Edgar Filing: RANDGOLD RESOURCES LTD

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Form 20-F

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

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

¨	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)

3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey JE2 4WJ, Channel Islands

(Address of principal executive offices)

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


Title of each class		Name of each exchange on which registered
Ordinary Shares, par value US $0.05 per Share*		NASDAQ Global Select Market

American Depositary Shares each represented by one Ordinary Share

*	Not for trading, but only in connection with the listing of American Depositary Shares on the NASDAQ Global Select Market pursuant to the requirements of the Securities and Exchange Commission.

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

None

(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, 2012, the Registrant had outstanding 92,070,753 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. x 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 x 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. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:


U.S. GAAP ¨		International Financial Reporting Standards as issued by the International Accounting Standards Board x		Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ¨ Item 17 x 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 x No

TABLE OF CONTENTS


Index	Page No.
Item 1. Identity of Directors, Senior Management and Advisers		7
Item 2. Offer Statistics and Expected Timetable		7
Item 3. Key Information		7
Item 4. Information on the Company		25
Item 4A. Unresolved Staff Comments		86
Item 5. Operating and Financial Review and Prospects		86
Item 6. Directors, Senior Management and Employees		103
Item 7. Major Shareholders and Related Party Transactions		117
Item 8. Financial Information		119
Item 9. The Offer and Listing		119
Item 10. Additional Information		120
Item 11. Quantitative and Qualitative Disclosures About Market Risk		138
Item 12. Description of Securities Other Than Equity Securities		140
Item 13. Defaults, Dividend Arrearages and Delinquencies		141
Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds		141
Item 15. Controls and Procedures		142
Item 16. Reserved		143
Item 16A. Audit Committee Financial Expert		143
Item 16B. Code of Ethics		143
Item 16C. Principal Accountant Fees and Services		143
Item 16D. Exemptions from the Listing Standards for Audit Committees		144
Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers		144
Item 16F. Change in Registrant’s Certifying Accountant		144
Item 16G. Corporate Governance		144
Item 17. Financial Statements		145
Item 18. Financial Statements		145
Item 19. Exhibits		145

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 (“Annual Report”).


Alteration:		The chemical change in a rock due to hydrothermal and other fluids.

Archaean:		A geological eon before 2.5 Ga.

Arsenopyrite:		An iron arsenic sulfide mineral.

bcm		A measure of volume representing a cubic meter of in-situ rock.

Birimian:		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.

Cut-off grade:		The lowest grade of material that can be mined and processed considering all applicable costs, without incurring a loss or gaining a profit.

Development:		Underground work carried out for the purpose of opening up a mineral deposit which includes shaft sinking, crosscutting, drifting and raising.

Diamond Drilling (“DDH”):		A rotary type of rock drilling that cuts a core of rock that is recovered in long cylindrical sections, two cm or more in diameter.

Dilution (mining):		Rock that is, by necessity, removed along with the ore in the mining process, subsequently lowering the grade of the ore.

Discordant:		Structurally unconformable.

Disseminated ore:		Ore carrying small particles of valuable minerals spread more or less uniformly through the host rock.

EEP:		Exclusive EP.

EP:		Exploration permit.

Exploration:		Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.

Fault:		A break in the Earth’s crust caused by tectonic forces which have moved the rock on one side with respect to the other.

Feasibility Study:		A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.



Feldspar:		An alumino-silicate mineral.

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

g/t:		Grams of gold per metric tonne.

Gneiss:		A coarse-grained, foliated rock produced by metamorphism.

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

Gold sales:		Represents the sales of gold at spot and the gains/losses on hedge contracts which have been delivered into at the designated maturity date. It excludes gains/losses which have been rolled forward to match future sales. This adjustment is considered appropriate because no cash is received/paid in respect of such contracts.

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.

Granite:		A coarse-grained intrusive igneous rock consisting of quartz, feldspar and mica.

Greenstone belt:		An area underlain by metamorphosed volcanic and sedimentary rocks, usually in a continental shield.

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

Hydrothermal:		Relating to hot fluids circulating in the earth’s crust.

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

Igneous rocks:		Rocks formed by the solidification of molten material from far below the earth’s surface.

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

Kibalian:		A geological time era.

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 US units are provided below:


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



Metamorphism:		The process by which the form or structure of rocks is changed by heat and pressure.

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

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/a revolving drum used for the grinding of ores in preparation for treatment.

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:		A mine that is entirely on surface. Also referred to as open-cut or open-cast mine.

Orebody:		A natural concentration of valuable material that can be extracted and sold at a profit.

Ounce:		One troy ounce, which equals 31.10348 grams.

Prefeasibility Study:		A comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and which, if an effective method of mineral processing has been determined and includes a financial analysis based on reasonable assumptions of technical, engineering, operating, economic, social and environmental factors and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.



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.

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 yellow iron sulphide mineral, normally of little value. It is sometimes referred to as “fool’s gold”.

Quartz:		A mineral compound of silicon and oxygen.

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

Quartz-Tourmaline:		A rock unit created by alteration due to the addition of silica and boron.

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.

RP:		Reconnaissance Permit.

Sampling:		Selecting a fractional but representative sample for analysis.

Satellite deposit:		A smaller subsidiary deposit proximal to a main deposit.

Scoping study:		A conceptual study and the preliminary evaluation of the mining project. The principal parameters for a scoping study are mostly assumed and/or factored. Accordingly, the level of accuracy is low. A conceptual study is useful as a tool to determine if subsequent engineering studies are warranted. However, it is not valid for economic decision making nor is it sufficient for reserve reporting.



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:		A zone in which shearing has occurred on a large scale.

Silica:		Silicon dioxide. Quartz is a common example.

Stockpile:		Broken ore heaped on surface, pending treatment.

Strike length:		The direction and length of a geological plane.

Stripping:		The process of removing overburden to expose ore.

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

Tailings:		Material rejected from a mill after most of the recoverable valuable minerals have been extracted.

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 where relevant and royalties.

Trend:		The direction, in the horizontal plane, of a linear geological feature, such as an ore zone, or a group of orebodies measured from true north.

Volcaniclastic:		Where volcanic derived material has been transported and reworked through mechanical processes.

Volcanisedimentary:		Where volcanic and sedimentary material have been transported and reworked through mechanical processes.

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

Weathered or weathering:		Rock broken down by erosion.

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 “PART I. 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 and Central Africa. Our books of account are maintained in US dollars and our annual and interim financial statements are prepared on a historical cost basis, except as otherwise required under International Financial Reporting Standards as issued by International Accounting Standards Board (“IFRS”), and in accordance with IFRS. IFRS differs in significant respects from generally accepted accounting principles in the United States, or US GAAP. This Annual Report includes our audited consolidated financial statements prepared in accordance with IFRS. The financial information included in this Annual Report has been prepared in accordance with IFRS and, except where otherwise indicated, is presented in US dollars. For a definition of cash costs and other non-GAAP measures, please see “PART I. Item 3. Key Information – A. Selected Financial Data”.

