RANDGOLD RESOURCES LIMITED. Notice of Extraordinary General Meeting

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1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. If you have sold or otherwise transferred all your Ordinary Shares in the Company, please send this document, together with the accompanying Form of Proxy, as soon as possible, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding, you should retain these documents. HSBC Bank plc, which is regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company and no one else in connection with the Kibali Acquisition and will not be responsible to anyone other than the Company for providing the protections afforded to its customers or for giving advice in connection with the arrangements described in this document. RANDGOLD RESOURCES LIMITED (Incorporated in Jersey with limited liability under the Companies (Jersey) Law 1991 with registered number 62686) Proposed indirect acquisition of 10 per cent. of the issued share capital of Kibali Goldmines s.p.r.l. Notice of Extraordinary General Meeting Your attention is drawn to the letter from the Chairman of the Company which is set out on pages 5 to 14 of this document and which recommends you to vote in favour of the Resolution to be proposed at the Extraordinary General Meeting referred to below. You should read the whole text of this document. For a discussion of certain risk factors which should be taken into account when considering what action you should take in connection with the EGM refer to Part II of this document. Notice of an Extraordinary General Meeting of Randgold Resources Limited, to be held at 8:30 a.m. on 16 December 2009 at La Motte Chambers, La Motte Street, St Helier, Jersey JE1 1BJ, Channel Islands, is set out at the end of this document. The Form of Proxy for use at the meeting accompanies this document and, to be valid, should be completed and returned to the Company s registrars, Computershare Investor Services (Jersey) Limited at PO Box 83, Ordnance House, 31 Pier Road, St. Helier, Jersey JE4 8PW, as soon as possible and, in any event, so as to arrive by no later than 8:30 a.m. on 14 December Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting in person at the Extraordinary General Meeting, should they so wish.

2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain matters discussed in this document are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. 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 forwardlooking 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 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 the integration of the Kibali Acquisition, 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 the section entitled Risk Factors in Part II of this document. 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 including the Prospectus Rules, the Listing Rules and the Disclosure Rules and Transparency Rules. Cautionary note to U.S. investors: the U.S. Securities and Exchange Commission generally permits companies, in their filings with the SEC, to disclose only those mineral deposits that qualify as proven and probable ore reserves for purposes of the SEC s Industry Guide 7. Under the SEC s Industry Guide 7 standards, mineralisation may not be classified as a reserve unless the determination has been made that the mineralisation could be economically and legally produced or extracted at the time the reserve determination is made. Randgold uses certain terms in this document, such as inferred, indicated and resources, that the SEC does not recognise and strictly prohibits Randgold from including in its filings with the SEC. Shareholders are cautioned not to assume that all or any parts of Randgold s or Kibali Goldmines 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. QUALIFIED PERSONS The mineral reserve, mineral resource and gold production estimates and all other scientific or technical information related to Kibali included in this document were reviewed and approved by Quinton de Klerk, a Director of Cube Consulting Pty Ltd ( Cube ), Patrick (Rick) Adams, a Director of Cube, Terje (Ted) Hansen, a Director of Cube, Paul Kerr, a Senior Consultant (Underground Mining) employed by SRK Consulting Pty Ltd, Fred Kock, a Lead Metallurgist of Orway Mineral Consultants (WA) Pty Ltd, Rodney Leonard, a Technical Director of Lycopodium Minerals Pty Ltd, and Rodney Quick, an Officer of Randgold (each a Qualified Person under National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators) and documented in the Technical Report (NI ) Kibali Gold Project in the Democratic Republic of Congo, dated 27 November This report is available under the Company s profile on the SEDAR website at The information contained in paragraph 3 of Part I is sourced from the Expert s Report set out in Appendix 1 to this circular. Shareholders are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. Under applicable Canadian securities laws, estimates of inferred mineral resources may not form the basis of an economic analysis. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, shareholders are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, shareholders are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded into mineral reserves. 2

3 CONTENTS TIMETABLE OF PRINCIPAL EVENTS PARTI... 5 Letter from the Chairman of Randgold Resources Limited... 5 PARTII Risk Factors PARTIII Financial Information on Moto Section A Audited financial information for the three years ended 31 December Section B Unaudited financial information for the six months ended 30 June Section C Reconciliation of financial information on Moto for the three years and six months ended 30 June 2009 to Randgold s IFRS accounting policies Section D Accountant s report on the reconciliation of financial information on Moto PARTIV Section A Unaudited pro forma financial information of Randgold Section B Accountant s report on the pro forma financial information PARTV Section A Principal terms of the Kibali Acquisition Agreement Section B Principal terms of the Restated JV Contract Section C Principal terms of the Protocol Section D Principal terms of the Declaration Section E Principal terms of the Technical Services Agreement PARTVI Additional Information PARTVII Definitions Glossary Part A Technical terms used in this document Part B Reserves and Resources definitions Notice of Extraordinary General Meeting APPENDIX 1 Mineral Expert s Report Page 3

4 TIMETABLE OF PRINCIPAL EVENTS Latest time and date for receipt of Forms of Proxy... 8:30 a.m. on 14 December 2009 Extraordinary General Meeting... 8:30 a.m. on 16 December

5 PART I Letter from the Chairman of Randgold Resources Limited RANDGOLD RESOURCES LIMITED REG NO LA MOTTE CHAMBERS ST HELIER JERSEY JEI IBJ CHANNEL ISLANDS TEL : FAX: November 2009 Dear Shareholder 1. Introduction Proposed indirect acquisition of 10 per cent. of the issued share capital of Kibali Goldmines s.p.r.l. Notice of Extraordinary General Meeting The Board announced on 5 August 2009 that the Company and Moto Goldmines Limited had agreed the terms of a recommended transaction pursuant to which Subco, a company jointly owned by Randgold and AngloGold Ashanti Limited, would acquire all of the common shares of Moto. Moto indirectly owns 70 per cent. of a gold mining project in the Democratic Republic of the Congo through its interest in Kibali Goldmines s.p.r.l.. The remaining 30 per cent. interest in Kibali Goldmines is owned by L Office des Mines d Or de Kilo-Moto, which is itself owned by the Government of the DRC. The Moto Acquisition was completed on 15 October The Company agreed with AngloGold to jointly acquire, fund and develop Kibali, and accordingly Moto is now indirectly jointly owned by the Company and AngloGold. On 31 October 2009, the Board further announced that, together with AngloGold Ashanti Limited, Randgold had entered into an agreement for the acquisition of a further 20 per cent. interest in Kibali Goldmines from OKIMO. The Kibali Acquisition will be effected by Jersey JVCo, a company that is jointly owned by Randgold and AngloGold and the same vehicle which holds Randgold and AngloGold s joint venture interest in Moto. Following completion of the Kibali Acquisition, Randgold and AngloGold will together hold a 90% joint venture interest in Kibali Goldmines through Jersey JVCo (both directly and indirectly) and OKIMO will hold the remaining 10% stake. The total consideration payable to OKIMO under the Kibali Acquisition Agreement is US$113.6 million payable in cash on completion. Of this sum, an amount, currently expected to be US$4.7 million, will be used by OKIMO to discharge certain debts owed to Kibali Goldmines, and a further US$10.8 million will be used by OKIMO to pay certain sums due to OKIMO employees and former employees and a further US$8 million will be placed into a social fund used to build roads, hospitals, an airfield and other infrastructure works in the region of Kibali. 50 per cent. of the total acquisition cost of US$113.6 million is being funded by AngloGold. Accordingly, the total amount payable by Randgold will be US$56.8 million. In addition to the Kibali Acquisition, pursuant to a protocol agreed by Moto and Jersey JVCo with the Government in relation to the renewal of exploitation permits held by Kibali Goldmines, a payment of US$4.5 million was made by Moto, 50 per cent. to the Government and 50 per cent. to OKIMO. The Moto Acquisition did not require the approval of Randgold Shareholders, but the increased stake in Kibali Goldmines proposed to be acquired pursuant to the Kibali Acquisition, when aggregated with the Moto Acquisition, does give rise to a requirement to obtain the approval of Randgold Shareholders pursuant to Chapter 10 of the Listing Rules. Accordingly, this document constitutes a Class 1 circular for the purposes of the Listing Rules in connection with the Kibali Acquisition. The purpose of this document is to provide Shareholders with details of the Kibali Acquisition, to explain why the Board believes that the Kibali Acquisition is in the best interests of the Company and its Shareholders, and why the 5

6 PART I - Letter from the Chairman of Randgold Resources Limited Board unanimously recommends Shareholders to vote in favour of the Resolution to be proposed at the Extraordinary General Meeting. The notice of the Extraordinary General Meeting at which the Resolution will be proposed, which is to be held at 8:30 a.m. on 16 December 2009, is set out at the end of this document. 2. Background to and reasons for the Kibali Acquisition On 5 August 2009, the Company and Moto announced that they had agreed the terms of a recommended offer by which Subco would acquire all the common shares of Moto. The Moto Acquisition was completed on 15 October Under the Moto Acquisition, Moto Shareholders were entitled to receive either of an Ordinary Share (or, where applicable, of an ADS) per Moto Share or, alternatively (at the option of each Moto Shareholder), cash consideration of US$4.47 per Moto Share in respect of all or some of their Moto Shares, subject to an aggregate maximum cash amount payable to all Moto Shareholders under the Moto Acquisition of approximately US$244 million. Moto Shareholders elected to receive approximately US$76.9 million pursuant to the Cash Election which resulted in the issue of a total of 6,628,769 Consideration Shares upon completion of the Moto Acquisition. Pursuant to the Bid Agreement, on completion of the Moto Acquisition, AngloGold acquired an indirect 50 per cent. interest in Jersey JVCo. (and as a result an indirect 50 per cent. interest in Moto) in exchange for funding the payment to Moto Shareholders under the Cash Election and paying to Randgold approximately US$171 million. Randgold and AngloGold are each responsible for funding 50 per cent. of the development of Kibali and Randgold will provide technical services to Kibali. Moto s key asset is a 70 per cent. interest in Kibali which holds ten exploitation permits over one of the largest undeveloped gold deposits in Africa. Kibali is a joint venture between Moto and OKIMO, which currently owns the remaining 30 per cent. interest in Kibali, and covers an area of approximately 1,836 km 2 with significant Mineral Resources and growth potential. Moto completed the Feasibility Study on the Kibali Gold Project in March 2009, which contemplated an open pit and underground mining operation producing approximately 2.4 million ounces of gold in the first five years of operation and total Mineral Reserves estimated to be 5.5 million ounces. The Mineral Resource estimates have been further updated in November 2009, with Indicated Mineral Resources of 13.9 million ounces and Inferred Mineral Resources of 5.8 million ounces being estimated, and provide a solid platform for growth. It is the Company s intention to optimise the feasibility study during the course of Randgold has a proven track record of finding, financing, developing and operating mines in West Africa. At present the Company operates two mines in Mali and has mining projects at various stages of evaluation and development in Mali, Côte d Ivoire, Senegal and DRC. Furthermore, the Group has exploration permits and licenses covering substantial areas in Mali, Côte d Ivoire, Burkina Faso, Senegal and DRC. The Company s strategy is to create value by finding, developing and operating profitable gold mines for all its Shareholders. The Company seeks to discover significant gold deposits, either from its own phased exploration programmes or the acquisition of early stage to mature exploration programmes. The Company s exploration team has made five significant gold discoveries since its IPO in The Company actively manages both its portfolio of exploration and development properties and its risk exposure to any particular geographical area. It also routinely reviews opportunities to acquire development projects and existing mining operations and companies. The Directors believe that the acquisition of its interest in Kibali is in accordance with the Company s objectives and strategy. Randgold has a history of building strong relationships with the governments in whose countries it operates, especially in francophone Africa, and has a proven track record of delivering profits and real value to Shareholders through long term disciplined growth based on maintaining a pipeline of high-quality development projects, strict cost control and operational excellence. Randgold and AngloGold will jointly implement the Kibali Acquisition as described below. AngloGold is one of the largest gold producers in the world with meaningful production and exploration activities in Africa, including exploration activities in the DRC. The agreement to jointly develop Kibali combines Randgold s and AngloGold s regional business knowledge and government relationships with their extensive gold mining expertise. The Directors believe that Kibali and the Kibali Acquisition brings the following key attractions: Opportunity to convert Kibali into a profitable mine. The Moto Acquisition and the Kibali Acquisition together represent an opportunity to convert this large gold deposit into a profitable mine. The Randgold capital projects team which is responsible for Kibali is the same one which has successfully developed the Morila and Loulo mines in Mali and is currently building the Company s Tongon mine in Côte d Ivoire. The Company 6

7 PART I - Letter from the Chairman of Randgold Resources Limited believes that the combination of Randgold s and AngloGold s regional business knowledge and government relationships with their extensive gold mining expertise in Africa will assist in unlocking the value of Kibali. In line with Randgold s growth strategy. Increasing its stake in Kibali pursuant to the Kibali Acquisition is in line with Randgold s growth strategy of creating value by developing discoveries rather than paying a premium for established operations. Greater leverage of Randgold management s time and expertise. As the provider of technical services to Kibali, Randgold will dedicate its management s time and expertise to developing the project into a profitable mine. Through the acquisition of the additional stake in Kibali, this intellectual capital will be able to be leveraged over a larger economic interest in the project without any incremental cost to Randgold, increasing the return for Shareholders; Removes a 20 per cent. non-dilutable interest in Kibali. OKIMO currently holds a 30 per cent. non-dilutable interest in Kibali through its holding in Kibali Goldmines. Under the current shareholding structure, this would mean that Randgold and AngloGold fund 100 per cent. of capital required to develop Kibali with only 70 per cent. of the benefit following repayment of capital funding. The Kibali Acquisition reduces OKIMO s holding to a 10 per cent. non-dilutable interest such that Randgold and AngloGold will receive greater economic benefit from Kibali. Simplifies the historic arrangements between Moto, Kibali Goldmines and OKIMO. Historically, there have been a number of loans, commitments and agreements in place between Moto, Kibali Goldmines and OKIMO in relation to Kibali. Under the terms of the Kibali Acquisition, the indebtedness of OKIMO to Kibali Goldmines will be repaid, the outstanding obligations of OKIMO to its employees and former employees will be funded through the purchase consideration and the US$3m loan commitment from Kibali Goldmines to OKIMO in respect of OKIMO s obligations to its employees will be discharged. Secures operational control of Kibali Goldmines. As part of the Kibali Acquisition, the joint venture agreement which governs Kibali Goldmines is being amended to reflect the reduced holding of OKIMO in Kibali. As part of these amendments, Kibali Services Limited, a subsidiary of Jersey JVCo will enter into the Technical Services Agreement with Kibali Goldmines under which Kibali Services Limited will become the Technical Services Provider, providing technical services to Kibali Goldmines including through secondment of Randgold employees in exchange for a fee. Randgold and AngloGold will have increased representation on the Board of Kibali Goldmines and will nominate the chairman of Kibali Goldmines, thereby enabling them to have a greater influence over the constitution of the Executive Committee which oversees the day-to-day management of Kibali Goldmines with the assistance of the Technical Services Provider. Retains support of the Government of the DRC. The Kibali Acquisition represents an opportunity for Randgold to acquire a further stake in Kibali and provide greater participation for its Shareholders in Kibali s success, while retaining the support of the Government of the DRC, which is important to the successful development of Kibali. Increase of Randgold s Mineral Reserves and Mineral Resources. Based on the Feasibility Study and the update to the Mineral Resource estimates in November 2009, the Kibali Acquisition will, in conjunction with the Moto Acquisition, increase Randgold s attributable Mineral Reserves by 2.5 Moz, its Indicated Mineral Resources by 6.3 Moz and its Inferred Mineral Resources by 2.6 Moz. 3. Information on Kibali Location The Kibali Gold Project is a gold exploration property which covers an area of approximately 1,836km 2 in the north east of the Democratic Republic of Congo. The area is situated in a rural setting and lacks substantial infrastructure development. Remnants of historical mining activities (residential buildings, processing plant, underground mine shafts and surface workings) are present in various states of repair. The Kibali Gold Project is located in the Moto greenstone belt, some 560km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua. 7

8 PART I - Letter from the Chairman of Randgold Resources Limited Permits Kibali Goldmines has been issued with ten exploitation permits under the DRC mining code in respect of the Kibali Gold Project, most of which are valid until 2014 and the balance of which are valid until Under the terms of the Kibali Acquisition, it is a condition to completion (unless otherwise waived) that the exploitation permits expiring in 2014 are renewed and extended until 2029 by the Government of the DRC. Geology and mineralisation The goldfields at the Kibali Gold Project are located within the Moto greenstone belt, which is comprised of the Archean Kibalian (Upper and Lower) volcano-sedimentary rocks and ironstone-chert horizons that have been metamorphosed to greenschist facies. The goldfields at Kibali are cut by regional-scale north, east, northeast and northwest trending faults and are bounded to the north by the Middle Archaean West Nile granite-gneiss complex and cut to the south by the Upper Zaire granitic complex. The stratigraphy consists of a volcano-sedimentary sequence comprising fine-grained sedimentary rocks, several varieties of pyroclastic rocks, basaltic flow rocks, mafic-intermediate intrusions (dykes and sills) and intermediate-felsic intrusive rocks (stocks, dykes and sills). The sequence is variably altered from slight (texture benign) to intense (texture destructive) such that in some cases the protolith rock is unrecognisable. In the Kibali district the majority of gold mineralisation identified to date is disseminated style, hosted within a sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally structurally controlled and associated with quartz-carbonate alteration and pyrite. The majority of mineralisation areas currently being delineated occur within two broad mineralised trends. The first group lie within a north east trending structural-alteration corridor from the Kibali prospect in the southwest to the Ndala prospect in the northeast, called the Kibali-Durba-Karagba Trend. The second group lies within a north west trending zone that stretches from the Pakaka prospect in the southeast to the Mengu Hill prospect in the northwest and is called the Pakaka-Mengu Trend. Drilling Mineral Resource estimates have been completed for the Pakaka, Gorumbwa, Kibali, Mengu Hill, Mengu Village, Karagba, Chauffeur, Durba, Megi, Marakeke, Kombokolo, Sessenge, Ndala and Pamao mineralisation. The Mineral Resource estimates are based primarily on the post-2004 drilling by Moto, as very limited records are available to validate the pre-2004 drilling. The primary focus of the drilling strategy since June 2006 has been to target the KCD deposit with infill and extension drilling focussed on defining the open pit as well as the underground potential of the system. Status of exploration, development and operations The Kibali Gold Project is in an exploration phase which has focussed on a number of deposits within the property boundary. Exploration activities are currently targeting mineralisation identified as having potential for extraction by open pit and underground mining methods. Development on site is limited to buildings, roads and minor service infrastructure to support exploration activities. Operations are confined to small scale artisanal mining conducted in various locations throughout the property. 8

9 PART I - Letter from the Chairman of Randgold Resources Limited Open pit resources A tabulation of the updated Kibali Gold Project open pit Mineral Resources classified as the in situ resources at a nominal 0.5 g/t gold cut-off within the US$1,000 per oz whittle pit shell as of September 2009 is shown in Table 1 Table 1 Kibali Gold Project open pit Mineral Resource Tabulation All Deposits H 0.5 g/t gold September 2009 Deposit Tonnes (Mt) Indicated Mineral Resources Grade g/t Gold koz *Attrib. gold koz Tonnes (Mt) Inferred Mineral Resources Grade g/t Gold koz *Attrib. gold koz Pakaka , Gorumbwa , Kibali , Mengu Hill Mengu Village KCD ,957 1, Megi Marakeke Kombokolo Sessenge Ndala Pamao TOTAL ,253 2, ,256 1,465 * Attributable gold (koz) refers to the quantity attributable to Randgold based on Randgold s (post completion of the Kibali Acquisition) 45% interest in the Kibali Gold Project. KCD underground resources Table 2 summarises the underground Resources resulting from the ankerite-carbonate-silica-albite-pyrite alteration interpretation for the KCD deposit. The Resources detailed in Table 2 are additional to the open pit local recoverable Mineral Resources reported for the KCD deposit in Table 1. Ongoing work is presently being conducted to determine the appropriate modifying factors for formulating reportable underground mining Mineral Reserves. These modifying factors will be significantly different in nature to those applied to the open pit Mineral Resources reported in Table 1. Table 2 KCD deposit Kibali Gold Project underground Mineral Resource Tabulation H 2.0 g/t gold September 2009 Deposit Tonnes (Mt) Indicated Mineral Resources Grade g/t Gold koz *Attrib. gold koz Tonnes (Mt) Inferred Mineral Resources Grade g/t Gold koz *Attrib. gold koz KCD ,674 3, ,569 1,156 TOTAL ,674 3, ,569 1,156 * Attributable gold (koz) refers to the quantity attributable to Randgold based on Randgold s (post completion of the Kibali Acquisition) 45% interest in the Kibali Gold Project. At this stage of the Kibali Gold Project, a significant proportion of the Mineral Resources remain in the Inferred Mineral Resource category defined under the 2004 JORC Code (equivalent to the guidelines adopted for the Canadian National Instrument ) and are therefore not suitable for detailed Mineral Reserve estimation, mine planning or financial evaluation purposes. Open pit mining The Feasibility Study assessment of open pit mining potential at the Kibali Gold Project has determined that the Kibali Gold Project contains total open pit Probable Mineral Reserves of 30.7Mt at 3.2 g/t Au for 3.2Moz of gold, based on the Mineral Resources of November These Mineral Reserves are included in the Mineral Resources 9

10 PART I - Letter from the Chairman of Randgold Resources Limited estimated for the Kibali Gold Project. The Feasibility Study assessment proposes that the Mineral Reserves are mined from 6 separate pits over 8 years (including pre-strip period) with treatment of this material concurrent with this mining period and extending for a further 9 years to give a total open pit mine life of 17 years. A conventional excavator and truck mining system is proposed. Total material movements reach a steady state of approximately 22Mtpa for 6 years before reducing to match treatment requirements (ranging between 1.6Mtpa and 2.9Mtpa). Life of mine unit mining operating costs (including stock reclaim) are estimated at US$2.52/ore tonne. Total capital costs are estimated at US$98.7M for life of mine, comprised of US$19.0M capital development (pre-stripping), US$2.5M capital works and US$77.0M capital fleet. Underground mining The Feasibility Study assessment of underground mining potential at the KCD deposit has determined that the deposit contains underground Probable Mineral Reserves of 11.6Mt at 6.2 g/t Au for 2.3Moz of gold, based on the Mineral Resources of November These Mineral Reserves are included in the Indicated Mineral Resources estimated for the deposit. The designed underground mine has a mine life of 13 years (including development lead time) and features a mechanised long hole open stopping method with paste fill to reach a steady state production level of approximately 1.5Mtpa. Unit operating cost estimates average US$29.33 /ore tonne over the life of mine. Capital expenditure estimates total US$122.6M over life of mine consisting of US$49.7M capital development, US$71.7M capital fleet and US$1.1M capital works. The underground mine designs and Mineral Reserve calculations used a gold price assumption of US$600/oz. Metallurgy, processing and infrastructure The Feasibility Study assessment of metallurgy, processing operations and infrastructure requirements for the Kibali Gold Project has concluded that a nominal 2.8Mtpa throughput plant processing oxide, transitional and fresh material from open pit and underground mines of the Kibali Gold Project will produce 4.8Moz of gold over a life of 16 years. Metallurgical testwork of open pit and underground ores yielded predicted recoveries as follows: Ore Source Oxide % Recovery Transition % Recovery Primary % Recovery KCD Pakaka Mengu Hill... NA Kombokolo Pamao Sessenge Underground... NA NA 91.3 NOTE 1: Oxide master composite recovery was used for Pamao oxide recovery assumptions. NOTE 2: Advice from geological consultant indicates limited transition ore for Pakaka and Pamao. Primary recoveries were used for transition material predicted recovery. NOTE 3: No oxide samples sourced from Mengu Hill. All ore logged as oxide from this deposit is assumed to be treated as transition ore. The processing plant incorporates conventional crushing and grinding circuits, an oxide CIL circuit, an ultra-fine grinding and flotation circuit followed by a CIL circuit for transitional and fresh material types, and conventional elution and gold room facilities. A 28Mt capacity tailings dam will be constructed progressively over the operation s life. A key feature of the Kibali Gold Project is the construction of a 2 stage hydro-electric power station (ultimate generating capacity 20MW) on the Nzoro River with supplemental and back-up power being sourced from diesel-fired generators installed at the plant site. The process plant and infrastructure requirements have an estimated pre-commissioning capital cost of US$339M. This estimate excludes capital expenditure associated with open pit and underground mining activities. Life of mine total capital expenditure for processing and infrastructure activities is estimated to be US$396.6M. Life of mine operating costs for processing and general and administration activities is estimated to be US$17.14/tonne. Unit processing costs for oxide and transition/fresh material types vary over life of mine according to material hardness (throughput determining), power supply (hydro-electric / diesel components) and labour compliment (expatriate / DRC national). 10

11 PART I - Letter from the Chairman of Randgold Resources Limited Financial performance Financial modelling of the exploitation of Probable Mineral Reserves of the Kibali Gold Project as part of the Feasibility Study (using US$750/oz as the base case gold price) yielded the following results: Initial Capital Payback Period 3.1 years Mine Life (total operation life post processing plant commissioning) 16 years After-tax cashflows for the Kibali Gold Project are estimated to be: Year (1) Cashflow (US$m)... (438) Year (Cashflow (US$m) Sensitivity analysis conducted on the Kibali Gold Project s financial performance for variation in gold price, capital costs, operating costs and mined grade concluded that the project was most sensitive to gold price. Specific effects on annual cashflows for all input variations are included in detail. 4. Principal terms of the Kibali Acquisition Under the terms of the Kibali Acquisition Agreement, Jersey JVCo has agreed to acquire from OKIMO a further 20 per cent. interest in Kibali Goldmines, which will leave OKIMO with a 10 per cent. interest (non dilutable) in Kibali Goldmines and Kibali. The total consideration payable to OKIMO under the Kibali Acquisition Agreement is US$113.6 million payable in cash on Completion. Of this sum, a sum, currently estimated to be US$4.7 million, will be used by OKIMO to discharge certain debts owed by it to Kibali Goldmines, a further US$10.8 million will be used by OKIMO to pay certain sums due to OKIMO employees and former employees and a further US$8 million will be placed into a social fund used to build roads, hospitals, an airfield and other infrastructure works in the region of Kibali. Fifty per cent. of the total acquisition cost of US$113.6 million and fifty per cent. of the expenses of the transaction will be funded by AngloGold. Completion of the Kibali Acquisition is conditional, inter alia, upon: the approval of Randgold Shareholders; and the renewal of those of the Exploitation Permits which are due to expire in 2014 pursuant to the Protocol. Further details of the Kibali Acquisition Agreement are set out in Part V of this document. In connection with the Kibali Acquisition, OKIMO has agreed that the joint venture agreement governing the operation of Kibali Goldmines shall be amended to reflect certain matters in relation to the operation of Kibali Goldmines, and to reflect OKIMO s reduced shareholding in Kibali Goldmines. A summary of the main changes which are reflected in the Restated JV Contract, are set out in Part V of this document. Pursuant to the Protocol, and in consideration of the payment by Moto of US$4.5 million (which sum is in addition to the consideration payable for the Sale Shares and which has been paid half to the Government and half to OKIMO), the Government has agreed with Moto to extend the Exploitation Permits for additional periods of 15 years from their current expiry dates. In addition, the Government of the DRC undertake for such time as Kibali is in commercial production to renew all of the Exploitation Permits on their respective earliest future renewal dates. Furthermore, the Government acknowledge that no further payment shall be required to be made in connection with the Moto Acquisition. The Protocol Consideration was paid by Moto on 13 November Further details of the Protocol are set out in Part V of this document. Pursuant to the Declaration, the Government confirm to Randgold, AngloGold, Moto and Kibali Goldmines the provisions of the Protocol and provide certain further confirmations including stability provisions under the Mining Code and the Mining Regulations. Further details of the Declaration are set out in Part V of this document. 5. Financing of the Kibali Acquisition Randgold s 50 per cent. share of the consideration for the Kibali Acquisition will be funded by Randgold from its available cash resources. Randgold s share of the aggregate consideration (including the Protocol Consideration) is 11

12 PART I - Letter from the Chairman of Randgold Resources Limited US$59.05 million. The balance of the consideration is payable by AngloGold, which it has stated will be funded from its own available cash resources. 6. Financial information on Kibali As at 31 December 2008, Kibali Goldmines had gross assets of approximately US$137.2 million. For the year ended 31 December 2008, Kibali Goldmines made a loss before tax of approximately US$21.3 million. As at 30 June 2009, Moto had gross assets of approximately AUS$297.3 million and as at 31 December 2008, Moto had gross assets of approximately AUS$260.0 million. For the year ended 31 December 2008, Moto made a loss of approximately AUS$14.1 million. Prior to April 2009, Moto held 100% of Kibali Goldmines. Moto issued a 30 per cent. stake in Kibali Goldmines to OKIMO in April 2009 and has since then consolidated 100 per cent. of Kibali Goldmines in its financial statements and has shown a 30 per cent. non-controlling interest to reflect the minority interest of OKIMO in Kibali Goldmines. Historical financial information on Moto is contained in sections A, B and C of Part III of this document. Shareholders should read the whole of this document and not rely solely on the summarised information set out above. 7. Management of Kibali The Restated JV Contract will make various changes to the management of Kibali. Following Completion, the administration and management of Kibali Goldmines will be carried out by Kibali Goldmines management board which will be comprised of eight members, six of whom shall be appointed by Border (a wholly-owned indirect subsidiary of Moto) and two of whom shall be appointed by OKIMO. The Kibali Goldmines Board will appoint a five man Executive Committee, the members of whom will be employees of Kibali Goldmines who will be recruited by Kibali Services Limited, the Technical Services Provider to Kibali Goldmines save that OKIMO has the right to nominate one member of the Executive Committee, who need not be recruited by Kibali Services Limited. In addition, the Executive Committee shall be chaired by the Chairman of Kibali Goldmines. The business of Kibali Goldmines will be conducted by the Executive Committee with the assistance of the Technical Services Provider, through the Technical Services Agreement. AngloGold has agreed that the fees payable pursuant to the Technical Services Agreement shall be paid for the benefit of Randgold. Further details of the Technical Services Agreement are set out in Section E of Part V of this document. 8. Current trading and prospects The Company remains committed to meeting its annual production target as disclosed at the beginning of 2009 in its fourth quarter and full year 2008 financial results. The drilling programme at Massawa has been completed and the Company is on track to finish the pre-feasibility study on this project by the end of Furthermore, phase 1 drilling and a scoping study at Gounkoto were completed in the third quarter of 2009 and the Company has commenced a pre-feasibility study on the project, anticipated to be completed by the end of the first quarter of Both of these projects represent significant growth opportunities for Randgold. Randgold is expanding its exploration horizons to encompass the prospective rocks of the Congo Craton. This area, which ranges from the well known deposits of Tanzania through the east of the DRC and the Central African Republic to Cameroon, could, the Directors believe, become the next gold belt to deliver multi-million ounce deposits. In November 2009, the Company completed the acquisition of a further 5% of the issued share capital of Société des Mines de Tongon SA, the owner of the Company s Tongon mine in Côte d lvoire, for total consideration of US$10 million. In November 2009, the Company completed the sale of its entire interest in the Kiaka gold project in Burkina Faso to Volta for an aggregate cash consideration of C$4 million to be paid over a period of 24 months following closing of the transaction and share consideration of 20 million common shares in Volta which were issued on closing. The fair value of the consideration to be reflected in Randgold s income statement for the fourth quarter and year ended 31 December 2009 is expected to be approximately US$10.9 million. Kibali is currently at feasibility stage. Following Randgold s acquisition of its interest in Moto, work is ongoing to review and update the Kibali geological model to integrate all surface and underground mapping and historical data with drill data for the project. The Company expects to be in a position by January 2010 to give a definite timeline on 12

13 PART I - Letter from the Chairman of Randgold Resources Limited the development of Kibali. During 2010, Randgold will be looking to optimise the Feasibility Study, including reestimating the project s Mineral Resources and Mineral Reserves in the light of the updated geological model. The Company s financial results are and will be subject to the movement in gold prices. In the past financial year, the general trend in gold prices has been upwards and this has had a positive impact on revenues. However, it should be noted that fluctuations in the price of gold remain a significant risk to the Company. 9. Financial effects of the Kibali Acquisition Randgold s proportion of the consideration payable pursuant to the Kibali Acquisition will be funded through its own cash resources. The Kibali Acquisition will therefore have the effect of reducing the Group s cash balance. Since Kibali is at feasibility stage, all costs associated with its development are capitalised and, therefore, there will be no impact on the earnings of Randgold until commercial production commences. Although Randgold Shareholder approval is only being sought in relation to the 10 per cent. of Kibali Goldmines which Randgold proposes to acquire from OKIMO, in consideration of the recent indirect acquisition of 50 per cent. of Moto by Randgold, pro forma financial information showing the hypothetical effect on the Group if the Moto Acquisition and the Kibali Acquisition had taken place on 30 September 2009 has been included within this document in order to give Shareholders a more complete understanding of the combination of the two acquisitions. A pro forma unaudited net assets statement of Randgold as at 30 September 2009 and unaudited pro forma earnings statements of Randgold for the year ended 31 December 2008 and the six months ended 30 June 2009 are set out in Part IV of this document. Shareholders should be aware that the Company s results for the nine months ended 30 September 2009, published on 10 November 2009, do not include the impact of the Moto Acquisition which closed on 15 October Risk factors Shareholders should consider fully the risk factors associated with the Group, Kibali Goldmines and the Kibali Acquisition. Shareholders attention is drawn to the risk factors set out in Part II of this document. 11. Extraordinary General Meeting A notice convening an extraordinary general meeting of the Company to be held at 8:30 a.m. on 16 December 2009 at La Motte Chambers, La Motte Street, St Helier, Jersey JE1 1BJ, Channel Islands is set out at the end of this document. The Form of Proxy to be used in connection with the Extraordinary General Meeting is enclosed. The purpose of this meeting is to seek Shareholders approval for the Kibali Acquisition. This approval is required by the Listing Rules as a result of its size when taken together with the Moto Acquisition. 12. Action to be taken Shareholders will find enclosed the Form of Proxy for use at the Extraordinary General Meeting. Whether or not Shareholders intend to be present at that meeting, Shareholders are requested to complete the Form of Proxy (in accordance with the instructions printed thereon) and return it to the Company s registrars, Computershare Investor Services (Jersey) Limited, as soon as possible and, in any event, so as to arrive by 8:30 a.m. on 14 December Completion and return of a Form of Proxy will not preclude Shareholders from attending that meeting and voting in person if they so wish. 13. Further information Your attention is drawn to the further information contained in Parts II to VII of this document. Shareholders are advised to read the whole of this document and not to rely solely on the information contained in this letter. 14. Financial advice Your Board has received financial advice from HSBC in relation to the Kibali Acquisition. In providing this advice to the Board, HSBC has relied on the Board s commercial assessment of the Kibali Acquisition. 13

14 PART I - Letter from the Chairman of Randgold Resources Limited 15. Recommendation Your Board considers the terms of the Kibali Acquisition to be in the best interests of the Company and its Shareholders taken as a whole. Accordingly, your Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the Extraordinary General Meeting, as the members of the Board intend to do in respect of their own beneficial holdings amounting to an aggregate of 780,280 Ordinary Shares, representing approximately 0.87 per cent. of the Company s current issued share capital. Yours faithfully Philippe Liétard Chairman 14

15 PART II Risk Factors In addition to the other information included in this document, Shareholders should carefully consider the following factors (which are set out in no particular order), which individually or in combination could have a material adverse effect on the Group s and/or the Enlarged Group s business, financial condition and results of operations. There may be additional risks and uncertainties not presently known to the Company, or that the Company currently sees as immaterial, which may also harm the Group s and/or the Enlarged Group s business. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, the Group s and/or the Enlarged Group s business, results of operations and financial condition could be materially and adversely affected. In this case, the trading price of the Ordinary Shares and American Depositary Shares could decline and investors might lose all or part of their investment. 1. Risks Relating to the Group s Operations 1.1 The profitability of the Group s operations, and the cash flows generated by the Group s operations, are affected by changes in the market price for gold which in the past has fluctuated widely. Substantially all of the Group s revenues and cash flows have come from the sale of gold. Historically, the market price for gold has fluctuated widely and has been affected by numerous factors, over which the Group has no control, including: the demand for gold for investment purposes, industrial uses and for use in jewellery; international or regional political and economic trends; the strength of the US dollar, the currency in which gold prices generally are quoted, and of other currencies; market expectations regarding inflation rates; interest rates; speculative activities; actual or expected purchases and sales of gold bullion holdings by central banks, the International Monetary Fund, or other large gold bullion holders or dealers; hedging activities by gold producers; and the production and cost levels for gold in major gold-producing nations. If gold prices should fall below and remain below the Company s cost of production for any sustained period the Company may experience losses, and if gold prices should fall below the Company s cash costs of production it may be forced to curtail or suspend some or all of its mining operations. In addition, the Company would also have to assess the economic impact of low gold prices on its ability to recover from any losses it may incur during that period and on its ability to maintain adequate reserves. The Company s total cash cost per ounce of gold sold was US$467 in the year ended 31 December 2008, US$356 in the year ended 31 December 2007, and US$296 in the year ended 31 December The Company expects that Morila s cash costs per ounce will rise as the life of the mine advances as a result of expected declining grade, which will adversely affect the Company s profitability in the absence of any mitigating factors. The high grades expected from the underground mining at Loulo will, in the absence of any other increases, have a positive impact on unit costs. 1.2 The Company s mining operations may yield less gold under actual production conditions than indicated by its gold reserve figures, which are estimates based on a number of assumptions, including assumptions as to mining and recovery factors, production costs and the price of gold. The Company s ore reserve estimates are estimates of the mill delivered quantity and grade of gold in the Company s deposits and stockpiles. They represent the amount of gold that the Company believes can be mined, processed and sold at prices sufficient to recover its estimated total cash costs of production, remaining investment and anticipated additional capital expenditures. The Company s ore Reserves (including those in relation to Kibali) are estimated based upon many factors, including: the results of exploratory drilling and an ongoing sampling of the orebodies; past experience with mining properties; 15

16 PART II - Risk Factors gold price; and operating costs. Because the Company s ore reserve estimates are calculated based on current estimates of future production costs and gold prices, they should not be interpreted as assurances of the economic life of the Company s gold deposits or the profitability of its future operations. Reserve estimates may require revisions based on actual production experience. Further, a sustained decline in the market price of gold may render the recovery of ore reserves containing relatively lower grades of gold mineralisation uneconomical and ultimately result in a restatement of Reserves. The failure of the Reserves to meet the Company s recovery expectations may have a material adverse effect on the Company s business, financial condition and results of operations. 1.3 The profitability of operations and the cash flows generated by these operations are significantly affected by the fluctuations in the price, cost and supply of inputs. Fuel, power and consumables, including diesel, steel, chemical reagents, explosives and tyres, form a relatively large part of the Company s operating costs. The cost of these consumables is impacted to varying degrees by fluctuations in the price of oil, exchange rates and a shortage of supplies. Such fluctuations have a significant impact upon the Company s operating costs and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for mining projects, new and existing, and could even render certain projects non-viable. 1.4 Any appreciation of the currencies in which the Company incurs costs against the US dollar could adversely affect the Company s results of operations. While the Company s revenue is derived from the sale of gold in US dollars, a significant portion of the Company s input costs are incurred in currencies other than the dollar, primarily Euro, South African Rand, Communauté Financière Africaine franc and the Congolese franc. Accordingly, any appreciation in such other currencies could adversely affect the Company s results of operations. 1.5 The Company s results of operations have been adversely affected by increases in fuel prices, and the Company would be adversely affected by future increases in fuel prices or disruptions in the supply of fuel. The Company s results are significantly affected by the price and availability of fuel, which are in turn affected by a number of factors beyond the Company s control. Fuel prices are volatile and increased significantly in While prices have decreased significantly in 2009, they remain higher than historical standards. In the year ended 31 December 2008, the cost of fuel and other power generation costs comprised 35 per cent. of the Company s operating costs and the annual price increase of the Company s landed fuel was 38 per cent. Historically, fuel costs have been subject to wide price fluctuations based on geopolitical factors and supply and demand. While the Company does not currently anticipate a significant reduction in fuel availability, factors beyond the Company s control make it impossible to predict the future availability of fuel. If there are additional outbreaks of hostilities or other conflicts in oil producing areas or elsewhere, or a reduction in refining capacity (due to weather events, for example), or governmental limits on the production or sale of fuel, or restrictions on the transport of fuel, there could be reductions in the supply of fuel and significant increases in the cost of fuel. The Company is not party to any agreements that protect it against price increases or guarantee the availability of fuel. Major reductions in the availability of fuel or significant increases in its cost, or a continuation of current high prices for a significant period of time, would have a material adverse impact on the Company. 1.6 The Company s business may be adversely affected if the Government of Mali fails to repay Value Added Tax, or TVA ( TVA ), owing to Morila and Loulo. The Company s mining companies operating in Mali are exonerated by their establishment conventions from paying TVA for the three years following first commercial production. After that, TVA is payable and reimbursable. TVA is only reclaimable insofar as it is expended in the production of income. A key aspect in TVA recovery is managing the completion of the Government of Mali s audit of the taxpayer s payments, at which time the Government of Mali recognises a liability. 16

17 PART II - Risk Factors By December 2007, Morila had successfully concluded a reimbursement protocol with the Government of Mali for all TVA reimbursements it was owed up to June Morila was unable to conclude a second protocol subsequent to December 2007, however, and pursuant to its establishment convention, began offsetting TVA reimbursements it was owed against corporate and other taxes payable by Morila to the Government of Mali. As a result of the offsets, the TVA owed by the Government of Mali to Morila declined by $8 million between 31 December 2008 ($12.3 million) and 30 September 2009 ($4.3 million). Morila is in discussions with the Malian fiscal authorities in order to ensure that the tax offsets are accurately recorded and recognised, although the Company cannot give assurances that the Government of Mali will ultimately recognise the tax offsets. At 31 December 2008, TVA owed by the Government of Mali to Loulo stood at $1.8 million. This amount has increased by $25.3 million to $27.1 million at 30 September 2009 due to the end of the exoneration period on 8 November If Morila and Loulo are unable to recover these funds, or if the tax offsets are not recognised, then their results of operations and financial position would be adversely affected, as would their ability to pay dividends to their shareholders. Accordingly, the Company s business, cash flows and financial condition will be adversely affected if anticipated dividends are not paid. 1.7 The Company s business may be adversely affected if the Government of Mali fails to repay fuel duties owing to Morila and Loulo. Up to June 2005, Morila was responsible for paying to diesel suppliers the customs duties which were then paid to the Government of Mali. The Company s operations at Morila and Loulo could claim reimbursement of these duties from the Government of Mali on presentation of a certificate from Société Générale de Surveillance. During the third quarter of 2003, the Government of Mali began to reduce payments to all the mines in Mali due to irregularities involving certain small exploration companies. The Government of Mali has since given full exoneration from fuel duties to the mining industry so that fuel duties are no longer payable. However, a portion of previously paid duties remain outstanding, principally the duties paid for the period June 2005 to December The Company s share of the amounts owing to Morila was $2.1 million on 31 December 2008 and $4 million on 31 December Amounts owing to Loulo were $0.7 million on 31 December 2008 and $0.7 million on 31 December At 30 September 2009, amounts owing to Loulo were $0.7 million. At 30 September 2009, Morila s outstanding fuel duties were offset in full against corporate and other taxes payable by the mine. If Morila and Loulo are unable to recover these amounts, or if the amounts offset are not recognised, then their results of operations and financial position would be adversely affected, as would their ability to pay dividends to their shareholders. Accordingly, the Company s business, cash flows and financial condition will be adversely affected if anticipated dividends are not paid. 1.8 Certain factors may affect the Company s ability to support the carrying value of the Company s property, plant and equipment, and other assets on its balance sheet. The Company reviews and tests the carrying amount of its assets on an annual basis when events or changes in circumstances suggest that the net book value may not be recoverable. If there are indications that impairment may have occurred, the Company prepares estimates of expected future discounted cash flows for each group of assets. Assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units) for purposes of assessing impairment. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash flows are significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures. During 2008, the Company recorded impairment charges against its auction rate securities, or ARS, which is described in the following paragraph. 1.9 The Company has invested in debt instruments for which the market has become substantially illiquid. The Company has invested in debt instruments for which the market has become substantially illiquid. The Company had cash and cash equivalents of $520.8 million as of 30 September In addition, the Company had available-for-sale financial assets with a carrying value of approximately $32.7 million as of 30 September The available-for-sale financial assets consist of auction rate securities. In the third quarter of fiscal year 2007, ARS 17

18 PART II - Risk Factors with a cost value of $49 million failed at auctions due to the sudden and unusual deterioration in the global credit and capital markets, and have since experienced multiple failed auctions. Consequently, the funds associated with these investments will not be accessible until a successful auction occurs, a buyer is found outside of the auction process or the underlying securities have matured. The Company made provisions against these ARS of $10.35 million in the second half of 2008 and an additional $5.9 million in the first nine months of 2009, in each case following the deterioration of the underlying credit ratings of the collateral of certain of the ARS. The trading market for these instruments has become substantially illiquid as a result of unusual conditions in the credit markets. As these investments have been illiquid for more than twelve months and there is no certainty that they will become liquid within the next twelve months, the assets have been reclassified into the non-current section of available-for-sale financial assets to more accurately reflect their nature. Management estimates the fair value of these investments at each reporting period. Management applies a mark to model valuation method. Continued uncertainties in the credit and capital markets may result in additional impairment provisions, which could adversely impact the Company s financial condition, current asset position and reported earnings. Furthermore, there can be no assurance that the Company will be successful in its actions against the investment bank or the individual brokers that it has commenced The Company may not be able to recover certain funds from MDM Ferroman (Pty) Limited. In August 2004, the Company entered into a fixed lump sum turnkey contract for $63 million for the design, supply, construction and commissioning of the Loulo processing plant and infrastructure with MDM Ferroman (Pty) Ltd. At the end of 2005, after making advances and additional payments to MDM totalling $26 million in excess of the contract, the Company determined that MDM was unable to perform its obligations under the MDM contract, at which time the Company enforced a contractual remedy which allowed it to act as its own general contractor and to complete the remaining work on the Loulo project that was required under the MDM contract. The Company believes that it is entitled to recover certain amounts from MDM, including advances of $12.1 million (31 December 2007: $12.1 million) included in receivables as at 31 December Of this latter amount, $7.0 million is secured by performance bonds and the remainder is secured by various personal guarantees and other assets. In January 2009, the liquidator declared and paid the first dividend of $0.1 million from the insolvent estate, leaving an outstanding balance of $12.0 million as at 30 September As part of the Company s efforts to recoup the monies owed to it, MDM was put into liquidation on 1 February This resulted in a South African Companies Act Section 417 investigation into the business and financial activities of MDM, its affiliated companies and their directors. The investigation was completed and summons has been issued against those MDM creditors deemed as preferential creditors. These legal proceedings are continuing with pleadings having been closed and court dates been set in the South African courts. The Company s ability to recover in full the $12.0 million included in receivables is dependent on the amounts which can be recovered from the performance bonds, personal guarantees and other assets provided as security. Any shortfall is expected to be recovered from any free residue accruing to the insolvent estate. The aggregate amount which will ultimately be recovered cannot presently be determined. The financial statements do not reflect any additional provision that may be required if the $12.0 million cannot be recovered in full. The Company s results of operations may be adversely affected if the Company is unable to recover the amounts advanced by it to MDM. Any part of the $12.0 million included in accounts receivable which cannot in fact be recovered will need to be charged as an expense. The ultimate outcome of this claim cannot presently be determined and there is significant uncertainty surrounding the amount that will ultimately be recovered The Company may incur losses or lose opportunities for gains as a result of the Company s use of its derivative instruments to protect the Company against low gold prices. The Company uses derivative instruments to protect the selling price of some of its anticipated gold production at Loulo. The intended effect of the Company s derivative transactions is to lock in a fixed sale price for some of the Company s future gold production to provide some protection against a subsequent fall in gold prices. No such protection is in place for the Company s production at Morila. Derivative transactions can result in a reduction in revenue if the instrument price is less than the market price at the time the hedged sales are recognised. Moreover, the Company s decision to enter into a given instrument is based upon market assumptions. If these assumptions are not met, significant losses or lost opportunities for significant gains may result. In all, the use of these instruments may result in significant losses which will prevent the Company 18

19 PART II - Risk Factors from realising the positive impact of any subsequent increase in the price of gold on the portion of production covered by the instrument The Company s underground project at Loulo, developing two mines at Yalea and Gara, is subject to all of the risks associated with underground mining. Development of the underground mine at Yalea commenced in December 2006 and the first ore was mined in April These planned mines represent the Company s entry into the business of underground mining. In connection with the development of the underground mines, the Company must build the necessary infrastructure, the costs of which are substantial. The underground mines may experience unexpected problems and delays during their development and construction. Delays in the commencement of gold production could occur and the development costs could be larger than expected, which could affect the Company s results of operations and profitability. Since the commencement of the underground operations at Yalea, the Company has experienced a number of technical challenges, principally the availability of the underground fleet, the ability to drill and blast up holes, water control and ventilation. The development and operation of the underground mine will be negatively impacted should these issues continue. The business of underground mining by its nature involves significant risks and hazards. In particular, as the development commences the operation could be subject to: rockbursts; seismic events; underground fires; cave-ins or falls of ground; discharges of gases or toxic chemicals; flooding; accidents; and other conditions resulting from drilling, blasting and the removal of material from an underground mine. The Company is at risk of experiencing any and all of these hazards. The occurrence of any of these hazards could delay the development of the mine, production, increase cash operating costs and result in additional financial liability for the Company The Company s success may depend on its social and environmental performance. The Company s ability to operate successfully in communities will likely depend on its ability to develop, operate and close mines in a manner that is consistent with the health, safety and well being of the Company s employees, the protection of the environment, and the creation of long-term economic and social opportunities in the communities in which the Company operates. The Company seeks to promote improvements in health and safety, environmental performance and community relations. However, the Company s ability to operate could be adversely impacted by accidents or events detrimental (or perceived to be detrimental) to the health, safety and well being of the Company s employees, the environment or the communities in which it operates. In July 2009, the Loulo mine experienced some disruption, caused by a small group of disaffected people unable to secure long term employment at the mine. The disruption resulted in some damage to the tailings pipeline as well as to some accommodation units and other property. All operations were suspended for 36 hours, following which all mining and processing operations were restored and operating back at normal capacity. The Company cannot give assurances that similar events will not happen in the future, or that such events will not adversely affect the Company s results of operations and properties Actual cash costs of production, production results and economic returns may differ significantly from those anticipated by the Company s feasibility studies and scoping studies for new development projects, including Tongon. It can take a number of years from initial feasibility studies of a mining project until development is completed and, during that time, the economic feasibility of production may change. The economic feasibility of development projects is based on many factors, including the accuracy of estimated reserves, metallurgical recoveries, capital 19

20 PART II - Risk Factors and operating costs and future gold prices. The capital expenditures and time required to develop new mines or other projects are considerable, and changes in costs or construction schedules can affect project economics. Thus it is possible that actual costs and economic returns may differ materially from the Company s estimates. In addition, there are a number of uncertainties inherent in the development and construction of any new mine, including: the availability and timing of necessary environmental and governmental permits; the timing and cost necessary to construct mining and processing facilities, which can be considerable; the availability and cost of skilled labour, power, water and other materials; the accessibility of transportation and other infrastructure, particularly in remote locations; and the availability of funds required in the longer term to finance construction and development activities. At the Company s Tongon project in Côte d Ivoire, the board approved the development of the new mine based on the strength of a feasibility study. A final draft of the proposed mining convention has been submitted to Côte d Ivoire s Ministry of Mines and Energy and the Company expects to sign the convention during the fourth quarter of Construction of the mine commenced at the end of 2008 with first gold production scheduled for the fourth quarter of The Company cannot provide any assurance that the project will ultimately result in a new commercial mining operation, or that a new commercial mining operation will be successful The Company conducts mining, development and exploration activities in countries with developing economies and are subject to the risks of political and economic instability associated with these countries. The Company currently conducts mining, development and exploration activities in countries with developing economies. These countries and other emerging markets in which the Company may conduct operations have, from time to time, experienced economic or political instability. It is difficult to predict the future political, social and economic direction of the countries in which the Company operates, and the impact government decisions may have on the Company s business. Any political or economic instability in the countries in which the Company currently operates could have a material and adverse effect on the Company s business and results of operations. The countries of Mali, Senegal, Burkina Faso, DRC and Côte d Ivoire have, since independence, experienced some form of political upheaval with varying forms of changes of government taking place. Côte d Ivoire has experienced several years of political chaos, including an attempted coup d état. The political situation in that country is normalising and national elections are anticipated in the fourth quarter of Goods are supplied to the Company s operations in Mali through Ghana, Burkina Faso and Senegal, which routings have, to date, functioned satisfactorily. The Company s operations at Morila have been adversely affected by the higher transportation costs for diesel that now has to be delivered via Senegal. Any present or future policy changes in the countries in which the Company operates may in some way have a significant effect on its operations and interests. The mining laws of Mali, Côte d Ivoire, Senegal, Burkina Faso and DRC stipulate that, should an economic orebody be discovered on a property subject to an exploration permit, a permit that allows processing operations to be undertaken must be issued to the holder. Legislation in these countries currently provides for the relevant government to acquire a free ownership interest in any mining project. The requirements of the various governments as to the foreign ownership and control of mining companies may change in a manner which adversely affects the Company The Company is subject to varying degrees of political and economic uncertainties associated with operating in the DRC. The Company is subject to risks associated with operating Kibali in the DRC. Kibali is located in the north-east region of the DRC and is subject to various levels of political, economic and other risks and uncertainties associated with operating in the DRC. Some of these risks include political and economic instability, high rates of inflation, severely limited infrastructure, lack of law enforcement, labour unrest, and war and civil conflict. In addition, Kibali is subject to the risks inherent in operating in any foreign jurisdiction including changes in government policy, restrictions on foreign exchange, changes in taxation policies, and renegotiation or nullification of existing concessions, licenses, permits and contracts. 20

21 PART II - Risk Factors The DRC is an impoverished country with physical and institutional infrastructure that is in a debilitated condition. It is in transition from a largely state-controlled economy to one based on free market principles, and from a nondemocratic political system with a centralised ethnic power base to one based on more democratic principles. There can be no assurance that these changes will be effected or that the achievement of these objectives will not have material adverse consequences for Kibali. Any changes in mining or investment policies or shifts in political attitude in the DRC may adversely affect operations and/or profitability of Kibali. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. These changes may impact the profitability and viability of Kibali. Furthermore, Kibali is located in a remote area of the DRC, which lacks basic infrastructure, including sources of power, water, housing, food and transport. In order to develop any of the mineral interests, facilities and material necessary to support operations in the remote locations in which they are situated must be established. The remoteness of the mineral interests would affect the potential viability of mining operations, as the Company would also need to establish substantially greater sources of power, water, physical plant and transport infrastructure than are currently present in the area. Moreover, the north-east region of the DRC has undergone civil unrest and instability that could have an impact on political, social or economic conditions in the DRC generally. The impact of unrest and instability on political, social or economic conditions in the DRC could result in the impairment of the explorations, development and operations at Kibali Failure to integrate the Moto Acquisition and the Kibali Acquisition (once completed) may adversely affect the Group s results of operations or financial condition. The Moto Acquisition was completed on 15 October 2009, and the Company is currently integrating Moto into the Group s businesses. The integration of Moto involves a number of risks, including: the attention of the Group s management may be diverted away from other business concerns; there may be outstanding or unforeseen legal, regulatory, contractual, labour or other issues arising from the Moto Acquisition; and the Group may find it difficult to effectively assimilate the respective business and management cultures of the existing Group and Moto. If the Group fails to integrate the Moto Acquisition and the Kibali Acquisition on a timely and cost-effective basis, the higher than expected costs and other difficulties could have an adverse effect upon the results of operations or financial condition of the Group Under the Company s joint venture agreements with AngloGold, the Company jointly manages Morila Limited and Kibali Goldmines and any disputes with AngloGold over the management of Morila Limited or Kibali Goldmines could adversely affect the Company s business. The Company jointly controls Morila Limited and Kibali Goldmines with AngloGold under joint venture agreements. Since 15 February 2008, the Company has been responsible for the day-to-day operations of Morila, subject to the overall management control of the Morila Limited board. Substantially all major management decisions, including approval of a budget for Morila, must be approved by the Morila Limited board. The Company and AngloGold retain equal control over the board, with neither party holding a deciding vote. If a dispute arises between the Company and AngloGold with respect to the management of Morila Limited and the Company is unable to amicably resolve the dispute, the Company may have to participate in arbitration or other proceeding to resolve the dispute, which could materially and adversely affect its business. Under the Technical Services Agreement, Kibali Services Limited, a subsidiary of Jersey JVCo (a company that is jointly owned by Randgold and AngloGold), will be responsible for the day-to-day operations of Kibali. A number of major management decisions, including approval of a budget for Kibali, must be approved by the Kibali board. The Company and AngloGold retain equal control over the Kibali board, with neither party holding a deciding vote. If a dispute arises between the Company and AngloGold with respect to the management of Kibali and the 21

