Edgar Filing: RANDGOLD RESOURCES LTD

Title of each class

Name of each exchange on which registered

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 20-F


	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report....

For the transition period from to

Commission file number: 000-49888

RANDGOLD RESOURCES LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

JERSEY, CHANNEL ISLANDS

(Jurisdiction of incorporation or organization)

La Motte Chambers, La Motte Street, St. Helier, Jersey JE1 1BJ, Channel Islands

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Ordinary Shares, U.S. Dollar five cent par value per share

(Title of Class)

American Depositary Shares

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report.

As of December 31, 2005, the Registrant had outstanding 68,130,189 ordinary shares, par value $0.05 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes No

If the report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer Accelerated filer Non-accelerated filer

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by a checkmark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes No

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Glossary Of Mining Technical Terms


Index		Page No.
Item 1.	Identity of Directors, Senior Management and Advisers		1
Item 2.	Offer Statistics and Expected Timetable		1
Item 3.	Key Information		1
Item 4.	Information on the Company		13
Item 4A.	Unresolved Staff Comments		42
Item 5.	Operating and Financial Review and Prospects		42
Item 6.	Directors, Senior Management and Employees		58
Item 7.	Major Shareholders and Related Party Transactions		65
Item 8.	Financial Information		66
Item 9.	The Offer and Listing		67
Item 10.	Additional Information		68
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		82
Item 12.	Description of Securities Other Than Equity Securities		85
Item 13.	Defaults, Dividend Arrearages and Delinquencies		85
Item 14.	Material Modification to the Rights of Security Holders and Use of Proceeds		85
Item 15.	Controls and Procedures		85
Item 16.	Reserved		85
Item 16A.	Audit Committee Financial Expert		85
Item 16B.	Code of Ethics		85
Item 16C.	Principal Accountant Fees and Services		86
Item 16D.	Exemptions from the Listing Standards for Audit Committees		86
Item 16E.	Purchaser of Equity Securities by the Issuer and Affiliated Purchasers		86
Item 17.	Financial Statements		87
Item 18.	Financial Statements		87
Item 19.	Exhibits		87

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GLOSSARY OF MINING TECHNICAL TERMS

The following explanations are not intended as technical definitions, but rather are intended to assist the reader in understanding some of the terms as used in this Annual Report.


Birrimian:		Geological time era, about 2.1 billion years ago.


Carbonate:		A mineral salt typically found in quartz veins and as a product of hydrothermal alteration of sedimentary rock.


Clastic:		Rocks built up of fragments of pre-existing rocks which have been produced by the processes of weathering and erosion.


Cut-off grade:		The grade at which the total profit from mining the orebodies, under a specified set of mining parameters, is maximized.


Development:		Activities required to prepare for mining activities and maintain a planned production level and those costs to enable the conversion of mineralized material to reserves.


Dilution:		Mixing of ore grade material with non-ore grade/waste material in the mining process.


Disseminated:		A term used to describe fine particles of ore or other minerals dispersed through the enclosing rock.


Dyke:		A sheet-like body of igneous rock which is discordant to bedding or foliation.


EEP:		Exclusive exploration permit.


EP:		Exploration permit.


Exploration:		Activities associated with ascertaining the existence, location, extent or quality of mineralized material, including economic and technical evaluations of mineralized material.


Fault:		A fracture or a zone of fractures within a body of rock.


Feldspar:		An alumino-silicate mineral.


Fold:		A flexure of planar structures within the rocks.


Foliation:		A term used to describe planar arrangements of minerals or mineral bands within rocks.


Footwall:		The underlying side of a fault, orebody or stope.


Fragmentation:		The breakage of rock during blasting in which explosive energy fractures the solid mass into pieces; the distribution of rock particle sizes after blasting.

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g/t:		Gram of gold per metric tonne.


Gold reserves:		The gold contained within proven and probable reserves on the basis of recoverable material (reported as mill delivered tonnes and head grade).


Grade:		The quantity of metal per unit mass of ore expressed as a percentage or, for gold, as grams of gold per tonne of ore.


Greenstone:		A field term used to describe any weakly metamorphosed rock.


Greywacke:		A dark gray, coarse grained, indurated sedimentary rock consisting essentially of quartz, feldspar, and fragments of other rock types


Head grade:		The grade of the ore as delivered to the metallurgical plant.


Hydrothermal:		Pertaining to the action of hot aqueous solutions on rocks.


Igneous:		A rock or mineral that solidified from molten or partially molten material.


In situ:		In place or within unbroken rock or still in the ground.


Kriging:		An interpolation method that minimizes the estimation error in the determination of reserves.


Landsat:		Spectral images of the Earth’s surface.


Leaching:		Dissolution of gold from the crushed and milled material, including reclaimed slime, for absorption and concentration on to the activated carbon.


Lower proterozoic:		Era of geological time between 2.5 billion and 1.8 billion years before the present.


Measures:		Conversion factors from metric units to U.S. units are provided below:



Metric Unit		U.S. Equivalent
1 tonne	= 1 t	= 1.10231 tons
1 gram	= 1 g	= 0.03215 ounces
1 gram per tonne	= 1 g/t	= 0.02917 ounces per ton
1 kilogram per tonne	= 1 kg/t	= 29.16642 ounces per ton
1 kilometer	= 1km	= 0.621371 miles
1 meter	= 1m	= 3.28084 feet
1 centimeter	= 1cm	= 0.3937 inches
1 millimeter	= 1mm	= 0.03937 inches
1 square kilometer	= 1 sq km	= 0.3861 miles


Mill delivered tonnes:		A quantity, expressed in tonnes, of ore delivered to the metallurgical plant.

iii

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Milling/mill:		The comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where the gold is separated from the ore.


Mineable:		That portion of a mineralized deposit for which extraction is technically and economically feasible.


Mineralization:		The presence of a target mineral in a mass of host rock.


Mineralized material:		A mineralized body which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metals to warrant further exploration.


		A deposit of mineralized material does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.


Moz:		Million troy ounces.


Mt:		Million metric tonnes.


Open pit:		Mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the orebody.


Orebody:		A continuous, well-defined mass of material containing sufficient minerals of economic value to make extraction economically feasible.


Orogenic:		Of or related to mountain building, such as when a belt of the Earth’s crust is compressed by lateral forces to form a chain of mountains.


Ounce:		One troy ounce, which equals 31.1035 grams.


Oxide Ore:		Soft, weathered rock that is oxidized.


Payshoot:		A defined zone of economically viable mineralization.


Probable reserves:		Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.


Prospect:		An area of land with insufficient data available on the mineralization to determine if it is economically recoverable, but warranting further investigation.


Prospecting license or permits:		An area for which permission to explore has been granted.

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PL:		Prospecting License.


PLR:		Prospecting License (reconnaissance).


Proven reserves:		Reserves for which quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.


Pyrite:		A brassy-colored mineral of iron sulphide (compound of iron and sulfur).


Quartz:		A mineral compound of silicon and oxygen.


Quartzite:		Metamorphic rock with interlocking quartz grains displaying a mosaic texture.


Refining:		The final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag.


Regolith:		Weathered products of fresh rock, such as soil, alluvium, colluvium, sands, and hardened oxidized materials.


Rehabilitation:		The process of restoring mined land to a condition approximating its original state.


Reserve:		That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.


Reverse circulation (RC) drilling:		A drilling method.


Rotary Air Blast (RAB) drilling:		A drilling method.


Sampling:		Taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content).


Sedimentary:		Pertaining to or containing sediment. Used in reference to rocks which are derived from weathering and are deposited by natural agents, such as air, water and ice.


Shear zone:		An elongated area of structural deformation.


Silica:		A naturally occurring dioxide of silicon.


Stockpile:		A store of unprocessed ore.


Stripping:		The process of removing overburden to expose ore.

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Stripping ratio:		Ratio of waste material to ore material in an open pit mine.


Sulphide:		A mineral characterized by the linkages of sulfur with a metal or semi-metal, such as pyrite or iron sulphide. Also a zone in which sulfide minerals occur.


Tailings:		Finely ground rock from which valuable minerals have been extracted by milling.


Tonalite:		A type of igneous rock.


Tonnage:		Quantities where the ton or tonne is an appropriate unit of measure. Typically used to measure reserves of gold-bearing material in situ or quantities of ore and waste material mined, transported or milled.


Tonne:		One tonne is equal to 1,000 kilograms (also known as a ‘‘metric’’ ton).


Total cash costs:		Total cash costs, as defined in the Gold Institute standard, include mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, transfers to and from deferred stripping and royalties.