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

PART I

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, 2012, 2011 and 2010 and as at December 31, 2012 and 2011, which appear elsewhere in this Annual Report. The historical consolidated financial data as at December 31, 2010, 2009 and 2008, and for the years ended December 31, 2009 and 2008 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.


$000:	Year Ended December 31, 2012		Year Ended December 31, 2011 (Restated)+			Year Ended December 31, 2010		Year Ended December 31, 2009		Year Ended December 31, 2008
STATEMENT OF COMPREHENSIVE INCOME DATA:
Amounts in accordance with IFRS
Revenues		1,317,830		1,127,086			484,553		432,780		338,572
Profit from operations#		567,442		499,816	+		136,141		113,764		75,937
Net profit attributable to owners of the parent		431,801		383,860	+		103,501		69,400		41,569
Basic earnings per share ($)		4.70		4.20	+		1.14		0.86		0.54
Fully diluted earnings per share ($)		4.65		4.16	+		1.13		0.84		0.54
Weighted average number of shares used in computation of basic earnings per share		91,911,444		91,337,712			90,645,366		81,022,790		76,300,116
Weighted average number of shares used in computation of fully diluted earnings per share		92,824,826		92,276,517			91,926,912		82,161,851		77,540,198
Dividends declared per share^		0.50		0.40			0.20		0.17		0.13
Other data
Total cash costs ($ per ounce sold)*		735		688			681		510		468

#	Profit from operations is calculated as profit before income tax under IFRS, excluding net finance income/(loss). Profit from operations all arises from continuing operations.

+	The group changed its accounting policy on production phase stripping costs effective from January 1, 2012. As a result, the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

^	Dividend distribution to the company’s shareholders is recognized as a liability in the group’s financial statements in the period in which the dividends are approved by the board of directors and declared to shareholders.

Refer to explanation of non-GAAP measures provided. The group has changed its treatment of consolidated non-GAAP measures in the period, which has resulted in changes to the group level non-GAAP measures for 2009 to 2012, in addition to the effect of the IFRIC 20 restatement above. Details of the change are provided in the section “Non-GAAP Measures” below.


$000:	At December 31, 2012		At December 31, 2011 (Restated)+			At December 31, 2010		At December 31, 2009		At December 31, 2008
STATEMENT OF FINANCIAL POSITION AMOUNTS:
Amounts in accordance with IFRS
Total assets		3,127,144		2,544,807	+		1,994,340		1,820,168	821,442
Long-term loans		13,296		—			—		234		1,284
Share capital		4,603		4,587			4,555		4,506		3,827
Share premium		1,409,144		1,386,939			1,362,320		1,317,771	455,974
Retained earnings		1,154,273		759,209	+		393,570		305,415	245,982
Other reserves		50,994		40,531			31,596		18,793		(31,387	)
Equity attributable to the owners of the parent		2,619,014		2,191,266	+		1,792,041		1,646,485	674,396

+	The group changed its accounting policy on production phase stripping costs effective from January 1, 2012. As a result, the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

Non-GAAP Measures

We have identified certain measures that we believe will assist understanding of the performance of the business. As the measures are not defined under IFRS, they may not be directly comparable with other companies’ adjusted measures. The non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures or performance, but management has included them as these are considered to be important comparables and key measures used within the business for assessing performance.

Previously, total cash cost and cash operating cost only included costs associated with activities at each operating mine. The group has changed the treatment of total cash cost and cash operating cost, by including all costs and activities across the group after elimination of intragroup transactions, rather than aggregating the mine level costs. This does not impact the individual mines as the adjustment reflects consolidation level adjustments. All comparative periods have been restated accordingly.

These measures are further explained below:

Total cost of producing gold is not a defined term under IFRS and includes mine production costs, depreciation and amortization charges, other mining and processing costs, transport and refining costs, royalties and movement in production inventory and ore stockpiles. Previously, total cost of producing gold only included costs associated with activities at each operating mine. The group has changed the treatment, by including all costs and activities across the group after elimination of intra group transactions, rather than aggregating the mine level costs. This does not impact the individual mines as the adjustment reflects consolidation level adjustments. All comparative periods have been restated accordingly and the total cost of producing gold is therefore calculated on a consistent basis for all periods presented.

Total cost of producing gold per ounce is calculated by dividing total cost of producing gold, as defined above, by gold ounces sold for the periods presented. Total cost of producing gold per ounce is calculated on a consistent basis for the periods presented. As discussed above, the treatment of total cost of producing gold per ounce has been amended and all comparative periods have been adjusted accordingly.

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 where relevant, and royalties. Under the company’s accounting policies, there are no transfers to and from deferred stripping.

Total cash costs per ounce are calculated by dividing total cash costs, as determined using the Gold Institute guidance, by gold ounces sold for the periods presented. Total cash costs and total cash cost per ounce are calculated on a consistent basis for the periods presented. As discussed above, the treatment of total cash costs and cash operating costs have been amended and all comparative periods have been adjusted accordingly.

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 measures or an indicator of our performance. The data does not have a meaning prescribed by IFRS 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, but are not included in total cash costs under the guidance provided by the Gold Institute. Furthermore, while the Gold Institute has provided a definition for the calculation of total cash costs and total cash costs per ounce, the calculation of these numbers may vary from company to company and may not be comparable to other similarly titled measures of other companies. However, 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.

Cash operating costs and cash operating cost per ounce are calculated by deducting royalties from total cash costs. Cash operating costs per ounce are calculated by dividing cash operating costs by gold ounces sold for the periods presented.

Profit from mining activity is calculated by subtracting total cash costs from gold sales for all periods presented.

Gold sales referred to in the production results tables for each mine refer to gold sales by the mine, which in the case of Loulo, includes a limited amount of gold sales to group companies. The consolidated IFRS measured revenue in the financial statements and the aggregate of the gold sales by mine, after the elimination of intragroup transactions, are $1.318 billion; 2011: $1.127 billion; 2010: $0.485 billion.