22 PART II - Risk Factors Company is unable to amicably resolve the dispute, the Company may have to participate in arbitration or other proceeding to resolve the dispute, which could materially and adversely affect its business The use of mining contractors at certain of the Company s operations may expose it to delays or suspensions in mining activities. Mining contractors are used at Loulo and Morila to mine and deliver ore to processing plants. These mining contractors rely on third-party vendors to supply them with required mining equipment, many of which have been adversely affected by the global economic slowdown. Consequently, at these mines, the Company does not own all of the mining equipment and may face disruption of operations and incur costs and liabilities in the event that any of the mining contractors at these mines, or any of the vendors that supply them, has financial difficulties, or should there be a dispute in renegotiating a mining contract, or a delay in replacing an existing contractor The Company may be required in the longer term to seek funding from the global credit and capital markets to develop its properties, and the recent weaknesses in those markets could adversely affect the Company s ability to obtain financing and capital resources required by the business. The Company requires substantial funding to develop its properties, and may be required to seek funding from the credit and capital markets to finance these activities. The Company s ability to obtain outside financing will depend upon the price of gold and the market s perception of its future price, and other factors outside of the Company s control. The Company may not be able to obtain funding in the longer term on acceptable terms when required, or at all. The credit and capital markets experienced significant deterioration in 2008 and 2009, including the failure of significant and established financial institutions in the US and abroad, and may continue to deteriorate in the future, all of which may, in the longer term, have an impact on the availability and terms of credit and capital required by the business. If uncertainties in these markets continue, or these markets deteriorate further, it could have a material adverse effect on the Company s ability to raise capital required in the longer term. Failure to raise capital in the longer term when needed or on reasonable terms may have a material adverse effect on the Company s business, financial condition and results of operations The Company may not pay dividends to shareholders in the near future. The Company paid its third dividend since 2007 to ordinary Shareholders in March It is the Company s policy to pay dividends if profits and funds are available for that purpose. Whether or not funds are available depends on a variety of factors, including capital expenditures. The Company cannot guarantee that dividends will be paid in the future If the Company is unable to attract and retain key personnel its business may be harmed. The Company s ability to bring additional mineral properties into production and explore its extensive portfolio of mineral rights will depend, in large part, upon the skills and efforts of a small group of management and technical personnel, including Mark Bristow, the Company s Chief Executive Officer. If the Company is not successful in retaining or attracting highly qualified individuals in key management positions its business may be harmed. The loss of any of the Company s key personnel could adversely impact the Company s ability to execute its business plan The Company s insurance coverage may prove inadequate to satisfy future claims against it. The Company may become subject to liabilities, including liabilities for pollution or other hazards, against which the Company has not insured adequately or at all, or cannot insure. The Company s insurance policies contain exclusions and limitations on coverage. The Company s current insurance policies provide worldwide indemnity of 50 million in relation to legal liability incurred as a result of death, injury, disease of persons and/or loss of or damage to property. Main exclusions under this insurance policy, which relates to the Company s industry, include war, nuclear risks, silicosis, asbestosis or other fibrosis of the lungs or diseases of the respiratory system with regard to employees, and gradual pollution. In addition, the Company s insurance policies may not continue to be available at economically acceptable premiums. As a result, in the future the Company s insurance coverage may not cover the extent of claims against it. 22

23 PART II - Risk Factors 1.24 It may be difficult to affect service of process and enforce legal judgments against the Company or its affiliates. The Company is incorporated in Jersey, Channel Islands and a majority of its directors and senior executives are not residents of the United States. Virtually all of the Company s assets and the assets of those persons are located outside the United States. As a result, it may not be possible to effect service of process within the United States upon those persons or the Company. Furthermore, the United States and Jersey currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, it may not be possible to enforce a final judgment for payment rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon United States federal securities laws against those persons or the Company. In order to enforce any judgment rendered by any federal or state court in the United States in Jersey, proceedings must be initiated by way of common law action before a court of competent jurisdiction in Jersey. The entry of an enforcement order by a court in Jersey is conditional upon the following: that the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognised by Jersey law with reference to the jurisdiction of the foreign courts; that the judgment is final and conclusive it cannot be altered by the courts which pronounced it; that there is payable pursuant to a judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty; that the judgment has not been prescribed; that the courts of the foreign country have jurisdiction in the circumstances of the case; that the judgment was not obtained by fraud; and that the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the rules of natural justice which require that documents in the United States proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal. Furthermore, it is doubtful whether an original action based on United States federal securities laws could be brought in a Jersey court. 2. Risks Relating to the Company s Industry 2.1 The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently unproductive. The Company must continually seek to replenish its ore reserves depleted by production to maintain production levels over the long term. Ore reserves can be replaced by expanding known ore bodies or exploring for new deposits. Exploration for gold is highly speculative in nature. The Company s future growth and profitability will depend, in part, on its ability to identify and acquire additional mineral rights, and on the costs and results of its continued exploration and development programs. Many exploration programs, including some of the Company s, do not result in the discovery of mineralisation and any mineralisation discovered may not be of sufficient quantity or quality to be profitably mined. The Company s mineral exploration rights may not contain commercially exploitable reserves of gold. Uncertainties as to the metallurgical recovery of any gold discovered may not warrant mining on the basis of available technology. The Company s operations are subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, such as: encountering unusual or unexpected formations; environmental pollution; personal injury and flooding; and decrease in reserves due to a lower gold price. If the Company discovers a viable deposit, it usually takes several years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production may change. 23

24 PART II - Risk Factors Moreover, the Company will use the evaluation work of professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit before it can be determined whether or not the deposit contains economically recoverable mineralisation. As a result of these uncertainties, the Company may not successfully acquire additional mineral rights, or identify new proven and probable reserves in sufficient quantities to justify commercial operations in any of its properties. If management determines that capitalised costs associated with any of the Company s gold interests are not likely to be recovered, the Company would recognise an impairment provision against the amounts capitalised for that interest. All of these factors may result in losses in relation to amounts spent which are found not to be recoverable. 2.2 Title to the Company s mineral properties may be challenged, which may prevent or severely curtail its use of the affected properties. Title to the Company s properties may be challenged or impugned, and title insurance is generally not available. Each sovereign state is the sole authority able to grant mineral property rights, and the Company s ability to ensure that it has obtained secure title to individual mineral properties or mining concessions may be severely constrained. The Company s mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, the Company may be unable to operate its properties as permitted or to enforce its rights with respect to its properties. 2.3 The Company s ability to obtain desirable mineral exploration projects in the future may be adversely affected by competition from other exploration companies. The Company competes with other mining companies in connection with the search for and acquisition of properties producing or possessing the potential to produce gold. Existing or future competition in the mining industry could materially and adversely affect the Company s prospects for mineral exploration and success in the future. 2.4 The Company s operations are subject to extensive governmental and environmental regulations, which could cause it to incur costs that adversely affect its results of operations. The Company s mining facilities and operations are subject to substantial government laws and regulations, concerning mine safety, land use and environmental protection. The Company must comply with requirements regarding exploration operations, public safety, employee health and safety, use of explosives, air quality, water pollution, noxious odour, noise and dust controls, reclamation, solid waste, hazardous waste and wildlife as well as laws protecting the rights of other property owners and the public. Any failure on the Company s part to be in compliance with these laws, regulations, and requirements with respect to its properties could result in the Company being subject to substantial penalties, fees and expenses, significant delays in its operations or even the complete shutdown of its operations. The Company provides for estimated environmental rehabilitation costs when the related environmental disturbance takes place. Estimates of rehabilitation costs are subject to revision as a result of future changes in regulations and cost estimates. The costs associated with compliance with government regulations may ultimately be material and adversely affect the Company s results of operations and financial condition. 2.5 If the Company s environmental and other governmental permits are not renewed or additional conditions are imposed on the Company s permits, its financial condition and results of operations may be adversely affected. Generally, compliance with environmental and other government regulations requires the Company to obtain permits issued by governmental agencies. Some permits require periodic renewal or review of their conditions. The Company cannot predict whether it will be able to renew these permits or whether material changes in permit conditions will be imposed. Non-renewal of a permit may cause the Company to discontinue the operations requiring the permit, and the imposition of additional conditions on a permit may cause the Company to incur additional compliance costs, either of which could have a material adverse effect on the Company s financial condition and results of operations. 24

25 PART II - Risk Factors 2.6 Labour disruptions could have an adverse effect on the Company s operating results and financial condition. The Company s operations in West Africa are highly unionised, and strikes are legal in the countries in which the Company operates. Therefore, the Company s operations are at risk of having work interrupted for indefinite periods due to industrial action, such as strikes by employee collectives. Should long disruptions take place on the Company s operations, the results from its operations and their financial condition could be materially and adversely affected. 2.7 AIDS poses risks to the Company in terms of productivity and costs. The incidence of AIDS in Mali, Côte d Ivoire and DRC, which has been forecast to increase over the next decade, poses risks to the Company in terms of potentially reduced productivity and increased medical and insurance costs. The exact extent to which the Company s workforce is infected is not known at present. The prevalence of AIDS in the countries in which the Company operates and among its workforce could become significant. Significant increases in the incidence of AIDS infection and AIDS-related diseases among members of the Company s workforce in the future could adversely impact the Company s operations and financial condition. 3. Risks Relating to Kibali and the Kibali Acquisition 3.1 Risk factors in common with the Group s business In view of the fact that the Company in conjunction with AngloGold already controls Kibali, the Company is already subject to the risks associated with Kibali and the DRC as disclosed in paragraphs 1 and 2 of this Part II. 3.2 Reduced stake in Kibali held by the Government On completion of the Kibali Acquisition, the Government stake in Kibali held through OKIMO will reduce from 30 per cent. to 10 per cent. The Government s support is important in developing Kibali. With a reduced stake in Kibali there is a risk that OKIMO and the Government will have a reduced interest in developing Kibali. 3.3 Kibali may not perform in line with the Group s expectations If the Kibali Acquisition completes and the results and cash flows generated by Kibali are not in line with the Group s expectations, a write-down may be required against the increased carrying value of its investment in Kibali. 25

26 PART III Financial Information on Moto Section A Audited financial information for the three years ended 31 December 2008 Consolidated Balance Sheets (Expressed in Australian dollars) Notes Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 ASSETS Current Assets Cash and cash equivalents... 62,336,081 26,122,662 54,689,744 Accounts receivables ,263 8,913, ,714 Inventories ,040 Prepaid expenses , ,619 62,565,344 35,133,860 55,351,117 Joint Venture Receivable ,667,085 Capital assets ,003,859 1,585,417 1,596,624 Mineral properties ,511, ,495, ,081,577 94,182, ,081, ,678, ,747, ,215, ,029,318 LIABILITIES Current Liabilities Accounts payable and accrued liabilities... 1,788,052 6,713,288 12,457,863 Loan due to former joint venture partner ,669,454 19,946,260 12,715,021 Consolidation payment due to Okimo ,334,727 4,562,564 5,432,657 20,792,233 31,222,112 30,605,541 Non Current Liabilities Loan due to former joint venture partner ,668,446 24,357,644 36,191,518 45,460,679 55,579,756 66,797,059 SHAREHOLDERS EQUITY Share Capital ,479, ,128, ,895,395 Warrants ,053,152 Contributed surplus ,043,193 20,143,699 23,112,412 Deficit... (38,288,602) (49,636,689) (63,775,548) 111,287, ,635, ,232, ,747, ,215, ,029,318 26

27 PART III - Financial Information on Moto Consolidated Statements of Operations, Comprehensive Loss and Deficit (Expressed in Australian dollars) Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Revenue... 2,821,931 2,371,071 1,324,385 Operating Expenses Employees and consultants... 1,677,718 3,350,351 6,636,527 Amortisation , , ,191 Occupancy , , ,807 Shareholder and listing costs , , ,685 Marketing and promotion , , ,293 Foreign exchange loss/(gain)... 3,407,406 (2,022,565) (3,216,704) Stock based compensation... 8,377,507 6,583,228 2,968,713 Interest ,036 2,974,833 3,075,140 Other , , ,434 Write off of mineral properties and capital assets ,065 3,005,158 16,250,751 13,722,158 15,463,244 Loss and comprehensive loss for the period... 13,428,820 11,351,087 14,138,859 Deficit beginning of period... 24,859,782 38,285,602 49,636,689 Deficit end of period... 38,288,602 49,636,689 63,775,548 Cents Cents Cents Basic loss per share Weighted number of shares outstanding ,649,524 62,574,386 83,303,673 27

28 PART III - Financial Information on Moto Consolidated Statements of Cash flows (Expressed in Australian dollars) Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Cash flows used in operating activities Loss for the year.... (13,428,820) (11,351,087) (14,138,859) Items not affecting cash: Amortisation , , ,191 Stock based compensation... 8,377,507 6,583,228 2,968,713 Foreign exchanges variances... (5,893,185) 6,328,513 Write-off of mineral properties ,488 3,005,158 Write-off of capital assets... 42,577 Interest accrued on loan to former joint venture partner ,036 2,974,833 2,968,337 Changes in non-cash working capital balances Inventory... (166,111) Prepayments... (151,130) Sundry receivables... (92,564) (6,457) (42,975) Accounts payable and accrued liabilities ,405 42,908 8,027,620 (4,232,786) (6,644,687) 9,629,457 Cash flows used in investing activities Expenditures on mineral properties... (23,732,532) (31,575,261) (47,424,424) Purchases of capital assets.... (845,831) (1,331,142) (972,888) (24,578,363) (32,906,403) (48,397,312) Cash flows provided by financing activities Proceeds from issuances of shares and warrants... 69,798,927 3,337,671 66,995,976 Share issue cost... (3,125,995) (3,467,627) 66,672,932 3,337,671 63,528,349 Net increase in cash and cash equivalents ,861,783 (36,213,419) 24,760,494 Exchange gain on holding foreign currencies... 3,806,588 Cash and cash equivalents beginning of period... 24,474,298 62,336,081 26,122,662 Cash and cash equivalents end of period... 62,336,081 26,122,662 54,689,744 The accompanying notes are an integral part of these consolidated financial statements. 28

29 PART III - Financial Information on Moto 1. Nature of Operations Notes to Consolidated Financial Statements (Expressed in Australian dollars, unless otherwise stated) Moto and its subsidiaries are engaged in the acquisition, exploration and development of mineral properties located in the Democratic Republic of Congo. The Company focuses its activities on Kibali located in the north-east of the DRC. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that exploration and development programs will result in profitable mining operations. The recoverability of the carrying value of mineral properties and the Company s continued existence is dependent upon the preservation of its interest in the underlying properties, the existence of economically recoverable mineralisation, the ability of the Company to raise additional financing to complete the exploration and the development of the mineral properties, the achievement of profitable operations or alternatively upon the Company s ability to dispose of its interest on an advantageous basis. These financial statements have been prepared in accordance with Canadian generally accepted accounting principles ( GAAP ) applicable to a going concern, which assume continuity of operations and realisation of assets and settlement of liabilities in the normal course of business. However, the Company is in the exploration and early development stage and is subject to risks and challenges similar to companies in a comparable stage of development. As a result of these circumstances, there is substantial doubt as to the appropriateness of the going concern assumption. There is no assurance that the Company s funding initiatives will continue to be successful and these financial statements do not reflect the adjustments to the carrying values that would be necessary were the going concern assumption inappropriate. These adjustments could be material. 2. Summary of Significant Accounting Policies These consolidated financial statements have been prepared in accordance with Canadian GAAP. Summarised below are the significant accounting policies used in the preparation of these consolidated financial statements. (a) Basis of consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company and their results for the period since the acquisition date. The effects of all transactions between entities in the consolidated group are eliminated in full (see note 13 for a list of subsidiaries and their domiciles). (b) Use of estimates The preparation of consolidated financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and report amounts of revenues and expenses during the reported period. Such estimates and assumptions affect the carrying value of assets, impact decisions as to when exploration and development costs should be capitalised or expensed, estimates for asset retirement obligations and reclamation costs and the methods and rates of amortisation and depletion. Other significant estimates made by the Company include factors affecting valuations of stock based compensation, warrants, inventory, mineral properties (including estimated reserves) and income tax accounts. The Company regularly reviews its estimates and assumptions, however, actual results could differ from these estimates and these differences could be material. (c) Reporting currency The functional currency of the Group is the Australian Dollar ( $ or A$ ). The Company s senior management and principal office operates in Australia. Accordingly, the Company has adopted the Australian Dollar as its reporting currency. (d) Foreign Currency Translation The monetary assets and liabilities of the Company that are denominated in foreign currencies are translated at the rate of exchange at the balance sheet date and non-monetary items are translated at historical rates. Revenues and 29

30 PART III - Financial Information on Moto expenses are translated at the average exchange rate for the year. Exchange gains and losses arising on translation are included in the statement of operations. The financial statements of the Company s subsidiaries outside Australia are translated using the temporal method. Under this method, monetary items are translated at the rate of exchange in effect at the balance sheet date, nonmonetary items are translated at historical rates and revenue and expense items are translated at the exchange rates prevailing when such items are recognised and are included in operations. Exchange gains and losses arising on translation are included in the statement of operations. (e) Revenue Recognition Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset. (f) Mineral Properties The Company defers the costs of exploration on existing projects and carries them as assets until production commences. The amount at which mineral properties and deferred exploration costs are recorded do not necessarily reflect present or future values. If a project is successful, the related mineral properties and deferred exploration costs will be amortised over the estimated economic life of the project. If a project is unsuccessful, or if exploration has ceased because continuation is not economically feasible, the mineral properties and deferred exploration costs are written off. (g) Capital Assets Equipment is recorded at cost less accumulated amortisation. Amortisation is provided using the straight-line method, at annual rates varying from 3 to 5 years. (h) Income Taxes The Company follows the liability method of accounting for income taxes. Under this method future tax liabilities and assets are recognised for the estimated tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax liabilities and assets are measured using enacted or substantively enacted tax rates. The effect on future tax liabilities and assets of a change in tax rates is recognised in the period that the change occurs. (i) Stock-Based Compensation and Other Stock-Based Payments The Company records director and employee stock-based compensation and warrant issuances using the fair value method. Under the fair value method, stock-based payments are measured at the fair value of the equity instruments issued and are amortised over the vesting period. The offset to stock-based compensation is recorded to contributed surplus. Contributed surplus is relieved of the fair value of these instruments and transferred to share capital when exercised by the holders. The Company uses the Black-Scholes option pricing model to determine the value of all issued options and warrants. Note 7(f) details the weighted average assumptions used with the Black-Scholes model for determining the value of the stock-based costs for the stock options and warrants issued in 2008 and (j) Cash and Cash Equivalents Cash and cash equivalents are comprised of cash on hand and interest bearing deposits that mature within 90 days from the date of acquisition. (k) Inventories Inventories, which are comprised of fuel for Kibali site equipment, is carried at its laid-down cost. (l) Asset Retirement Obligation As the Group currently has no projects under construction, there is no legal obligation requiring remediation. However, as the development of any project commences, senior management will assess whether an asset retirement obligation ( ARO ) liability will arise. At the point where such liability arises, the financial statement adjustment required will be to increase the project s property value and related ARO liability by the discounted 30

31 PART III - Financial Information on Moto value of the total liability. Once a property enters production, the Company will be required to record a charge to earnings each year to accrete the discounted ARO obligation amount to the final expected liability. (m) Impairment of Long-lived Assets Senior management periodically reviews the carrying value of mineral properties and deferred exploration costs to consider whether there are any conditions that may indicate impairment. Where estimates of future cash flows are available, a reduction in the carrying value is recorded to the extent the net book value of the investment exceeds the estimated fair value which is normally the discounted value of future cash flows. Where estimates of future cash flows are not available and where other conditions suggest impairment, management assesses if carrying value can be recovered and provides for impairment if so indicated, by reducing the carrying value of the property to its estimated fair value. (n) Loss per Share Basic loss per share has been calculated using the weighted average number of common shares outstanding during the year. Diluted loss per share has been calculated reflecting the issuances of warrants and assuming the full exercise of stock options. Diluted loss per share has not been presented as the factors referred to above are antidilutive. (o) Comprehensive Loss Section 1530 Comprehensive Income introduces the concept of comprehensive income to Canadian GAAP. Comprehensive income is the change in equity (net assets) of the Company during a reporting period from transactions and other events and circumstances from non-owner sources. It includes all changes to equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income is comprised of net income for the period and other comprehensive income. (p) Financial Instruments Recognition and Measurement The Company classifies all financial instruments as either held-to maturity, available-for-sale, held for trading or loans and receivables. Financial assets held to maturity, loans and receivables and financial liabilities over than those held for trading, are measured at amortised cost. Available-for-sale instruments are measured at fair value with unrealised gains and losses recognised in other comprehensive income. Instruments classified as held for trading are measured at fair value with unrealised gains and losses recognised in the statement of loss. The Company has classified its cash equivalents and other short-term investments as held for trading which are carried at fair value with unrealised gains and losses recorded in income. (q) Fair Value of Financial Instruments Canadian generally accepted accounting principles require that the Company disclose information about the fair value of its financial assets and liabilities. Fair value estimates are made at the balance sheet date, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The carrying amounts of cash and cash equivalents, amounts receivable, and accounts payable and accrued liabilities approximate their fair values since these instruments have short term maturity dates. (r) Hedging Section 3865 of the CICA Handbook specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. As at and for the year ended December 31, 2008, the Company had no hedges in place. (s) Changes in Accounting Policies Effective January 1, 2008, the Company adopted the following standards of the Canadian Institute of Chartered Accountants Handbook ( CICA ): (i) Section 1535 Capital disclosures 31

32 PART III - Financial Information on Moto This section establishes standards for disclosing information about an entity s capital and how it is managed. Under this standard, the Company is required to disclose quantitative and qualitative information about its objectives, policies and processes for managing capital. The Company has included disclosures recommended by the new Handbook section in note 16 to these consolidated financial statements. (ii) Section 3862 Financial instruments Disclosures and Section 3863 Financial Instruments Presentation These sections require entities to disclose quantitative and qualitative information that enables users to evaluate (i) the significance of financial instruments for the Company s financial performance, and (ii) the nature and extent of risks arising from financial instruments to which the Company is exposed during the period and at the balance sheet date, and management s objectives, policies and procedures for managing such risks. The Company is required to disclose the measurement bases used, and the criteria used to determine classification of financial instruments. The Company has included disclosures recommended by the new Handbook section in note 17 to these consolidated financial statements. (iii) Section 1400 General Standards on Financial Statement Presentation Effective January 1, 2008, the Company adopted CICA Section 1400, General Standards on Financial Statement Presentation, which was amended to include requirements to assess and disclose a company s ability to continue as a going concern. (t) Future Changes in Accounting Policies The CICA has issued new standards, which may affect the financial disclosures and results of operations of future reporting periods. A summary of these standards is as follows: (i) Goodwill and Intangible Assets Section 3064, Goodwill and intangible assets, establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets. Concurrent with the introduction of this standard, the CICAwithdrew EIC 27, Revenues and Expenses during the pre-operating period. As a result of the withdrawal of EIC 27, the Company will no longer be able to defer costs and revenues incurred prior to commercial production at new mine operations. The Company is required to adopt these changes effective for interim and annual periods beginning January 1, 2009 and will adopt the requirements commencing in the quarter ended March 31, The Company is considering the impact, if any; these changes will have on its consolidated financial statements. (ii) International Financial Reporting Standards ( IFRS ) In January 2006, the CICA s Accounting Standards Board ( AcSB ) formally adopted the strategy of replacing Canadian GAAP with IFRS for Canadian enterprises with public accountability ( PAEs ). The current conversion timetable calls for financial reporting under IFRS for accounting periods commencing on or after January 1, The use of IFRS will be required in 2011 for publicly accountable profit-oriented enterprises. For these entities, IFRS will be required for interim and annual financial statements relating to fiscal years beginning on or after January 1, The Company will be required to have prepared, in time for its first quarter 2011 filing, comparative financial statements in accordance with IFRS for the three months ended September 30, Accounts receivables Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Current Receivables: GST recoverable... 99,145 47,337 23,352 Accrued interest receivable... 84,821 47,555 76,805 Share subscription receivable from Company s Chairman... 8,775,481 Sundry receivables ,297 42, , ,263 8,913, ,714 32

33 PART III - Financial Information on Moto 4. Capital assets Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Accumulated Accumulated Accumulated Cost Amortisation Cost Amortisation Cost Amortisation $ $ $ $ $ $ Field equipment... 1,417,825 (922,413) 1,505,214 (1,214,484) Motor vehicles... 1,013,702 (601,728) 510,631 (108,854) 852,953 (337,584) Office equipment... 67,468 (9,506) 298,394 (98,013) 378,709 (206,692) Furniture and fixtures ,777 (74,178) 183,424 (35,588) 324,992 (118,438) Buildings ,888 (62,142) 489,281 (149,270) 489,281 (311,758) Capital works in progress.. 264,732 (10,154) 234,431 1,761,567 (757,708) 2,899,555 (1,314,138) 3,785,580 (2,188,956) Net book value.... 1,003,859 1,585,417 1,596, Mineral properties Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Mineral Properties Cost beginning of period... 3,210,024 3,210,024 3,210,024 Acquisition costs... Cost end of year... 3,210,024 3,210,024 3,210,024 License Consolidation & Renegotiation Cost beginning of year... 17,574,134 43,894,321 Expenditure incurred during the year... 17,574,134 26,320,187 34,291,153 Cost end of year... 17,574,134 43,894,321 78,185,474 Deferred Exploration Expenditures Cost beginning of year... 22,961,697 45,727,394 90,391,589 Expenditure incurred during the year... 22,765,697 44,919,682 34,299,648 Write-down of Deferred Exploration Expenditure.... (255,487) (3,005,158) Cost end of year... 45,727,394 90,391, ,686,079 Total end of year... 66,511, ,495, ,081,577 Represented by: Kibali... 66,256, ,495, ,081,577 Other projects ,487 66,511, ,495, ,081,577 Since the signing of the November 2006 Protocol, Moto has completed the purchase of Orgaman s 10 per cent. interest in Kibali. In July 2008, Moto announced that its wholly owned subsidiary, Kibali Goldmines, had entered into the Consolidated Lease with Okimo. The Consolidated Lease was registered with the DRC Mining Registry in early January On January 7, 2009 Moto announced that Kibali Goldmines had successfully concluded a series of meetings with Okimo, which were conducted in the presence of experts appointed by the DRC Minister of Mines. These meetings led to the partners entering into amendment agreements to reflect the agreed terms and to the registration of the Consolidated Lease with the DRC Mining Registry. The amendment agreements became effective following approval by the Okimo board and notification to the Umbrella Authorities. On March 13, 2009 Moto, its wholly owned subsidiary Border Energy Pty Ltd, Okimo and Kibali Goldmines entered into the Original JV Contact to regulate the conduct of the joint venture. The Original JV Contact was effective immediately as Okimo received the requisite approvals from its Umbrella Authorities prior to signing the agreements. The parties have also agreed to a transfer of the Exploitation Permits covering the Consolidated Perimeter to Kibali Goldmines. The transfer deeds required to transfer the Exploitation Permits to Kibali Goldmines have been signed and the parties are awaiting registration with the DRC Mining Registry. 33

34 PART III - Financial Information on Moto The signing of the amendment agreements and the Original JV Contract confirmed that Kibali Goldmines will be the joint venture company and that Moto had a 70 per cent. equity interest in Kibali and Okimo had a 30 per cent. non-dilutable equity interest. The Consolidated Lease, the amendment agreements and the Original JV Contract provide that: The Consolidated Lease amalgamates the various existing leases in respect of Kibali in favour of the Consolidated Lease issued to Kibali Goldmines. The Consolidated Lease confirms the area of Kibali at 1,836 km 2. All the exploration work carried out by the Moto Group falls within the Consolidated Perimeter; The Consolidated Lease has the same term as the Exploitation Permits. The Exploitation Permits have an initial term that expires in 2014/15 and are then subject to renewal in accordance with the DRC Mining Code, which permits multiple renewals for a duration of fifteen years; Pursuant to the Original JV Contract, until the commencement of commercial production at Kibali, Kibali Goldmines will continue paying Okimo a rent of US$350,000 per month. Kibali Goldmines is responsible for paying the surface rents payable by Okimo under the Exploitation Permits in respect of the Consolidated Perimeter of approximately US$1.1 million per year; Okimo has agreed that its contribution to the joint venture will include the transfer of those parts of the Exploitation Permits which relate to the Consolidated Perimeter to Kibali Goldmines for no additional payment. Upon completion of the transfer, Kibali Goldmines will hold title to the Consolidated Perimeter, and all resources within the Consolidated Perimeter, directly from the DRC State, rather than as currently by way of lease from Okimo. 6. Joint Venture Receivable Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Non-Current Receivable... 26,667,085 Joint Venture Receivable... 26,667,085 As noted in Note 5, Mineral Properties, under the November 2006 Protocol the Group assumed the OKIMO Loan. This transaction was initially accounted for at December 31, 2006, however, due to the uncertainties that existed at the time the transaction assumed that the principal amount of the loan, US$21,048,330, would remain a receivable due by Okimo. This resulted in the Joint Venture Receivable of $26,667,085 (US$21,048,330) being recorded as a non-current asset at December 31, Moto agreed to purchase Orgaman s 10 per cent. interest in Kibali on December 31, 2007 (which completed on January 31, 2008), and as part of that transaction formalised and signed a Loan Assumption Agreement for the OKIMO Loan. Under the assumption agreement the liability for the OKIMO Loan was to be transferred in due course to Moto, with the joint venture then responsible for the repayment of the principal amount (US$21,048,330). Upon consolidation with effect from 31 December 2009, the joint venture receivable payable to the parent entity, Moto Goldmines Limited, was eliminated as the joint venture entities (or the DRC entities) were then directly controlled by the group and are thus consolidated into the accounts of the consolidated group (see note 14). 7. Loan due to joint venture partner Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Current Liability: Loan due to joint venture partner (Okimo Loan) (i)... 12,669,454 11,406,411 12,715,021 Loan due to joint venture partner (Borgakim Loan)... 8,539,849 12,669,454 19,946,260 12,715,021 Non current liability: Loan due to joint venture partner (Okimo Loan) (i)... 24,668,446 24,357,644 36,191,518 24,668,446 24,357,644 36,191,518 (i) The Okimo Loan is a mixed currency loan including capitalised interest, incurs interest at 8 per cent. per annum and totals US$31,452,743 plus Euro 1,636,228 at December 31, 2008 (US$29,122,910 and Euro 1,515,026 at December 31, 2007; US$27,675,218 and Euro 1,402,802 at December 31, 2006). 34

35 PART III - Financial Information on Moto This arrangement has been formalised with Orgaman with the signing of the Loan Assumption Agreement as part of Moto s purchase of Orgaman s 10 per cent. interest in Kibali and its DRC subsidiaries. Payments to Orgaman in respect of the Okimo Loan will be in three tranches: (i) (ii) (iii) US$9.7 million and Euro 0.5 million within seven business days of the Tripartite Agreement becoming effective; US$9.7 million and Euro 0.5 million on the first anniversary of the Tripartite Agreement becoming effective; and the balance (including accrued interest) on the second anniversary of the Tripartite Agreement becoming effective. The Company has the ability to pay up to 50 per cent of each tranche in Common Shares, subject to receiving regulatory approval. The Company pledged 10 per cent. of its shares of Kibali Goldmines as security for this loan. The Company granted Orgaman the right to purchase, for no additional consideration, 100 per cent. of this subsidiary should Moto abandon all of its equity in Kibali. 8. Share capital (a) Authorised capital The Company is authorised to issue an unlimited number of Common Shares. (b) Movements in common share capital The following table shows movements in the share capital of the Company during the year: Number of shares $ Balance at December 31, ,902, ,479,418 Issued for cash: Placement of 2,717,874 shares at C$2.78 (i)... 2,717,874 8,775,482 Exercise of warrants ,228 3,314,071 Exercise of stock option... 21,455 23,599 Value of warrants and options exercised ,875 Balance at December 31, ,616, ,128,445 Issued for cash: Issue of Common Shares to Orgaman (ii)... 9,319,211 30,669,762 Issue of Common Shares Short Form Prospectus ( SFP ) (iii)... 11,000,000 50,925,926 Issue of Common Shares SFP Over Allotment Option (iv)... 1,650,000 7,638,889 Costs of Short Form Prospectus & Over Allotment (iii) & (iv)... (3,445,018) Costs of Share Form Prospectus & Over Allotment (iii) & (iv)... (22,609) Balance at December 31, ,585, ,895,395 (i) (ii) (iii) (iv) On December 31, 2007, a Placement of 2,717,874 shares was made to Moto s chairman, Sir Sam Jonah, at a price of C$2.78 per share. On January 30, 2008, the Company issued Orgaman 9,319,211 Common Shares in the Company to complete the purchase agreement for Orgaman s 10 per cent. interest in Kibali (see note 5). On April 9, 2008, the Company issued 11,000,000 Common Shares in the Company at C$4.35 per share. The shares were offered in Canada by way of a short-form prospectus and were part of a bought deal lead by a syndicate of underwriters. On April 17, 2008, the Company issued 1,650,000 Common Shares in the Company at C$4.35 per share. The shares were issued pursuant to an Over Allotment Option granted to the syndicate of underwriters. 35

36 PART III - Financial Information on Moto (c) Future issues of common shares On December 31, 2007 (as amended by a letter dated December 4, 2008), the Company entered into a consultancy agreement with GICC, a DRC-based consultancy group, under which GICC agreed to assist the Group in obtaining the Consolidated Lease and negotiating government approvals and consents to enable the development of Kibali. If such agreements and approvals are obtained by March 31, 2009, the Company will pay to GICC US$2 million within seven business days of successful completion of the agreed upon services plus issue to GICC 1,886,948 Common Shares less such number of Common Share as have a value equal to US$2 million. The value of these shares shall be based on the volume weighted average price of the Company s Common Shares on the TSX for the previous five trading days converted to United States dollars at the noon rate of exchange published by the Bank of Canada on the last day of the five-day period. If GICC achieves the objectives set out in the agreement and in the period prior to November 30, 2009 the price of the Company s Common Shares on the TSX exceeds C$11.92 or C$15.90, a further 628,982 Common Shares will be issued to GICC on each such share price level being exceeded as deferred compensation. If there is a change of control of Moto, certain of the shares will be required to be issued even if the conditions and thresholds have not been met, but the obligation to issue further shares shall lapse. It is expected that the relevant approvals will be obtained prior to March 31, 2009 and therefore the appropriate number of Common Shares to be issued on completion will be issued prior to the end of the month. The Company must issue a further 100,000 Common Shares for every 250,000 ounces of gold identified within the Agbarabo licence area, to a maximum of a further 800,000 Common Shares. (d) Warrants The following table summarises the movements in warrants. Number of warrants Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Weighted average exercise price Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Balance at beginning of period ,253,348 A$2.24 3,730,976 A$ ,000 A$8.74 Transactions during the period: Issued ,000 A$8.31 Exercised (9,928,974) A$1.78 (974,228) A$3.39 Expired (93,398) A$1.40 (2,256,748) A$3.62 Balance at end of period ,730,976 A$ ,000 A$ ,000 A$9.07 Exercisable at end of period ,730,976 A$ ,000 A$ ,000 A$9.07 At December 31, 2008 and December 31, 2007 a total of 500,000 warrants with an exercise price of C$7.65 and expiring on May 2, 2010 remained outstanding. (e) Stock Options The Company established a stock option plan to provide additional incentive to its directors, officers, employees and consultants in their effort on behalf of the Company in the conduct of its affairs. The maximum number of shares which may be issuable pursuant to options granted under the plan shall be a number equal to 15 per cent. of the number of issued and outstanding Common Shares from time to time. Under the terms of the plan, options vest as determined by the board of directors, are non-assignable and may be granted for a term not exceeding six years. The Company has also agreed to issue further stock options to Sam Jonah KBE on the basis that if the Company makes a material further issuance of shares, the Company will grant stock options at the prevailing market price expiring 6 years after grant such that the total number of stock options granted to Sam Jonah KBE from the date of his appointment is 5 per cent. of the total number of Common Shares issued by the Company. 36

37 PART III - Financial Information on Moto The following table summarises the movements in stock options: Number of Options Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Weighted- Average Exercise Price Number of Options Weighted- Average Exercise Price Number of Options Weighted- Average Exercise Price Balance at beginning of period.. 5,240,000 AS$2.73 7,181,455 AS$4.89 9,428,639 AS$4.77 Transactions during the period: Exercised... (21,455) AS$1.10 Expired/ Cancelled... (1,268,545) AS$1.15 (50,000) AS$8.97 Granted... 3,210,000 AS$7.21 2,268,639 AS$3.32 1,233,461 AS$5.70 Balance at end of period.... 7,181,455 AS$4.89 9,428,639 AS$ ,612,100 AS$4.97 Exercisable at end of period... 5,406,455 AS$4.15 8,678,639 AS$4.11 9,644,792 AS$4.92 The following table provides a summary of the weighted average exercise price and weighted average remaining contractual life for all outstanding options: At December 31, 2008 Price Ranges Weighted Ave. Exercise Price No. Options Weighted Ave. Remaining Contractual Life (years) C$2.60 C$ C$2.93 6,638, C$3.91 C$ C$5.29 2,048, C$5.91 C$ C$7.65 1,925, C$ ,612, (f) Stock Based Compensation Costs The following table summarises the weighted average assumptions used with the Black-Scholes valuation model for the determination of the stock-based compensation costs for the year ended December 31, 2008, 2007 and 2006: Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Number of options granted.... 3,210,000 2,268,639 1,233,461 Exercise price... C$6.64 C$3.12 C$4.86 Volatility... 60% 67% 68% Expected life (years) Risk free interest rate % 4.04% 3.28% Dividend yield.... Nil Nil Nil Weighted average grant-date fair value... C$1.90 C$1.69 C$ Contributed surplus Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Change in Contributed Surplus results from the following: Balance beginning of year... 5,823,781 12,043,193 20,143,699 Transfer from warrant reserve... 1,530,687 Warrants and options exercised... (2,158,095) (13,409) Stock based compensation... 8,377,507 6,583,228 2,968,713 Balance end of year... 12,043,193 20,143,699 23,112,412 37

38 PART III - Financial Information on Moto 10. Warrants Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Change in Warrants results from the following: Balance beginning of year.... 3,043,065 2,053,152 Transfer to share capital on exercise of warrants... (989,913) (522,465) Transfer to contributed surplus (expired warrants)... (1,530,687) Balance end of period... 2,053, Segment reporting During the period the Company operated predominantly in the mining and exploration sector in the Democratic Republic of Congo. Financial information by geographic area is as follows: Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ Revenues: Canada ,324 DRC... 14,191 Australia... 2,821,931 2,371, ,870 2,821,931 2,371,071 1,324,385 Net loss (profit) Canada ,379,592 8,667,654 (2,287,190) Australia... 2,384,103 1,997,617 8,974,056 DRC , ,475 7,325,581 South Africa , , ,412 13,428,820 11,351,087 14,138,859 Capital Assets written down value Australia... 39, , ,188 DRC ,557 1,333,234 1,447,436 South Africa ,483 1,003,859 1,585,417 1,596,624 Non-cash items, other than amortisation, charged to net loss in the year: Write-off of mineral properties Australia ,488 DRC... 3,005,158 Write-off capital assets... South Africa , Related party transactions During the year, the Company entered into the following transactions with related parties: (a) Paid or accrued $1,421,329 (2007: $1,649,271, 2006: $504,244) for administrative expenses and $288,756 (2007: $369,635, 2006: $678,862) for deferred exploration expenditures in consulting fees & salaries to directors or companies controlled by directors and officers of the Company. (b) Paid or accrued $nil (2007: $6,250, 2006: $60,000) for accounting and general administrative services and $nil (2007:$28,340, 2006: $23,829) for office rental to companies in which directors and officers of the Company had beneficial interests. 38

39 PART III - Financial Information on Moto (c) On December 31, 2007, a placement of 2,717,874 shares was made to the Company s Chairman. The shares were issued at a price of C$2.78 As at December 31, 2008 there were related party balances in the amount of $nil (2007: $nil, 2006: $13,530) included in accounts payable, and $nil (2007:$8,775,481, 2006: $nil) in accounts receivable. The accounts receivable balance relates to the subscription receivable from the Company s Chairman. 13. Income taxes Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 $ $ $ (a) Income tax benefit Prima facie income tax benefit calculated at statutory rates on the loss for the year.... (4,743,620) (3,870,721) (4,821,351) Decrease in income tax benefit due to: Future income benefit not brought to account.... 1,685,830 1,625,840 3,809,020 Non-deductible stock based compensation ,057,790 2,244,881 1,012,331 Income tax benefit attributable to loss for the year... (b) Future income tax assets The potential future income tax benefits arising from tax losses and temporary differences have not been recognised as an asset... 7,281,830 8,907,670 12,716, Subsidiary companies Particulars in relation to subsidiary companies are as follows: Name (Country of Incorporation) Interest % Parent Entity: Moto Goldmines Limited (Canada) Subsidiary companies: Moto Goldmines Australia Limited (Australia) Westmount Resources NL (Australia) Border Energy Pty Ltd (Australia) Border Energy East Africa Pty Ltd (Uganda) Borgakim Mining s.p.r.l. (DRC) Rambi Mining s.p.r.l. (DRC) Amani Gold s.p.r.l. (DRC) Kibali Gold s.p.r.l. (DRC) Gorumbwa Mining s.p.r.l. (DRC) Blue Rose s.p.r.l. (DRC) Tangold s.p.r.l. (DRC) On December 31, 2007 the Company finalised an agreement with Orgaman, which held shares in each of the DRC subsidiaries, to purchase these shares. This transaction was completed on January 31, 2008 and as a result on that date the shareholding of the Company increased from 80 per cent. to 100 per cent.. Refer to note 15 below for further details of the transaction. 15. Contingent asset The Company has an indirect and non-controlling contingent interest in Kilo Goldmines Inc. ( Kilo ), a private Ontario company with exploration interests in the DRC. The Company s contingent interest in Kilo arose from an agreement entered into in November 2006 to transfer the Company s rights and obligations to several mineral projects in the north east of the DRC (the West Kilo Project ) to Kilo. These projects were for properties outside of Kibali and were previously written off from the Company s books. The agreement provides that The Company will receive common shares of Kilo upon Kilo completing a Going Public Transaction on the TSX Venture Exchange, whether by an initial public offering, reverse takeover or other similar transaction. The percentage to be received is currently being negotiated with Kilo. 39

40 PART III - Financial Information on Moto The Company has the right to obtain 10 per cent. of the West Kilo Project upon paying US$5 million upon completion of a bankable feasibility study and if there are measured resources on the West Kilo Project of at least two million ounces. The Company has the right to nominate one person for appointment or election to the Board of Directors of Kilo. At the date of this report, the Company is unable to determine a suitable value for its contingent interest in Kilo. 16. Events subsequent to balance sheet date The partners have recently signed the Original JV Contract which reflects the agreements that had been previously reached. Moto will capitalise approximately US$10 million of existing shareholder loans made to Kibali Goldmines by Moto through an issue of shares to the shareholders pro-rata to their proposed shareholdings of 70 per cent. and 30 per cent. in favour of Moto and Okimo, respectively. The balance of the existing shareholder loans to Kibali Goldmines as well as future shareholder loans will be retained on the books of Kibali Goldmines and shall carry market rate interest. The market rate will be set at the rate charged on external financings to Kibali Goldmines during the period when such loans are in place or otherwise 8 per cent. per annum. These loans will be repayable in preference to the payment of dividends to shareholders, but after paying to Okimo the monthly cash flow referred to below. As agreed during the review meetings, the Original JV Contract provides for confirmation of the social and community benefits of Kibali and effective participation of Okimo in the management of Kibali Goldmines. The board of directors of Kibali Goldmines will consist of five members, two of whom will be appointed by Okimo and three by Moto, and the chairman of the board will be appointed annually on a rotating basis, with Okimo appointing the first chairman. Daily management of Kibali Goldmines will be delegated to the executive management. There will be an executive committee composed of a maximum of five members. Moto shall recommend persons for the positions of general manager/chief executive officer, chief financial officers and chief operating officer. Okimo shall recommend persons for the positions of deputy chief executive officer, corporate and social responsibility officer. Certain matters (principally amendments to the articles, issues of shares, entering into contracts otherwise than on an arms length basis and changing the description of social projects to be performed in respect of local communities) require the approval of both shareholders. Once the transfer of the Exploitation Permits covering the Consolidated Perimeter is registered in the name of Kibali Goldmines with the DRC Mining Registry the Consolidated Lease will terminate and the pas de porte of US$4.5 million will be payable, in part to Okimo and in part to the DRC State. Pursuant to the Restated JV Contract, until the commencement of commercial production at Kibali, Kibali Goldmines will continue paying Okimo a rent of US$350,000 per month. Kibali Goldmines has also agreed to make the following additional loans to Okimo to assist it financially: (a) (b) Loans totalling some US$7.0 million in accordance with the Revised ATF Contract (described below), to assist Okimo to redevelop its mining production, which are expected to be advanced over a two year period; and A loan of up to US$3.0 million (of which an advance of US$200,000 has already been paid) to help Okimo pay arrears due to Okimo employees, including termination payments due to former employees, following independent review to verify the applicable amounts. Funding for Kibali Goldmines will be provided by Moto or one of its subsidiary companies to the extent third party financing is not directly available to Kibali Goldmines. Okimo is not obliged to pledge its shares to secure any financing nor will Kibali Goldmines be permitted to allow a charge of the Exploitation Permits. Unless terminated by mutual agreement, the Restated JV Contract will continue for so long as the Exploitation Permits are held by Kibali Goldmines and shall only be terminable on the non-payment of the rentals or advances due to Okimo, royalties, surface rights and other amounts due under the DRC Mining Code and certain limited insolvency events.. 40

41 PART III - Financial Information on Moto 17. Capital Management The Company s current structure is comprised of shareholder s equity, short and long-term debt and working capital. The Company s objectives when managing its capital is to maintain a conservative capital structure which will allow the Company to both fund its exploration and development programs and provide financial flexibility to execute on any strategic opportunities. Achieving this objective requires management to consider the underlying nature of exploration and development activities, availability of capital, the cost of various capital alternatives and other factors. The Company manages its capital structure and makes adjustments according to market conditions to maintain flexibility while achieving the objectives stated above. To manage the capital structures, the Company may adjust capital spending, issue new shares, issue new debt or repay existing debt. There was no change to the Company s approach to capital management during the period. The Company s capital under management includes share capital of $233,895,395 (December 31, 2007: $148,128,445). Changes in the capital components of shareholders equity resulted from the issue of common shares through a private placement and by way of a short-form prospectus that was part of a bought deal lead by a syndicate of underwriters. In addition, the Company has a short-term loan due to its former joint venture partner, Orgaman, of $12,715,021 (December 31, 2007: $19,946,260) and a long-term loan due to Orgaman of $36,191,518 (December 31, 2007: $24,357,644). Changes in the short-term loan to Orgaman are the result of the repayment of US$7,486,886 ($8,539,849) in January Other changes to the short-term loan reflect foreign exchange movements resulting from the translation of the loan that is denominated in a mixture of US dollar and the Euro to the Australian dollar. Changes in the long-term loan to Orgaman are the result of the accrual of interest at 8 per cent. per annum and the foreign exchange movements as previously mentioned. 18. Financial Risk Factors The Company s risk exposures and the impact on the Company s financial instruments are summarised below: (a) (b) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company actively manages its liquidity risk through cash, debt and equity management strategies. Such strategies include continuously monitoring forecasted and actual cash flows from operating, financing and investing activities, and opportunities to issue additional Company shares or other forms of equity. Credit Risk Credit risk is the risk of financial loss to the Company is a partner or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments which potentially subject the Company to concentrations of credit risk consist only of cash equivalents. The cash equivalents consist mainly of shortterm money market deposits. The Company has deposited the cash equivalents with reputable financial institutions, from which management believes the risk of loss to be remote. (c) Interest Rate Risk The Company is not exposed to interest rate risk on its debt as interest on the loans its former joint venture partner, Orgaman is fixed at a rate of 8.0 per cent. per annum. As such it does not currently hold any financial instruments that mitigate this risk. The Company maintains its cash equivalents in short-term money market deposits that are highly liquid and short-term in nature. As such the Company is subject to fluctuations in variable market interest rates, however these fluctuations do not have a significant impact on estimated fair values as of December 31, Future cash flows from interest income on cash and cash equivalents will be affected by interest rate fluctuations. The Company manages interest rate risk by focusing primarily on the preservation of capital and liquidity. For the twelve month period to December 31, 2008, the Company recorded interest revenue of $1,324,385 (2007: $2,371,071). 41

42 PART III - Financial Information on Moto (d) Foreign Currency Risk The Company operates internationally and is exposed to risks from changes in foreign currency rates. The functional currency of the Company is Australian dollars, consequently fluctuations of the Australian dollar against other currencies, primarily the US dollar, Canadian dollar and the Euro impact the fair value of financial assets and liabilities and on operating results. Financial assets and liabilities subject to currency translation risk primarily include US dollar and Canadian dollar denominated cash and cash equivalents, accrued liabilities in US dollars and the short-term and long-term loans due to its former joint venture partner, Orgaman that has a mixed currency denomination of the US dollar and Euro. For the twelve month period to December 31, 2008, the Company had recorded foreign exchange gains on the translation of cash and cash equivalents of $3,806,588, and foreign exchange losses on the translation of the short-term and long-term loans due to Orgaman of $2,502,620. (e) Commodity Price Risk The Company s future profitability and viability of development depends upon the world market price for gold. Gold has fluctuated widely in recent years. There is no assurance that, even as commercial quantities of gold may be produced in the future, a profitable market will exist for them. A decline in the market price of gold may also require the Company to reduce the carrying values of its mineral properties, which could have a material and adverse effect on the Company s value. As of December 31, 2008, the Company is not a gold producer. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. This may also affect the Company s liquidity and its ability to meet its ongoing obligations. (f) Mineral Property Risk The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that planned exploration and development programs will result in profitable mining operations. The recoverability of amounts shown for mineral exploration properties is dependant upon completion of the acquisition of the mineral property interests, the discovery of economically recoverable reserves, confirmation of the Company s interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development and future profitable production. Changes in future conditions could require material write downs of the carrying values of a mineral property. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it is acquiring an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company s title. Property title may be subject to unregistered prior agreements, non-compliance with regulatory requirements, the risk of foreign investment, increases in taxes and royalties, renegotiation of contracts, currency exchange fluctuations and political uncertainty. (g) Sensitivity Analysis The sensitivity analysis shown in the notes below may differ materially from actual results. (i) (ii) (iii) Interest rate risk on cash equivalents is minimal as these have fixed interest rates. The Company s short-term investments consist of short-term guaranteed deposits and equity investments listed on Canadian exchanges. All amounts are denominated in Canadian dollars. Interest rate risk on shortterm guaranteed deposits is minimal as these have fixed interest rates. Financial instruments denominated in US and Canadian dollars are subject to foreign currency risk. As at December 31, 2008, had the US and Canadian dollar weakened/strengthened by 10 per cent. against the Australian dollar with all other variables held constant, the Company s loss for the year ended December 31, 2008 would have been approximately $979,406 higher/lower as a result of foreign exchange losses/gains on translation of non-australian dollar denominated financial instruments. Shareholders equity would have been approximately $979,406 lower/higher had the US and Canadian dollar weakened/strengthened by 10 per cent. as a result of foreign exchange losses/gains on translation of non-australian dollar denominated financial instruments. 42

43 PART III - Financial Information on Moto Section B Unaudited financial information for the six months ended 30 June 2009 Consolidated Balance Sheets (Unaudited) (Expressed in Australian dollars) Jun Dec 31, 2008 Assets Current Assets Cash and cash equivalents... 55,320,690 54,689,744 Sundry receivables & prepayments , ,333 Inventories , ,040 55,827,791 55,351,117 Investment in Kilo Goldmines Limited (note 4)... 3,292,279 Loan receivable from Okimo (note 5)... 3,603,130 Capital assets (note 6).... 1,290,886 1,596,624 Mineral properties (note 7) ,316, ,081,577 $ 297,331,072 $260,029,318 Liabilities and Shareholders Equity Current Liabilities Accounts payable and accrued liabilities... 3,561,338 12,457,863 Loan due to Orgaman under Assignment Agreement with Orgaman (note 8)... 12,430,000 12,715,021 Consolidation payment due to Okimo... 5,432,657 15,991,338 30,605,541 Non Current Liabilities Loan due to Orgaman under Assignment Agreement with Orgaman (note 8)... 18,747,835 39,191,518 Non-controlling interests (note 11)... 52,458,472 71,206,307 36,191,518 Shareholders Equity Share capital (note 9) ,042, ,895,395 Contributed surplus (note 10)... 24,517,912 23,112,412 Deficit... (120,667,339) (63,775,548) Accumulated comprehensive income , ,133, ,232,259 $ 297,331,072 $260,029,318 The accompanying notes are an integral part of these consolidated financial statements. 43

44 PART III - Financial Information on Moto Consolidated Statement of Operations and Deficit (Unaudited) (Expressed in Australian Dollars) Jun Jun 30, 2008 Revenue , ,562 Other Income (note 3)... 3,155,043 Operating Expenses Employees and consultants... 5,810,186 1,806,053 Amortisation , ,217 Occupancy , ,013 Shareholder and listing Costs , ,608 Marketing and promotion , ,305 Stock based compensation... 1,460,740 1,126,205 Interest... 1,889,524 1,459,830 Foreign exchange loss/ (gain)... 1,399,595 (387,904) Other expenses , ,418 Net loss before non-controlling interest, dilution loss and taxes... 8,902,171 4,938,183 Non-controlling interest (note 11)... (1,353,864) Dilution loss (note 11)... 49,456,648 Net loss before taxes... 57,004,955 4,938,183 Future income tax recoveries (note 4)... (113,164) Net loss for the period ,891,791 4,938,183 Deficit beginning of period ,775,548 49,636,688 Deficit end of period.... $120,667,339 $54,574,871 Basic loss per share Net Loss... $ (0.5941) $ (0.0625) Comprehensive Loss.... $ (0.5916) $ (0.0625) The accompanying notes are an integral part of these consolidated financial statements. 44

45 PART III - Financial Information on Moto Consolidated Statement of Comprehensive Income (Loss) and Accumulated Comprehensive Income (Unaudited) (Expressed in Australian Dollars) Jun 30, 2009 Jun 30, 2008 Net loss... 56,891,791 4,938,183 Other comprehensive (income): Unrealised gain on available-for-sale Securities... (240,475) Total comprehensive loss... 56,651,316 4,938,183 Jun Jun 30, 2008 Accumulated unrealised gain on available-for-sale Securities (note 4)... (240,475) Accumulated comprehensive (income)... (240,475) The accompanying notes are an integral part of these consolidated financial statements. 45

46 PART III - Financial Information on Moto Consolidated Statement of Cash flows (unaudited) (Expressed in Australian Dollars) Jun Jun 30, 2008 Cash flows in operating activities Loss for the period... (56,891,791) (4,938,183) Items not affecting cash: Stock based compensation.... 1,460,740 1,126,205 Amortisation , ,217 Write-off mineral properties and capital assets... 2,988 Foreign exchange variances... (2,097,621) (3,038,803) Interest accrued on joint venture loan... 1,889,524 1,360,766 Non-controlling interest..... (1,353,864) Dilution loss ,456,648 Initial gain on investment in Kilo Goldmines... (3,155,043) Future income tax recoveries.... (113,164) Changes in non-cash working capital balances (Decrease) in inventories..... (73,835) (Increase)/decrease in sundry receivables... 17,544 (130,666) Increase/(decrease) in accounts payable and accrued liabilities ,411 (128,106) (9,622,080) (5,384,570) Cash flows used in investing activities Expenditures on mineral properties... (31,786,413) (443,097) Purchases of capital assets..... (249,645) (24,374,820) Consolidation payment to Okimo... (5,432,657) Advances made to Okimo under revised Technical and Financial Assistance Contract and other arrangements... (4,789,256) (42,257,971) (24,817,917) Cash flows from financing activities Issue of common shares and warrants for cash (net of issue costs)... 62,662,757 63,895,279 Proceeds from exercise of unlisted Moto stock option ,238 Repayments to Orgaman under Assignment Agreement... (6,214,963) 56,609,032 63,895,279 Exchange loss on holding foreign currencies... (4,098,035) Net increase in cash and cash equivalents ,946 33,692,792 Cash and cash equivalents beginning of period... 54,689,744 26,122,662 Cash and cash equivalents end of period.... $ 55,320,690 $ 59,815,454 The accompanying notes are an integral part of these consolidated financial statements. 46

47 PART III - Financial Information on Moto Notes to Consolidated Financial Statements (unaudited) (Expressed in Australian Dollars, unless otherwise stated) Six months ended June 30, Basis of presentation of interim financial report Moto and its subsidiaries are engaged in the acquisition, exploration and development of mineral properties in the Democratic Republic of Congo. Moto focuses its activities on Kibali located in the north-east of the DRC. The unaudited interim consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles ( GAAP ). The preparation of financial data is based on accounting policies and practices consistent with those used in the preparation of the audited annual consolidated financial statements. The accompanying unaudited consolidated financial statements should be read in conjunction with the Notes to the Company s audited consolidated financial statements for the year ended December 31, 2008, since they do not contain all disclosures required by the Canadian GAAP for annual financial statements. These unaudited interim consolidated financial statements relect all normal recurring adjustments, which are in the opinion of management necessary for a fair presentation of the respective interim periods presented. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that exploration and development programs will result in profitable mining operations. The recoverability of the carrying value of mineral properties and the Company s continued existence is dependant upon the preservation of its interests in the underlying properties, the existence of economically recoverable mineralisation, the ability of the Company to raise additional financing to complete the exploration and the development of the mineral properties, the achievement of profitable operations or alternatively upon the Company s ability to dispose of its interest on an advantageous basis. The financial statements have been prepared using Canadian GAAP applicable to a going concern, which assumes continuity of operations and realisation of assets and settlement of liabilities in the normal course of business. However, the Company is in the exploration and early development stage and is subject to risks and challenges similar to companies in a comparable stage of development. As a result of these circumstances there is substantial doubt as to the appropriateness of the going concern assumption. There is no assurance that the Company s funding initiatives will continue to be successful and these financial statements do not reflect the adjustments to the carrying value of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material. 2. Summary of Significant Accounting Policies These consolidated financial statements have been prepared in accordance with Canadian GAAP. Summarised below are the significant accounting policies used in the preparation of these consolidated financial statements. (a) Basis of consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company and their results for the period since the acquisition date. The effects of all transactions between entities in the consolidated group are eliminated in full. (b) Use of Estimates The preparation of consolidated financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and report amounts of revenues and expenses during the reported period. Such estimates and assumptions affect the carrying value of assets, impact decisions as to when exploration and development costs should be capitalised or expensed, estimates for asset retirement obligations and reclamation costs and the methods and rates of amortisation and depletion. Other significant estimates made by the Company include factors affecting valuations of stock based compensation, warrants, inventory, mineral properties (including estimated reserves) and income tax accounts. The Company regularly reviews its estimates and assumptions, however, actual results could differ from these estimates and these differences could be material. 47