Trend:		The arrangement of a group of ore deposits or a geological feature or zone of similar grade occurring in a linear pattern.


Waste:		Rock mined with an insufficient gold content to justify processing.


Weathered:		Rock broken down by erosion.

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Statements in this Annual Report concerning our business outlook or future economic performance; anticipated revenues, expenses or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are ‘‘forward-looking statements’’ as that term is defined under the United States federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth under ‘‘Item 3. Key Information — D. Risk Factors’’ in this Annual Report as well as those discussed elsewhere in this Annual Report and in our other filings with the Securities and Exchange Commission.

We are incorporated under the laws of Jersey, Channel Islands with the majority of our operations located in West Africa. Our books of account are maintained in U.S. dollars and our annual and interim financial statements are prepared on a historical cost basis in accordance with International Financial Reporting Standards, or IFRS. IFRS differs in significant respects from generally accepted accounting principles in the United States, or U.S. GAAP. This Annual Report includes a discussion of the relevant differences between IFRS and U.S. GAAP, and Note 27 to our audited consolidated financial statements included in this Annual Report sets forth a reconciliation from IFRS to U.S. GAAP of net income and shareholders’ equity. We have also included in this Annual Report the audited financial information for the years ended December 31, 2005 and 2004 and 2003 of Société des Mines de Morila SA, or Morila SA. The financial information included in this Annual Report has been prepared in accordance with IFRS, and except where otherwise indicated, is presented in U.S. dollars. For a definition of cash costs, please see ‘‘Item 3. Key Information — A. Selected Financial Data.’’

Unless the context otherwise requires, ‘‘us’’, ‘‘we’’, ‘‘our’’, or words of similar import, refer to Randgold Resources Limited and its subsidiaries and affiliated companies.

PART 1

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information


A.	SELECTED FINANCIAL DATA

The following selected historical consolidated financial data have been derived from, and should be read in conjunction with, the more detailed information and financial statements, including our audited consolidated financial statements for the years ended December 31, 2005, 2004, and 2003 and as at December 31, 2005 and 2004, which appear elsewhere in this Annual Report. The historical consolidated financial data as at and for the years ended December 31, 2002 and 2001 have been derived from our audited consolidated financial statements not included in this Annual Report.

The financial data have been prepared in accordance with IFRS, unless otherwise noted. In Note 27 to our audited consolidated financial statements, we present the principal differences between IFRS and U.S. GAAP and a reconciliation of our net income attributable to equity shareholders and shareholders’ equity to U.S. GAAP.

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	Year Ended December 31, 2005				Year Ended December 31, 2004				Year Ended December 31, 2003				Year Ended December 31, 2002				Year Ended December 31, 2001
STATEMENT OF OPERATIONS DATA:	(In thousands, except per share and per ounce data)
Amounts in accordance with IFRS
Revenues – Gold sales		$	151,502			$	73,330			$	109,573			$	131,440			$	84,154
Profit from operations^#			45,019				12,313				48,071				68,969				19,003
Net income attributable to equity shareholders			38,538				18,793				47,175				65,728				17,759
Basic earnings per share ($)			0.62				0.32	^*			0.83	^*			1.31	^*			0.29	^*
Fully diluted earnings per share ($)			0.60				0.31	^*			0.83	^*			1.30	^*			0.29	^*
Weighted average number of shares used in computation of basic earnings per share (3)			61,701,782				58,870,632	^*			57,441,360	^*			50,295,640	^*			61,035,295	^*
Weighted average number of shares used in computation of fully diluted earnings per share⁽³⁾			63,828,996				59,996,257	^*			57,603,364	^*			50,817,466	^*			61,523,810	^*
Amounts in accordance with U.S. GAAP (2)
Revenues			30,688				—				—				—				16,723
Loss from operations before joint venture			(10,525	)			(8,274	)			(24,621	)			(31,081	)			(16,703	)
Equity income of Morila joint venture			49,293				25,162				67,230				90,522				32,482
Net income			36,419				16,888				42,960				59,661				16,435
Basic earnings per share ($)			0.59				0.29	^*			0.75	^*			1.19	^*			0.27	^*
Fully diluted earnings per share ($)			0.57				0.28	^*			0.74	^*			1.17	^*			0.27	^*
Weighted average number of shares used in computation of basic earnings per share (3)			61,701,782				58,870,632	^*			57,441,360	^*			50,295,640	^*			61,035,295	^*
Weighted average number of shares used in computation of fully diluted earnings per share (3)			63,828,996				59,996,257	^*			57,603,364	^*			50,817,466	^*			61,523,810	^*
Amounts in accordance with IFRS
Total cash costs ($ per ounce) (1)			209				183				96				75				175


^#	Profit from operations is calculated as profit before income tax under IFRS, excluding interest income, interest expense and profit on sale of Syama.


*	Reflects adjustments resulting from the sub-division of shares


	At December 31, 2005				At December 31, 2004				At December 31, 2003				At December 31, 2002				At December 31, 2001
BALANCE SHEET AMOUNTS IN ACCORDANCE WITH IFRS
Total assets		$	471,472			$	268,461			$	224,534			$	173,858			$	119,554
Long-term loans			49,538				40,718				6,832				19,307				57,147
Share capital			3,404				2,961				2,926				2,766				2,246
Share premium			208,582				102,342				200,244				190,618				161,830
Accumulated profit/(loss)			138,751				100,213				(18,580	)			(66,106	)			(131,834	)
Other reserves			(41,000	)			(14,347	)			(7,403	)			(8,293	)			(1,745	)
Shareholders’ equity			309,737				191,169				177,187				118,985				30,497
AMOUNTS IN ACCORDANCE WITH U.S. GAAP (2)
Total assets			442,117				245,026				193,458				136,789				78,107
Long-term debt			45,081				35,042				891				3,999				30,727
Shareholders’ equity			302,642				187,253				177,187				118,771				30,359

1. Total cash cost and total cash cost per ounce are non-GAAP measures. We have calculated total cash costs and total cash costs per ounce 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, and royalties. The transfer to and from deferred stripping is calculated based on the actual historical waste stripping costs, as applied to a life of mine estimated stripping ratio. The

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costs of waste stripping in excess of the life of mine estimated stripping ratio, are deferred, and charged to production, when the actual stripping ratio is below the life of mine stripping ratio. The net effect is to include a proportional share of total estimated stripping costs for the life of the mine, based on the current period ore mined. 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. We have calculated total cash costs and total cash costs per ounce on a consistent basis for all 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 U.S. GAAP measures or an indicator of our performance. The data does not have a meaning prescribed by IFRS or U.S. 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 and amortization would be included in a measure of total costs of producing gold under IFRS and U.S. GAAP, but is not included in total cash costs under the guidance provided by the Gold Institute. The total cost of producing gold calculated in accordance with IFRS and U.S. GAAP would provide investors with an indication of earnings before exploration and corporate expenditure, interest expense and taxes, when compared to the average realized price. We have therefore provided an IFRS measure of total cash cost and total cash per ounce as required by securities regulations that govern non-GAAP performance measures. 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, we believe that total cash costs per ounce is a useful indicator 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. Within this annual report our discussion and analysis is focused on the ‘‘total cash cost’’ measure as defined by the Gold Institute.

The following table lists the costs of producing gold, determined in accordance with IFRS, and reconciles this GAAP measure to total cash costs as defined by the Gold Institute’s guidance, as a non-GAAP measure, for each of the periods set forth below:


Costs	Year Ended December 31, 2005			Year Ended December 31, 2004			Year Ended December 31, 2003			Year Ended December 31, 2002			Year Ended December 31, 2001
Mine production costs		66,612			37,468			26,195			22,706			37,349
Depreciation and amortization		11,910			8,738			10,269			8,765			7,097
General and administration expenses		7,438			6,809			6,108			4,128			11,262
Transport and refinery costs		360			233			408			588			547
Royalties		10,273			5,304			7,648			9,185			5,801
Movement in production inventory and ore stockpiles		(27,137	)		(8,512	)		(6,229	)		(145	)		(813	)
Transfer from/(to) deferred stripping costs		11,197			(3,999	)		(3,483	)		(5,043	)		(1,991	)
Total cost of producing gold determined in accordance with IFRS		80,653			46,041			40,916			40,184			59,252
Less: Non-cash costs included in total cost of producing gold:
depreciation and amortization		(11,910	)		(8,738	)		(10,269	)		(8,765	)		(7,097	)
Total cash costs using the Gold Institute’s guidance		68,743			37,303			30,647			31,419			52,155
Ounces produced (our share)		328,428			204,194			317,596			421,127			298,375
Total production cost per ounce under IFRS		246			225			129			95			199
Total cash cost per ounce using Gold Institute’s guidance		209			183			96			75			175

2. Under IFRS, we account for our interest in Morila Limited using the proportionate consolidation method, whereby our proportionate share of Morila Limited’s assets, liabilities, income, expenses and cash flows are incorporated in our consolidated financial statements under the

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appropriate headings. Under U.S. GAAP, we equity account for our interest in Morila Limited. This requires that we recognize our share of Morila Limited’s net income as a separate line item in the income statement. In the balance sheet, we reflect as an investment our share of Morila Limited’s net assets. While this results in significantly different financial statement presentation between IFRS and U.S. GAAP, it has no impact on our net income or our net asset value except for any difference between IFRS and U.S. GAAP which relates to Morila.

