Investors STAKEHOLDERS

24 Disclaimer CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Except for the historical information contained herein, the matters discussed in this presentation are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934, and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources, the realisation of mineral reserve estimates, the timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as will, plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or state that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Assumptions upon which such forward-looking statements are based are in turn based on factors and events that are not within the control of Randgold Resources Limited ( Randgold ) and there is no assurance they will prove to be correct. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Randgold to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to mining operations, including political risks and instability and risks related to international operations, actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, as well as those factors discussed in Randgold s filings with the US Securities and Exchange Commission (the SEC ). Although Randgold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Randgold does not undertake to update any forward-looking statements herein, except in accordance with applicable securities laws. Randgold reports its mineral resources and mineral reserves in accordance with the JORC 212 code. As such numbers are reported to the second significant digit. They are equivalent to National Instrument Mineral resources are reported at a cut-off grade based on a gold price of US$1 5/oz. The reporting of mineral reserves is also in accordance with Industry Guide 7. Pit optimisations are carried out at a gold price of US$1 /oz, except for Morila which is reported at US$1 3/oz. Mineral reserves are reported at a cut-off grade based on US$1 /oz gold price within the pit designs. Underground reserves are also based on a gold price of US$1 /oz. Dilution and ore loss are incorporated into the calculation of reserves. Cautionary note to US investors: The United States Securities and Exchange Commission (the SEC) permits mining companies, in their filings with the SEC, to disclose only proven and probable ore reserves. Randgold uses certain terms in this annual report such as resources, that the SEC does not recognise and strictly prohibits the company from including in its filings with the SEC. Investors are cautioned not to assume that all or any parts of the company s resources will ever be converted into reserves which qualify as proven and probable reserves for the purposes of the SEC s Industry Guide number 7.