48 PART III - Financial Information on Moto (c) Reporting currency The functional currency of the Group is the Australian Dollar ( $ or A$ ). The Company s senior management and principal office operates in Australia. Accordingly, the company has adopted the Australian Dollar as its reporting currency. (d) Foreign Currency Translation The monetary assets and liabilities of the Company that are denominated in foreign currencies are translated at the rate of exchange at the balance sheet date and non-monetary items are translated at historical rates. Revenues and expenses are translated at the average exchange rate for the year. Exchange gains and losses arising on translation are included in the statement of operations. The financial statements of the Company s subsidiaries outside of Australia are translated using the temporal method. Under this method, monetary items are translated at the rate of exchange in effect at the balance sheet date, non-monetary items are translated at historical rates and revenue and expense items are translated at the exchange rates prevailing when such items are recognised and are included in operations. Exchange gains and losses arising on translation are included in the statement of operations. (e) Revenue Recognition Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset. (f) Mineral Properties The Company defers the costs of exploration on existing projects and carries them as assets until production commences. The amount at which mineral properties and deferred exploration costs are recorded do not necessarily reflect present or future values. If a project is successful, the related mineral properties and deferred exploration costs will be amortised over the estimated economic life of the project. If a project is unsuccessful, or if explorations has ceased because continuation is not economically feasible, the mineral properties and deferred exploration costs are written off. (g) Capital Assets Equipment is recorded at cost less accumulated amortisation. Amortisation is provided using the straight-line method, at annual rates varying from 3 to 5 years. (h) Income tax The Company follows the liability method of accounting for income taxes. Under this method future tax liabilities and assets are recognised for the estimated tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax liabilities and assets are measured using enacted or substantively enacted tax rates. The effect on future tax liabilities and assets of a change in tax rates is recognised in the period that the change occurs. (i) Stock-Based Compensation and Other Stock-Based Payments The Company records director and employee stock-based compensation and warrant issuances using the fair value method. Under the fair value method, stock-based payments are measured at the fair value of the equity instruments and are amortised over the vesting period. The offset to stock-based compensation is recorded to contributed surplus. Contributed surplus is relieved of the fair value of these instruments and transferred to share capital when exercised by the holders. The Company uses the Black-Scholes option pricing model to determine the value of all issued options and warrants. (j) Cash and Cash Equivalents Cash and cash equivalents are comprised of cash on hand and interest bearing deposits that mature within 90 days from the date of acquisition. 48

49 PART III - Financial Information on Moto (k) Inventories Inventories, which are comprised of fuel for Kibali site equipment, is carried at its laid-down cost. (l) Asset Retirement Obligation As the Group currently has no projects under construction, there is no legal obligation requiring remediation. However, as the development of any project commences, senior management will assess whether an asset retirement obligation ( ARO ) liability will arise. At the point where such liability arises, the financial statement adjustment required will be to increase the project s property value and related ARO liability by the discounted value of the total liability. Once a property enters production, the Company will be required to record a charge to earnings each year to accrete the discounted ARO obligation amount to the final expected liability. (m) Impairment of Long-Lived Assets Senior management periodically reviews the carrying value of mineral properties and deferred exploration costs to consider whether there are any conditions that may indicate impairment. Where estimates of future cash flows are available, a reduction in the carrying value is recorded to the extent the net book value of the investment exceeds the estimated fair value which is normally the discounted value of future cash flows. Where estimates of future cash flows are not available and where other conditions suggest impairment, management assesses if carrying value can be recovered and provides for impairment if so indicated, by reducing the carrying value of the property to its estimated fair value. (n) Loss per share Basic loss per share has been calculated using the weighted average number of common shares outstanding during the year. Diluted loss per share has been calculated reflecting the issuances of warrants and assuming the full exercise of stock options. Diluted loss per share has not been presented as the factors referred to above are antidilutive. (o) Comprehensive Loss Section 1530 Comprehensive Income introduces the concept of comprehensive income to Canadian GAAP. Comprehensive income is the change in equity (net assets) of the Company during a reporting period from transactions and other events and circumstances from non-owner sources. It includes all changes to equity during a period except those resulting from investments by owners and distributions to owners. Comprehensive income is comprised of net income for the period and other comprehensive income. (p) Financial Instruments All financial instruments are classified into one of the following five categories: held-for-trading, held-to-maturity, loans and receivables, available for sale financial assets or other financial liabilities. All financial instruments, including derivatives, are measured in the balance sheet at fair value except for loans and receivables, held to maturity investments and other financial liabilities which are measured at amortised cost using the effective interest method. Subsequent measurement and changes in fair value will depend on their initial classification, as follows: held-for-trading financial assets are measured at fair value and changes in fair value are recognised in the statement of operations in the period in which they arise; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is de-recognised or impaired at which time the amounts would be recorded in the statement of operations. Fair value estimates are made at the balance sheet date, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumption could significantly affect these estimates. 49

50 PART III - Financial Information on Moto The Company has made the following classifications: Cash Sundry receivables Investment in Kilo Goldmines Limited Loan receivable from Okimo Accounts payable and accrued liabilities Loan due to Orgaman Held for trading Loans and Receivables Available-for-sale Loans and receivables Other liabilities Other liabilities Transaction costs are expensed as incurred for financial instruments classified as held for trading. For other financial instruments, transaction costs are expensed on initial recognition. The Company accounts for regular purchases and sales of financial assets using trade date accounting. The investment in Kilo Goldmines Limited is marked-to-market at each reporting period date. Movements in the market value are recognised in the Statement of Comprehensive Income, net of future income taxes, whilst exchange gains and losses resulting from the investment are recognised within the Statement of Operations. (q) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. They are initially recognised at fair value and subsequently measured at amortised cost less allowance for uncollectible amounts. Collectability and impairment are assessed on a regular basis. The loan receivable from Okimo is recorded at its fair value, the calculation of which includes a discount to present value based upon the expected date of repayment of the loan, estimated to be within year 2016 and the effective interest rate used to discount, being 12 per cent.. The difference between actual cash payments and fair value of the Okimo receivable are recognised in mineral properties. Over time, as the expected repayment date is approached the discount applied unwinds in the form of a finance accretion revenue (which is included within revenue in the statement of operations). The loan receivables from Okimo are denominated in United States dollars, being the currency in which the funds were lent and the currency in which the lender, Kibali Goldmines, reports in. As a result, quarterly foreign exchange movements are recorded on translation to Australian dollars for the purpose of preparing these financial statements. These foreign exchange movements are reflected in the Statement of Operations. (r) Hedging Section 3865 of the CICA Handbook specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. As at and for the quarter ended June 30, 2009, the Company had no hedges in place. (s) General Standards on Financial Statement Presentation The Canadian Accounting Standards Board ( AcSB ) amended the section 1400, to include requirements for management to assess an entity s ability to continue as a going concern and to disclose material uncertainties related to events or conditions that may cause doubt upon the entity s ability to continue as a going concern. (t) Changes in Accounting Policies Effective January 1, 2009, the Company adopted the following standards of the Canadian Institute of Chartered Accountants Handbook ( CICA ): (i) Goodwill and Intangible Assets The Canadian Institute of Chartered Accountants ( CICA ) issued a new accounting standard, Handbook Section 3064, Goodwill and Intangible Assets, which clarifies that costs can be deferred only when they relate to an item that meets the definition of an asset, and as a result, start-up costs must be expensed as incurred. The CICA s Emerging Issues Committee ( EIC ) Abstract No. 27, Revenues and Expenditures During the Pre-operating Period, is no longer applicable once the Handbook Section 3064 was adopted. This new standard has no impact on the Company s financial statements. 50

51 PART III - Financial Information on Moto (u) Future Changes in Accounting Policies The CICA has issued new standards, which may affect the financial disclosures and results of operations of future reporting periods. A summary of these standards is as follows: (i) International Financial Reporting Standards ( IFRS ) In January 2006, the CICA s Accounting Standards Board ( AcSB ) formally adopted the strategy of replacing Canadian GAAP with IFRS for Canadian enterprises with public accountability ( PAEs ). The current conversion timetable calls for financial reporting under IFRS for accounting periods commencing on or after January 1, The use of IFRS will be required in 2011 for publicly accountable profit-oriented enterprises. For these entities, IFRS will be required for interim and annual financial statements relating to fiscal years beginning on or after January 1, The Company will be required to have prepared, in time for its first quarter 2011 filing, comparative financial statements in accordance with IFRS for the three months ended September 30, (ii) Business Combinations In January 2009, the CICA issued new accounting standards concerning Business Combinations ( Section 1582 ), Non-controlling Interests ( Section 1602 ) and Consolidated Financial Statements ( Section 1601 ), which is based on the IASB s International Financial Reporting Standard 3, Business Combinations. The new standards replace the existing guidance on business combinations and consolidated financial statements. The objective of the new standards is to harmonise Canadian accounting for business combinations with the international and U.S. accounting standards. The new standards are to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011, with earlier application permitted. Assets and liabilities that arose from business combinations whose acquisition dates preceded the application of the new standards shall not be adjusted upon application of these new standards. The Non-controlling Interest standard should be applied retrospectively except for certain items. 3. Other Income Jun 30, 2009 Jun 30, 2008 Initial gain on recognition of investment in Kilo Goldmines Limited (i)... 3,155,043 Total... 3,155,043 (i) The issue of common shares of Kilo Goldmines Limited ( Kilo Goldmines ), to the Company, is the result of an agreement entered into in November 2006 to transfer Moto s rights and obligations to several mineral projects in the north-east of the DRC to Kilo Goldmines. Pursuant to this agreement the Company would receive common shares upon Kilo Goldmines completing a going public transaction on the TSX Venture Exchange, in order to maintain a prescribed ownership interest at the time of the transaction. This agreement was revised to include warrants upon the Issuer determining to include the issuance of warrants in the going public transaction. Pursuant to the Transaction, the Company acquired ownership of and control over 7,853,353 common shares of the Issuer, making up approximately 20 per cent. of the 39,266,766 common shares of the Issuer that are currently issued and outstanding, on a non-diluted basis, based on information received from Kilo Goldmines. 4. Investment in Kilo Goldmines Limited Opening Balance Dec 31, 2008 Initial gain on recognition of Investment in Kilo Goldmines (i) Mark to market of available for sale Financial Assets (ii) Foreign exchange movements (iii) Closing balance Jun 30, 2009 Investment in Kilo Goldmines... 3,155, ,639 (216,403) 3,292,279 Total... 3,155, ,639 (216,403) 3,292,279 (i) (ii) Refer to note 3(i) for details of this transaction. Movements in the market value of Kilo Goldmines shares held by the Company. These movements represent unrealised gains, and actual gains realised should the Company sell it s shares, may differ due to market volume and volatility. The amount included in the table above represents the mark to market gain prior to any future income taxes, which the company has determined to be $112,164 based on a corporate tax rate of 32 per cent. As the Company has available tax losses or pools to offset any future taxes, the income tax liability on the 51

52 PART III - Financial Information on Moto mark to market adjustment of $112,164 has been reduced to zero with a corresponding future income tax recovery recorded in the current periods net loss. (iii) As shares held in Kilo Goldmines are denominated in CAD, movements in the Canadian Dollar against the Australia Dollar result in foreign exchange gains or losses affecting the mark to market value of the investment in Kilo Goldmines. 5. Loan receivable from Okimo Opening Balance Dec 31, 2008 Expenditure/ Transfers Present value discount recorded in Mineral Properties Finance accretion/ interest charge Foreign Exchange Movements Closing Balance Jun 30, 2009 Revised ATF Contract Payments (i)... 1,558,061 (146,209) 36,961 (198,103) 1,250,710 Okimo Employee Provisions (ii) ,742 (iv) (51,208) 9,893 (50,951) 200,476 Surface Rentals (iii)... 2,938,453 (510,601) 115,748 (391,656) 2,151,944 Total.... $4,789,256 $(708,018) $162,602 $(640,710) $3,603,130 (i) (ii) (iii) (iv) All expenditure incurred by Kibali Goldmines (formerly Borgakim Mining s.p.r.l.) under its obligations of the Revised Technical and Financial Assistance Contract ( Revised ATF Contract ) are provided to Okimo by way of loans. These loans will be reimbursed from 30 percent of the profits generated by Okimo s own exploration activities and, if such profits should be insufficient, from the dividends that Okimo will receive from Kibali Goldmines in respect of Kibali. Interest is accrued at the rate of 8 per cent. per annum, until financing is in place for Kibali at which time the interest rate applicable to Kibali financing will be applied. Kibali Goldmines is obligated to provide a loan to Okimo to fund arrears due to Okimo employees, including termination costs, up to US$3.0 million. This loan will be repaid by Okimo through its share of dividends from the joint venture for Kibali. The initial advance of US$200,000 (see note 5(iv) below) will not begin to accrue interest until March 9, 2010 at which point it will accrue interest at the rate of 8 per cent. per annum, until financing is in place for Kibali. At this point Kibali financing rate will be applied to this receivable. Kibali Goldmines has advanced US$2.0 million to Okimo to cover Okimo s share of the outstanding historical surface rentals owing on the exploitation permits that cover part of Kibali. This advance is expected to be repaid by Okimo through its share of dividends from the joint venture for Kibali. This advance will not begin to accrue interest until March 9, 2010 at which point it will accrue interest at the rate of 9 per cent. per annum, until financing is in place for Kibali. At this point Kibali financing rate will be applied to this receivable During the 2008 financial year Okimo was advanced US$200,000 by Kibali Goldmines for the Okimo Employee Provisions Obligation as noted above at point (ii). This amount was initially treated as an investment cost and capitalised as part of deferred exploration expenditures (see note 7). Subsequent to the year end, this amount has been re-classified as a receivable due by Okimo. 6. Capital Assets June 30, 2009 Cost Accumulated depreciation Net book value Field Equipment... 1,493,028 (1,317,357) 175,671 Motor Vehicles ,337 (493,317) 448,020 Office Equipment ,471 (266,025) 147,446 Furniture and fixtures ,274 (171,931) 154,343 Lab equipment (i) ,617 (49,142) 197,475 Buildings ,281 (392,188) 97,093 Capital works in progress... 70,838 70,838 $3,980,846 $(2,689,960) $1,290,886 December 31, 2008 Cost Accumulated depreciation Net book value Field Equipment... 1,505,214 (1,214,484) 290,730 Motor Vehicles ,953 (337,584) 515,369 Office Equipment ,709 (206,692) 172,017 Furniture and fixtures ,992 (118,438) 206,554 Buildings ,281 (311,758) 177,523 Capital works in progress (i) , ,431 $3,785,580 $(2,188,956) $1,596,624 52

53 PART III - Financial Information on Moto (i) Items held in capital works in progress as at 31 December 2008 were completed during the March quarter and were transferred to Lab Equipment. These assets are now being depreciated over their useful lives 7. Mineral properties Jun 30, 2009 Dec 31, 2008 Mineral Properties Cost beginning of period... 3,210,024 3,210,024 Acquisition costs.... Cost end of period... $ 3,210,024 $ 3,210,024 License Consolidation & Renegotiation Cost beginning of period... 78,185,474 43,894,321 Expenditure incurred during the period... 9,993,829 34,291,153 Costs end of period... $ 88,179,303 $ 78,185,474 Deferred Exploration of period Cost beginning of period ,686,079 90,391,589 Expenditure incurred during the period... 20,534,322 34,299,648 Write-down of deferred exploration expenditures... (3,005,158) Transfer (i)... (292,742) Cost end of period... $141,927,659 $121,686,079 Total end of period... $233,316,986 $203,081,577 (i) Transfer of an advance of US$200,000 made on the obligation of Kibali Goldmines to provide loans to Okimo for the payment of employee provisions during the 2008 financial year, previously recorded as an investment cost in deferred exploration expenditures. Refer to Note 5. Kibali The ultimate recoupment of the above deferred expenditures is dependent on the successful development and commercial exploitation or sale of the respective areas. On January 7, 2009 Moto announced the successful completion of a series of meetings with Okimo, which were conducted in the presence of experts appointed by the DRC Minister of Mines to conclude the work of the DRC Mining Contracts Review in relation to Kibali. These meetings led to the partners entering into amendment agreements to reflect the agreed terms and to the registration of the Consolidated Lease with the DRC Mining Registry. The Amendment Agreements became effective following approval by the Okimo Board, notification to the Umbrella Authorities and specific approval from the Minister of Mines. Separately, the DRC Prime Minster has also confirmed that the Council of Ministers has examined the report of the Minister of Mines on the DRC Mining Contracts Review and has approved the continuance of the Okimo/ Moto/Kibali Goldmines partnership. On March 13, 2009 Moto announced the signing of the Original JV Contract between Moto, Border Energy Pty Ltd, Okimo and Kibali Goldmines. The Original JV Contract was effective immediately as Okimo had previously received the requisite approvals from its Umbrella Authorities. The Original JV Contract confirms Kibali Goldmines as the joint venture company carrying out Kibali, owned as to a 70 per cent. equity interest by Moto and as to a 30 per cent. non-dilutable equity interest by Okimo. The issuance to Okimo of its 30 per cent. equity interest in Kibali Goldmines is, in part, as consideration for the transfer of the ten Exploitation Permits to the joint venture company for no additional payment and the shares have now been officially issued to Okimo. On May 28, 2009, the Company announced that the transfer of the Exploitation Permits from Okimo to Kibali Goldmines had been completed. During the registration process, the project area was revised from 2,143 carrés to 2,161 carrés (approximately 1,836 km 2 ) to take into account the requirement for the transfer of whole carrés as required by the DRC Mining Code. The Exploitation Permits are now held directly by and for the benefit of Kibali Goldmines. Resulting from the transfer of the Exploitation Permits, the payment of the US$4.5 million pas de porte was made, in part to the DRC Government and in part to Okimo. 53

54 PART III - Financial Information on Moto The pas de porte of US$4.5 million was payable on the registration of the Exploitation Permits covering the Consolidated Perimeter in the name of Kibali Goldmines with the DRC Mining Registry which occurred in May This was paid in part to Okimo and in part to the DRC state. Pursuant to the Original JV Contract, until the commencement of commercial production at Kibali, Kibali Goldmines will continue paying Okimo a rent of US$350,000 per month. Funding for Kibali Goldmines will be provided by Moto or one of its subsidiary companies to the extent third party financing is not directly available to Kibali Goldmines. Okimo is not obliged to pledge its shares to secure any financing nor will Kibali Goldmines be permitted to allow a charge of the Exploitation Permits. Unless terminated by mutual agreement, the Original JV Contract will continue for so long as the Exploitation Permits are held by Kibali Goldmines and shall only be terminable on the non-payment of the rentals or advances due to Okimo, royalties, surface rights and other amounts due under the DRC Mining Code and certain limited insolvency events. 8. Loan Due under Assignment Agreement with Orgaman Jun 30, 2009 Dec 31, 2008 Current Liability: Loan due under Assignment Agreement with Orgaman (i)... 12,430,000 12,715,021 $12,430,000 $12,715,021 Non Current Liability: Loan due under Assignment Agreement with Orgaman (i)... 18,747,835 36,191,518 $18,747,835 $36,191,518 (i) The loan incurs interest at 8 percent per annum and totals US$25,083,116 at June 30, 2009 (US$31,452,743 and Euro 1,636,228 at December 31, 2008). The final assignment of the loan (formerly referred to as the Okimo Loan) was formalised between Moto, Orgaman, Kibali Goldmines and Okimo with the signing of the Tripartite Agreement on June 26, The Tripartite agreement agreed to convert the Euro portion of the loan to United States dollars based on an agreed rate of exchange. The agreements set out the instalment terms for the loan, which are to be in three tranches, each comprising 100 percent in cash or at the Company s election up to 50 percent in Common Shares. The first tranche was paid upon signing of the Tripartite Agreement and the Company elected to pay 50 per cent. in Common Shares. The remaining two tranches are to be paid as set out below: (i) US$10 million on the first anniversary of the effective date of the assignment, being 29 June 2010; (ii) the balance (including accrued interest) on the second anniversary of the effective date of the assignment, being 29 June Moto pledged 10 per cent. of its shares of the Company s subsidiary, Border Energy Pty Ltd, as security for this loan. The Company granted Orgaman the right to purchase, for no additional consideration, 100 percent of this subsidiary should Moto abandon all of its equity in Kibali. As a consequence of the Tripartite Agreement being executed, the charge granted by Moto to Orgaman over 10 per cent. of Moto s shares in Kibali Goldmines has been discharged. 54

55 PART III - Financial Information on Moto 9. Share capital (a) Authorised: The Company is authorised to issue an unlimited number of common shares without par value. (b) Issued and outstanding Number of Shares Amount Balance, December 31, ,585, ,895,395 Issued during the March 2009 quarter: Issue of Common Shares to Consultant (GICC) (i) ,193 3,298,566 Issued during the June 2009 Quarter: Issue of Common Shares bought deal (ii)... 20,539,000 62,662,757 Issue of Common Shares to Orgaman (iii)... 1,300,539 5,971,790 Exercise of unlisted Moto stock options (iv)... 50, ,631 Transfer of fair value of common share options exercised (v)... 55,240 Balance, June 30, ,456,087 $306,042,379 Shares on exercise for warrants and stock options: (i) On March 31, 2009 the Company issued Generale Industrielle et Commerciale au Congo ( GICC ) 981,193 Common Shares in the Company as detailed in the news release of March 31, This was a non-cash transaction and resulted in a corresponding charge to mineral properties. The transaction was in accordance with the terms of a consultancy agreement entered into between Moto and GICC on December 31, 2007 (as amended), following the successful negotiation of documentation relating to Kibali and obtaining of relevant government approvals and consents for Kibali. Refer note 9(e). (ii) (iii) (iv) (v) (c) On April 27, 2009 the Company issued 17,860,000 common shares for cash proceeds at C$2.80 per share on a bought deal basis through a syndicate of underwriters, co-led by GMP Securities L.P. and BMO Capital Markets and including RBC Capital Markets and Haywood Securities Inc. (collectively, the Underwriters ). On May 15, 2009 the Over-Allotment Option was exercised in full by the Underwriters resulting in an additional 2,679,000 common shares being issued at C$2.80 per share. Costs incurred in relation to the share issue were made up of C$2.9 million in underwriter s fees and C$0.2 million in legal and other related fees. On June 29, 2009 the Company issued 1,300,539 (at C$4.452 per common share) common shares to Orgaman upon the Tripartite agreement becoming effective. The issue was at the Company s election in order to settle 50 per cent. of the US$10 million payable as the first of three tranches payable to Orgaman. Refer note 8. On June 9, 2009 the Company issued 50,000 common shares for cash proceeds to an option holder who exercised their right to purchase shares in the Company at C$3.00 per share. This represents the fair value at grant date of the options issued, as described above in (iv) and as disclosed in note 10, Contributed Surplus. Stock options The Company established a stock option plan to provide additional incentive to its directors, officers, employees and consultants in their efforts on behalf of the Company in the conduct of its affairs. The maximum number of shares that may be issuable pursuant to options granted under the plan shall be a number equal to 15 percent of the number of issued and outstanding Common Shares from time to time. The total number of options exercisable under the plan as at 30 June 2009 is 11,889,050. Under the terms of the plan, options vest as determined by the board of directors, are priced based on the volume weighted average price for the 5 days prior to grant date and may be granted for a term not exceeding 6 years. The Company has also agreed to issue further stock options to Sam Jonah KBE on the basis that if the Company makes a material further issuance of shares, the Company will grant stock options at the prevailing market price expiring 6 years after grant such that the total number of stock options granted to Sam Jonah KBE from the date of his appointment is 5 percent of the total number of Common Shares issued by the Company. 55

56 PART III - Financial Information on Moto The Stock Option Plan was renewed for a further three years and amended by shareholder approval at the Company s 2008 Annual and Special Meeting held on May 30, The amended Stock Option Plan is available on the Company s website, and under the Company s SEDAR profile at The following table summarises the movements in stock options during the six months ended June 30, 2009: Number of Options Six Months Jun 30, 2009 Weighted- Average Exercise Price Balance at beginning of period... 10,612,100 A$4.77 Transactions during the period: Exercised... (50,000) A$3.40 Expired/Cancelled... (200,000) A$8.92 Granted... 1,326,950 A$3.30 Balance at end of period... 11,689,050 A$4.03 Exercisable at end of period... 9,820,443 A$4.08 The following table provides a summary of the weighted average exercise price and weighted average remaining contractual life for all outstanding options: Price Ranges Weighted Ave. Exercised Price No. Options Weighted Ave. Remaining Contractual Life (years) C$2.60 C$ C$2.91 7,915, C$3.91 C$ C$5.29 2,048, C$5.91 C$ C$7.65 1,725, C$ ,689, (d) Share purchase warrants The following table summarises the movements in warrants during the six months ended June 30, 2009: Expiry dates Exercise Prices Balance Dec 31, 2008 Granted Exercised Expired/ Cancelled Balance June 30, 2009 May 2, C$ , ,000 Weighted average.... A$8.74 A$8.97 (e) Future issues of common shares On December 31, 2007 (as amended by a letter dated December 4, 2008), the Company entered into a consultancy agreement with GICC, a DRC-based consultancy group, under which GICC agreed to assist the Group in obtaining the Consolidated Lease and negotiating government approvals and consents to enable the development of Kibali. Pursuant to the consultancy agreement, if by November 30, 2009, the price of the Company s Common Shares on the TSX exceeds C$11.92 or C$15.90, a further 628,982 Common Shares will be issued to GICC on each such share price level being exceeded as deferred compensation. Under a change of control the Company is required to, regardless of the closing price of the Company s shares on the TSX prior to the change of control, issue 628,982 Common Shares to GICC immediately prior to (but conditional upon) completion of the change of control. In addition, if the share prices is at least C$11.92 just prior to the change of control, a further 628,982 Common Shares must be issued to GICC immediately prior to (but conditional upon) completion of the change of control. 56

57 PART III - Financial Information on Moto (f) Stock-Based Compensation Costs The following table summarises the weighted average assumptions used with the Black-Scholes valuation model for the determination of the stock-based compensation costs for the six months ended June 30, 2009 and the year ended December 31, 2008: Six months, Jun 30, 2009 Year ended Dec 31, 2008 Number of options granted... 1,326,950 1,233,461 Weighted Ave Exercise price... C$2.85 C$4.86 Volatility % 68% Expected life (years) Risk free interest rate % 3.28% Dividend yield... Nil Nil Weighted average grant-date fair value.... C$2.02 C$ Contributed Surplus Change in Contributed Surplus results from the following: Jun 30, 2009 Dec 31, 2008 Balance beginning of period... 23,112,412 20,143,699 Transfer of fair value of common share options exercised... (55,240) Stock based compensation.... 1,460,740 2,968,713 Transfer from Warrant Reserve... Balance end of period... $24,517,912 $23,112, Non-controlling Interest Initial recognition of non-controlling interest in Kibali Goldmines recognised upon issue of shares in Kibali... 53,812,335 Goldmines to Okimo Non-controlling interest in results of Kibali Goldmines..... (1,353,864) $52,458,472 The non-controlling interest represents the interest Okimo has in Kibali Goldmines. On April 1, 2009, Okimo was issued shares in Kibali Goldmines representing 30 percent of Kibali Goldmines total outstanding issued capital. The initial recognition of the non-controlling interest has resulted in a dilution loss of $49,456,648 being recorded in the income statement, which represents the difference between the value of the shares issued to Okimo (US$3 million) and the net identifiable assets of Kibali Goldmines. The non-controlling interest in results of Kibali Goldmines represents Okimo s 30 per cent. share of Kibali Goldmines net loss resulting from operations from the date upon which Okimo acquired their 30 per cent. interest in Kibali Goldmines to June 30, Segment information During the period the Company operated predominantly in the mining and exploration sector in the DRC. Financial information by geographic area is as follows: June 30, 2009 Australia DRC Canada Other Total Revenues... 89, ,044 51,000 $ 303,626 Net Loss... 38,632,260 5,354,368 12,668, ,230 $56,891,791 Capital Assets ,840 1,145,312 44,734 $ 1,290,886 December 31, 2008 Australia DRC Canada Other Total Revenues ,870 14, ,324 $ 1,324,385 Net Loss (Profit)... 8,974,056 7,325,581 (2,287,190) 126,412 $14,138,859 Capital Assets ,188 1,447,436 $ 1,596,624 57

58 PART III - Financial Information on Moto 13. Capital Management The Company s current structure is comprised of shareholder s equity, short and long-term debt and working capital. The Company s objectives when managing its capital is to maintain a conservative capital structure which will allow the Company to both fund its exploration and development programs and provide financial flexibility to execute on any strategic opportunities. Achieving this objective requires management to consider the underlying nature of exploration and development activities, availability of capital, the cost of various capital alternatives and other factors. The Company manages its capital structure and makes adjustments according to market conditions to maintain flexibility while achieving the objectives stated above. To manage the capital structures, the Company may adjust capital spending, issue new shares, issue new debt or repay existing debt. There was no change to the Company s approach to capital management during the period. The Company s capital under management includes share capital of $306,042,379 (December 31, 2008: $233,895,395). For details of movements in share capital during the six months ended June 30, 2009, refer to note 9(b). In addition, the Company has a short-term loan due to its former joint venture partner, Orgaman, of $12,430,000 (December 31, 2008: $12,715,021) and a long-term loan due to Orgaman of $18,747,835 (December 31, 2008: $36,191,518). Changes in the short-term loan to Orgaman reflect foreign exchange movements resulting from the translation of the loan that is denominated in US dollar to the Australian dollar and also the conversion of the previously mixed currency loan to a US dollar loan (refer note 8). Changes in the long-term loan to Orgaman are the result of the accrual of interest at 8 percent per annum, the repayment of US dollar $10 million on June 29, 2009 (refer note 8), the conversion of the previously mixed currency loan to a US dollar loan and foreign exchange movements as previously mentioned. 14. Financial Risk Factors The Company s risk exposures and the impact on the Company s financial instruments are summarised below: (a) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company actively manages its liquidity risk through cash, debt and equity management strategies. Such strategies include continuously monitoring forecasted and actual cash flows from operating, financing and investing activities, and opportunities to issue additional Company shares or other forms of equity. (b) Credit Risk Credit risk is the risk of financial loss to the Company if a partner or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash equivalents and the Okimo loan (note 5). The cash equivalents consist mainly of shortterm money market deposits. The Company has deposited the cash equivalents with reputable financial institutions, from which management believes the risk of loss to be remote. The Okimo loan is expected to be repaid out of dividends paid out of Kibali Goldmines, which Okimo has a 30 per cent. ownership. Management has discounted the value of the repayments to present value based on estimated timing of the repayments. The repayment of this loan is dependent on the success of Kibali. (c) Interest Rate Risk The Company is not exposed to interest rate risk on its debt as interest on the loans its former joint venture partner, Orgaman is fixed at a rate of 8 percent per annum. As such it does not currently hold any financial instruments that mitigate this risk. The Company maintains its cash equivalents in short-term money market deposits that are highly liquid and shortterm in nature. As such the Company is subject to fluctuations in variable market interest rates, however these fluctuations do not have a significant impact on estimated fair values as of June 30, Future cash flows from interest income on cash and cash equivalents will be affected by interest rate fluctuations. The Company manages interest rate risk by focusing primarily on the preservation of capital and liquidity. 58

59 PART III - Financial Information on Moto For the six month period to June 30, 2009, the Company recorded bank interest revenue of $141,024 (2008: $583,969) and interest revenue on the loan receivable with Okimo of $26,783 (2008: nil). (d) Foreign Currency Risk The Company operates internationally and is exposed to risks from changes in foreign currency rates. The functional currency of the Company is Australian dollars, consequently fluctuations of the Australian dollar against other currencies, primarily the US dollar, Canadian dollar and the Euro impact the fair value of financial assets and liabilities and operating results. Financial assets and liabilities subject to currency translation risk primarily include US dollar and Canadian dollar denominated cash and cash equivalents, accrued liabilities in United States dollars and the short-term and long-term loans due to its former joint venture partner, Orgaman, which has a United States dollar denominated loan. For the six month period to June 30, 2009, the Company had recorded foreign exchange losses on the translation of cash and cash equivalents of $4,098,035, and foreign exchange gains on the translation of the short-term and longterm loans due to Orgaman of $3,270,649. (e) Commodity Price Risk The Company s future profitability and viability of development depends upon the world market price for gold. Gold has fluctuated widely in recent years. There is no assurance that, even as commercial quantities of gold may be produced in the future, a profitable market will exist for them. A decline in the market price of gold may also require the Company to reduce the carrying values of its mineral properties, which could have a material and adverse effect on the Company s value. As of June 30, 2009, the Company is not a gold producer. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. This may also affect the Company s liquidity and its ability to meet its ongoing obligations. (f) Mineral Property Risk The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that planned exploration and development programs will result in profitable mining operations. The recoverability of amounts shown for mineral exploration properties is dependant upon completion of the acquisition of the mineral property interests, the discovery of economically recoverable reserves, confirmation of the Company s interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development and future profitable production. Changes in future conditions could require material write downs of the carrying values of a mineral property. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it is acquiring an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company s title. Property title may be subject to unregistered prior agreements, noncompliance with regulatory requirements, the risk of foreign investment, increases in taxes and royalties, renegotiation of contracts, currency exchange fluctuations and political uncertainty. (g) Sensitivity Analysis The sensitivity analysis shown in the notes below may differ materially from actual results. (i) (ii) (iii) Interest rate risk on cash equivalents is minimal as these have fixed interest rates. The Company s short-term investments consist of short-term guaranteed deposits and equity investments listed on Canadian exchanges. All amounts are denominated in Canadian, United States and Australian dollars. Interest rate risk on short-term guaranteed deposits is minimal as these have fixed interest rates. Financial instruments denominated in United States and Canadian dollars are subject to foreign currency risk. As at June 30, 2009, had the US and Canadian dollar weakened/strengthened by 10 per cent. against the Australian dollar with all other variables held constant, the Company s loss for the period ended June 30, 2009 would have been approximately $1,389,940 higher/lower as a result of foreign exchange losses/gains on translation of non-australian dollar denominated financial instruments. Shareholders equity would have been approximately $1,389,940 lower/higher had the United States and Canadian dollar weakened/ strengthened by 10 per cent. as a result of foreign exchange losses/gains on translation of non-australian dollar denominated financial instruments. 59

60 PART III - Financial Information on Moto 15. Subsequent events Randgold Resources Limited Arrangement Agreement On June 1, 2009 the Company and Red Back Mining Inc. ( Red Back ) entered into an arrangement agreement providing for the exchange of each common share of the Company for 0.45 of a common share of Red Back. Subsequently, the Company received a second un-solicited offer from Randgold Resources Limited ( Randgold ) which was deemed to be superior to the Red Back proposal. On August 5, 2009 the Company and Randgold entered into the Arrangement Agreement which provides for the exchange of each outstanding common share of Moto for the equivalent of C$4.84 per share (as at August 4, 2009) on the basis of each Moto common share being exchanged for of a Randgold ordinary share or Randgold American Depositary Share ( ADS ). Under the Randgold Transaction, Moto shareholders will receive of an ordinary share of Randgold (or, where applicable, of an ADS of Randgold) per Moto common share. In addition, Moto shareholders will have the option to elect to receive (in lieu of Randgold shares or ADSs) cash consideration of US$4.47 per Moto share in respect of all or some of their Moto shares, subject to proration based on an aggregate maximum cash amount payable to all Moto shareholders under the Randgold Transaction of US$244 million (the Cash Election ). Assuming full take-up of the Cash Election, Randgold expects to issue a total of approximately 3.9 million shares (including shares represented by ADSs), representing approximately 4.6 per cent. of Randgold s shares in issue following closing, and pay a total cash amount of approximately US$244 million to Moto shareholders. If no Moto shareholders make the Cash Election, Randgold expects to issue approximately 7.8 million shares (including shares represented by ADSs), representing approximately 8.6 per cent. of Randgold s shares in issue following closing. Immediately prior to accepting the Randgold Transaction, the Company terminated the existing arrangement agreement with Red Back in accordance with its terms and initiated payment to Red Back of the agreed termination fee of C$15.25 million. This amount was paid on August 5, 2009 and will be recorded as a charge to the income statement for the Company. The voting agreements of the Company s directors and officers regarding the Red Back transaction were also terminated. The Company s Board of Directors has unanimously recommended that the shareholders and optionholders of Moto vote in favour of the Randgold Transaction. Concurrently with the Company entering into the Arrangement Agreement with Randgold, the directors and officers of the Company have entered into voting agreements in respect of the Randgold Transaction (representing an aggregate of 2,782,472 million shares (2.5 per cent.) of Moto). Together with the support of shareholders of the Company representing an aggregate of 39.4 million shares, a total of 42.2 million shares, or 38.2 per cent. of the issued and outstanding common shares of Moto, have agreed to support the Randgold Transaction. The Company has been advised by Randgold that Randgold and AngloGold Ashanti Limited ( AngloGold ) have agreed to cooperate in respect of the Randgold Transaction, which includes an agreement by AngloGold to fully fund the Cash Election in partial payment for an indirect 50 per cent. interest in Moto, which it will acquire upon completion of the Randgold Transaction. The Company has been further advised by Randgold that, following completion of the Randgold Transaction, AngloGold will be jointly responsible with Randgold for funding the development of Kibali for the collective benefit of the shareholders of all three companies and that Randgold will be appointed operator of Kibali. Randgold has represented to the Company that Randgold and AngloGold have received the full support from their respective boards of directors for the Randgold Transaction and that neither Randgold nor AngloGold requires shareholder approval in order to proceed with the Randgold Transaction. If Moto shareholders elect to receive, in aggregate, more than the maximum aggregate amount of cash offered under the Randgold Transaction, (a) the amount of cash consideration available to Moto shareholders making the Cash Election will be allocated pro rata among all Moto shareholders making valid Cash Elections; and (b) each Moto shareholder making a valid Cash Election will instead receive Randgold ordinary shares (or ADSs, as applicable) in exchange for the remainder of their Moto shares for which they did not receive cash due to proration. Entitlements to fractions of a Randgold share (or ADS, as applicable), as well as the entitlements of any Moto shareholders who are resident in any jurisdictions where it is or may be unlawful for them to receive Randgold shares (or ADS, as applicable), will be paid in cash pro rata to entitlements, based on a whole Randgold share being valued at US$63.26, and such cash payments, if any, will not reduce the amount available to pay the Cash Election. 60

61 PART III - Financial Information on Moto The Arrangement Agreement includes a commitment by the Company not to solicit or initiate discussions concerning alternative transactions, including the sale of material assets. The Company has agreed to pay a break fee of US$14,627,300 to Randgold in certain circumstances and has granted Randgold the right to match competing offers. Randgold has agreed to reimburse the Company for the Red Back termination fee in certain circumstances where the Randgold Transaction does not close. Each party has also been provided with certain other rights, representations and warranties and covenants customary for a transaction of this nature. The Randgold Transaction, which will be effected by way of a statutory plan of arrangement of Moto s shareholders and optionholders under British Columbia corporate law, is subject to certain customary conditions, including the receipt of all necessary court and regulatory approvals, third party consents and the approval of the Randgold Transaction by not less than per cent. of the outstanding shares and options of the Company, voting as a single class and a simple majority of the votes cast in person or by proxy by Moto shareholders at the special meeting that will be called to approve the Randgold Transaction. It is anticipated that the meeting of Moto s shareholders will be held in October, 2009, and subject to approval by shareholders and optionholders and the British Columbia Supreme Court, the transaction will complete by mid- October, Full details of the Randgold Transaction will be included in a Moto Management Information Circular to be filed with applicable Canadian securities regulatory authorities and mailed to Moto shareholders in accordance with applicable Canadian securities laws. The Company expects to mail the Management Information Circular by mid- September

62 PART III - Financial Information on Moto Section C Reconciliation of financial information on Moto for the three years and six months ended 30 June 2009 to Randgold s IFRS accounting policies The following is a summary of the material adjustments to the loss before taxes and net assets of Moto as at and for the three years ended 31 December 2008 and the interim six months ended 30 June 2009, which would have been required to adjust for significant differences between Moto s accounting policies and Randgold s accounting policies. Year ended 31 December 2006 Year ended 31 December 2007 Year ended 31 December 2008 Six months ended 30 June 2009 Note AUD 000 AUD 000 AUD 000 AUD 000 Loss before taxes for the period as previously reported by Moto... (13,429) (11,351) (14,139) (57,005) Change in recognition of exploration costs.. (i) (40,340) (70,984) Loss before income tax under Randgold accounting policies... (53,769) (82,335) (14,139) (57,005) 31 December December December June 2009 Note AUD 000 AUD 000 AUD 000 AUD 000 Net assets as previously reported by Moto , , , ,592 Change in recognition of exploration costs.. (i) (66,512) (137,496) (137,496) (137,496) Net assets under Randgold accounting policies... 44,775 (18,861) 55, ,096 Notes to the unaudited reconciliation (i) Change in the recognition of exploration costs This adjustment reflects differences in the accounting treatment of exploration costs between Moto and Randgold. Under Moto accounting policies, all exploration costs are capitalised until production commences. Once production has commenced exploration costs are amortised over the life of the mine. If a project is unsuccessful or a project has ceased because it is not economically feasible, the exploration costs previously capitalised are written off. Under Randgold accounting policies, all exploration costs are expensed until such time as the directors have sufficient information to determine that future economic benefits are probable. The adjustment to the loss before taxes represents the amount that was capitalised in each year in Moto s consolidated financial statements. The adjustment to net assets represents the cumulative amount capitalised to date. 62

63 PART III - Financial Information on Moto Section D Accountant s report on the reconciliation of financial information on Moto BDO LLP 55 Baker Street London W1U 7EU The Directors 30 November 2009 Randgold Resources Limited La Motte Chambers La Motte Street St Helier Jersey JE1 1BJ HSBC Bank plc 8 Canada Square London E14 5HQ Dear Sirs Randgold Resources Limited (the Company ) Class 1 circular dated 30 November 2009 (the Circular ) Proposed acquisition of 10 per cent. of the issued share capital of Kibali Goldmines s.p.r.l. We report on the unaudited reconciliation of net assets as at 31 December 2006, 31 December 2007, 31 December 2008 and 30 June 2009, and of the loss before taxes for the periods then ended (together, the financial information ), as previously reported in the financial statements of Moto Goldmines Limited ( Moto ), prepared under Canadian Generally Accepted Accounting Principles, showing the adjustments necessary to restate it on the basis of the Company s accounting policies used in preparing its financial statements for the period ended 30 June 2009 ( the Reconciliation ), set out in Section C of Part III of the Circular. This report is required by items R(2)(b) and R(2) of the listing rules made by the Financial Services Authority for the purposes of part VI of the Financial Services and Markets Act 2000 (the Listing Rules ) and is given for the purpose of complying with those Listing Rules and for no other purpose. Responsibilities It is the responsibility of the directors of the Company (the Directors ) to prepare the Reconciliation in accordance with Listing Rules R(2)(a) and R(2). It is our responsibility to form an opinion, as required by Listing Rules R(2)(b) and R(2), as to whether: (a) (b) the Reconciliation has been properly prepared on the basis stated; and the adjustments are appropriate for the purpose of presenting the financial information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies, and to report our opinion to you. Save for any responsibility which we may have to those persons to whom this report is expressly addressed and which we may have to shareholders of the Company as a result of the inclusion of this report in the Circular, to the fullest extent permitted by the law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item R(6) of the Listing Rules consenting to its inclusion in the Circular. The Reconciliation is based on the historical consolidated financial statements of Moto for the three years ended 31 December 2008 and the interim six month period ended 30 June The financial statements for the three 63

64 PART III - Financial Information on Moto years ended 31 December 2008 were the responsibility of the directors of Moto and were audited by Parker Simone LLP who gave unqualified reports thereon. The interim financial statements for the six months ended 30 June 2009 were the responsibility of the directors of Moto but were unaudited. We do not accept responsibility for any of the historical financial statements of Moto, nor do we express an opinion on those financial statements. Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of checking whether the unadjusted financial information of Moto has been accurately extracted from an appropriate source, assessing whether all adjustments necessary for the purpose of presenting the financial information on a basis consistent in all material respects with the Company s accounting policies have been made, examination of evidence supporting the adjustments in the Reconciliation and checking the arithmetical accuracy of the calculations within the Reconciliation. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Reconciliation has been properly compiled on the basis stated and that the adjustments are appropriate for the purpose of presenting the financial information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. Opinion In our opinion: (a) the Reconciliation has been properly compiled on the basis stated; and (b) the adjustments made are appropriate for the purpose of presenting the financial information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies. Yours faithfully BDO LLP 64

65 PART IV Section A Unaudited pro forma financial information of Randgold The following unaudited pro forma balance sheet and statements of income of Randgold (the pro forma financial information ) are based on the consolidated balance sheet as at 30 September 2009, the consolidated statement of income for the 6 months ended 30 June 2009 and the consolidated statement of income for the year ended 31 December 2008 of the Group and have been prepared to illustrate the effect on the Group of: 1. the 15 October 2009 acquisition of 50 per cent. of Moto through a joint venture with Anglogold; and 2. the potential acquisition of an additional 10 per cent. stake in Kibali Goldmines, as if these transactions had occurred at 30 September 2009 for the balance sheet and as at 1 January 2008 for the statements of income. The pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and does not, therefore, represent the Group s actual financial position or results. The pro forma financial information has been prepared on the basis of the accounting policies adopted in the interim financial statements of the Company for the period ended 30 September 2009, under International Financial Reporting Standards as adopted by the EU, and on the basis set out in the notes set out below. 65

66 PART IV - Section A Unaudited pro forma financial information of Randgold Unaudited pro forma balance sheet as at 30 September 2009 Randgold as at 30 September 2009 (note 1) $000 50% of Moto s balance sheet as at 30 June 2009 (note 2a) $000 Adjustments Adjustments to reflect acquisition of 50% of Moto Note 3 Adjustments to reflect acquisition of 10% of Kibali Goldmines Pro forma net assets of the Group as at 30 September 2009 (note 4) $000 $000 ASSETS NON-CURRENT ASSETS Property, plant and equipment , ,309 Mineral properties , ,420 (a)(i)(ii)(iii) 45, ,832 (iv)(v)(d)(e) Deferred tax Long term ore stockpiles ,833 43,833 Receivables ,651 1,449 14,958 (a)(ii) (4,700) 18,358 Available for sale financial assets.. 32,690 1,324 34,014 TOTAL NON-CURRENT ASSETS ,558 49, ,378 41, ,940 Inventories and ore stockpiles , ,972 Receivables , ,803 Cash and cash equivalents ,765 22, ,674 (a)(i)(ii)(iii)(iv) (55,100) 628,592 (b)(c)(d) TOTAL CURRENT ASSETS ,336 22, ,674 (55,100) 800,367 TOTAL ASSETS... 1,214,894 72, ,052 (14,068) 1,735,307 EQUITY Ordinary shares (4,148) (123,106) 122,694 (a)(i)(e) (4,560) Share premium (800,093) (484,579) (a)(i)(e) (1,284,672) Accumulated profit (273,335) 95,615 (92,527) (b) (270,247) Other reserves ,512 (9,863) (20,182) (a)(ii) (23,533) Non-controlling interest (22,009) (21,102) 14,068 (29,043) TOTAL EQUITY... (1,093,073) (58,456) (474,594) 14,068 (1,612,055) NON-CURRENT LIABILITIES Long term borrowings (516) (7,542) 7,542 (c) (516) Loans from minority shareholders in subsidiaries (2,990) (2,990) Deferred tax (3,016) (3,016) Financial liabilities forward gold sales (4,169) (4,169) Provision for rehabilitation (14,174) (14,174) TOTAL NON-CURRENT LIABILITIES... (24,865) (7,542) 7,542 (24,865) CURRENT LIABILITIES Financial liabilities forward gold sales (27,176) (27,176) Trade and other payables (65,962) (1,431) (67,393) Current tax payable (2,844) (2,844) Current portion of long term borrowings (974) (5,000) 5,000 (c) (974) TOTAL CURRENT LIABILITIES... (96,956) (6,431) 5,000 (98,387) TOTAL EQUITY AND LIABILITIES... (1,214,894) (72,429) (462,052) 14,068 (1,735,307) Explanatory notes are provided below. 66

67 PART IV - Section A Unaudited pro forma financial information of Randgold Unaudited proforma statement of income for the six months ended 30 June 2009 Randgold as at 30 June 2009 (note 1) $000 50% of Moto s statement of income for the six months ended 30 June 2009 (note 2b) $000 Adjustments Adjustments to reflect acquisition of 50% of Moto (note 3) $000 Adjustments to reflect acquisition of 10% of Kibali Goldmines Pro forma for the six months ended 30 June 2009 (note 4) $000 $000 REVENUE Gold sales on spot , ,216 Profit/(loss) on hedging contracts... (21,386) (21,386) TOTAL REVENUE , ,830 OTHER INCOME Other income... 2,714 1,117 3,831 TOTAL INCOME ,544 1, ,661 COST AND EXPENSES Mining and processing costs... (109,532) (109,532) Transport and refining costs.... (778) (778) Royalties.... (11,171) (11,171) Exploration and corporate expenditure... (23,823) (3,122) (26,945) Other expenses... (17,805) (17,805) TOTAL COSTS... (145,304) (20,927) (166,231) Finance income ,086 Finance costs... (1,549) (962) (2,511) Provision for financial assets... (4,975) (4,975) Finance (costs)/income net.. (5,545) (855) (6,400) PROFIT/(LOSS) BEFORE INCOME TAX... 42,695 (20,665) 22,030 Income tax expense... (10,679) 40 (10,639) NET PROFIT/(LOSS)... 32,016 (20,625) 11,391 Profit/(loss) attributable to: Owners of the parent... 25,998 (20,145) 5,853 Non-controlling interests... 6,018 (480) 5,538 32,016 (20,625) 11,391 Explanatory notes are provided below 67

68 PART IV - Section A Unaudited pro forma financial information of Randgold Unaudited proforma statement of income for the year ended 31 December 2008 Randgold for the year ended 31 December 2008 (note 1) $000 50% of Moto s statement of income for the year ended 31 December 2008 Adjustments Adjustments to reflect acquisition of 50% of Moto Note 3 (note 2c) $000 $000 Adjustments to reflect acquisition of 10% of Kibali Goldmines Pro forma for the year ended 31 December 2008 (note 4) $000 $000 REVENUE Gold sales on spot , ,110 Profit/(loss) on hedging contracts... (35,538) (35,538) TOTAL REVENUE , ,572 OTHER INCOME Other income... 4, ,993 TOTAL INCOME , ,565 COST AND EXPENSES Mining and processing costs... (199,520) (199,520) Transport and refining costs... (2,053) (2,053) Royalties.... (19,730) (19,730) Exploration and corporate expenditure... (45,163) (6,266) (51,429) Other expenses... (363) (252) (3,088) (b) (3,703) TOTAL COSTS... (266,829) (6,518) (3,088) (276,435) Finance income... 9,335 1,098 10,433 Finance costs... (3,338) (1,285) (4,623) Provision for financial assets... (10,350) (10,350) Finance (costs)/income net... (4,353) (187) (4,540) PROFIT/(LOSS) BEFORE INCOME TAX... 71,584 (5,906) (3,088) 62,590 Income tax expense... (24,564) (24,564) NET PROFIT/(LOSS)... 47,020 (5,906) (3,088) 38,026 Profit/(loss) attributable to: Owners of the parent... 41,569 (5,906) (3,088) 32,575 Non-controlling interests.. 5,451 5,451 47,020 (5,906) (3,088) 38,026 Explanatory notes are provided below 68

69 PART IV - Section A Unaudited pro forma financial information of Randgold Notes to the unaudited proforma financial information 1. The balance sheet of the Group as at 30 September 2009 has been extracted without material adjustment from the published unaudited interim financial statements of the Group for the period ended 30 September The statement of income of the Group for the six months ended 30 June 2009 has been extracted without material adjustment from the published unaudited financial statements of the Group for the six months ended 30 June The statement of income of the Group for the year ended 31 December 2008 has been extracted without material adjustment from the statutory financial statements on the Group for the year ended 31 December The statements of income for the year ending 31 December 2008 and the six month period ending 30 June 2009 and the balance sheet at 30 June 2009, as published by Moto, require the following adjustments in order to combine them with the consolidated financial statements of Randgold: Translation from Australian dollars ( AUD ) to US$; Adjustment (where applicable) to Randgold s accounting policies, following a review undertaken by Randgold management to identify any differences between Canadian GAAP and IFRS and any accounting policy differences between Randgold and Moto, where the impact was potentially material and could be reasonably estimated; Reclassification to a presentation that is consistent with the Randgold IFRS financial statements; and Calculation of 50 per cent. of the adjusted figures of each of the periods presented to reflect the fact that Randgold s 50 per cent. share of Moto will be proportionately consolidated into Randgold s financial statements. These adjustments are set out in the tables below in respect of each of the periods presented. 69

70 PART IV - Section A Unaudited pro forma financial information of Randgold 2a. Moto balance sheet as at 30 June 2009 Moto AUD 000 (note A) Moto (conversion to USD using spot exchange rate of 1.243) $000 (note B) Accounting policy adjustments into Randgold s accounting policies $000 (note C) Other reclassification adjustments into Randgold presentation $000 (note D) Moto (adjusted) $000 (note E) Proportionate consolidation of 50% of Moto $000 (note F) NON-CURRENT ASSETS , ,290 (94,346) 99,944 49,972 Investment in Kilo Goldmines Limited... 3,292 2,648 (2,648) Loan receivable from Okimo... 3,603 2,899 (2,899) Capital Assets... 1,291 1,038 (1,038) Mineral properties , ,705 (94,346) 93,359 46,680 Property, plant and equipment... 1,038 1, Deferred tax... Long term ore stockpiles... Receivables... 2,899 2,899 1,449 Available-for-sale financial assets... 2,648 2,648 1,324 CURRENT ASSETS... 55,828 44,914 44,914 22,457 Inventories and ore stockpiles Receivables Cash and cash equivalents... 55,321 44,506 44,506 22,253 TOTAL ASSETS , ,204 (94,346) 144,858 72,429 Ordinary shares... (306,042) (246,213) (246,213) (123,106) Share premium... Accumulated loss (profit)... 94,346 96, ,230 95,615 Other reserves... (19,725) (19,725) (9,863) Non-controlling interest... (42,203) (42,203) (21,102) Contributed surplus... (24,518) (19,725) 19,725 Deficit ,667 97,077 (97,077) Accumulated comprehensive income... (240) (193) 193 TOTAL EQUITY.... (210,133) (169,054) 94,346 (42,203) (116,911) (58,456) NON-CURRENT LIABILITIES... (71,206) (57,286) 42,203 (15,083) (7,542) Long term borrowings... (15,083) (15,083) (7,542) Loans from minority shareholders in subsidiaries... Deferred tax... Financial liabilities forward gold sales... Provision for rehabilitation... Loan due to Orgaman under Assignment Agreement with Orgaman... (18,748) (15,083) 15,083 Non-controlling interests... (52,458) (42,203) 42,203 CURRENT LIABILITIES... (15,992) (12,864) (12,864) (6,431) Financial liabilities forward gold sales... Trade and other payables... (3,562) (2,864) (2,864) (1,431) Current tax payable... Current portion of long term borrowings.. (10,000) (10,000) (5,000) Loan due to Orgaman under Assignment Agreement with Orgaman... (12,430) (10,000) 10,000 TOTAL EQUITY AND LIABILITIES.. (297,331) (239,204) 94,346 (144,858) (72,429) Notes: A These figures have been extracted without material adjustment from Moto s June 30, 2009 unaudited interim financial statements. B Converted at the spot exchange rate of prevailing at 30 June C Historical exploration costs of $94,346,299 were charged to accumulated loss (profit) to bring the historical treatment of exploration costs in Moto into line with Randgold s accounting policy of expensing all exploration costs until such time as the Directors have sufficient information to determine that future economic benefits are probable. 70

71 PART IV - Section A Unaudited pro forma financial information of Randgold D The presentation of various line items were amended to bring the presentation of Moto s assets and liabilities into line with those of Randgold: Moto s investment in Kilo Goldmines was reclassified to Randgold s available-for-sale financial assets. Moto s loan receivable from Okimo was reclassified to Randgold s long term receivables. Moto s capital assets were reclassified to Randgold s property, plant and equipment. Moto s deficit and accumulated comprehensive income was reclassified to Randgold s accumulated profit. Moto s contributed surplus was reclassified to Randgold s total equity. Moto s long and short term portion of the loan due to Orgaman was reclassified to Randgold s long and short term borrowings respectively. E Being Moto s financial information in US$ adjusted for accounting policy differences and reclassifications. F 50 per cent. of Moto s balance sheet to be proportionally consolidated into the statement of financial position of Randgold. 71

72 PART IV - Section A Unaudited pro forma financial information of Randgold 2b. Moto income statement for the six months ended 30 June 2009 Moto AUD 000 (note A) Moto (conversion to USD using average exchange rate of ) $000 (note B) Reclassification adjustments into Randgold presentation $000 (note C) Moto (adjusted) $000 (note D) Proportionate consolidation of 50% of Moto $000 (note E) REVENUE Gold sales on spot Loss on matured hedges Revenue (215) Total revenue (215) OTHER INCOME Other income ,155 2,234 2,234 1,117 TOTAL INCOME.... 3,458 2,449 (215) 2,234 1,117 COST AND EXPENSES Mining and processing costs Transport and refining costs Royalties Exploration and corporate expenditure (6,244) (6,244) (3,122) Other expenses (256) (181) (35,427) (35,608) (17,805) Employees and consultants (5,810) (4,114) 4,114 Amortisation (555) (393) 393 Occupancy (160) (113) 113 Shareholder and listing costs (155) (110) 110 Marketing and promotion (676) (479) 479 Foreign exchange (loss)/gain operational (572) (405) 405 Foreign exchange (loss)/gain finance (828) (586) 586 Stock based compensation (1,460) (1,034) 1,034 Write off of mineral properties and capital assets... Dilution loss (49,456) (35,023) 35,023 TOTAL COSTS... (59,928) (42,438) 586 (41,852) (20,927) Finance income Finance costs (1,924) (1,924) (962) Interest (1,889) (1,338) 1,338 Provision for financial assets Finance (costs)/income net (1,889) (1,338) (371) (1,709) (855) PROFIT/(LOSS) BEFORE INCOME TAX..... (58,359) (41,327) (41,327) (20,665) Income tax recovery NET PROFIT/(LOSS)... (58,246) (41,247) (41,247) (20,625) Profit/(loss) attributed to: Owners of the parent (56,892) (40,288) (40,288) (20,145) Non-controlling interests (1,354) (959) (959) (480) (58,246) (41,247) (41,247) (20,625) Notes: A These figures have been extracted without material adjustment from Moto s June 30, 2009 unaudited interim financial statements B Converted at the six-month average exchange rate of C The presentation of various expenses was amended to bring the presentation of Moto s expenses and income into line with those of Randgold: Moto s revenue was reclassified to Randgold s finance income. Moto s foreign exchange gain on financing activities was reclassified to Randgold s finance income. Moto s interest expense was reclassified to Randgold s finance cost. Moto s dilution loss was reclassified to Randgold s other expenditure. The remainder of the adjustments reclassified Moto s other expense items to Randgold s corporate and exploration expenditure D Being Moto s financial information in US$ adjusted for reclassifications. E 50% of Moto s income statement to be proportionally consolidated into the income statement of Randgold. 72