3. Effective June 11, 2004, we undertook a split of our ordinary shares, which increased our issued share capital from 29,273,685 to 58,547,370 ordinary shares. In connection with this share split our ordinary shareholders of record on June 11, 2004 received two (2) $0.05 ordinary shares for every one (1) $0.10 ordinary share they held. See ‘‘Item 4. Information on the Company — A. History and Development of the Company.’’


B.	CAPITALIZATION AND INDEBTEDNESS

Not applicable.


C.	REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.


D.	RISK FACTORS

In addition to the other information included in this Annual Report, you should carefully consider the following factors, which individually or in combination could have a material adverse effect on our business, financial condition and results of operations.

The profitability of our operations, and the cash flows generated by our operations, are affected by changes in the market price for gold which in the past has fluctuated widely.

Substantially all of our revenues and cash flows have come from the sale of gold. Historically, the market price for gold has fluctuated widely and has been affected by numerous factors over which we have no control, including:


	•	the demand for gold for industrial uses and for use in jewelry;


	•	international or regional political and economic trends;


	•	the strength of the U.S. dollar, the currency in which gold prices generally are quoted, and of other currencies;


	•	financial market expectations regarding the rate of inflation;


	•	interest rates;


	•	speculative activities;


	•	actual or expected purchases and sales of gold bullion holdings by central banks or other large gold bullion holders or dealers;


	•	hedging activities by gold producers; and


	•	the production and cost levels for gold in major gold-producing nations.

The volatility of gold prices is illustrated in the following table, which shows the quarterly high, low and average of the afternoon London Bullion Market fixing price of gold in U.S. dollars for the past two years and the first quarter of 2006.

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		Price per ounce ($)
Year		High		Low		Average
2006	First Quarter		584.00		524.75		554.07
2005
	Fourth Quarter		536.50		456.50		484.20
	Third Quarter		473.25		418.35		439.72
	Second Quarter		440.55		414.45		427.25
	First Quarter		443.00		411.10		427.35
2004
	Fourth Quarter		454.20		411.25		433.77
	Third Quarter		415.65		391.40		401.30
	Second Quarter		427.25		375.15		393.27
	First Quarter		425.50		390.50		408.44

In addition, the current demand for, and supply of, gold affects the price of gold, but not necessarily in the same manner as current demand and supply affect the prices of other commodities. Historically, gold has tended to retain its value in relative terms against basic goods in times of inflation and monetary crisis. As a result, central banks, financial institutions, and individuals hold large amounts of gold as a store of value, and production in any given year constitutes a very small portion of the total potential supply of gold. Since the potential supply of gold is large relative to mine production in any given year, normal variations in current production will not necessarily have a significant effect on the supply of gold or its price.

If gold prices should fall below and remain below our cost of production for any sustained period, we may experience losses and may be forced to curtail or suspend some or all of our mining operations. In addition, we would also have to assess the economic impact of low gold prices on our ability to recover any losses we may incur during that period and on our ability to maintain adequate reserves. Our total cash cost of production per ounce of gold sold was $209 in the year ended December 31, 2005, $183 in the year ended December 31, 2004, and $96 in the year ended December 31, 2003. We expect that Morila’s total cash costs will rise as the life of the mine advances, which will adversely affect our profitability in the absence of any mitigating factors. We do not envisage a major increase in Loulo’s cash costs as the life of mine advances, as the higher grades expected from the underground mining should offset increase in costs.

We may incur losses or lose opportunities for gains as a result of our use of our derivative instruments to protect us against low gold prices.

We use derivative instruments to protect the selling price of some of our anticipated gold production at Loulo. The intended effect of our derivative transactions is to lock in a fixed sale price for some of our future gold production, reducing the impact on us of a future fall in gold prices. No such protection is in place for our production at Morila.

Derivative transactions can result in a reduction in possible revenue if the instrument price is less than the market price at the time of settlement. Moreover, our decision to enter into a given instrument is based upon market assumptions. If these assumptions are not met, significant losses or lost opportunities for significant gains may result. In all, the use of these instruments may result in significant losses or prevent us from realizing the positive impact of any subsequent increase in the price of gold on the portion of production covered by the instrument.

Our business may be harmed if the Government of Mali fails to repay fuel duties owing to Morila.

Up to November 2005, Morila was responsible for paying to diesel suppliers the customs duties which are then paid to the Government of Mali. Morila can claim reimbursement of these duties from the Government of Mali on presentation of a certificate from Société Généralé de Surveillance. During the third quarter 2003, the Government of Mali began to reduce payments to all the mines in Mali due to irregularities involving certain small exploration companies. The Government of Mali has

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since given full exoneration from fuel duties to the mining industry so that fuel duties are no longer payable. However, significant amounts of previously paid duties remain outstanding. The amount owing to Morila was $17.2 million on December 31, 2005 and $18.4 million on March 31, 2006.

If Morila is unable to recover these amounts, its ability to pay dividends to its shareholders would be affected. Our business, cash flows and financial condition will be adversely affected if anticipated dividends were not paid.

Under our joint venture agreement with AngloGold Ashanti Limited, or AngloGold Ashanti, we jointly manage Morila Limited, and any disputes with AngloGold Ashanti over the management of Morila Limited could adversely affect our business.

We jointly control Morila Limited with AngloGold Ashanti under a joint venture agreement. Under the joint venture agreement, AngloGold Ashanti is responsible for the day-to-day operations of Morila, subject to the overall management control of the Morila Limited board. Substantially all major management decisions, including approval of a budget for Morila, must be approved by the Morila Limited board. We and AngloGold Ashanti retain equal control over the board, with neither party holding a deciding vote. If a dispute arises between us and AngloGold Ashanti with respect to the management of Morila Limited and we are unable to amicably resolve the dispute, we may have to participate in arbitration or other proceeding to resolve the dispute, which could materially and adversely affect our business.

Our mining project at Loulo, or Loulo Project, is subject to all of the risks of a start-up mining operation.

As a new mining operation, Loulo may experience unexpected problems and delays. While the processing plant is substantially complete and has successfully processed soft ore since October 2005, we may still experience problems and delays relating to the hard rock crushing circuit, which is still under construction and which could affect our results of operations and profitability.

We may not be able to recover certain funds from MDM Ferroman (Pty) Limited.

In August 2004, we entered into a fixed lump sum turnkey contract for $63 million for the design, supply, construction and commissioning of the Loulo processing plant and infrastructure with MDM Ferroman (Pty) Ltd (‘‘MDM’’). At the end of 2005, after making advances and additional payments to MDM totaling $26 million in excess of the contract, we determined that MDM was unable to perform its obligations under the MDM Contract, at which time we enforced a contractual remedy which allowed us to act as our own general contractor and to complete the remaining work on the Loulo project that was required under the MDM Contract.

As a result of MDM's failure to perform under the MDM Contract, we believe that we are entitled to recover from them all amounts paid in excess of the lump sum contract. Certain of these amounts have been capitalized as part of the cost of the Loulo project. In addition, MDM has signed loan agreements with us and performance bonds in our favor, for amounts totaling approximately $12.2 million which is included in accounts receivable. Approximately $7 million of such accounts receivable are secured by performance bonds, and $5.2 million are secured by various fixed assets, debtors, bank accounts and personal guarantees.

We believe that we have sufficient security to recover the full amount of $12.2 million included in accounts receivable. However, there is a risk that the security may be found to be worth less than the amount of the accounts receivable. Although we believe that our claims against the performance bonds are meritorious, the issuer of the performance bonds is disrupting any liability under the performance bonds. The legal process to progress our claim has commenced, but we are unable to provide assurance that we will recover the full amount of $7 million. In addition, we are unable to provide assurance as to the recoverability of the full amount of the $5.2 million of security provided by MDM.

