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Gold/Mining/Energy : SOUTH AFRICAN MINING -- Ignore unavailable to you. Want to Upgrade?

To: POLARBEAR who wrote (90)	8/2/1998 11:01:00 PM
From: baystock	Respond to of 472

Hi Polarbear, Your's and Disney's analysis was appreciated despite its omissions. I will respond little by little over time to the points you raise since it takes time and research. First regarding RANGY's debt, I still believe it is $48 million, but I could be wrong. Maybe my source of info is outdated: woza.co.za Ram news/ mining Randgold keeps on trucking By BRENDAN RYAN October 30, 1996 While the quarterly results from Randgold's mines show overall good performances, with the exception of Grootvlei, it's the group's exploration efforts into the rest of Africa that seem to be driving and underpinning the share price. The facts of life concerning gold investments really boil down to Randgold chairman Peter Flack's observation at this week's presentation to analysts on the relative values placed by investors on gold in the ground in South Africa compared with gold in the ground elsewhere in the world. While the share prices of SA gold mines show international investors value gold in the ground in SA at around US$35/oz they are applying much higher values to deposits elsewhere in Africa. Flack is bench-marking his ventures against Lonrho's Ashanti gold mine in Ghana where the share price equates to a value of between $90 and $100 per ounce of gold in the ground. It's no surprise he's cock-a-hoop over the developments of the past few months which have seen Randgold acquire control of BHP's Syama gold mine in Mali for $82m paid for with a $30m cash payment and the issue of 2m shares in Randgold Resources - the group's as yet unlisted international arm. That was followed by the raising of $48m in 7% convertible bonds which Flack points out was oversubscribed four times. The bonds are convertible into ordinary shares at R39 by the year 2001 which compares with the current share price of R35. Syama faces a number of problems, particularly in the metallurgical treatment of its refractory gold-bearing ores, but Flack reckons Randgold management has the answers and the operation will be able to easily fund the $20m required in capital expenditure to upgrade and improve the Syama metallurgical plant. The production forecast for calendar 1997 from Syama is 190,000oz of gold with benefits expected to flow from Randgold's management strategy aimed at improving both grade control and operating performances at the mine as well as establishing better training programmes and improved relations with the labour force. According to Flack the working costs at Syama were $360/oz of gold produced when Randgold took over and this figure should be reduced to $275/oz by the end of the year with the target for 1997 being $250/oz. The Syama deposit is estimated to contain 2,2m oz of proven gold reserves with an additional resource of 1,7m oz while there is "good potential" for adding extra surface and underground reserves. There could be more to come from the other projects being looked at . It's clear that if Syama works out as planned and the other exploration projects produce a further viable gold mine the Randgold share price should benefit further from recognition by international investors of the group's abilities. The separate listing of Randgold Resources which is scheduled to take place before March 1998 is shaping up as a key development. As part of the BHP Mali acquisition Randgold also picked up 20% of the Loulo exploitation permit with the option to acquire an additional 31%. Loulo is at the reserve definition stage with a resource of 1,2m oz identified at this point and a feasibility study due to be completed by June next year. Also by June next year the phase three pre-feasibility study on the Golden Ridge gold mine project in Tanzania should be completed. Overall, Randgold Resources now has an operating gold mine in West Africa, 190 gold targets of which two projects are at the feasibility stage with another two at the advanced target stage . The resource base outside South Africa has reached 6m oz of gold and plans are to more than double exploration expenditure to more than R90m in 1997 from R42m in 1996. It's an impressive performance from an operation which just two years ago, before the hostile takeover bid launched by Flack and his backers, was languishing at a share price of around 300c with, seemingly, no future worth considering. Randgold info@woza.co.za c Woza Internet (Pty) Ltd news/ mining

To: POLARBEAR who wrote (90)	8/2/1998 11:06:00 PM
From: baystock	Respond to of 472

PB, I also think DROOY is a better asset than Harmony since it is a more marginal mine and therefore more leveraged to the POG. Also regarding Randgold Resources. Yes their growth prospects are very impressive. Their financial situation would be tremendous if they can achieve their stated objective of $50 million per year cashflow at POG=$320. And RANGY would be a great way to play these prospects IF RANGY can pay off all their debts and still maintain their stake in Randgold resources. I guess this is where I really don't have enough info. Yes RANGY may be very undervalued but I need to know for sure before I will risk any more money into it. Ram