The following table lists the costs of producing gold, based on IFRS figures extracted from the financial statements of the Company, and reconciles this 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:


$000: Costs	Year Ended December 31, 2012			Year Ended December 31, 2011 (Restated)+			Year Ended December 31, 2010			Year Ended December 31, 2009			Year Ended December 31, 2008
Mine production costs		460,322			362,892	+		247,850			196,318			186,377
Depreciation and amortization		131,741			82,060			28,127			28,502			21,333
Other mining and processing costs		84,182			70,303			20,598			19,073			13,675
Transport and refinery costs		2,988			2,641			1,653			1,594			2,053
Royalties		67,802			53,841			27,680			25,410			19,730
Movement in production inventory and ore stockpiles		(31,970	)		5,047			(16,152	)		5,741			(21,865	)
Total cost of producing gold #		715,065			576,784	+		309,756			276,638			221,303
Less: Non-cash costs included in total cost of producing gold: Depreciation and amortization		(131,741	)		(82,060	)		(28,127	)		(28,502	)		(21,333	)
Total cash costs using the Gold Institute’s guidance#		583,324			494,724	+		281,629			248,136			199,970
Ounces sold*		793,852			718,762			413,262			486,324			427,713
Total cost of producing gold per ounce ($ per ounce)#		901			802	+		750			569			517
Total cash costs per ounce ($ per ounce)#		735			688	+		681			510			468

40% share of Morila and 100% share of Loulo, Tongon and Gounkoto

The group changed its accounting policy on production phase stripping costs effective from January 1, 2012. As a result, the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

The figures above are stated after the effects of restatements to prior periods, as detailed above and on pages F-9 to F-10 of this Annual Report, as detailed below:


$000:	Year Ended December 31, 2012			Year Ended December 31, 2011 (Restated)+			Year Ended December 31, 2010			Year Ended December 31, 2009			Year Ended December 31, 2008
Impact of IFRIC 20+
Impact on total cost of producing gold		—			(12,100	)		—			—			—
Impact on total cash costs		—			(12,100	)		—			—			—
Impact on total cost of producing gold per ounce		—			(17	)		—			—			—
Impact on total cash cost per ounce		—			(17	)		—			—			—
Impact of change in treatment of total cost of producing gold per ounce and total cash cost per ounce
Impact on total cost of producing gold		(11,306	)		(7,690	)		(7,414	)		(1,047	)		—
Impact on total cost of producing gold per ounce		(14	)		(11	)		(17	)		(2	)		—
Impact on total cash costs		(11,306	)		(7,690	)		(7,414	)		(1,047	)		—
Impact on total cash cost per ounce		(14	)		(11	)		(17	)		(2	)		—

+	The group changed its accounting policy on production phase stripping costs effective from January 1, 2012. As a result, the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

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. There may be additional risks and uncertainties not presently known to us, or that we currently see as immaterial, which may also harm our business. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, results of operations and financial condition could be materially and adversely affected. In this case, the trading price of our ordinary shares and American Depositary Shares, or ADS, could decline and you might lose all or part of your investment.

Risks Relating to Our 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 revenue 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 investment purposes including Exchange Traded Funds, industrial uses and for use in jewelry;

•

international or regional political and economic trends;

•

the strength of the US dollar, the currency in which gold prices generally are quoted, and of other currencies;

•

market expectations regarding inflation rates;

•

interest rates;

•

speculative activities;

•

actual or expected purchases and sales of gold bullion holdings by central banks, the International Monetary Fund, 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 approximate annual high, low and average of the afternoon London Bullion Market fixing price of gold in US dollars for the past ten years.


	Price Per Ounce ($)
Year	High		Low		Average
2003		416		320		363
2004		454		375		409
2005		537		411		444
2006		725		525		604
2007		841		608		695
2008		1,011		712		871
2009		1,213		810		972
2010		1,421		1,058		1,224
2011		1,895		1,319		1,571
2012		1,792		1,540		1,669
2013 (through February)		1,694		1,577		1,649

If gold prices should fall below and remain below our cost of production for any sustained period we may experience losses, and if gold prices should fall below our cash costs of production we may be forced to re-plan and mine higher grade ore which will have a negative impact on our reserves and life of mine plans. Low gold prices for an extended period could result in us having 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 from 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 $735 in the year ended December 31, 2012, $688 (as restated) in the year ended December 31, 2011 and $681 in the year ended December 31, 2010.

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 cash 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;

•

depletion from past mining;

•

mining method and associated dilution and ore loss factors;

•

gold price; and

•

operating costs.

Because our ore reserve estimates are calculated based on current estimates of future 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 material adverse effect on our business, financial condition and results of operations.

We are subject to various political and economic uncertainties associated with operating in Mali, that could significantly affect our mines in Mali and our results of operations and financial condition.

We are subject to risks associated with operating gold mines in Mali. In 2012, gold produced in Mali represented approximately 74% of our consolidated group gold production. On March 21, 2012, Mali was subject to an attempted coup d’état that resulted in the suspension of the constitution, the partial closing of the borders and the general disruption of business activities in the country. The supply of consumables to our mines in Mali was temporarily interrupted as a result of the political situation. The borders were reopened shortly after these events and an interim government was installed within a month. In January 2013, following military conflicts with terrorist insurgents, the Malian State requested the assistance of the French Government to assist the Malian army to repel the insurgents who had been occupying parts of the north of the country and beginning to move towards the southern part of the country. At present, French and other foreign troops occupy the northern part of the country to assist the Malian State in maintaining control of this region.

Government elections are scheduled to take place during the middle of 2013. Although we have continued to produce and sell gold during this political crisis, there can be no assurance that the political situation will not disrupt our ability to continue gold production, or our ability to sell and ship our gold from our mines in Mali. Furthermore, there can be no assurance that the Malian political crisis will not have a material adverse effect on our operations and financial condition.

Our business and results of operations may be adversely affected if the State of Mali and the DRC state fail to repay Value Added Tax, or TVA, owing to the Morila and Loulo mines and the Kibali project.

Our mining companies operating in Mali are exonerated by their Establishment Conventions from paying TVA for the three years following first commercial production. After that, TVA is payable and reimbursable. TVA is only reclaimable insofar as it is expended in the production of income. A key aspect in TVA recovery is managing the completion of the State of Mali’s audit of the taxpayer’s payments, at which time the State of Mali recognizes a liability.

By December 2007, Morila had successfully concluded a reimbursement protocol with the State of Mali for all TVA reimbursements it was owed up to June 2005. Morila was unable to conclude a second protocol subsequent to December 2007, however, and pursuant to its Establishment Convention, began offsetting TVA reimbursements it was owed against corporate and other taxes payable by Morila to the State of Mali. As a result of the offsets, Morila had recouped all its outstanding TVA as at December 31, 2010, as the State of Mali repaid all outstanding amounts by this date. As of December 31, 2011 and December 31, 2012, TVA owed by the State of Mali amounted to $3.9 million and $6.4 million (our 40%), respectively.

During 2010 and 2011 and, to a degree, 2012 Loulo has offset TVA reimbursements it was owed against corporate and other taxes payable by Loulo to the State of Mali. At December 31, 2011, TVA owed by the State of Mali to Loulo stood at $19 million. This amount has increased to $72.2 million at December 31, 2012.

