Our winning strategy is all about
profitable investments…
Graham Shuttleworth
Investor Days November 2016
Changes in African mining codes…
AFRICA
Mining code legislation
changes
Mining codes currently
under review
Sources: EY, Deloitte, Randgold
Côte d’Ivoire Mining Code…
MINING CODE SUMMARY
State participation (free carried)
Fiscal Stability Arrangements
Right to International Arbitration
Corporate tax rate
Tax holiday – Corporate tax
Royalties
Import duties
Withholding tax on dividends
Côte d’Ivoire (2014 Code)
Tongon Convention
10%
The State guarantees the stability of the
tax and customs regime. In the event of a
more favourable regime, the more
favourable tax and customs regime may
be adopted, provided it is done in its
entirety.
Yes, if provided for in Establishment
Agreement
25%
10%
5 years subsequent to first production
The State guarantees the stability of
the tax and customs regime
Yes
25%
5 years subsequent to first
production
Sliding scale depending on Gold Price
(GP) :
*GP < $1000/oz : 3%
*GP $1000/oz to $1300/oz : 3.5%
*GP $1300/oz to $1600/oz : 4%
GP $1600/oz to $2000/oz : 5%
*GP > $2000/oz :6%
Exemption to first production
Exemption from duties on fuel and
reagents for mine life
Exemption to first production
Exemption from duties on fuel and
reagents for mine life
12%
12%
3%
Senegal Mining Code…
MINING CODE SUMMARY
State participation (free carried)
Fiscal Stability Arrangements
Right to International Arbitration
Corporate tax rate
Tax holiday – Corporate tax
Royalties
Import duties
Withholding tax on dividends
Senegal (2003 Code)
10%
The State guarantees the stability of the tax and customs regime.
In the event of a more favourable regime, the more favourable tax
and customs regime may be adopted, provided it is done in its
entirety.
Yes, if provided for in Establishment Agreement
25%
7 years subsequent to award of the mining permit
3%
Exemption to up to 7 years subsequent to award of mining permit
10%
Mali Mining Codes…
MINING CODE SUMMARY
State participation (free
carried)
Fiscal Stability Arrangements
Right to International
Arbitration
Corporate tax rate
Tax holiday – Corporate tax
Royalties
Mali (1991 Code)
Mali (1999 Code)
Mali (2012 Code)
10%
10%
10%
Yes, may adopt more
favourable conditions. No
need to adopt in entirety
Yes
Yes. More favourable
conditions can be opted for
if adopted in their entirety
Yes
Yes
25% for first 15 years after
first production.
Then 30%
45% initially. Now 30%
35% initially. Now 30%
5 years subsequent to first
production
6%
None
None
3%
6%
Exempted first 3 years of
production
Exempted first 3 years of
production
Exemption from
duties on fuel for mine life
Exemption from
duties on fuel for mine life
Exempt
Exempt
Import duties
Withholding tax on dividends
Yes. More favourable
conditions can be opted for
if adopted in their entirety
Exempted first 3 years of
production
Exemption from
duties on fuel for mine life
10%
20 years of investment in Mali…
$4.7 billion to economy (taxes, royalties, salaries, local
suppliers and community initiatives)
Randgold has contributed between
6% and 10% of Mali GDP
GDP %
10%
Randgold paid $832 million in taxes
and royalties from 2011 to 2015
Gold price US$/oz
2000
8%
6%
1600
200
1200
160
4%
800
2%
400
0%
0
2010 2011 2012 2013 2014 2015 2016
June
Loulo
Gounkoto
Morila
Source; World Bank
Randgold has paid $2.8 billion to
stakeholders over 20 years
Dividends to
State
Dividends to
Randgold
Royalties to
State
Direct and
Indirect taxes
Taxes and royalties US$m
240
Gold price US$/oz
2000
1600
1200
120
80
800
40
400
-
0
2011
2012
2013
2014
Au Price
Supplementary taxes paid in 2016
Gounkoto
2015
Loulo
Morila
Randgold has invested $2.7 billion in
capital since 1996
Exploration
Syama
Morila
Gounkoto
Loulo
Top ten risks facing mining industry…
EY Annual Survey
2008
2015 - 2016
2016 - 2017
Resource Nationalism has now dropped out of the top ten
Cash / Capital Access now the biggest issue for the industry
Social License to Operate has remained consistently high, and is an area
which has consistently received focused attention from Randgold
Randgold country ranking…
Dependent on a qualitative
assessment combining:
Tunisia
Morocco
Algeria
Libya
geological opportunity
Egypt
Western Sahara
political stability
Mauritania
Niger
Mali
N Sudan
infrastructure
Chad
Senegal
Burkina
Faso
Nigeria
Benin
Togo
Guinea Bissau
Guinea
S Sudan
Cameroon
Sierra Leone
Liberia
Ghana
Cote
d’Ivoire
Ethiopia
CAR
Uganda
DRC
Gabon
Congo
Kenya
Rwanda
Burundi
Eq Guinea
A
B
C
D
economic and fiscal regime
Eritrea
Angola
Somalia
Tanzania
Malawi
Zambia
Zimbabwe
Namibia
Botswana
Madagascar
Mozambique
South
Africa
Swaziland
Lesotho
Group Cash Operating Cost by Element
Proportionate Cost Components (%)
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2015
Monthly Operating Cost ($'000)
65 000
60 000
55 000
50 000
45 000
40 000
35 000
30 000
2015
2016 YTD
Key drivers of changing cost structure:
fuel price and increased reliance on non diesel generated power sources (Hydro, Grid)
Switch to owner mining at Loulo (lower UG contractors and higher employment and stores)
Increased group throughput and operational challenges at Kibali and Tongon – higher stores
and reagents consumed
Mines Cash Operating Costs (cont.)
