Our winning strategy is all about profitable investments…
Graham Shuttleworth
Investor Days November 2016
Changes in African mining codes…
Sources: EY, Deloitte, Randgold
Mining code legislationchangesMining codes currently under review
AFRICA
Côte d’Ivoire Mining Code…MINING CODE SUMMARY Côte d’Ivoire (2014 Code) Tongon Convention
State participation (free carried) 10% 10%
Fiscal Stability Arrangements
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.
The State guarantees the stability of the tax and customs regime
Right to International Arbitration Yes, if provided for in Establishment Agreement Yes
Corporate tax rate 25% 25%
Tax holiday – Corporate tax 5 years subsequent to first production 5 years subsequent to first
production
Royalties
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%
3%
Import duties
Exemption to first productionExemption from duties on fuel and
reagents for mine life
Exemption to first productionExemption from duties on fuel and
reagents for mine life
Withholding tax on dividends 12% 12%
Senegal Mining Code…
MINING CODE SUMMARY Senegal (2003 Code)
State participation (free carried)10%
Fiscal Stability Arrangements
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.
Right to International Arbitration Yes, if provided for in Establishment AgreementCorporate tax rate 25%
Tax holiday – Corporate tax 7 years subsequent to award of the mining permit
Royalties 3%
Import duties Exemption to up to 7 years subsequent to award of mining permit
Withholding tax on dividends 10%
Mali Mining Codes…MINING CODE SUMMARY Mali (1991 Code) Mali (1999 Code) Mali (2012 Code)
State participation (free carried) 10% 10% 10%
Fiscal Stability ArrangementsYes, may adopt more
favourable conditions. No need to adopt in entirety
Yes. More favourable conditions can be opted for if adopted in their entirety
Yes. More favourable conditions can be opted for if adopted in their entirety
Right to International Arbitration Yes Yes Yes
Corporate tax rate45% initially. Now 30% 35% initially. Now 30%
25% for first 15 years after first production.
Then 30%
Tax holiday – Corporate tax 5 years subsequent to first production
None None
Royalties 6% 3% 6%
Import duties
Exempted first 3 years of production
Exemption fromduties on fuel for mine life
Exempted first 3 years of production
Exemption fromduties on fuel for mine life
Exempted first 3 years of production
Exemption fromduties on fuel for mine life
Withholding tax on dividends Exempt Exempt 10%
- 40 80
120 160 200 240
2011 2012 2013 2014 2015
Supplementary taxes paid in 2016 Gounkoto Loulo MorilaAu Price
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
Randgold has paid $2.8 billion to stakeholders over 20 years
Loulo
Exploration SyamaMorila
Gounkoto
Randgold paid $832 million in taxes and royalties from 2011 to 2015
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016Loulo Gounkoto Morila
0
400
800
1200
16002000
GDP % Gold price US$/oz
JuneSource; World Bank
0
400
800
1200
1600
2000Gold price US$/ozTaxes and royalties US$m
Royalties to State
Dividends to State
Dividends to Randgold
Direct and Indirect taxes
Randgold has invested $2.7 billion in capital since 1996
Top ten risks facing mining industry…EY Annual Survey
2015 - 2016 2016 - 20172008
Resource Nationalism has now dropped out of the top tenCash / Capital Access now the biggest issue for the industrySocial License to Operate has remained consistently high, and is an area which has consistently received focused attention from Randgold
Randgold country ranking…
geological opportunitypolitical stabilityeconomic and fiscal regimeinfrastructure
Dependent on a qualitative assessment combining:
MauritaniaMali
BurkinaFaso
Morocco Tunisia
EgyptLibya
CAR
Niger
Nigeria
Zambia
Namibia
Angola
Tanzania
DRC
EthiopiaS Sudan
SouthAfrica
Zimbabwe
Botswana
Kenya
Algeria
Congo
Malawi
Uganda
RwandaBurundi
Cameroon
Chad
ABCD
Senegal
Guinea Bissau
Guinea
Sierra Leone
Liberia Cote d’Ivoire
Gabon
BeninTogo
Ghana
Eritrea
Somalia
Eq Guinea
Madagascar
Mozambique
Swaziland
Lesotho
Western Sahara
N Sudan
Key drivers of changing cost structure:
fuel price and increased reliance on non diesel generated power sources (Hydro, Grid)
Switch to owner mining at Loulo (lower UG contractors and higher employment and stores)
Increased group throughput and operational challenges at Kibali and Tongon – higher stores and reagents consumed
Group Cash Operating Cost by Element
30 000
35 000
40 000
45 000
50 000
55 000
60 000
65 000
2015 2016 YTD
Monthly Operating Cost ($'000)
0%2%4%6%8%
10%12%14%16%18%20%
Proportionate Cost Components (%)
2015
Mines Cash Operating Costs (cont.)