Included in the TVA owing amounts are amounts which had been extracted from the Morila and Loulo TVA refunds pertaining to disputed tax assessments. As at December 31, 2012 these amounted to $4.7 million (our 40%) owing to Morila and $24.4 million owing to Loulo.

By December 31 2012, TVA owing to Kibali by the DRC State amounted to $20.1 million (our 50%). Kibali has received TVA refunds during the year, but the process has been slower than set out by law, due to additional administrative requirements imposed by the relevant State departments.

Our business, cash flow and results of operations will be adversely affected to the extent the TVA amounts owing to the group are not paid.

Our business may be adversely affected if we fail to resolve disputed tax claims with the State of Mali.

As at December 31, 2012, the group had received claims for various taxes from the State of Mali totaling $86.2 million, in respect of the Loulo, Gounkoto and Morila mines. Having taken professional advice, the group considers the claims to be wholly without merit or foundation and is strongly defending its position, including following the appropriate legal process for such disputes in Mali. Each of the companies have legally binding mining conventions which guarantee fiscal stability, govern the taxes applicable for the companies and allow for international arbitration in the event that a dispute cannot be resolved in the country. Management continues to engage with the Malian authorities at the highest level to resolve this issue. However, it may be necessary to instigate arbitration proceedings to resolve these disputes.

If for any reason these disputed tax claims become due and payable the results of Morila and Loulo’s operations and financial position would be adversely affected, as would their ability to pay dividends to their shareholders. Accordingly, our business, cash flows and financial condition will be adversely affected if anticipated dividends are not paid.

Our success may depend on our social and environmental performance.

Our ability to operate successfully in communities will likely depend on our ability to develop, operate and close mines in a manner that is consistent with the health, safety and well-being of our employees, the protection of the environment, and the creation of long term economic and social opportunities in the communities in which we operate.

Mining companies are required to make a fair contribution and provide benefits to the communities and countries in which they operate, and are subject to extensive environmental, health and safety laws and regulations. As a result of public concern about the real or perceived detrimental effects of economic globalization and global climate impacts, businesses generally and large multinational corporations in natural resources industries, in particular, face increasing public scrutiny of their activities. These businesses are under pressure to demonstrate that, as they seek to generate satisfactory returns on investment to shareholders, other stakeholders, including employees, governments, communities surrounding operations and the countries in which they operate, benefit and will continue to benefit from their commercial activities. Such pressures tend to be particularly focused on companies whose activities relate to non-renewable resources and are perceived to have a high impact on their social and physical environment. The potential consequences of these pressures include reputational damage and legal suits.

Certain non-governmental organizations oppose globalization and resource development and are often vocal critics of the mining industry and its practices. Adverse publicity by such non-governmental agencies could have an adverse effect on our reputation and financial condition and could have an impact on the communities within which we operate.

In addition, our ability to successfully obtain key permits and approvals to explore for, develop and operate mines and to successfully operate in communities around the world will likely depend on our ability to develop, operate and close mines in a manner that is consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be required by law. Mining operations should be designed to minimize the negative impact on such communities and the environment, for example, by modifying mining plans and operations or by relocating those affected to an agreed location. The cost of these measures could increase capital and operating costs and therefore could have an adverse impact upon our financial conditions and operations. We seek to promote improvements in health and safety, environmental performance and community relations. However, our ability to operate could be adversely impacted by accidents or events detrimental (or perceived to be detrimental) to the health, safety and well-being of our employees, the environment or the communities in which we operate.

In July 2009, the Loulo mine experienced some disruption, caused by a small group of disaffected people unable to secure long term employment at the mine. The disruption resulted in some damage to the tailings pipeline as well as to some accommodation units and other property. As a result, all operations at the Loulo mine were suspended for 36 hours, following which all mining and processing operations returned to normal. There can be no assurance that similar events will not happen in the future, or that such events will not adversely affect our results of operations and properties.

In November 2011 and March 2012, the Tongon mine experienced temporary work stoppages during the course of negotiating a mine level agreement with a newly established union. Though we signed the mine level agreement with the union during 2012, there can be no assurance that similar work stoppages will not happen in the future, or that such events will not adversely affect our results of operations.

Any appreciation of the currencies in which we incur costs against the US dollar could adversely affect our results of operations and financial condition.

While our revenue is derived from the sale of gold in US dollars, a significant portion of our input costs are incurred in currencies other than the dollar, primarily Euro, Communauté Financière Africaine franc and South African Rand. Accordingly, any appreciation in such other currencies could adversely affect our results of operations.

The profitability of our operations and the cash flows generated by these operations are significantly affected by the fluctuations in the price, cost and supply of fuel and other inputs, and we would be adversely affected by future increases in the prices of fuel and other inputs.

Fuel, power and consumables, including diesel, steel, chemical reagents, explosives and tires, form a relatively large part of our operating costs. The cost of these consumables is impacted to varying degrees by fluctuations in the price of oil, exchange rates and availability of supplies. Such fluctuations have a significant impact upon our operating costs and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for mining projects, new and existing, and could even render certain projects non-viable.

Fuel is the primary input utilized in our mining operations, and our results are significantly affected by the price and availability of fuel, which are in turn affected by a number of factors beyond our control. Historically, fuel costs have been subject to wide price fluctuations based on geopolitical factors and supply and demand. Recent political unrest in certain oil producing countries has led to an increase in the cost of fuel. If there are additional outbreaks of hostilities or other conflicts in oil producing areas or elsewhere, or a reduction in refining capacity (due to weather events, for example), or governmental limits on the production or sale of fuel, or restrictions on the transport of fuel, there could be reductions in the supply of fuel and significant increases in the cost of fuel.

During 2011, the average price of our landed fuel was higher than 2010, and it rose slightly in 2012. In the year ended December 31, 2012, the cost of fuel and other power generation costs comprised approximately 25% of our operating costs (2011: 25%).

While we do not currently anticipate a significant reduction in fuel availability, factors beyond our control make it impossible to predict the future availability of fuel. We are not parties to any agreements that protect us against price increases or guarantee the availability of fuel. Major reductions in the availability of fuel or significant increases in its cost, or a continuation of current high prices for a significant period of time, would adversely affect our results of operations and profitability.

Our underground mines at Loulo and our underground development project at Kibali are subject to all of the risks associated with underground mining.

Development of the underground mine at Yalea (Loulo) commenced in December 2006 and first ore was mined in April 2008. This planned mine, and the subsequent Gara underground mine (Loulo), represented our entry into the business of underground mining, and the commencement of underground mining in Mali by any mining company. In connection with the development of the underground mines, we must build the necessary infrastructure, the costs of which are substantial. The underground mines may experience unexpected problems and delays during their development and construction. Delays in the commencement of gold production could occur and the development costs could be larger than expected, which could affect our results of operations and profitability.