73 PART IV - Section A Unaudited pro forma financial information of Randgold 2c. Income statement for the year ended 31 December 2008 Moto AUD 000 (note A) Moto (conversion to USD using average exchange rate of 1.197) $000 (note B) Reclassification adjustments into Randgold s presentation $000 (note C) Moto (adjusted) $000 (note D) Proportionate consolidation of 50% of Moto $000 (note E) REVENUE Gold sales on spot... Loss on matured hedges..... Revenue ,324 1,106 (1,106) Total revenue... 1,324 1,106 (1,106) OTHER INCOME Other income ,598 1, TOTAL INCOME... 1,324 1, , COST AND EXPENSES Mining and processing costs... Transport and refining costs... Royalties..... Exploration and corporate expenditure (12,534) (12,534) (6,266) Other expenses..... (602) (503) (503) (252) Employees and consultants... (6,636) (5,544) 5,544 Amortisation... (812) (679) 679 Occupancy... (278) (232) 232 Shareholder and listing costs (514) (429) 429 Marketing and promotion.... (788) (658) 658 Foreign exchange (loss)/gain operational.... 1,913 1,598 (1,598) Foreign exchange (loss)/gain finance... 1,303 1,089 (1,089) Stock based compensation... (2,969) (2,480) 2,480 Write off of mineral properties and capital assets..... (3,005) (2,511) 2,511 TOTAL COSTS... (12,388) (10,349) (2,688) (13,037) (6,518) Finance income ,196 2,196 1,098 Finance costs.... (2,569) (2,569) (1,285) Interest (3,075) (2,569) 2,569 Provision for financial assets Finance costs/(income) net (3,075) (2,569) 2,196 (373) (187) PROFIT/(LOSS) BEFORE INCOME TAX... (14,139) (11,812) (11,812) (5,906) Income tax expense... NET PROFIT/(LOSS)... (14,139) (11,812) (11,812) (5,906) Profit/(loss) attributed to: Owners of the parent... (14,139) (11,812) (11,812) (5,906) Non-controlling interests.... (14,139) (11,812) (11,812) (5,906) Notes: A These figures have been extracted without material adjustment from Moto s December 31, 2008 audited financial statements. B Converted at annual average exchange rate of C The presentation of various expenses was amended to bring the presentation of Moto s expenses and income into line with those of Randgold: Moto s revenue was reclassified to Randgold s finance income as it represents interest received. Moto s foreign exchange gain on financing activities was reclassified to Randgold s finance income. Moto s interest expense was reclassified to Randgold s finance cost. The remainder of the adjustments reclassified Moto s other expense items to Randgold s corporate and exploration expenditure D Being Moto s financial information in US$ adjusted for reclassifications. E 50% of Moto s income statement to be proportionally consolidated into the income statement of Randgold. 73

74 PART IV - Section A Unaudited pro forma financial information of Randgold 3. These adjustments reflect the acquisition of 50% of the issued share capital of Moto: The table below summarises the adjustments to the Moto balance sheet as at 30 June 2009 in relation to the acquisition of 50% of Moto: Note Description Mineral Properties Receivables Cash and Cash Equivalents Ordinary Shares Share Premium Accumulated Profit Other Long Term Reserves Borrowings Current Portion of Long Term Borrowings 3(a)(i) Share consideration.. 483,370 (331) (483,039) 3(a)(i) Cash consideration.. 76,864 (76,864) 3(a)(i) Cash from AngloGold... (248,162) 248,162 3(a)(ii) Moto options.. 14,958 14,958 (29,916) 3(a)(ii) Moto warrants (130) 3(a)(ii) Cash for Moto options (640) 3(a)(iii) Transaction costs ,134 (5,134) 3(a)(iv) Red Back termination fee ,970 (6,970) 3(a)(v) Elimination on consolidation.. (37,354) 123,106 (95,615) 9,863 3(b) BMO fee.... (3,088) 3,088 3(c) Orgaman loan (12,542) 7,542 5,000 3(d) Protocol payment ,250 (2,250) 3(e) GICC shares.. 1,621 (81) (1,540) Total adjustment 306,420 14, , ,694 (484,579) (92,527) (20,182) 7,542 5,000 (a) The calculations required to calculate and allocate the excess of the fair value of the consideration paid over the book value of the net assets acquired, which comprise: (i) the fair value of the consideration paid to acquire Moto on 15 October 2009; (ii) the fair value of Moto options and warrants; (iii) the Group s transaction expenses; (iv) the termination fee incurred in terminating Moto s agreement with Red Back; and (v) the elimination of the net assets acquired and equity of Moto. (i) The cost of the acquisition paid to Moto Shareholders comprised $76.9m paid pursuant to a cash election and a total of 6,628,769 Ordinary Shares valued at $72.92 per share as at 15 October 2009 (total $483.4m), the date of completion of the acquisition, net of cash received from AngloGold of $248.2m. In the pro forma balance sheet: The $76.9m cash payment pursuant to the cash election is capitalised to mineral properties and deducted from cash. The $483.4m fair value of the shares issued in consideration for the acquisition is capitalised to mineral properties. $0.3m is credited to share capital and represents the nominal value of the 6,628,769 shares issued and the remaining $483.1m is credited to share premium. The $248.2m cash received from AngloGold increases the cash balance and reduces the amount capitalised to mineral properties. (ii) Additional grants to Moto option and warrant holders were as follows: 774,163 Ordinary Shares are issuable in relation to Moto options, valued at a weighted average exercise price of $56.39 per option as at 15 October 2009, the date of completion of the Moto Acquisition. The fair value of these share options has been calculated as $29.9m. The Black- Scholes valuation model was used to determine the fair value of these options. The full fair value of the share options is reflected in Randgold s other reserves; AngloGold are liable for 50% of the difference between the closing price of Randgold ADSs on the date of exercise and the strike 74

75 PART IV - Section A Unaudited pro forma financial information of Randgold (iii) (iv) (v) price of the share options. Therefore, in the pro forma balance sheet this has been recorded as a credit to share based payment reserves for the full fair value of $29.2m, the recognition of a receivable from AngloGold of $14.96m and capitalisation of $14.96m to mineral properties. 35,305 Ordinary Shares will be issued for Moto warrants, valued at $3.68 per warrant as at 15 October 2009, the date of completion of the Moto Acquisition. The fair value of these warrants has been calculated as $0.1m. In the pro forma balance sheet this has been capitalised to mineral properties and credited to share based payment reserves. Cash of $1.2m was paid to in the money Moto share option holders, Randgold s share of this being $0.6m. A cash payment of $0.05m was also made to Moto shareholders in respect of fractional Rangold shares. In the pro forma balance sheet this has been capitalised to mineral properties and has reduced cash balances. Transaction costs are estimated at $5.1m, being Randgold s share of the total estimated costs of $10.2m. These fees are payble to lawyers, bankers and accountants who assisted in completion of the Moto Acquisition. In the pro forma balance sheet this has been capitalised to mineral properties and has reduced the cash balance. A termination fee of C$15,250,000 was payable to Red Back Mining Inc when Moto terminated its agreement with Red Back Mining Inc and entered into arrangements with Randgold. The fee was paid on 12 August The total fee was translated at the rate of to $13.9m, and Randgold s share of this is therefore $6.97m. In the pro forma balance sheet this has been capitalised to mineral properties and has reduced the cash balance. Eliminate net assets acquired of $37.4m (net of $21.1m non-controlling interest acquired) in order to give effect to the fair value adjustment of $302.5m as set out in the table below. In the pro forma balance sheet share capital of $123.1m, accumulated losses of $95.6m and other reserves of $9.9m are also eliminated to give effect to the proportional consolidation of 50% of Moto. The excess of the fair value of the net consideration paid by Randgold to acquire 50% of Moto over the book value of the 50% of Moto s assets and liabilities acquired by Randgold is attributable to the mineral resources of the Kibali Gold Project and therefore the excess is fully attributed to mineral properties. These adjustments are summarised in the table below: $000 Consideration payable in Ordinary Shares (i) ,370 Consideration payable in cash (i)... 76,864 Less cash received from AngloGold (i)... (248,162) 774,163 Randgold share options issued for Moto options (ii)... 14,958 35,305 Randgold share options issued for Moto warrants (ii) Cash granted to in the money Moto share option holders including fractions (ii) Transaction costs of the Company that may be capitalised (iii)... 5,134 Termination fee paid to Red Back Mining Inc (iv)... 6,970 Net consideration paid by Randgold ,904 Less Randgold share of the book value of Moto assets and liabilities acquired (v)... (37,354) Excess of fair value of consideration paid over book value of net assets acquired (attributable to mineral properties) ,550 (b) A fee which Moto agreed with BMO Nesbitt Inc. ( BMO ) to pay to BMO on completion of the Moto Acquisition. The actual fee paid was $6.2m (Randgold s share of this being $3.1m) calculated using the formula set out below with the following inputs: Moto share price of C$5.31 at 15 October 2009, total outstanding shares in Moto (including in-the-money options) of 119,000,598 and an exchange rate of In the pro forma income statement for the year ending 31 December 2008 this fee was charged as a consultant s fee. In the pro forma balance sheet this amount is shown as an adjustment to accumulated profit and a reduction in the cash balance. The formula used to calculate the completion fee was: up to $4.25 per Moto share: 0.75% of the transaction value: plus 2% of any incremental transaction value from C$4.26 to C$5.25 (inclusive) 3% of any incremental transaction value above C$5.25 per Moto share 75

76 PART IV - Section A Unaudited pro forma financial information of Randgold (c) (d) (e) Change in contol of Moto required the immediate repayment of the loan due to Orgaman. The total balance of the loan as per the Moto 30 June 2009 financial statements was AUS$31.2 million which has been translated to $25.1m as at 30 June 2009 at an exchange rate of Randgold s 50% share of the loan repayment was $12.5m. in the pro forma balance sheet this is shown as a reduction of $7.5m in long term borrowings, a reduction of $5m in the short term portion of long term borrowings and a reduction of $12.5m in cash balances. The $4.5 million protocol payment is a payment to the DRC government in order to secure the extension of Moto s exploitation licences in the DRC. Randgold s share of this payment was $2.25 million. In the pro forma balance sheet this has been capitalised to mineral properties and has reduced cash balances. 628,982 Moto shares were issued to Moto s advisors GICC as a result of the change of control arising from completion of the Moto Acquisition. The closing share price of Moto at 15 October, 2009 was C$5.31 and was used to calculate the fair value of C$3.4m translated to $3.2m at a rate of Randgold s share of this cost was $1.6m. In the pro forma balance sheet this has been capitalised to mineral properties, $0.08m has been credited to share capital and represents the nominal value of the 628,982 shares issued and the $1.5m is credited to share premium. 4. These adjustments reflect the acquisition of 10% of Kibali Goldmines: (a) An adjustment has been made to reflect the cash consideration of $56.8m payable for the acquisition of 10% of Kibali Goldmines. 50% of the total acquisition cost of $113.6m is to be funded by AngloGold. The estimated transaction expenses of $3m are based on the Directors latest estimate of the Company s transaction expenses that may be capitalised as part of the total expenses of the transaction. $m Consideration payable in cash Transaction costs Estimated consideration Less the book value of net assets acquired... (14.1) Excess of fair value of consideration paid over book value of net assets acquired (attributable to mineral properties) The consideration of $59.8m was paid to acquire 10% of the net assets of Kibali Goldmines with a corresponding reduction in the non-controlling interest from 15% to 5%. The excess of the consideration paid over the book value of net assets acquired represents the value of the mineral resources acquired and is, therefore, fully attributed to mineral properties. In the pro forma balance sheet the net amount of $45.7m is capitalised to mineral properties, non-controlling interests are reduced by $14.1m and cash is reduced by $59.8m. (b) An adjustment of $4.7m was made to reflect OKIMO s intention to discharge certain debts owed to Kibali Goldmines. In the pro forma balance sheet this is shown as a reduction in receivables and an increase in cash. The adjustments to cash in respect of note 4(a) and (b) are therefore: $m Consideration payable in cash... (56.8) Transaction costs... (3.0) Cash received from OKIMO Net adjustment to cash.... (55.1) 5. No account has been taken of (i) the financial performance of the Group since 30 June 2009 in the pro forma income statement or since 30 September 2009 in the pro forma balance sheet; (ii) the financial performance of Moto or Kibali Goldmines since 30 June 2009; or (iii) any other event, save as disclosed above. 6. The calculations of the excess of the fair value of the consideration paid over the book value of the net assets acquired set out in the tables in notes 3(a) and 4(a) above are provisional, being based on the net assets at 30 June 2009, and the net assets acquired will be subject to a fair value restatement as at the effective dates of, respectively, the Moto Acquisition and the Kibali Acquisition. As a result, the adjustment to mineral properties in the Group s consolidated balance sheet may change from that shown in the pro forma balance sheet. 76

77 PART IV Section B Accountants report on the pro forma financial information BDO LLP 55 Baker Street London W1U 7EU The Directors 30 November 2009 Randgold Resources Limited La Motte Chambers La Motte Street St Helier Jersey JE1 1BJ HSBC Bank plc 8 Canada Square London E14 5HQ Dear Sirs Randgold Resources Limited (the Company ) Pro forma financial information We report on the unaudited pro forma balance sheet and the unaudited proforma statements of income (the Pro Forma Financial Information ) set out in Section A of Part IVof the class 1 circular dated 30 November 2009 (the Circular ), which has been prepared on the basis described, for illustrative purposes only, to provide information about how the 50% acquisition of Moto Goldmines Limited on 15 October 2009 and the proposed acquisition of 10% of the issued share capital of Kibali Goldmines s.p.r.l. might have affected the financial information presented, on the basis of accounting policies adopted by the Company in preparing its consolidated interim financial statements for the period ended 30 September This report is required by paragraph R of the listing rules made by the Financial Services Authority for the purposes of part VI of the Financial Services and Markets Act 2000 (the Listing Rules ) and is given for the purpose of complying with that item and for no other purpose. Responsibilities It is the responsibility of the directors of the Company (the Directors ) to prepare the Pro Forma Financial Information in accordance with item R of the Listing Rules. It is our responsibility to form an opinion, as required by item 7 of Annex II of the PD Regulation as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you. Save for any responsibility arising under which we may have to those persons to whom this report is expressly addressed and which we may have to shareholders of the Company as a result of the inclusion of this report in the Circular, to the fullest extent permitted by the law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item R(6) of the Listing Rules consenting to its inclusion in the Circular. In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue. 77

78 PART IV - Section B Accountants report on the pro forma financial information Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the Directors. We planned and performed our work so as to obtain the information and explanations which we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. Opinion In our opinion: (a) the Pro Forma Financial Information has been properly compiled on the basis stated; and (b) such basis is consistent with the accounting policies of the Company. Yours faithfully BDO LLP 78

79 1. Introduction PART V Section A Principal terms of the Kibali Acquisition Agreement Under the terms of the Kibali Acquisition Agreement Jersey JVCo has agreed to acquire shares in the capital of Kibali Goldmines (representing 20 per cent. of the issued share capital of Kibali Goldmines) from OKIMO for an aggregate consideration of US$113.6 million payable in immediately available cash funds as set more fully at paragraph 4 below. 2. Conditions 2.1 The Kibali Acquisition Agreement is conditional on: (a) (b) (c) (d) (e) (f) (g) (h) the Company obtaining shareholder approval for the Kibali Acquisition; the South African Reserve Bank granting approval for AngloGold to enter into the Kibali Acquisition Agreement and for the Kibali Acquisition; OKIMO obtaining shareholder and board approval for: (i) (ii) (iii) (iv) the sale of the Sale Shares; the signature of the Restated JV Contract; the adoption of the Restated Articles; voting in favour of the Kibali Resolution; delivery of duly executed copies of the Declaration and the Protocol to Jersey JVCo, Randgold and AngloGold along with the Notification Letter; the passing of the Kibali Resolution; delivery of duly executed copies of the Restated JV Contract to Jersey JVCo, Randgold and AngloGold; and the renewal of those Exploitation Permits expiring in 2014 due for renewal under the Protocol. the representations and warranties given by the Seller being authentic and accurate at Completion. 2.2 Jersey JVCo may waive the conditions set out in paragraph 2.1 above although the conditions set out in paragraph (c), (e), (f) and (h) above are also given for the benefit of OKIMO. 2.3 If the conditions set out in paragraph 2.1 above are not satisfied (or waived) by 31 January 2010 or such other date as may be agreed between Jersey JVCo and OKIMO, the Kibali Acquisition Agreement shall lapse with effect from that date. 3. Waiver Moto, OKIMO, Kibali Goldmines and Border have each agreed to waive their applicable rights (including preemption) under the Original JV Contract in respect of the Kibali Acquisition Agreement. 4. Completion Payments At Completion, Jersey JVCo will pay in cash: (a) (b) (c) the Sale Price less an amount equal to the aggregate of (i) the Debt Adjustment and (ii) the Balancing Retirement Amount and (iii) the Kibali Retirement Amount and (iv) the Social Fund Amount to accounts specified by OKIMO and approved by the Minister of Mines and the Minister of Portfolio; the Debt Adjustment amount to such persons as are notified to it prior to Completion so that the amount of Debt owed by OKIMO to Kibali Goldmines, Moto and/or Border (if any) shall be entirely repaid in full; the Balancing Retirement Amount to a bank account notified to Jersey JVCo by OKIMO. Following the payment of the Balancing Retirement Amount, OKIMO shall as soon as practicable make payment of the Balancing Retirement Amount to such employees or former employees of OKIMO as have been recognised as having amounts due to them; 79

80 PART V - Section A Principal terms of the Kibali Acquisition Agreement (d) (e) the Kibali Retirement Amount to a bank account notified to Jersey JVCo by Kibali Goldmines following which Kibali Goldmines has agreed to, as soon as practicable, make payment of the Kibali Retirement Amount to OKIMO to enable it to make payment to various employees or former employees of OKIMO; and the Social Fund Amount in cash to a bank account notified to Jersey JVCo by OKIMO following which OKIMO undertakes to Jersey JVCo to use the Social Fund Amount for the purposes of building roads, an airfield, hospitals and other social and infrastructure works in the Doko region in the vicinity of Kibali. 5. Representations, Warranties and Indemnity 5.1 OKIMO has agreed to provide limited representations and warranties to Jersey JVCo, Randgold and AngloGold in relation to Kibali Goldmines. 5.2 OKIMO has agreed to indemnify Jersey JVCo against all losses, costs, liabilities (including any liability to tax) and expenses (including legal and other professional fees and expenses) suffered arising directly from a breach by OKIMO of the warranties contained in the Kibali Acquisition Agreement provided that such amount is in excess of US$100,000. The total amount of the indemnity is capped at the sale price. 5.3 Jersey JVCo has agreed to provide limited representations and warranties to OKIMO in relation to its authority to enter into the Kibali Acquisition Agreement and other matters. 5.4 Jersey JVCo has agreed to indemnify OKIMO against all losses, costs, liabilities (including any liability to tax) and expenses (including legal and other professional fees and expenses) suffered arising directly from a breach by Jersey JVCo of the warranties contained in the Kibali Acquisition Agreement provided that such amount is in excess of US$100,000. The total amount of the indemnity is capped at the Sale Price. 6. Termination The Kibali Acquisition Agreement may be terminated: (a) at any time by agreement in writing signed by all the parties; or (b) on five days written notice if a party is in default of any material obligation and has not remedied its default within twenty days of receipt of a notice from a non-defaulting party advising the defaulting party of such default. 7. Guarantee Each of Randgold and AngloGold have agreed to (acting severally) irrevocably and unconditionally guarantee to OKIMO the payment by Jersey JVCo of half of the Sale Price due under the Kibali Acquisition Agreement and the performance by Jersey JVCo of its obligation and undertakings set out in the Kibali Acquisition Agreement. 8. Governing Law The Kibali Acquisition Agreement is governed by the laws of the Democratic Republic of Congo. 80

81 PART V Section B Principal terms of the Restated JV Contract 1. Introduction In connection with the Kibali Acquisition, OKIMO has agreed that the joint venture agreement governing the operation of Kibali Goldmines shall be amended to reflect certain matters in relation to the operation of Kibali Goldmines, and to reflect OKIMO s reduced shareholding in Kibali Goldmines. The Restated JV Contract was entered into between OKIMO, Moto, Border, Kibali Goldmines and Jersey JVCo on 31 October 2009 to take effect from Completion. 2. Transformation and Capitalisation of Kibali Goldmines 2.1 The parties have agreed that Kibali Goldmines will continue to hold the exploitation permits for the Consolidation Perimeter and other assets relating to Kibali and the business of Kibali Goldmines shall be conducted by the board together with the Executive Committee (both with the assistance of the Technical Services Provider). 2.2 Moto and Border have agree to procure that a general meeting and a meeting of the Kibali Board be held in order to approve: the transfer of 2,000,000 shares in Kibali Goldmines from OKIMO to Jersey JVCo; the adoption of revised articles of association of Kibali Goldmines; and the appointment of three further directors of Kibali Goldmines by Border such that the board of directors of Kibali Goldmines will comprise eight directors of which two are appointed by OKIMO and six by Border; 2.3 Following the transfer described in 2.2 above the share capital of Kibali Goldmines will be held as follows: Name Number of Shares Percentage shareholding Border... 7,000,000 70% Jersey JVCo... 2,000,000 20% OKIMO... 1,000,000 10% 2.4 The Parties agree that the 10 per cent. participation by OKIMO in Kibali Goldmines is non-dilutable and such participation shall in no event be lower than 10 per cent., except in case of a voluntary sale or other transfer by OKIMO of its holding. The parties to the Restated JV Contract have agreed that OKIMO will not be required to contribute to the financing of the Business. 3. Contributions and Undertakings of Moto 3.1 Moto has agreed to finance Kibali Goldmines business to the extent not covered by internally generated cashflow, either by capital contributions, shareholder loans or external financing. 3.2 Moto has represented that it has now transferred to Kibali Goldmines the benefit of the 2007 Feasibility Study, all geological information, and any other relevant technical data (including drilling samples and interpretation of such data) relating to exploration carried out by the Moto Group on the Consolidated Perimeter prior to the execution of the Restated JV Agreement. 4. OKIMO Declarations and Warranties 4.1 OKIMO has agreed to indemnify Moto, Border and their affiliated companies against all damages that any one of them could have incurred, and from any liabilities, losses or claims against any one of them, resulting from the inaccuracy or the falseness of any declaration or warranty at the time such declaration or warranty was given that is set forth under the Original JV Contract and the Restated JV Agreement. 5. Undertakings 5.1 OKIMO has agreed to make available to Kibali Goldmines certain rights relating to the zones outside the Consolidated Perimeter insofar as OKIMO, has or will have the exclusive use of those zones and to the extent that these rights are reasonably necessary for Kibali Goldmines to carry to completion Kibali in as cost efficient a manner as possible. These rights are: rights of way, servitudes, easements, water rights, existing air infrastructure, and all the supplementary rights that can facilitate access to or use of the Consolidated Perimeter and the facilities located thereon. 81

82 PART V - Section B Principal terms of the Restated JV Contract 5.2 OKIMO has agreed to provide assistance to Kibali Goldmines in obtaining all the visas, residency and work permits and other documents required for the persons working on Kibali, its shareholders and its contractors in connection with formalities required in the DRC for the import of equipment and the export of necessary materials. 5.3 OKIMO has agreed to provide Kibali Goldmines with assistance in negotiations with the competent authorities in relation to the construction of a new N Zoro hydro-electrical plant and in dealing with small scale and artisanal miners. 5.4 Kibali Goldmines has agreed to take all reasonable actions in a reasonable time in order to assist OKIMO with identifying one or more deposits or tailings sites outside the Consolidated Perimeter for development. Once Kibali Goldmines and OKIMO have identified deposits or tailings sites which individually is expected to permit OKIMO to maintain a level of production and profitability equivalent to that resulting from the Existing Tailings, OKIMO shall transfer its activities, operations, offices and people and the processing plant to such sites. Once this has been effected OKIMO shall no longer have any rights to retreat the Existing Tailings within the Consolidated Perimeter and Kibali Goldmines obligations under the Revised ATF Agreement shall cease. 5.5 OKIMO has agreed to provide assistance to obtain, all necessary approvals, permits and consents required by the DRC (and in due course for the renewal of the Exploitation Permits) and local authorities with regards to the planning for the construction of the infrastructure of Kibali and the commencement of commercial production as well as for the social development projects including the delocalisation and the relocation of the population affected by Kibali. 6. Payment of the pas de porte, rent and other payments in favour of OKIMO and the DRC 6.1 OKIMO has confirmed, as concerns the Consolidated Perimeter, that neither Moto, Border, Kibali Goldmines nor any other entity of the Moto Group is held to pay to any third party whomsoever any other payment at any time whatsoever, as a pas de porte. 6.2 The Parties have confirmed that lease rent on the Consolidated Perimeter has been transformed into a monthly rent of US$350,000 payable by Kibali Goldmines to OKIMO until the beginning of commercial production of gold at Kibali. 7. Royalties Kibali Goldmines will pay royalties to the DRC, in accordance with applicable law and regulations and other than those royalties, the other amounts provided for under the Restated JV Contract and all taxes payable to the DRC in connection with the Restated JV Contract, the parties to the Restated JV Contract have agreed that no other royalty shall be payable to the DRC. 8. Business of Kibali Goldmines Unless the shareholders of Kibali Goldmines unanimously decide otherwise, the shareholders shall procure that the only business of Kibali Goldmines shall be the Business and that the shareholders shall co-operate with each other in the running and operation of Kibali Goldmines in accordance with the recommendations of the Executive Committee (with the assistance of the Technical Services Provider). 9. Budget and Business Plan The Business will be conducted and exclusively in compliance with the approved budget and business plan to be prepared by the Executive Committee (with the assistance of the Technical Service Provider) for approval or modification by the Kibali Goldmines Board. The prior approval of the Board of Directors is required for any significant variance in relation to an adopted budget and business plan. 10. The Kibali Board 10.1 The administration of Kibali Goldmines will be provided for by the Kibali Board composed of eight members of which two members will be appointed by OKIMO and six members appointed by Border. The Chairman of the Board of Directors will be appointed by Border from amongst the members of the Kibali 82

83 PART V - Section B Principal terms of the Restated JV Contract Board. The deputy Chairman of the Kibali Board will be appointed by OKIMO from amongst the members of the Kibali Board A quorum for Kibali Board meetings will require at least five of its members to be present or represented, including at least four directors appointed by Border and at least one director appointed by OKIMO save that at a second meeting convened for lack of a quorum the quorum shall be met if at least four directors appointed by Border are present or represented. 11. Executive Committee 11.1 The Kibali Board will appoint an Executive Committee of Kibali Goldmines, accountable to the Kibali Board, to comprise such posts as the Kibali Board shall determine and which will be composed of a maximum of five members save for the chairman of the Executive Committee (who shall be the chairman of Kibali Goldmines). All members will be full-time employees of Kibali Goldmines and all (save as set out at 11.2 below) shall be recruited by the Technical Services Provider. In addition, and as an additional member, the Chairman of the Board may act as chairman of the Executive Committee with the approval of the Kibali Board For five years from Completion, OKIMO will have the right to nominate a person to become a member of the Executive Committee. 12. General Meetings 12.1 An annual general meeting must be held within three (3) months of the end of each financial year Any shareholder representing at least one tenth of the authorised shares, the Chairman of the Kibali Board, two Kibali Board members or the auditors may request that an extraordinary general meeting be held A quorum for a general meeting will be constituted if all shareholders are present save that at a second meeting convened for a lack of a quorum the quorum shall be met if holders of at least 50 per cent. of the shares are present or represented Subject to paragraph 13 below, decisions are made on a simple majority of the votes. Each share gives entitlement to one vote. 13. Decisions submitted to the blocking minority and other important decisions 13.1 Any business which relates to a decision submitted to minority (set out below) blocking will not be transacted without approval of OKIMO Decisions submitted to the blocking majority are: (a) (b) (c) (d) (e) (f) (g) (h) any amendment to the Restated Articles or the adoption of new articles of association of Kibali Goldmines; any increase or decrease in the authorised share capital of Kibali Goldmines; the creation, allotment or issue of any shares or the grant or agreement to grant any option or interest (in the form of obligations convertible) over any shares or any uncalled capital of Kibali Goldmines; the consolidation, sub-division, conversion or cancellation of any share capital of Kibali Goldmines; the relocation of Kibali Goldmines place of incorporation to a jurisdiction other than the DRC; entering into any contract or agreement with any affiliate of Border otherwise than on arm s length terms, excluding the Technical Services Agreement and any transfer of shares to an affiliate of Border; any steps to be undertaken by Kibali Goldmines in the framework of a business or a project that is not directly related to the Business; and any change in the description of the social projects to be performed in relation with economic and social development of local communities. 83

84 PART V - Section B Principal terms of the Restated JV Contract 13.3 Moto and Border have acknowledged that the following matters, even though they are not decisions subject to the blocking minority as set out above, are of great importance to OKIMO and have agreed to consult with the latter on all decisions that are related to them: (a) (b) (c) (d) any decision that relates to the approval and/or change in the budget or in the business plan; any decision that relates to the powers, attributes, fees or compensation of the members of the Kibali Board and the Executive Committee; any decision that relates to a contract between Kibali Goldmines and any Shareholder in Kibali Goldmines, (other than OKIMO) and any additional companies or such Shareholder; and the terms of the Moto Financing Agreement can only be amended with the consent of OKIMO, such consent not to be unreasonably withheld. 14. Financing 14.1 Any further financing which may be required to meet the working capital requirements of Kibali Goldmines will have to be determined by the Kibali Board and be subject to a budget or business plan. The intention of the Parties is that all such financing be provided for, so far as possible, by loans made to Kibali Goldmines by (i) Jersey JVCo or its affiliated companies (ii) Randgold or its affiliated companies or (iii) AngloGold or its affiliated companies, or by third parties. Jersey JVCo and its affiliated companies will be in charge of obtaining all external financing that may be required in relation to the Business Subject to the obligations of Moto as set out at paragraph 3.1 above, neither of the shareholders of Kibali Goldmines shall be obliged to make any loans or to subscribe for any share capital of Kibali Goldmines All existing and future shareholder financing shall be on the terms of the Moto Financing Agreement OKIMO must be notified with regard to the terms and conditions of any external financing in favour of Kibali Goldmines. OKIMO has agreed to co-operate with Jersey JVCo and its affiliated companies and Kibali Goldmines in order to facilitate the obtaining of such financing but shall not be under any obligation to pledge its Shares in Kibali Goldmines A shareholder of Kibali Goldmines may only encumber its shares by lien or pledge if the creditor agrees expressly in writing that its rights arising out of its surety will be subject to the entering by said creditor into an adherence deed to the Restated JV Contract in the agreed form As at the date of Completion all amounts owing from OKIMO to Kibali Goldmines or the Moto Group shall have been repaid. Under the Revised ATF Agreement there will remain an obligation on Kibali Goldmines to fund OKIMO with a maximum aggregate amount of approximately US$7 million. This funding and any other funding to OKIMO shall be on the terms of the OKIMO Financing Agreement. 15. Use of cash flows Subject to the discretion of the Kibali Board consistent with applicable legal requirements, cash available to Kibali Goldmines will be used as follows: (a) (b) (c) (d) priority shall be given to payment of the financial obligations related to the Business; available cash may also be reserved and thereafter utilised for anticipated operating costs over a reasonable period of time, for taxes, for repair and replacement equipment and facilities, for contingencies, for modifications, improvements, and expansions of equipment and facilities, and for the purchase and construction of new equipment and facilities; cash available after payments of the items set out above will be utilised to repay shareholder loans owed by Kibali Goldmines to the Moto Group; and the balance of cash remaining may be utilised for the payment of dividends to the shareholders of Kibali Goldmines as determined by the Kibali Board. (The dividends paid to OKIMO shall be first used to repay amounts owing under the OKIMO Financing Agreement.) 84

85 PART V - Section B Principal terms of the Restated JV Contract 16. Accounts and accounting information The accounting records and financial statements of Kibali Goldmines will be drawn up by the Technical Services Provider in accordance with the provisions of the DRC accounting legislation and practice and in accordance with the Technical Services Agreement in accordance with the accounting standards used by Randgold and AngloGold to the extent that these principles comply with the international norms for financial information. 17. Dealings with and transfers of shares 17.1 Any Shareholder may, at any time, freely transfer one, several shares or all of its shares in Kibali Goldmines to another party or to an affiliated company or, in the case of Border, any entity owned as to 50 per cent. or more by Randgold or AngloGold, provided that (i) the shares shall be transferred back to the transferor if the transferee ceases to be an affiliated company and that (ii) the act or the transfer agreement shall expressly provide for such obligation to transfer back The Restated JV Contract contains pre-emption provision in respect of proposed transfers of shares by OKIMO as well as tag-along rights in respect of offers for the entire shareholding of Jersey JVCo and Border. 18. Termination 18.1 The parties to the Restated JV Contract may at any time terminate the Restated JV Contract by agreement in writing signed by all the parties OKIMO may terminate the Restated JV Contract on five days notice if Kibali Goldmines is in default of payment of any sums due to OKIMO and has not remedied such default within 30 days of receipt of notice of the default. 19. Governing law and Arbitration 19.1 The validity, interpretation and performance of the Restated JV Contract are governed by the laws in force in the DRC with disputes to be submitted to arbitration in Paris under the rules of the International Court of Arbitration of the International Chamber of Commerce. 85

86 PART V Section C Principal terms of the Protocol 1. Payments Moto agreed, pursuant to the Protocol, to pay a total amount of US$4.5 million to the Government of the DRC and OKIMO within three business days of the fulfilment of certain conditions. These conditions have been satisfied. The Protocol Consideration was paid by Moto on 13 November 2009 and was paid 50 per cent. to the Government and 50 per cent. to OKIMO. 2. Renewal of Exploitation Permits 2.1 The Government agrees to authorise the renewal of the Exploitation Permits held by Kibali Goldmines, for additional periods of 15 years from their current expiry dates. The Protocol recognises that the applications for renewal of those Exploitation Permits which expire in 2014 can be renewed as of the date of the Protocol, while those expiring in June 2015 can, in accordance with the Mining Code only be renewed as of June 2010 and the DRC undertakes to effect the renewals of all Exploitation Permits as soon as possibly under the Mining Code. 2.2 The Government further undertakes that, for such time as Kibali is in commercial production, all of the Exploitation Permits held by Kibali Goldmines shall be renewed on their respective earliest permitted renewal dates. 3. General 3.1 Pursuant to the Protocol, the Government also agree that no approval or further payment for any reason is currently or shall, after the date of the Protocol be required by the Government in connection with the Moto Acquisition. 3.2 Moto Goldmines and Jersey JVCo undertake to observe their respective obligations arising out of the Restated JV Contract or the Original JV Contract, as the case may be, as they may be amended from time to time, including the process for approving and amending the budget and business plan of Kibali Goldmines (as defined and set out in the Original JV Contract). 86

87 PART V Section D Principal terms of the Declaration 1. The Mining Code and the Mining Regulations The Government has confirmed that the Mining Code and the Mining Regulations are in full force and effect and constitute binding obligations on the DRC and that there are no current or planned proposals to amend or supplement the Mining Code and the Mining Regulations 2. Customs Duties, Charges, Royalties And Other Fees in DRC The Government has confirmed that the only taxes, customs duties, charges, royalties and other fees due to the Government applicable to Kibali Goldmines, Moto, Randgold or AngloGold or any other company associated with them and involved in Kibali which apply to mining activities are those outlined in the Mining Code and guarantees the stability of these provisions in accordance with Article 276 of the Mining Code. 3. Exploitation Permits 3.1 The Government agreed (as per the Protocol) that any and all of the Exploitation Permits which have not been renewed at the date of the Declaration will be renewed on the terms of the Protocol and thereby extended for a fifteen year period and all other permits and licenses required for development and exploitation shall be granted in a timely manner. 3.2 The Government agreed (as per the Protocol) that for as long as Kibali is in commercial production that (provided that Kibali Goldmines complies with the Mining Code and the Mining Regulations), all of the Exploitation Permits held by Kibali Goldmines shall be renewed on all relevant future renewal dates. 3.3 The Government agreed (provided that Kibali Goldmines complies with the Mining Code and the Mining Regulations,) not to terminate or otherwise limit the scope or effect of the Exploitation Permits held by Kibali Goldmines other than in accordance with their terms and the terms of the Mining Code or the Restated JV Contract. 3.4 The Government has undertaken that it shall take no action to prevent, prohibit or frustrate any future transfer of any shares in Kibali Goldmines by Moto, Jersey JVCo, Randgold or AngloGold or any other company associated with them and involved in Kibali to any company associated with them and involved in Kibali and that it will levy no charges on such transfer other than normally applicable share transfer taxes and that it will not seek to acquire a further interest in Kibali Goldmines. 87

88 PART V Section E Principal terms of the Technical Services Agreement 1. Parties The Technical Services Agreement was entered into between Kibali Goldmines and Kibali Services Limited on 20 November 2009, with a commencement date of 15 October Appointment Kibali Goldmines has agreed to appoint Kibali Services Limited to provide technical services to Kibali and Kibali Goldmines business, to make recommendations as to the members of the Executive Committee; to identify and recruit employees and secondees for Kibali; and to provide assistance to the Kibali Board and the Executive Committee in providing services requested under the Restated JV Agreement. 3. Duration Kibali Goldmines and Kibali Services Limited have agreed that the Technical Services Agreement will terminate on the earliest of: (a) the final termination of the Exploitation Permits; or (b) the giving of 12 months notice by either Kibali Services Limited or Kibali Goldmines. 4. Remuneration Kibali Services Limited will receive reimbursement of its reasonably and necessarily incurred costs in connection with the provision of both mining services and other services under the Technical Services Agreement and, in addition: (a) during the period until the date on which the Kibali Board approves the commencement of construction of the Kibali Gold Project, Kibali Services shall be paid a pre-construction exploration fee of US$1 million per financial year, quarterly in arrears, pro-rated for part of a year (as escalated in accordance with the United States Consumer Price Index); and (b) following such approval Kibali Services shall be paid a services fee of US$4 million per financial year, quarterly in arrears, pro-rated for part of a year (as escalated in accordance with the United States Consumer Price Index). 5. Governing Law The Technical Services Agreement is governed by English Law and disputes arising from it will be submitted to arbitration in London under the Rules of Arbitration of the International Chamber of Commerce. 88

89 PART VI Additional Information 1. Responsibility The Directors, whose names appear below, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. 2. Company address The registered office and the principal place of business of the Company is at La Motte Chambers, La Motte Street, St. Helier, Jersey, JE1 1BJ, Channel Islands (telephone number or, if dialling from outside the United Kingdom or the Channel Islands, ). 3. Directors and others interests 3.1 As at 27 November 2009 (being the latest practicable date prior to the posting of this document), the aggregate interests of each of the Directors in the share capital of the Company which have been notified by each Director to the Company pursuant to DTRs 3.1.2R and 3.1.3R or the interests of persons connected with them which would, if the connected person were a Director, be required to be disclosed under DTRs 3.1.2R and 3.1.3R and the existence of which is known to, or could with reasonable diligence be ascertained by, that Director) were as follows: Director Number of Ordinary Shares Percentage of existing issued share capital M. Bristow , G. Shuttleworth... 24, P. Liétard... 31, N. Cole... 2,265 G0.01 C. Coleman... 1,800 G0.01 R. Israel... 40, K. Voltaire... 2,265 G0.01 J. Walden G0.01 Save as disclosed in this paragraph 3, none of the Directors has any interest in the share capital of the Company. 3.2 The Directors currently do not hold any options to acquire Ordinary Shares. 3.3 On 11 May 2005 the first US$30,000 award was allocated to each of the non-executive Directors at such time for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq National Market closing price on 10 May 2005, being $ In terms of the policy, 783 shares were issued directly to each non-executive director and 1,565 shares were held as restricted stock. Non-executive Directors were issued the second tranche of 782 Ordinary Shares on 13 February 2006 and the final balance was issued 3 January On 13 February 2006 the second US$30,000 award was allocated to each of the non-executive Directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq National Market closing price on 10 February 2006 or US$ In terms of the policy, 584 shares were issued directly to each non-executive Director and 1,169 shares were held as restricted stock. Non-executive Directors were issued the second tranche of 584 Ordinary Shares on 3 January 2007 and the final balance was issued on 1 January On 3 January 2007 the third US$30,000 award was allocated to each of the non-executive Directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq Global Select Market closing price on 3 January 2007, or US$ In terms of the policy 447 shares were issued directly to each non-executive Director and 894 shares were held as restricted stock. Non-executive Directors were issued the second and third tranches on 1 January 2008 and 1 January 2009 respectively. On 3 January 2008, the fourth US$30,000 award was allocated to each of the non-executive Directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq Global Select Market closing price on 2 January 2008, or US$ In terms of the policy 262 shares were issued 89

90 PART VI - Additional Information directly to each non-executive Director and 524 shares were held as restricted stock. Non-executive directors were issued the second tranche on 1 January 2009 and subject to agreed conditions, the final tranche will be issued on 1 January On 1 January 2009, the first award of 1,200 restricted shares were allocated to the non-executive Directors as approved by Shareholders at the Company s 2008 annual general meeting. The price of the restricted stock calculation was the Nasdaq Global Select Market closing price on 31 December 2008, or US$ In terms of the policy, 400 shares were issued directly to each non-executive Director and 800 shares were held as restricted stock. Non-executive Directors will be issued the second and third tranches subject to agreed conditions on 1 January 2010 and 1 January 2011 respectively. In accordance with the Randgold Restricted Share Scheme, Dr M Bristow was awarded 40,000 restricted shares in August 2008, subject to agreed performance criteria and with a one year vesting period. In order to bring future awards of restricted shares in line with a three year vesting period, the Remuneration Committee has proposed and the board agreed to the following recommendation: 40,000 restricted shares with an award date of 1 January 2009, two thirds vesting on 1 January 2010 and the remaining third vesting 1 January 2011; 40,000 restricted shares with an award date of 1 January 2009, one third vesting on 1 January 2010, one third vesting 1 January 2011 and the final third vesting 1 January 2012; 40,000 restricted shares with an award date of 1 January 2010, one third vesting on 1 January 2011, one third vesting 1 January 2012 and the find third vesting 1 January All the newly awarded restricted shares are subject to the achievement by the Group of a performance bettering the HSBC Global Gold Mining Index. In accordance with the Randgold Restricted Share Scheme, Mr G Shuttleworth was awarded 36,000 restricted shares on 1 July In accordance with the terms of the contract and having met the agreed performance criteria, one third of the award of the restricted shares vested on 1 July 2008, the second third vested on 1 July 2009 and the last third will vest on 1 July Mr G Shuttleworth was further awarded another 54,000 restricted shares effective from 2 September Subject to the achievement of agreed performance conditions being met for the one year period immediately prior to each vesting, one third of the award will vest on 2 September 2011, one third on 3 September 2012 and the remaining third will vest on 2 September The price of the restricted stock was the Nasdaq Global Select Market closing price on 1 September 2009 of US$ The vesting of any portion of the award is subject to Mr G Shuttleworth being employed and achieving a satisfactory performance based on agreed criteria, including an overall strategic output achievement score of 70 per cent. or greater, for a 12 month period preceding each vesting date. 3.4 So far as the Company is aware, as at 27 November 2009 (being the latest practicable date prior to the publication of this document), the following persons (other than the Directors) had notifiable interests in three per cent. or more of the issued share capital of the Company, including pursuant to financial instruments: Shareholder Number of Ordinary Shares Percentage of existing issued share capital BNY (Nominees) Limited (1)... 63,166, FMR LLC (2)... 9,191, Wells Fargo & Company (3)... 6,470, Blackrock Global Funds (4)... 4,253, (1) (2) (3) (4) Shares held by BNY (Nominees) Limited are held for and on behalf of the Company s ADS holders. FMR LLC announced on 6 May 2009 that its ownership in the Company amounted to 9,191,491 Ordinary Shares on a consolidated basis. These shares are believed to be included in the shares held by BNY (Nominees) Limited. Wells Fargo & Company reported in its Schedule 13G filed with the Securities and Exchange Commission on 1 May 2009 that its beneficial ownership in the Company amounted to 6,470,274 Ordinary Shares on a consolidated basis. These shares are included in the shares held by BNY (Nominees) Limited. Blackrock Global Funds announced on 4 November 2009 that its ownership in the Company amounted to 4,253,648 Ordinary Shares. These shares are believed to be included in the shares held by BNY (Nominees) Limited. 90

91 PART VI - Additional Information 3.5 The date of appointment, date of expiration and length of service for each of the Company s Directors is set out below : Director Date of appointment Date of expiration of term Number of years served M. Bristow G. Shuttleworth P. Liétard N. Cole C. Coleman R. Israel K. Voltaire J. Walden The Company currently has service contracts with each of the executive Directors. The service contract with Mr. M Bristow is terminable on one year s notice by the Company and three months notice by Mr. M Bristow, while the service contract with Mr. G Shuttleworth is terminable on six months notice by either party. These do not provide for benefits on termination. The Company does not have written contracts with its non-executive Directors, however each Director is subject to re-election by the Company s shareholders in accordance the Company s Articles of Association. 4. Related Party Transactions The Company, its Directors and major shareholders have not entered into any related party transactions (as set out in the Standards adopted according to Regulation (EC) No 1606/2002) since 1 January 2006 and up to the date of this document save that: 4.1 Under the operator agreement between Morila SA and AngloGold Ashanti Services Mali SA, a management fee calculated as 1 per cent. of the total revenue of Morila, is payable to AngloGold Ashanti Services Mali SA quarterly in arrears. The attributable management fees for the year ended 31 December 2008 amounted to US$0.2 million (2007: US$1.3 million). With effect from 15 February 2008 Randgold Resources Limited (through Mining Investments Jersey Limited) assumed responsibility for the operatorship of Morila SA and accordingly receives payment of the management fees. The total management fee received for the year amounted to US$2 million and the amount outstanding at the year end was US$1 million. 4.2 Randgold Resources (through Randgold Resources (Somilo) Ltd) is the operator of Somilo. Total management fees received for the year ended 31 December 2008 amounted to US$5.7 million (2007: US$5.1 million). Total interest earned on shareholder loans advanced to Somilo amounted to US$8.8 million (2007: US$5.8 million) for the year ending 31 December Seven Bridges Trading 14 (Pty) Limited provided administration services to Rockwell Resources RSA (Pty) Limited ( Rockwell ). Total fees received during the year amounted to US$0.06 million (2007: US$0.08 million). Total balances outstanding at 31 December 2008 from Rockwell amounted to US$6,000 (2007: US$11,000). 5. Material Contracts 5.1 In addition to the Acquisition Documents described in Part Vof this document, the following contracts (not being contracts entered into in the ordinary course of business) have been entered into by members of the Group (a) in the two years immediately preceding the date of this document and are, or may be, material or (b) contain provisions under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this document: (a) (b) Underwriting agreement dated 28 November 2007 between the Company, HSBC Bank plc and Citigroup Global Markets Limited for the global offering of 6,000,000 new Ordinary Shares in the form of Ordinary Shares or American Depositary Shares together with an over-allotment option to purchase up to 900,000 additional Ordinary Shares in the form of new Ordinary Shares or American Depositary Shares. Arrangement Agreement dated 5 August 2009 between Moto, Subco and the Company which provided for the exchange of each Moto Share for, at the option of the holder, of an Ordinary 91

92 PART VI - Additional Information (c) (d) (e) Share or ADS of the Company or US$4.47 in cash. The elections by the holders of Moto Shares and the completion of the Moto Acquisition meant that a total of 6,628,769 ADSs of the Company were issued and US$76.9 million in cash were paid to holders of Moto Shares. Bid Agreement dated 16 July 2009 between the Company and AngloGold (as amended on 27 July 2009) pursuant to which AngloGold has paid a total of approximately US$248.8 million to the Company, Subco and Moto in return for an indirect 50 per cent. stake in Subco (and an indirect 50 per cent. interest in Moto) which it acquired upon completion of the Moto Acquisition. The funds raised were used for the purposes of the Moto Acquisition. Joint Venture Agreement dated 16 July 2009 between the Company and AngloGold where the parties have agreed to regulate their relationship as equal shareholders of Jersey JVCo which indirectly owns 100 per cent. of the issued and outstanding shares of Moto and 70 per cent. of the issued share capital of Kibali Goldmines. The Joint Venture Agreement provides for, among other things: (i) (ii) (iii) (iv) representation on the board of directors of Jersey JVCo pro rata to the percentage interests in Jersey JVCo held by the Company and AngloGold from time to time (initially three directors each); all decisions with respect to Jersey JVCo and Kibali Goldmines are to be taken on a consensual basis for so long as neither the Company nor AngloGold holds less than a 45 per cent. interest in Jersey JVCo. The Joint Venture Agreement also contemplates that the Company shall be the initial operator of Jersey JVCo and, if agreed by the board of directors of Kibali Goldmines, of Kibali Goldmines, under the terms of an operatorship agreement providing for compensation to the operator on a basis consistent with that charged generally within the international mining industry; pro rata funding of Jersey JVCo and Kibali Goldmines and provision for dilution in the event of a failure to meet a funding obligation; and a right of first refusal in the event that either the Company or AngloGold wishes to sell its interest in Jersey JVCo and a call option at a price based on fair value in the event that the interest of either party in Jersey JVCo is diluted below 35 per cent. as a result of a failure to meet funding commitments (subject, in the case of the Company, to certain limits on its right to receive payment if the purchase price would exceed 24.9 per cent. of the Company s market capitalisation). Underwriting agreement dated 29 July 2009 between the Company, HSBC Bank plc and Merrill Lynch International (together the Representatives ) in relation to the Global Offer (including ordinary shares in the form of ADSs) in respect of 5,000,000 new Ordinary Shares. Key terms of the agreement include: (i) (ii) the Company granted the Representatives an over-allotment option to purchase (severally and not jointly) up to an additional 750,000 Ordinary Shares, at the offering price less underwriting discounts and commissions. This option was exercisable within 30 days from the closing date of the Global Offer to cover over-allotments in the Global Offer, if any, and was exercised; and the Company indemnified the underwriters and others against specified liabilities, including liabilities under the US Securities Act and other applicable securities laws, and to contribute to payments the underwriters may be required to make in respect of those liabilities, losses and expenses. The Company completed the Global Offer of 5,750,000 new Ordinary Shares in August 2009, raising approximately US$331 million after underwriting commissions and before expenses. 5.2 The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by Kibali Goldmines (a) in the two years immediately preceding the date of this document and are, or may be, material to Kibali Goldmines or (b) contain provisions under which Kibali Goldmines has any obligation or entitlement which is material to Kibali Goldmines as at the date of this document: (a) The Kibali Acquisition Agreement. 92

93 PART VI - Additional Information (b) (c) (d) (e) (f) (g) (h) The Declaration. The Original JV Contract as proposed to be amended by the Restated JV Contract. The Technical Services Agreement. Moto Financing Agreement dated 10 March 2009 between Moto Goldmines Australia PTY Limited (a subsidiary of Moto) and Kibali Goldmines pursuant to which certain sums were agreed to be advanced to Kibali Goldmines. At the date of signature, US$125 million had been loaned, with further amounts available for loan. Interest was payable on all loans at market rate. OKIMO Financing Agreement dated 10 March 2009 between OKIMO and Kibali Goldmines pursuant to which certain sums were agreed to be advanced to OKIMO by Kibali Goldmines. At the date of signature, US$2.2 had been loaned, with further amounts available for loan. Interest was payable on all loans at market rate. A tripartite agreement relating to debt financing dated 12 June 2009 between Kibali Goldmines, Moto, Société d Organisation, de Participation et de Management, SPRL and OKIMO pursuant to which debt totalling US$34,860,739 (including interest) as at 31 May 2009 originally due by OKIMO to Société d Organisation, de Participation et de Management, SPRL was assumed by Kibali Goldmines and under which OKIMO will be exempt from having to make payment of such debt. The Revised ATF Agreement as amended by the provisions of the Restated JV Contract pursuant to which Kibali Goldmines provided technical services and financial assistance in respect of the Kibali Gold Project in order to develop the Kibali Gold Project (including the obligation to provide a loan facility to OKIMO of up to US$7 million) in return for payment from OKIMO and a 70 per cent. interest in the Kibali Gold Project. 6. Working capital of the Enlarged Group The Company is of the opinion that the Enlarged Group has sufficient working capital for its present requirements, that is, for at least the next twelve months from the date of this document. 7. Litigation 7.1 Save as set out below neither the Company nor any other member of the Group is or has been engaged in any legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have or have had during the 12 months prior to the date of this document a significant effect on the financial position of the Group: (a) In August 2004, Randgold entered into a fixed lump sum turnkey contract for US$63 million for the design, supply, construction and commissioning of the Loulo processing plant and infrastructure with MDM Ferroman (Pty) Ltd. At the end of 2005, after making advances and additional payments to MDM totalling $26 million in excess of the contract, Randgold determined that MDM was unable to perform its obligations under this contract, at which time Randgold enforced a contractual remedy which allowed it to act as its own general contractor and to complete the remaining work on the Loulo project that was required under the contract with MDM. The Group believes that it is entitled to recover US$59.3 million from MDM, comprising payments totalling US$32 million which have been capitalised as part of the cost of the project, US$15.2 million in respect of damages arising from delayed completion of the project, and advances of US$12.0 million included in receivables. Of this latter amount US$7 million is secured by performance bonds and the remainder is secured by various personal guarantees and other assets. As part of the Group s efforts to recoup these monies, MDM was put into liquidation on 1 February This resulted in a South African Companies Act Section 417 investigation into the business and financial activities of MDM, its affiliated companies and their directors. This investigation was completed in the last quarter of 2007 and legal proceedings have been instituted by the liquidators against numerous creditors who had received preferential payments in the six months prior to MDM s liquidation. Proceedings are ongoing and it is expected that some of these claims will be heard by the South African courts during In January 2009, the liquidator declared and paid the 93

94 PART VI - Additional Information first dividend of US$0.1 million from the insolvent estate, leaving an outstanding balance of US$12 million as at September 30, The Group believes that it will be able to recover in full the US$12 million included in receivables. However, this is dependent on the amounts which can be recovered from the performance bonds, personal guarantees and other assets provided as security. Any shortfall is expected to be recovered from any free residue accruing to the insolvent estate. The aggregate amount which will ultimately be recovered cannot presently be determined. The Company s financial statements do not reflect any additional provision that may be required if the US$12 million cannot be recovered in full. Recovery of the other $47.1 million is dependent on the extent to which there is any amount in the free residue. The ultimate outcome of this claim cannot presently be determined and there is significant uncertainty surrounding the amount that will ultimately be recovered. The Company s financial statements do not reflect any adjustment to the cost of the Loulo development that may arise from this claim, or any additional income that may arise from the claim for damages, or any charge that may arise from MDM s inability to settle amounts that are determined to be payable by MDM to Randgold in respect of the Loulo development. (b) As at 31 December 2008 and 30 September 2009, the Group had approximately US$257.6 million and US$520.8 million of cash and cash equivalents, respectively. In addition, the Group had available-for-sale financial assets with a carrying value of US$32.7 million as of September 30, The available-for-sale financial assets consist of ARS. In the third quarter of 2007, certain ARS with a cost value of US$49 million failed at auctions due to the sudden and unusual deterioration in the global credit and capital markets, and have since experienced multiple failed auctions. The Directors believe that the Group has been the subject of a fraud committed by brokers working for a large investment bank through material misrepresentations of the nature of the ARS in which the Group was invested. Consequently, the Group has engaged lawyers and in October 2008 the Group commenced arbitration proceedings for US$49 million against the relevant bank and the brokers for their misconduct. These individuals are the subject of criminal proceedings instigated by the US Government, in which the Group has cooperated with the Department of Justice, and regulatory proceedings instigated by the SEC. In July 2009, one of the two brokers pleaded guilty in the criminal proceeding, and in August 2009, a jury returned a guilty verdict against the other broker. The Group believes the criminal and regulatory proceedings reinforce its position. 7.2 Kibali Goldmines has not been engaged in any legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have or have had during the 12 months prior to the date of this document a significant effect on the financial position of Kibali Goldmines. 8. Significant change 8.1 Save for the Moto Acquisition (further described in paragraph 1 of Part I and paragraphs 5.1(b) and 5.1(c) of this Part VI) and the sale of Randgold s entire interest in the Kiaka gold project in Burkina Faso (further described in paragraph 3 of Part I) there has been no significant change in the financial or trading position of the Group since 30 September 2009, being the date of the last unaudited interim financial information of the Company. 8.2 There has been no significant change in the financial or trading position of Kibali Goldmines since 30 June 2009, being the date of the last unaudited financial statements of Moto. 9. Consents 9.1 HSBC has given and not withdrawn its written consent to the issue of this document with the inclusion in it of references to its name in the form and context in which it appears. 9.2 BDO LLP (a member firm of the Institute of Chartered Accountants in England and Wales) has given and has not withdrawn its written consent to the inclusion in this document of its report on the reconciliation of financial information on Moto and its report on the pro forma financial information set out in Parts III and IV respectively, in the form and context in which they appear. 94

95 PART VI - Additional Information 9.3 Cube Consulting Pty Ltd has given and has not withdrawn its written consent to the inclusion in this document of the Expert s Report set out in Appendix 1 and the references to its name in the form and context in which they respectively appear. 9.4 Lycopodium Minerals Pty Ltd has given and has not withdrawn its written consent to the inclusion in this document of the Expert s Report set out in Appendix 1 and the references to its name in the form and context in which they respectively appear. 9.5 SRK Consulting Pty Ltd has given and has not withdrawn its written consent to the inclusion in this document of the Expert s Report set out in Appendix 1 and the references to its name in the form and context in which they respectively appear. 10. Documents available for inspection and available information Copies of the following documents will be available for inspection at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA and at the registered office of the Company during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) until the conclusion of the Extraordinary General Meeting: (a) the memorandum and articles of association of the Company; (b) the Expert s Report; (c) the published audited consolidated accounts of the Group for the two financial years ended 31 December 2008; (d) the opinions by BDO set out in Parts III and IV of this document; (e) the Kibali Acquisition Agreement (in the final form in French with an English translation); (f) the Restated JV Contract (in the final form in French with an English translation); (g) the Protocol (in the final form in French with an English translation); (h) the Declaration (in the final form in French with an English translation); (i) the Technical Services Agreement; (j) all other documents described in paragraph 5 of this Part VI (k) this document. 95