Our results of operations may be adversely affected if we are unable to recover the amounts advanced by us to MDM. Any part of the $12.2 million included in accounts receivable which cannot in fact be recovered will need to be charged as an expense.

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In addition, we cannot provide any assurance that we will ultimately bring an action against MDM to recover any damages claimed against MDM, or that if any such claims are brought they will ultimately result in any recovery against MDM. The financial statements do not reflect any charge that may arise from MDM's inability to settle amounts that are determined to be payable to us by MDM.

We have brought an action seeking MDM's liquidation. MDM is currently opposing its final liquidation based upon counter claims which it allegedly has against us. We believe that these allegations are without merit and merely an attempt to avoid liquidation. To date, MDM has not instituted legal proceedings against us with regard to these counter claims. We do not believe that MDM has a valid basis for asserting claims against us, although we can provide no assurance that MDM will not attempt to bring any such claims in the future. If MDM is successful in bringing a claim against us in respect of the MDM Contract, our results of operations may be adversely affected.

Our mining operations may yield less gold under actual production conditions than indicated by our gold reserve figures, which are estimates based on a number of assumptions, including assumptions as to mining and recovery factors, production costs and the price of gold.

The ore reserve estimates contained in this Annual Report are estimates of the mill delivered quantity and grade of gold in our deposits and stockpiles. They represent the amount of gold that we believe can be mined, processed and sold at prices sufficient to recover our estimated total costs of production, remaining investment and anticipated additional capital expenditures. Our ore reserves are estimated based upon many factors, including:


	•	the results of exploratory drilling and an ongoing sampling of the orebodies;


	•	past experience with mining properties; and


	•	the experience of the person making the reserve estimates.

Because our ore reserve estimates are calculated based on current estimates of production costs and gold prices, they should not be interpreted as assurances of the economic life of our gold deposits or the profitability of our future operations.

Reserve estimates may require revisions based on actual production experience. Further, a sustained decline in the market price of gold may render the recovery of ore reserves containing relatively lower grades of gold mineralization uneconomical and ultimately result in a restatement of reserves. The failure of the reserves to meet our recovery expectations may have a materially adverse effect on our business, financial condition and results of operations.

We may be required to seek funding from third parties or enter into joint development arrangements to finance the development of our properties and the timely exploration of our mineral rights, which funding or development arrangements may not be available on acceptable terms, or at all.

In some countries, if we do not conduct any mineral exploration on our mineral holdings or make the required payments in lieu of completing mineral exploration, these mineral holdings will lapse and we will lose all interest that we have in these mineral rights.

We conduct mining, development and exploration activities in countries with developing economies and are subject to the risks of political and economic instability associated with these countries.

We currently conduct mining, development and exploration activities in countries with developing economies, including Côte d’Ivoire, Mali, Senegal, Burkina Faso, Ghana and Tanzania. These countries and other emerging markets in which we may conduct operations have, from time to time, experienced economic or political instability, in the form of:


	•	war and civil disturbance;


	•	expropriation or nationalization;


	•	changing regulatory and fiscal regimes;


	•	fluctuations in currency exchange rates;

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	•	high rates of inflation;


	•	underdeveloped industrial and economic infrastructure; and


	•	unenforceability of contractual rights.

Any political or economic instability in the West African countries in which we currently operate could have a material and adverse effect on our business and results of operations.

The countries of Mali, Senegal, Burkina Faso and Côte d’Ivoire were French colonies and Tanzania and Ghana were British colonies until their independence in the early 1960’s. Each country has, since its independence, experienced its own form of political upheavals with varying forms of changes of government taking place, including violent coup d’etats. However, Côte d’Ivoire, the leading economic power in the region, and once considered one of the most stable countries in Sub-Saharan Africa, has experienced several years of political chaos, including an attempted coup d’etat. In November 2002, a mutiny by disaffected soldiers developed into a national conflict between rebels who took control of the north of the country and Government supporters in the south. An agreement was reached in March 2005 whereby all sides agreed to disarm and new elections for the country as a whole are planned for late 2006.

The conflict in Côte d’Ivoire resulted in us suspending work in the country pending a peaceful solution. As a result, the progress of the Tongon feasibility study has been delayed. We have commenced a small drilling program in June 2006, but we anticipate that the state of ‘‘Force Majeure’’ could be lifted after the successful conclusion of the election in the latter part of 2006, which will allow us to undertake further exploration drilling ahead of the preparation of the Tongon feasibility study.

Goods are supplied to Mali through Ghana, Burkina Faso and Senegal, which are all functioning satisfactorily. Other supply routes to Mali are, however, functioning. Our operations at Morila have been affected only to the extent of making the supply of diesel more expensive since it now has to be delivered via Togo, which adds additional transportation costs to allow for greater delivery distances.

Also, any present or future policy changes in the countries in which we operate may in some way have a significant effect on our operations and interests. The mining laws of Mali, Côte d’Ivoire, Senegal, Burkina Faso, Ghana and Tanzania stipulate that should an economic orebody be discovered on a property subject to an exploration permit, a permit that allows processing operations to be undertaken must be issued to the holder.

Except for Tanzania, legislation in these countries currently provides for the relevant government to acquire a free ownership interest, normally of at least 10%, in any mining project. For example, the Malian government holds a 20% interest in Morila SA and Somilo SA, and cannot be diluted below 10%, as a result of this type of legislation. The requirements of the various governments as to the foreign ownership and control of mining companies may change in a manner which adversely affects us.

If we are unable to attract and retain key personnel our business may be harmed.

Our ability to bring additional mineral properties into production and explore our extensive portfolio of mineral rights will depend, in large part, upon the skills and efforts of a small group of management and technical personnel, including D. Mark Bristow, our Chief Executive Officer. If we are not successful in retaining or attracting highly qualified individuals in key management positions our business may be harmed. The loss of any of our key personnel could adversely impact our ability to execute our business plan.

Our insurance coverage may prove inadequate to satisfy future claims against us.

We may become subject to liabilities, including liabilities for pollution or other hazards, against which we have not insured adequately or at all or cannot insure. Our insurance policies contain exclusions and limitations on coverage. Our current insurance policies provide worldwide indemnity of

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£50 million in relation to legal liability incurred as a result of death, injury, disease of persons and/or loss of or damage to property. Main exclusions under this insurance policy, which relates to our industry, include war, nuclear risks, silicosis, asbestosis or other fibrosis of the lungs or diseases of the respiratory system with regard to employees, and gradual pollution. In addition, our insurance policies may not continue to be available at economically acceptable premiums. As a result, in the future our insurance coverage may not cover the extent of claims against us.

It may be difficult for you to affect service of process and enforce legal judgments against us or our affiliates.

We are incorporated in Jersey, Channel Islands and a majority of our directors and senior executives are not residents of the United States. Virtually all of our assets and the assets of those persons are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon those persons or us. Furthermore, the United States and Jersey currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, it may not be possible for you to enforce a final judgment for payment rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon United States Federal securities laws against those persons or us.

In order to enforce any judgment rendered by any Federal or state court in the United States in Jersey, proceedings must be initiated by way of common law action before a court of competent jurisdiction in Jersey. The entry of an enforcement order by a court in Jersey is conditional upon the following:


	•	the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the foreign courts;


	•	the judgment is final and conclusive — it cannot be altered by the courts which pronounced it;


	•	there is payable pursuant to a judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty;


	•	the judgment has not been prescribed;


	•	the courts of the foreign country have jurisdiction in the circumstances of the case;


	•	the judgment was not obtained by fraud; and


	•	the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the rules of natural justice which require that documents in the United States proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal.

Furthermore, it is doubtful whether you could bring an original action based on United States Federal securities laws in a Jersey court.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

The United States Securities and Exchange Commission, or the SEC, as required by Section 404 of Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, adopted rules requiring every public company to include a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal controls over financial reporting. In addition, an independent registered public accounting firm must attest to and report on management’s assessment of the company’s internal controls over financial reporting. These requirements will first apply to our annual report on Form 20-F for the fiscal year ending December 31, 2006. Our management may conclude that our internal controls over

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its financial reporting are not effective. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may still be unable to attest to management’s assessment or may issue a report that concludes that our internal controls over financial reporting are not effective.