20,0%
Loulo Complex
20%
Kibali
2015
15,0%
2015
2016 YTD
15%
2016 YTD
10,0%
10%
5,0%
5%
0,0%
0%
Key Drivers:
Key Drivers:
Decreased oil price and fuel cost and increased hydro
Switch to UG owner mining
utilisation driving down power costs
Resulting increased UG employment and
UG mining ramping up production (increased % of costs)
consumables use – own equipment
Multiple ore sources = increased reagent and stores
Decrease in oil price and fuel cost
consumption/additional engineering costs in plant, in H1
Overall $ costs decreased by 8%, with further 2016
opportunities related to localisation of labour
Decrease in OC Mining total tonnes vs 2015
Mines Cash Operating Costs (cont.)
30%
25%
30%
Tongon
2015
25%
2016 YTD
20%
20%
15%
15%
Morila
2015
2016 YTD
10%
5%
0%
10%
5%
0%
Key Drivers:
Decreased oil price and fuel cost & increased
grip power utilisation
Increased engineering costs (stores/other)
relating to the plant to deal with crushing
optimisation and the mill journal failure/repair
Total $ costs in line with 2015
Key Drivers:
Reduced mining operations
Increased tonnes though the plant (TSF)
resulting in higher reagent consumption
Decrease in total monthly $ costs of 25% vs.
2015 (so while some of these are proportionately
higher, they are down in absolute terms)
Mines Power Costs
0,80
Loulo Power Cost - Processing
Plant
0,75
0,70
0,65
Diesel Price ($c)
HFO Price ($c)
$/t Processed
12
11
10
0,60
9
0,55
8
0,50
7
0,45
1,60
Kibali Power Cost – Processing
Plant
10
9
1,40
8
1,20
7
1,00
6
0,80
5
4
0,60
3
6
0,40
0,40
0,35
5
0,30
4
Diesel Price ($c)
$/t Processed
0,20
-
Key Drivers:
Decreased fuel price – HFO and LFO
Better generating efficiency and higher proportion of
power from HFO (cheaper)
Better power management and distribution (MV
upgrade)
Improved efficiency in use of power in the plant (kWh
per tonne processed)
2
1
0
Key Drivers:
Decreased fuel price
Commissioning and optimisation of hydro
power stations, with another scheduled to
come on line imminently
Seasonality – effect of rain on hydro
availability
Mines Power Costs (cont.)