96 PART VII Definitions The following definitions apply throughout this document and the accompanying Form of Proxy, unless the context otherwise requires: 2007 Feasibility Study the feasibility study in relation to Kibali completed in September 2007 Acquisition Documents ADRs or American Depositary Receipts ADSs or American Depositary Shares AngloGold Arrangement Agreement ARS AUS$ Balancing Retirement Amount Bid Agreement Board or Directors Border Burkina Faso Business Cameroon Canadian National Instrument Cash Election Central African Republic Completion Consideration ADSs Consideration Shares Consolidated Lease Consolidated Perimeter the Kibali Acquisition Agreement, the Protocol, the Restated JV Contract and the Declaration the American Depositary Receipts of the Company which evidence ADSs the American Depositary Shares of the Company, each of which represents one Ordinary Share AngloGold Ashanti Limited the arrangement agreement dated 5 August 2009 between Moto, Subco and the Company relating to the Moto Acquisition auction rate securities Australian Dollars the amount of approximately US$10.8 million being due to OKIMO employees less an amount currently expected to be US$2.8 million which shall be funded by Kibali Goldmines, being a net amount of approximately US$8 million the bid agreement dated 16 July 2009 between the Company and AngloGold, pursuant to which the parties agreed to cooperate in respect of the Moto Acquisition (as amended by those parties on 27 July 2009) the Board of Directors of the Company Border Energy PTY Limited, a wholly-owned indirect subsidiary of Moto the Republic of Burkina Faso to conduct exploration, exploitation, development and construction of Kibali, including any exploitation of waste materials the Republic of Cameroon National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators the cash election that Moto Shareholders could elect to receive in lieu of Ordinary Shares or ADSs pursuant to the Moto Acquisition the state of the Central African Republic completion of the Kibali Acquisition Agreement new ADSs issued to the holders of Moto Shares, pursuant to the Moto Acquisition new Ordinary Shares issued to the holders of Moto Shares, pursuant to the Moto Acquisition which includes where the context requires, Consideration ADSs a lease agreement signed in July 2008 between OKIMO and Kibali Goldmines in respect of the Kibali area the surface area covered by the Exploitation Permits held by Kibali Goldmines 96

97 PART VII - Definitions Côte d Ivoire C$ Debt Debt Adjustment Declaration Directors or Board DRC DTRs or Disclosure Rules and Transparency Rules Enlarged Group Executive Committee Existing Tailings Expert s Report the Republic of Côte d Ivoire Canadian Dollars all amounts characterised as debt including loans or indebtedness owed to Moto, Border and/or Kibali Goldmines from OKIMO together with interest accrued thereon at completion of the Kibali Acquisition the amount notified by Kibali Goldmines prior to Completion to the parties to the Kibali Acquisition Agreement equal to the Debt the declaration given by the Government in favor of Randgold, AngloGold, Moto and Kibali Goldmines details of which are set out in Part V of this document the directors of the Company as at the date of this document whose names are set out on page 89 of this document the Democratic Republic of the Congo the disclosure rules and the transparency rules as made by the FSA under Part VI of FSMA as amended from time to time the Group as enlarged by the Kibali Acquisition the executive committee of Kibali Goldmines to be established pursuant to the Restated JV Contract the tailings already existing on the Consolidated Perimeter resulting from the previous exploitation by OKIMO the mineral expert s report produced by Cube Consulting Pty Ltd, Lycopodium Minerals Pty Ltd and SRK Consulting Pty Ltd set out in Appendix 1 of this circular Exploitation Permits exploitation permits numbered 5052, 5073, 5088, 11447, 11467, 11468, 11469, 11470, and relating to Kibali Extraordinary General Meeting or EGM the extraordinary general meeting of the Company convened for 16 December 2009 (or any adjournment of it), notice of which is set out at the end of this document Feasibility Study the feasibility study in relation to Kibali completed in March 2009 Financial Services Authority or FSA Form of Proxy FSMA GAAP Gara the Financial Services Authority of the UK in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA the form of proxy relating to the EGM being sent to Shareholders with this document the Financial Services and Markets Act 2000 of England and Wales, as amended generally accepted accounting principles one of the two underground mines at Loulo Global Offer the global offer of shares announced by the Company in August 2009 Gounkoto Government Group HSBC the Company s mining project in Mali the Government of the DRC the Company and its existing subsidiary undertakings; HSBC Bank plc 97

98 PART VII - Definitions IFRS Jersey JVCo Joint Venture Agreement or Jersey JVCo Joint Venture Agreement KCD Kibali or Kibali Gold Project Kibali Acquisition Kibali Acquisition Agreement Kibali Board Kibali Goldmines Kibali Resolution Kibali Retirement Amount Listing Rules Loulo Mali Massawa or Massawa project MDM Mining Code Mining Regulations Morila or Morila mine Moto Moto Acquisition Moto Financing Agreement Moto Group International Financial Reporting Standards Kibali (Jersey) Limited which is owned indirectly, 50 per cent. by Randgold and 50 per cent. by AngloGold and which indirectly owns 100% of Subco the joint venture agreement between Randgold and AngloGold dated 16 July 2009 regulating their relationship in relation to Jersey JVCo Karagba-Chauffeur-Durba and Seessenge Deeps means the gold project located in the north-east of the DRC, approximately 560 kilometres northeast of the city of Kisangari and 150 kilometres west of the Ugandan border town of Arua owned by Kibali Goldmines, formerly known as the Moto gold project the proposed acquisition of 20 per cent. of the issued share capital of Kibali Goldmines pursuant to the Kibali Acquisition Agreement the agreement dated 31 October 2009 between OKIMO, Randgold, AngloGold, Moto, Border, Jersey JVCo, Kibali Goldmines and the Government for the acquisition of the Sale Shares the management board of Kibali Goldmines Kibali Goldmines s.p.r.l. a resolution of the shareholders of Kibali Goldmines approving the sale and purchase contemplated in the OKIMO Acquisition Agreement, the appointment of new directors as contemplated in the Restated JV Contract and the adoption of the Restated Articles, conditional only on the Kibali Acquisition Agreement becoming unconditional the amount of US$2,800,000 being owed to OKIMO employees which shall be funded by Kibali Goldmines the listing rules made by the FSA under Part VI of FSMA (as amended from time to time) the Company s mine located at Loulo in Mali the Republic of Mali the Company s mining project in Senegal MDM Ferroman (Pty) Limited Law No. 007/2002 of 11 July 2002 relating to the Mining Code of the DRC as amended from time to time the decree no. 038/2003 of 26 March 2003 establishing the Mining Regulations, as amended from time to time the Company s mine located at Morila in Mali Moto Goldmines Limited the acquisition of the entire issued share capital of Moto by Subco which completed on 15 October 2009 the agreement dated 10 March 2009 between Moto Goldmines Australia PTY Limited (a subsidiary of Moto) and Kibali Goldmines pursuant to which certain sums were advanced to Kibali Goldmines. Moto and its subsidiary undertakings 98

99 PART VII - Definitions Moto Incentive Stock Option Plan Moto Share Options Moto Shareholders Moto Shares Nasdaq Nasdaq Global Select Market Nasdaq National Market Notification Letter Official List OKIMO OKIMO Financing Agreement Ordinary Shares Original JV Contract Prospectus Rules Protocol Protocol Consideration Randgold or the Company Resolution Restated Articles Restated JV Contract Revised ATF Agreement Sale Price Sale Shares SEC Senegal the former Moto stock option plan for directors and senior executives of Moto options to receive Moto Shares granted under the Moto Incentive Stock Option Plan former holders of Moto Shares and where the context requires holders of Moto Share Options common shares of Moto, including shares represented by depositary interests the National Association of Securities Dealers Automated Quotations, an American stock exchange a market on the Nasdaq a market on the Nasdaq means a notification letter from the Government regarding a meeting of the cabinet of the Government, confirming that it has considered the Kibali Acquisition and its terms and confirming that the Kibali Acquisition is in accordance with DRC law the Official List of the Financial Services Authority Office des Mines d Or de Kilo-Moto, a Congolese para-statal entity the agreement dated 10 March 2009 between OKIMO and Kibali Goldmines pursuant to which certain sums were advanced to OKIMO. ordinary shares of US$0.05 each in the capital of the Company the contract of association executed by OKIMO, Moto, Border and Kibali Goldmines on 10 March 2009 the prospectus rules as made by the FSA under Part VI of FSMA as amended from time to time the protocol given by the Government to Moto and Jersey JVCo, details of which are set out in Part V of this document the sum of US$4.5 million, paid by Moto pursuant to the Protocol Randgold Resources Limited the resolution set out in the notice of EGM the articles of association of Kibali Goldmines as proposed to be restated with effect from Completion the joint venture agreement between OKIMO, Moto, Border and Kibali Goldmines in relation to Kibali Goldmines and Kibali as proposed to be restated with effect from Completion, and as described in Part V of this document the revised financial and technical assistance contract entered into between OKIMO and Kibali Goldmines dated 3 July 2008 and as amended on 30 September 2008 the consideration payable on completion of the Kibali Acquisition Agreement as set out in that agreement the 2,000,000 shares in Kibali Goldmines to be acquired pursuant to the Kibali Acquisition Agreement U.S. Securities and Exchange Commission the Republic of Senegal 99

100 PART VII - Definitions Shareholders or Randgold Shareholders Social Fund Amount Somilo Subco Tanzania Technical Services Agreement Technical Services Provider or Kibali Services Tongon or Tongon project UK or United Kingdom Umbrella Authorities U.S. Securities Act USD or US$ or $ Volta Yalea holders of Ordinary Shares means the amount of US$8 million coming out of the Sale Price to be used for the purposes of building roads, an airfield, hospitals and other social and infrastructure works in the Doko region in the vicinity of Kibali Société des Mines de Loulo SA, a subsidiary of the Company B.C. Ltd., a corporation incorporated under the laws of British Columbia, which is indirectly wholly-owned by Jersey JVCo, (which in turn is owned indirectly 50 per cent. by Randgold and indirectly 50 per cent. by AngloGold,) and which acquired Moto the United Republic of Tanzania an agreement dated 20 November 2009 between the Technical Services Provider and Kibali Goldmines, details of which are set out in Part V of this document Kibali Services Limited, being a wholly-owned subsidiary of Jersey JVCo the Company s mining project at Tongon in Côte d Ivoire the United Kingdom of Great Britain and Northern Ireland the DRC Minister of Mines and Minister of Portfolio the United States Securities Act of 1933 as amended United States Dollars Volta Resources Inc one of the two underground mines at Loulo 100

101 Glossary aeromagnetic Au CIL cut-off disseminated dyke elution facies felsic g/t JORC Code km km 2 Life of Mine M mafic Moz Mtpa MW paste fill protolith pyrite pyroclastic sill stocks volcaniclastic Part A Technical terms used in this document airborne geophysical programme which measures the magnetic properties of the different lithologies at the surface the chemical symbol for the element gold carbon in leach a series of tanks containing activated carbon onto which gold in cyanide solution is absorbed the minimum concentration (grade) of the valuable component in a mass of rock that will produce sufficient revenue to pay for the cost of mining, processing and product sale ore carrying fine particles, usually sulphides scattered throughout the rock a sheet-like intrusion which cuts across bedding or the main structural fabric in a rock a process to remove gold in solution from carbon by passing caustic solution through the carbon at high temperature and pressure the features of a sedimentary rock which defines its original sedimentary environment a compositional term which indicates a dominance of silicates grams per tonne an acronym for Joint Ore Reserve Committee, an Australian committee formed by the Australian Stock Exchange and Australasian Institute of Mining and Metallurgy, the purpose of which is to set the regulatory enforceable standards for the Code of Practice for the reporting of Mineral Resources and Mineral Reserves kilometres square kilometres the time in which, given the available capital, the ore reserves of a mine will be extracted metre a compositional term which indicates a dominance of ferromagnesian minerals million ounces million tonnes per annum megawatt (one million watts), a measure of energy backfill material for underground support produced from sand or slime product and usually mixed with cement prior to placement original lithology iron sulphide (fools gold) which is often associated directly with gold in ore deposits but has no intrinsic value fragmental volcanic material which has been blown from volcanoes a sheet-like intrusion which conforms with bedding or the main structural fabric in a rock a network of intense veining, usually relating to hydrothermal activity, or a medium sized plug of intrusive rock clastic rocks derived from the ejecta from volcanoes 101

102 Part B Reserves and Resources definitions Mineral Resource Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource. A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilised organic material in or on the Earth s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. The term Mineral Resource covers mineralisation and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. A Mineral Resource is an inventory of mineralisation that under realistically assumed and justifiable technical and economic conditions might become economically extractable. Inferred Mineral Resource An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Due to the uncertainty which may attach to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies. Indicated Mineral Resource An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. Mineralisation may be classified as an Indicated Mineral Resource when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralisation. An Indicated Mineral Resource estimate is of sufficient quality to support a preliminary feasibility study which can serve as the basis for major development decisions. Measured Mineral Resource A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. Mineralisation or other natural material of economic interest may be classified as a Measured Mineral Resource when the nature, quality, quantity and distribution of data are such that the tonnage and grade of the mineralisation can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit. 102

103 Part B - Reserves and Resources definitions Mineral Reserve Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve. A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a preliminary feasibility study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term Mineral Reserve need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals. Probable Mineral Reserve A Probable Mineral Reserve is the economically mineable part of an Indicated Mineral Resource, and in some circumstances a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. Proven Mineral Reserve A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. Application of the Proven Mineral Reserve category implies the highest degree of confidence in the estimate. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability. 103

104 RANDGOLD RESOURCES LIMITED Notice of Extraordinary General Meeting NOTICE is hereby given that an extraordinary general meeting of Randgold Resources Limited (the Company ) will be held at 8:30 a.m. on 16 December 2009 at La Motte Chambers, La Motte Street, St Helier, Jersey JE1 1BJ, Channel Islands for the purpose of considering and, if thought fit, passing the following resolution of the Company which will be proposed as an ordinary resolution: ORDINARY RESOLUTION THAT the proposed acquisition by Kibali (Jersey) Limited of shares in Kibali Goldmines s.p.r.l. be and is hereby approved on the terms and conditions contained in the acquisition agreement dated 31 October 2009 between the Company, L Office des Mines d Or de Kilo-Moto, AngloGold Ashanti Limited, Moto Goldmines Limited, Border Energy PTY Limited, Kibali (Jersey) Limited, Kibali Goldmines s.p.r.l and the Government of the Democratic Republic of the Congo and described in the circular to the Company s shareholders dated 30 November 2009 and with such non-material amendments thereto as the directors of the Company (or any duly constituted committee thereof) may consider appropriate. BY ORDER OF THE BOARD OF THE COMPANY David Haddon Company Secretary Dated: 30 November 2009 Registered Office: La Motte Chambers, La Motte Street, St. Helier, Jersey JE1 1BJ, Channel Islands Incorporated in Jersey with limited liability under the Companies (Jersey) Law 1991 with registered number Notes: 1. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that in order to have the right to attend and vote at the Extraordinary General Meeting (and also for the purpose of determining how many votes a person entitled to attend and vote may cast), a person must be entered on the register of members of the Company at 8:30 a.m. on 14 December 2009 or, in the event of any adjournment, at 8:30 a.m. on the date which is two days before the day of the adjourned meeting. Changes to entries on the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at the meeting. 2. Only holders of ordinary shares are entitled to attend and vote at this meeting. A member is entitled to appoint another person as his proxy to exercise all or any of his rights to attend, to speak and to vote at the Extraordinary General Meeting. A member may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him. A proxy need not be a member of the Company. A form of proxy for the meeting is enclosed. To be valid any proxy form or other instrument appointing a proxy must be received by post or by hand (during normal business hours only) to our registrar Computershare Investor Services (Jersey) Limited at PO Box 83, Ordnance House, 31 Pier Road, St Helier, Jersey, JE4 8PW, in each case no later than 8:30 a.m. on 14 December If you are a CREST member, see note 3 below. Completion of a form of proxy, or other instrument appointing a proxy or any CREST Proxy Instruction will not preclude a member attending and voting in person at the meeting if he/she wishes to do so. 3. Alternatively, if you are a member of CREST, you may register the appointment of a proxy by using the CREST electronic proxy appointment service. Further details are contained below. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Extraordinary General Meeting and any adjournment(s) thereof by using the procedures, and to the address, described in the CREST Manual subject to the provisions of the Company s articles of association. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 104

105 In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear UK and Ireland (formerly CRESTCo) specifications and must contain the information required for such instructions, as described in the CREST Manual (available via The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the issuer s agent (ID3RA50) by the latest time(s) for receipt of proxy appointments specified in the notice of the Extraordinary General Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the issuer s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK and Ireland (formerly CRESTCo) does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares. 105

106 APPENDIX 1 Mineral Expert s Report 30 November 2009 The Directors Randgold Resources Limited La Motte Chambers La Motte Street St Helier Jersey JE1 1BJ Channel Islands Dear Sirs Re: Independent Technical Report on the Kibali Gold Project, Moto Goldfields, DRC Purpose of Report Cube Consulting Pty Ltd (Cube) was requested in August 2009, by Moto Goldmines Ltd (Moto) to compile an updated resource estimate of the combined Karagba-Chauffeur-Durba and Sessenge Deeps (KCD) deposit which forms a part of the Kibali Gold Project. Randgold Resources Limited (Randgold) and Moto subsequently agreed the terms of a recommended transaction pursuant to which Kibali (Jersey) Limited, a company jointly owned by Randgold and AngloGold Ashanti Limited (AngloGold), would indirectly acquire all of the common shares of Moto. The Moto Acquisition was completed on 15 October On 31 October 2009 Randgold agreed to indirectly acquire, jointly with AngloGold, a further 20 per cent. interest in the issued share capital of Kibali Goldmines s.p.r.l. of which Randgold s attributable interest will be 10 per cent.. Completion of the Kibali Acquisition is conditional, inter alia, on the approval of shareholders of Randgold. Randgold requested Cube to complete the updated resource estimate for the KCD deposits as originally requested by Moto and to report the total Kibali Gold Project Resources within criteria laid out by the JORC Code. The Kibali Project open pit Resources have been classified as the insitu resources falling within the $US1,000 per oz Whittle pit shell at a 0.5g/t gold cut-off. In the case of the KCD deposits the underground resources are reported as those insitu resources below the underground interface (5685mRL) and reported at a 2g/t gold cut-off. This report, inter alia, details the updated reporting of the total Mineral Resources for the Kibali Gold Project and the re-estimation of the KCD deposit. It should be noted that only the KCD deposit is a re-estimated Mineral Resource and the changes to the Mineral Resource inventories in all other deposits is a function of the reporting methodology. As a consequence of the ongoing nature of the Kibali Gold Project this report also includes information and conclusions directly from the previous technical report for the Kibali Gold Project. In particular, sections of this report detailing Mineral Reserve Estimates, Mineral Processing and Metallurgical Testing, Environmental Considerations and Economic Analysis are taken directly from the Amended and Restated Technical Report prepared by Cube Consulting Pty Ltd, Lycopodium Minerals Pty Ltd, SRK Consulting Pty Ltd and Moto Goldmines Ltd, 20 th April This independent technical report is intended to comply with disclosure and reporting requirements set forth by the United Kingdom Financial Services Authority s requirement for a Mineral Expert s Report. Capability and Independence Cube is an Australian owned company providing geological and mining consulting services and software systems to the resources and industrial sectors. The organisation is well resourced with an established office in Perth, Western

107 Australia and has undertaken work for a number of substantial international mining houses. Cube Consulting comprises a team of technical professionals dedicated to providing excellence of service in their field of expertise. Neither Cube nor the authors of this report have or have had previously any material interest in Moto, Randgold or related entities or interests. Cube s relationship with Moto and now Randgold is solely a professional association between client and independent consultant. The report has been prepared in return for fees based on agreed commercial rates and the payment of these fees is in no way contingent on the results of this report. Details of qualifications of the consultants who carried out the work are included in Table A, B and C below and Section 18 of the Report. Scope of Work, Materiality and Exclusions The scope of Cube s engagement was as follows: Review and update the geological/mineralisation interpretations for KCD incorporating available information as of 31 st August 2009; Undertake statistical and geostatistical analysis of the mineralised material; Estimate and update the KCD deposit local recoverable open pit gold Mineral Resources; Undertake a refined geological interpretation for all the KCD Lodes based on distinctive alteration characteristics observed to be internal to the broader mineralised zone. The intention of this refined interpretation was to provide an objective basis for the delineation and estimation of a higher grade subset of mineralisation appropriate for reporting of underground gold Mineral Resource; Undertake an interpretation of the halo mineralisation encompassing and adjacent to the most significant KCD Acsa lodes, to provide dilution grades for an underground evaluation; Estimate and update the KCD deposit global insitu underground gold Mineral Resources; Independently classify the Mineral Resources for the total Kibali Gold Project in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code) and the Canadian Companion Policy CP. Report the open pit Mineral resources for the total Kibali Gold Project based on the $US1,000 per oz Whittle pit shell at a 0.5g/t gold cut-off; Report the KCD underground Resources below the underground interface (5685mRL) and at a 2g/t gold cut-off. The estimation work started in September 2009 and was completed during October Reliance on Information This report is based on data and information gathered by the authors and Moto since the Kibali Gold Project s commencement. The components of this report addressing the September 2009 Mineral Resource update are based on drilling data and other information gathered by Moto during the period February 2004 to August Specifically, Moto provided Cube with the following digital information prior to or during the Mineral Resource estimation project: Separate validated drilling data for each deposit; Summary details of drilling data quality including age of data, drilling method, location and survey accuracy, sampling procedures, and analytical methods; Description of mineralisation characteristics and geology; and Mineralisation interpretations where available. Other information concerning Mineral Reserve Estimates, Mineral Processing and Metallurgical Testing, Environmental Considerations and Economic Analysis have been sourced from Moto s Feasibility Study which was completed in September 2007 and the Amended and Restated Technical Report prepared by Cube Consulting Pty Ltd, Lycopodium Minerals Pty Ltd, SRK Consulting Pty Ltd and Moto Goldmines Ltd, 20 th April Comments on tenure, commercial arrangements and legal position are sourced from experts in these fields. References for this report are included in Section 17 of the Report.

108 Declarations Cube s relationship with Moto and now Randgold is solely a professional association between client and independent consultant. The report has been prepared in return for fees based on agreed commercial rates and the payment of these fees is in no way contingent on the results of this report. Neither Cube nor the authors of this report have or have had previously any material interest in Moto, Randgold or related entities or interests. Glossary of Terms Defined and technical terms used in this report are set out in Sections 1 and 2 of this report. Inherent Mining Risk The mineral resources data included in this document are estimates only and no assurance can be given that the estimated quantities or grades of minerals will be available to extract, or that any particular level of recovery of minerals will in fact be realised. Statements regarding any plans with respect to developing the Kibali Gold Project are forward-looking. There can be no assurance that any mineralisation will be proven to be economic, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits identified with the project or that future required regulatory approvals will be obtained. Significant expenditure is required to develop the mining project and the infrastructure required. In addition, there can be no assurance that the Kibali Gold Project will be fully developed in accordance with the current plans or completed on time or to budget. Feasibility studies derive estimates of cash operating costs based on anticipated tonnage and grades of ore to be mined and processed, the configuration of the orebody, expected recovery rates, comparable facility and equipment operating costs, anticipated climatic conditions and other factors. No assurance can be given that such estimates are correct or that the operators will be able to extract minerals in sufficient quantities or of a sufficient grade to justify the estimates in such studies. As a result, it is possible that the Kibali Gold Project s actual operating costs and economic returns may differ from those currently estimated. Qualifications of Consultants The individuals listed in Tables A, B and C have provided input into this Independent Technical Report and have extensive experience in the mining industry and are members in good standing of appropriate professional institutions. Table A: Cube Consulting Pty Ltd Patrick (Rick) Adams, BSc MAusIMM CPGeo Terje (Ted) Hansen, BSc MAusIMM Quinton de Klerk, NHD MAusIMM David (Ted) Coupland, BSc DipGeoSc ASIA CFSG MAusIMM CPGeo MMICA Table B: Lycopodium Minerals Pty Ltd Rod Leonard, MSc (MetEng), BSc (MetHonEng) MAusIMM Fred Kock, NHD MAusIMM Table C: SRK Consulting Pty Ltd Paul Kerr, P.Eng, BSc, MAusIMM Yours truly Cube Consulting Pty Ltd Patrick Adams BSc. CPGeo Director

109 INDEPENDENT TECHNICAL REPORT KIBALI GOLD PROJECT IN THE DEMOCRATIC REPUBLIC OF CONGO Prepared by: Cube Consulting Pty Ltd Patrick (Rick) Adams, BSc MAusIMM CPGeo Terje (Ted) Hansen, BSc MAusIMM Quinton de Klerk, NHD MAusIMM Lycopodium Minerals Pty Ltd Rod Leonard, MSc (MetEng), BSc (MetHonEng) MAusIMM Fred Kock, NHD MAusIMM SRK Consulting Pty Ltd Paul Kerr, P.Eng, BSc, MAusIMM 30 November 2009 Cube Consulting Pty Ltd Perth, Western Australia Cube Project: 2009_116

110 Table of Contents 1.0 GLOSSARY OF ABBREVIATIONS & TERMS MINERAL RESOURCE AND RESERVE DEFINITIONS SUMMARY PROPERTY DESCRIPTION PROPERTY LOCATION PROPERTY OWNERSHIP AND PERMITTING GEOLOGY AND MINERALISATION DRILLING STATUS OF EXPLORATION, DEVELOPMENT AND OPERATIONS COMPETENT PERSON S CONCLUSIONS Open Pit Resources KCD Underground Resources Open Pit Mining Underground Mining Metallurgy, Processing and Infrastructure Financial Performance COMPETENT PERSON S RECOMMENDATIONS Geology and Mineral Resources Open Pit Mining Underground Mining Metallurgy, Processing and Infrastructure SOURCES OF INFORMATION AND DATA SCOPE OF PERSONAL INSPECTIONS OF THE PROPERTY INTRODUCTION PURPOSE OF TECHNICAL REPORT PREPARATION RELIANCE ON OTHER EXPERTS PROPERTY DESCRIPTION AND LOCATION PROJECT LOCATION TENEMENT DETAILS LOCATION OF MINERALISED ZONES &EXISTING SURFACE FEATURES GEOLOGICAL SETTING INTRODUCTION MINERALISATION CONTROLS Breccia Development Structural Control Stratigraphic Control DEPOSIT TYPES MINERALISATION KIBALI-DURBA-KARAGBA TREND Kibali Sessenge Durba-Chauffeur Karagba NDALA PAKAKA-MENGU TREND Pakaka-Pamao Megi-Marakeke Mengu Mengu Hill GORUMBWA-KOMBOKOLO TREND Gorumbwa Kombokolo AGBARABO TREND

111 9.0 EXPLORATION INTRODUCTION PAKAKA GORUMBWA KIBALI MENGU HILL MENGU VILLAGE KARAGBA, CHAUFFEUR AND DURBA MEGI MARAKEKE KOMBOKOLO SESSENGE NDALA PAMAO OTHER PROSPECTS EXPLORATION POTENTIAL EXPLORATION AND EVALUATION MODELS DRILLING DRILLING BY PREVIOUS OWNERS DRILLING BY CURRENT OWNERS SAMPLING METHOD AND APPROACH INTRODUCTION DIAMOND DRILLING REVERSE CIRCULATION DRILLING SAMPLE PREPARATION, ANALYSES & SECURITY INTRODUCTION SAMPLE PREPARATION AREAS SAMPLE PREPARATION EQUIPMENT QUALITY CONTROL AND QUALITY ANALYSIS Gold Blanks Standards Duplicates SAMPLE SHIPMENTS TO THE ANALYTICAL LABORATORIES DIAMOND DRILL SAMPLE PREPARATION REVERSE CIRCULATION SAMPLE PREPARATION CONCLUSION DATA VERIFICATION PROJECT DATABASE DATABASE UPGRADE AND VALIDATION OVERVIEW OF DATA QUALITY ASPECTS Data Transfer Liaison with Cube and offsite Database Validation Quality Control Data Bulk Density Downhole Survey Collar Reduced Level Validation

112 14.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES MINERAL RESOURCE ESTIMATES Geological Interpretation and Modelling Statistical Analysis Variography Block Modelling Estimation Block Size, Search Strategies and Grade Interpolation Density and Oxidation Model Validation Mineral Resource Reporting MINERAL RESERVE ESTIMATES Open Pit Mineral Reserves Underground Mineral Reserves MINERAL PROCESSING & METALLURGICAL TESTING INTRODUCTION METALLURGICAL SAMPLES TESTWORK REGIME Head Assays Comminution Oxide Ore Leach Testwork Primary Ore Flotation Testwork Primary Concentrate Leach Testwork Oxidation Process Testwork Variability Testwork METALLURGICAL RECOVERIES PROCESS PLANT AND SERVICES GOLD PRODUCTION FORECAST OTHER RELEVANT DATA AND INFORMATION INDEPENDENT STATUS OF AUTHORS ENVIRONMENTAL CONSIDERATIONS Environmental Legislation Environmental adjustment plan Decommission, Closure and Security for Rehabilitation Works Ongoing Environmental Compliance Resettlement ECONOMIC ANALYSIS Assumptions Base Case Financial Evaluation Project Sensitivity Analysis REFERENCES REPORT AUTHOR LISTING

113 List of Tables Table 3-1 Kibali Gold Project Open Pit Mineral Resource Tabulation All Deposits H 0.5 g/t gold September Table 3-2 KCD deposit Kibali Gold Project Underground Mineral Resource Tabulation H 2.0 g/t gold September Table 12-1 Certified Reference Material List Table 13-1 Assays H20g/t Gold sample checking Table 13-2 List of Validated Boreholes January 2004 to April Table 14-1 Volume changes by Lode due to Re-interpretation of mineralised lodes September Table 14-2 KCD High Grade Composite Cuts September Table 14-3 KCD Lodes Acsa and Halo High Grade Composite Cuts September Table 14-4 Variogram Parameters Open Pit Resource Methodology September Table 14-5 Variogram Parameters Underground Resource Methodology September Table 14-6 Block Model Field Names Open Pit Resource Methodology September Table 14-7 Block Model Definition Co-ordinate Limits Open Pit Resource Methodology September Table 14-8 Block Model Field Names Underground Resource Methodology September Table 14-9 Block Model Definition Co-ordinate Limits Underground Resource Methodology September Table Estimation Search Parameters Open Pit Resource Methodology September Table Underground Estimation Search Parameters September Table OPRM-LR Density Mean Values Assigned September Table Density Mean Values for Simple Kriging September Table URM-GI Density Mean Values Assigned September Table Kibali Gold Project Open Pit Mineral Resource Tabulation All Deposits H 0.5 g/t gold September Table KCD Underground Mineral Resource Tabulation H 2.0 g/t gold September Table Open Pit Mineral Reserve Summary Table First Pass Processing and G&A Costs for Pit Optimisations Table Waste Mining Costs Used in Optimisations Table Waste Mining Costs Used in Optimisations Table Recommended Slope Angles Table Pit Cut-off Grades Table Indicated Mineral Resource Selected Optimisation Shells Evaluated at US$600/oz Table Underground Mineral Reserve Summary Table st Pass Underground Cut-off Grade Calculation Table Mineral Resource Inventory Table Underground Mineral Resource Inventory with Planned Recovery Considerations Applied Table Underground Mineral Resource Inventory with Planned Dilution Considerations Applied.. 83 Table Underground Unplanned Recovery Factors Table Underground Mineral Resource Inventory with Unplanned Recovery Considerations Applied Table Unplanned Dilution Allowances Table Final Underground Cut-off Grade Calculation Table Summary of Conversion of Underground Mineral Resources to Mineral Reserves Table 15-1 Mineralogy Summary Table 15-2 Comminution Parameters Table 15-3 Predicted Gold Recovery Table 15-4 Gold Production Profile Table 16-1 Project Net After-Tax Cashflows (US$M) Table 16-2 Sensitivity Analysis Project Net After-Tax Cashflows (US$)

114 List of Figures Figure 5-1 Kibali Goldmines area North East DRC Figure 5-2 Map of the DRC showing the location of Haut Uélé District (Province Orientale) Figure 5-3 Kibali Gold Project Tenement Holdings Figure 5-4 Kibali Gold Project Mineralised Zones and existing Facilities Figure 6-1 Kibali Gold Project Prospect Geology Figure 8-1 Kibali-Durba-Karagba Mineralised Trend Plan Figure 8-2 Pakaka-Mengu Mineralised Trend Plan Figure 14-1 Pit Location Plan Figure 14-2 Example of Planned Dilution Allowance Figure 14-3 Rock Dilution Envelope Figure 14-4 Example of Estimate for Paste Fill Dilution Figure 14-5 Changes in Tonnage and Contained Metal During conversion from Underground Mineral Resource to Underground Mineral Reserve

115 List of Appendices APPENDIX 1: PROJECT RESOURCE IMAGES APPENDIX 2: RESOURCE VALIDATION PLOTS APPENDIX 3: GRADE TONNAGE CURVES

116 1.0 GLOSSARY OF ABBREVIATIONS & TERMS / Per $ Dollars.csv Cube Comma separated file extent convention Cube Consulting Pty Ltd 2007 Feasibility Study Feasibility study of September 2007 reported in Independent Technical Report, January D 3D 3SD $1000/oz shell AAC Acsa AngloGold Ag Albite Ankerite Anticline Argillaceous Arsenopyrite As ATF ATF Contract Au Azurite BCM BFS BGC Bimodal Brecciated o C Carbonates Cell CIL cm Co Two Dimensional Three Dimensional Three standard deviations the pit shell that will result in the highest undiscounted net value at a gold price of $1000 per ounce Anglo American Corporation ankerite-carbonate-silica-albite-pyrite alteration AngloGold Ashanti Limited The chemical symbol for the element silver A specific feldspar mineral product of hydrothermal alteration A specific carbonate mineral containing A description of folding of rocks which has produced a convex shape A group of fine grained sedimentary rocks, including clays, shales, mudstones, siltstones and marls A mineral that is made up of arsenic, iron and sulphur The chemical symbol for the element arsenic Area of Technical and Financial Assistance legal agreement governing the conduct of the parties in the ATF The chemical symbol for the element gold A mineral that is made up of copper, up to 55% Cu, with carbonate and water Bank Cubic Metres, a measure of volume applied to unbroken rock Bankable feasibility study Barrick Gold Corporation Statistical term for two peaks in a graph of values. Describes rock made up of angularly broken or fractured rock generally indicating a fault plane Temperature measurement in degrees Celsius (also called Centigrade) Rocks made up mainly of a metal, commonly calcium or magnesium or copper, zinc and lead and carbon dioxide A term applied to the three dimensional volume used in the mathematical modelling by computer techniques of ore bodies Carbon in Leach Centimetre The chemical symbol for the element cobalt 8

117 Conglomerate Cut-off Dilution Disseminated Dolomite Domain DBA DC DRC DTM E Feasibility Study Ferric Fluvial Fluvio Flotation g g/t Geosearch Geostatistics Graben HMS A sedimentary rock made up of various size particles from small pebbles to large boulders rounded other rock fragments cemented together The minimum concentration (grade) of the valuable component in a mass of rock that will produce sufficient revenue to pay for the cost of mining, processing and selling it A term used to describe the waste or non economic materials included when mining ore Ore carrying fine particles, usually sulphides scattered throughout the rock A mineral containing calcium, magnesium and carbonate A term used mainly in ore resource estimation or geotechnical calculations to describe a regions of a geological model with similar physical or chemical characteristics Database Administrator Diamond Core drilling Democratic Republic of Congo Digital Terrain Model Easting Coordinate Feasibility study of March 2009, reported in Amended and Restated Technical Report, April 2009 Iron in an ionic state of three missing electrons A geological process in, or pertaining to, rivers A description applied to moving material by streams of water A widely used process to concentrate valuable minerals after mining that treats finely ground rock in a water based pulp with chemicals that allow them to float to the surface where they are recovered in preference to waste or gangue minerals which sink Grammes Grammes per tonne Geosearch Limited A term used meaning a mathematical statistical method based on geological spatial knowledge of grade distributions to estimate grades in a systematic way A downthrown block between two parallel faults Heavy Media Separation. A process that uses high density fluids to separate valuable minerals from waste or gangue by exploiting differences in specific gravity ID 2 Inverse Distance Squared (method of estimating grades by mathematically weighting samples based on their distance away from the estimation point) JORC/JORC Code An acronym for Joint Ore Reserve Committee, an Australian committee formed by the Australian Stock Exchange and Australasian Institute of Mining and Metallurgy, the purpose of which is to set the regulatory enforceable standards for the Code of Practice for the reporting of mineral resources and reserves 9

118 Kibali Acquisition Kibali Goldmines Kibali Gold Project/Kibali KCD kg km 2 km Kt Kurtosis Lithology The indirect acquisition of a 20 per cent. interest in the issued share capital of Kibali Goldmines s.p.r.l. by Randgold and AngloGold Kibali Goldmines s.p.r.l. The gold project located in the north east of the DRC, approximately 560km north east of the city of Kisangani and 150km west of the Ugnadan border town of Arua owned by Kibali Goldmines, previously known as the Moto gold project Karagba-Chauffeur-Durba and Sessenge Deeps Kilogramme Square kilometres Kilometres Thousands of tonnes Statistical term for peaked graph shape (peakedness) General rock description based usually on hand specimen Log Natural logarithm to the base 10 Lycopodium m m 3 Massive Mineralization Mining Code Lycopodium Engineering Pty Ltd Metre Cubic metre A term used to describe a large occurrence of a pure mineral species, often with no structure The presence of minerals of possible economic value or the description of the process by which the concentration of valuable minerals occurs Law No. 007/2002 of July 11, 2002 relating to the DRC Mining Code Mining Regulations Decree No. 038/2003 of 26 March 2003 mm MN Moto Moto Acquisition Moz Mt N Neoproterozoic National Instrument / NI OK OKIMO Ore Millimetre Magnetic North Moto Goldmines Ltd The indirect acquisition all of all the common shares of Moto by Randgold and AngloGold Million ounces Million tonnes Northing Coordinate The term used in the geological time scale for the period from 545 million years ago to 1000 million years ago National Instrument Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators Ordinary Kriging A mathematical method that uses linear weighted combinations of the available data to estimate unbiased block grades with the aim of minimizing the variance of the error L Office des Mines d Or de Kilo-Moto A natural aggregate of one or more minerals which, at a specified time and place, may be mined and sold at a profit or from which some part may be profitably separated 10

119 Orway OPRM-LR Pb Porphyry ppm Protolith QKNA Randgold RC RL S Sandstone Sericite Silica SMU Stratiform Strings SURPAC Tholeiitic TN Tuff UC URM-GI US W Zn Orway Mineral Consultants (WA) Pty Ltd Open Pit Resource Methodology Local Recoverable The chemical symbol for the element lead An igneous rock with relatively large crystals set in a finer grained background mass Parts per million (same as grammes per tonne) Original lithology A Quantitative Kriging Neighbourhood Analysis Randgold Resources Limited Reverse Circulation drilling Reduced Level (same as elevation coordinate) South Coordinate A sedimentary rock consisting of sand size grains, generally the mineral quartz, which is in a consolidated mass a mica mineral product of hydrothermal alteration A compound of silicon and oxygen, generally occurring in the form of a mineral called quartz. Selective Mining Unit The minimum likely volume for which ore and waste will be discriminated under the assumed open pit mining method Describes a layered or tabular shaped body of mineralised rock within a sedimentary rock and implies that the layering of the mineralisation is parallel to the bedding planes in that sedimentary rock A term used by SURPAC, applied to a line drawn within the programme that outlines or describes a shape of an object or interpretation A proprietary computer programme developed to model, view, analyse and report on geological and mining data A particular type of basalt composed of basic plagioclase and pigeonite with interstitial glass or quartz-alkali feldspar intergrowths True North General term for rocks that consist of fragmental material thrown into the air by explosive volcanic activity Uniform Conditioning A mathematical method that allows the discrimination of ore and waste at a selective mining unit size within an estimated panel of significantly larger size. In theory, this provides a more accurate prediction of estimated resource grade above a cut off Underground Resource Methodology Global Insitu United States of America Westing Coordinate chemical symbol for the element zinc 11

120 2.0 MINERAL RESOURCE AND RESERVE DEFINITIONS Mineral Resource Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource. A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase reasonable prospects for economic extraction implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and technical reports. Inferred Mineral Resource An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Due to the uncertainty which may attach to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies. Indicated Mineral Resource An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Preliminary Feasibility Study which can serve as the basis for major development decisions. Measured Mineral Resource A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade of the mineralization can be estimated to within close limits and that variation from the estimate would not 12

121 significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit. Mineral Reserve Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve. A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term Mineral Reserve need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals. Probable Mineral Reserve A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. Proven Mineral Reserve A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. Application of the Proven Mineral reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability. Feasibility Study feasibility study means a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production; Preliminary Feasibility Study preliminary feasibility study and pre-feasibility study each mean a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and an effective method of mineral processing has been determined and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic, social and environmental factors and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve. 13

122 3.0 SUMMARY This independent technical report is intended to comply with disclosure and reporting requirements set forth by the United Kingdom Financial Services Authority s requirement for a Mineral Expert s Report. Cube Consulting Pty Ltd was requested in August 2009, by Moto Goldmines Ltd to compile an updated resource estimate of the combined Karagba-Chauffeur-Durba and Sessenge Deeps deposit which forms a part of the Kibali Gold Project. Randgold Resources Limited and Moto subsequently agreed the terms of a recommended transaction pursuant to which Kibali (Jersey) Limited, a company jointly owned by Randgold and AngloGold Ashanti Limited, would indirectly acquire all of the common shares of Moto. The Moto Acquisition was completed on 15 October On 31 October 2009 Randgold agreed to indirectly acquire jointly with AngloGold a further 20 per cent. interest in the issued share capital of Kibali Goldmines s.p.r.l. of which Randgold s attributable interest will be 10 per cent. Completion of the Kibali Acquisition is conditional, inter alia, on the approval of shareholders of Randgold. Randgold requested Cube to complete the updated resource estimate for the KCD deposits as originally requested by Moto and to report the total Kibali Gold Project Resources within criteria laid out by the JORC Code. Open pit resources have been classified as the insitu resources falling within the US$1,000 per oz Whittle pit shell at a 0.5g/t gold cut-off. In the case of the KCD deposits the underground resources are classified as the insitu resources below the pit to underground interface (5685mRL), reported at a 2g/t gold cutoff. In order to meet the requirements of the Randgold reporting criteria, Cube has re-reported all the Mineral Resources for the Kibali Gold Project and undertaken two resource estimates on the KCD deposits using all available data as at 31 st August The first estimate was an updated independent estimation of local recoverable open pit gold resources and the second estimate was based on a refined geological interpretation for the KCD lodes interpreted on the distinctive alteration characteristics observed to be internal to the broader mineralised zone. The intention of the first estimate was to yield a reportable open pit mineral resource inventory and to provide a model suitable for a future open pit mining study. This first estimate is based on a 0.2g/t gold lower cut-off and has been estimated using Ordinary Kriging and Uniform Conditioning methodology. The intention of the refined geological interpretation, constrained by ankerite-carbonate-silica-albite-pyrite alteration, was to provide an objective basis for the delineation and estimation of a possible higher grade subset of the KCD mineralisation appropriate for reporting of an underground mineral resource inventory. This second estimate has been completed using OK methodology. These two estimates should be considered as two distinctly different representations of overlapping portions of the same mineralisation. They are based on different interpretations of mineralisation and on different mining assumptions. Although the models partially overlap, they are not mutually exclusive or directly additive. It is the intention of Kibali Goldmines to use the two models and limits established with an open pit optimal shell to report two mineral resource inventories, one for the open pit resources, from the first model and one for the underground resources, from the second model. When reported these two mineral resource inventories will be additive. The previous Mineral Resource estimation for the KCD deposit was reported on 20 th November 2008 using all data available as at 10 th July In the period since the last Resource estimate 90 diamond drill holes over a total of 47,277m have been completed within the KCD deposit area. This drilling has primarily been targeted at infilling the previously Inferred Resources of the KCD mineralisation. This report, inter alia, details the updated reporting of the total Mineral Resources for the Kibali Gold Project and the re-estimation of the KCD deposit. It should be noted that only the KCD deposit is a re-estimated Mineral Resource and the changes to the Mineral Resource inventories in all other deposits is a function of the reporting methodology. As a consequence of the ongoing nature of the Kibali Gold Project this report also includes information and conclusions directly from previous technical reports for the Kibali Gold Project. In particular, Section 14.2 and Section 15.0 of this report are directly taken from the Amended and Restated Technical Report by Adams et al, April Apart from Cube, the major contributors to these sections were Lycopodium Engineering Pty Ltd and Orway Mineral Consultants (WA) Pty Ltd. 3.1 Property Description The Kibali Gold Project is a gold exploration property which covers an area of 1,836km 2 in the north east of the Democratic Republic of Congo. The area is situated in a rural setting and lacks substantial infrastructure development. Remnants of historical mining activities (residential buildings, processing plant, underground mine shafts and surface workings) are present in various states of repair. 14

123 3.2 Property Location The Kibali Gold Project is located in the Moto greenstone belt in the north east of the Democratic Republic of Congo, some 560km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua. The Kibali Gold Project area covers a 7km by 5km area near the towns of Doko and Durba. 3.3 Property Ownership and Permitting Kibali is currently owned 70 per cent. by Moto and 30 per cent. by L Office des Mines d Or de Kilo-Moto. Moto is indirectly owned by Randgold and AngloGold. On 31 October 2009, Randgold and OKIMO announced that they had agreed terms pursuant to which subject to, inter alia, the approval of Randgold shareholders, Randgold and AngloGold would indirectly acquire a 20 per cent. interest in Kibali Goldmines from OKIMO. Kibali Goldmines has been issued with ten exploitation permits under the DRC mining code in respect of the Kibali Gold Project, most of which are valid until 2014 and the balance of which are valid until Under the terms of the Kibali Acquisition, it is a condition (unless otherwise waived) to completion that the exploitation permits expiring in 2014 are renewed and extended until 2029 by the Government of the DRC. 3.4 Geology and Mineralisation The goldfields at the Kibali Gold Project are located within the Moto greenstone belt, which is comprised of the Archean Kibalian (Upper and Lower) volcano-sedimentary rocks and ironstone-chert horizons that have been metamorphosed to greenschist facies. The goldfields at Kibali are cut by regional-scale north, east, northeast and northwest trending faults and are bounded to the north by the Middle Archaean West Nile granite-gneiss complex and cut to the south by the Upper Zaire granitic complex. The stratigraphy consists of a volcano-sedimentary sequence comprising fine-grained sedimentary rocks, several varieties of pyroclastic rocks, basaltic flow rocks, mafic-intermediate intrusions (dykes and sills) and intermediate-felsic intrusive rocks (stocks, dykes and sills). The sequence is variably altered from slight (texture benign) to intense (texture destructive) such that in some cases the protolith rock is unrecognisable. In the Moto district the majority of gold mineralisation identified to date is disseminated style, hosted within a sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally stratigraphy sub parallel and associated with quartz-carbonate alteration and pyrite. Quartz and quartzcarbonate veins are present within the ore zones but are found to be generally barren with respect to mineralisation. The majority of mineralisation areas currently being delineated occur within two broad mineralised trends. The first group lie within a north east trending structural-alteration corridor from the Kibali prospect in the southwest to the Ndala prospect in the northeast, called the Kibali-Durba-Karagba Trend. The second group lies within a north-west trending zone that stretches from the Pakaka prospect in the southeast to the Mengu Hill prospect in the northwest and is called the Pakaka-Mengu Trend. 3.5 Drilling Kibali Goldmines has primarily used the Barrick Gold Corporation/Anglo American Corporation aeromagnetic interpretation and 1950 s OKIMO drill results to define drill targets in the project area. Mineral Resource estimates have been completed for the Pakaka, Gorumbwa, Kibali, Mengu Hill, Mengu Village, Karagba, Chauffeur, Durba, Megi, Marakeke, Kombokolo, Sessenge, Ndala and Pamao mineralisation. The Mineral Resource estimates are based primarily on the post-2004 drilling by Moto, as very limited records are available to validate the pre-2004 drilling. The primary focus of the drilling strategy since June 2006 has been to target the KCD deposit with infill and extension drilling focussed on defining the open pit as well as the underground potential of the system. 3.6 Status of Exploration, Development and Operations The Kibali Gold Project is in an exploration phase which has focussed on a number of deposits within the property boundary. Exploration activities are currently targeting mineralisation identified as having potential for extraction by open pit and underground mining methods. Development on site is limited to buildings, roads and minor service infrastructure to support exploration activities. Operations are confined to small scale artisanal mining conducted in various locations throughout the property. 15

124 3.7 Competent Person s Conclusions Open Pit Resources It is Cube s opinion that the mineralised interpretations based on a nominal plus 0.2g/t gold cut-off, fully enclose altered rock material and the resource estimates based on these interpretations are free of any potential bias due to the incorrect connection of elevated grade intervals. The resource estimates (Open Pit Methodology Local Recoverable) have been undertaken using OK and UC methods. There are material changes to the reported open pit resources for all deposits of the Kibali Gold Project compared to the November 2008 reported figures. However, only the KCD deposit has undergone re-estimation based on additional drilling and interpretation. There are two significant changes to the reporting criteria compared to the November 2008 reported figures. Firstly, Kibali Goldmines have requested that all open pit resources be reported above a 0.5g/t gold cut off and secondly, that all open pit resources be limited by open pit optimisation shells. The input parameters for these open pit optimisation shells were sourced from the optimisation section of the completed Feasibility Study published in the Amended and Restated Technical Report, April The shells selected for the limiting of the resources correspond to the Whittle shell produced using a gold price of US$1,000 per oz. By definition of the optimisation process, this shell corresponds to the shell which will result in the highest undiscounted net value at that gold price. For the reporting of KCD open pit resources, an additional condition was required to differentiate the open pit material from the potential underground resources. The open pit to underground interface was chosen by using a blanket elevation to limit the open pit optimisation analysis. The elevation selected for this purpose was 5685mRL which corresponds to the deepest portion of open pit design from the 2007 Feasibility Study. In summary, in the running of the open pit optimisation process, all resources below the 5685mRL were excluded, in so doing preventing the open pit optimisation accessing any of the deeper material. A tabulation of the updated Kibali Gold Project Open Pit Mineral Resources at a nominal 0.5 g/t gold cut-off within the interpreted mineralised lodes as of September 2009 is shown in Table 3-1 Table 3-1 Kibali Gold Project Open Pit Mineral Resource Tabulation All Deposits 0.5 g/t gold September 2009 Deposit Tonnes (Mt) Indicated Mineral Resources Grade g/t Gold koz *Attrib. gold koz Tonnes (Mt) Grade g/t Inferred Mineral Resources Gold koz *Attrib. gold koz Pakaka , Gorumbwa , Kibali , Mengu Hill Mengu Village KCD ,957 1, Megi Marakeke Kombokolo Sessenge Ndala Pamao TOTAL ,253 2, ,256 1,465 * Attributable gold (koz) refers to the quantity attributable to Randgold based on Randgold s (post completion of the Kibali Acquisition) 45% interest in the Kibali Gold Project KCD Underground Resources The second estimate (Underground Resource Methodology Global Insitu) undertaken by Cube was within a geological interpretation that was constrained by Acsa. This alteration style is closely associated with significantly higher tenor gold grades and appears to form reasonably continuous and robust mineralised lodes internal to the broader mineralised envelope used for defining the Open Pit Mineral Resources. The infill drilling targeted at the mineralised lodes has resulted in a substantial increase in the tonnage of the previously identified lodes and the identification of additional significant tonnages in newly interpreted lodes. 16

125 It is Cube s opinion that confidence in identifying this style of mineralisation and the demonstrated continuity of Acsa mineralisation, allows reliable estimation of global in-situ resources using traditional 3D OK methodology. In conjunction with this Acsa associated high grade interpretation some lower grade surrounding mineralisation (KCD Halo and Karagba Halo) has been interpreted at a nominal plus 0.5g/t gold cut-off to provide dilution grades for an underground evaluation. Material changes since the November 2008 Report include the identification and modelling of Karagba underground lodes and increases in the Chauffeur Acsa resource base. Table 3-2 summarises the Underground Resources resulting from the Acsa alteration interpretation for the KCD project. The Resources detailed in Table 3-2 are additional to the Open Pit Local Recoverable Mineral Resources reported for the KCD deposit in Table 3-1. Ongoing work is presently being conducted to determine the appropriate modifying factors for formulating reportable underground mining mineral reserves. These modifying factors will be significantly different in nature to those applied to the open pit mineral resources reported in Table 3-1. Table 3-2 KCD deposit Kibali Gold Project Underground Mineral Resource Tabulation 2.0 g/t gold September 2009 Deposit Tonnes (Mt) Indicated Mineral Resources Grade g/t Gold koz *Attrib. gold koz Tonnes (Mt) Grade g/t Inferred Mineral Resources Gold koz *Attrib. gold koz KCD ,674 3, ,569 1,156 TOTAL ,674 3, ,569 1,156 * Attributable gold (koz) refers to the quantity attributable to Randgold based on Randgold s 45% (post completion of the Kibali Acquisition) interest in the Kibali Gold Project. At this stage of the Kibali Gold Project, a significant proportion of the Mineral Resources remain in the Inferred Mineral Resource category defined under the 2004 JORC Code (equivalent to the guidelines adopted for the Canadian National Instrument ) and are therefore not suitable for detailed Mineral Reserve estimation, mine planning or financial evaluation purposes Open Pit Mining The Feasibility Study assessment of open pit mining potential at the Kibali Gold Project has determined that the Kibali Gold Project contains total open pit Probable Mineral Reserves of 30.7Mt at 3.2 g/t Au for 3.2Moz of gold, based on the Mineral Resources of November These Mineral Reserves are included in the Indicated Mineral Resources estimated for the Kibali Gold Project. The Feasibility Study assessment proposes that the Mineral Reserves are mined from 6 separate pits over 8 years (including pre-strip period) with treatment of this material concurrent with this mining period and extending for a further 9 years to give a total open pit mine life of 17 years. A conventional excavator and truck mining system is proposed. Total material movements reach a steady state of approximately 22Mtpa for 6 years before reducing to match treatment requirements (ranging between 1.6Mtpa and 2.9Mtpa). Life of mine unit mining operating costs (including stock reclaim) are estimated at US$2.52/ore tonne. Total capital costs are estimated at US$98.7M for life of mine, comprised of US$19.0M capital development (prestripping), US$2.5M capital works and US$77.0M capital fleet Underground Mining The Feasibility Study assessment of underground mining potential at the KCD deposit has determined that the deposit contains underground Probable Mineral Reserves of 11.6Mt at 6.2 g/t Au for 2.3Moz of gold, based on the Mineral Resources of November These Mineral Reserves are included in the Mineral Resources estimated for the deposit. The designed underground mine has a mine life of 13 years (including development lead time) and features a mechanised long hole open stopping method with paste fill to reach a steady state production level of approximately 1.5Mtpa. Unit operating cost estimates average US$29.33 /ore tonne over the life of mine. Capital expenditure estimates total US$122.6M over life of mine consisting of US$49.7M capital development, US$71.7M capital fleet and US$1.1M capital works. The underground mine designs and Mineral Reserve calculations used a gold price assumption of US$600/oz Metallurgy, Processing and Infrastructure The Feasibility Study assessment of metallurgy, processing operations and infrastructure requirements for the Kibali Gold Project has concluded that a nominal 2.8Mtpa throughput plant processing oxide, transitional and fresh 17

126 material from open pit and underground mines of the Kibali Gold Project will produce 4.8Moz of gold over a life of 16 years. Metallurgical testwork of open pit and underground ores yielded predicted recoveries as follows: Ore Source Oxide % Recovery Transition % Recovery Primary % Recovery KCD Pakaka Mengu Hill... NA Kombokolo Pamao Sessenge Underground... NA NA 91.3 NOTE 1: Oxide master composite recovery was used for Pamao oxide recovery assumptions. NOTE 2: Advice from geological consultant indicates limited transition ore for Pakaka and Pamao. Primary recoveries were used for transition material predicted recovery. NOTE 3: No oxide samples sourced from Mengu Hill. All ore logged as oxide from this deposit is assumed to be treated as transition ore. The processing plant incorporates conventional crushing and grinding circuits, an oxide CIL circuit, an ultra-fine grinding and flotation circuit followed by a CIL circuit for transitional and fresh material types, and conventional elution and gold room facilities. A 28Mt capacity tailings dam will be constructed progressively over the operation s life. A key feature of the Kibali Gold Project is the construction of a 2 stage hydro-electric power station (ultimate generating capacity 20MW) on the Nzoro River with supplemental and back-up power being sourced from diesel-fired generators installed at the plant site. The process plant and infrastructure requirements have an estimated pre-commissioning capital cost of US$339M. This estimate excludes capital expenditure associated with open pit and underground mining activities. Life of mine total capital expenditure for processing and infrastructure activities is estimated to be US$396.6M. Life of mine operating costs for processing and general and administration activities is estimated to be US$17.14/tonne. Unit processing costs for oxide and transition/fresh material types vary over life of mine according to material hardness (throughput determining), power supply (hydro-electric/diesel components) and labour compliment (expatriate/drc national) Financial Performance Financial modelling of the exploitation of Probable Mineral Reserves of the Kibali Gold Project as part of the Feasibility Study (using US$750/oz as the base case gold price) yielded the following results: Initial Capital Payback Period 3.1 years Mine Life (total operation life post processing plant commissioning)16 years After-tax cashflows for the Kibali Gold Project are estimated to be: Year (1) Cashflow (US$m)... (438) Year (Cashflow (US$m) Sensitivity analysis conducted on the Kibali Gold Project s financial performance for variation in gold price, capital costs, operating costs and mined grade concluded that the project was most sensitive to gold price. Specific effects on annual cashflows for all input variations are included in detail. 3.8 Competent Person s Recommendations Geology and Mineral Resources Cube recommends the following resource drilling to progress the project towards value engineering and development: Continue infill drilling areas of underground potential and to increase Mineral Resources and Mineral Resource confidence in the remaining Inferred Mineral Resource areas of the KCD deposits. Recent drilling of the KCD trend has demonstrated the capability of this area to host very large gold Mineral Resources; Continue testing of the potential of the underground mineralisation in the Karagba area of the KCD deposit. 18

127 In addition to drilling activities, it is recommended that the following technical work be undertaken: continue to examine alteration/grade relationships to improve the understanding and definition of mineralisation boundaries; there are some areas within the Indicated Resource base that require additional infill drilling to increase confidence within the feasibility open pit designs. In particular, in areas where strong geological continuity has been confirmed but where drilling access is limited e.g., Mengu Hill and KCD; undertake sensitivity analysis to quantify potential risks and uncertainties associated with volume controls and grade distribution; comprehensive bulk density determinations for all deposits and material types ongoing; undertake check downhole surveys using a non-magnetic tool such as a gyro on selected deep holes in KCD; comprehensive review of weathering and oxidation surfaces ongoing; and continue to advance the structural understanding of mineralisation controls on a deposit and regional scale. Undertake a geological modelling of the linkage features of KCD to Gorumbwa to assess the exploration potential Open Pit Mining Further work required, after the decision to progress the development of the Kibali Gold Project, includes: additional infill drilling targeting high value Inferred Mineral Resources within the Kibali Gold Project area; detailed mine design of the planned pits; and an assessment of using mining contractors for all or part of the mining and maintenance activities. These items of work are independent of each other and are continuous in nature Underground Mining Further work required, after the decision to progress the development of the Kibali Gold Project, includes: infill diamond drilling targeting high value Inferred Mineral Resource of the 5100 lode; insitu stress measurements; geotechnical site investigations for major development excavations connecting to surface. Additional backfill geotechnical testing; assessment of the cost/benefit of contractors for all or part of mining and maintenance activities; development of effective training programmes for the national workforce; recruitment of suitably skilled employees with previous African work experience; and a study of mine design alternatives in the upper lode area of the mine. These items of work are independent of each other and are continuous in nature Metallurgy, Processing and Infrastructure Further work required, after the decision to progress the development of the Kibali Gold Project, includes: additional metallurgical recovery variability testing during grade control/infill drilling campaigns; development of a predictive grade control programme to refine process route selection during production; and further examination of oxidation processes to enhance metallurgical recovery of transitional and fresh ores. 3.9 Sources of Information and Data This report is based on data and information gathered by the authors and Kibali Goldmines since the Kibali Gold Project s commencement. The components of this report addressing the September 2009 Mineral Resource update are based on drilling data and other information gathered by Kibali Goldmines during the period February 2004 to August

