Following the 2003 updated feasibility study on the Loulo
project (which comprises the Loulo 0 and Yalea deposits)
and the rise in the gold price, the boards of Somilo and
Randgold Resources approved the development of the
Loulo project. Construction commenced in February
2004. The mine produced its first gold in September
2005 and made its first gold sale on 8 November 2005,
which marked the commencement of the five year tax
holiday and three year duty free period granted to the
mine under the Loulo establishment convention.
The President of Mali, Amadou Toumani Touré, officially
opened the Loulo mine on 12 November 2005 at an
event attended by, among others, Malian government
ministers, ministers from other West African countries,
several thousand local villagers and their leadership,
and the Randgold Resources board.
A summary of the salient production and financial
statistics follow:
12 months
ended
LOULO RESULTS
31 Dec 2005
Mining
Tonnes mined
(000)
12 096
Ore tonnes
mined (000)
1 213
Milling
Tonnes processed
(000)
551
Head grade
milled (g/t)
4.5
Recovery
(%)
94.3
Ounces produced
67 984
Average price
received (US$/oz)
499
Cash operating
costs* (US$/oz)
137
Total cash
costs* (US$/oz)
165
Profit from
mining* (US$million)
19.5
Gold revenue
(US$million)
30.7
Randgold Resources owns 80% of Loulo with the
Government of Mali owning 20%. Attributable production
for the year is 54 387 ounces.
* Refer to note
25: Notes to the consolidated financial
statements
page 63.
Mining
During the year a total of 1.2 million ore tonnes at 3.66g/t
was mined from Yalea. A selective mining and stockpiling
strategy was implemented in August 2005 which allowed
for the stockpiling of ore according to hardness and
grade. Low grade rehandled stockpiles (greater than
0.7g/t and less than 2g/t) and medium grade (greater
than 2g/t and less than 4g/t) hard and soft material were
created to allow preferential treatment of soft high grade
ore together with soft high grade feed from the pit. This
allowed for the feed grade to be kept at 4.5g/t for the
year.
At the end of December 2005, total stockpiled material
was 661 833 tonnes at 2.94g/t. Of this, 401 587 tonnes
at 2.83g/t was soft material feedable through the mineral
sizer. A mobile crushing and screening facility is planned
to be operating during the first quarter of 2006, which
will allow the medium and high grade transitional ore on
the stockpiles (197 941 tonnes at 3.64g/t) to be fed
through the soft ore mineral sizer.
Ore processing
The Phase 1 plant operation has been satisfactory,
despite the lack of completion of certain areas of the
facility. Throughput, recovery and reagent utilisation
have all met forecast levels. The operational team
continues to meet its objectives, while the company’s
capital projects team completes the remaining
construction work on Phase 1 and the challenge to put
the Phase 2 hard ore crushing plant back on track.
The operation
of the softer ore Phase 1 circuit will be
extended
through:
Utilisation
of current ore stockpiles.
Use of mobile
crushing facilities, already established
on site,
to break down the harder material fraction
which increases
as the mining horizon deepens in
the Yalea
pit. This will allow transitional ore to be
fed through
to the soft ore crusher.
Further
infill drilling to facilitate grade control
mapping
at the P129 pit will allow this softer ore
resource
to be brought into the production mix in
the first
quarter of 2006.
Manpower build up is nearing its peak following Loulo’s
first commercial sale of gold. Although the construction
workforce is decreasing on the Phase 1 plant, this
resource is being re-deployed on the Phase 2
construction work. Further on-the-job training to local
employees in the plant area is being provided to improve
their skill levels.
Mineral resources
Grade control versus plant check out reconciliations
was very good, at 3% for tonnes and 1% for grade, well
within the 5% target for the year. The strong geological
emphasis in mining operations, together with a very
visual orebody, has allowed dilution to be kept to a
minimum.
Deep drilling continued through 2005 on both Yalea and
Loulo 0, allowing total resources for Loulo to be increased
by 24% to just short of 10 million ounces. This increase
occurred despite the depletion of 73 500 ounces from
ore fed to the plant. More importantly, an additional
3.82 million ounces of this resource was converted into
reserves, thus achieving the objective of adding value
through improving the reserve to resource ratio from
23% to 56%. The successful completion of the
underground feasibility study, along with further updates,
has enabled the conversion of 3.82 million ounces into
underground reserves and allowed the go-ahead of this
exciting project.
Greenfields exploration continued with good results
emerging from the Faraba and P64 targets in the south
of the permit.
14 Annual
Report 2005 Randgold Resources