Furthermore, during the course of the evaluation, documentation and attestation, we may identify deficiencies that we are not able to remedy in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. If we fail to achieve and maintain the adequacy of our internal controls, we may not be able to conclude that we have effective internal controls, on an ongoing basis, over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our ADS’s and ordinary shares. Furthermore, we have incurred, and anticipate that we will continue to incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

Risks Relating to Our Industry

The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently unproductive.

Exploration for gold is highly speculative in nature. Our future growth and profitability will depend, in part, on our ability to identify and acquire additional mineral rights, and on the costs and results of our continued exploration and development programs. Many exploration programs, including some of ours, do not result in the discovery of mineralization and any mineralization discovered may not be of sufficient quantity or quality to be profitably mined. Our mineral exploration rights may not contain commercially exploitable reserves of gold. Uncertainties as to the metallurgical recovery of any gold discovered may not warrant mining on the basis of available technology. Our operations are subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, such as:


	•	encountering unusual or unexpected formations;


	•	environmental pollution;


	•	personal injury and flooding; and


	•	decrease in reserves due to a lower gold price.

If we discover a viable deposit, it usually takes several years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production may change.

Moreover, we will use the evaluation work of professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit before it can be determined whether or not the deposit contains economically recoverable mineralization. As a result of these uncertainties, we may not successfully acquire additional mineral rights, or identify new proven and probable reserves in sufficient quantities to justify commercial operations in any of our properties.

If management determines that capitalized costs associated with any of our gold interests are not likely to be recovered, we would recognize an impairment provision against the amounts capitalized for that interest. All of these factors may result in losses in relation to amounts spent which are not recoverable.

Title to our mineral properties may be challenged which may prevent or severely curtail our use of the affected properties.

Title to our properties may be challenged or impugned, and title insurance is generally not available. Each sovereign state is the sole authority able to grant mineral property rights, and our

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ability to ensure that we have obtained secure title to individual mineral properties or mining concessions may be severely constrained. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, we may be unable to operate our properties as permitted or to enforce our rights with respect to our properties.

Our ability to obtain desirable mineral exploration projects in the future may be adversely affected by competition from other exploration companies.

In conducting our exploration activities, we compete with other mining companies in connection with the search for and acquisition of properties producing or possessing the potential to produce gold. Existing or future competition in the mining industry could materially and adversely affect our prospects for mineral exploration and success in the future.

Our operations are subject to extensive governmental and environmental regulations, which could cause us to incur costs that adversely affect our results of operations.

Our mining facilities and operations are subject to substantial government laws and regulations, concerning mine safety, land use and environmental protection. We must comply with requirements regarding exploration operations, public safety, employee health and safety, use of explosives, air quality, water pollution, noxious odor, noise and dust controls, reclamation, solid waste, hazardous waste and wildlife as well as laws protecting the rights of other property owners and the public.

Any failure on our part to be in compliance with these laws, regulations, and requirements with respect to our properties could result in us being subject to substantial penalties, fees and expenses, significant delays in our operations or even the complete shutdown of our operations. We provide for estimated environmental rehabilitation costs when the related environmental disturbance takes place. Estimates of rehabilitation costs are subject to revision as a result of future changes in regulations and cost estimates. The costs associated with compliance with government regulations may ultimately be material and adversely affect our business.

If our environmental and other governmental permits are not renewed or additional conditions are imposed on our permits, our financial condition and results of operations may be adversely affected.

Generally, compliance with environmental and other government regulations requires us to obtain permits issued by governmental agencies. Some permits require periodic renewal or review of their conditions. We cannot predict whether we will be able to renew these permits or whether material changes in permit conditions will be imposed. Non-renewal of a permit may cause us to discontinue the operations requiring the permit, and the imposition of additional conditions on a permit may cause us to incur additional compliance costs, either of which could have a material adverse effect on our financial condition and results of operations.

Labor disruptions could have an adverse effect on our operating results and financial condition.

All Malian national employees are members of the Union Nationale des Travailleurs du Mali, or UNTM. Due to the number of employees that belong to UNTM, we are at risk of having Morila and Loulo’s mining and exploration operations stopped for indefinite periods due to strikes and other labor disputes. Should any labor disruptions occur, our results of operations and financial condition could be materially and adversely affected.

AIDS poses risks to us in terms of productivity and costs.

The incidence of AIDS in Mali, which has been forecasted to increase over the next decade, poses risks to us in terms of potentially reduced productivity and increased medical and insurance costs. The exact extent to which our workforce is infected is not known at present. The prevalence of AIDS could become significant. Significant increases in the incidence of AIDS infection and AIDS-related diseases among members of our workforce in the future could adversely impact our

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operations and financial condition.

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Item 4.	Information on the Company


A.	HISTORY AND DEVELOPMENT OF THE COMPANY

Randgold Resources Limited was incorporated under the laws of Jersey, Channel Islands in August 1995, to engage in the exploration and development of gold deposits in Sub-Saharan Africa. Our principal executive offices are located at La Motte Chambers, La Motte Street, St. Helier, Jersey, JE1 1BJ, Channel Islands and our telephone number is (011 44) 1534 735-333. Our agent in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

We discovered the Morila deposit during December 1996 and we subsequently financed, built and commissioned the Morila mine.

During July 2000, we concluded the sale of 50% of our interest in Morila Limited and a shareholder loan made by us to Morila Limited to AngloGold Ashanti for $132 million in cash.

We have an 80% controlling interest in Société des Mines de Loulo S.A., or Somilo, through a series of transactions culminating in April 2001. The new Loulo mine commenced operations in October 2005 and mines the Loulo 0 and Yalea deposits. We discovered the Yalea deposit in 1997.

We conduct our mining operations through:


	•	a 50% interest in Morila Limited; and


	•	a controlling interest in Somilo, the Yalea and Loulo 0 deposits and further exploration within the greater lease area situated within the Loulo permit.

In July 2002, we completed a public offering of 5,000,000 of our ordinary shares, including American Depositary Shares, or ADSs, resulting in gross proceeds to us of $32.5 million. These proceeds were used to repay a syndicated term loan and revolving credit facility in November 2002 and for feasibility studies and development activities. In connection with this offering, we listed our ADSs on the Nasdaq National Market.

In September 2002, we completed an exchange offer in which we exchanged substantially all of our outstanding Global Depositary Shares for ADSs representing a like number of our ordinary shares.

On March 10, 2003, we changed our ADR ratio from two ordinary shares to one ADR, to one ordinary share to one ADR.

On April 16, 2003 we entered into a heads of agreement with Resolute Mining Limited, or Resolute. Under this agreement we gave Resolute a 12 month option to acquire our entire interest in our wholly-owned subsidiary, Randgold Resources (Somisy) Limited, or RRL Somisy, for $6 million, plus a quarterly royalty payment based on the gold price. RRL Somisy owns 80% of Somisy which owns the Syama mine. In addition, Resolute would accept $7.0 million of Syama’s liabilities. During the option period, Resolute paid us option fees of $75,000 per month.

As of June 13, 2003, Randgold & Exploration had a percentage ownership in us of 43%. Since that time, a number of transactions have taken place which have resulted in all of our shares which were held by Randgold & Exploration being sold. Currently Randgold & Exploration has no interest in us.

In February 2004, we announced that we would develop a new mine at Loulo in western Mali. Construction continued through 2005 and the new mine went into production from open-pit operations in October 2005. In addition, as a result of the positive outcome of the development study on the underground potential to extend the life of the proposed Loulo operation our board agreed to proceed with the development of the underground mine. The first phase of this development is scheduled to commence in the third quarter of 2006.

In April 2004, Resolute exercised their option to acquire the Syama mine. Resolute has subsequently paid us $6 million in cash and has assumed liabilities of $7 million, of which $4 million owing to ourselves has been settled. The agreement entered into in June 2004 between the parties

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makes provision for the payment of a royalty by Resolute. At a gold price of more than $350 per ounce, we would receive a royalty on Syama’s production of $10 per ounce on the first million of ounces attributable to Resolute and $5 per ounce on the next three million of attributable ounces entered. This royalty payment is capped at $25 million. In April 2006, Resolute announced that they would commence a recommissioning of the Syama mine. We did not receive any royalties during the year ended December 31, 2005.