128 Specifically, Kibali Goldmines provided Cube with the following digital information prior to or during the Mineral Resource estimation project: Separate validated drilling data for each deposit; Summary details of drilling data quality including age of data, drilling method, location and survey accuracy, sampling procedures, and analytical methods; Description of mineralisation characteristics and geology; and Mineralisation interpretations where available. Other information concerning metallurgical testwork, Mineral Reserves, and capital and operating cost estimates have been sourced from Moto s 2007 Feasibility Study and from the Feasibility Study reported in Amended and Restated Technical Report, April Comments on tenure, commercial arrangements and legal position are sourced from experts in these fields. References for this report are included in Section Scope of Personal Inspections of the Property The following visits to the property are considered relevant to the preparation of this technical report: Mr Adams visited the Kibali Gold Project site in July 2005 for the purpose of independently verifying the quality of Moto s resource evaluation work; Mr Ted Coupland and Mr Terje Hansen visited site in late March 2006 to review the controls on mineralization and geological interpretation procedures and independently drill and sample some representative mineralised material; Mr Terje Hansen has also visited site in February 2007 and February 2008 to review the current controls on mineralization and geological interpretation, review data collections and QAQC. 20

129 4.0 INTRODUCTION 4.1 Purpose of Technical Report Preparation This independent technical report is intended to comply with disclosure and reporting requirements set forth by the United Kingdom Financial Services Authority s requirement for a Mineral Expert s Report. The report specifically details the results the Kibali Gold Project s recently completed drilling campaign and the associated updated Mineral Resource estimates as reported in the Randgold Resources Class 1 Circular to be published on 30 November This technical report includes information and conclusions on specific aspects of the project from previous technical reports despite no additional information or work being conducted in respect of these aspects. The estimation project, which is the primary focus of this technical report, follows a Diamond Core drilling programme that commenced in February 2004 and was ongoing at the time of this Mineral Resource estimation. An additional 47,276m of DC has been drilled for which assay data is available since the last data cut-off at 31st July The additional DC drilling has been mostly confined to the KCD deposit areas. The scope of Cube s engagement was as follows: Review and update the geological/mineralisation interpretations for KCD incorporating available information as of 31st August 2009; Undertake statistical and geostatistical analysis of the mineralised material; Estimate and update the Kibali Gold Project local recoverable open pit gold Mineral Resources for the KCD deposit; Undertake a refined geological interpretation for all the KCD lodes based on distinctive alteration characteristics observed to be internal to the broader mineralised zone. The intention of this refined interpretation was to provide an objective basis for the delineation and estimation of a higher grade subset of mineralisation appropriate for reporting of underground gold Mineral Resource; Undertake an interpretation of the halo mineralisation encompassing and adjacent to the most significant KCD Acsa lodes, to provide dilution grades for an underground evaluation; Independently classify and report the Mineral Resources and Open Pit Mineral Reserves in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code) and National Instrument The estimation work started in September 2009 and was completed during October

130 4.2 Reliance on Other Experts Cube, Lycopodium and Orway have based this Technical Review of the Kibali Gold Project on information provided by Kibali Goldmines. The data includes third party technical reports and relevant published and unpublished third party information. Cube, Lycopodium and Orway have made all reasonable endeavours, including site visits and review of the Kibali Goldmines operations, to confirm the authenticity and completeness of the technical data on which this report is based, however Cube, Lycopodium and Orway cannot guarantee the authenticity or completeness of such third party information. Neither Cube, Lycopodium, Orway, nor the authors of this report are qualified to provide comment on the legal issues associated with the Kibali Gold Project, including any agreements, joint venture terms or the legal status of the tenements included in the Kibali Gold Project. Cube, Lycopodium and Orway have included and completely relied upon copies of the arêtes supplied by Kibali Goldmines for statements in Sections 5. Reference is made to Section 17.0 of this report which details all documents used in the preparation of this report. 22

131 5.0 PROPERTY DESCRIPTION AND LOCATION 5.1 Project Location The concession areas are located in the north-eastern part of the Democratic Republic of Congo near the international borders with Uganda and Sudan (refer Figure 5-1). The location of the Kibali Gold Project area is shown in Figure 5-2. The local office of Kibali Goldmines, is located in the village of Doko, which is centrally located within the project area and approximately 180km by road from Arua on the Ugandan border and lies immediately north of the town of Watsa. The project area is centred at approximately 3.13 o North and o East in the administrative district of Haut Uélé in Province Orientale (Figure 5-2). Access is by charter flight from Entebbe/Kampala in Uganda (470km) or Mwanza (740km) in Tanzania to the airstrip at Doko (1,000 metres in length), a flying time of approximately 1.5 and 2.2 hours, respectively. Entebbe is an international airport with good commercial links to Nairobi, Johannesburg and London. Access by road is from Kampala (approximately 650km); the capital and commercial centre of Uganda, via Arua on the Uganda/DRC border (Figure 5-1). Larger trucks with heavy freight are presently using a route through the Sudan from Kampala. Durba Village with approximately 10,000 inhabitants lies immediately to the west of the project area and effectively continues into the Karagba Village, situated on the western side of Lac Karagba and is located on the site of the proposed Karagba and Chauffeur open pits. The boundaries of the Kibali Gold Project have been taken from the maps at the Cadastre Minier relating to the boundaries of OKIMO s exploitation permits. Kibali has not as yet separately surveyed the area. The district capital of Watsa lies about 9km to the south of the project, which is situated just north of the Kibali River on the road to Faradje and the Sudan. The town of Bunia, which is the United Nations controlled entry point to north eastern DRC, lies about 200km to the south of the project. 23

132 Figure 5-1 Kibali Goldmines area North East DRC 24

133 Figure 5-2 Map of the DRC showing the location of Haut Uélé District (Province Orientale) 25

134 5.2 Tenement Details Kibali Goldmines has been issued with ten exploitation permits under the DRC mining code in respect of the Kibali Gold Project, most of which are valid until 2014 and the balance of which are valid until Under the terms of the Kibali Acquisition, it is a condition to completion that the exploitation permits expiring in 2014 are renewed and extended until 2029 by the Government of the DRC. All Mineral Resources referred to in this report are contained within the area consolidated within these permits. Cube has reviewed copies of certificates granting the exploitation permits as well as the Ministerial Arretes which transfer the permits into the name of Kibali Goldmines. Cube has sourced this information directly from Kibali Goldmines. Figure 5-3 Kibali Gold Project Tenement Holdings Arrete # Permit # Surface Area (km 2 ) Expiry Year Note: The certificates for exploitation permits and correctly indicate an expiry date of 3 June 2015, however, the expiry dates on the corresponding decrees read 11 May These are to be changed to 3 June 2015 and then application made for renewal. 26

135 5.3 Location of Mineralised Zones & Existing Surface Features The locations of mineralised zones and historic workings (including the shafts and open pit at Gorumbwa, an open pit at Agbarabo, the Processing Plant and Tailings Dam) are shown in Figure 5-4. Figure 5-4 Kibali Gold Project Mineralised Zones and existing Facilities 27

136 6.0 GEOLOGICAL SETTING 6.1 Introduction The Moto Goldfields are located within the Moto greenstone belt, which is comprised of the Archean Kibalian (Upper and Lower) volcano-sedimentary rocks and ironstone-chert horizons that have been metamorphosed to greenschist facies. It is cut by regional-scale north, east, northeast and northwest trending faults and is bounded to the north by the Middle Archaean West Nile granite-gneiss complex and cut to the south by the Upper Zaire granitic complex. This is shown below in Figure 6-1. Figure 6-1 Kibali Gold Project Prospect Geology The stratigraphy consists of a volcano-sedimentary sequence comprising fine-grained sedimentary rocks, several varieties of pyroclastic rocks, basaltic flow rocks, mafic-intermediate intrusions (dykes and sills) and intermediatefelsic intrusive rocks (stocks, dykes and sills). The sequence is variably altered from slight (texture benign) to intense (texture destructive) such that in some cases the protolith rock is unrecognisable. Several major mineralised trends are outlined by the soil geochemistry data and by the distribution of known gold mineralisation. The Kibali-Durba-Karagba Trend and the Gorumbwa-Kombokolo Splay are anomalous with respect to gold endowment and together, define a mineralised, North East-striking mineralised corridor, 1.5km wide and 8km long. 6.2 Mineralisation Controls Breccia Development Breccia development is an important feature of the higher grade mineralized zones with multiple types of breccias being observed. Early-formed breccias characterized by an amorphous silica matrix, are generally barren with respect to gold. In places, the silica matrix is accompanied by albite and ankerite-siderite P sulphides and can carry anomalous gold values. Late breccias are sealed with a matrix of secondary chlorite that is probably hydrothermal in origin. These breccias can carry very high gold values with coarse gold being visible in hand specimen. The presence of numerous generations of breccias suggests that brecciation is an important element of ground preparation by hydraulic fracturing proceeding and/or accompanying mineralisation. These breccias may also mark periods of fluid over-pressuring and rupturing of the rock column below the various aquitards (seismic pump-and-seal model). The timing and sequence of the formation of these breccia bodies has not been adequately determined. However, some of the early breccias are overprinted by the S1 foliation (as well as early quartz-feldspar 28

137 and silica veins) while some of the chlorite-filled breccias appear to be late with respect to S1, suggesting an evolution of breccia development with time Structural Control Structural control is apparent from the linear distribution of mineralised occurrences, the regular periodicity of the emplacement of the mineralised lenses and the shape of the mineralised units. The largest zones of mineralisation are aligned along north east trends such as the Kibali-Durba-Karagba Trend and the Gorumbwa Splay. The mineralized lenses are ovoid-shaped with long axes that extend down plunge for considerable distances. The orientation of the long axes of mineralisation approximates the orientation of F2 fold axes, the orientation of the intersection of S1 and S2, as well as the orientation of stretching defined by stretched varioles at Pakaka and the rodded lozenges developed at Durba and Kombokolo. It is clear that the dynamic interaction of D1 and D2 has had a direct impact on the siting and shape of the mineralized bodies. The alteration-mineralisation event is texture destructive such that the early structural fabrics (S1 and S2) are strongly overprinted or destroyed. This indicates that main-stage gold mineralisation was synchronous with or post dates both D1 and D2. The gold associated breccias appear to have utilized north east-trending D2 structures Stratigraphic Control Stratigraphic control such as primary porosity/permeability features is inferred where the mineralisation is sub-parallel to bedding contacts. The presence of iron-rich units such as ironstone, ferruginous chert, Fe-tholeiitic basalt and pervasive early ankerite alteration, in the stratigraphy has enhanced the potential for deposition of gold. Main-stage mineralizing fluids appear to have ponded or have been otherwise restricted in their movement (aquitard control) by both the ironstone-chert unit (Mengu Hill) and the upper basalt unit (Pakaka-Pamao deposit). 29

138 7.0 DEPOSIT TYPES The following description has been drawn from Moto Information Circular (February 2006). Gold mineralisation within the Kilo-Moto Belt in the eastern part of the DRC is associated with epigenetic mesothermal style mineralisation, consistent with the majority of Archaean and Proterozoic greenstone terranes worldwide. This style of mineralisation is generally associated with regionally metamorphosed terranes that have experienced a long history of thermal and deformational events. As such, the gold deposits are invariably structurally controlled. The most common style of mineralisation in this setting is fracture and vein-type gold mineralisation in zones of brittle fracture to ductile dislocation. Deposits of this type are best developed in the Kilo sector of the Kilo-Moto district where AngloGold is currently exploring mylonite hosted vein-style mineralisation. In the Kibali district the majority of gold minerilaisation identified to date is disseminated style, hosted within a sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally stratigraphy and associated with quartz-carbonate alteration and pyrite. Quartz and quartz-carbonate veins are present within the ore zones but are found to be generally barren with respect to mineralisation. The mineralisation currently being drill defined in the Kibali Gold Project area is reminiscent of Archean deposits like Geita (Tanzania). This analogy is based on the predominance of a volcaniclastic-sedimentary host, degree of silica-iron metasomatism, disseminated style of mineralisation, stratiform geometry of mineralised zones, intrusion-related doming, regional scale of significant mineralisation, and interpreted paragenesis. For the Kibali Gold Project, diamond drilling is used extensively to test continuity of mineralisation in the fresh profile, with only limited use of RC drilling to define the oxide mineralisation. The relationship between geology and mineralisation is covered in more detail in Section

139 8.0 MINERALISATION The following description has been drawn from Moto Information Circular (February 2006). Gold mineralisation in the Kibali Gold Project area comprises a series of prospects that have been identified by a variety of methods, including previous exploration and mining, the presence of artisanal diggings, soil geochemistry, aeromagnetic anomalies and drilling using the current geological model for mineralisation. The majority of prospects currently being delineated occur within two broad mineralised trends. The first group lie within a north east trending structural-alteration corridor from the Kibali Prospect in the southwest to the Ndala Prospect in the northeast, called the Kibali-Durba-Karagba Trend. The second group lies within a north-west trending zone that stretches from the Pakaka Prospect in the southeast to the Mengu Hill Prospect in the northwest and is called the Pakaka-Mengu Trend. 8.1 Kibali-Durba-Karagba Trend The 7km-long, north east-trending, Kibali-Durba-Karagba Trend includes, from south west to north east, the Kibali, Sessenge, Durba, Chauffeur, Karagba, and Ndala prospects. Soil anomalies along strike of the above projects suggest that gold anomalism may be in excess of 20km in length. The mineralised lenses at Sessenge, Durba, Chauffeur and Karagba prospects are mainly north east-plunging (25-35 o ) bodies within the north east mineralised trend, interpreted to represent an ancient fault corridor that controlled fluid movement and gold emplacement. The mineralised lenses are generally elongate ellipse-shaped bodies with extensive down-plunge extent. Mineralisation at the Kibali Prospect south of the Kibali River occurs as a series of tabular bodies with a moderate north-west dip. Figure 8-1 shows the identified prospects along the Kibali-Durba-Karagba Trend Kibali The Kibali Prospect is located south of the Kibali River at the south west end of the 7km long, north east trending Kibali-Durba-Karagba Trend. The lowest unit at the Kibali Prospect is a mafic volcanic sequence called the Kibali River Basalt which forms the footwall to the Kibali Prospect. The mafic unit is massive and variably altered and interpreted to be pillowed tholeiitic basalt flows with minor interbedded interflow sedimentary horizons. This sequence is interpreted to be the lowest formation in the stratigraphy of the Kibali Gold Project area to be established to date. At the Kibali Prospect, the Kibali River Basalt is interpreted to strike to the north east, dip moderately to the north west with an interpreted facing direction to the north-west. The mafic volcanic flows can be traced to the north and northeast where they have been intersected at depth by RC and DDH drilling associated with the Sessenge Prospect. It is postulated that the Kibali River Basalt may underlie mineralisation at the Memekasi and Renzi Prospects further to the east. Thus, the strike of this unit is interpreted to swing from northeast into a more easterly strike as it crosses the Kibali River going north. Mineralisation at Kibali is spatially associated with shear zones that are hosted within a thick sequence of felsic tuffs, fine-grained sedimentary rocks, a coarse fragmental rock, and chert. Gold is associated with zones of bleaching (sericite-albite-silica-alteration) with sulphide content (mainly pyrite and arsenopyrite) reaching 15%. The mineralised zone is hosted in a shear zone that has a north-easterly strike and dips to the northwest at approximately 40 o over a strike length of approximately 1.6km, at an average width of 300 metres and has been indentified to a depth of 250 metres below the topographical surface. 31

140 Figure 8-1 Kibali-Durba-Karagba Mineralised Trend Plan Sessenge The Sessenge Prospect is located 1.5km to the north east of the Kibali Prospect along the Kibali-Durba-Karagba Trend and north of the Kibali River. The lowest stratigraphic unit consists of a thick sequence of ironstone and magnetite-rich basalt called the Sessenge Footwall Formation. The ironstone units vary in thickness up to 50 metres and the basalt unit up to 15m. The basalt flows within this formation are tentatively correlated with the Kibali River Basalt at the Kibali Prospect. Drilling to date has indicated that the formation is in excess of 70 metres thick and strikes east-west. The base of the formation has not yet been established by drilling in the Sessenge Prospect area. Conformably overlying the Sessenge Footwall Formation is a thick sequence of volcanic agglomerate (Vag) that appears to thicken in section from east to west. This thick agglomeratic unit is called the Sessenge Main-Lode-Vag Formation and is correlated with the volcaniclastic and sedimentary units at the Kibali Prospect. The apparent thickening in section of the volcanic agglomerate is the result of a relatively flat lying basal contact and an upper contact with an apparent dip to the east of 25 o. Units associated with the Sessenge Footwall Formation can be locally highly altered and have been logged as Acsa and undifferentiated silicified tuff. Lying conformably above the Sessenge Main-Lode-Vag Formation, is a mixed sequence commencing with a basal ironstone unit that averages about 20 metres in apparent thickness, followed by a volcanic agglomerate unit that averages about 20 metres in thickness, followed by a second ironstone unit that is at least 10 metres in apparent thickness, which in turn is followed by a very-fine-grained black, siliceous unit identified as a graphitic argillite. This agglomerate-ironstoneargillite sequence along the north east part of the Sessenge Prospect is called the Durba Mine Formation and appears to be greater than 85m in thickness and dip to the east. The basal contact of the Durba Mine Formation is correlated with the first appearance of ironstone at the top of the Sessenge Main-Lode-Vag Formation with the contact being traceable along the southern side of Durba Hill. The top of the sequence is located on the north east side of Durba Hill where it is overlain by the Karagba Deeps Formation. Gold mineralisation is mainly confined to the Sessenge Main-Lode-Vag Formation and associated with silica-albite-ankerite/siderite-pyrite alteration. Mineralisation at Sessenge forms two shoots (Sessenge East and West) that plunge to the north east within the Kibali-Durba-Karagba Trend. The mineralisation is approximately 850m in strike length at an average width of 200 metres and has been identified to a depth of 200 metres below the topographical surface. 32

141 8.1.3 Durba-Chauffeur The Durba-Chauffeur Prospects are located to the north east of the Sessenge Prospect and on the north east side of Durba hill. The prospects include the historic Durba Mine, as well as the East and West Chauffeur artisanal mine workings. The Durba and Chauffeur West prospects lie entirely within the Durba Mine Formation. This unit is comprised of a thick sequence of altered fine-grained sedimentary rocks (argillite-mudstone-siltstone), felsic tuffs, and ironstonechert units. This formation underlies Durba Hill and possibly Kombokolo Hill directly to the north-north-west. The top of the formation is defined by the first appearance of thick volcanic agglomerate units associated with the overlying Karagba Deeps Formation. The base is defined by an ironstone-agglomerate-argillite sequence that lies above the thick agglomeratic units of the Sessenge Main Lode Vag Formation in the Sessenge Prospect area to the south west. The Durba Mine Formation appears to be greater than 220 metres in thickness. Mineralisation at the Durba and Chauffeur Prospects consist of tabular to elliptical shaped mineralised bodies (East and West zones) with shallow plunges to the north east. Exploration drilling is ongoing at the Durba Prospect and infill drilling is in progress in the Chauffeur area. The mineralisation is approximately 1.6km in strike length at an average width of 350 metres and has been identified to a depth of 850 metres below the topographical surface Karagba The Karagba Prospect is located to the north east of the historic Durba Mine and represents the northeast extent of known significant mineralisation along the Kibali-Durba-Karagba Trend. The upper stratigraphy in the Karagba Prospect area is represented by the Durba Lake Formation. This stratigraphy is dominated by a sequence of ash-lapilli tuff horizons and interbedded fine-grained sediments. The tuffaceous units are generally coarse at the base and fine upward into mudstone-argillite units. The individual beds range in thickness from 0.5 to 2.0 metres. Narrow volcanic agglomerate horizons are present within the formation. The bottom of the formation is placed at the base of a distinctive basaltic sill BIF pair (DDD018; metres down hole). The top of the formation is not known, however it is suggested that a distinctive, thick sequence of ironstone-chert that forms the summit of Kanga Sud hill represents the upper part of the formation. The Durba Lake Formation conformably overlies the Karagba Deeps Formation. This formation is defined by a distinctive, thick volcanic agglomerate unit that is characterized by intermediate-to-felsic fragments set within a fine-grained chloritic matrix. The unit is generally matrix supported with fragments varying slightly in lithology. Large sections of the unit appear dominantly monomictic with fragment size varying from several mm to several cm in diameter. At depth, a different volcanic agglomerate is noted with polymictic fragments that include a distinctive dark fragment interpreted as a silicified argillite. Alteration of the matrix in the agglomerate is dominated by chlorite (greenschist facies), which in turn can be variably overprinted by sericite, ankerite, silica and albite. The mineralisation at Karagba is represented by numerous mineralised zones with the lower Karagba lenses hosted primarily in the agglomeratic units of the Karagba Deeps Formation, while the upper zones such as Chauffeur, Upper Karagba West lens appear to be hosted both within the sedimentary and tuffaceous units of the Durba Mine Formation and the Karagba Deeps agglomeratic units. The mineralised shoots are tabular to elliptical in shape and plunge to the north east at 30 o. Of note is the presence of a distinctive hydrothermal breccia body that underlies the main mineralized lens at Karagba West. The breccia can be followed through the section as a sub-vertical body with subordinate, moderately-dipping apophosies. This generation of breccia is distinguished by a black chloritic matrix and occasional coarse gold content. Infill drilling is ongoing in the Karagba area to upgrade the currently defined Mineral Resources to Indicated Mineral Resource status. The mineralisation extends over a strike length of 850 metres at an average width of 250 metres and has been identified to a depth of 550 metres below the topographical surface. 8.2 Ndala The Ndala Prospect area lies 2km to the east of the Pakaka Prospect and 5km to the north east of the Karagba Prospect, along the Kibali-Durba-Karagba Trend. 33

142 The stratigraphic section at Ndala is relatively simple in that it is entirely massive basalt (with minor interflow sedimentary rocks) that is cut by abundant quartz veins. The basalt was determined by BGC. to be iron-rich tholeiites of subaqueous deposition based on the presence of pillow structures. The basaltic rocks at Ndala are correlated with those in the hanging wall of the Pakaka Prospect to the west and represent a thick sequence of mafic volcanic rocks and fine-grained interflow sedimentary rocks that belong to the Pakaka-Pamao Hanging Wall Formation. The thickness of this formation is yet to be determined from the present drilling. The Ndala mineralisation is located entirely within the basalt unit and appears to be related to supergene enrichment of the gold within the transition zone from weathered to fresh material. The mineralisation extends over a strike length of 250 metres at an average width of 50 metres to a depth of 80 metres below the topographical surface. Further drilling is planned for the Ndala North area. 8.3 Pakaka-Mengu Trend The 7km-long, north west-trending Pakaka-Mengu Trend includes from south east to north west, the Pakaka, Pamao, Megi, Marakeke, Mengu Village, and Mengu Hill prospects. Soil anomalies along strike within this trend suggest that gold anomalism may extend for up to 13km. The mineralised lenses are highly elongate tabular or ellipse-shaped bodies ( metres in strike and 5-25 metres in average thickness) with an unknown downplunge extent. The lenses plunge consistently to the north east at o within a stratabound horizon below a major basalt unit that is interpreted to have acted as an aquitard. Mineralisation occurs in a number of rock types with the highest gold grades showing a strong spatial association with zones of variably silicified, albitised and carbonate altered rock. These alteration-mineralisation zones appear to be broadly conformable with the regional S1 fabric and sub-parallel to bedding. Figure 8-2 shows the identified prospects along the Pakaka-Mengu Trend. Figure 8-2 Pakaka-Mengu Mineralised Trend Plan 34

143 8.3.1 Pakaka-Pamao The Pakaka-Pamao Prospects are located at the south west end of the 7km-long, north west-trending Pakaka-Mengu Trend. The stratigraphic section at Pakaka-Pamao is comprised of three formations: An upper tholeiitic basalt flow sequence with interbedded argillite and graphitic argillite horizons called the Pakaka-Pamao Hanging Wall Formation; A middle formation composed of a volcanic agglomerate unit interbedded with abundant felsic crystal tuff, undifferentiated tuff, as well as lesser horizons of argillite, mudstone (and at Pamao, ironstone) called the Pakaka Main Lode Vag Formation; A lower conformably underlying formation, called the Pakaka-Pamao Footwall Formation, being massive mafic volcanic units presently interpreted as a sequence of basalt flows. The sequence could however be a relatively thick sill- or dyke-like intrusion as there are no known interflow sediments noted in the sequence. Gold mineralisation at Pakaka-Pamao is found predominantly within the coarse volcaniclastic rocks, minor tuffaceous and fine-grained sedimentary rocks of the Pakaka Main Lode Vag Formation. The mineralised zones are characterized by silica-albite-ankerite/siderite-pyrite alteration, mainly in well foliated siliceous rocks. The mineralised zones are associated with pervasive silicification with local preservation of breccia textures that have been overprinted by the dominant S1 fabric. Higher gold grades appear to correlate well with the presence and abundance of pyrite. A shallow open pit comprising a series of artisanal workings has been excavated over the south-western part of the Pakaka Prospect where the mineralisation outcrops. These workings extend over a strike length of approximately 100 metres. Historic Belgian-era open pits are found at Bakangwe Aval and Tete Bakangwe, and artisanal pits are scattered across the southern part of the Pamao area where mineralisation outcrops. This Pamao mineralisation extends over a strike length of 1.4km at an average width of 300 metres and has been identified to a depth of 150 metres below the topographical surface. The weathering profile at Pakaka is relatively deep, with oxidation extending to depths of approximately 50 metres below surface. At the Pakaka-Pamao Prospect there are six recognisable lenses, these being the Pakaka South Shoot, Pakaka North Shoot, Tete Bakangwe, Bakangwe Aval, Pamao East Shoot and Pamao West Shoot. All the mineralised shoots plunge shallowly and strike to the north east. The largest and most persistent of these are the Pakaka South and North lenses, which have been modelled. The individual shoots vary in width from 25 metres at Bakangwe Aval to over 200 metres at Pakaka North. The Pakaka shoots continue down plunge beyond the limits of the drilling and represent underground potential. The Pakaka mineralisation extends over a strike length of 1km at an average width of 500 metres and has been identified to a depth of 350 metres below the topographical surface Megi-Marakeke The Megi-Marakeke Prospects are located midway along the Pakaka-Mengu Trend. The lowest stratigraphic unit in the Megi Section is interpreted to be a basalt flow unit, the Megi Footwall Basalt Formation, which may correlate with the basalt units found in the lower stratigraphy at Pakaka-Pamao (Pakaka- Pamao Footwall Formation). This unit ranges in colour from buff to dark grey, is generally fine-grained in texture and is variably carbonate-sericite-silica altered. The basalt dips to the north east at approximately 30 o and strikes to the west-north-west. The Megi Footwall Basalt is overlain by a thick sequence of chert-tuff and ironstone called the Megi Ironstone- Chert Formation. In drill sections this unit is over 50 metres in thickness and is characterized by the interlayering of iron-rich units (ironstone and ferruginous chert ) and bleached units ( tuff ) with variable percentages of silica, sericite and carbonate with minor horizons of albite, pyrite, and arsenopyrite. The interleaving of the ironstone with the chert-tuff is ephemeral and cannot be traced with confidence through the sections as separate mappable horizons; therefore, the ironstone-chert-tuff is considered together as a mappable unit. The iron-silica-carbonate-potassium-flooding is interpreted to be the result of alteration processes. This alteration is pervasive, widespread and it can be followed between drill holes and across sections. It is considered to be part of the stratigraphic section in some parts of the project area. The iron-silica unit is resistant and forms the summits of many of the hills and ridges within the area, stretching from the Memekasi Hills in the south to the Kalimva Hills in the north, a distance of 25km. 35

144 It is noted that the Megi Ironstone-Chert Formation is best developed around the Megi Prospect. This observation may have significance with relation to mineralisation-alteration processes and their possible relationship to a fundamental structural control and the probability that the ironstone-chert alteration unit is best developed over early growth faults. The Megi mineralisation extends over a strike length of 700 metres at an average width of 250 metres and has been identified to a depth of 300 metres below the topographical surface. A lithology interpreted as a fine-grained sedimentary rock appears to the east and west of the Megi Prospect. Further west in the Marakeke area, this unit dominates the stratigraphic section. This lithology is given the name mudstone and is tentatively recognized as the Marakeke Mudstone Formation. Narrow, fine-grained sedimentary units (mudstone) are recognized in the Megi sections but are minor in relation to the more dominant ironstone-chert lithologies. The relationship of the mudstone to the spatially-associated alteration units is still open to conjecture but it possible that much of the ironstone-chert is developed in the fine-grained sedimentary units and that there is an alteration facies change outward from the pervasively altered zones around the mineralised zones, from ironstone-chert (proximal) to mudstone (distal). The Marakeke mineralisation extends over a strike length of 1.1km at an average width of 100 metres and has been identified to a depth of 90 metres below the topographical surface Mengu Mengu Hill The Mengu Village and Mengu Hill Prospects lie near the north west end of the north-west trending Pakaka-Mengu Trend. The stratigraphy in the vicinity of the Mengu Hill is dominated by a volcanic agglomerate unit that is interbedded with fine-grained sediments, siliceous tuffaceous rocks and minor mafic volcanic rocks. These lithologies overlay a massive magnetite and specular hematite ironstone-chert unit. At Mengu Hill, mineralisation is associated with silica-albite-ankerite/siderite-pyrite alteration that is focused within the ironstone unit and along its contact with the overlying volcanic agglomerate unit. The mineralised lens plunges shallowly to the north east. The Mengu Hill mineralisation is approximately 700 metres in strike length at an average width of 120 metres and has been identified to a depth of 250 metres below the topographical surface. At Mengu Village the mineralisation the mineralisation is 600 metres in strike length at an average width of 150 metres and has been identified to a depth of 70 metres below the topographical surface. 8.4 Gorumbwa-Kombokolo Trend Refer to Figure 8-1 and Figure 8-2 for the position of the Gorumbwa-Kombokolo Trend Gorumbwa The Gorumbwa prospect containing the historic high-grade Gorumbwa Mine is located immediately to the north of the Sessenge Prospect and to the west of the historic Durba Mine. The Gorumbwa Prospect lies along a mineralised trend that appears to be a splay off the Kibali-Durba-Karagba Trend. The Kombokolo Prospect is interpreted to lie along this splay to the north east of Gorumbwa. The uppermost sequence recognized in the Gorumbwa drilling is referred to as the Gorumbwa Upper Vag Formation. It is a volcaniclastic sequence dominated by a distinctive volcanic agglomeratic unit, containing felsic fragments within a chloritic matrix, intermixed with a fine-grained ash tuff unit. The average thickness of this formation is unknown as it is seen in the eroded top section of nearly every drill hole at the Gorumbwa Mine. The Gorumbwa Upper Vag Formation is underlain by the Gorumbwa Middle Marker Formation. It is represented by a mixed but distinctive sequence of fine-grained sediments (mudstone-siltstone) and crystal tuff. The sedimentary units often have wispy magnetite bands at centimetre scale which formed within the layers. The crystal tuff is dominated by subhedral to euhedral quartz phenocrysts set within a silica-sericite-carbonate matrix. The stratigraphy below the Middle Marker Formation is not well known at this point in time. However, one relatively deep hole (GDD009) appears to have penetrated through the Middle Marker at 178 metres down hole and gone back into a thick volcanic agglomerate unit. This lower agglomeratic unit may be part of a larger volcaniclastic sequence which conformably underlies the Gorumbwa Middle Marker Formation at Gorumbwa. Both the Gorumbwa Upper Vag Formation and the Gorumbwa Middle Marker Formation may belong to the Sessenge Main Lode Vag Formation as described for the Sessenge prospect. 36

145 A significant mafic intrusion, formally known as the Banc Vert, is found within the Gorumbwa stratigraphy. For most of its known extent it appears to lie sub-parallel to lithologic layering and is assumed to be sill-like in its relationship to the stratigraphy. The Banc Vert is generally a medium grained mafic unit which becomes fine-grained at the contact with the host rock. The main constituents appear to be chlorite, feldspar and ankerite-calcite, with the ankerite appearing as porphyroblastic euhedral crystals up to 2 millimetres in diameter. Some parts of the mafic intrusion contain magnetite. The contacts of the Banc Vert are difficult to distinguish as there appears to be a degree of mixing and assimilation along the contacts suggestive of emplacement within an unconsolidated host (soft-sedimentary emplacement). Mineralisation at the Gorumbwa Mine is hosted within a sequence of meta-tuffs and agglomerates. Silicification and sericitisation is pervasive, with visible gold noted within late, strongly silicified structures. Three lodes or lenses were present with historic mining focussed on the main (middle) lode located between the upper and the lower lodes. The main lode is capped and divided from the upper lode by the Banc Vert. The mineralisation extends over a strike length of 1km at an average width of 150 metres and has been identified to a depth of 400 metres below the topographical surface Kombokolo The Kombokolo Prospect lies approximately 1km to the north east of the Gorumbwa Prospect along the north easttrending Gorumbwa-Kombokolo Splay. The lowest stratigraphic unit at Kombokolo is a black to dark grey, very-fine-grained argillite. The Kombokolo argillite is followed by a fine-grained, grey-coloured sedimentary unit identified as a mudstone or volcanic agglomerate in KKRC002 and KKRC005. The Kombokolo argillite-mudstone sequence is followed by an ironstone unit averaging 4-5 metres in thickness and dipping to the north. The sequence of fine-grained sedimentary and ironstone rocks at Kombokolo are correlated with units belonging to the Durba Mine Formation described above for the Durba-Chauffeur area. Mineralisation is located in a moderate to pervasively altered carbonate-sericite-silica unit underlying the ironstone horizon. One main shallow north east plunging mineralised lens is present at Kombokolo. This mineralised lens strikes over 300 metres at an average width of 120 metres and has been identified to a depth of 170 metres below the topographical surface. 8.5 Agbarabo Trend Figure 8-2 shows the identified prospects along the Agbarabo Trend. The historic high-grade Agbarabo Mine is located immediately to the north west of the Kombokolo prospect and to the north of the historic Gorumbwa Mine. The stratigraphy at the Agbarabo Prospect consists of a thick sequence of undifferentiated tuffs, mudstone and volcanic agglomerate. These units are variably altered (silica-albite-carbonate-sericite) with minor ironstone. The volcaniclastic-sedimentary sequence is cut by a relatively thick and weakly carbonate altered mafic sill similar to that found in the Gorumbwa stratigraphy. The lithologic units found at Agbarabo appear to belong to the lower part of the Durba Mine Formation or the upper part of the Sessenge Main Lode Vag Formation. Gold mineralisation in the volcaniclastic-sedimentary sequence is associated with silica-albite-carbonate-pyrite alteration. No gold Mineral Resources have been established by drilling in the Agbarabo mine area. 37

146 9.0 EXPLORATION 9.1 Introduction Moto has primarily used the BGC/AAC aeromagnetic interpretation and 1950 s OKIMO drill results to define drill targets in the project area. The Mineral Resources estimates currently published by Kibali Goldmines are based primarily on the post 2004 Moto Mineral Resource drilling as very limited records are available to validate the pre drilling. The primary focus of the Kibali Goldmines drilling strategy since July 2008 has been to target the KCD mineralised trend with infill and extension drilling focussed on defining the open pit as well as the underground potential of the KCD system. 9.2 Pakaka OKIMO and Davy McKee drilled the Pakaka deposit on drill lines orientated north-south, which is along the strike of the mineralisation and therefore sub-optimal. Kibali Goldmines is in possession of the drill hole data from the Davy McKee holes, and drill hole collar positions, composited assay data and depths are available from the OKIMO holes. These data are of low confidence due to grid conversion problems and associated sample location uncertainties. RC drilling by Moto has been completed to a nominal spacing of 40m by 40m over the majority of the shallower western half of the deposit. This includes as small area of 20m by 20m spaced drilling. DC drilling by Moto has also been completed to a nominal spacing of 40m by 40m over the majority of the deeper eastern half of the deposit. Only a small proportion of the overall Pakaka deposit has not been drilled to 40m by 40m spacing. Maximum drill spacing at Pakaka is no greater than 80m by 80m and these areas are internal to the 40m by 40m spaced drilling. The drilling database for Pakaka consists of: : 101 surface diamond drill holes totalling 13,645m drilled by the Belgians; 1990: 10 surface diamond drill holes totalling 2,000 metres drilled by Davy McKee; 1996: 5 surface diamond drill holes totalling 467m drilled by Barrick Gold Corporation (BGC); : 226 reverse circulation drill holes totalling 15,310m drilled by Moto; : 140 surface diamond drill holes totalling 26,709m drilled by Moto; 2006: 5 surface diamond drill holes for geotechnical data totalling 692m drilled by Moto. Only data drilled by Moto was included in the November 2008 Mineral Resource estimation. No material additional drilling has taken place at Pakaka since the November 2008 Mineral Resource statement and so no update resource estimate has been done. 9.3 Gorumbwa The Gorumbwa deposit was mined by OKIMO commencing in 1955 from underground and via a small open pit. Total production from this mine is estimated at approximately 2.8Mt at grades of approximately 12g/t gold to 15g/t gold. The underground and open pit workings are now collapsed and flooded. Two old head frames remain. Underground workings extend to 380m below surface. In 2005, Moto carried out an RC infill drilling programme at the Gorumbwa Prospect to a nominal spacing of 20m by 20m. Drilling logistics at Gorumbwa were difficult due to the presence of a historic open pit and extensive underground workings. One aim of the close spaced RC drilling was to identify the extent and location of underground workings of which many of the RC holes have intersected as expected. Moto have drilled three lines of DC at a nominal drill spacing of 120m by 40m to test the down plunge extent of mineralisation as well as some holes to test the shallower parts of the deposit. A limited RC infill programme was carried out during March 2006 to better define the Mineral Resource along south-east edge and immediately below the historic Gorumbwa open pit. The drilling database for Gorumbwa consists of: Pre-1960: 157 surface diamond drill holes totalling 25,203m drilled by the Belgians; Post-1960: 63 underground diamond drill holes totalling 1,315m drilled by OKIMO; 1996: 3 surface diamond drill holes totalling 907m drilled by Barrick Gold Corporation (BGC); 38

147 : 83 Reverse circulation drill holes totalling 9,570m drilled by Moto; : 27 surface diamond drill holes totalling 5,382m drilled by Moto. 2006: 1 surface diamond drill hole for geotechnical data totalling 150m drilled by Moto. No material additional drilling has taken place at Gorumbwa since the November 2008 Mineral Resource statement and so no update has been done. 9.4 Kibali The drilling database for Kibali consists of: 1998: 55 surface diamond drill holes totalling 6,610 metres drilled by Barrick Gold Corporation (BGC); : 42 reverse circulation drill holes totalling 2,397 metres drilled by Moto. Both the BGC and Moto data has been included in the Mineral Resource estimation as both data sets are considered to be of high reliability. The BGC drill holes were vertical DC holes drilled at a nominal spacing of 160m by 80m on drill fences orientated at 135 o. Most of the Moto RC holes were drilled vertically. Given that the mineralised zone dips at approximately 40 o to 45 o to the west, inclined drill holes will be required, although the relatively steep topography will create access difficulties in places. RC drilling by Moto was reportedly slow due to the hard ground, and drill hole dips deviated significantly. Unfortunately, the BGC diamond core was vandalised during previous unrest in the area, and cannot be used to confirm the geology or to obtain bulk density readings. No additional drilling has taken place at Kibali since the November 2008 Mineral Resource statement and so no update has been done. 9.5 Mengu Hill Moto have completed six 80m by 40m spaced section lines covering the extent of the Mengu Hill deposit. The Mengu Hill Mineral Resource extents and continuity of mineralisation appear to be well defined with the current drilling coverage. The drilling database for Mengu Hill consists of: : 46 reverse circulation drill holes totalling 2,760 metres drilled by Moto; : 40 surface diamond drill holes totalling 6,329m drilled by Moto. 2006: 3 surface diamond drill holes for geotechnical data totalling 480m drilled by Moto. No material additional drilling has taken place at Mengu Hill since the November 2008 Mineral Resource statement and so no update has been done. 9.6 Mengu Village The drilling database for Mengu Village consists of: : 51 reverse circulation drill holes totalling 3,702m drilled by Moto. No additional drilling has taken place at Mengu Village since the November 2008 Mineral Resource statement and so no update has been done. 9.7 Karagba, Chauffeur and Durba The KCD mineralised trend is proving to be a very significant system capable of hosting large gold Mineral Resources. Recent deep drilling at the KCD deposit prospect has confirmed the existence of a very large mineralised system of stacked shoots. The up-dip extension of these mineralised shoots at Chauffeur and Karagba has been the focus of the recent DC drilling with 80m spaced drill lines with 20m collar spacing. An infill programme with nominal 40m x 40m spacing is in progress to increase confidence in the up dip Mineral Resources to Indicated Mineral Resource. There is clearly excellent potential for significant additional near surface and down-dip resources to be defined in the KCD deposit. 39

148 The drilling database for Karagba-Chauffeur-Durba consists of: : 44 reverse circulation drill holes totalling 3,788m drilled by Moto; : 350 surface diamond drill holes totalling 152,175m drilled by Moto; : 21 surface diamond drill holes for geotechnical data totalling 9,409m drilled by Moto. 2008: 3 surface diamond drill holes totalling 1,556m drilled by Barrick as part of a Due Diligence process Moto drilling data and the three Barrick confirmatory holes data have been used in the Mineral Resource estimation. 9.8 Megi The drilling database for Megi consists of: : 100 reverse circulation drill holes totalling 8,240 metres drilled by Moto. No additional drilling has taken place at Megi since the November 2008 Mineral Resource statement and so no update has been done. 9.9 Marakeke The drilling database for Marakeke consists of: : 72 reverse circulation drill holes totalling 4,957m drilled by Moto. No additional drilling has taken place at Marakeke since the November 2008 Mineral Resource statement and so no update has been done Kombokolo The drilling database for Kombokolo consists of: Pre-1960: 12 surface diamond drill holes totalling 1,814 drilled by OKIMO; 2005: 30 reverse circulation drill holes totalling 3,382m drilled by Moto; 2006: 2 surface diamond drill holes totalling 248m drilled by Moto; : 4 surface diamond drill holes for geotechnical data totalling 488m drilled by Moto. No material additional drilling has taken place at Kombokolo since the November 2008 Mineral Resource statement and so no update has been done Sessenge The entire Sessenge deposit area has been drilled by RC to a nominal spacing of 40m by 40m. Additional DC drilling was completed aimed at the down plunge continuation of the geological model. The drilling database for Sessenge consists of: 1998: 26 surface diamond drill holes totalling 3,598m drilled by Barrick Gold Corporation (BGC); : 151 reverse circulation drill holes totalling 12,780m drilled by Moto; : 28 diamond drill holes totalling 5,620 metres drilled by Moto; 2008: 1 surface diamond drill hole totalling 266m drilled by Barrick as part of a Due Diligence process; 2008: 3 surface diamond drill holes for geotechnical data totalling 458m drilled by Moto. No material additional drilling has taken place at Sessenge since the November 2008 Mineral Resource statement and so no update has been done Ndala RC drilling has been completed at the Ndala deposit, west of Pakaka. The Ndala deposit was pitted extensively by OKIMO, however the grades obtained by OKIMO were not confirmed by the Davy McKee drilling. BGC/AAC drilled some DC holes on the prospect and reported some significant results. Moto completed two fences of RC holes orientated north-south and east-west across the area pitted by OKIMO at 40m spacings. 40

149 The drilling database for Ndala consists of: 1998: 6 surface diamond drill holes totalling 844m drilled by BGC; : 28 reverse circulation drill holes totalling 1,718m drilled by Moto. No additional drilling has taken place at Ndala since the November 2008 Mineral Resource statement and so no update has been done Pamao Pamao lies 500m west of Pakaka on the Pakaka Mengu gold in soil geochemical anomaly. The drilling database for Pamao consists of: : 179 reverse circulation drill holes totalling 13,355m drilled by Moto; 2005: 27 surface diamond drill holes totalling 3,795m drilled by Moto; 2007: 4 surface diamond drill holes for geotechnical data totalling 385m drilled by Moto. No material additional drilling has taken place at Pamao since the November 2008 Mineral Resource statement and so no update has been done Other Prospects Other prospects investigated by Moto include Tete Bakangwe located northwest of Pakaka and Aindi which lies west of Pamao. Moto has also completed some RC drilling at Aerodrome, Kanga Moke and an area of extensive artisan workings east of Gorumbwa and northwest of Durba. A small high grade open pit was excavated by OKIMO at Bakangwe Aval, however drilling by BGC and Moto did not obtain any significant results apart from a small zone to the northeast of the prospect Exploration Potential It is considered that the exploration potential of the Moto area is extremely good with potential for the discovery of high-grade mineralisation in the Sessenge-Durba-Karagba segment of the Kibali-Durba-Karagba Trend, the Gorumbwa-Kombokolo Splay, and the Agbarabo Trend. A number of stacked high-grade ore shoots may be defined in this corridor and drilling over the entire strike length is warranted. There is potential to define additional mineralisation at all known occurrences, and it can reasonably be expected that new deposits will be located within the main structural corridors as the geological and structural knowledge of the area is improved. In addition, there is potential for the discovery of mineralisation elsewhere in the district Exploration and Evaluation Models Moto primarily used the BGC/AAC aeromagnetic interpretation and 1950 s OKIMO drill results to define initial drill targets. Kibali Goldmines is also in possession of the BGC/AAC drilling data from Kibali. Mineral Resource estimations were reported for the Kibali Gold Project, being Pakaka, Karagba, Sessenge, Kombokolo, Marakeke, Gorumbwa, Megi, Mengu, Mengu Hill, Ndala, Pamao and Kibali deposits by Cube in November Since November 2005, several Mineral Resource updates and extensive DC drilling has been undertaken for the Kibali Gold Project using 3 drill rigs with the focus being the KCD mineralised trend. Cube last undertook an update resource estimate in November 2008 using all data up to July Since then Moto continued to target mineralisation extensions and infill in the KCD mineralised trend to better define the economic base of open pitable material and refine the models for underground evaluation 41

150 10.0 DRILLING 10.1 Drilling by Previous Owners Very little information is available regarding drilling by OKIMO, BGC or AAC. Inspection by RSG Global of the vandalised BGC drill core suggests that the majority of the core is NQ diameter Drilling by Current Owners Diamond Core and Reverse Circulation drilling have been undertaken on behalf of Kibali Goldmines by GeoSearch Limited, an experienced drilling contract company based in South Africa. The orientation of the DC drilling undertaken on the KCD mineralisation is where possible orthogonal to mineralisation (stratigraphy) to avoid distorting the relationship between sample length and true width. DC assay samples are 2 metres down hole composites. DC core recovery is generally very good in the transition and fresh zones. Above the transition zone the core recoveries are variable with the lithologies being colluvium, silt/clay and minor laterite material. In the shallow intensely oxidised material, the oxidised and friable matrix surrounding remnant siliceous fragments are washed out by the drilling fluids, thus resulting in limited core recovery. Core recovery improves markedly below the intensely oxidised material in the zone of haematitic/limonitic puggy clay/silts that overlies a relatively thin (3-5 metres) transition zone (SOX). Most DC holes commence in HQ diameter, which is reduced to NQ when fresh rock is reached or when difficulties are encountered (such as old stope voids). There has been a limited amount of DC drilling using PQ and BQ core diameters. 42

151 11.0 SAMPLING METHOD AND APPROACH 11.1 Introduction A set of standard procedures have been developed to ensure that there is consistency of all procedures including sampling, geological logging etc across the project. A discussion of the relevance of the samples by prospect is undertaken in Section Diamond Drilling Drill core is marked up by the geologist responsible and cut in half lengthways using a diamond saw. The half core is sampled in 2 metre composites, crushed and pulverised on site and the other half is retained for future reference. All diamond core is geologically logged and photographed prior to sampling Reverse Circulation Drilling RC samples are collected at the drill site via a cyclone for each metre drilled. Samples from each metre are sampled using a 75/25 Jones riffle splitter, followed by a 50/50 riffle splitter to obtain a sample weight of approximately 2.5 kg/m. Two adjacent metre samples are combined at the rig to create a 2 metre composite of approximately 4kg to 5kg. Wet RC sampling can occur periodically when RC air volume and pressure is insufficient to maintain a dry sample. Where wet sampling occurs, excess water in the wet RC samples is decanted by rolling the bag gradually sideways and pouring off the excess water. The assay sample is then obtained by using a small scoop to cut a vertical channel through the entire sample in the plastic bag whilst the bag is lying on its side. The decanting of excess water will have implications for grade, which will be downgraded if the gold is fine, or upgraded if the gold is coarse. Details of wet sample intervals are logged according to degree of dampness and entered into the database. This ensures the assessment of the significance of wet RC drilling can be taken into account. The RC sampling procedures were revised in August 2009 with all samples being taken back to the on site processing facility and dried prior to splitting. Historically the RC bulk rejects were stored on site in plastic bags and were exposed to the weather. Individual samples can be located, however many bags were in poor condition and inter-sample contamination has occurred with time. Whilst it is not practical to store all samples under cover, mineralised intervals are now being stored under cover such that deterioration of the bags is minimised. Chip boards are prepared for RC drilling prior to geological logging. 43

152 12.0 SAMPLE PREPARATION, ANALYSES & SECURITY 12.1 Introduction A comprehensive audit report regarding sampling method, sample preparation, analysis and security was prepared by Michel M. Mercier (Mercier, September 2005) at the request of Moto Gold Mines Ltd during September This report represents the most detailed, up to date and accurate account of procedures, methods, quality assurance and sample preparation facilities currently adopted for all forms of sampling at the Kibali Gold Project. Descriptions contained in this report are consistent with Cube s recent observations and understanding of the same Sample Preparation Areas The following description has been drawn directly from the Mercier, September 2005 Audit Report. The sample preparation areas are housed in a large building of 441m 2 divided into various sections for the processing and preparation of different types of samples. The building also has a small core storage area and an office for the senior lab technician. The areas are clean and well laid out with activities separated from each other. The various preparation sections of the laboratory are: crusher section, pulverizer section, core saw section, chipboard section, core drying section and soil preparation section Sample Preparation Equipment The following description has been drawn directly from the Mercier, September 2005 Audit Report. The main equipment in use at the Doko preparation laboratory consists of: Jaw crushers; Pulverizers (both saucer style puck and ring type); Drying oven; Diamond saws; Riffle splitters; Various stainless steel screens; Ultrasonic sieve cleaners; Compressed air connections; Work stations equipped with dust exhausts; Dust extractor system Jaw Crushers: two TM Engineering jaw crushers are used in the Doko preparation laboratory. Each machine can crush P 6kg of material (approximately 2m of core) in about 4 minutes, so that 90% of the sample is less than 2mm. The jaws can be cleaned very easily with compressed air or, when necessary, with barren granitoid rock material (see section on Pulverisers below for details about the gold barren material). The jaw crushers are also used to prepare the blank material to clean the LM2 and the TM Engineering pulverizer bowls. Pulverizers: two types of pulverizers are used; the flying saucer style puck (LM2) and the ring type (TM Engineering). The two TM Engineering pulverizers with a bowl capacity of approximately 250g (which were used at the beginning of the project) have been replaced by three LM2 machines with a bowl capacity of approximately 1.5kg. Both models pulverize samples to the point that 85% of the material passes through a 75 micrometer mesh. A crushed gold-barren material, obtained from fresh granitoid rock, is used to clean the bowls. Analyses carried out on the barren granitoid material have consistently returned values of 0.03ppb Au with the majority of samples giving G 0.01ppb Au. This gold-barren granitoid material is collected from an area 14km north of Doko, at the following UTM locations: N395654/E785046; N395620/E785240; N359597/E785091; N359641/E785181; N359655/E785062; 44

153 N395644/E785190; N359595/E Drying oven: a Marc ventilated electric drying oven (0 to 300 C) is used in the Doko preparation laboratory. This oven permits the control of the temperature to accommodate different types of sample material (drying of 48 core samples in about 1 hour at 120 C; drying of 24 RC samples in about 6 hours at 120 C; drying of 40 to 48 soil samples in about 6 or 7 hours at 120 C). Diamond saws: two types of diamond saw were used to split the diamond core, a Vancon core saw that can split one meter of core in about 5 minutes and a Corstor core splitter that can split one meter of core in about 10 minutes. A second Vancon saw was installed in August 2006 to enhance efficiency. Riffle splitters: different types of stainless steel riffle splitters (Geneq and Controlab) are available on site. They are used to prepare sub-samples. Various stainless steel screens: different types of stainless steel screens (Controlab and Madison) are available on site. They are used to test the quality of crushing and pulverization, and also to obtain the fine fraction from soil for analysis. Ultrasonic sieve cleaners: two Controlab ultrasonic sieve cleaners are used to clean the screens. They are very efficient and after the cleaning no particles are left in the mesh. Compressed air connections numerous compressed air connections are available in the preparation laboratory to do the cleaning of the different apparatus and material used. Work stations equipped with dust exhausts: four work stations are present in the laboratory and these are equipped with dust exhausts that connect to a dust extraction system (Donaldson Torit Downflo Oval). The work stations are used for sample splitting and for recuperation of the pulverized samples from pulverizer bowls Quality Control and Quality Analysis The following description has been drawn directly from the Mercier, September 2005 Audit Report. A programme of external quality control (QC) and quality analysis (QA) is applied to check for contamination, accuracy and precision. This consists of three types of check samples that are introduced into the sample stream, which include gold blanks, standards and laboratory duplicates. In addition, for RC samples, field duplicates are also introduced in the sample stream. For the Diamond drill programme, the check samples introduced into the batch stream total 12% which is very high when compared to the 5-6% that is considered as adequate for most exploration projects. For the RC programme, the check samples introduced into the batch stream total 15%. As a test, for the Gorumbwa deposit, where coarse gold was observed, Screen Fire Assay is also performed for all RC samples that return Au values over 1g/t. The preliminary results show that Screen Fire Assay results are higher than the usual Au Fire Assay analyses Gold Blanks Gold blanks are used to check the possibility of gold contamination during the analytical procedure. This blank material had previously been prepared on site with reverse circulation cuttings of hole PMRC 089 (from 58m to 80m) that returned values 5ppb Au. Since October 2006, Gannet certified blanks have been routinely used. For Diamond drill samples, one blank is introduced randomly into the sample stream for each group of 25 samples (4%) Standards Various certified reference standards are used to verify the ability of the laboratory to accurately detect gold values. For RC and diamond drill samples, one certified reference standard is nominally inserted every 25 samples in the sample stream (approximately 3.3%). Twenty eight (28) different certified standards have been used as control samples over the life of the project (2004 to 2009), and are detailed below in Table 0-1. The thirteen standards still currently in use are indicated in bold italics. The AU prefixed series of standards (2005 to 2006) were obtained from Western Mineral Standards, 28 Irwin St, Bellevue, WA The more recent ST prefixed series have been sourced from Gannet Holdings Pty Ltd., 43 Frederic St, Naval Base, WA, The standards with SE, SH SJ & SL prefixes have been sourced from Rocklabs Australian X-Ray tubes Pty Ltd and were submitted with the Barrick due diligence samples in

154 Table 12-1 Certified Reference Material List Standard_ID Analyte_ID Expected Value Std Deviation Units Last Used blank... Au ppm 14-Jul-06 ST154-blank.... Au ppm 30-Jun-08 ST216-blank... Au ppm 0l-Jul-09 BBG-blank... Au ppm 05-Oct-08 ST428-blank... Au ppm 01-Jul-09 AUOH-1... Au ppm 05-Jul-06 AUOI-1... Au ppm 24-Jul-06 AUOJ-1... Au ppm 24-Jul-06 AUSK-1... Au ppm 24-Jul-06 ST04/ Au ppm 29-Aug-05 ST10/ Au ppm 09-Jul-08 ST16/ Au ppm 24-Apr-06 ST17/ Au ppm 16-Sep-04 ST18/ Au ppm 07-Jul-05 ST Au ppm 11-Nov-08 ST Au ppm 13-Dec-08 ST Au ppm 01-Jul-09 ST Au ppm 27-Apr-07 ST Au ppm 01-Jul-09 ST44/ Au ppm 14-Aug-08 ST44/ Au ppm 31-Dec-08 ST49/ Au ppm 11-Nov-08 ST73/ Au ppm 22-Aug-08 ST274/ Au ppm 01-Jul-09 ST49/ Au ppm 01-Jul-09 SE19... Au ppm 05-Oct-08 SH24... Au ppm 05-Oct-08 SJ Au ppm 05-Oct-08 SL20... Au ppm 05-Oct Duplicates Duplicates are used to verify the degree of precision of the analyses. They can also be used to verify the quality of the preparation of samples in the preparation laboratory or to verify if mixing of samples occurred during batch processing. For Diamond drill samples, one duplicate is introduced randomly into the sample stream for each 25 samples (4%). For RC samples one field duplicate and one laboratory duplicate are introduced into the sample stream for each 20 samples (10%) Sample Shipments to the Analytical Laboratories The following description has been drawn directly from the Mercier, September 2005 Audit Report. Two analytical laboratories are used by Moto Goldmines Ltd.: Genalysis analytical laboratory in Perth (Australia ISO 17025, NATA 3244) for Diamond drill samples, and SGS analytical laboratory in Mwanza (Tanzania) for RC and Soil samples. The RC and Soil samples are sent to SGS laboratory in Mwanza. They are packed in new polyweave bags (between 50 and 90 RC samples) or in cardboard boxes inserted into new polyweave bags (approximately 50 to 60 Soil samples), and sent from the Doko airport in the DRC to Mwanza, Tanzania on an airplane belonging to Kilwa Air (a company associated with Geosearch that is engaged in the contract drilling for the Moto project). The parcels are then picked up by SGS staff at the airport in Mwanza. The Diamond drill samples, sent to Genalysis laboratory in Perth, are packed in cardboard boxes (100 to 110 samples per cardboard box) that are closed with packing tape. The boxes are sent from Doko airport with the Kilwa Air plane to Entebbe airport in Uganda and then picked up by DHL staff at the airport and redirected by DHL (air service) to the Genalysis laboratory in Perth. To this point in time, it appears that best-practice security assurance of the samples during transport between Doko and the various external laboratories has not been addressed. As a consequence, it is recommended that the samples 46

