UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of November, 2006 Commission File Number: 0-49888 Randgold Resources Limited (Translation of registrant's name into English) La Motte Chambers, La Motte Street, St. Helier, Jersey, JE1 1BJ, Channel Islands (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [_] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): NOTE: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): NOTE: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [_] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________ Attached to the Registrant's Form 6-K filing for the month of November 2006, and incorporated by reference herein, is: Exhibit No. Description ----------- ----------- 1. Report for the Quarter Ended 30 September 2006. This Form 6-K and the exhibit contained herein are explicitly incorporated by reference into the Registrant's registration statement on Form S-8 filed with the Securities and Exchange Commission on February 14, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. RANDGOLD RESOURCES LIMITED By: /s/ David Haddon --------------------------------- David Haddon Group Company Secretary Dated: November 3, 2006 Exhibit 1 RANDGOLD RESOURCES LIMITED Incorporated in Jersey, Channel Islands Reg. No. 62686 LSE Trading Symbol: RRS Nasdaq Trading Symbol: GOLD REPORT FOR THE QUARTER ENDED 30 SEPTEMBER 2006 * Profit from mining up by 90% for the nine months year on year * Production increases at Loulo by 11% but down by 8% at Morila * Underground drilling expands the resource base at Loulo to more than 10 million ounces * Loulo underground mine development formally underway * Tongon drilling results support decision to proceed with feasibility programme * Exploration team gears up ahead of new field season * New opportunities beyond our current country portfolio to be evaluated Randgold Resources Limited has 68.6 million shares in issue as at 30 September 2006 SUMMARISED FINANCIAL INFORMATION AND OPERATING RESULTS Quarter ended Quarter Quarter 30 Sept ended ended 2005 30 Sept 30 June (Re- US$000 2006 2006 stated)+ ---------------------------- ------- ------- -------- Gold sales revenue* 63 178 63 441 31 000 Total cash costs* 32 504 28 448 13 211+ Profit from mining activity* 30 674 34 993 17 789+ Profit from operations* 17 520 23 093 9 955+ Net profit 12 746 14 573 9 949+ Net profit (as previously reported) n/a n/a 9 219+ Net profit attributable to equity shareholders 12 285 13 754 9 949+ Net cash generated from operations 17 818 21 418 5 360 Bank and cash 155 320 151 531 45 022 Attributable production** (ounces) 107 002 105 388 69 160 Group total cash costs per ounce** * (US$) 304 270 191+ Group cash operating costs per ounce* (US$) 265 231 160+ SUMMARISED FINANCIAL INFORMATION AND OPERATING RESULTS (continued) 9 months ended 9 months 30 Sept ended 2005 30 Sept (Re- US$000 2006 stated)+ ----------------------------------- -------- -------- Gold sales revenue* 193 860 90 949 Total cash costs* 94 415 38 556+ Profit from mining activity* 99 445 52 393+ Profit from operations* 61 740 28 450+ Net profit 40 086 28 761+ Net profit (as previously reported) n/a 28 461 Net profit attributable to equity shareholders 37 584 28 761+ Net cash generated from operations 61 765 16 251 Bank and cash 155 320 45 022 Attributable production** (ounces) 331 379 202 024 Group total cash costs per ounce** * (US$) 285 191+ Group cash operating costs per ounce* (US$) 247 160+ * Refer to explanation of non-GAAP measures provided. ** Randgold Resources consolidates 40% of Morila and 100% of Loulo. + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. n/a Not applicable. COMMENTS * The doubling of revenue compared to the corresponding period in 2005 reflects the inclusion of the Loulo operation from November 2005 plus the impact of a higher received gold price. Gold sales revenue for the quarter ended 30 September 2006 at US$63.2 million, was in line with the previous quarter despite a less favourable received gold price. This was due to a 3 percent increase in ounces of gold sold. * Costs are higher than the corresponding period in 2005 since this quarter includes US$19.9 million from the inclusion of the Loulo operation which commenced production in November 2005. Total cash costs of US$32.5 million for the quarter ended 30 September 2006 increased by US$4.1 million compared to the previous quarter as a result of increased costs as explained under Operations. The costs were in line with the first quarter of the year. * The increase in profit from mining activity of US$12.9 million over the corresponding quarter in 2005, is attributable to the inclusion of US$11.2 million from Loulo plus the effect of higher received gold prices. The decrease in the current quarter by US$4.3 million compared to the quarter ended 30 June 2006, is as a result of increased unit costs as well as a change in the mix of production. More ounces were produced at the higher cost Loulo operation and less ounces were produced at the lower cost Morila operation quarter on quarter. * When compared to the corresponding period in 2005, net profit from the inclusion of the Loulo operation is offset by income tax at the Morila operation and interest payments on the Loulo project loan. A decrease in net profit to US$12.7 million, compared to the previous quarter, is as a result of the reduced