Since the commencement of the underground operations at Yalea, in working with a mining contractor, we have experienced a number of challenges which have led to delays and slower build up of production. These challenges included the availability of the underground fleet, the ability to drill and blast in line with the plan and the contractor’s poor safety record.

Following these setbacks experienced during 2009, we terminated the underground mining contract with the contractor and have assumed responsibility for underground mining at Loulo. At the beginning of 2010, we appointed a new contractor to develop the Gara underground mine, and subsequently extended their contract at the end of 2010 to include the additional development of the Yalea underground mine. The development and operation of the underground mine has been negatively impacted by these issues and resulting delays, and there can be no assurance that such issues will be fully resolved or that we will not have any further future delays.

Development of the Kibali mine includes the development of an underground mine, utilizing two separate mining contractors for each of the declines and vertical shaft. During 2012, we commenced the development of the decline shaft system and the vertical shaft platform was completed. In 2013, we have continued to progress our underground operations at Kibali, including starting the development of the shaft collar and foundations for the winder house.

The business of underground mining by its nature involves significant risks and hazards. In particular, as the development commences the operation could be subject to:

•

rockbursts;

•

seismic events;

•

underground fires;

•

cave-ins or falls of ground;

•

discharges of gases or toxic chemicals;

•

flooding;

•

accidents; and

•

other conditions resulting from drilling, blasting and the removal of material from an underground mine.

We are at risk of experiencing any and all of these hazards. The occurrence of any of these hazards could delay the development of the mine, production, increase cash operating costs and result in additional financial liability for us.

Actual cash costs of production, production results, capital expenditure costs and economic returns may differ significantly from those anticipated by our feasibility studies for new development projects.

It typically takes a number of years from initial feasibility studies of a mining project until development is completed and, during that time, the economic feasibility of production may change. The economic feasibility of development projects is based on many factors, including the accuracy of estimated reserves, metallurgical recoveries, capital and operating costs and future gold prices. The capital expenditures and time required to develop new mines or other projects are considerable, and changes in costs or construction schedules can affect project economics. Thus it is possible that actual costs and economic returns may differ materially from our estimates.

In addition, there are a number of uncertainties inherent in the development and construction of any new mine, including:

•

the availability and timing of necessary environmental and governmental permits;

•

the timing and cost necessary to construct mining and processing facilities, which can be considerable;

•

the availability and cost of skilled labor, power, water and other materials;

•

the accessibility of transportation and other infrastructure, particularly in remote locations; and

•

the availability of funds to finance construction and development activities.

Kibali completed an optimized feasibility during 2011 and construction of the mine started in 2012. Included in the mine development is the relocation of approximately 20,000 people from the mine site, and 10 of the 14 affected villages were relocated to the new model village of Kokiza during the year. At Kibali, open pit and underground mining also commenced during the year and the construction of the processing plant is well advanced, with the mine’s first gold production scheduled for the end of 2013. However, there can be no assurance that the project will not be subject to the risks and uncertainties listed above, all of which could have an adverse material affect on the results of our operations and financial condition. At Massawa (Senegal), a technical and financial study was completed on the open pit enabling us to declare mineral reserves in 2010. In 2012 it was decided to focus on understanding the geological and metallurgical controls as well as the growing resource base of the project. The current plan is to progress the feasibility study through 2013 and 2014. There can be no assurance that the Massawa project will ultimately result in a new commercial mining operation, or that such new commercial mining operations would be successful.

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. These countries and other emerging markets in which we may conduct operations have, from time to time, experienced economic or political instability. It is difficult to predict the future political, social and economic direction of the countries in which we operate, and the impact government decisions may have on our business. Any political or economic instability in the countries in which we currently operate could have a material adverse effect on our business and results of operations.

The countries of Mali, Senegal, Burkina Faso, Democratic Republic of the Congo (“DRC”) and Côte d’Ivoire have, since independence, experienced some form of political upheaval with varying forms of changes of government taking place.

Goods are supplied to our operations in Mali primarily by road through Senegal and Côte d’Ivoire, which at times have been disrupted by geopolitical issues. Any present or future policy changes in the countries in which we operate, or through which we are supplied, may in some way have a significant effect on our operations and interests.

The mining laws of Mali, Côte d’Ivoire, Senegal, Burkina Faso, and DRC stipulate that, should an economic orebody be discovered on a property subject to an EP, a permit that allows processing operations to be undertaken must be issued to the holder. Legislation in certain countries currently provides for the relevant government to acquire a free ownership interest in any mining project. 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.

In addition, unforeseen events, including war, terrorism and other international conflicts could disrupt our operations and disrupt the operations of our suppliers. Such events could make if difficult or impossible for us to conduct our mining operations, including delivering our products and receiving materials from suppliers.

Changes in mining legislation can have significant effects on our operations.

While we have entered into binding mining conventions with the governments of Côte d’Ivoire, Mali and the DRC, changes in mining legislation in these countries could have significant adverse effects on our results of operations. In addition, changes in mining legislation may discourage future investments in these jurisdictions, which may have an adverse impact on our ability to develop new mines and reduce future growth opportunities. Among the jurisdictions in which we currently have major operations, there are several proposed or recently adopted changes in mining legislation that could materially affect us. The governments in these jurisdictions may require us to renegotiate our mining conventions. If so, there can be no assurance that the outcome of our negotiations will not have a material adverse impact on our financial condition or operational results.

We are subject to various political and economic uncertainties associated with operating in the DRC, and the success of the Kibali project will depend in large part on our ability to overcome significant challenges.

We are subject to risks associated with operating the Kibali project in the DRC. The Kibali project is located in the north-east region of the DRC and is subject to various levels of political, economic and other risks and uncertainties associated with operating in the DRC. Some of these risks include political and economic instability, high rates of inflation, severely limited infrastructure, lack of law enforcement, labor unrest, and war and civil conflict. In addition, the Kibali project is subject to the risks inherent in operating in any foreign jurisdiction including changes in government policy, restrictions on foreign exchange, changes in taxation policies, and renegotiation or nullification of existing concessions, licenses, permits and contracts.

The DRC is an impoverished country with physical and institutional infrastructure that is in a debilitated condition. It is in transition from a largely state-controlled economy to one based on free market principles, and from a non-democratic political system with a centralized ethnic power base to one based on more democratic principles. There can be no assurance that these changes will be effected or that the achievement of these objectives will not have material adverse consequences for the Kibali project.