155 be packed in new polyweave bags protected by bag seals in order to ensure their security. The polyweave bags can then be inserted into cardboard boxes where necessary. A receiving form would then be sent with the parcels and be returned signed to Moto Diamond Drill Sample Preparation The following description has been drawn directly from the Mercier, September 2005 Audit Report. The diamond drill samples are logged, photographed, split and pulverized on site by Moto employees and then packed and sent to Genalysis laboratory in Australia for a Fire Assay gold analysis. The following flow sheet summarizes the different stages of diamond drill sample processing. 47

156 12.7 Reverse Circulation Sample Preparation The following description has been drawn directly from the Mercier, September 2005 Audit Report. In the field, Reverse Circulation (RC) samples were collected by Moto employees on a metre basis while the sample collected at the drill for analysis represents a 2m sample. In the Doko preparation laboratory, only the splitting of each two meter sample received from the field and the introduction of standards and duplicates are performed. The rest of the preparation (drying, crushing and pulverization) is handled at the SGS laboratory in Mwanza. The RC samples are analyzed by SGS in Mwanza for Au, Fire Assay, AAS finish. Chipboards are prepared on site. The following flow sheet summarizes the different stages of RC sample processing Conclusion In the opinion of the author the procedures for sample preparation, security and analytical procedures are adequate. 48

157 13.0 DATA VERIFICATION 13.1 Project Database Data was initially compiled and validated on site by Moto geologists. Logging data are entered manually from the drill logs. In January 2006 IPAQ was introduced to speed up the geological logging of the DC. The IPAQ is equipped with Micromine Field Marshall and the logging codes were set up to reflect site specifications. The drill log is up loaded to a dedicated desk top computer and data stored in Micromine. Assay data are received from SGS and Genalysis in an electronic format and is imported directly into the site database. All data is validated by the Moto Database Administrator prior to transmission to Cube. Core recoveries are routinely entered into the digital database. Cube is routinely supplied with site validated ASCII files representing collar, downhole survey, assay and geology data together with original electronic lab assay files. Cube maintains the data in a SQL Server relational drill hole database. Cube considers the data management processes in place to be robust and adequate Database Upgrade and Validation H S Lucas was contracted from January 2006 by Moto Goldmines Ltd to be the Database Administrator for the Kibali Gold Project. A summary of the database procedures and issues are itemised below. Data is held onsite as Micromine project databases. Data is manipulated and used on site through Micromine with MapInfo being used as a GIS package. Micromine is used by the DBA with all data transfers being made in Micromine DAT format. Data is held offsite by Cube in a relational SQL Access database. Scripts are used to import Micromine DAT files directly into Access. Site visits by the DBA are made typically monthly, bi-monthly or as and when required. From January to April 2006 an intensive database audit was completed. Aspects of this continue to date along with normal database validation for on-site and off-site files. Key aspects of the database audit included: Compilation of all project specific drilling data into single collar, assay, geology and survey files. Site files tended to comprise compiled files, individual files and various subsets of those which made evaluation of the data difficult. Complete validation of all drilling data from the start of MGL involvement, identifying, correcting and documenting all data problems, sourcing all missing drilling data, laboratory files, sampling information etc. End of hole (EOH) verified to hard copy sources where collar EOH, sampling EOH and geology EOH were in disagreement. All corrections documented. Data checked in 3D for obvious collar and survey discrepancies. Verification and documenting of boreholes actually drilled on projects, removal of those planned but not drilled from the drilling databases. This involved checking all hard copy data to fully verify whether a hole had or had not been drilled. Compilation of sample dispatch information, dates, batch ID, Laboratory references etc, prep and assay techniques used, ongoing confirmation of hard copy certificates being supplied along with digital lab files. Sourcing missing geological logging and oxidation logging. This has generally involved relogging of drill holes. Validation involved identifying drilling intervals which had no sampling information present. All such intervals were documented and hard copy sources investigated. In a minor number of cases additional sampling was identified and captured. All missing intervals have now been captured digitally with Not Sampled or No Recovery flags. This means that all boreholes have a complete sequence of From and To from top of hole to bottom of hole. All corrections documented. This applied mostly to diamond drilling. With particular reference to Gorumbwa, all logged stope intervals in RC or DC were rechecked against hard copy sources for verification purposes. Corrections made where necessary and documented. A check was made 49

158 that such intervals were not assigned a zero grade. All hard copy drilling logs for Gorumbwa were checked to ensure that all logged stope intervals had been digitally captured. All DC sampling was overview checked to verify sampling to ensure that different phases of sampling had been captured, i.e. top of the hole sampling, bottom of the hole sampling. This was not required for RC as the entire hole is sampled. A number of instances were identified and fixed. A check was made against hard copy records of Moto samples exceeding 4 m in sample length with associated grade. Intervals with a sample ID but no grade back checked against hard copy sources and hard copy lab files to verify. Only a very small number actually had missing grade. The bulk of the occurrences are due to samples not being received by the relevant lab or the lab losing/damaging the sample. Corrections / documentation were applied. Data procedures and data handling procedures reviewed and modified where necessary. Downhole survey information has been checked for significant deviations in dip and azimuth. This is part of the standard procedure. Hard copy sources and drillers digital borehole files checked. Due to the presence of high concentrations of magnetite present, a number of azimuth readings are highly erratic. In such instances, an average reading has been calculated based on the surrounding good readings and a remark placed in the digital file along with the original logged azimuth. Borehole assigning to different prospects was thoroughly reviewed and corrections applied. This had most effect on the Megi drilling which encompasses 4 known deposits Mengu Hill, Mengu Village, Marakeke and Megi Overview of Data Quality Aspects In conjunction with Cube and Michael Mercier (Senior Consulting Geologist / Geochemist) extensive evaluation of the inserted QC samples (standards, blanks, field duplicates and lab duplicates) has been completed. All erroneous data has been followed up by Moto and all occurrences, conclusions and corrections have been documented and re-assaying of affected samples/batches completed where required. Outliers still remain in the dataset, though the number is statistically very small and they do not affect the quality of the database. These outliers include: Insertions where there is insufficient information or evidence to make an informed correction. Presence of problematic Western Mineral Standards which failed to report within acceptable limits has now been discontinued. Standards for which there is insufficient material left for the laboratory to re-assay during pulp repeat exercises on surrounding samples in the sequence. A programme has been completed to verify all occurrences of +20 g/t assays in the digital database from 2004 to April 2009 (Table 0-1). This equates to approximately 225 individual samples which have been back checked against hard copy sources to firstly verify correct sampling information (Hole ID, From, To, Sample ID etc.) and then against the hard copy analytical certificate. The checking revealed no significant problem with the assays or sampling information. A couple of samples could not be located on the certificates (from 2004, DRC* series) and a couple of samples (from 2004, DRC* series) had the wrong Laboratory Reference assigned. Date Table 13-1 Assays H20g/t Gold sample checking Period Number of Samples H20ppm Cumulative Total July to July January July 2006 to Jan 2007 April Jan2007 to April June April 2007 to June November June 2007 to Nov March Nov2007 to March August March 2008 to Aug April Sept 2008 to Dec A programme has been completed to verify a selection of significant intersections from through the main resource deposits back against original hard copy logs and hard copy analytical certificates. The following list (Table 0-2) of the boreholes has been checked for problems with the analytical data were identified. Minor From and To errors were identified in the Mengu Hill diamond data and corrected. 50

159 Table 13-2 List of Validated Boreholes January 2004 to April 2009 Date Deposit RC Holes DD Holes No. Of Holes Meterage 2006 Sessenge SRC034, 036, 073 SD003, 009, 014 Mengu Hill MRC128, 129 MDD007, 011, 012, 019, 023, 035, MRCD136 Pakaka PRC012, 017, 027, 062, 070, PDD049, 063, , 168, 221 Gorumbwa GRC016, 020, 026 GDD004, 010, 026 Megi MRC010, 153, 174,278,290 Durba DRC002, 013, 073 DDD011, 017, 020, 021, 028, 033, 067, 073, 077, 095, 121 Jan Kombokolo KKDD Agbarabo ADD009 Sessenge SRC092 SDD024 Pakaka PDD122, 131 Durba DDD129, 154, 165, 206 April 2007 Nov 2007 Aug 2008 April 2009 Represents 2100 intervals in 51 Boreholes for 4000m Represents 1285 intervals in 10 Boreholes for 2500m Durba DDD205, 209, 212, 213, 228 Represents 1570 intervals in 5 Boreholes for 3000m Ndala North NNRC086, 111 Aerodrome AERC091, 092, 097 AEDD002, 007, 034, 035 Represents 2480 intervals in 17 Boreholes for 5000m Durba DDD235, 240, 241, 243, 253, 262, 267, 292 Durba DDD067, 074, 079, 126, 295, 296, 297, 298, 300, 301, 307, 308, 313, 319 Durba DDD051, 288, 290, 291, 310, 349, 360, 377, 379, 380, 381A, 387, 389, DGT010 Represents 1825 intervals in 14 Boreholes for 3500m Represents 996 intervals in 14 Boreholes for 2000m A programme of pulp repeat determinations has been implemented since mid 2006 with the initial batch consisting of approximately pulps from each primary assay lab (SGS Mwanza and Genalysis Perth) sent for pulp repeat determinations by ALS Chemex Perth and Ultratrace Perth respectively. This programme is ongoing with approximately 100 pulps per month from each lab going for repeat determinations. As at August , a total of approximately 3,758 assay pairs were available for review. Due to logistical and customs problems, the umpire laboratories insert additional Gannet certified reference material into the sample stream. As part of the ongoing quality control programme for the Doko preparation lab, high grade samples (H25 g/t Au) are selected and prepared by the lab followed by the normal barren granite flush followed by a barren blank to assess any carry over after the flush. This exercise generally consists of samples grading greater than 25 g/t Au. The exercise was completed in July and August 2006 and January and thereafter repeated every 4 months. The results indicate no evidence of sample contamination. A programme was implemented to check a number of DC intersections, on the instruction of Cube, to assess whether there was any down hole smearing (contamination tails) in the intersection caused by contamination at the Doko preparation laboratory. Five intersections were identified as suitable (3 from Durba, 1 from Gorumbwa and 1 from Pakaka). The remaining 1 2 core was used and therefore can be assessed as a field duplicate in addition to the main testwork. A blank was inserted after the sample to assess any carry over. The results indicated no carry over and good correlation between the primary and the field duplicate assay. The test was repeated in March 2006 and thereafter every 4 months Data Transfer Data capture and manipulation is completed in Micromine. Geological logging is completed digitally straight onto handheld loggers. 51

160 Data is forwarded to the DBA either weekly or bi-weekly depending upon volumes. All data is validated and checked for completeness before being forwarded onto Cube. Significant errors identified by the DBA are rectified by site before any data reaches Cube. Minor errors, such as misflagged standards, blanks, Not Sampled intervals are corrected immediately if it can be confidently done so. Otherwise they are corrected during site visits when all hard copy sources are back checked and a final informed decision made. All problems/corrections are documented. Merged assay data is forwarded to Cube in conjunction with the digital lab files at all times. Data is only transferred in Micromine DAT format between Site-DBA-Cube Liaison with Cube and offsite Database Validation Cube maintains a relational Access database of the drilling data. It has been compiled from data supplied by Moto when Cube became fully involved in the project. With reference to the database audit conducted in 2006, when a significant amount of the validation work had been completed, and a final set of drilling files generated for each prospect, the data was verified against the Cube held data, to ensure conformity. Full verification by the DBA against the Cube sample database was completed in February, April, June, September and November 2006 and prior to the finalisation of the 2007 Feasibility Study. The procedure has been repeated since 2007 at approximately 3 month intervals. All corrections/modifications are passed onto Cube in digital format unless it s a very minor change for updating in the database. All corrections/modifications are logged in Excel tables (drilling data/qc data) which are regularly supplied to Cube as an audit trail. In broad terms, the following was found to require attention and subsequently corrected: Planned holes in the database and holes which were not drilled Modest amounts of sampling, assays, geology, collar and survey information missing Project/Prospect nomenclature The database also provided digital information on boreholes/sampling/assays that was known to exist but could not be located on site. Data was queried out of the supplied databases and validated as per normal through Micromine as previously described. It was cross-checked against final Micromine validated files for correctness and completeness. Special attention was paid to: Collars and Surveys same number of holes present, hole sequences, EOH s etc Geology confirmation of missing geology and oxidation, overview checking of logging. Sampling/assays Sample ID s and From and To were flagged which did not agree between the Micromine files and the sample database. All problems were tracked down, in most cases eventually to hard copy sources. Missing portions of holes and samples with no gold determinations checked. To ensure record completeness, Moto sourced for Cube all analytical lab files from SGS and Genalysis from 2004 to This is to ensure that Cube have all information to hand and can update the database with the required laboratory metadata fields as well as grade verification. Cross-validation of the site databases and the Cube relational database continues to date, and was last carried out in January/February 2009 once all analytical results had been received from the 2008 drilling Quality Control Data A site visit was undertaken by independent sampling expert Michel M. Mercier in September The aim of the visit was to audit the preparation laboratory of at Doko, Democratic Republic of Congo. During that visit, the entire programmes of Quality Control (QC) and Quality Assurance (QA) were investigated. A report was presented at the end of the visit (Mercier, September 2005,) that concluded that the preparation laboratory was well organized and well managed, and that the different types of sample preparation observed were being performed to a high standard. 52

161 It was also decided that all results of controls (blanks, standards and duplicates), received before the end of August 2005, would be studied and the results presented in a different report (Mercier, January 2006) in order to evaluate the efficiency of the various preparations and procedures on site and the quality of the analyses performed. The QAQC report was updated in June 2006 to cover the period August 2005 to May In January 2007 following a site visit by M. Mercier, a February 2007 QAQC audit Report covering the period May 2006 to January 2007 was compiled to review the final Kibali Gold Project dataset being used for the FS Mineral Resource modelling. Additional investigative studies have since been completed by Mercier in August 2007 and December The December 2008 QAQC audit report covers the period between 24 June 2007 and 24 October 2008 and concluded that with the exception of a relatively small number of samples, the values returned for certified blanks, cross contamination study samples, certified reference material samples (standards), laboratory DD duplicates and repeat samples sent to umpire laboratory are very acceptable. In summary; the standards assays show a very small fraction (only 3 certified reference standard samples out of the 1228) returned values out of the range of acceptable values. the present study shows mixed results for RC samples for both laboratory and field duplicates. Good precision obtained when the RC data is not filtered becomes a poor precision when data is filtered of low values; the two populations (originals and duplicates) do not show a similar distribution. However, when the data is filtered of low values, the RC duplicates group less than 41 pair assays. Therefore, the dataset could not be statistically significant for these populations. The problems with the RC laboratory and field duplicates are probably more related to the sample preparation than to the Au analysis. the cross contamination samples shows that 3.77% (2 samples of 53) returned values higher than 20ppb (two times the detection limit) and that no samples of the 53 (0%) returned a value higher than 30ppb (three times the detection limit). the study of the pulp repeat samples from Genalysis sent to ALS Chemex shows clearly that: a) the dataset returned a very acceptable precision; b) the two variables, originals and duplicates (or populations), follow a similar distribution; c) the analyses performed by both laboratories (Genalysis and ALS Chemex) must be considered as very acceptable. the results show clearly that the accuracy and precision for these analyses are the best obtained since the beginning of the Kibali project. In addition, Cube has undertaken routine QAQC monitoring since November 2005, on an annual basis or prior to a resource update to evaluate the performance of the certified standards, blanks and laboratory duplicates with results being distributed to Kibali Goldmines. All available assay drilling data from the project start date of 30 th April 2004 to the 10 th July 2009 have been reviewed with respect to QAQC performance. From a total of 6,716 QAQC (standards and blanks) samples submitted, 104 samples were identified as exceeding the sample variance limits (H3 standard deviations). The number of errors found ( 1.5% of control samples) and the small random deviations from the acceptable limit are not considered material. Some of the samples outside the 3SD acceptable limit can be explained by the incorrect placement/mixing of standard and blanks into the sample stream. Cube has also observed that certified reference standards show no material systematic bias with time over this period. All erroneous samples identified are forwarded to the DBA for checking, and follow-up investigation if necessary. Overall, the certified standards have performed well and indicate the sample data is of a high standard. Poor precision is reported for the SGS (Mwanza) laboratory for the RC field duplicates submitted in the period 2004 and Use of this laboratory has been discontinued, and the preparation and collection of RC samples has been modified (larger sample sizes to be used) to address the precision issue for any future RC drilling. 53

162 Bulk Density Bulk density determinations are measured at an interval frequency of approximately 5m to 10m, with each core sample tested having a minimum length of approximately 10 centimetres. The procedure for determining bulk density has changed over time, with the water displacement method being used prior to 21 st November 2006, then a change to the immersion weight method. This change was recommended by Mercier in order to improve reproducibility of the measurements. As part of the implementation of this change in procedure, a representative number of holes from KCD prefix DDD110 onwards were repeated using the immersion method. As a routine QAQC check, approximately 15% to 30% of the selected measurements are randomly repeated. In addition, all samples with a measured density of greater than 3.2 gm/cc are systematically repeated to a maximum of 15 per hole. This work is undertaken under strict supervision with the results reported in a monthly QAQC report held on site Downhole Survey Historically down-hole measurements were undertaken every 30m downhole using an Eastman camera. No check surveys using a non magnetic tool such as a gyro have been undertaken. All DC holes are now surveyed as the hole is drilled (down-hole) using a Flexit single shot tool. Since May 2009, drill holes have been additionally surveyed up-hole using a Flexit multi-shot tool at 6m intervals to check the accuracy and reproducibility of the down hole cameras in measuring the inclination and azimuth of the core holes. A magnetic susceptibility tool is also being utilised to define areas of magnetic wallrock which will affect azimuth readings. Comparison of the two survey methods indicates there is good correlation between down-hole and up-hole azimuth and magnetic intensity measurements where the wall rock is not magnetic. Up-hole multi-shot measurements at 6m intervals are used in preference to the downhole 30m single shot measurements where available. Up-hole measurements within casing are replaced by downhole survey measurements conducted during drilling. Erratic azimuth values in areas of defined magnetic wallrock are removed and replaced with values averaged from adjacent measurements in non-magnetic wallrock. Average curvature and deviation over the adjacent sections of the hole are also used to infer a corrected reading. Any changes to the original survey data are documented in the comments field in the survey table of the drillhole database. A regular internal QC report is compiled to monitor the survey measurement process and involves; graphing of up-hole and down-hole inclination, azimuth and magnetic intensity measurements to enable comparison of the hole profile by different survey methods tabulation for each hole of the raw survey data (down-hole and up-hole) including the presence of magnetic wall rock at measurement depths a brief description of the corrections proposed with reasons why they were proposed summarised in a table Collar Reduced Level Validation All drill holes used in the Mineral Resource estimation have collar RLs checked on hardcopy sections to assess any possible impact on the interpretation and wire-frames. Any errors of greater than +/-1 metres in collar reduced level have been pressed onto the Photomap DTM, and may have the minor effect of jogging the ore-body wire-frames locally in space. Extensive validation of the data clearly shows that the known errors in the collar RL s of the Mineral Resource drill holes have no material effect on the Mineral Resource estimation. 54

163 14.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES 14.1 Mineral Resource Estimates Cube was requested in August 2009, by Moto to update the KCD resource inventory using the most recent available data. Because the KCD deposit included both an open pit and underground component this update required two separate estimates of the KCD deposit which forms a part of the Kibali Gold Project. The first estimate was an updated independent estimation of local recoverable open pit gold resources and the second estimate was based on a refined geological interpretation based on the distinctive alteration characteristics observed to be internal to the broader mineralised zone. The intention of the first estimate using Open Pit Resource Methodology Local Recoverable (OPRM-LR) was to yield a reportable open pit mineral resource inventory and to update the model suitable for future open pit mining study. This first estimate was based on a 0.2g/t gold lower cut-off and has been estimated using OK and UC methodology. As discussed in previous Reports the review of interpretations of mineralisation at Pakaka and KCD in January and again in August 2008 based on infill drilling led to the conclusion by Cube that an interpretation of mineralisation for the purposes of local recoverable resource estimation (for exploitation by open pit mining) based on a low grade cut off of 0.15g/t gold represented a significantly less complex mineralised interpretation and one that could be confidently stated to be free from conditional bias. For the current estimate the mineralised lodes for KCD have been re-interpreted at a slightly higher, 0.2g/t gold low grade cut off, with an emphasis on minimising the volumes of waste grade material included in these interpretations. As was done in November 2008, the local recoverable resource estimation used the Uniform Conditioning methodology with allowance for an Information Effect incorporating important modifying factors such as likely grade control drilling, mining selectivity and cut-off grade criteria. The application of the UC technique is based on the premise that mining would be by open pit extraction. A Selective Mining Unit of 5m by 5m by 2.5m was evaluated within Ordinary Kriged panels Y=20m X=20m Z=5m for the purposes of reporting local recoverable open pit resources. An Information Effect has been applied to the SMU blocks with the assumption of grade control drilling on a 7.5m by 7.5m by 2.5m sampling grid. The intention of the second estimate using Underground Resource Methodology Global Insitu (URM-GI) using a refined geological interpretation, constrained by Acsa alteration, was to provide an objective basis for the delineation and estimation of a possible higher grade subset of the KCD mineralisation appropriate for reporting of an underground mineral resource inventory. The infill drilling has resulted in a substantial increase in the confidence of the continuity of Acsa style mineralisation and allows reliable estimation of global in-situ resources using traditional 3D Ordinary Block Kriging methodology. The work involved review and update of the geological/mineralisation interpretations for the KCD deposit incorporating available information as of August 31 st, The previous Mineral Resource estimation results for the total Kibali Gold Project were reported in Adams et al November 2008 as part of a Resource Update Study and that estimate incorporated all drilling information up to July 10 th This current resource update follows a DC programme by Moto that commenced in late July 2008 targeted the upper Chauffeur and Karagba areas and aimed at increasing the drilling density in the Inferred Mineral Resource areas of the KCD deposit. The drill programme was ongoing at the time of this Mineral Resource estimation. An additional 47,277m of DC has been drilled for which assay data is available since the last data cut-off at 10th July The estimation work started in September 2009 and was completed during October The Mineral Resource estimates undertaken by Cube have been individually classified and reported in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code). The 2004 JORC reporting guidelines are equivalent to the guidelines adopted for the Canadian National Instrument Geological Interpretation and Modelling Open Pit Resource Methodology (Local Recoverable) Mineralised outlines have been broadly defined using a combination of geological model, alteration characteristics and low grade cut-off criteria based on available DC and RC drilling within each KCD lode. In all lodes a nominal lower cut-off grade of 0.2g/t gold has been applied. A proportion of lower grade material is inevitably included as internal dilution in order to preserve overall continuity of the mineralised lodes. 55

164 The interpretations for mineralisation are based on grade and geological continuity within generally stratigraphy parallel mineralisation. The geological and mineralisation frame work is based on interpretations validated by Moto onsite personnel. The interpretation is an attempt to encompass the complete mineralised distribution and produce a model that reduces the risk of conditional bias often introduced where the constraining interpretation and data selection is based on a significantly higher grade than the natural geological lower cut-off. This approach is specifically suited to a proposed exploitation by open pit methods and estimation by OK and UC. Criteria used in defining mineralised outlines can be summarised as follows: Determine a nominal low grade geological cut-off to assist in defined mineralised outlines; Utilise lithology, alteration, veining and mineralisation characteristics to define the mineralised outlines; No minimum width or downhole length criteria was applied; No internal dilution criteria was applied; No additional dilution was applied. Statistical and visual analysis of the data showed that a suitable geological cut-off grade was approximately 0.2g/t gold. The encompassing mineralised envelope incorporates minor amounts of internal sub-grade being less than 0.2g/t gold content. An effort was made during the interpretation to minimise the amount of sub-grade material incorporated into each lode wireframe. Geological interpretation was undertaken using north east to south-west oriented 20 metre spaced long sections. Wireframes were not snapped to drillhole traces in order to create a more consistently shaped representation of mineralisation at the geological cut-off grade (nominal 0.2g/t gold) and section spacing. The resulting interpretation demonstrates consistent geometry and geological continuity of the plunging mineralised lodes. Mineralisation at Karagba has been re-interpreted as three Lodes encompassing the previously interpreted Karagba and Durba Lodes (November 2008: 3000 and 4000) which occur as stratigraphy parallel tabular shoots up to 350m thick trending northwest and dipping gently to the northeast. The mineralised Lodes, coded 3000, 4000 and 4100 are associated with albite-carbonate-silica-alteration of volcanic agglomerate interspersed with thin intrusive/volcanic basalts. Lode 4100 represents a down dip extension of Lode The mineralised lodes tested by drilling extend up to 700 metres down plunge and 400 metres vertically below the surface. At Chauffeur the mineralisation has remained a pair of stratigraphy parallel lenses, coded 5000 and 5500 that trend northwest and dip gently to the northeast. The mineralisation is hosted by volcanic agglomerate and is associated with thick zones of albite-carbonate-silica-alteration. The zone of mineralisation at Chauffeur is capped by graphitic sediment. Thin continuous barren intrusive/volcanic basalt units are interspersed within the volcanic agglomerate and have been used as marker units for the interpretation. The Sessenge Deeps mineralisation (coded 9000 in November 2008) has remained a single Lode coded 9000 that consists of wide zones of strong Acsa with high grade mineralisation, above a laterally extensive sill like mafic intrusive. Sessenge Deeps is located approximately 700 metres below surface in KCD. The deepest part of the system so far identified is a single Lode coded It is situated below the mafic (IB/VB) marker unit and is interpreted to be the down dip expression of the mineralisation at the Sessenge deposit. It has remained virtually unchanged from November Table 14-1 details the changes in volume by Lode at KCD for the September re-interpretations compared to the November interpretations. 56

165 Table 14-1 Volume changes by Lode due to Re-interpretation of mineralised lodes September 2009 KCD Lode Previous Total Volume BCM September 2009 Total Volume BCM Variation ,614,000 34,952,000 (7)% ,970,000 7,092,000 +2% ,250, % ,132,000 58,726,000 +3% ,008,000 10,228, % ,598,000 16,020,000 +3% ,736,000 5,736,000 +0% Total ,396, ,666,000 +6% Underground Resource Methodology (Global Insitu) A refined geological interpretation based on continuous logged Acsa alteration was applied to the KCD mineralised lodes. As previously stated the intention of this refined interpretation was to provide an objective basis for the delineation and estimation of a higher grade subset of mineralisation appropriate for underground resources reporting and evaluation. Wireframes were interpreted on 20m spaced north west to south-east cross sections, with the wireframes approximately confined within the wireframes previously created for the local recoverable estimation methodology. The process was to restrict these wireframes to the strongly altered logged Acsa rock type with high pyrite content, using the geometry of the modelled basalts as the initial controlling surfaces. The refined wireframes were constructed using the following hierarchical criteria as guidelines for their interpretation; 1. Include logged Acsa material with visual logged pyrite content of H5%; 2. Use visual logged pyrite % to determine the edge of the mineralised zones within Acsa dominant intervals; 3. Exclude where possible non-acsa material, even if mineralised; 4. Minimise inclusion of any non Acsa material (G50% of mineralised interval) as the edges are approached and narrow bands of waste increase, i.e. prioritise Acsa only criteria; 5. Use a nominal lower grade of 1.0g/t gold to exclude barren Acsa intervals and to terminate mineralised zones within Acsa material, where no distinction can be made based on alteration; 6. Include up to a maximum of 6m of subgrade material (G1.0g/t gold), if required, to ensure the continuity of interpreted zones. The process of re-interpretation within the KCD Lodes resulted in the definition of ten continuous Acsa Lodes (3002, 3702, 5052, 5102, 5202, 5502, 5602, 5802, 9102 and 9202). In addition to these high grade Acsa lodes, five halo lodes surrounding and adjacent to some of the Acsa domains have been interpreted based on the six criteria above (3101, 3201, 3701, 9101 and 9201). For the definition of the halo domain a nominal lower grade of 0.5g/t gold was used to exclude barren Acsa intervals. These halo domains provide dilution grade information for use during future underground evaluation Statistical Analysis For both estimations (open pit and underground) all Moto drill holes (RC and Diamond) were flagged with a unique database code corresponding to the interpreted mineralised lodes. This flagging was used to control the downhole compositing process whereby an individual set of 2.5 metre downhole composites was generated from each Lode. Residual composites (less than 1.25m in length) not meeting the 50% threshold were, where possible, length weighted into the adjacent full composite. The remaining residuals not meeting the 50% threshold and not being adjacent to an existing composite were discarded. The statistics of these discarded residuals were checked to ensure no bias was present as a result of discarding. Statistical analysis on a lode by lode basis was carried out on the 2.5 metre downhole composite data to identify population characteristics and outliers that may need the application of high grade assay limits. High grade assay limits were applied on a lode basis and were typically between 95th and 100th percentile of the composite distribution. 57

166 The high grade cut composite data used for OPRM-LR estimation was declustered in Isatis by assigning a weight. Declustering weights were calculated for Lodes 4000, 5000 and 5500 on a 50 by 50 by 10 metre grid and for Lodes 3000, 4100, 6000, and 9000 on a 75 by 75 by 10 metre grid. The high grade cut composite data used for URM-GI estimation was also declustered by assigning a weight. Declustering weights were calculated on a 75 by 75 by 10 metre grid for all lodes Open Pit Resource Methodology (Local Recoverable) High grade assay cuts were determined and applied within individual mineralised lodes as detailed in Table Graphical representations of the KCD lodes are included in Appendix 1. Lode Table 14-2 KCD High Grade Composite Cuts September 2009 Number of Composite Data High Grade Cut Number of Composite Data Cut Percentile of Cut Percent Metal reduction th 11% th 10% % 4% th 2% th 5% th 13% th 2% * Note: Approximate metal reduction based on the sum of grades, the presence of extreme outliers (H100g/t gold) accounts for any large reduction in metal and a significant drop in mean cut grade Underground Resource Methodology (Global Insitu) Where required, a high grade assay cut was applied to the 2.5 metre downhole composites on a lode by lode basis, generally representing a point above the 99th percentile of the mineralised gold population. Table 14.3 details the high grade assay cut applied by Lode and the effects on populations of the cuts. Lode Table 14-3 KCD Lodes Acsa and Halo High Grade Composite Cuts September 2009 Number of Composite Data High Grade Cut Number of Composite Data Cut Percentile of Cut Percent Metal reduction th 9% NA 0 NA NA th 1% th 2% th 2% th 5% th 3% NA 0 NA NA th 2% NA 0 NA NA th 1% th 8% th 0.1% th 2% th 2% Variography Variography has been used to analyse the spatial continuity within the individual mineralised lodes and to determine appropriate estimation inputs to an interpolation process. The variogram modelling process followed by Cube involves the following steps: Calculate and model the omni-directional or down hole variogram to characterise the Nugget Effect; Systematically calculate orientated variograms in 3 dimensions to identify the plane of greatest continuity; 58

167 Calculate a fan of variograms within the plane of greatest continuity to identify the direction of maximum continuity within the plane. Model the variogram in the direction of maximum continuity and the orthogonal directions; Variography was undertaken on Gaussian transformed 2.5 metre downhole high cut composite data in all estimated prospect areas, both for the Local Recoverable and Global In-situ Estimates. The Gaussian Transformation was modelled in Isatis on declustered 2.5 metre composite data. The Gaussian variogram models were back transformed and modelled to obtain the appropriate variogram models for interpolation of raw composite data Open Pit Resource Methodology (Local Recoverable) Variogram parameters were derived for each individual mineralised lode within the KCD Project. Variogram relative nugget effects were typically in the range of 30-50% indicating a moderate to high degree of short scale grade variability as would be expected in gold deposits such as those in the Kibali Gold Project area. Variogram ranges were typically significantly greater than the average drill hole spacing. Table 14.4 summarises the variogram parameters used in the OK estimation of Open Pit Resources by Lode. 59

168 KCD 3000 KCD 4000 KCD 4100 KCD 5000 KCD 5500 KCD 6000 KCD 9000 Table 14-4 Variogram Parameters Open Pit Resource Methodology September 2009 Lode Structure Sill Relative Variance Range Isatis Rotations Surpac Rotations % Major Semi-Major Minor Az Ax Ay Azimuth Plunge Dip Nugget % S % (25) 0 S % (25) 0 Nugget % S % (22) 0 S % (22) 0 Nugget % S % (22) 0 S % (22) 0 Nugget % S % (25) 0 S % (25) 0 S % (25) 0 Nugget % S % (22) 0 S % (22) 0 S % (22) 0 Nugget % S % (27) 0 S % (27) 0 Nugget % S % (22) 0 S % (22) Underground Resource Methodology (Global Insitu) Due to the relatively low composite numbers in individual mineralised lodes to be used for the underground resource estimates, variogram modelling was undertaken on either grouped lodes or single most populous lodes for each KCD deposit. Individual variography was undertaken on 2.5m composites for the combined high grade Acsa 9102 and 9202 lodes, for the combined halo Acsa 9101 and 9201 lodes and for all Karagba lodes (3002, 3101, 3201, 3701 and 3702) grouped together. Within the Chauffeur deposit variography was undertaken on Lode 5102 being the most populous lode. For grade estimation by OK relative variogram models were used within individual lodes adopted from the appropriate modelled lode variogram. The variogram relative nugget effects in the deeper Asca and halo lodes were around 40-50% indicating a moderate to high degree of short scale grade variability as could be expected in higher grade gold lode style mineralisation. The modelled relative nugget in the Chauffeur lodes was quite low at 27% which may be a reflection of the use of a single lode for modelling. Within the Karagba lodes a relative nugget of 38% was modelled indicating a moderate degree of short scale variability. Variogram ranges were around 100 to 200 metres which is significantly greater than the current drill hole spacing. Table 14-5 summarises the variogram parameters used in the KCD Global In-situ estimation for underground evaluation. 60

169 KCD - Halo KCD - Halo KCD - Acsa KCD -Acsa All Karagba Acsa + Halo Lodes Chauffeur Acsa Lodes Table 14-5 Variogram Parameters Underground Resource Methodology September 2009 Lode Structure Sill Relative Variance Range Isatis Rotations Surpac Rotations % Major Semi-Major Minor Az Ax Ay Azimuth Plunge Dip Nugget 48% 9101 S1 18% S2 34% Nugget 48% 9201 S1 18% S2 34% Nugget 44% 9102 S1 36% S2 20% Nugget 44% 9202 S1 36% S2 20% , 3101, Nugget 38% 3201, 3701, S1 43% (40) S2 19% (40) , 5102, 5202, 5502, 5602, 5802 Nugget 27% S1 32% (50) S2 19% (50) Block Modelling Open Pit Resource Methodology (Local Recoverable) A single 3D block model was generated for the KCD deposit area. An individual block model constraint was created for each mineralised lode. A list of field names and descriptions in the block model are shown in Table The block model dimensions and extents are shown in Table

170 Table 14-6 Block Model Field Names Open Pit Resource Methodology September 2009 Field Name Description x... Easting Block Centroid y... Northing Block Centroid z... Reduced Level Block Centroid au... Gold Grade Estimate (top cut) Ordinary Kriging density Density g/cm 3 oxidat Oxidation State 1=Fresh 2=Transitional 3=Oxide rescat... 1=Measured 2=Indicated 3=Inferred 4=Undefined zonecode.... Estimation Lode Flag krg_var... OKKriging Variance ads... AverageDistance to Composite dns_au Distance to Nearest Composite ns... Number of Composites used to Estimate a Block q*... metal above cutoff E.g. q1p2 = Metal H 1.2 g/t gold t*... tonnes above cutoff E.g. q1p2 = Tonnage H 1.2 g/t gold m*... grade above cutoff E.g. q1p2 = Grade H 1.2 g/t gold q_noie Metal above cutoff without Information Effect t_noie Tonnes above cutoff without Information Effect m_noie Grade above cutoff without Information Effect slp_of_reg... Estimation Slope of Regression Z/Z* Table 14-7 Block Model Definition Co-ordinate Limits Open Pit Resource Methodology September 2009 KCD Minimum Maximum Model Extent Easting Northing RL Parent Cell X m 20 Min Sub-Cell X m 20 Parent Cell Y m 20 Min Sub-Cell Y m 20 Parent Cell Z m 5 Min Sub-Cell Z m 5 Parent Cell Z m 5 Min Sub-Cell Z m Underground Resource Methodology (Global Insitu) A single 3D block model was generated for the KCD deposit. An individual block model constraint was created for each mineralised lode. A list of field names and descriptions in the block model are shown in Table All estimations and geological constraints for KCD were based on a subset of the block model prototype definitions shown in Table Table 14-8 Block Model Field Names Underground Resource Methodology September 2009 Field Name Description X... Easting Block Centroid Y... Northing Block Centroid Z... Reduced Level Block Centroid au_ok.... Gold Grade Estimate (top cut) Ordinary Kriging density Density g/cm 3 oxidat Oxidation State 1=Fresh 2=Transitional 3=Oxide rescat... 1=Measured 2=Indicated 3=Inferred 4=Undefined zonecode.... Estimation Lode Flag krg_var... Kriging Variance Ads... AverageDistance to Composite Ns... Number of Composites used to Estimate a Block slp_reg Estimation Slope of Regression Z/Z* 62

171 Table 14-9 Block Model Definition Co-ordinate Limits Underground Resource Methodology September 2009 Minimum Maximum Model Extent Easting Northing RL Parent Cell X m MinSub-Cell X m 2.5 Parent Cell Y m MinSub-Cell Y m 2.5 Parent Cell Z m... 5 MinSub-Cell Z m Estimation Block Size, Search Strategies and Grade Interpolation A number of issues have been taken into consideration when deciding on an appropriate search strategy and estimation block size, including data spacing, variogram nugget effect and model ranges, estimation quality and Mineral Resource classification. Estimation Block Size Data spacing was the primary consideration taken into account when selecting an appropriate estimation block size. Data spacing within the mineralised zones is quite variable. Cube considers it good geostatistical practice to use an estimation parent cell size that approaches the data spacing where possible while at the same time being mindful of potential mine design and selectivity implications. Cube reviewed the physical data spacing relative to the mineralised zones to be estimated when deciding on the appropriate estimation block size. Cube concluded that an estimation parent block size smaller than 20 (north) by 20 (east) by 5 metre (high) would result in excessive smoothing of the estimates and could lead to a biased estimate. Grade Interpolation and Search Strategies Grade interpolation was carried out using OK for each mineralised lode using the uniquely coded 2.5 metre downhole composite data specific to that lode. All block estimates were based on grade interpolation into parent cells of 20 by 20 by 5 metres high. Cube has attempted to characterise the spatial relationship of the data using variography and have sought to implement search strategies aimed at producing a robust block estimate whilst at the same time minimising estimation error and conditional biases. Cube routinely tests several search iterations before determining the most appropriate search strategy. Fundamental to the search strategy is the determination of appropriate minimum and maximum numbers of composites for estimation. The minimum number of composites has been considered by Cube as a key component of the criteria applied in determining the Mineral Resource classification. Cube initially bases search distances for the first search iteration on the analysis of theoretical kriging weight charts. An examination of these kriging weight charts provides a good starting point for testing a search strategy as they provide a guide as to the distribution of kriging weights for a given variogram with respect to distance along the major axis of the search volume. Of particular interest is the approximate distance that kriging weights tend towards zero. Cube believes that it good estimation practice to use a search volume that ensures that kriging weights allocated to composites tend toward zero or slightly negative on the periphery of the search. Cube generally extends the search where there are large positive weights at the periphery and reduces the search where there are a large proportion of negative kriging weights involved. A limitation of these charts is that they are based on an assumption that each block is directly informed by a composite at the block centroid and they will, therefore generally understate the required search with respect to actual data spacing to achieve a robust block estimate. A Quantitative Kriging Neighbourhood Analysis of key lodes was undertaken to assist in optimising the search parameters. The procedure of search optimisation adopted by Cube involves selecting individual blocks representing data configurations from well informed blocks. The aim of these tests is to optimise the kriging search neighbourhood and maximise the quality of the kriging when dealing with a non-exhaustive data set. A number of key criteria were captured for each selected block as follows: Block coordinates and dimensions; Estimated grade; 63

172 Kriging variance; Block Dispersion variance; Slope of Regression of estimated blocks z*(v) and theoretical true blocks z(v); A listing of the actual informing composites within the search volume of the block including coordinates, grades, distance from block and kriging weight; Statistics of the informing composites including number of composites, minimum, maximum, mean, standard deviation, variance and coefficient of variation. An important feature of Ordinary Kriging is its inherent property to minimise estimation error. Estimation error will increase substantially as the amount of informing data decreases. Ordinary Kriging can calculate the estimation error on a block by block basis as a function of the variogram model and the specific data configuration informing each block. A comparison can be made of actual block estimates and a theoretically unbiased block estimate as a quantitative way of assessing the quality of a kriged block estimate. This comparison is the basis for QKNA mentioned above and is expressed in terms of slope of regression of estimated blocks z*(v) and theoretical true blocks z(v). The slope of regression provides a consistent and robust way of comparing the relative quality of kriged estimates and should be considered as an input into decisions regarding Mineral Resource classification. The closer the slope of regression is to 1 the more robust the block estimate. Generally, in moderately to well-informed areas of all models, the slope of regression was close to 1.0 indicating that the potential for conditional bias is minimal using the chosen search strategy. The slope of regression was often considerably lower around the periphery of the model where data spacing is sparse and irregular Open Pit Resource Methodology (Local Recoverable) Search strategies were optimised using quantitative kriging neighbourhood analysis and are summarised in Table Grade interpolation was carried out using OK into 20 by 20 by 5 metre (high) parent cells. UC as implemented in Isatis V9 software [see Deraisme (2005) and Humpreys (1998) for an explanation of the method] was applied to these estimates with an appropriate change of support to incorporate a SMU of 5 by 5 by 2.5 metres (high) and an information effect adjustment to take into account a likely grade control programme [see Deraisme and Roth (2000)] to enable reporting of local recoverable Mineral Resources above a range of grade cutoffs. The cut-off range used in each deposit was 0.0; 0.25; 0.5; 0.6; 0.7; 0.8; 0.9; 1.0; 1.1; 1.2; 1.3; 1.4; 1.5; 2.0; 2.5; 3.0; 3.5; 4.0; 4.5; 5.0; 10.0; 15.0 g/t gold. The UC process requires the calculation of a number of support correction coefficients to determine the likely distribution of mining SMUs of a specified dimension within larger estimation grade panels. Cube has employed a standardised methodology for all Lodes to determine the required parameters including panel variance, SMU variance and covariance. The OK estimated panel grades are generally more smoothed than the expected real panel grades due to the smoothing effects of kriging. The amount of smoothing is influenced by a number of factors including the variogram, the block dimensions and the data configuration. The panel variance statistic describes the variability of panel grades within a lode. Ideally a panel support correction would be calculated for each panel or groupings of panels with similar data configurations to accurately reflect specific data configurations. The theoretical mean panel variances of each panel within a lode were grouped into deciles and the bin average variance used to calculate the panel change of support. This provides a robust average panel change of support to be calculated for a range of data configurations. The SMU variances and covariances required for the SMU change of support were calculated automatically within the Isatis V9 implementation as they are not influenced by data configuration. The Information Effect adjustment was based on an assumption of grade control drilling on a 7.5 by 7.5 by 2.5 metre grid and the SMU of 5 by 5 by 2.5 metres. Cube undertakes a test kriging of a grid of data and SMUs for each Lode to determine the variance and covariance required for implementation of the information effect adjustment. 64

173 Table Estimation Search Parameters Open Pit Resource Methodology September 2009 Mineralised Lode Search Type Minimum Number of Composites Maximum Number of Search Radius Isatis Rotations Composites Major Semi-Major Minor Az Ax Ay Octant Octant * Octant Octant Octant Octant Octant Underground Resource Methodology (Global In-Situ) KCD Lodes Search strategies were optimised using quantitative kriging neighbourhood analysis and are summarised in Table Mineralised Lode Search Type Table Underground Estimation Search Parameters September 2009 Minimum Number of Composites Maximum Number of Search Radius Isatis Rotations Composites Major Semi-Major Minor Az Ax Ay Ellipsoid Ellipsoid Ellipsoid Ellipsoid Ellipsoid (40) Ellipsoid (40) Ellipsoid (40) Ellipsoid (40) Ellipsoid (40) Ellipsoid (50) Ellipsoid (50) Ellipsoid (50) Ellipsoid (50) Ellipsoid (50) Ellipsoid (50) Grade interpolation was carried out using OK into 20 by 20 by 5 metre (high) parent cells Density and Oxidation Open Pit Resource Methodology (Local Recoverable) Depth of the weathering interfaces have been interpreted from drill logging. Weathering descriptions are based on a classification system defined by likely mining parameters as follows: Eluvium defined as the soil profile; Oxide profile is defined as zone of red/orange coloured silt/clay fragments with no recognisable lithology generally clay rich and probably free dig; Transitional is defined as the first appearance of recognisable chips of the underlying lithology these chips will be oxidised probably drill and blast material the transitional profile from logging can be thin; Fresh defined as unweathered underlying lithology generally grey in colour. Bulk density values were derived by Kibali Goldmines from DC core by Archimedean principles. For all weathering domains except KCD fresh, block model bulk density values were assigned on the basis of the weathering regimes and mineralisation as shown in Table

174 Table OPRM-LR Density Mean Values Assigned September 2009 Prospect Area # Observations Oxide Transitional Fresh KCD waste KCD Ore-Oxide NA NA KCD-Ore-Trans NA 2.3 NA The fresh mineralised domain within KCD contains significant numbers of density data. For this reason Cube have interpolated block bulk density values into individual lodes using the density data in each lode. A Simple Kriging Methodology (Search Major: 260m; Semi-Major: 100 and Minor: 80 and Isatis Rotations as for Grade Estimation) was used taking the required mean for each lode from the mean lode fresh density in Table KCD Lode Table Density Mean Values for Simple Kriging September 2009 Mean Density t/m The Simple Kriging estimation used a minimum of 6 and a maximum of 42 data for each block estimation Underground Resource Methodology (Global Insitu) A block bulk density value has been applied to all estimated KCD Acsa and Halo lodes. This value has been based on rounded average values determined form data within each lode as detailed in Table KCD Lode Table URM-GI Density Mean Values Assigned September 2009 Mean Density t/m Model Validation Modelled estimates have been visually validated and locally compared to downhole composite grades for each mineralised lode. Plots by Northing, Easting and RL have been made showing composite number and grade, estimated tonnes and grade. These plots for each lode are presented in Appendix 2. From Cube s investigations there appears to be no systematic bias evident in the estimated model outcomes. 66

175 Mineral Resource Reporting All Mineral Resource estimates undertaken for the Kibali Gold Project, by Cube have been classified and reported in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code). The 2004 JORC reporting guidelines are equivalent to the guidelines adopted for the Canadian National Instrument Cube s approach to the classification of resources has been to examine the estimation quality of each block model with reference to geological continuity and confidence and to design broad contiguous zones of well estimated resources which may be considered as Indicated Resources. These zones are flagged into each block model for reporting purposes. In previous work undertaken by Cube on the Kibali Gold Project the entire geological domain has been reported as a classified Resource. There are material changes to the reported open pit resources for all deposits of the Kibali Gold Project compared to the November 2008 reported figures. However, only KCD has undergone re-estimation based on additional drilling and interpretation. There are two significant changes to the reporting criteria compared to the November 2008 reported figures. Firstly, the new Project Managers have requested that all open pit resources be reported above a 0.5g/t gold cut off and secondly, that all open pit resources be limited by open pit optimisation shells. The input parameters for these analyses were sourced from the optimisation section of the completed Feasibility Study. The shells selected for the limiting of the resources correspond to the shell produced using a gold price of US$1,000 per oz. By definition of the optimisation process, this shell corresponds to the shell which will result in the highest undiscounted net value at that gold price. For the reporting of KCD open pit resources, an additional condition was required to differentiate the open pit material from the potential underground resources. The open pit to underground interface was chosen by using a blanket elevation to limit the open pit optimisation analysis. The elevation selected for this purpose was 5685mRL which corresponds to the deepest portion of open pit design from the 2007 Feasibility Study. In summary, in the running of the open pit optimisation process, all resources below the 5685mRL were excluded, in so doing preventing the open pit optimisation accessing any of the deeper material. This also results in a clear demarcation of Underground Resources from any Open Pit Resources and allows the reporting of both at KCD without any ambiguity Open Pit Resource Methodology (Local Recoverable) The KCD deposit has been defined by an additional 90 DC holes and drilled on a variable grid where average drill spacing is between 50 to 80 metres. Although the continuity of mineralised zones appears to be well established it is Cube s opinion that drill spacing greater than 40 by 40 metres is insufficient to estimate grade and volume to a level of precision that would be considered appropriate for Indicated Mineral Resources. There are however a number of specific lodes that have been drilled at a closer spacing than 40 by 40 metres.. These lodes are the upper most regions of the Karagba, Chauffeur and Durba project areas and the recently targeted deeper KCD project area. The recent drilling completed confirms the mineralised widths, grade tenor and continuity of mineralisation defined in previous Mineral Resource estimates. There are some areas of the resource inventory that have been classified as Indicated despite greater than 40 by 40 metre drill spacing. These areas are generally where successive drill campaigns have confirmed a high degree of geological and grade continuity. In general, drilling, surveying, sampling and analytical methods and controls currently employed are suitable and adequate for the style of deposits under consideration. Cube considers that Ordinary Kriging is an appropriate method of panel grade estimation. Kriging quality tests confirm that high quality block estimates were achieved throughout the Indicated Mineral Resource area. The application of UC with an information effect to the kriged panel grades has resulted in a more realistic grade and tonnage above a 0.5g/t gold cut-off with allowance for the proposed mining selectivity. Grade tonnage curves for the KCD Lodes are presented in Appendix 3. A tabulation of the updated Kibali Gold Project Open Pit Mineral Resources at a nominal 0.5 g/t gold cut-off as of September 2009 is shown in Table

176 Table Kibali Gold Project Open Pit Mineral Resource Tabulation All Deposits H 0.5 g/t gold September 2009 Deposit Tonnes (Mt) Grade g/t Indicated Mineral Resources Gold koz *Attrib gold koz Tonnes (Mt) Grade g/t Inferred Mineral Resources Gold koz *Attrib gold koz Pakaka , Gorumbwa , Kibali , Mengu Hill Mengu Village KCD ,957 1, Megi Marakeke Kombokolo Sessenge Ndala Pamao TOTAL ,253 2, ,256 1,465 The competent persons believe that the existence of the gold Resources of Table is substaintiated by evidence obtained from their site visits and observations, and is supported by the details of drilling results and analyses presented in this report and takes account of all relevant information supplied to the competent person by Kibali Goldmines Underground Resource Methodology (Global Insitu) A large proportion of the infill drilling undertaken since February 2007 was targeted at the higher grade areas of the KCD deposit. This infill drilling has resulted in a substantial increase in the confidence of the style and continuity of the mineralisation associated with Acsa alteration. The KCD volumes were specifically constrained by ankeritecarbonate-silica-albite-pyrite alteration. This alteration style is closely associated with significantly higher tenor gold grades and appears to form reasonably continuous and robust mineralised zones within the broader mineralised material. A combination of infill drilling and detailed interpretation has resulted in a significant proportion of the KCD mineralisation being classified as Indicated in the context of global in-situ resources. Ongoing work is still required to fully identify and quantify the various risks and uncertainties required to confirm appropriate modifying factors for formulating underground mining reserves. Although the current Indicated Resource provides a reasonable estimate of global contained metal, further drilling and analysis will be required to improve the local precision of the Mineral Resource estimate. This has particular relevance to underground mining where the degree of local grade and volume variation may have a critical impact on project viability. In general, drilling, surveying, sampling and analytical methods and controls currently employed are suitable and adequate for the style of deposits under consideration. Cube considers that Ordinary Kriging is an appropriate method of global in-situ grade estimation. Kriging quality tests confirm that high quality block estimates were achieved throughout the Indicated Mineral Resource area. Grade tonnage curves for KCD Underground Resources are presented in Appendix 3 A tabulation of the classified KCD Underground Mineral Resources at a nominal 2 g/t gold cut-off as of September 2009 is shown in Table Table KCD Underground Mineral Resource Tabulation H 2.0 g/t gold September 2009 Deposit Tonnes (Mt) Indicated Mineral Resources Grade g/t Gold koz *Attrib gold koz Tonnes (Mt) Inferred Mineral Resources Grade g/t Gold k Oz *Attrib gold koz KCD ,674 3, ,569 1,156 TOTAL ,674 3, ,569 1,156 The competent persons believe that the existence of the gold Resources of Table is substaintiated by evidence obtained from their site visits and observations, and is supported by the details of drilling results and analyses 68

177 presented in this report and takes account of all relevant information supplied to the competent person by Kibali Goldmines Mineral Reserve Estimates Mineral Reserve Estimates were last updated for the Feasibility Study for the Kibali Gold Project. These results were reported in the Amended and Restated Technical Report by Adams et al, April The Reserve Estimates stated below are therefore not based on the Resources, as stated in this current report but are included within these mineral resources. Section 14.2 is reproduced in its entirety from the April 2009 Report. All the Mineral Reserves calculated have been classified and reported in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code). The 2004 JORC reporting guidelines are equivalent to the guidelines adopted for Canadian National Instrument Open Pit Mineral Reserves Mineral Reserve Summary The total open pit Probable Mineral Reserves within the Kibali Gold Project based upon the Feasibility Study pit designs is 30.7Mt at 3.2 g/t for 3.2Moz of gold. These Mineral Reserves are contained within the Open Pit Indicated Mineral Resources of the Kibali Gold Project. Table Open Pit Mineral Reserve Summary Tonnes (kt) LG Ore High Grs de Ore Pit Fresh Transition Oxide Total Fresh Transition Oxide Total Total Reserves KCD... 2, ,210 6,629 1,894 2,471 10,995 14,205 Kombokolo Mengu Hill ,656 1,105 1,821 4,583 5,411 Pakaka... 1, ,474 3, ,136 4,643 6,116 Pamao ,585 Sessenge , ,166 2,926 Total... 3,992 1,177 1,737 6,906 13,372 3,938 6,467 23,776 30,682 Mined Ounces (koz) LG Ore High Grade Ore Fresh Transition Oxide Total Fresh Transition Oxide Total Total Reserves KCD , ,522 1,642 Kombokolo Mengu Hill Pakaka Pamao Sessenge Total , ,898 3,163 Mined Grades (g/t) LG Ore High Grade Ore MGH Fresh Transition Oxide Total Fresh Transition Oxide Total Total reserves KCD Kombokolo Mengu Hill Pakaka Pamao Sessenge Total The Mineral Reserves in Table have been estimated by Quinton de Klerk, NHD MAusIMM. Quinton de Klerk is a Director of Cube Consulting Pty Ltd and is independent of Kibali Goldmines.. 69

178 Mineral Reserve Calculation Methodology The calculation of Open Pit Mineral Reserves is based on the following key inputs: Mineral Resource models (UC estimation methodology) estimating gold content and material weathering type; estimated processing and general and administration costs (refer Table 14-18) predicted metallurgical recovery by material type by deposit (refer Table 15-3); geotechnical wall angle parameters (refer Table 14-21); estimated mining costs (refer Table and Table 14-20); and cutoff grade analysis using final estimated costs derived from pit designs and pit schedules, and finalised processing and administration costs. Oxide Ore COST CENTRE Table First Pass Processing and G&A Costs for Pit Optimisations Moto Goldmines Ltd Kibali Gold Project Summary of Operating Costs Costs Using 90% HEP and 10% Diesel Generated Power Tonnage US$/Year Total Oxide 3,000,000 US$/t Fixed Cost Variable Cost US$/Year US$/Year US$/t Labour Processing... $ 2,898,504 $ 0.97 $ 2,898,504 $ 0 $0.00 Operating Consumables... $22,450,930 $ 7.48 $ 2,055,133 $20,395,797 $6.80 Power... $ 7,611,024 $ 2.54 $ 4,708,352 $ 2,902,672 $0.97 Maintenance and Repairs... $ 2,341,370 $ 0.78 $ 2,107,000 $ 234,370 $0.08 Mobile Equipment... $ 177,410 $ 0.06 $ 177,410 $ 0 $0.00 Laboratory... $ 434,953 $ 0.14 $ 434,953 $ 0 $0.00 TOTAL... $35,914,191 $11.97 $12,381,352 $23,532,839 $7.84 Transitional Ore COST CENTRE Tonnage US$/Year Total Transitional 2,600,000 US$/t Fixed Cost Variable Cost US$/Year US$/Year US$/t Labour Processing... $ 2,898, $ 2,898,504 $ 0 $ 0.00 Operating Consumables... $23,351, $ 1,952,175 $21,399,138 $ 8.23 Power... $ 9,123, $ 4,757,235 $ 4,365,827 $ 1.68 Maintenance and Repairs... $ 2,858, $ 2,572,334 $ 285,815 $ 0.11 Mobile Equipment... $ 177, $ 177,410 $ 0 $ 0.00 Laboratory... $ 434, $ 434,953 $ 0 $ 0.00 TOTAL... $38,843,391 $14.94 $12,792,611 $26,050,781 $10.02 Primary Ore COST CENTRE Tonnage US$/Year Total Primary 2,600,000 US$/t Fixed Cost Variable Cost US$/Year US$/Year US$/t Labour Processing... $ 2,898,504 $ 1.11 $ 2,898,504 $ 0 $ 0.00 Operating Consumables... $23,351,313 $ 8.98 $ 1,952,175 $21,399,138 $ 8.23 Power... $ 9,123,062 $ 3.51 $ 4,757,235 $ 4,365,827 $ 1.68 Maintenance and Repairs... $ 2,858,148 $ 1.10 $ 2,572,334 $ 285,815 $ 0.11 Mobile Equipment... $ 177,410 $ 0.07 $ 177,410 $ 0 $ 0.00 Laboratory... $ 434,953 $ 0.17 $ 434,953 $ 0 $ 0.00 TOTAL... $38,843,391 $14.94 $12,792,611 $26,050,781 $