profit from mining as well as a US$2 million increase in the depreciation charge for the quarter at Loulo. * The bank and cash balance increased by US$110.3 million compared to the corresponding period in 2005 which reflects the cash generated by the operations after capital investment and the equity of US$103 million raised in October 2005 and by US$3.8 million for the quarter ended 30 September 2006,when compared to the previous quarter. OPERATIONS LOULO Confusion caused by the name of Loulo being assigned to both a single pit as well as the entire gold mine facility led to the decision to rename the Loulo 0 pit, the Gara pit. The name is sourced from the nearby Gara stream. The throughput at Loulo was hampered by the delay in commissioning the hard rock crusher. This resulted in the operation having to process transitional ore during the rainy season which caused occasional blockages in the crushing circuit. Higher grades and improved recoveries as mining shifted to the Gara orebody in the latter part of the quarter, resulted in an increase in gold produced. Cash operating costs of US$317 per ounce after adjusting for the accounting treatment for production inventories for the quarter ended 30 September 2006, reflect an increase of US$40 per ounce over the previous quarter. This was mainly due to increased waste prestripping in the current quarter as well as additional costs incurred in hiring mobile crushers to handle the transitional ore required because of the delay in commissioning the hard rock crusher. The additional costs associated with the hire of mobile crushers are expected to cease in October 2006. Revenue increased by US$0.7 million compared to the quarter ended 30 June 2006, mainly as a result of an increase in ounces sold, partly offset by a lower achieved gold price of US$548 per ounce compared to US$577 per ounce. The average gold price reported for the current quarter includes 22 752 ounces delivered into the hedge at US$437. The above impacted on the profit from mining activity which decreased by US$3.3 million compared to the previous quarter. Production statistics: LOULO RESULTS Quarter Quarter Quarter ended ended ended 30 Sept 30 June 30 Sept 2006 2006 2005 ------- ------- ------- Mining Tonnes mined (000) 4 830 3 934 -- Ore tonnes mined (000) 784 724 -- Milling Tonnes processed (000) 588 630 -- Head grade milled (g/t) 3.2 2.8 -- Recovery (%) 95.2 91.9 -- Ounces produced 57 123 51 233 -- Average price received + (US$/oz) 548 577 -- Cash operating costs* (US$/oz) 317 277 -- Total cash costs* (US$/oz) 350 313 -- Profit from mining activity* (US$000) 11 125 14 416 -- Gold revenue (US$000) 31 110 30 445 -- LOULO RESULTS (continued) 9 months 9 months ended ended 30 Sept 30 Sept 2006 2005 -------- -------- Mining Tonnes mined (000) 12 805 -- Ore tonnes mined (000) 1 887 -- Milling Tonnes processed (000) 1 940 -- Head grade milled (g/t) 3.0 -- Recovery (%) 93.3 -- Ounces produced 173 033 -- Average price received + (US$/oz) 560 -- Cash operating costs* (US$/oz) 294 -- Total cash costs* (US$/oz) 329 -- Profit from mining activity* (US$000) 42 266 -- Gold revenue (US$000) 99 173 -- Randgold Resources owns 80% of Loulo with the Government of Mali owning 20%. Randgold Resources consolidates 100% of Loulo and then shows the minority interest separately. * Refer to explanation of non-GAAP measures provided. + Includes the impact of 22 752 ounces delivered into the hedge at US$437 per ounce. Despite difficulties experienced with rain-induced stickiness of the ore, secondary and tertiary crusher throughputs improved through the quarter. Most areas still related to the original development project are in their final completion stages, with no further critical areas outstanding. The completion of the straddling conveyor on the stockpile, the permanent water pumping installations at the Faleme river and Gara reservoir supply stations and the mining fuel storage area will further improve and facilitate greater ease of running the operation. Loulo continues to evolve into a world class mining complex encompassing a broad set of operations. MORILA Morila produced 124 698 ounces in the third quarter at a total cash cost of US$251 per ounce, down from the 135 387 ounces produced in the previous quarter. The lower production was a result of operational problems which resulted in a lower head grade as well as lower plant throughput. A review team comprising Randgold, Loulo and AngloGold Ashanti personnel spent time on site working with Morila staff to identify the problems and institute corrective action. Morila is still expected to produce in excess of 500 000 ounces for the year, in line with earlier forecasts. Exploration of both near pit targets as well as the regional drilling programme continued during the quarter. Further resources have been committed to a research programme aimed at developing an integrated structural and mineralogical model to determine the genesis of the Morila orebody. MORILA RESULTS (100%) Quarter Quarter Quarter ended ended ended 30 Sept 30 June 30 Sept 2006 2006 2005 ------- ------- -------- Mining Tonnes mined (000) 4 862 6 006 2 976 Ore tonnes mined (000) 1 261 1 591 1 194 Milling Tonnes processed (000) 1 007 998 1 010 Head grade milled (g/t) 4.2 4.6 5.8 Recovery (%) 90.8 92.3 91.4 Ounces produced 124 698 135 387 172 901 Average price received (US$/oz) 622 628 443 Cash operating costs * (US$/oz) 206 187 160+ Total cash costs * (US$/oz) 251 229 191+ Profit from mining activity (US$000) 48 872 51 443 44 473+ Attributable (40% pro- proportionately consolidated) Gold revenue (US$000) 32 068 32 996 31 000 Ounces produced 49 879 54 155 69 160 Profit from mining activity (US$000) 19 549 20 577 17 789+ MORILA RESULTS (100%) (continued) 9 months 9 months ended ended 30 Sept 30 Sept 2006 2005 -------- -------- Mining Tonnes mined (000) 16 927 17 755 Ore tonnes mined (000) 4 331 4 807 Milling Tonnes processed (000) 3 052 2 817 Head grade milled (g/t) 4.4 6.1 Recovery (%) 91.8 91.9 Ounces produced 395 864 505 061 Average price received (US$/oz) 603 437 Cash operating costs * (US$/oz) 195 160+ Total cash costs * (US$/oz) 237 191+ Profit from mining activity (US$000) 142 947 130 983+ Attributable (40% pro- proportionately consolidated) Gold revenue (US$000) 94 687 90 949 Ounces produced 158 346 202 024 Profit from mining activity (US$000) 57 179 52 393+ * Refer to explanation of non-GAAP measures provided. + Restated due to change in accounting policy related to deferred stripping. See note on accounting policies. PROJECTS AND EVALUATION LOULO GOLD MINE: UNDERGROUND DEVELOPMENT Yalea Excavation and construction of the boxcut for the Yalea underground development started during August 2006. The mining contractor, Shaft Sinkers arrived on site to assist with the boxcut construction and the labour complement includes Malian nationals, who are being trained to replace the expatriates. The delivery schedule for the underground vehicle fleet ordered from JA Delmas is on track with the first equipment already on site. To date two R1300G Loaders, two Multi Task Loaders and an Atlas Copco Rocket Boomer drill rig have been delivered to site. Further deliveries including the CAT AD30 dump trucks are expected and commissioning of the equipment should take place during November 2006. Gara During this quarter conceptual mine re-design has been completed for the Gara underground mine, based on an increased resource base. Scheduling of this underground design and optimisation with the current open pit plan is currently underway. Eleven diamond drill holes were completed on the deep drilling of the Gara deposit for a total of 6 940 metres this quarter. Results confirmed the presence of good grades at depth in the central portion of the orebody. The new results were used to remodel the geological and resource models, resulting in an increase of the total resource to 25 million tonnes at 4.11g/t for 3.3 million ounces. The updated resource is tabled below and reflects an 800 000 ounce increase from the previous declaration. The block model indicates a broad south westerly plunge to the high-grade mineralisation which is coincident with the plunge angle and direction of fold lineations measured in the pit. Further drilling is underway to infill some gap areas within the deep drilling as well as to test the grade trend of the central high-grade portion of the deposit to 600 metres below surface. DIAMOND DRILLING - MINERALISED INTERSECTIONS AT THE GARA DEPOSIT (formerly Loulo 0) Ore Intersection ------------------------------- Width Grade Hole Id From To (m) (g/t) ------- ------ ------ ----- ----- L0CP95 582.10 595.05 12.95 0.68 L0CP97 361.25 382.75 21.50 7.15 L0CP102 643.86 645.38 1.52 12.09 L0CP109 707.32 711.98 4.66 5.40 L0CP86 221.70 223.50 1.80 4.18 L0CP92 333.35 338.10 4.75 0.11 L0CP93 317.10 335.48 18.38 0.65 L0CP105 483.25 490.53 7.28 2.67 L0CP108 715.05 722.00 6.95 0.92 L0CP96 590.40 594.10 3.70 0.97 L0CP98 324.80 333.00 8.20 3.36 L0CP99 356.00 364.60 8.60 1.95 L0CP101 476.00 478.23 2.23 2.27 L0CP103 558.70 564.45 5.75 9.66 L0CP103 579.00 604.37 25.37 1.33 L0CP103 673.90 682.40 8.50 1.82 L0CP105 483.25 490.53 7.28 2.67 L0CP106 767.05 774.80 7.75 0.85 L0CP108 715.05 722.00 6.95 0.92 L0CP110 678.82 682.60 3.78 2.58 L0CP110 705.15 713.40 8.25 0.34 L0CP111 712.35 720.95 8.60 4.23 L0CP107 734.90 748.20 13.30 5.07 DIAMOND DRILLING - MINERALISED INTERSECTIONS AT THE GARA DEPOSIT (formerly Loulo 0) (continued) Including ------------------------------- Width Grade Hole Id From To (m) (g/t) ------- ------ ------ ----- ----- L0CP95 L0CP97 375.82 382.75 6.93 13.95 L0CP102 L0CP109 L0CP86 L0CP92 L0CP93 L0CP105 L0CP108 L0CP96 L0CP98 325.90 328.30 2.40 4.63 L0CP99 L0CP101 L0CP103 L0CP103 599.80 603.17 3.37 4.99 L0CP103 L0CP105 485.10 490.5 35.43 3.40 L0CP106 L0CP108 L0CP110 L0CP110 L0CP111 719.90 720.95 1.05 20.70 L0CP107 735.73 741.17 5.44 9.50 UPDATED RESOURCE ESTIMATE AT THE GARA DEPOSIT (formerly Loulo 0) Tonnes Grade Ounces (Mt) (g/t) (Moz) ----------- ----------- ----------- Dec Aug Dec Aug Dec Aug Classification 2005 2006 2005 2006 2005 2006 -------------- ---- ---- ---- ---- ---- ---- Measured 9.4 9.7 3.84 3.91 1.20 1.2 Indicated 9.6 14.4 4.29 4.19 1.30 1.9 Measured and indicated 18.9 24.1 4.07 4.08 2.50 3.2 Inferred 0.3 0.9 6.28 4.83 0.06 0.1 Total 19.3 25.0 4.10 4.11 2.50 3.3 Tongon Project As discussed later in the exploration section a successful drilling programme was carried out at Tongon and the results from this are being used to plan the feasibility drilling programme. Dependent on the local political situation, this 30 000 metre programme will commence in January 2007. EXPLORATION ACTIVITIES In West Africa, the third quarter of the year