The Companies (Jersey) Law, 1991, or the 1991 Law, places restrictions on our ability to pay dividends. Because of accumulated losses, we have not been able, under the 1991 Law, to make dividend payments. At our annual general meeting, held on April 26, 2004, our shareholders approved a resolution to reduce our share premium account by $100 million. This enabled us to re-organize our balance sheet and has placed us in a position to have the option to pay dividends from our future trading profits. On April 27, 2004, the Royal Court in Jersey, Channel Islands, sanctioned the capital reduction which has now become effective. No capital was returned to shareholders in connection with this adjustment. As a result of the Court approval, accumulated losses of $75 million have been cancelled from our profit and loss account and an amount of $25 million has been transferred to a special reserve which shall be treated as our realized profit and will be available for distribution to our shareholders by way of dividend, return of capital or otherwise and/or for transfer to our profit and loss account to the extent of any accrued losses thereon at any time.

Effective on June 11, 2004, we undertook a split of our ordinary shares, which increased our issued share capital from 29,263,385 to 58,526,770 ordinary shares. In connection with this share split our ordinary shareholders of record on June 11, 2004 received two (2) $0.05 ordinary shares for every one (1) $0.10 ordinary share they held. Following the share split, each shareholder held the same percentage interest in us, however, the trading price of each share was adjusted to reflect the share split. ADR holders were affected the same way as shareholders and the ADR ratio remains 1 ADR to 1 ordinary share.

Recent Developments

On November 1, 2005, we completed a public offering of 8,125,000 of our ordinary shares, including ADSs, resulting in gross proceeds to us of $109.7 million. The new shares were allocated to institutional shareholders in the United Kingdom, the United States, Canada and the rest of the world. The proceeds from the offering will first be used for the development of the underground project at Loulo 0 and Yalea, then for the Tongon feasibility study, together with such other organic and corporate opportunities, including possible acquisitions, as might arise.

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provide assurance that we will recover the full amount of $7 million. In addition, we are unable to provide assurance as to the recoverability of the full amount of the $5.2 million of security provided by MDM.

Principal Capital Expenditures

Capital expenditures incurred for the year ended December 31, 2005 totaled $73.2 million (excluding the Loulo power plant acquired under a finance lease) compared to $68.5 million for the year ended December 31, 2004 and $6.7 million for the year ended December 31, 2003. As of December 31, 2005, our capital commitments amounted to $27.3 million, principally for the Loulo Project. The capital expenditures will be financed out of internal funds. Total initial capital cost for Loulo underground is expected to amount to $85 million from 2006 through 2009.


B.	BUSINESS OVERVIEW

Overview

We engage in gold mining, exploration and related activities. Our activities are focused on West and East Africa some of the most promising areas for gold discovery in the world. In Mali, we own 50% of Morila Limited, which in turn owns 80% of Morila SA, the owner of the Morila mine. In October 2005 the first gold was poured at our new Loulo mine, in which we have an 80% controlling interest. The Loulo open pit mine was formally opened by the Malian President on November 12, 2005. In addition, we have a feasibility stage project in the neighboring country of Côte d’Ivoire, as well as exploration permits covering additional areas in Mali, Côte d’Ivoire, Burkina Faso, Ghana and Senegal and exploration licenses in Tanzania. As of December 31, 2005, we had declared proven and probable reserves of approximately 5.42 million ounces attributable to our percentage ownership interest in our assets.

Our strategy is to achieve superior returns on equity through the discovery, management and exploitation of resource opportunities, focusing on gold. We seek to discover bulk tonnage gold deposits, either from our own phased exploration programs or the acquisition of early stage to mature exploration programs. We actively manage both our portfolio of exploration and development properties and our risk exposure to any particular geographical area.

The focus of Morila SA’s exploration activities is on extending the existing orebody and discovering new deposits which can be processed using the Morila plant. A 40,000 meter regional drilling program has commenced which will explore the mine lease area with a focus on the south western extension of the high grade axis identified in the pit.

Outside of Morila SA, we hold exploration permits covering 3,000 square kilometers in the Morila region, where we are engaged in early stage exploration work.

In February 2004 we announced that we would develop a new mine at Loulo in western Mali. The new mine commenced production in October 2005. In addition, a development study has been completed on the underground potential to extend the life of the proposed new Loulo operation. The board approved the development of the underground mine in August 2005. It is anticipated that the underground development will commence in the third quarter of 2006.

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The focus of exploration at Loulo is to continue to explore and discover additional mineralized material from the 372 square kilometer permit.

We also own an advanced-stage development project at Tongon, located in Côte d’Ivoire. We have not yet committed to constructing a mine at Tongon. However, our work to date, together with the current gold price environment, indicates that a profitable mine could, subject to the political climate in Côte d’Ivoire, potentially be developed.

Ownership of Mines and Subsidiaries

The Morila mine is owned by a Malian company, Morila SA. The mine is controlled by a 50/50 joint venture management committee with day-to-day operations being the responsibility of a Malian subsidiary of AngloGold Ashanti.

Under a joint venture agreement between us, we are each entitled to appoint four directors to the board of directors of Morila Limited, the sole shareholder of Morila SA. AngloGold Ashanti is entitled to appoint one of its four directors as chairman, which position does not possess an additional vote. A quorum of the board for any meeting may only be achieved if at least two directors appointed by each of us are present. We have further agreed that all major decisions involving Morila Limited must be decided upon at the board level on a consensus basis, though under an operating agreement we have agreed to delegate responsibility for and authority regarding the day-to-day operation of Morila to a subsidiary of AngloGold Ashanti. Under the joint venture agreement, if either party wishes to sell its interest in Morila Limited, the other has a right of first refusal regarding that interest.

At March 31, 2006, Morila had been in production for 66 months and in that time had produced approximately 3.8 million ounces at a total cash cost of less than $125 per ounce.

The Loulo mine is owned by a Malian company, Somilo, which in turn is owned 80% by Randgold Resources (Somilo) Limited, our wholly-owned subsidiary, and 20% by the State of Mali. Randgold Resources is the operator of the Loulo mine. In 2005, Loulo’s production was 67,984 ounces at a total cash cost of $165 per ounce.

Geology

We target profitable gold deposits that have the potential to host mineable gold reserves of two million ounces or more.

West Africa is one of the more geologically prospective regions for gold deposits in the World. Lower Proterozoic rocks are known to contain significant gold occurrences and occur in West Africa in abundance. The Birrimian greenstone belts, part of the Lower Proterozoic, which are younger than the Archaean greenstones of Canada, Australia and South Africa, contain similar types of ore deposits along with Birrimian greenstone belts that are located in Ghana, Côte d’Ivoire, Burkina Faso, Guinea, Mali, Senegal and Niger. Although a significant amount of geological information has been collected by government and quasi-government agencies in West Africa, the region has largely been under-explored by mining and exploration companies using modern day technology. Most of our exploration properties are situated within the Birrimian Formation, a series of Lower Proterozoic volcanic and sedimentary rocks. The West African Birrimian sequences host a number of world class gold deposits and producing gold mines.

Our strategy was initiated before the current entry of our competitors into West Africa and we believe that this enabled us to secure promising exploration permits in the countries of Côte d’Ivoire, Mali, Burkina Faso, and Senegal at relatively low entry costs.

Reserves

Only those reserves which qualify as proved and probable reserves for purposes of the SEC’s industry guide number 7 are presented in this Annual Report. The reserves are calculated at an average gold price of $425 per ounce over the life of the mine or project.

Morila reserves have been estimated by our joint venture partner, AngloGold Ashanti. The Loulo mine and Project reserves were estimated by us in conjunction with our independent mining engineers.

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Total reserves as of December 31, 2005, amounted to 60.71 million tonnes at an average grade of 4.08 g/t, giving 7.95 million ounces of gold of which 5.42 million ounces are attributable to us. In calculating proven and probable reserves, current industry standard estimation methods are used. The reserves were calculated using classical geostatistical techniques, following geological modeling of the borehole information. The sampling and assaying is done to internationally acceptable standards and routine quality control procedures are in place.

The preferred technique used for estimation was ordinary kriging, and the resources have been converted to reserves by the application of all the necessary economic, mining and metallurgical parameters into a pit optimization algorithm. All reserves are based on feasibility level studies.

Factors such as grade distribution of the orebody, planned production rates, forecast working costs and metallurgical factors as well as current forecast gold price are all used to determine a cut-off grade from which a life of mine plan is developed in order to optimize the profitability of the operation.

The following table summarizes our declared reserves as of December 31, 2005:


	Proved Reserves			Probable Reserves				Total Reserves
Operation/ Project	Tonnes (Mt)	Grade (G/T)	Gold (Moz)	Tonnes (Mt)	Grade (G/T)	Gold (Moz)		Tonnes (Mt)	Grade (G/T)	Gold (Moz)
Morila mine	15.95	3.21	1.65	6.19	3.63	0.72	Our 40% share	8.86	3.33	0.95
Loulo Project *	13.75	3.48	1.54	24.82	5.07	4.05	Our 80% share	30.85	4.50	4.47


*	Includes Loulo underground.