0,0%
5,0%
10,0%
15,0%
20,0%Loulo Complex
2015
2016 YTD
0%
5%
10%
15%
20%
Kibali 20152016 YTD
Key Drivers:Switch to UG owner miningResulting increased UG employment and consumables use – own equipmentDecrease in oil price and fuel costOverall $ costs decreased by 8%, with further opportunities related to localisation of labour
Key Drivers:Decreased oil price and fuel cost and increased hydro utilisation driving down power costsUG mining ramping up production (increased % of costs)Multiple ore sources = increased reagent and stores consumption/additional engineering costs in plant, in H1 2016Decrease in OC Mining total tonnes vs 2015
Mines Cash Operating Costs (cont.)
Key Drivers:Decreased oil price and fuel cost & increased grip power utilisationIncreased engineering costs (stores/other) relating to the plant to deal with crushing optimisation and the mill journal failure/repairTotal $ costs in line with 2015
Key Drivers:Reduced mining operations Increased tonnes though the plant (TSF) resulting in higher reagent consumptionDecrease in total monthly $ costs of 25% vs. 2015 (so while some of these are proportionately higher, they are down in absolute terms)
0%
5%
10%
15%
20%
25%
30% Tongon2015
2016 YTD
0%
5%
10%
15%
20%
25%
30% Morila2015
2016 YTD
Mines Power Costs
4
5
6
7
8
9
10
11
12
0,30
0,35
0,40
0,45
0,50
0,55
0,60
0,65
0,70
0,75
0,80Loulo Power Cost - Processing
PlantDiesel Price ($c)HFO Price ($c)$/t Processed
0
1
2
3
4
5
6
7
8
9
10
-
0,20
0,40
0,60
0,80
1,00
1,20
1,40
1,60
Kibali Power Cost – Processing Plant
Diesel Price ($c) $/t Processed
Key Drivers:Decreased fuel price – HFO and LFOBetter generating efficiency and higher proportion of power from HFO (cheaper)Better power management and distribution (MV upgrade)Improved efficiency in use of power in the plant (kWh per tonne processed)
Key Drivers:Decreased fuel priceCommissioning and optimisation of hydro power stations, with another scheduled to come on line imminentlySeasonality – effect of rain on hydro availability
2
3
4
5
6
7
8
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1Tongon Power Cost - Processing Plant
Diesel Price ($/l) $/t Processed
Mines Power Costs (cont.)
