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Notes to the consolidated financial statements
(continued)
FOR THE YEAR ENDED 31 DECEMBER 2005
56 Annual Report 2005    Randgold Resources
Group
Group
Company
Company
31 Dec
31 Dec
31 Dec
31 Dec
US$000
Note
2005
2004
2005
2004
13 ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
Trade payables
16 776        6 064            383            23
Payroll and other compensation
2 887           532         2 578           532
Accruals
6 169        5 105                -               -
-
-
Other
2 981        2 727             663          757
28 813      14 428          3 624        1 312
14 PROVISION FOR ENVIRONMENTAL
REHABILITATION
Opening balance
3 701        5 962
-
-
Disposal of Syama
24
-      (2 438)
-
-
Unwinding of discount
254           177
-
-
Additional disturbances
5 525              -
-
-
9 480        3 701
-
-
As at 31 December 2005, US$5.5 million of the provision relates to Loulo (31 December 2004: US$nil) which is based
on estimates provided by environmental consultants in connection with the Loulo feasibility study. The remaining
US$3.9 million relates to Morila (31 December 2004: US$3.7 million). The provisions for rehabilitation costs include
estimates for the effect of future inflation and have been discounted to their present value at 6% per annum, being
an estimate derived from the risk free rate. Limited environmental rehabilitation regulations currently exist in Mali to
govern the mines, so the directors have based the provisions on environmental rehabilitation using the standards as
set by the World Bank, which require an environmental management plan, an annual environmental report, a closure
plan, an up to date register of plans of the facility, preservation of public safety on closure, carrying out rehabilitation
works and ensuring sufficient funds exist for the closure works. However, it is reasonably possible that the group’s
estimate of its ultimate rehabilitation liabilities could change as a result of changes in regulations or cost estimates.
The group is committed to rehabilitation of its properties. It makes use of independent environmental consultants for
advice and it also uses past experience in similar situations to ensure that the provisions for rehabilitation are
adequate.
Group
Group
Company
Company
31 Dec
31 Dec
31 Dec
31 Dec
US$000
Note
2005
2004
2005
2004
15 BORROWINGS
Morila power plant finance lease
15.1        4 792         5 787
-
-
Morila oxygen plant finance lease
884         1 045
-
-
Loulo project finance loan
15.3      60 010       35 042
-
-
Loulo CAT finance lease
15.4        6 843               -
-
-
72 529       41 874
-
-
Less: current portion
(22 991)      (1 156)
-
-
49 538       40 718
-
-
All loans are secured and have variable interest rates, except for the Loulo CAT finance lease.
15.1 Morila power plant finance lease
The Morila power plant finance lease relates to five generators leased from Rolls-Royce for Morila. The lease
is repayable over ten years commencing 1 April 2001 and bears interest at a variable rate of interest which
as at 31 December 2005 was approximately 20% per annum. The lease is collateralised by plant and
equipment whose net book value at 31 December 2005 amounted to US$4.8 million (2004: US$5.8 million).
Average annual lease payments of US$1.5 million are payable in instalments over the term of the lease. The
company has, together with AngloGold Ashanti, jointly guaranteed the repayment of this lease.
15.2 Morila oxygen plant finance lease
The Morila oxygen plant finance lease relates to three oxygen generating units leased from Air Liquide
for Morila. The lease is payable over 10 years commencing 1 December 2000 and bears interest at a
variable rate which as at 31 December 2005 was approximately 3.09% per annum. The lease is collateralised
by the production units whose net book value at 31 December 2005 amounted to US$0.8 million
(2004: US$1.0 million).
15.3 Loulo project finance loan
The US$60 million Loulo project loan was arranged by N M Rothschild & Sons Limited and SG Corporate &
Investment Banking, who have been joined in the facility by Absa Bank and HVB Group, and is repayable
between June 2006 and September 2009. A first instalment of US$35 million was drawn against the loan in
December 2004. A further US$25 million was drawn down in 2005. The loan is collateralised over the assets
of the Loulo project with a carrying amount of US$161.1 million (2004: US$82.3 million). Additionally, the
company has pledged its interest in Randgold Resources (Somilo) Limited and related assets, and Randgold
Resources (Somilo) Limited has pledged its interest in Somilo and related assets to secure Somilo’s
obligations under this loan. The loan is guaranteed by Randgold Resources until economic completion of the