Any changes in mining or investment policies or shifts in political attitude in the DRC may adversely affect operations and/or profitability of the Kibali project. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. These changes may impact the profitability and viability of the Kibali project.

Furthermore, the Kibali project is located in a remote area of the DRC, which lacks basic infrastructure, including adequate roads and other transport, sources of power, water, housing, food and transport. In order to develop any of the mineral interests, facilities and material necessary to support operations in the remote locations in which they are situated must be established. The remoteness of the mineral interests would affect the potential viability of mining operations, as we would also need to establish substantially greater sources of power, water, physical plant, roads and other transport infrastructure than are currently present in the area. It is planned that hydropower stations will be utilized at Kibali, which will necessarily involve reconfiguring, refurbishing and maintaining existing stations and building new hydropower stations and also obtaining certain government licenses related to their operation.

Moreover, the north-east region of the DRC has undergone civil unrest and instability that could have an impact on political, social or economic conditions in the DRC generally. Stability must be maintained in order for us to build and operate a mine at the Kibali project site. The impact of unrest and instability on political, social or economic conditions in the DRC could result in the impairment of the exploration, development and operations at the Kibali project.

The communities near the Kibali project need to be resettled in an orderly and peaceful manner to allow the development and operation of a mine at the site. The resettlement program has commenced following agreement with the local authorities and communities affected by the project, with 10 of the 14 affected villages successfully relocating to the model village of Kokiza during 2012. Any failure to complete the settlement plan successfully will materially and adversely affect our ability to build and operate a mine at the Kibali project site.

We are subject to various political and economic uncertainties associated with operating in Côte d’Ivoire, that could significantly affect the success of the Tongon mine.

We have been subject to risks associated with operating the Tongon mine in Côte d’Ivoire. Côte d’Ivoire has experienced several years of political disruptions, including an attempted coup d’état and civil war. A dispute over the Côte d’Ivoire presidential election in November 2010 resulted in the establishment of two rival governments and the imposition of targeted sanctions. The political impasse, however, was resolved during 2011, and while the Tongon mine continued to operate throughout the crisis, at times we were unable to ship and sell our Tongon gold production, which resulted in timing discrepancy between our gold produced and the recognition of revenue from gold sales. While all our gold production was subsequently sold and the country reverted to normality, there can be no assurance that similar events may not occur in the future which would have a material adverse effect on our gold production and financial results. Our operations and financial conditions could be impacted by future political and economic instabilities.

Certain factors may affect our ability to support the carrying value of our property, plant and equipment, and other assets on our consolidated statement of financial position.

We review and test the carrying amount of our assets on an annual basis when events or changes in circumstances suggest that the net book value may not be recoverable. If there are indications that impairment may have occurred, we prepare estimates of expected future discounted cash flows for each group of assets. Assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units) for purposes of assessing impairment. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash flows are significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.

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

We have from time to time used derivative instruments to protect the selling price of some of our anticipated gold production. The intended effect of our derivative transactions was to lock in a fixed sale price for some of our future gold production to provide some protection against a subsequent fall in gold prices. Although we have currently ceased using derivative instruments to protect us against low gold prices at our operations, we may in the future determine to implement the use of derivatives in connection with a portion of our anticipated gold production.

Derivative transactions can result in a reduction in revenue if the instrument price is less than the market price at the time the hedged sales are recognized. Moreover, our decision to enter into a given instrument would be based upon market assumptions. If these assumptions are not ultimately met, significant losses or lost opportunities for significant gains may result. In all, the use of these instruments may result in significant losses which would 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.

Under our joint venture agreements with AngloGold Ashanti Limited, or AngloGold Ashanti, we operate the Morila mine and the Kibali project through a joint venture agreement and joint venture committee, and any disputes with AngloGold Ashanti over the management of the Morila mine or the Kibali project could adversely affect our business.

We jointly control Morila SA, the owner of the Morila mine, and Kibali Goldmines SPRL, the owner of the Kibali project, with AngloGold Ashanti under joint venture agreements. We are responsible for the day-to-day operations of Morila and the Kibali project, subject to the overall management control of the Société des Mines de Morila SA (“Morila SA”) and Kibali Goldmines SPRL boards, respectively. Substantially all major management decisions, including approval of a budget for the Morila mine and the Kibali project, must be approved by the Morila SA and Kibali Goldmines SPRL boards, respectively. We and AngloGold Ashanti retain equal representation on the boards, with neither party holding a deciding vote. If a dispute arises between us and AngloGold Ashanti with respect to the management of Morila SA or Kibali Goldmines SPRL, and we are unable to amicably resolve the dispute, we may have to participate in arbitration or other proceedings to resolve the dispute, which could materially and adversely affect our business.

The Kibali project development plan was approved by the board of Kibali Goldmines SPRL in May 2012. However, there can be no assurance that the Kibali project will ultimately receive all the required approvals of all stakeholders or that disputes between the joint venture partners will not disrupt the development of the project.

Our mines and projects face many risks related to their present or future operations that may impact cash flows and profitability.

Our mines and projects are subject to all of the operating hazards and risks normally incident to exploring for, developing and operating mineral properties and mines, such as:

•

encountering unusual or unexpected formations;

•

environmental pollution;

•

mechanical breakdowns;

•

safety-related stoppages;

•

work stoppages or other disruptions in labor force;

•

electrical power and fuel supply interruptions;

•

unanticipated ground conditions; and

•

personal injury and flooding.

During 2011, Tongon’s operations were negatively impacted by flooding as a result of the rainy season and by problems encountered during the change-over from diesel generated power to Côte d’Ivoire’s national grid. Also, in November 2011, the Tongon mine suffered a major failure of the barring gear at its No 1 mill. As a result, management also shut down Tongon’s No 2 mill as well in the interests of personal safety and to protect the No 2 mill from a similar failure. In November 2011 and March 2012, the Tongon mine experienced temporary work stoppages during the course of negotiating a mine level agreement with a newly established union. During 2012 the Tongon mine was plagued by a series of operational challenges, including underperformance in the mining of the open pit as the mine struggled to manage the transition from softer oxide material to fresh rock. Also, the mine experienced frequent outages of grid power which disrupted the processing plant. Additionally, during December 2012 there was a fire in the milling circuits which resulted in both mills being offline for one week followed by lower throughput and recoveries. These issues led to gold production at Tongon missing its target by 26%. The plant was restored to full production by the end of January 2013 and the power and recovery problems are still being addressed.

During 2011, the Gounkoto’s mine operations were disrupted by flooding following unusually heavy rains. In July 2009, the Loulo mine experienced some disruption, caused by a small group of disaffected people unable to secure long term employment at the mine. The disruption resulted in some damage to the tailings pipeline as well as to some accommodation units and other property. All operations were suspended for 36 hours, following which all mining and processing operations were restored and operating back at normal capacity.