At current prices Tongon’s diesel power is roughly 50% more expensive than grid in $/kWh termsBiggest driver of cost is therefore the mix of grid to diesel power generated / consumed Targeted mix is 97% grid – however instability of the supply has resulted in greater reliance on diesel – 2016 YTD is 12% (i.e. only 88% grid) Lower tonnes, especially during Q2 2016 mill failure, resulted in higher cost / tonne –substantial improvement in Q3 2016
Cost by Activity…group
0
2
4
6
8
10
12
14
16
18
20
Mining OC Mining UG Processing G&A Truck & Haul Royalties
Group ($/t) by Activity
$/t 2015
$/t - 2016 YTD
-2,0
8,0
18,0
28,0
38,0
48,0
58,0
68,0
2015 2016 YTD
Total Cash Cost $/t
Stockpile
Royalties
Trucking &HaulingG&A
Processing
Mining UG
Mining OC
In terms of $/t processed, costs have dropped by 6% year on yearStrong operation performance from Loulo complex partially offset by challenging operating conditions at Kibali and Tongon (1H 2016)Improved power costs and higher throughputHigher gold price increasing royalties
Cost by Activity… by mine per tonne processed
- 5,0
10,0 15,0 20,0 25,0 30,0 35,0 40,0
Loulo Complex ($/t)
$/t 2015
$/t - 2016 YTD
- 2,0 4,0 6,0 8,0
10,0 12,0 14,0 16,0 18,0 20,0
Mining OC Mining UG Processing G&A Royalties
Kibali ($/t)
$/t 2015
$/t - 2016 YTD
-
5,0
10,0
15,0
20,0
25,0
Mining OC Processing G&A Royalties
Tongon ($/t)
$/t 2015$/t - 2016 YTD
- 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0
10,0
Mining OC / OreHandling
Processing G&A Royalties
Morila ($/t)
$/t 2015$/t - 2016 YTD
Major Consumables…
12,8%
35,6%
22,9%
4,1%
2,2%
2,9%
6,8%
12,7%
Reagents & Grinding Media
Lime CyanideGrinding Media Caustic SodaActivated Carbon FlocculantHydrogen Peroxide Other
Reagents and grinding media made up approximately 12% of cash operating costs for 2016Since the start of 2014, these costs have dropped by approximately 25% over the key components
-
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
4,50
5,00
Cyanide Grinding Media Lime
Negotiating Better Prices
Stores Price Dec 2013 ($/kg)
Contracted Price Q4 2016($/kg)
Effect of Oil Price and Forex…
30
35
40
45
50
55
60
65
70
2015
-06-
01
2015
-07-
01
2015
-08-
01
2015
-09-
01
2015
-10-
01
2015
-11-
01
2015
-12-
01
2016
-01-
01
2016
-02-
01
2016
-03-
01
2016
-04-
01
2016
-05-
01
2016
-06-
01
2016
-07-
01
2016
-08-
01
2016
-09-
01
Oil
Pric
e -$
/bbl
|
Fue
l Pric
e U
SD c
ents
/ l
Oil Price vs. LFO and HFO –West Africa
Brent crude $/bbl (1 monthlag)LFO Price cents / l (fullylanded)HFO Price cents / l (fullylanded)
65%
25%
7% 3%
Currency Exposure
USDEUR & XOFZAROther
Fuel made up around 16% of group costs in 2016, a decrease from 20% 2 years agoThe oil price is the key driver of the landed fuel price as can be seen aboveAt current prices ($50/bbl) a 10% change in the price of oil would result in an approximate $6/oz change in total cash cost
The group’s Euro denominated cost is approximately 25% YTDSome of the larger Euro based supplier contracts are concluded with an annually agreed rateA 10% change in the US$ / Euro exchange rate would have a $14/oz effect on total cash cost
Looking Ahead – Unit Costs
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
-
10,0
20,0
30,0
40,0
50,0
60,0
70,0
2014 2015 2016 FOR 2017 2018 2019 2020 2021
Group Total Cash Costs - $/t
StockpileRoyaltiesTrucking & HaulingG&AProcessingMining UGMining OCGrade (g/t)
Lower costs in 2017 driven by:Fixed cost efficiencies and lower strip ratio of Gounkoto super pitSteady 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
-
100
200
300
400
500
600
700
800
900
1 000
2014 ACT 2015 ACT 2016ACT/FOR
2017 2018 2019 2020 2021
Cost $ / oz Breakdown
Depreciation $ /oz
Corporate Tax $ /oz
Corporate & Exploration$ /oz
Total Cash Cost $ /oz
Profile reflects the lower total cash costsDepreciation 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…
0
1
2
3
4
0
200
400
600
800
1000
1200
1400
1600
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Oz actual Oz forecast Total Cash Cost/oz Capital Grade
Production Oz 000Total cash cost/ozCapex $m
Grade g/t
A cash generative business…
0
100
200
300
400
500
600
700
2016 2017 2018 2019 2020 2021
Free cash before distributions @ $1200/oz
Total Capital Spend ($m)
Free Cash Per Year ($m)
Group cumulative cash balance
0
500
1000
1500
2000
2500
3000
2016 2017 2018 2019 2020 2021
Cash on hand @ $1200/oz
Closing Cash Assuming Flat Dividend($62m)