Tongon Power Cost - Processing Plant
1
8
0,9
7
0,8
6
0,7
5
0,6
0,5
4
0,4
0,3
0,2
3
Diesel Price ($/l)
$/t Processed
2
At current prices Tongon’s diesel power is roughly 50% more expensive than grid in $/kWh
terms
Biggest driver of cost is therefore the mix of grid to diesel power generated / consumed
Targeted mix is 97% grid – however instability of the supply has resulted in greater reliance on
diesel – 2016 YTD is 12% (i.e. only 88% grid)
Lower tonnes, especially during Q2 2016 mill failure, resulted in higher cost / tonne –
substantial improvement in Q3 2016
Cost by Activity…group
Group ($/t) by Activity
Total Cash Cost $/t
68,0
20
18
58,0
16
Stockpile
48,0
14
$/t 2015
12
$/t - 2016 YTD
Royalties
38,0
Trucking &
Hauling
G&A
10
28,0
8
6
Processing
18,0
4
Mining UG
8,0
2
Mining OC
0
Mining OC
Mining UG Processing
G&A
Truck & Haul Royalties
-2,0
2015
2016 YTD
In terms of $/t processed, costs have dropped by 6% year on year
Strong operation performance from Loulo complex partially offset by challenging operating conditions
at Kibali and Tongon (1H 2016)
Improved power costs and higher throughput
Higher gold price increasing royalties
Cost by Activity… by mine per tonne processed
Kibali ($/t)
Loulo Complex ($/t)
40,0
35,0
30,0
25,0
20,0
15,0
10,0
5,0
-
20,0
18,0
16,0
14,0
12,0
10,0
8,0
6,0
4,0
2,0
-
$/t 2015
$/t - 2016 YTD
$/t 2015
$/t - 2016 YTD
Mining OC
Mining UG
Tongon ($/t)
20,0
$/t 2015
$/t - 2016 YTD
10,0
5,0
Mining OC
Processing
G&A
G&A
Royalties
Morila ($/t)
25,0
15,0
Processing
Royalties
10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
-
$/t 2015
$/t - 2016 YTD
Mining OC / Ore
Handling
Processing
G&A
Royalties
Major Consumables…
Negotiating Better Prices
Reagents & Grinding Media
12,7%
12,8%
5,00
4,50
Stores Price Dec 2013 ($/kg)
4,00
6,8%
3,50
2,9%
Contracted Price Q4 2016
($/kg)
3,00
2,2%
2,50
4,1%
2,00
35,6%
1,50
1,00
0,50
-
22,9%
Cyanide
Lime
Cyanide
Grinding Media
Caustic Soda
Activated Carbon
Flocculant
Hydrogen Peroxide
Other
Grinding Media
Lime
Reagents and grinding media made up approximately
12% of cash operating costs for 2016
Since the start of 2014, these costs have dropped by
approximately 25% over the key components
Effect of Oil Price and Forex…
Oil Price vs. LFO and HFO –
West Africa
Currency Exposure
Brent crude $/bbl (1 month
lag)
65
7%
3%
LFO Price cents / l (fully
landed)
60
HFO Price cents / l (fully
landed)
55
25%
50
45
65%
40
35
USD
EUR & XOF
2016-09-01
2016-08-01
2016-07-01
2016-06-01
2016-05-01
2016-04-01
2016-03-01
2016-02-01
2016-01-01
2015-12-01
2015-11-01
2015-10-01
2015-09-01
2015-08-01
2015-07-01
30
2015-06-01
Oil Price - $/bbl
| Fuel Price USD cents / l
70
Fuel made up around 16% of group costs in 2016, a decrease
from 20% 2 years ago
The oil price is the key driver of the landed fuel price as can
be seen above
At current prices ($50/bbl) a 10% change in the price of oil
would result in an approximate $6/oz change in total cash cost
ZAR
Other
The group’s Euro denominated cost is approximately 25%
YTD
Some of the larger Euro based supplier contracts are
concluded with an annually agreed rate
A 10% change in the US$ / Euro exchange rate would have a
$14/oz effect on total cash cost
Looking Ahead – Unit Costs
Group Total Cash Costs - $/t
70,0
4,5
60,0
4,0
50,0
3,5
40,0
3,0
Stockpile
Royalties
Trucking & Hauling
G&A
Processing
30,0
2,5
20,0
2,0
10,0
1,5
Mining UG
Mining OC
-
Grade (g/t)
1,0
2014
2015 2016 FOR 2017
2018
2019
2020
2021
Lower costs in 2017 driven by:
Fixed cost efficiencies and lower strip ratio of Gounkoto super pit
Steady state processing compared with higher costs at Tongon and Kibali in H1 2016
Costs increase in 2020 as grades increase:
Kibali grade increases in each year to 2020 and then Tongon starts to fall away, so the average
goes up
Looking Ahead - “All-in” group cost per ounce
Cost $ / oz Breakdown
1 000
900
800
700
Depreciation $ /oz
600
Corporate Tax $ /oz
500
400
Corporate & Exploration
$ /oz
300
200
Total Cash Cost $ /oz
100
2014 ACT
2015 ACT
2016
ACT/FOR
2017
2018
2019
2020
2021
Profile reflects the lower total cash costs
Depreciation increases slightly given the assets brought into use especially related to increased UG
production and lower production in 2021 (this excludes the Massawa project)
Group consolidated production, cash
cost and capital spend…
1600
Production Oz 000
Total cash cost/oz
Capex $m
Grade g/t
4
1400
1200
3
1000
800
2
600
400
1
200
0
0
2012
2013
Oz actual
2014
2015
Oz forecast
2016
2017
2018
Total Cash Cost/oz
2019
2020
Capital
2021
Grade
A cash generative business…
Free cash before distributions @ $1200/oz
700
600
500
400
Total Capital Spend ($m)
300
Free Cash Per Year ($m)
200
100
0
2016
2017
2018