traditionally sees a drop in exploration activity due to difficulty of access caused by heavy rains. The previous season's programmes were wrapped up and efforts focused on reporting and interpretation. Conversely in East Africa field activities were accelerated during the dry season, with drilling completed at Kiabakari. In the Cote d'Ivoire, we successfully completed an 8 hole, 1 992 metre tactical diamond coring programme at the Tongon prospect, situated within the Nielle permit, in the north of the country. Five holes were completed to further test a 1.5 kilometre segment of the main Northern Zone shear zone, which trends 250 DEG. to 260 DEG. and dips 80 DEG. to 70 DEG. northwest. It is represented by wide zones of pervasively foliated and altered mafic volcaniclastics. The mineralisation locates on the immediate hanging wall of the main graphitic shear. The mineralised zone is associated with increased silicification, sulphidation and fine brecciation; the results are presented below from west to east. * TND054: 10 metres at 3.70g/t (from 149 metres) * TND053: 3 metres at 8.03g/t (from 144 metres) and 31 metres at 2.99g/t (from 157 metres) * TND051: 9 metres at 1.55g/t (from 38 metres) and 10 metres at 2.40g/t (from 124 metres) * TND055: (No significant results) * TND050: 1 metre at 12.70g/t (from 146 metres) and 13 metres at 1.25g/t (from 154 metres) Three holes were completed in the Southern Zone to provide a framework for the future feasibility drilling. This zone is more geologically complex, with multiple mineralised zones trending 40 DEG. to 50 DEG. with variable dips from 60 DEG. to 70 DEG. northwest. The ore zones are hosted within quartz and shear bounded, brecciated volcaniclastics and appear lensoid in shape; their strike and depth continuity are variable. The silicate alteration is complicated with biotite, silica, sericite, tremolite, diopside and calcite; the results are presented below. * TND052: 6 metres at 1.04g/t (from 116 metres), 44 metres at 1.68g/t (from 185 metres) including 5 metres at 5.06g/t, 6 metres at 3.60g/t and 7 metres at 2.9g/t and a deeper intersect of 10 metres at 3.95g/t (from 342 metres) * TND056: 4 metres at 1.77g/t (from 143 metres) and 9 metres at 2.29g/t (from 194 metres) * TND057: 3 metres at 1.18g/t (from 46 metres) and 4 metres at 1.07g/t (from 84 metres) Plans are now underway to gear up for the start of the feasibility drilling (30 000 metres diamond core) in January 2007, pending safe working conditions and a stabilised political situation. At Loulo, new information from the mining of the Gara deposit and relogging of the diamond core has now enabled the development of a three dimensional geological model. The model reveals high-grade mineralisation is associated with the 30/40 DEG. trending axial planes of quartz tourmaline folds and is concentrated in the hinge zone of a large overturned antiform. The previous drilling at Gara South only tested the eastern limb of a synform and did not test the blind antiformal closure; this will be the target of drilling in the fourth quarter. At Faraba, 13 out of a planned 36 RC holes were completed for a total of 804 metres. The most significant intersections from FARC044 (21 metres at 1.35g/t including 8 metres at 2.88g/t), FARC062 (9 metres at 2.77g/t), FARC065 (32 metres at 1.64g/t including 10 metres at 2.91g/t) and FARC066 (14 metres at 3.70g/t) are hosted in strongly oxidised to gossanous saprolite. To date, trenching and drilling have identified two pods of mineralisation within the 2.6 kilometre Faraba main shear; a northern zone of 500 metres and a main zone of 1 kilometre. Drilling programmes, both RC and diamond core, are planned for Faraba, P64 and Baboto South during the final quarter of 2006. At Morila, drilling continued as part of the 40 000 metre regional drilling programme, although failing to intersect further high grades, the results continue to define the low-grade footprint. In South Mali, Randgold has been exploring on its permits immediately adjacent to its Morila mine for several years. The techniques used to date have been successful in locating mineralised structures such as Ntiola and Kona. However, so far no economic mineralisation resembling the Morila deposit has been located. A 3 000 metre diamond drilling programme was completed before the wet season and has highlighted areas with geological, structural and metamorphic similarities to the Morila enclave. To complement the data from this drilling programme, a ground gravity survey across the Morila area permits will be carried out in the final quarter of the year. In Senegal, we are currently prioritising 15 targets for RAB drilling and modelling the advanced targets of Bambaraya, Sofia and Delya for further diamond drilling. In Ghana, we have almost completed the first phase of exploration across all our permits which have already started to reveal a number of targets, for field validation and follow-up programmes. In Burkina Faso, a 549 hole 9 040 metre RAB programme was completed, testing three targets within the Kiaka permit. A 1 125 metre, 11 hole RC drilling programme was also completed, testing the Kiaka target, which defined broad zones of low-grade mineralisation over a 3 kilometre strike length. In addition, first pass regional exploration has been completed over the complete portfolio of nine