1.	A 10% mining dilution at zero grade and a gold loss of 5% have been incorporated into the estimates of reserves and are reported as mill delivered tonnes and head grades. Metallurgical recovery factors have not been applied to the reserve figures. The approximate metallurgical recovery factors would be 91.5% for the Morila mine and 89.6% for the Loulo mine.

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Results of Operations

The following chart details the operating and production results from operations for the years ended December 31, 2005, 2004 and 2003:


	Morila Attributable 40%		Morila Total
2005
Mined tonnes (million tonnes)		9.84		24.60
Ore tonnes mined (million tonnes)		2.80		7.00
Gold grade (g/t)		4.30		4.30
Ore tonnes milled (million tonnes)		1.52		3.80
Head grade (g/t)		5.90		5.90
Ounces production (oz)		260,440		651,110
2004
Mined tonnes (million tonnes)		10.64		26.60
Ore tonnes mined (million tonnes)		2.12		5.30
Gold grade (g/t)		4.32		4.32
Ore tonnes milled (million tonnes)		1.40		3.50
Head grade (g/t)		5.20		5.20
Ounces production (oz)		204,194		510,485
2003
Mined tonnes (million tonnes)		9.39		23.47
Ore tonnes mined (million tonnes)		1.62		4.05
Gold grade (g/t)		6.77		6.77
Ore tonnes milled (million tonnes)		1.31		3.27
Head grade (g/t)		8.33		8.33
Ounces production (oz)		317,597		793,992

Mining Operations — Loulo

The Loulo Mine Project is situated in western Mali adjacent to the Falémé River – which forms the frontier with Senegal. It is located 350 kilometers west of Bamako and 220 kilometers south of Kayes. Loulo falls within the Birrimian sequence of the Kenieba inlier. This succession of volcano-sedimentary and clastic rocks contains several major regional shear structures hosting gold deposits such as Sadiola, Segala, Tabakoto, Loulo 0 and Yalea as well as numerous other satellite targets. Loulo is situated 96 kilometers from Sadiola and approximately 25 kilometers from Segala and Tabakoto.

Following the 2003 updated feasibility study on the Loulo open pit project (which comprises the Loulo 0 and Yalea deposits) and the rise in the gold price, our board and that of Somilo approved the development of the Loulo open pit project. Construction commenced in February 2004. The mine produced its first gold in September 2005 and made its first gold sale on November 8, 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 open pit mine on November 12, 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 our board.

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A summary of the salient production and financial statistics follow:


Loulo Results	12 months ended December 31, 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 ($/oz)		499
Total cash costs ($/oz)*		165
Gold revenue ($million)		30.7

We own 80% of Loulo with the Government of Mali owning 20%. Attributable production for the year is 54,387 ounces.


	^*	Refer to Item 3 for a definition of total cash cost and total cash cost per ounce.

Mining

During 2005 a total of 1.2 million ore tonnes at 3.66g/t was mined at Yalea. A selective mining and stockpiling strategy was implemented in August 2005 which allowed for the stockpiling of ore according to hardness and grade. Various stockpiles differentiating grade and material hardness 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 crusher and screening facility operated during the first quarter of 2006, which allows 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 utilization have all met forecast levels. The operational team continues to meet its objectives, while our capital projects team completes all the outstanding issues of Phase 1, being the processing plant, which has been in production since September 2005 and the commissioning of the hard rock crushing circuit. The Phase 2 hard ore crushing plant was not completed by MDM in accordance with the construction contract. In January 2006, we took the project over ourselves. The hard rock crushing circuit is nearing completion and is scheduled to be commissioned by the end of the second quarter 2006.

The operation of the softer ore Phase 1 circuit is being extended through:


	•	Utilization 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 allows transitional ore to be fed through to the soft ore crusher.


	•	Further infill drilling to facilitate grade control mapping at the P129 pit allows this softer ore material 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 skills levels.

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Mineral material and reserves

Grade control versus plant check out reconciliations was at 3% for tonnes and 1% for grade, and was within the 5% target for the year. The 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 mineralized material 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 mineralized material was converted into reserves, thus achieving the objective of adding value through the reserve to mineralized material 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.


Ore Reserves	Mt		g/t		Mozs
Loulo 0 pit
Proven		7.29		3.29		0.77
Probable		0.24		3.00		0.02
Sub-total		7.53		3.28		0.79
Yalea pit
Proven		5.80		3.79		0.71
Probable		0.72		5.56		0.13
Sub-total		6.52		3.98		0.84
P125 pit
Proven		—		—		—
Probable		0.51		3.53		0.06
Sub-total		0.51		3.53		0.06
P129 pit
Proven		—		—		—
Probable		0.24		2.67		0.02
Sub-total		0.24		2.67		0.02
Stockpiles
Proven		0.66		2.94		0.06
Probable		—		—		—
Sub-total		0.66		2.94		0.06
Total surface sources
Loulo 0 underground		15.45		3.56		1.77
Proven		—		—		—
Probable		5.14		4.00		0.66
Sub-total		5.14		4.00		0.66
Yalea underground
Proven		—		—		—
Probable		17.98		5.46		3.15
Sub-total		17.98		5.46		3.15
Total underground
Loulo total		23.12		5.13		3.82
Proven		13.75		3.48		1.54
Probable		24.82		5.07		4.05
Total		38.57		4.50		5.59


	•	Reserves are reported at a gold price of $425 per ounce.


	•	Dilution of 10% and ore losses of 5% are incorporated into the calculation of reserves.


	•	Stockpiled ore included.

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Plant design, construction and commissioning

Despite major problems with the main contractor, MDM, sufficient progress was made on the first phase of the plant to allow the commissioning of the soft material circuit in August and September 2005, resulting in production of gold from the gravity circuit in September. The commissioning of the carbon circuit followed allowing gold production to stabilize and the first gold sale to be made on November 8, 2005.

Due to a failure on the part of MDM to meet its commitments on the Loulo project and after due notice in terms of the contract, we assumed responsibility for the final completion of any outstanding matters relating to Phase 1 and the finalization and construction of the Phase 2 hard rock crushing circuit. Our project team is now handling the day-to-day management of the construction activities. Although we are still in the process of completing the ‘‘punch list’’ items of Phase 1, the operation has settled down, and is milling in excess of 8,000 tonnes per day of softer material.

Civil works on the Phase 2 development have progressed with the completion of the crushing circuit expected by the end of the second quarter of 2006. The primary crusher, secondary and tertiary crushers were delivered to the site in March 2006. Additional manpower and mobile cranes have been mobilized to ensure that sufficient resources are available to complete the construction of the crushing plant timeously.

Tailings storage facility

Design of a conventional tailings facility has now been finalized and construction of a one-year starter wall has been completed at a site some six kilometers east of the process plant. A contractor with considerable experience in the tailings disposal industry has been engaged to assist us with the management of this facility.

Water supply

Construction of the pumping station at the Falémé River within the basin of the Falémé weir has been completed as has the Garra dam. The weir downstream of the intake station is to retain water in the basin for use in the dry season when the flow stops. The weir, along with the Garra storage dam and the tailings storage facility, are key to Loulo’s water management strategy.

Power supply

Although the mine owns its power generation facility, Somilo has retained the services of Manutention Africaine, the Malian Caterpillar affiliate, to operate and maintain it. The generation facility houses 15 Caterpillar 3512 units with a total rated capacity of 18 megawatts. It has been designed to accommodate a further seven units to allow for expansion to supply the underground operations. Manutention Africaine is fully established on site and the power plant is running smoothly.

Loulo underground project

During 2005, our evaluation team and SRK Consulting completed a development study examining the feasibility of mining the down-dip extensions of the Loulo 0 and Yalea open pit orebodies from underground. The results, including estimated reserves as of June 30, 2005, showed that the project had the potential to add significant mine life. As a stand-alone underground project and based on the results of an initial drilling program, it was estimated that approximately 1.8 million ounces could be recovered within the first ten years of production, with the remaining defined ounces recoverable after that period. The study envisaged that sub-level open stoping with or without post-fill depending on the grade of the area would be the preferred mining method. Metallurgical test work has confirmed that the deeper ore is no different from the shallower ore and that the current plant along with the already approved additional leach tanks will be able to process the underground ore.