There can be no assurance that similar operational issues will not happen in the future, or that such events will not adversely affect our results of operations.

The use of mining contractors at certain of our operations may expose it to delays or suspensions in mining activities.

Mining contractors are used at Tongon, Loulo, Gounkoto, Kibali and Morila to mine and deliver ore to processing plants and at Loulo and Kibali to develop the underground mine. These mining contractors rely on third-party vendors to supply them with required mining equipment, some of which have been adversely affected by the global economic slowdown. Consequently, at these mines, we do not own all of the mining equipment and may face disruption of operations and incur costs and liabilities in the event that any of the mining contractors at these mines, or any of the vendors that supply them, has financial difficulties, or should there be a dispute in renegotiating a mining contract, or a delay in replacing an existing contractor.

Since the commencement of the underground operations at Yalea, in working with a mining contractor, we experienced a number of challenges which have led to delays and slower build up of production. These challenges included the availability of the underground fleet, the ability to drill and blast up holes and the contractor’s poor safety record. Following these setbacks experienced during 2009, we terminated the underground mining contract with the contractor and have assumed responsibility for underground mining at Loulo. At the beginning of 2010, we appointed a new contractor to develop the Gara underground mine, and subsequently extended their contract at the end of 2010 to include the development of the Yalea underground mine. The development and operation of the underground mine has been negatively impacted by these issues and resulting delays and while significant improvement was recorded in 2012, there can be no assurance that we will not have future issues or delays.

Mining operations and projects are vulnerable to supply chain disruption and our operations could be adversely affected by shortages of, as well as lead times to deliver fuel, strategic spares, critical consumables, mining equipment or metallurgical plant.

Our operations could be adversely affected by both shortages and long lead times to deliver fuel, strategic spares, critical consumables, mining equipment and metallurgical plant. We have limited influence over suppliers and manufacturers of these items. In certain cases there are a limited number of suppliers for fuel, certain strategic spares, critical consumables, mining equipment or metallurgical plant who command superior bargaining power relative to us. We could at times face limited supply or increased lead time in the delivery of such items. There can be no assurance that such limited supply or increased lead time in the delivery of items will not happen in the future, or that such events will not adversely affect our results of operations.

We may be required to seek funding from the global credit and capital markets to develop our properties, and the recent weaknesses in those markets could adversely affect our ability to obtain financing and capital resources.

We require substantial funding to develop our properties, and may be required to seek funding from the credit and capital markets to finance these activities. Our ability to obtain outside financing will depend upon the price of gold and the market’s perception of its future price, and other factors outside of our control. We may not be able to obtain funding on acceptable terms when required, or at all.

The credit and capital markets experienced serious deterioration in 2008, including the failure of significant and established financial institutions in the US and abroad, which continued throughout 2010, 2011 and 2012 and may continue in 2013 and beyond, and the conditions in these markets have continued to be difficult since then and may continue to be difficult in the future, which could have an impact on the availability and terms of credit and capital in the near term. The deteriorating financial condition of certain government authorities has significantly increased the potential for sovereign defaults in a number of jurisdictions, including within the European Union. If uncertainties in these markets continue, or these markets deteriorate further, it could have a material adverse effect on our ability to raise capital. Failure to raise capital when needed or on reasonable terms may have a material adverse effect on our business, financial condition and results of operations. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to consumer spending, employment rates, inflation, fuel and energy costs, lack of available credit, the state of the financial markets, interest rates and tax rates may affect our growth and profitability.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available for operations.

Most of our cash deposited with banks is not insured and would be subject to the risk of bank failure. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits. The loss of our deposits would reduce the amount of cash we have available for operations and additional investments in our business, and would have a material adverse effect on our financial condition.

The SEC has adopted rules that may affect mining operations in the DRC.

The SEC adopted final rules pursuant to the Dodd Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) regarding disclosure on potential conflict minerals that are necessary to the functionality or production of a product manufactured by a company that files reports with the SEC. Conflict minerals include columbite-tantalite, cassiterite, gold, wolframite or their derivatives or any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the DRC or a bordering country. Under the final rules, reporting companies must disclose the origin of and certain other information concerning the conflict minerals. Issuers subject to the rules have to furnish certain information to the SEC which includes a due diligence report and a certified independent private sector audit that is to be made publicly available. The report will need to disclose whether or not the issuer and the audit have determined that the conflict minerals are “conflict free”, meaning that they did not benefit or finance armed groups in the DRC. The report must include the due diligence measures the issuer took regarding the source and chain of custody of the minerals.

Under the final rules, an issuer that mines conflict minerals, such as the company, is not deemed to be manufacturing or contracting to manufacture those minerals, unless the issuer also engages in manufacturing, whether directly or indirectly through contract. Though we are not subject to the disclosure requirements of the final rules, we may be called upon by other entities we contract with to provide information to them for their own supply-chain due diligence investigations. This may result in the increased cost of demonstrating compliance and difficulties in the sale of gold emanating from the DRC and its neighbors. The complexities of the gold supply chain, especially as they relate to ‘scrap’ or recycled gold, and the fragmented and often unregulated supply of artisanal and small-scale mined gold are such that there may be significant uncertainties at each stage in the chain as to the origin of the gold, and as a result of uncertainties in the process, the costs of due diligence and audit, or the reputational risks of defining their product or a constituent part as containing a ‘conflict mineral’ may be too burdensome for the buyers of our gold. Accordingly, they may decide to switch supply sources. This could have a material negative impact on the gold industry, our relationship with the buyers of our gold, and our financial results.

Inflation may have a material adverse effect on our operations.

Some of our operations are located in countries that have and may continue to experience high rates of inflation during certain periods. It is possible that significantly higher future inflation in countries in which we operate may result in increased future operational costs in local currencies. This could have a material adverse effect upon our operations and financial conditions.

Regulations and pending legislation governing issues involving climate change could result in increased operating costs which could have a material adverse effect on our business.

A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the political significance and uncertainty around the impacts of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.

Some of our operations are carried out in geographical areas which lack adequate infrastructure.

Mining, processing, development and exploration activities depend, in some part, on adequate infrastructure. Reliable roads, power sources and water supply are important factors which affect our operating costs. A lack of infrastructure or varying weather phenomena, sabotage, terrorism or other interferences in the maintenance or provision of such infrastructure could affect our operations and financial conditions.

We may not pay dividends to shareholders in the future.

We have proposed the payment of our seventh dividend to ordinary shareholders, subject to approval by our shareholders at our annual general meeting of shareholders in April 2013. It is our policy to pay dividends if profits and funds are available for that purpose. Whether or not funds are available depends on a variety of factors, including capital expenditure. We cannot guarantee that dividends will be paid in the future.