permits. In Tanzania, recent drilling at Kiabakari has not so far identified a large mineralised system meeting Randgold's investment criteria and the project status is currently being re-evaluated. However a number of new opportunities and ideas are being followed-up to further develop the Tanzanian business. CONSOLIDATED INCOME STATEMENT Quarter ended Quarter Quarter 30 Sept ended ended 2005 30 Sept 30 June (Restat- US$000 2006 2006 ed)+ ------------------------- ------- ------- -------- REVENUES Gold sales on spot 67 205 66 684 31 000 Realised loss on closing out of hedges (4 027) (3 243) -- Non-cash realised profit/(loss) on roll forward of hedges 577 (2 050) -- Total 63 755 61 391 31 000 OTHER INCOME Interest income 1 889 1 754 308 Exchange gains 169 1 552 179 Other income 550 164 159 Total other income 2 608 3 470 646 Total revenue 66 363 64 861 31 646 COSTS AND EXPENSES Mine production costs 29 673 29 066 11 608 Movement in production inventory and ore stockpiles (3 528) (7 697) (2 258)+ Transfer from/(to) deferred stripping -- -- --+ Depreciation and amortisation 6 386 4 962 2 275 General and admin- istration expenses 2 079 2 824 1 635 Mining and processing costs 34 610 29 155 13 260+ Transport and refinery costs 179 126 68 Royalties 4 101 4 129 2 158 Exploration and corporate expenditure 6 768 6 938 5 559 Other losses/(gains) - net 323 -- (54) Exchange losses 465 1 406 370 Unwind of discount on provisions for rehab- ilitation 84 84 117 Interest expense 1 531 1 537 219 Profit before income tax 18 302 21 486 9 949+ Income tax expense (5 556) (6 913) -- Net profit 12 746 14 573 9 949+ Attributable to: Equity shareholders 12 285 13 754 9 949 Minority Shareholders 461 819 -- 12 746 14 573 9 949+ Basic earnings per share (US$) 0.18 0.20 0.17+ Fully diluted earnings per share (US$) 0.18 0.20 0.16+ Average shares in issue (000) 68 474 68 266 59 723 CONSOLIDATED INCOME STATEMENT (continued) 9 months ended 9 months 30 Sept ended 2005 30 Sept (Restat- US$000 2006 ed)+ ----------------------------------- -------- -------- REVENUES Gold sales on spot 201 130 90 949 Realised loss on closing out of hedges (7 270) -- Non-cash realised profit/(loss) on roll forward of hedges (4 700) -- Total 189 160 90 949 OTHER INCOME Interest income 5 692 997 Exchange gains 3 777 544 Other income 730 1 761 Total other income 10 199 3 302 Total revenue 199 359 94 251 COSTS AND EXPENSES Mine production costs 86 150 40 142 Movement in production inventory and ore stockpiles (12 521) (12 776) Transfer from/(to) deferred stripping -- --+ Depreciation and amortisation 16 312 7 177 General and administration expenses 7 777 4 714 Mining and processing costs 97 718 39 257 Transport and refinery costs 458 197 Royalties 12 551 6 279 Exploration and corporate expenditure 21 393 16 766 Other losses/(gains) - net 323 (54) Ex change losses 3 767 1 830 Unwind of discount on provisions for rehabilitation 252 351 Interest expense 4 687 864 Profit before income tax 58 210 28 761+ Income tax expense (18 124) -- Net profit 40 086 28 761+ Attributable to: Equity shareholders 37 584 28 761+ Minority shareholders 2 502 -- 40 086 28 761+ Basic earnings per share (US$) 0.55 0.48+ Fully diluted earnings per share (US$) 0.54 0.47+ Average shares in issue (000) 68 291 59 578 The results have been prepared in accordance with International Financial Reporting Standards (IFRS). + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. CONSOLIDATED BALANCE SHEET At At 31 Dec 30 Sept At 2005 2005 30 Sept (Restat- (Restat- US$000 2006 ed)+ ed)+ ------------------------- ------- -------- -------- Assets Non-current assets Property, plant and equipment 237 168 202 636 188 392 Cost 287 175 236 331 217 354 Accumulated depreciation and amortisation (50 007) (33 695) (28 962) Deferred stripping costs -- --+ --+ Deferred taxation 2 696 2 957+ -- Long-term ore stockpiles 29 522 22 176+ 22 599+ Total non-current assets 269 386 227 769+ 210 991+ Current assets Deferred stripping costs -- --+ --+ Inventories and stockpiles 40 473 34 210+ 10 340 Receivables 52 169 47 918 50 491 Cash and cash equivalents 155 320 152 452 45 022 Total current assets 247 962 234 580+ 105 853+ Total assets 517 348 462 349+ 316 844+ Shareholders' equity 328 911 301 822+ 197 557+ Minority interest 3 897 1 395 (954) Total equity 332 808 303 217+ 196 603+ Non-current liabilities Long-term borrowings 36 777 49 538 58 848 Loans from minority shareholders in subsidiaries 2 663 2 483 2 448 Financial liabilities - forward gold sales 40 128 34 151 22 796 Provision for rehabilitation 9 751 9 480 8 997 Total non-current liabilities 89 319 95 652 93 089 Current liabilities Financial liabilities - forward gold sales 22 982 8 939 3 683 Current portion of long-term borrowings 24 730 22 991 10 716 Accounts payable and accrued liabilities 42 575 28 813 12 753 Taxation payable 4 934 2 737 -- Total current liabilities 95 221 63 480 27 152 Total equity and liabilities 517 348 462 349+ 316 844+ + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. Main balance sheet movements for the nine months ended 30 September 2006 were as follows: * The increase in property, plant and equipment for the 9 months ended September 2006 mainly reflects the expenditure to complete Phase 2 of the Loulo plant as well as the commencement of construction and purchase of equipment for the Loulo underground mine at