Morila keeps Randgold in black

Denver — With contribution from the new Morila gold mine in Mali, Randgold Resources posted a profit during 2000.

In its first year of operation, the company, a 61%-held subsidiary of Randgold & Exploration (RANGY-Q), reported a profit of US$142 million before other charges.

A US$74.6-million writedown caused net income to be reduced to US$24.4 million (or 74 per share).

In January, Randgold suspended mining at the Syama gold mine in southern Mali. Care-and-maintenance costs are projected to be US$30 million. For the year, the mine produced 168,892 oz. at cash operating costs of US$321 per oz.

However, the Morila mine gave Randgold a year-end boost, in the form of 141,615 oz. gold during its first two months of operation. Randgold’s 40% interest amounts to 56,646 oz. Cash operating costs were US$71 per oz., whereas total cash costs, including royalties, were US$88 per oz.

Last year, Randgold sold 40% of the mine to AngloGold (AU-N) for US$130 million. In early January, the operation began commissioning the gyratory crusher and semi-autogenous grinding mill in preparation for hardrock ores.

Meanwhile, exploration continues around Morila. So far, Randgold has secured seven exploration permits around the mine (four are joint ventures with local partners).

On the Morila property, the company completed 11,415 metres of rotary drilling, while diamond drilling has confirmed a northeastern extension of the Morila deposit within the mining lease. Hole 186 encountered 40 metres averaging 9 grams gold per tonne, plus 18 metres of 6.1 grams. The company plans another 135,000 metres of rotary drilling for the year.

Randgold also intends to resume drilling at the Loulo project in Mali, and the Nielle project in Ivory Coast.

Meanwhile, the South African Reserve Bank has rejected a proposal to merge Nasdaq-listed Randgold & Exploration with its London-listed subsidiary, Randgold Resources. The companies are reviewing other options to complete the restructuring of the Randgold group.