Group consolidated production, cash cost and capital spend…including Massawa
0
1
2
3
4
0
200
400
600
800
1000
1200
1400
1600
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Oz actual Oz forecast Total Cash Cost/oz Capital Grade
Production Oz 000Total cash cost/ozCapex $m Grade g/t
Group cumulative cash…including Massawa
-
500
1 000
1 500
2 000
2 500
3 000
2016 2017 2018 2019 2020 2021
Cash on hand @ $1200/oz
Closing Cash Assuming Flat Dividend($62m)
0
100
200
300
400
500
600
700
800
900
2016 2017 2018 2019 2020 2021
Free cash before distributions @ $1200/oz
Total Capital Spend ($m)
Free Cash Per Year ($m)
A cash generative business, after capital expenditure and taxes Including funding for dividends, exploration and new projectsWith the ability to increase dividends substantiallyAnd still take advantage of any acquisition opportunities that might meet our investment filters
Disclaimer…
Randgold reports its mineral resources and mineral reserves in accordance with the JORC 2012 code. As suchnumbers are reported to the second significant digit. They are equivalent to National Instrument 43-101. Mineralresources 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 agold price of US$1 000/oz, except for Morila which is reported at US$1 300/oz. Mineral reserves are reported at acut-off grade based on US$1 000/oz gold price within the pit designs. Underground reserves are also based on agold 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) permitsmining companies, in their filings with the SEC, to disclose only proven and probable ore reserves. Randgold usescertain terms in this annual report such as ‘resources’, that the SEC does not recognise and strictly prohibits thecompany from including in its filings with the SEC. Investors are cautioned not to assume that all or any parts ofthe company’s resources will ever be converted into reserves which qualify as ‘proven and probable reserves’ forthe purposes of the SEC’s Industry Guide number 7.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Except for the historical informationcontained herein, the matters discussed in this presentation are forward-looking statements within the meaning ofSection 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934, andapplicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statementswith respect to the future price of gold, the estimation of mineral reserves and resources, the realisation of mineralreserve estimates, the timing and amount of estimated future production, costs of production, reservedetermination and reserve conversion rates. Generally, these forward-looking statements can be identified by theuse 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 ofsuch words and phrases or state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will betaken’, ‘occur’ or ‘be achieved’. Assumptions upon which such forward-looking statements are based are in turnbased on factors and events that are not within the control of Randgold Resources Limited (‘Randgold’) and thereis no assurance they will prove to be correct. Forward-looking statements are subject to known and unknownrisks, uncertainties and other factors that may cause the actual results, level of activity, performance orachievements of Randgold to be materially different from those expressed or implied by such forward-lookingstatements, including but not limited to: risks related to mining operations, including political risks and instabilityand risks related to international operations, actual results of current exploration activities, conclusions ofeconomic evaluations, changes in project parameters as plans continue to be refined, as well as those factorsdiscussed in Randgold’s filings with the US Securities and Exchange Commission (the ‘SEC’). Although Randgoldhas attempted to identify important factors that could cause actual results to differ materially from those containedin forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated orintended. There can be no assurance that such statements will prove to be accurate, as actual results and futureevents could differ materially from those anticipated in such statements. Accordingly, readers should not placeundue reliance on forward-looking statements. Randgold does not undertake to update any forward-lookingstatements herein, except in accordance with applicable securities laws.