2019
2020
2021
Group cumulative cash balance
Cash on hand @ $1200/oz
3000
2500
Closing Cash Assuming Flat Dividend
($62m)
2000
1500
1000
500
0
2016
2017
2018
2019
2020
2021
Group consolidated production, cash cost
and capital spend…including Massawa
1600
Production Oz 000
Total cash cost/oz
Capex $m
Grade g/t
4
1400
1200
3
1000
800
2
600
1
400
200
0
0
2012
2013
Oz actual
2014
2015
Oz forecast
2016
2017
2018
Total Cash Cost/oz
2019
2020
Capital
2021
Grade
Group cumulative cash…including
Massawa
3 000
Cash on hand @ $1200/oz
900
800
2 500
Closing Cash Assuming Flat Dividend
($62m)
Free cash before distributions @
$1200/oz
Total Capital Spend ($m)
700
600
2 000
Free Cash Per Year ($m)
500
1 500
400
300
1 000
200
500
100
-
0
2016
2017
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
A cash generative business, after capital expenditure and taxes
Including funding for dividends, exploration and new projects
With the ability to increase dividends substantially
And still take advantage of any acquisition opportunities that might meet
our investment filters
Disclaimer…
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Except for the historical information
contained herein, the matters discussed in this presentation are forward-looking statements within the meaning of
Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934, and
applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements
with respect to the future price of gold, the estimation of mineral reserves and resources, the realisation of mineral
reserve estimates, the timing and amount of estimated future production, costs of production, reserve
determination and reserve conversion rates. Generally, these forward-looking statements can be identified by the
use of forward-looking terminology such as ‘will’, ‘plans’, ‘expects’ or ‘does not expect’, ‘is expected’, ‘budget’,
‘scheduled’, ‘estimates’, ‘forecasts’, ‘intends’, ‘anticipates’ or ‘does not anticipate’, or ‘believes’, or variations of
such words and phrases or state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will be
taken’, ‘occur’ or ‘be achieved’. Assumptions upon which such forward-looking statements are based are in turn
based on factors and events that are not within the control of Randgold Resources Limited (‘Randgold’) and there
is no assurance they will prove to be correct. Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the actual results, level of activity, performance or
achievements of Randgold to be materially different from those expressed or implied by such forward-looking
statements, including but not limited to: risks related to mining operations, including political risks and instability
and risks related to international operations, actual results of current exploration activities, conclusions of
economic evaluations, changes in project parameters as plans continue to be refined, as well as those factors
discussed in Randgold’s filings with the US Securities and Exchange Commission (the ‘SEC’). Although Randgold
has attempted to identify important factors that could cause actual results to differ materially from those contained
in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. Randgold does not undertake to update any forward-looking
statements herein, except in accordance with applicable securities laws.
Randgold reports its mineral resources and mineral reserves in accordance with the JORC 2012 code. As such
numbers are reported to the second significant digit. They are equivalent to National Instrument 43-101. Mineral
resources are reported at a cut-off grade based on a gold price of US$1 500/oz.
The reporting of mineral reserves is also in accordance with Industry Guide 7. Pit optimisations are carried out at a
gold price of US$1 000/oz, except for Morila which is reported at US$1 300/oz. Mineral reserves are reported at a
cut-off grade based on US$1 000/oz gold price within the pit designs. Underground reserves are also based on a
gold price of US$1 000/oz. Dilution and ore loss are incorporated into the calculation of reserves.
Cautionary note to US investors: The United States Securities and Exchange Commission (the SEC) permits
mining companies, in their filings with the SEC, to disclose only proven and probable ore reserves. Randgold uses
certain terms in this annual report such as ‘resources’, that the SEC does not recognise and strictly prohibits the
company from including in its filings with the SEC. Investors are cautioned not to assume that all or any parts of
the company’s resources will ever be converted into reserves which qualify as ‘proven and probable reserves’ for
the purposes of the SEC’s Industry Guide number 7.