Yalea. * Inventories and stockpiles increased due to an increase in ore stockpiles at Morila in line with the life of mine plan as well as the planned build up of warehouse inventories at Loulo. * The increase in receivables is mainly a result of the timing of gold shipments at the end of the current quarter. Furthermore, the company has instituted a Section 417 Companies Act enquiry into the financial dealing of MDM Ferroman (Pty) Limited in liquidation and its associated companies as the first step in recovering outstanding debts. The forensic audit is currently underway with the hearing scheduled for November 2006. * Cash and cash equivalents increased in line with the cash generated by operations offset by funds expended on property, plant and equipment. * The decrease in long-term borrowings reflects the first repayment of US$8.4 million on the Loulo project loan in June 2006 plus scheduled repayments on the CAT finance lease at Loulo and the attributable portion of the Morila power plant finance lease. * The increase in financial liabilities of forward gold sales is due to an increase in the negative marked-to-market valuation of contracts held at 30 September 2006. The gold price was US$599.25 at 30 September 2006. * Accounts payable and accrued liabilities increased in line with the procurement of equipment for the Loulo underground project. * The increase in taxation payable is in line with the end of the tax exoneration period at Morila in November 2005. CONSOLIDATED CASHFLOW STATEMENT 9 months ended 9 months 30 Sept ended 2005 30 Sept (Restat- US$000 2006 ed)+ ---------------------------------- -------- -------- Profit before income tax 58 210 28 761+ Adjustment for non-cash items 23 425 14 129+ Working capital changes (19 870) (26 639) Net cash generated from operations 61 765 16 251 Additions to property, plant and equipment (50 844) (60 798) Financing of contractors 105 (17 930) Net cash utilised in investing activities (50 739) (78 728) Ordinary shares issued 2 685 1 696 (Decrease)/increase in long-term borrowings (10 843) 27 563 Net cash generated by financing activities (8 158) 29 259 Net increase/(decrease) in cash and cash equivalents 2 868 (33 218) Cash and cash equivalents at beginning of period 152 452 78 240 Cash and cash equivalents at end of period 155 320 45 022 + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Number of Share Share ordin- capit- pre- Other ary al mium reserves shares US$000 US$000 US$000 ---------- ------ ------- -------- Balance - 31 Dec 2005 (as previously reported) 68 072 864 3 404 208 582 (41 000) Change in accounting policy - deferred stripping cost -- -- -- -- Balance - 31 Dec 2005 68 072 864 3 404 208 582 (41 000) Net income -- -- -- -- Movement on cash flow hedges - Realised (non cash) -- -- -- 5 023 - Unrealised -- -- -- (20 020) Total recognised (loss)/income -- -- -- (14 997) Share-based payments -- -- -- 1 817 Share options exercised 486 867 24 2 661 -- Exercise of options previously expensed under IFRS 2 -- -- 502 (502) Shares vested# 6 830 -- 108 (108) Balance - 30 Sept 2006 68 566 561 3 428 211 853 (54 790) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) Total attri- butable Accu- to mulated equity Minority Total Profits share- interest equity US$000 holders US$000 US$000 ------- ------- -------- ------- Balance - 31 Dec 2005 (as previously reported) 138 751 309 737 1 395 311 132 Change in accounting policy - deferred stripping cost (7 915)+ (7 915)+ -- (7 915)+ Balance - 1 Dec 2005 130 836+ 301 822+ 1 395 303 217+ Net income 37 584 37 584 2 502 40 086 Movement on cash low hedges - Realised (non cash) -- 5 023 -- 5 023 - Unrealised -- (20 020) -- (20 020) Total recognised (loss)/income 37 854 22 587 2 502 25 089 Share-based payments -- 1 817 -- 1 817 Share options exercised -- 2 685 -- 2 685 Exercise of options previously expensed under IFRS 2 -- -- -- -- Shares vested# -- -- -- -- Balance - 30 Sept 2006 168 420 328 911 3 897 332 808 # Restricted shares were issued to directors as remuneration. The transfer between "other reserves" and "share premium" in respect of the shares vested represents the cost calculated in accordance with IFRS 2. + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. NON-GAAP MEASURES Total cash costs and cash cost per ounce are non-GAAP measures. Total cash costs and total cash costs per ounce are calculated using guidance issued by the Gold Institute. The Gold Institute was a non profit industry association comprised of leading gold producers, refiners, bullion suppliers and manufacturers. This institute has now been incorporated into the National Mining Association. The guidance was first issued in 1996 and revised in November 1999. Total cash costs, as defined in the Gold Institute's guidance, include mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, transfers to and from deferred stripping where relevant, and royalties. Under the company's revised accounting policies, there are no transfers to and from deferred stripping. Total cash costs per ounce are calculated by dividing total cash costs, as determined using the Gold Institute guidance, by gold ounces produced for the periods presented. Total cash costs and total cash costs per ounce are calculated on a consistent basis for the periods presented. Total cash costs and total cash costs per ounce should not be considered