8 Annual Report 2005    Randgold Resources

5 Our exploration strategy is to develop good models and then

establish a dominant land position.

6 Mining began at Loulo in the last quarter of 2004.

7 Loulo and the area around it remains our most prospective

region.

8 Morila paid out dividends of US$90 million during the past year.

functioning at its full expanded capacity, however, so

there is room for further improvement and this remains

a key management issue.

The other major focus at Morila is the continuing hunt

for more ounces. Last year we came close to replacing

the reserves that were depleted, and we believe there

is still a considerable upside in the lease area. We

currently have a two pronged exploration strategy there:

we are looking closely at the known mineralisation

around the margins of the mine, and we’re also about

to embark on an ambitious strategic drilling programme

which will cover the full200km² of the lease and give

us a complete picture of its overall resource potential.

Morila last year paid out dividends of US$90 million and

it remains a spectacular cash generator. We are

forecasting production of at least 500 000 ounces per

year for another three years, and even modest exploration

success will enable the mine to sustain its output at that

level for a fourth year.

WAITING IN THE WINGS

Our three million ounce Tongon project in the Côte

d’Ivoire has been put on hold by the political unrest

which has plagued that country for the past two years.

There has been some progress towards a settlement,

but it has been a bumpy road with frequent diversions.

However, elections have now been scheduled for

later this year, and there is a considerable momentum

within Africa as well as the wider international community

to press for a durable reconciliation of the conflicting

parties’ differences. We therefore remain optimistic that

our patience and our long term faith in the country will

eventually be rewarded.

In anticipation of that day we recently revisited the

project site and confirmed that it would be relatively

simple to resume our activities there. We have had

preliminary discussions about our plans with the various

parties concerned and we hope to do some preliminary

drilling before the start of the wet season. If the elections

have the anticipated stabilising effect, we would then

mobilise a comprehensive programme to complete the

feasibility study.

GENERATING ORGANIC GROWTH

Our annual resource and reserve declaration, published

elsewhere in this report, shows that our resource base

has grown by 14% to 16.54 million ounces over the past

year, (16% to 11.67 million ounces attributable) a clear

tribute to the continuing success of our exploration

programmes.

Randgold Resources’ key business model is the resource

triangle: a broad base of targets, the best of which

become projects, from the ranks of which emerge the

mines. This model requires expertise in the evaluation

of targets and the development of projects; and, equally

important, a constant flow of fresh prospects to expand

and replenish the base. Finding these is the task of our

exploration teams, and their consistent record of success

has been the main driver of this company’s growth.