179 General & Administration Costs COST CENTRE Tonnage US$/Year 2,600,000 Fixed Cost Variable Cost US$/t US$/Year US$/Year US$/t Labour Administration... $3,993,791 $1.54 $3,993,791 $0 $0.000 General & Administration... $5,690,719 $2.19 $5,690,719 $0 $0.000 TOTAL OXIDE... $9,684,510 $3.23 $9,684,510 $0 $ 0.00 TOTAL PRIMARY.... $9,684,510 $3.72 $9,684,510 $0 $ 0.00 TOTAL COST Fixed Cost Variable Cost COST CENTRE US$/Year US$/t US$/Year US$/Year US$/t TOTAL OXIDE... $45,598,701 $15.20 $22,065,863 $23,532,839 $ 7.84 TOTAL TRANSITIONAL... $48,527,902 $18.66 $22,477,121 $26,050,781 $10.02 TOTAL FRESH... $48,527,902 $18.66 $22,477,121 $26,050,781 $

180 Table Waste Mining Costs Used in Optimisations KCD Kombokolo Mengu Hill/Mengu Village Pakaka Pamao Sessenge From To L&H $/BCM D&B $/BCM Total $/BCM Density Presplit $/t Total $/t L&H $/BCM D&B $/BCM Total $/BCM Density Presplit $/t Total $/t L&H $/BCM D&B $/BCM Total $/BCM Density Presplit $/t Total $/t L&H $/BCM D&B $/BCM Total $/BCM Densit Presplit $/t Total $/t L&H $/BCM D&B $/BCM Total $/BCM Densit Presplit $/t Total $/t L&H $/BCM D&B $/BCM Total $/BCM Densit Presplit $/t Total $/t

181 Table Waste Mining Costs Used in Optimisations KCD Kombokolo Mengu Hill/Mengu Village Pakaka Pamao Sessenge Oxide Trans Primary Oxide Trans Primary Oxide Trans Primary Oxide Trans Primary Oxide Trans Primary Oxide Trans Primary Gold Price ($/oz) $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 $ 600 Gold Price ($/g) $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 $19.29 Gold Royalty ($/g) $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.48 Gold Security ($/g) $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 Net Gold Price ($/g)..... $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 $18.74 Processing Recovery % 90.1% 83.9% 95.6% 95.9% 74.6% 89.3% 89.3% 71.6% 88.7% 81.7% 81.7% 90.9% 85.0% 85.0% 90.3% 75.9% 80.6% Fixed Processing $ 4.13 $ 4.92 $ 4.92 $ 4.13 $ 4.92 $ 4.92 $ 4.13 $ 4.92 $ 4.92 $ 4.13 $ 4.92 $ 4.92 $ 4.13 $ 4.92 $ 4.92 $ 4.13 $ 4.92 $ 4.92 Variable Processing $ 7.84 $10.02 $10.02 $ 7.84 $10.02 $10.02 $ 7.84 $10.02 $10.02 $ 7.84 $10.02 $10.02 $ 7.84 $10.02 $10.02 $ 7.84 $10.02 $10.02 Total Processing $11.97 $14.94 $14.94 $11.97 $14.94 $14.94 $11.97 $14.94 $14.94 $11.97 $14.94 $14.94 $11.97 $14.94 $14.94 $11.97 $14.94 $14.94 General/Admin $ 3.23 $ 3.72 $ 3.72 $ 3.23 $ 3.72 $ 3.72 $ 3.23 $ 3.72 $ 3.72 $ 3.23 $ 3.72 $ 3.72 $ 3.23 $ 3.72 $ 3.72 $ 3.23 $ 3.72 $ 3.72 Extra $/t (Ore Premium) GC $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 $ 0.91 Mine Admin $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Overhaul $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 1.50 $ 1.50 $ 1.50 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.10 $ 0.10 $ 0.10 Rehandle $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 $ 1.04 Rehab $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 Water $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 Wall Stab $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 Total Ore Costs $18.70 $22.16 $22.16 $18.70 $22.16 $22.16 $20.05 $23.51 $23.51 $18.70 $22.16 $22.16 $18.70 $22.16 $22.16 $18.65 $22.11 $22.11 Cut off Grade (Calculated)

182 Whittle optimisations were carried out on each of the deposits containing Indicated Mineral Resources. A range of open pit optimisations were undertaken between US$300 (KCD US$150) and US$900 at US$25 increments and evaluated for net cashflow. All subsequent pit designs were capped at a maximum possible gold price of US$600/oz to ensure the project was robust Optimisation Results Quantitative and qualitative analysis was used to determine the appropriate shells upon which to base pit designs. Selected shells for each pit are listed in Table along with shell physicals. The majority of the selected shells are well below the US$600/oz revenue limit imposed for design purposes and therefore a degree of robustness is built into the pit design process. An approximation of mining rate for each pit was used to determine the effect of discounting the net cashflow Geotechnical Investigations and Implications for Mine Design The results of geotechnical drilling programmes carried out during February to April 2007 at the KCD, Pakaka, Pamao, Mengu Hill and Kombokolo deposits and in September 2008 at the Sessenge deposit have been evaluated with an earlier programme in May 2006 to assess likely ranges in ground conditions, and their impact on future slope designs. The evaluations and recommendations have been based on inspections of, and interpretations made from borehole logs (including structural geological measurements), borehole survey results, cores and core photographs, destructive core testing and information on groundwater measurements. Open pit mining at the proposed Karagba-Chauffeur-Durba (KCD), Pakaka, Pamao, Mengu Hill, Kombokolo and Sessenge deposits will take place within variably weathered and altered, locally flexed and folded, shallow north to north-east dipping, bedded and foliated volcano-sedimentary and intrusive rocks of the Moto greenstone belt. Gold mineralisation plunges at generally shallow angles to the north and north-east. North-east and north-west striking faults occur commonly. The proposed mining area is located in a low seismic hazard zone. All deposits are characterised by the presence of a near-surface groundwater table. Results obtained from preliminary hydrogeological investigations carried out at the KCD deposit indicate potential for high groundwater inflows to take place if the pit volume and wall rocks are not dewatered in advance of mining. Similar groundwater regimes are currently inferred to exist at the other deposits but need to be investigated. Rock weathering profiles at the deposits are variable, with the top of fresh rock occurring at depths ranging between several tens of metres and around 100 m below surface. Deep rock weathering profiles associated with faulting are judged to occur within the western sector of the KCD deposit and the north and western sectors of the Kombokolo deposit. Unconfined compressive strengths (UCS values) of intact fresh rocks are variable, being influenced by lithology and, in particular, the presence of healed foliation and bedding planes in tested specimens. Likely true intact rock compressive strengths would, in our opinion, be expected to fall within the range of strong rock (UCS value of between 50 and 100 MPa) to extremely strong rock (UCS values H200 MPa). Overall rock quality at the deposits is judged to range from very poor to poor within the weathered rocks, to good and very good within the underlying fresh rocks (unaffected by faulting). Base case pit wall design parameters provided for the deposits utilise a series of 5m, 10m,15m and 25m vertical height benches, mined at face angles ranging from 55o to 80o, separated by berms ranging in width from 4 m to 8 m. Wider berms have been incorporated in the fresh rock designs for the deeper pits at vertical intervals ranging from 45mto50m. The base case designs have been based on: interpretations made from geotechnical drilling investigations; information on rock weathering depths (assessed from exploration and geotechnical drilling results); results of unconfined compressive strength tests carried out on representative core samples; assessments of kinematically feasible potential gravity-induced wall failure mechanisms taking place along geological structures exposed in future pit walls; 74

183 results of a limited number of two-dimensional limit equilibrium stability analyses, using inferred groundwater conditions; and experience gained elsewhere with wall stability in pits of similar depth mined in volcano sedimentary rock environments. Mine Weathering Berm (m) Table Recommended Slope Angles Batter Angle (Deg) Bench Height(m) Domain A Domain B Domain C Inter Berm Angle (Deg) Berm (m) Batter Angle (Deg) Bench Height (m) Inter Berm Angle (m) Berm (m) Batter Angle (Deg) Bench Height (m) Inter Berm Angle (Deg) KCD Oxide /Transition Fresh Kombokolo Oxide /Transition Fresh Mengu Hill Oxide /Transition Fresh Pakaka Oxide /Transition Fresh Pamao Oxide /Transition Fresh Sessenge Oxide /Transition Fresh Hydrogeological Investigation Based upon the indications from findings of site visits, core inspection and geophysical testing as well as the high pump rates achieved during pump testing, it is anticipated that the area comprises a weathered aquifer characterised by relatively high transmissivity and storativity delivering relatively high aquifer yields. The aquifer yields experienced in the fractured aquifers underlying the weathered zone deliver significant yields that also suggest high storativity. These general rock mass flows do not account for any high flows, which may report from individual structural features which may intersect the pit design and have not been tested to date. Quantification of inflows from individual structural features cannot be conducted at this time, however with identification and testing of these features, flow estimates can be made. In addition to groundwater inflows, additional water will report to the pits in the form of precipitation. Based upon the average monthly precipitation values, average monthly precipitation inflows will range from approximately 30 mm in the dry season (November March) to a peak inflow rate in August to September. Depending on the actual area reporting to the pit sumps and the volume of water present within the pit, the actual pit dewatering requirements may vary. The surface hydrology is not expected to impact significantly on the mining operation as a system of bund walls and dewatering trenches will be established prior to mining, which will stop inflow of surface water to the pit area. The network of drainage channels will be maintained to discharge water intercepted by the perimeter drains to the Nzoro / Kibali River via a series of settling ponds Practical Pit and Road Designs In all cases the relevant Whittle optimisation shell was imported into the MINESIGHT software programme and used a basis for the design of the pit. These shells were used as a basis for the open pit inter ramp slope angle, berm width and batter angle formation. In all cases the strategy has been, where practically possible, to design an interim pit stage to account for the early excavation of material at higher value to accelerate project payback. As illustrated by Figure 14-1, the site is reasonably spread out, with the most activity occurring around the KCD pit. Satellite clusters of pits are located at Pakaka and Pamao, with Mengu Hill positioned to the far north west of the immediate project area. The project will require the construction of approximately 18,000 m of haul roads ex-pit suitable for the transport of material to the run of mine (ROM) pad, waste dumps and TSF. This consists of access haul roads from the ROM to Pakaka / Pamao of approximately 5,500 m, Mengu Hill to Pakaka of 6,100 m and approximately 2,000 m of Haul 75

184 road from Sessenge to the ROM. Other minor roads are required to and from the pits to the waste dumps and from KCD and Kombokolo to the TSF. The designs have the natural ground being excavated to a level where the base and crushed rock will be always added. The sub-base is put in as required to give more even changes of grade. The clearing width will vary according to the drainage requirements. 76

185 Figure 14-1 Pit Location Plan 77

186 Cut-off Grade Analysis The economic cut-offs that were determined at US$600/oz are shown in below in Table Table Pit Cut-off Grades Low Grade Ore High Grade Ore KCD Oxide Trans Primary Mengu hill Oxide Trans Primary Pakaka Oxide Trans Primary Pamao Oxide Trans Primary Sessenge Oxide Trans Primary Kombokolo Oxide Trans Primary The high grade ore grade ore cut-off represents the lowest operational plant feed cut-off at which the mining schedule will attempt to fill the plant. The low grade ore is intended as feed towards the end of the mine life when mine and processing overhead costs are reduced in line with the complexity of the operation, typically in the stock treatment scenario. The low grade ore also represents the cut-off for Mineral Reserves reporting. Mineral Resources contained within the final pit designs were evaluated against these cut-off grades to produce the Open Pit Probable Mineral Reserves Potential Dilution and Mining Losses There was no further mining dilution or ore loss applied in evaluation of the Mineral Reserves. Both these factors had already been taken into account in creation of the Mineral Resource models Sensitivity of Mineral Reserves to Variances in Modifying Factors The robustness of the Mineral Reserves as stated in this report, have been quantified by observation of various assessments and are discussed below: Previous Study Optimisation Sensitivities Sensitivity optimisation runs were carried out as part of the 2007 Feasibility Study which included the deposits in this study. Although the Mineral Resource models have since been updated and the input parameters revised following the completion of that study, the fundamentals of the sensitivities remain applicable and as such were not repeated in the Feasibility Study. Key sensitivities included in these optimisation runs included: Metallurgical recoveries Operating costs Wall angles It is notable that the selected optimal pits in the optimisation runs in this Feasibility Study fall well within the bounds of those evaluated in the 2007 Feasibility Study. 78

187 Analysis and Pit Selection in Nested Optimisation Runs The results of the open pit optimisation process and shell selection itself in this study serves as a confirmation of the robustness of the Mineral Reserves stated. Where the optimisations were carried out at a base revenue price of US$600/oz, the selected shells used as guides for the pit designs were significantly smaller than the revenue factor 1 shells. In other words the selected shells correspond to gold prices well below the base US$600/oz shells. This is as a result of the value driven shell selection process which ensured that only the highest value shells are included in the study. Sensitivity Analyses of Project Economics The final confirmation of the robustness of the stated Mineral Reserves is contained in the sensitivity analyses as reported in Table 16-2 of this report. Here the economic viability of the project using the stated Mineral Reserves is confirmed across an extensive range of sensitivities 79

188 Table Indicated Mineral Resource Selected Optimisation Shells Evaluated at US$600/oz Deposit Shell Base RL Total Tonnes Waste Tonnes Processed Strip Ratio Tonnes Au g/t Rcovered Ounces Mining Cost Processing Cost Royalty Revenue Undiscounted Cash Flow Discounted Best Discounted Worst Cost per Ounce KCD ,113,278 57,027, ,086, ,413, ,322, ,893,279 23,835, ,917, ,866, ,534, ,089, Pakaka ,174,237 21,618, ,555, ,693 53,833,427 98,791,113 6,774, ,010,386 81,610,942 68,554,984 64,971, Mengu Hill ,236,416 10,039, ,197, ,523 20,378,337 92,233,339 7,412, ,707, ,683, ,500, ,863, Sessenge ,441,169 8,205, ,235, ,499 13,832,046 47,492,385 3,044, ,296,672 43,927,976 38,589,729 37,910, Kombokolo ,055,797 2,628, , ,277 5,886,339 9,312, ,580 22,965,861 7,121,752 5,779,307 5,779, Pamao ,238,844 4,201, ,037, ,211 10,510,069 22,326,907 1,251,630 44,525,474 10,436,869 9,262,482 8,998, TOTAL ,259, ,721, ,538, ,547, ,762, ,049,213 42,964,624 1,528,423, ,647, ,221, ,612, Deposit Shell Base RL Ore Tonnes Au g/t Rec Oz Oxide Transitional Primary Ore Tonnes Au g/t Rec Oz Ore Tonnes Au g/t Rec Oz KCD ,496, ,923 1,949, ,746 7,639, ,559 Pakaka ,107, , , ,617 3,163, ,103 Mengu Hill ,888, ,468 1,126, ,898 1,183, ,156 Sessenge , , , ,269 1,111, ,167 Kombokolo , , , , , ,570 Pamao , , , , , ,565 TOTAL.... 6,564, ,424 4,046, ,888 13,927, ,525,120 Note Discounted best and discounted worst cashflows have been calculated at a high level using internal Whittle processes with an input of a 10% discount rate. The resulting discounted cashflows are considered to be indicative only. 80

189 Underground Mineral Reserves Mineral Reserve Summary The total underground Probable Mineral Reserves within the Kibali Gold Project based on the designs completed for the Feasibility Study is 11.6 Mt at 6.2 g/t for 2,307 koz. These Mineral Reserves are contained within the November 2008 Indicated Mineral Resources of the Kibali Gold Project. Table Underground Mineral Reserve Summary Lode Tonnage (Mt) Mineral Reserve Kibali Underground Grade (g/t) Contained Gold (koz.) Underground Probable Mineral Reserve ,307 Underground Proven Mineral Reserve Underground Total Mineral Reserve ,307 The Mineral Reserves in Table have been estimated by Paul Kerr, BSc (Mining Engineering) MAusIMM. Paul Kerr is an employee of SRK Consulting Pty Ltd and is independent of Kibali Goldmines Mineral Reserve Calculation Methodology The calculation of Underground Mineral Reserves is based on the following key inputs: cut-off grade criteria using 1 st pass assumed operating costs for mining; estimated processing and general and administration costs (refer Table 14-18); predicted metallurgical recovery by material type by deposit (refer Table 15-3); final stope and development designs; final open pit designs; final estimated mining costs; and modifying factors for mining recovery, and mining unplanned dilution st Pass Cut-off Grade Determination Table lists the input parameters and calculation of the 1 st pass cut-off grade for Mineral Reserve determination. In addition to the mining cut off grade, an incremental cut off grade (excluding mining costs) was estimated to classify mineralised material generated from essential development in mineralised rock. Table st Pass Underground Cut-off Grade Calculation Description Units Value Revenue parameters Gold price... US$/oz Process recovery... % 91.3 Royalty... US$/oz Cost parameters Long hole stoping cost US$/t Paste fill... US$/t Process and administration cost... US$/t Total unit operating costs.... US$/t Mining cut off grade... g/t 3.8 Incremental cut off grade.... g/t 1.3 The mining costs estimated allow for longhole stoping using paste fill. The 1 st pass cut-off grade is conservative due to the gold price value used and the subsequently calculated lower unit operating costs. 81

190 Underground Mineral Resource The assessment of underground Mineral Reserves considered only Indicated Mineral Resources. No Measured Mineral Resources exist. The Mineral Reserve calculation focussed on only significant lodes with reasonable geological and grade continuity. Mineral Resources exist outside the assessment which have potential for extraction by underground methods. It should be noted that the Mineral Resources used as the basis for underground Mineral Reserve determination (listed in Table 14-26) include Mineral Resources that extend well into the open pit mining area of KCD. The inclusion of these Mineral Resources in the assessment is essential for adequate determination of the underground and open pit mining interface. Table Mineral Resource Inventory Lode Tonnage (Mt) Indicated Mineral Resources Grade (g/t) Contained Gold (koz.) ,490 Subtotal ACSA , Subtotal ACSA Halo (VAG) TOTAL , Planned Recovery Development and stope designs were generated for the selected mining method using the cut-off grade estimate to target material for inclusion. Practical stope shapes were digitised around the main Acsa mineralisation for each lode in Table The stope shapes were created on the basis of the proposed mining method. Where appropriate, the stopes shapes were trimmed to the Acsa hanging wall and footwall boundaries. Following the design process, the Mineral Resource which is able to be recovered by the selected underground mining method after due consideration of constraints on planned recovery was determined by reporting tonnes and grade of stope wireframes against the Mineral Resource block model, and adding the tonnes and grade of development wireframes against the Mineral Resource block model. Only development material above a 1.3 g/t incremental cut-off grade was included. The resultant Mineral Resource is summarized in Table Table Underground Mineral Resource Inventory with Planned Recovery Considerations Applied Lode Mineral Resources (with Planned Recovery Constraints Applied) Tonnage (Mt) Grade (g/t) Contained Gold (koz.) ACSA ,270 ACSA Halo (VAG) TOTAL , Planned Dilution Allowances for planned dilution were included on a case by case basis according to final stope and development designs. The majority of the dilution allowances arise from the stope footwall geometries necessary to achieve practical extraction. Stope troughs were formed generally outside the ACSA boundary in low grade halo or waste regions. An example of planned dilution is illustrated in Figure 14-2 where it can be seen that Acsa Halo and waste material are incorporated in the stope trough in order to maximise the recovery of the high grade Acsa material. Table lists the result of this Mineral Resource modification step. 82

191 Figure 14-2 Example of Planned Dilution Allowance Table Underground Mineral Resource Inventory with Planned Dilution Considerations Applied Lode Underground Mineral Resource Inventory (with Planned Dilution Considerations Applied) Tonnage (Mt) Grade (g/t) Contained Gold (koz.) ACSA ,270.1 ACSA Halo (VAG) Waste TOTAL , Unplanned Recovery Unplanned loss factors account for the following situations: stope under-break and unrecoverable bridging; unrecovered stocks due to flat dipping footwalls and stope draw points; misclassified ore hauled to waste dumps; and over diluted ore (to the extent of unrecoverability) due to stope wall failures of backfill or waste. Ore loss factors were applied based on the stoping methods used in individual lodes. The loss factors applied to each of these scenarios is summarised in Table A nominal 2% ore loss was used as a baseline and applied to primary stopes. Loss factors were increased for secondary and tertiary stopes to account for the influence of the paste fill in adjacent stopes. 83

192 A substantially higher loss factor (20%) was applied to up-hole retreat stopes located in the upper lodes. This accounts for potential stope stability problems resulting in the need to increase pillars size or frequency or, in worst case scenarios, stope abandonment. Table lists the results of the application of these factors. Table Underground Unplanned Recovery Factors Lode Stope type Direction Ore Loss 5100 Primary Longitudinal 2% Secondary Longitudinal 3% Avoca Longitudinal 5% Up hole retreat Longitudinal 20% Bench stope Longitudinal 3% 5200 Primary Longitudinal 2% Secondary Longitudinal 3% Avoca Longitudinal 5% Up hole retreat Longitudinal 20% Bench stope Longitudinal 3% 5500 Primary Longitudinal 2% Secondary Longitudinal 3% Avoca Longitudinal 5% Up hole retreat Longitudinal 20% Bench stope Longitudinal 3% 5800 Primary Longitudinal 2% Secondary Longitudinal 3% Tertiary Longitudinal 5% 910 Primary Transverse 2% Secondary Transverse 3% Tertiary Transverse 5% 920 Primary Transverse 2% Secondary Transverse 2% Tertiary Transverse 5% Primary Longitudinal 2% Secondary Longitudinal 3% Tertiary Longitudinal 5% Table Underground Mineral Resource Inventory with Unplanned Recovery Considerations Applied Lode Mineral Resource Inventory (with Unplanned Recovery Considerations Applied) Tonnage (Mt) Grade (g/t) Contained Gold (koz.) UG Mineral Resource (with planned recovery and planned dilution allowances) ,317 Mineral Resource loss (when unplanned recovery allowances are applied)... (0.36) 6.7 (78) UG Mineral Resource (resultant Mineral Resource inventory after planned recovery, planned dilution and unplanned recovery allowances are applied) ,240 Overall unplanned loss factor % Unplanned Dilution Unplanned dilution was modelled for two identified sources surrounding hangingwall / footwall dilution and backfill dilution. Hangingwall and Footwall Dilution Stope dilution from the hangingwall and footwall was modelled using a technique of stope shifting to create an envelope from which dilution factors and dilution grade could be determined. 84

193 The stope wireframes were shifted back and forward along x, y and z axes a distance equivalent to the over-break envelope. After each shift, sub-cells were created within the wireframe using the grade of intersected or captured blocks in the Mineral Resource model. After the shifting process was completed sub-cells for each stope were reported for tonnes and grade and compared against the un-shifted stope inventory. Tonnage and gold increments were used to calculate dilution factors and grade. The distance of each shift was based on geotechnical recommendations. Where stope blast holes are drilled normal to the plane of the stope wall, an over-break dilution envelope of 0.5 m was used. In the case of holes drilled parallel to the stope wall, an over-break dilution envelope of 0.3 m was used. With the exception of the z direction (into the footwall), a dilution envelope of 0.5 m was used in each direction of shift. Because blast holes are likely to be drilled parallel to the footwall, a dilution envelope 0.3 m in the z direction was used. A schematic of the dilution envelope created from the stope shifting technique is illustrated in Figure Figure 14-3 Rock Dilution Envelope It should be noted that no dilution from in-situ adjacent stopes was factored into the Mineral Reserve. The net effect was considered to be negligible. For similar reasons, no dilution was modelled for over-break occurring in development ore drives. The total dilution due to waste rock is estimated to be 0.55 Mt at a grade of 3.8 g/t. Backfill Dilution Stope dilution from paste fill was modelled on an area basis. A 0.5 m fall off from exposed faces was assumed and a 2.1 t/m 3 in-situ fill density was applied to the volume. No grade was assigned to the paste. Examples of the technique used to estimate paste fill for secondary and tertiary transverse stopes is given in Figure A nominal allowance for waste rock fill dilution was also incorporated into the Mineral Reserve estimate for the Avoca and up-hole retreat stopes above the Avoca in the 5100 and 5500 lodes. A 10% allowance was assigned to the Avoca stopes to account for waste rock being removed during the mucking process. A high value was used due to the loader mucking directly against the fill. A 5% allowance was made in the up-hole retreat stopes to account for the rock fill removed as a result of the loader mucking over the top of the fill. Backfill dilution factors which allow for paste and rock fill were applied to the Mineral Reserve estimate based on the stoping methods used in individual lodes. The dilution factors applied to each of these scenarios is summarised in Table The total unplanned dilution estimated from backfill sources is 0.50 Mt at zero grade. 85

194 Figure 14-4 Example of Estimate for Paste Fill Dilution 86

195 Lode Stope Type Direction Table Unplanned Dilution Allowances Paste Fill Dilultion Rock Fill Dilution Total Fill Dilution 5100 Primary Longitudinal 0.0% 0% 0.0% Secondary Longitudinal 2.7% 0% 2.7% Avoca Longitudinal 2.3% 10% 12.3% Up-hole retreat Longitudinal 2.3% 5% 7.3% Bench stope Longitudinal 1.4% 0% 1.4% 5200 Primary Longitudinal 0.0% 0% 0.0% Secondary Longitudinal 2.7% 0% 2.7% Avoca Longitudinal 2.3% 10% 12.3% Up-hole retreat Longitudinal 2.3% 5% 7.3% Bench stope Longitudinal 1.4% 0% 1.4% 5500 Primary Longitudinal 0.0% 0% 0.0% Secondary Longitudinal 2.7% 0% 2.7% Avoca Longitudinal 2.3% 10% 12.3% Up-hole retreat Longitudinal 2.3% 5% 7.3% Bench stope Longitudinal 1.4% 0% 1.4% 5800 Primary Longitudinal 0.0% 0% 0.0% Secondary Longitudinal 2.7% 0% 2.7% Tertiary Longitudinal 2.3% 0% 2.3% 910 Primary Transverse 2.3% 0% 2.3% Secondary Transverse 1.7% 0% 1.7% Tertiary Transverse 5.9% 0% 5.9% 920 Primary Transverse 2.3% 0% 2.3% Secondary Transverse 1.7% 0% 1.7% Tertiary Transverse 5.9% 0% 5.9% Primary Longitudinal 0.0% 0% 0.0% Secondary Longitudinal 2.7% 0% 2.7% Tertiary Longitudinal 2.3% 0% 2.3% Final Cut-off Grade Determination Upon completion of final underground cost estimations and mill feed scheduling, the cut-off grade analysis was revised (refer Table 14-32) with the final cut-off grades used to report the underground Mineral Reserves listed in Table Table Final Underground Cut-off Grade Calculation Description Units Value Revenue parameters Gold price... US$/oz Process recovery... % 91.3 Royalty... US$/oz Cost parameters Mining cost (including backfill)... US$/t Process and administration cost... US$/t Total unit operating costs.... US$/t Mining cut off grade... g/t 2.8 Incremental cut off grade.... g/t Underground Mineral Reserve Estimate The conversion of Underground Mineral Reserve estimate based on the dilution and loss factors described is summarised in Table The effects of the Mineral Reserve estimation process on tonnes and contained ounces is also illustrated in Figure

196 Lode Table Summary of Conversion of Underground Mineral Resources to Mineral Reserves Tonnage (Mt) Grade (g/t) Contained Gold (koz.) Underground Mineral Resource ,528 Planned mining loss... (11.00) 3.4 (1,210) Mineral Resource Inventory (after planned mining loss allowance) ,317 Planned waste Mineral Resource Inventory (after planned mining loss and planned mining dilution allowance) ,317 Ore loss... (0.36) 6.7 (78) Planned waste loss... (0.01) Waste rock dilution Backfill dilution Underground Mineral Reserve , Sensitivity of Mineral Reserves to Variances in Modifying Factors Major variances in factors such as the gold price, gold recovery and operating costs can result in modifications to the mining cut off grade. For example, a 10% decrease of the contained gold in the Underground Mineral Reserves is estimated to occur if the mining cut off grade increases from 2.8 to 4.1 g/t. Variations in the following modifying factors would result in a cut off grade change to 4.1 g/t: 30% reduction in the gold price; 30% reduction in the process recovery; or 45% increase in the total unit operating costs Smaller variations to multiple factors could also occur which, when combined, could result in an overall larger variation to the cut off grade and the Underground Mineral Reserves. Variations to modifying factors could also result in a lower cut off grade and additional material classified as underground Mineral Reserves. To quantify this, stope shapes would need to be redesigned and all other modifying factors applied. Variations to Mineral Reserve estimates and attributed Mineral Reserves as a result of environmental, permitting, political, legal, title, taxation, social-economic, marketing or other factors may or may not occur, however at a high level and without definition of the specific impact, the magnitude of the potential variation is unknown. 88

197 Figure 14-5 Changes in Tonnage and Contained Metal During conversion from Underground Mineral Resource to Underground Mineral Reserve 89

198 15.0 MINERAL PROCESSING & METALLURGICAL TESTING Mineral Processing and Metallurgical testing was last updated for the Feasibility Study for the Kibali Gold Project. These results were reported in the Adams et al Feasibility Study reported in Amended and Restated Technical Report, April Section 15 is reproduced in its entirety from that report Introduction A programme of testwork has been completed previously in 2007 and updated in 2008 to determine the metallurgical response of the ore. The main objectives of the testwork were: complete a definitive feasibility level programme on the oxide and primary ore sources to provide sufficient data for plant design and cost estimates; complete a definitive feasibility level programme on the primary ore sources to provide sufficient data for plant design and cost estimates; and complete scoping level oxidation testwork to provide comparative data for future consideration Metallurgical Samples The locations of the drill holes for metallurgical testwork samples were selected by the Kibali Gold Project site geological and mining staff, the geological consultants (Cube) and the engineer (Lycopodium). The samples were selected to intersect all the major rock types and distributed to represent the anticipated plant gold and sulphur grade as best possible. It should be noted that sulphur values were based on visual assessment. No arsenic values were available for consideration in the sample selection. The composition of the hole composites was determined by the decision to target, as close as possible, the expected orebody grades for primary and oxide ores respectively. No blending of the primary and oxide material was done due to the decision to ultimately campaign treat the material separately. It was originally intended that primary material from Chauffeur, Karagba, Pakaka North and Pakaka South would each be subjected to the full suite of tests in the programme. The orebody at Pakaka presents a thin cross-section that makes it difficult to source the large volume of sample required to produce sufficient flotation concentrate quantities. The master composite for the primary material was thus a composite of material from Karagba, Chauffeur and Durba.. Sufficient material from Pakaka was available to perform process confirmation, variability and limited process optimisation testwork. Two major sample selection reviews were conducted as the metallurgical and comminution testwork results became available. Based on these reviews, additional samples were sourced from areas where the representivity was questioned. Subsequent to the initial test programme, additional samples were sourced from the underground sections to determine process amenability and potential recovery when subjected to the flowsheet selected based on the original testwork programme. The samples were selected from the 9100 and 9200 mineralised zones from Sessenge Deeps. These were tested for both oxide and primary process routes and also included confirmatory engineering design and comminution testwork Testwork Regime Head Assays The Moto hole composites were selectively blended to produce the oxide, primary and underground master composite samples. These were subjected to a complete head assay, including elements of interest to the cyanidation process and to environmental considerations. Gold head grade for the oxide master composite was 2.90 g/t, for the primary master composite was 4.02 g/t and for the underground master composite 8.84 g/t. Silver content is low and is not expected to influence carbon loadings or elution performance significantly. Higher silver values are however associated with high grade underground samples. Mercury levels are low, but appropriate ventilation is still recommended in the gold room. The values recorded in the underground samples are slightly higher at around 280 ppb compared to 120 ppb in the open pit areas. Antimony levels are low and are not expected to influence recoveries. 90

199 Arsenic levels are moderate and may contribute to low leach recoveries and / or potentially result in soluble arsenic in the final tailings. Organic carbon levels are low indicating that the preg-robbing potential should be low. Base metal concentrations are low and should not influence carbon loadings. Telluride levels are low and are not expected to adversely influence gold leaching kinetics or recovery. 91

200 Table 15-1 Mineralogy Summary Oxide Master Composite Sample Primary Master Composite Sample Underground Flotation Tail Sample Underground Flotation Concentrate Sample +0.1 mm (0.1) mm +0.1 mm (0.1) mm +0.1 mm (0.1) mm +0.1 mm (0.1) mm Major Minerals Goethite Goethite Pyrite Magnetite Accessory Minerals Haematite Magnetite Ti Oxides Mn Oxides Haematite Ti Oxides Pyrite Magnetite Trace Minerals Arsenopyrite Haematite Pyrrhotite Ilmenite Chalcopyrite Au Particles Detected Gangue Minerals None Detected Six occurrences, measuring 8, 9, 10, 30 15, 20 2 and 30 ms Quartz - Major Kaolin - Minor Muscovite - Minor Chlorite - Accessory 20, 22, 5, 4, 20, 3, 5 and 5 m gold particles mainly associated with pyrite Quartz - Major Siderite - (Major) Muscovite - (Minor) Chlorite - Accessory Ankerite - Accessory Plagioclase - Accessory Pyrite Magnetite Arsenopyrite Haematite Pyrrhotite Ilmenite Chalcopyrite 30 m particle consisting of a 50:50 gold: pyrite intergrowth Magnetite Magnetite Pyrite Pyrite Haematite Haematite Rutile Pyrite Pyrite Arsenopyrite Magnetite Pyrrhotite Ilmenite Gold None Detected None Detected 14 occurrences detected, ranging from 3-90 m gold particles all associated with pyrite Quartz - Major Siderite - (Minor) Plagioclase - (Minor) Mica - (Accessory) Quartz - Major Siderite - (Minor) Plagioclase - (Minor) Mica - (Accessory) Arsenopyrite Magnetite Fahlore Gold 7 occurrences detected, free gold of 25, 50 and 40 m and gold particles associated with pyrite of 25, 5, 7 and 6 m 92

201 Comminution The 85 th percentile ore characteristics were calculated for each of the three main ore sources, namely KCD, Pakaka and Mengu Hill based on comminution testwork carried out. These 85 th percentile values were then weighted according to the contributions of each of these ore sources in the mill feed blend. This process was followed for the oxide and primary ores. The following table summarises the 85 th percentile comminution design criteria selected. Table 15-2 Comminution Parameters Production Parameters Unit Primary Oxide SAG Mill Feed Size (F 80 )... mm SAG Mill Product Size (P 80 )... m Ore Parameters CWi... kwh/t 8.9 UCS... MPa 87 RWI... kwh/t P m BWI... kwh/t P m Ai RWi:BWi JK Drop weight JK A JK b JK A b Ta DWi... kwh/t OreSG Oxide Ore Leach Testwork Testwork on the oxide master composite showed the following: Leach tests were completed at grind sizes of 80% passing 150, 125, 106 and 75 m. The results showed optimum revenue gain at grind conditions of 80% passing 106 m for the oxide. The gravity-leach testwork results indicated that additional gold can be recovered via gravity and intensive leaching at all grind sizes. The results were then compared to the grind size evaluation without gravity. The comparison indicated that there is a benefit in including the gravity circuit and that the optimal benefit is still achieved at a grind size of 80% passing 106 m. A pre-oxidation stage followed by leaching at an initial cyanide concentration of 0.05% was necessary for optimal leach extraction. Testwork on oxide variability samples showed that gravity recovery varied between 3% and 62%, with an average value of 18%. The total extraction (gravity plus leach) varied between 42% and 98%, with an average of 83%. As a result of variable recoveries, selected samples were subjected to the primary processing route for comparison. Sample availability dictated which samples could be retested. It was evident that significant improvements could be realised by subjecting problematic oxides / transition ores to flotation and leaching of the flotation tail. It is recommended to perform basic flotation and bottle roll cyanidation leaches on samples from each mining bench as part of the grade control exercise. Once mining has progressed past the transition zone this practice will no longer be required. In order to have a better understanding of the slow leaching characteristics and poor gold recoveries from certain oxide samples, additional diagnostic testwork was conducted at the Australian Commonwealth Scientific and Industrial Research Organisation (CSIRO). Two samples, one with good and one with poor recovery were investigated and compared. The investigation provided the following additional information regarding the mineralisation and leach responses for both samples: Elemental analysis found a strong correlation of gold with arsenic, but not with sulphur across size fractions. Goethite was the dominant mineral in the -38 m fraction, quartz and muscovite in the m fraction and iron oxide in the +75 m fraction. 93

202 Most of the gold was associated and locked within the iron oxides in the coarse fraction for the poor recovery sample. Diagnostic leach results indicated a small improvement in recovery at a grind size of 80% passing 50 m. Pre-oxidation was confirmed to increase the leach kinetics, but neither intensive cyanidation nor acid treatment facilitated significant additional recoveries. Oxide Ore Ancillary Testing Viscosity measurements of oxide slurries indicated that there should be no issues with slurry viscosities at slurry densities up to 50% solids. The carbon kinetic constants were normal and no difficulty is indicated in reaching the chosen target loadings. Thickening testwork indicated optimal solids loading of 0.8 t/m 2 h at a flocculent dose rate of 20 g/t to achieve an underflow density of 60% solids Primary Ore Flotation Testwork Flotation tests were completed at grind sizes of 80% passing 150, 125, 106 and 75 m. The results indicated optimum revenue gain at grind conditions of 80% passing 106 m for the primary ore. To ensure optimum gold extraction by flotation for the purpose of the study, all further flotation testwork was conducted at a P 80 grind of 106 m. An assessment of gravity recoverable gold was made to decide whether there is a significant benefit with the inclusion of a gravity circuit. Results indicated that at grinds below 150 m the inclusion of a gravity recovery stage increased overall recovery. Flotation in site water, sourced from the Kibali River, did not indicate any problems. The effect of mine dewatering water was however not tested as part of the current study. A pilot flotation run on approximately 1,200kg of the primary master composite was conducted to generate concentrate for leach tests. Results showed flotation gold recovery to concentrate of between 97% and 98% Primary Concentrate Leach Testwork Leach testwork on the primary concentrates showed the following: Approximately 60 kwh/t of power was required to reduce the flotation concentrate particle size to 80% passing T12 m. For the master composite sample, grinding the concentrate to less than 15 m increased leach extraction to over 80%. A leach residence time of 48 hours and an initial cyanide concentration of 0.25% were found to be optimal for the flotation concentrate. Cyanide consumption was low when compared to most ultra fine grind / leach applications Oxidation Process Testwork Scoping level testwork was carried out on primary concentrates to determine the effect of oxidative processes: Pressure oxidation resulted in an overall recovery from concentrate of approximately 96%. Roasting resulted in an overall recovery from concentrate of approximately 94%. Biological oxidation testwork was aborted due to laboratory problems. Albion process testwork indicated overall recoveries from concentrate in excess of 98%. Partial oxidation had the following results, 0% oxidation = 82% recovery, 14% oxidation = 84% recovery, 39% oxidation = 90% recovery, 55% oxidation = 90% recovery and 84% oxidation = 98% recovery. The oxidation was associated with high limestone consumptions to ensure that the ph is maintained above 4. This is required to ensure goethite is the favoured iron precipitate during the alkaline Albion leach process. 94

203 Variability Testwork The variability samples were selected to represent a wide range of gold grades and also to represent the various ore bodies spatially and at varying depth. The minimum gold head grade for the variability samples was 0.64 g/t and the maximum g/t. The average grade was 4.88 g/t for the open pit ore. The sulphide sulphur values ranged from less than 0.02% to a maximum value of 6.6%. It was again noted that the geologically logged oxidation state and the sulphide sulphur content of the samples have a poor correlation. Sulphur analysis was not considered to be a good indicator for determination of the optimal process route for the ore. The minimum arsenic head grade for the variability samples was 18 ppm and the maximum 13,290 ppm. The average grade was 1,508 ppm. The arsenic content varies significantly between the various pits. High arsenic samples were specifically included to establish the response of this ore to the chosen processing route. High arsenic values generally resulted in high residual gold values, but some low arsenic values also resulted in poor extraction. The overall correlation between arsenic content and residual gold grade is poor. The optimal process route and operating conditions were selected based on the results of the oxide master composite and primary master composite samples respectively. Oxide Ore Variability Testing The total gold extraction (gravity plus leach) from the oxide variability samples varied between 42% and 98%, with an average of 83%. It should be noted that the two Mengu Hill oxide samples proved to be transition samples upon investigation into the poor dissolutions. The variability in these extraction numbers was considered to be unacceptably high and warranted further investigation. Based on the variability of the results, Cube was tasked to investigate factors like core recovery, spatial / domain location and transition ore content in the oxide ore. The conclusions can be summarised as follows: Certain oxide samples were found to be transition ore. However, even when these were excluded there is still a high degree of variability. There was no spatial or domain relationship that could explain the variability in extraction. Some of the holes had low core recovery. However, there was no clear relationship between core recovery and metallurgical extraction. The Moto ores displayed greater tropical weathering than typical West African laterites. This suggests that the oxide and transition profiles in the weathered ore zones will be intermixed, with the level of intermixing dependent on the intensity of silica alteration in the original ACSA ore zones. The cause for the underlying variability within the oxides was however not conclusive. Primary Ore Variability Testing Extraction results varied between 55% and 89% when primary ores were treated via the gravity / flotation / concentrate fine grind / concentrate leach route. It was notable that certain samples showed a significant benefit when the flotation tail was leached, but this must be evaluated on a case by case basis. Evaluation of the variability results is complex as the reasons for low extraction results were not consistent between the various samples based on spatial distribution, gold grade, sulphur grade or arsenic grade. Underground Ore Variability Testing Underground samples were subjected to the oxide and primary process routes to establish likely recovery levels at the selected operating parameters. Seven samples were tested individually and a master composite sample was also prepared from the seven individual samples. Extractions ranged from 71% to 81% when the oxide process route was followed, with an average of 76%. Extractions ranged from 85% to 94% when the primary process route was followed, with an average of 90% Metallurgical Recoveries Samples were delineated based on spatial location. Only samples which did not come within a 5 m buffer zone of the base of the oxidised layer (BOX) were classed as true oxides. Only samples which did not come within a 5 m 95

204 buffer zone of the top of the fresh rock (BOW) zone were classed as true primary material. Solution losses to tailings of ppm Au at 40% solids for the oxide, transition and the primary ore were adopted. This equates to approximately 0.6% overall recovery reduction in each instance. The recovery of each of the variability samples was calculated as follows: Ore Source Table 15-3 Predicted Gold Recovery Oxide Oxide process Route % Recovery Transition Primary Process Route Plus Tail Leach % Recovery Primary Primary Process Route Plus Tail Leach % Recovery KCD Pakaka Mengu Hill... N/A Kombokolo Pamao Sessenge Underground... N/A N/A 91.3 NOTE 1: Oxide master composite recovery was used for Pamao oxide recovery assumptions. NOTE 2: Advice from geological consultant indicates limited transition ore for Pakaka and Pamao. Primary recoveries were used for transition material predicted recovery. NOTE 3: No oxide samples sourced from Mengu Hill. All ore logged as oxide from this deposit is assumed to be treated as transition ore Process Plant and Services Based on the physical characteristics of the ore, metallurgical testwork results and the proposed operating philosophy, the following process plant flowsheet has been selected: Single stage primary crushing fed by front end loader or direct truck tip for treatment of both oxide and primary ores. Crusher product, nominal P 80 size of 160 mm, will be conveyed to a surge bin for direct transfer to mill feed, with excess being placed on a dead stockpile. Reclaim of crushed ore from the stockpile via apron feeders. Single stage SAG milling of the ore in a closed circuit with hydro-cyclones. The mill will be 7.0 m (diameter) x 6.4m (effective grinding length) 5.5MW mill, to a P 80 size of 106 m with scats recycled to the surge bin. Gravity gold recovery circuit incorporating a centrifugal concentrator and tabling of concentrates. Eight leach/cil tanks for multi-stage leaching of oxide or flotation tailings streams. Flotation plant for primary and transitional ore to produce a gold concentrate. The flotation plant will consist of conditioning, rougher flotation, scavenger flotation, and concentrate thickening. Fine grinding of concentrate before leaching in the dedicated CIL circuit. A dedicated 5 tank leach / CIL circuit for leaching of ground flotation concentrates, with one tank for preoxygenation. Gold room activities comprising tabling of gravity concentrates, acid washing of carbon, an AARL elution circuit with electrowinning and smelting of gravity and electrowinning products to produce dore bars. Cyanide detoxification (product G50ppm) on oxide leach tailings and concentrate leach tailings via air / SO 2 methodology. Discharge to the tailings storage facility (TSF) after thickening. Separation of process water streams into high-cyanide and low cyanide streams and allowance for detoxification of TSF supernatant solutions to minimise any deleterious effects on flotation. In general the design criteria for the process plant have been defined on the basis of an 85 th percentile of the relevant characteristic for ore types blended as per the mine schedule supplied by Moto. Feed scheduling is based on 8,000 operating hours per annum for the plant and total throughput varies from 2.5Mtpa to 2.9Mtpa depending on ore hardness. 96

205 Infrastructure and services required to be developed for the plant and site operations include: Nominal 20MW Hydro-electric power station on the Nzoro River, 30km from site and associated 66kV transmission line. Supplemental and back-up diesel-fired power generation facilities. Site roads, environmental control dams and event ponds. Accommodation and messing facilities. Water harvesting facilities at the nearby Kibali River Gold Production Forecast The optimised mill feed schedule yields significant metal production in the early years of the operation as listed below: Table 15-4 Gold Production Profile Year Gold Output (oz) 397, , , , , , , ,362 Year Gold Output (oz) 284, , , , ,144 92,370 81,159 94,474 Production forecasting is based on Mineral Reserves only no Inferred Mineral Resources are included. 97

206 16.0 OTHER RELEVANT DATA AND INFORMATION 16.1 Independent Status of Authors Cube is an Australian owned company providing geological and mining consulting services and software systems to the resources and industrial sectors. The organisation is well resourced with an established office in Perth, Western Australia and has undertaken work for a number of substantial international mining houses. Cube Consulting comprises a team of technical professionals dedicated to providing excellence of service in their field of expertise. Neither Cube nor the authors of this report have or have had previously any material interest in Moto or related entities or interests. Cube s relationship with Moto is solely a professional association between client and independent consultant. The report has been prepared in return for fees based on agreed commercial rates and the payment of these fees is in no way contingent on the results of this report Environmental Considerations Environmental Legislation The primary piece of legislation governing mining environmental issues in the DRC is the Mining Code. The Mining Regulations, promulgated in terms of this Mining Code, are of particular relevance Financial Security Obligation Articles 410 to 414 of the Mining Regulations set out the obligations in respect of a financial security which must be provided in terms of Article 294 of the Mining Code. The financial security must provide for the rehabilitation of the environment to the standard specified in the approved Environmental Adjustment Plan (EAP). The funds of the financial security shall be made available to the State and managed for the purpose of rehabilitating the site. Provision for the rehabilitation security will become effective from the third year of production. If the operation were to become ISO compliant the financial security would be waived Environmental adjustment plan Under the Mining Code mining operations which existed at the time the Mining Code came into force must be covered by an EAP approved by the DRC Ministry of Mines. The purpose of the EAP is to give an overview of the environmental condition of the areas covered by the relevant mining title under which such operations are conducted and to describe any measures that have been or will be taken for the purpose of the protection of the environment. Kibali Goldmines has completed a full environmental baseline study, followed by a Plan for Attenuation and Rehabiliation as required by the Mining Code. This has been submitted to the Ministry of Mines Decommission, Closure and Security for Rehabilitation Works The Mining Code also requires the holder of a mining title to provide security guaranteeing the performance of its environmental rehabilitation obligations under its EAP. The Equator Principles and good international practice dictate that the operator must make provision for closure and rehabilitation. The costs of ongoing rehabilitation of worked out or completed areas are to be provided for as part of the overall project costs, and final closure costs will be estimated as part of the Equator Principles report. A restoration and rehabilitation bond will be held against closure costs Ongoing Environmental Compliance Kibali Goldmines recognises that the World Bank and its affiliated bodies have issued guidance on the environmental standards that mine operators should aim to adhere to while conducting their operations. The Group therefore intends to implement the Kibali Gold Project in a manner that is compliant with the environmental guidelines set out in the World Bank Pollution Prevention and Abatement Handbook and supplements thereto, and the IFC s Performance Standards on Social and Environmental Sustainability (which have superseded the IFC Safeguard Policies and which form the basis of the Equator Principles), and that reflects these standards and policies, with any modifications as are appropriate for the Group s circumstances. 98

207 Resettlement It will be necessary to relocate in excess of 10,000 persons from the immediate project area to allow drilling and project development to take place. The Group has begun negotiations with the affected communities and will be putting plans in place for such relocations. In addition, a number of smaller settlements within the zone of the Group s proposed operations require relocation and the Group will need to find suitable available land for subsistence farming for these settlements. The Group has already carried out some of this resettlement and is working to develop plans for the other areas where resettlement will be required. The Group expects to comply with IFC guidelines in relation to these planned relocations and has budgeted accordingly Economic Analysis Assumptions Physical information set out in the Mining and Metallurgical sections of this report, as well as financial information set out in the Capital Cost Estimate and the Operating Cost Estimate sections of this report, form the basis of the financial model. In addition, the following financial and market related assumptions have been included in the Base Case financial model: gold price of US$750/ounce (no credit has been allowed for silver); equity financing of 100 percent of the Kibali Gold Project; royalties payable allowed at 2.5% of net sales revenue, deductable as an expense for taxation calculation purposes; corporate taxes at 30% are payable on assessable income, assumed paid in the year incurred; tax losses carried forward for a maximum of 5 years; depreciation and amortisation has been allowed as per provisions of the DRC mining Code 2002 and the DRC Tax Code Key features are an accelerated rate of depreciation of 60% for Year 1 and an accelerated amortisation rate for capital development; no allowance has been made for closure costs the large Inferred Mineral Resource base provides good potential for extensions to the Feasibility Study mine life; working capital, first fill and initial consumable stock values have not been returned at end of mine life; and sunk costs of US$90.8M have been included in the analysis for the purposes of taxation calculations sunk costs do not feature directly in calculation of total capital expenditure for the Kibali Gold Project Base Case Financial Evaluation The principal outcomes from the financial evaluation of the Feasibility Study, using Probable Mineral Reserves only, are as follows: Initial Capital Payback Period... Mine Life (total operation life post processing plant commissioning) years 16years Table 16-1 Kibali Gold Project Net After-Tax Cashflows (US$M) Year (1) Cashflow (438.0) Year Cashflow Project Sensitivity Analysis The sensitivity of the Kibali Gold Project to the variation of major high level inputs was assessed with the results presented in Table

208 Table 16-2 Sensitivity Analysis Kibali Gold Project Net After-Tax Cash flows (US$) Kibali Gold Project Feasibility Study Sensitivity Analysis % Variance Input Factor Cashflow Sensitivity Annual After Tax Project Cashflows (US$M) Total Life of Mine Year (4) Year (3) Year (2) Year (1) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Gold Price... (20)% (17) (108) (313) ($/oz)... (13)% (17) (108) (313) (7)% (17) (108) (313) % 750 1,035 (17) (108) (313) % 800 1,198 (17) (108) (313) % 850 1,361 (17) (108) (313) % 900 1,523 (17) (108) (313) OP Mined Grade.. (20)% (17) (108) (313) (g/t)... (10)% (17) (108) (313) % ,035 (17) (108) (313) % ,171 (17) (108) (313) % ,308 (17) (108) (313) UG Mined Grade.. (20)% (17) (108) (313) (g/t)... (10)% (17) (108) (313) % ,035 (17) (108) (313) % ,143 (17) (108) (313) % ,251 (17) (108) (313) CAPEX... (20)% ,097 (13) (86) (251) ($M)... (10)% ,066 (15) (97) (282) % ,035 (17) (108) (313) % ,005 (18) (119) (345) % (20) (130) (376) OPEX (20)% 1,237 (17) (108) (313) (10)% 1,136 (17) (108) (313) % 1,035 (17) (108) (313) % 935 (17) (108) (313) % 834 (17) (108) (313)

209 17.0 REFERENCES Adams, P., Coupland, T. (November 2004). Moto Project Resource Estimate, November Cube Consulting Perth, Australia. Adams, P., Coupland, T. (August 2005). Moto Gold Project Independent Technical Report, August Cube Consulting Perth, Australia. Adams, P., Coupland, T. (November 2005). Moto Gold Project Independent Technical Report, November Cube Consulting Perth, Australia. Adams, P., Coupland, T. (April 2006). Moto Gold Project Independent Technical Report, April Cube Consulting Perth, Australia. Adams, P., Coupland, T., de Klerk, Q., Hansen, T. (December 2006). Moto Gold Project Independent Technical Report, December Cube Consulting Perth, Australia. Adams, P., Hansen, T., Wearing, I. (January 2008). Moto Gold Project Independent Technical Report, January Cube Consulting Perth, Australia. Adams, P., Coupland, T., Kock, F., Hansen, T., Sapienza, C., Wearing, I., (November 2008). Moto Gold Project Independent Technical Report, November Cube Consulting Perth, Australia. Adams, P., Graindorge, J., Hansen, T., Kerr, P., Kock, F., Leonard, R., Sapienza, C., Schmiede, P., (April 2009). Moto Gold Project Amended and Restated Technical Report, April Cube Consulting Perth, Australia. Camden-Smith, P. (2005) Report Moto, June Camden Geoserve CC. South Africa. Davis, B. Moto Project Structural Geological Investigation, (August 2004). RSG Global Perth, Australia. Deraisme, J. (2005) Recoverable Resources Estimation: Indicator Kriging or Uniform Conditioning? EAGE 2005 Workshop Deraisme, J., Roth, C. (2000) The Information Effect and Estimating Recoverable Reserves. information effect-2.pdf Hamilton, J., Smith, G., Kiza, G., Sullivan, J. (February 2006). Moto Information Circular Geological Synopsis and Project Statistics for the Moto Gold Project, North-Eastern DRC prepared for the Indaba Conference held in Capetown, South Africa. Humpreys, M. (1998) Local Recoverable Estimation: A Case Study in Uniform Conditioning on the Wandoo Project for Boddington Gold Mine, from Beyond Ordinary Kriging Symposium Proceedings of a symposium held Friday 30 th October 1998 Perth, Western Australia mono 1 papers.htm Jones, C (June 2005). Independent Technical Report Moto Project prepared on behalf of Moto Goldmines Ltd, June RSG Global Perth, Australia. Lycopodium Engineering Pty Ltd. (September 2007). Moto Gold Project Feasibility Study, September Lycopodium Engineering Pty Ltd. Mercier, M (September 2005). Audit Report Preparation Laboratory of Borgakim Mining (sprl), Moto Project, Doko-Watsa, NE Democratic Republic of Congo, September Mercier, M (January 2006). Quality Assurance and Quality Control Report of all Database Gold Assay Data Received Before the End of August 2005 by Borgakim Mining (sprl), Moto Project, Doko-Watsa, NE Democratic Republic of Congo, January Mercier, M (June 2006). A Study of the Database Gold Assay Data for Check Samples Received by Borgakim (sprl) Between Late August 2005 and 12 May 2006, Moto Project, Doko-Watsa, NE Democratic Republic of Congo, June Mercier, M (February 2007). A Study of the Database Gold Assay Data for Check Samples Received by Borgakim (sprl) between 13 May 2006 and 4 January 2007, Moto Project, Doko-Watsa, NE Democratic Republic of Congo, February Mercier, M (August 2007). A Study of the Database Gold Assay Data for Check Samples Received by Borgakim (sprl) between 4 January 2007 and 24 June 2007, Moto Project, Doko-Watsa, NE Democratic Republic of Congo, August

210 Mercier, M (December 2008). A Study of the Database Gold Assay Data for Check Samples Received by Borgakim Mining (sprl) between 24 June 2007 and 24 October 2008, Moto Project, Doko-Watsa, NE Democratic Republic of Congo, December Moto Goldmines Ltd. Exploration Department (Moto June 2005) Lithologic Descriptions and Proposed Stratigraphy for the Moto Gold Project Area, DRC, June Internal Moto Goldmines document Doko DRC. Stephenson, P R and Stoker, P T (2001). Classification of Mineral Resources and Ore Reserves, in Mineral Resource and Ore Reserve Estimation The AusIMM Guide to Good Practice. AusIMM. Melbourne, Australia. Thatcher, E (October 2004). Petrographical Descriptions of Selected Drill Core Samples from the Gorumbwa Deposit DRC, October Microsearch CC. Petervale South Africa. Thatcher, E (June 2005). Petrographical Descriptions of Selected Drill Core Samples from the Mengu Hill Deposit DRC, 21 June Microsearch CC. Petervale South Africa. Vann, J., Jackson, S., Bertoli, O (September 2003). Quantitative Kriging Neighbourhood Analysis for the Mine Geologist: A description of the Method with Worked Case Examples, September Quantitative Geoscience. Perth, Australia. 102

211 18.0 REPORT AUTHOR LISTING The following people are responsible for supervising and/or preparing this report, which is effective as at 30th November Patrick (Rick) Adams Bsc MAusIMM CPGeo Director Geological Resource Services Cube Consulting Pty Ltd Terje Hansen Bsc MAusIMM Director Geological Consulting Cube Consulting Pty Ltd Dated this 30th day of November 2009 Dated this 30th day of November 2009 Quinton de Klerk National Higher Diploma MAusIMM Director Mining Engineering Cube Consulting Pty Ltd Rod Leonard MSC (MetEng), BSc (MetHonEng) MAusIMM Technical Director Lycopodium Minerals Pty Ltd Dated this 30th day of November 2009 Fred Kock National Higher Diploma in Extractive Metallurgy MAusIMM Lead Metallurgist Orway Mineral Consultants (WA) Pty Ltd Dated this 30th day of November 2009 Dated this 30th day of November 2009 Paul Kerr BSc (Mining Engineering) MAusIMM Senior Consultant SRK Consulting Pty Ltd 103

212 APPENDIX 1: PROJECT RESOURCE IMAGES 104

213 OPEN PIT RESOURCE METHODOLOGY LOCAL RECOVERABLE (UC) IMAGES Karagba-Chauffeur-Durba UC Mineralised Zone Plan 105

214 Karagba-Chauffeur-Durba UC Mineralised Zone Section Looking North Karagba-Chauffeur-Durba UC Mineralised Zone Section Looking West 106

215 UNDERGROUND RESOURCE METHODOLOGY GLOBAL INSITU IMAGES Karagba-Chauffeur-Durba OK-UG Mineralised Zone Plan 107

216 Karagba-Chauffeur-Durba OK-UG Mineralised Zone Section Looking North Karagba-Chauffeur-Durba OK-UG Mineralised Zone Section Looking West 108

217 APPENDIX 2: RESOURCE VALIDATION PLOTS 109

218 Open Pit Resource Methodology Local Recoverable 110

219 111

220 112

221 113

222 114

223 115

224 Underground Resource Methodology Global Insitu 116

225 117

226 118

227 119