by investors as an alternative to operating profit or net profit attributable to shareholders, as an alternative to other IFRS or US GAAP measures or an indicator of our performance. The data does not have a meaning prescribed by IFRS or US GAAP and therefore amounts presented may not be comparable to data presented by gold producers who do not follow the guidance provided by the Gold Institute. In particular depreciation, amortisation and share-based payments would be included in a measure of total costs of producing gold under IFRS and US GAAP, but are not included in total cash costs under the guidance provided by the Gold Institute. Furthermore, while the Gold Institute has provided a definition for the calculation of total cash costs and total cash costs per ounce, the calculation of these numbers may vary from company to company and may not be comparable to other similarly titled measures of other companies. However, Randgold Resources believes that total cash costs per ounce are useful indicators to investors and management of a mining company's performance as it provides an indication of a company's profitability and efficiency, the trends in cash costs as the company's operations mature, and a benchmark of performance to allow for comparison against other companies. Cash operating costs and cash operating cost per ounce are calculated by deducting royalties from total cash costs. Cash operating costs per ounce are calculated by dividing cash operating costs by gold ounces produced for the periods presented. Profit from mining activity is calculated by subtracting total cash costs from gold sales revenue for all periods presented. Profit from operations is calculated by subtracting depreciation and amortisation charges and exploration and corporate expenditure, as well as share-based payment from profit from mining activity. The following table reconciles total cash costs, profit from mining activity and profit from operations as non-GAAP measures, to the information provided in the income statement, determined in accordance with IFRS, for each of the periods set out below: Quarter ended Quarter Quarter 30 Sept ended ended 2005 30 Sept 30 June (Restat- US$000 2006 2006 ed)+ -------------------------- ------- ------- -------- Gold sales on spot 67 205 66 684 31 000 Realised loss on closing out of hedges (4 027) (3 243) -- Gold sales revenue 63 178 63 441 31 000 Mine production costs 29 673 29 066 11 608 Movement in production inventory and ore stockpiles (3 528) (7 697) (2 258)+ Transfer from deferred stripping -- -- -- Transport and refinery costs 179 126 68 Royalties 4 101 4 129 2 158 General and administration expenses 2 079 2 824 1 635 Total cash costs 32 504 28 448 13 211+ Profit from mining activity 30 674 34 993 17 789+ Depreciation and amortisation 6 386 4 962 2 275 Exploration and corporate expenditure 6 768 6 938 5 559 Profit from operations 17 520 23 093 9 955+ (continued) 9 months ended 9 months 30 Sept ended 2005 30 Sept (Restat- US$000 2006 ed)+ ------------------------------------- -------- -------- Gold sales on spot 201 130 90 949 Realised loss on closing out of hedges (7 270) -- Gold sales revenue 193 860 90 949 Mine production costs 86 150 40 142 Movement in production inventory and ore stockpiles (12 521) (12 776)+ Transfer from deferred stripping -- --+ Transport and refinery costs 458 197 Royalties 12 551 6 279 General and administration expenses 7 777 4 714 Total cash costs 94 415 38 556+ Profit from mining activity 99 445 52 393+ Depreciation and amortisation 16 312 7 177 Exploration and corporate expenditure 21 393 16 766 Profit from operations 61 740 28 450 + Restated due to change in accounting policy relating to deferred stripping. See note on accounting policies. ACCOUNTING POLICIES The financial information in this report has been prepared in accordance with the group's accounting policies, which comply with IFRS and are consistent with the prior period, except as noted below. Joint ventures are those investments in which the group has joint control and are accounted for under the proportional consolidation method. Under this method, the proportion of assets, liabilities, income and expenses and cash flows of each joint venture attributable to the group are incorporated in the consolidated financial statements under appropriate headings. Inter-company accounts and transactions are eliminated on consolidation. The directors have changed the group's accounting policy on deferred stripping costs, under both IFRS and US GAAP in the current period. Previously, costs of production stage waste stripping in excess of the expected pit life average stripping ratio were deferred and then charged to production when the actual stripping ratio was below the expected pit life average stripping ratio. Under the revised accounting policy, all stripping costs incurred during the production phase of a mine are treated as variable production costs and as a result are included in the cost of the inventory produced during the period that the stripping costs are incurred. Under US GAAP, EITF 04-06 'Accounting for Stripping Costs Incurred during Production in the Mining Industry' is effective for reporting periods beginning after 15 December 2005. The consensus does not permit the deferral of any waste stripping costs during the production phase of a mine, but