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Gold/Mining/Energy : RANDGOLD and EXPLORATION (RANGY) -- Ignore unavailable to you. Want to Upgrade?

To: baystock who wrote (440)	2/5/2001 7:33:23 PM
From: Bob Dobbs	Respond to of 448

Straight share swap with Resources nixed by South African authorities, otherwise profitable quarter before Syama writedown, with Morila contributing solid profits - Bob : mips1.net Randgold will not give up chase for gold merger Randgold Resources is confident it will be able to play a lead part in the restructuring of the Randgold group notwithstanding a decision last week by the South African Reserve Bank to block a merger of Randgold Resources and Randgold & Exploration. Mark Bristow, chief executive of Randgold Resources, said a share-exchange merger in which Randgold Resources would take out Randgold & Exploration was scuppered by the authorities because "... it didn't meet the foreign exchange regulatory provisions". "It was really first prize. It required issuing London scrip for the South African parent and that did go against the current rules," he said. Randgold Resources is listed on the London Stock Exchange whereas parent company, Randgold & Exploration, an investment company, is listed in Johannesburg. The group has been talking of restructuring the company for more than a year and in January 2000 was prevented from doing so after Harmony Gold bought kingpin company, Randfontein Estates. "We felt that there was merit in taking away South African dollar debt to where the cash is – that's in Randgold Resources – but the Reserve Bank clearly didn't think that way," Bristow said. Both Bristow, and Randgold Resources chairman, Roger Kebble, are confident of hatching a successful plan to rationalise the group. Bristow said there were three alternatives currently being worked upon. "We'll deal with them with our major shareholders and between the companies, and when we think we've got something that's workable we'll come back to the market and share it with the market," Bristow said. Kebble said the share swap route would have been the straightest route to the restructuring of the group, but there were other options available. The setback in rationalising the Randgold group dampens an otherwise much improved period for Randgold Resources. A decision last week to mothball the Mali-based gold mine Syama – which drained cash from the group – and maiden profits from the group's only operating mine, Morila, has given Randgold Resources a much better earnings outlook. Morila is a quality mine producing 141 000 ounces at a cash operating cost of $71 per ounce. As a result, a cash operating profit of $25 million propelled the company to a $12 million profit in the three months to end-December. Randgold Resources owns 40 per cent of the operation after selling a portion to AngloGold. Following a $30 million write-down for Syama, the company reported a $29 million loss. "When you look at the gold price and the market we work ... it's been really rewarding to stand up there for the first time since we listed and show solid profits and, more importantly, the promise of more to come," Bristow said. Bristow is hopeful that Randgold Resources will uncover other similar mines to Morila in the Mali region. "It (Morila) is the first discovery in what we believe is a new geological terrain and so we're cautiously optimistic that there's more opportunity to find more," Bristow said. In addition to exploration prospects around Morila, Randgold Resources is also exploring the Loulo deposit in Mali, and Nielle in the Ivory Coast. In total, Randgold Resources has gold resources of 11.5 million ounces. By: David McKay