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The table below summarizes projected capital and operating expenditure estimates for the stand-alone Loulo 0 and Yalea underground project for the periods indicated.

Our board approved the development of the underground project based on the SRK study. Subsequent to this, an experienced underground manager was appointed to advance the development of the underground project. An internal and external review of the SRK underground mining plan was also undertaken with the goal of developing a plan to exploit both the Yalea and Loulo 0 orebodies optimally as part of an integrated open pit and underground operation.

As a result of this review, the following changes were made to the SRK plan and design:


	•	Increase of the mineralized material and reserve base against the initial study at Yalea and Loulo 0 as a result of infill and extensional drilling.


	•	Five additional levels available for stoping at Yalea.


	•	The use of conveyor belts for transporting both waste and ore from the underground section to surface. This configuration offers numerous advantages, the most important being the ability to increase production rates beyond what is possible by underground fleet transport. There will also be ventilation and safety benefits.


	•	Decline design incorporating long straight sections at an inclination of 9 degrees.


	•	The size of the single decline has been changed to two (4.5 meter wide and 4.5 meter high) declines which provide a better sectional ventilation intake area and accommodates the proposed conveyor system.


	•	Indications at this stage are that while the Loulo 0 boxcut and the initial portion of the decline will be developed simultaneously with the Yalea boxcut and decline, the focus will be on the development of the Yalea mine, and the Loulo 0 development, based on ore feed requirements, will be scheduled later.


	•	Current mine scheduling indicates LOM production could extend beyond 2020 and should average more than 250,000 ounces per annum.


	•	A site visit by the prospective underground mining contractors has taken place and the award of the contract is expected towards the end of June 2006.

The capital program for 2006, estimated at some $20 million, was approved and will allow for site establishment, purchase of mining equipment and establishment of the portal and declines. Portal construction will start in the third quarter of 2006 and the main decline development should access first development ore late 2007.

Human Resources

Manpower

Manpower levels at Loulo increased during 2005 as the project progressed and mining and processing started. Expatriates make up 7% of the total workforce.

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Loulo Manpower	December 2005		December 2004
Mine		519		278
Construction		499		382
Mining contractors		184		0
TOTAL		1,202		600

Training

Three Loulo employees successfully completed their MBA degrees during 2005. A strategic planning program and three team effectiveness workshops were held at Loulo during 2005. Engineering maintenance and metallurgical action learning modules were implemented throughout the year.

All mine and contractor employees attended the mine’s induction and safety training course. Cyanide awareness, first aid treatment for cyanide victims and cyanide handling courses were held during November and attended by all processing plant employees.

Industrial relations

Industrial relations remained positive throughout the year. Plans for the election of union officials and the setting up of a union structure early in 2006 were discussed and agreed with SECNAMI, the largest Malian mining union. Loulo will support SECNAMI in organizing the election.

Community development

Relations with the community remained good throughout the year and community liaison committee meetings were held monthly. The focus areas agreed by the community were employment of local villagers, water provision and basic health, primary education and food security.

During the year the following activities were undertaken:

Employment of local villagers

Learning ability and other psychometric testing was carried out to select young people from the villages surrounding the mine for apprenticeship and/or other skilled and semi-skilled learner programs.

In addition, Loulo and its contractors continued to apply a recruitment process that gives preference to local villagers over other job seekers. As of December 2005, 310 local villagers were employed on the Loulo project.

Education

The schools in the local villages were refurbished and buildings repaired during the year in partnership with members of the community. A new primary school was built as part of the capital program in Djidian-Kenieba adjacent to the mine. Teaching staff at the village schools was increased by the mine funding one teacher for each one funded by the community.

School furniture and learning resources and equipment were donated by the mine to village primary schools.

Food security

Five vegetable gardens were established and vegetable seeds were distributed to gardeners in the villages surrounding the mine. The mine’s agricultural educational program encourages and assists with the introduction of improved maize varieties.

Water provision

During the year a person from each village was trained to maintain and repair the eight water pumps installed by the mine in 2004, which together with assistance to obtain spares for the pumps, aims to ensure a continuous and reliable supply of potable water.

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Basic health

The mine assisted the Malian government and the World Health Organisation in vaccinating the population in a 25 kilometer radius of Loulo against polio and meningitis.

Malaria control and HIV/AIDS awareness

Educational and awareness campaigns were undertaken throughout the year to inform people in the local villages about malaria and HIV/AIDS.

Mining Operations — Morila

Our major producing asset since October 2000 has been the Morila mine. Morila was discovered and developed by us between 1996 and 2000 and is now owned by a Malian company, Morila SA, which in turn is owned 80% by Morila Limited and 20% by the state of Mali. Morila Limited is jointly owned by us and AngloGold Ashanti. The mine is controlled by a 50:50 joint venture management committee with day to day operations being the responsibility of AngloGold Ashanti Mali SA, or Anser, a Malian subsidiary of AngloGold Ashanti, under an operating agreement. During the year, Anser underwent a major restructuring and senior staff changes were implemented. An independent CEO was appointed who answers directly to the Morila SA board.

From the start of production in October 2000 through December 2005, Morila has produced approximately 3.8 million ounces of gold at a total cash cost of $125 per ounce, and Morila SA has paid total dividends to its shareholders of $428.8 million.

Morila produced 651,110 ounces of gold for the year, outstripping 2004’s production by some 140,000 ounces. Slightly higher grade than budgeted as well as increased recoveries combined with an increased milling rate led to earlier forecasts being exceeded.

2005 started poorly with the plant failing to reach design capacity. Working together with its partner, we addressed the various issues with the goal of achieving consistent and sustainable production. While the plant was still not operating at full expanded capacity by year end, monthly throughput in the second half of the year increased by almost 10% over the first half, indicating that the remedial action was taking effect. Costs were reasonably well contained given prevailing increases in input costs. Cash operating costs, before adjusting for exceptional costs relating to provisions and indirect taxes, were $189 per ounce, up from last year’s costs of $158 per ounce. Total cash costs were $221 per ounce for the year after year end accounting adjustments and indirect tax provisions.

Good mining performance in the last quarter allowed the mine to catch up the production lost in the third quarter as a result of an unprocedural strike by the mining contractor’s employees.

Below is a summary of the salient production and financial statistics as well as a comparison with the previous year’s results:


Morila Results	2005			2004
Total mined tonnes (million tonnes)			24.6			26.6
Ore tonnes mined (million tonnes)			7.0			5.3
Mined grade (g/t)			4.3			4.3
Ore tonnes milled (million tonnes)			3.8			3.5
Head grade (g/t)			5.9			5.2
Recovery (%)			91.7			87.9
Ounces produced (oz)			651,110			510,485
Average gold price received ($/oz)		$	449		$	382
Total cash cost ($/oz)*		$	221		$	184
Attributable (40% proportionately consolidated)
Gold revenue ($ million)		$	120.8		$	73.3
Ounces produced (oz)			260,444			204,194


*	Refer to item 3 for a definition of total cash cost and total cash cost per ounce.

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Mining

Mining operations are carried out under contract by Somadex, which is a subsidiary of DTP Terrassement, the mining arm of the French construction company Bouygues. An alliance agreement which incorporates the principle of sharing the potential savings achieved by the contractor using agreed productivity assumptions and allowing for an agreed return has produced successes particularly in the improvement of productivity. During the year, the smaller mining fleet brought to site to assist with mining in 2004 was decommissioned as a result of the increased productivity.

The mine to mill project continued with the powder factor, blast patterns and blast initiation all being improved during the year. This has resulted in better fragmentation.

In the third quarter of 2005, Somadex staff embarked on an unprocedural strike which was subsequently declared illegal. Total tonnes mined for the third quarter of 2005 were negatively affected by the strike. However, by focusing on mining ore and blending from the higher grade stockpile ore, overall gold production was maintained. The strike was over by the fourth quarter of 2005 and the mining team was able to achieve the annual budgeted total tonnes mined.

Ore processing

Mechanical failures and bottlenecks associated with the expanded plant continued to negatively affect plant throughput during the year. We worked with AngloGold Ashanti to understand and address the issues and the strategy of aiming for a gradual but sustainable increase in throughput appears to be working. This was evidenced by the increased throughput during the second half of 2005, which was 10% higher on average than in the first half.

Mineralized material

As a result of extension drilling in the south of the pit and in the pit wall, or ‘‘the Tonalite extension’’, as well as in the north west of the pit, the mine has been successful in replacing all but a small portion of the mineralized material depleted by mining in 2005.

Morila Ore Reserves