requires instead that they should be treated as variable production costs. The directors have decided to adopt the same treatment under IFRS which will ensure that the accounting policies applied under IFRS and US GAAP remain in line. With regard to the conclusions reached by the EITF, the directors believe the revised policy will mean that the financial statements provide reliable and more relevant information about the group's financial position and its financial performance. In accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", the change in the IFRS policy has been applied retrospectively and hence the 2004 comparatives have been restated. The change in the IFRS accounting policy has resulted in the following adjustments to the amounts reported under IFRS: 30 Sept 31 Dec 30 Sept US$000 2006 2005 2005 -------------------------- ------- ------ ------- Decrease in deferred stripping costs -- 3 687 9 637 Decrease in ore stockpiles 9 150 8 342 5 244 Decrease/(increase) in gold in process (11) 51 (297) Decrease in deferred taxation liability -- 1 227 -- (Decrease)/increase in deferred taxation asset 311 2 938 -- Decrease in opening retained earnings -- 14 884 15 314 Quarter Quarter Quarter ended ended ended 30 Sept 30 June 30 Sept US$000 2006 2006 2005 ------------------------- ------- ------- ------- Increase/(decrease) in net profit 580 1 405 730 Increase/(decrease) in basic earnings per share (cents per share) 1 2 2 Increase in fully diluted earnings per share (cents per share) 1 2 1 (continued) 9 months 9 months ended ended 30 Sept 30 Sept US$000 2006 2005 ------------------------------------ -------- -------- Increase/(decrease) in net profit 3 019 300 Increase/(decrease) in basic earnings per share (cents per share) 5 -- Increase in fully diluted earnings per share (cents per share) 4 1 FORWARD COMMODITY CONTRACTS The group's hedging position which all relates to the Loulo project financing, was as follows at 30 September 2006: Forward Forward sales Sales average Maturity date ounces US$/oz --------------- ------- ------- Year ended 2006 37 737 434 Year ended 2007 122 003 438 Year ended 2008 80 496 431 Year ended 2009 84 996 437 Total 325 232 435 The remaining portion of the hedge book represents approximately 34% of planned open pit production at Loulo for the period that the project finance is in place and 22% of the group's attributable production. In the current gold price environment, it is the company's intention to take advantage of current spot prices and roll out longer dated forward sales contracts at the appropriate times. Morila's production is completely exposed to spot gold prices. During the quarter, the company delivered into 22 752 ounces of its hedge book at an average price of US$437 per ounce. GENERAL The company continues to evaluate various opportunities both at the corporate and project level. We are focused on value creation through exploration, discovery and development, as well as strategic leverage in merger and acquisition opportunities. D M Bristow R A Williams Chief executive Financial director 2 November 2006 This report is available in .pdf format on the companies website at : www.randgoldresources.com or email your request to : randgoldresources@dpapr.com. REGISTERED OFFICE: La Motte Chambers, La Motte Street, St Helier, Jersey JE1 1BJ, Channel Islands REGISTRARS: Computershare Investor Services (Channel Islands) Limited, PO Box 83, Ordnance House, 31 Pier Road, St Helier, Jersey JE4 8PW, Channel Islands TRANSFER AGENTS: Computershare Services PLC, PO Box 663, 7th Floor, Jupiter House, Triton Court, 14 Finsbury Square, London EC2A 1BR INVESTOR AND MEDIA RELATIONS: For further information contact Kathy du Plessis on Tel +27 (11) 728-4701, Mobile +27 83 266 5847, Fax +27 (11) 728-2547 E-MAIL: randgoldresources@dpapr.com DISCLAIMER: Statements made in this document with respect to Randgold Resources' current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Randgold Resources. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Randgold Resources cautions you that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. The 2005 annual report notes that the financial statements do not reflect any provisions or other adjustments that might arise from the claims and legal process initiated by Loulo against MDM. Other potential risks and uncertainties include risks associated with: fluctuations in the market price of gold, gold production at Morila, the development of Loulo and estimates of resources, reserves and mine life. For a discussion on such other risk factors refer to the annual report on Form 20-F for the year ended 31 December 2005 which was filed with the United States Securities and Exchange Commission (the 'SEC') on 29 June 2006. Randgold Resources assumes no obligation to update information in this release. Cautionary note to US investors: the 'SEC' permits companies, in their filings with the 'SEC', to disclose only proven and probable ore reserves. We use certain terms in this release, such as 'resources', that the 'SEC' does not recognise and strictly prohibits us from including in our filings with the 'SEC'. Investors are cautioned not to assume that all or any parts of our resources will ever be converted into reserves which qualify as 'proven and probable reserves' for the purposes of the SEC's Industry Guide number 7.