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, developing 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 $100 million 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 effect 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:

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that 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;

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that the judgment is final and conclusive – it cannot be altered by the courts which pronounced it;

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that 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;

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that the judgment has not been prescribed;

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

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that the judgment was not obtained by fraud; and

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that 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.

We are subject to significant corporate regulation as a public company and failure to comply with all applicable regulations could subject us to liability or negatively affect our share price.

As a publicly traded company we are subject to a significant body of regulation. While we have developed and instituted a corporate compliance program based on what we believe are the current best practices in corporate governance and continue to update this program in response to newly implemented or changing regulatory requirements, there can be no assurance that we are or will be in compliance with all potentially applicable corporate regulations. For example, there can be no assurance that in the future our management will not find a material weakness in connection with its annual review of our internal control over financial reporting pursuant to Section 404 of the US Sarbanes-Oxley Act of 2002. If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. If we must disclose any material weakness in our internal control over financial reporting, our share price could decline.

In addition, we abide by the provisions of the US Foreign Corrupt Practices Act, Corruption (Jersey) Law and the UK Bribery Act, which generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. The compliance mechanisms and monitoring programs that we have in place may not adequately prevent or detect possible violations under applicable anti-bribery and corruption legislation. Failure to comply with such legislation could expose us to civil and criminal sanction, including fines, prosecution, potential debarment from public procurement and reputational damage, all of which could have a material adverse effect on our financial results and could cause our share price to decline.

Risks Relating to Our Industry

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

We must continually seek to replace our ore reserves depleted by production to maintain production levels over the long term. Ore reserves can be replaced by expanding known orebodies or exploring for new deposits. 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.

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 found not to be 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 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.

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 results of operations and financial condition.

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.

Our operations are highly unionized, and strikes are legal in the countries in which we operate. Therefore, our operations are at risk of having work interrupted for indefinite periods due to industrial action, such as strikes by employee collectives. Should long disruptions take place on our operations, the results from our operations and their financial condition could be materially and adversely affected.

AIDS and tropical disease outbreaks pose risks to us in terms of productivity and costs.

The incidence of AIDS in the DRC, Mali, Côte d’Ivoire, Burkina Faso and Senegal, which has been forecast 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 in the countries in which we operate and among our workforce 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 operations and financial condition.

Malaria and other tropical diseases pose significant health risks at all of our operations in West Africa and Central Africa where such diseases may assume epidemic proportions. Malaria is a major cause of death and also gives rise to absenteeism in adult men. Consequently, if uncontrolled, the disease could adversely impact our operations and financial condition.

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 3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey, JE2 4WJ 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 also 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 SA, or Somilo, through a series of transactions culminating in April 2001. In February 2004, we announced that we would develop a new mine at Loulo in western Mali. The Loulo mine commenced operations in October 2005 and mines the Gara (formerly Loulo 0) and Yalea deposits. In addition, the board agreed to proceed with the development of the underground mine and, after the award of the development contract, work commenced with the construction of the boxcut at the Yalea mine in August 2006. We accessed first ore at Yalea in April 2008 with full production beginning in 2010. We commenced development of Loulo’s second underground mine, Gara, and started mining in 2011. We discovered the Yalea deposit in 1997.

We have an 80% controlling interest in Société des Mines de Gounkoto SA, or Gounkoto. The Gounkoto mine commenced mining in January 2011 and processing by way of a toll treatment agreement with Loulo, in June 2011.

We have an 89% controlling interest in Société des Mines de Tongon SA, or Tongon. The Tongon mine commenced mining in April 2010 and first gold was produced in 2010.

We conduct our mining operations through:

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a 50% joint venture interest in Morila Limited (which in turn owns an 80% interest in the Morila mine);

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an 80% interest in Somilo;

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an 80% interest in Gounkoto; and

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an 89% interest in Tongon.

In April 2004, Resolute Mining Limited, or Resolute, acquired the Syama mine from us. The agreement entered into in June 2004 between the parties provides for the payment of a production royalty by Resolute to us relating to Syama’s production equal to $10/oz on the first million ounces produced by Syama and $5/oz on the next 3Moz produced by Syama. This royalty payment is capped at $25 million. We received our first royalties in 2009. During 2012, quarterly royalty payments were received from Resolute throughout the year.

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 $0.05 ordinary shares for every one $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. ADS holders were affected the same way as shareholders and the ADS ratio remains one ADS to one ordinary share.

On October 15, 2009, we completed the acquisition of 50% of Moto Goldmines Limited (“Moto Goldmines”), in conjunction with AngloGold Ashanti, which resulted in a 50:50 joint venture control of the Kibali project in the DRC. On December 22, 2009 we completed a further acquisition of a 20% interest, on behalf of the joint venture, from Société des Mines d’Or de Kilo-Moto (“Sokimo”), the parastatal mining company of the DRC, resulting in an effective interest in the Kibali project of 45%.

During November 2009, we completed the sale of our Kiaka gold project to Volta Resources Inc., for CAD$4 million in cash and 20 million Volta Resources Inc. shares. During 2010, we sold 15.5 million Volta Resources Inc. shares for a net profit of $19.3 million. We had received CAD$4 million in full by the end of 2011.

Principal Capital Expenditures

Capital expenditures incurred for the year ended December 31, 2012 totaled $562.3 million compared to $460.6 million for the year ended December 31, 2011, and $410.8 million for the year ended December 31, 2010. Significant capital expenditure is expected to be incurred across the group during 2013 as part of its planned growth in production, especially on the Kibali project in the DRC of approximately $375 million (50% of the project), and the ongoing development of the underground mines at Loulo where total capital at the Loulo-Gounkoto complex is forecasted at $230 million which includes $65 million for the paste backfill plant. Project and sustaining capital at Tongon, including a crusher upgrade and gravity concentration circuit, is estimated at $30 million, and $35 million is estimated at Morila, including $28 million of preproduction costs in respect of the Pit 4S pushback. Total group capital expenditure for 2013 is expected to be approximately $670 million. The capital expenditures are projected to be financed out of internal funds.

Recent Developments

During 2012, we signed a joint venture agreement with Kilo Goldmines Inc. to explore for gold on 12 licenses covering 2,057km²over the northern portion of the Archaean Ngayu greenstone belt and the Isiro greenstone belt in the DRC. The licenses have numerous gold occurrences which were explored during the colonial era and which include current active artisanal sites. We will earn 51% of the joint venture by completing a prefeasibility study within five years.

Project expenditure for the Kibali project ramped up during 2012 as anticipated. Total expenditure for 2012 was $518.6 million (100% of the project, excluding shareholder loan interest and value of leased assets) which was slightly behind plan for the year as a result of the timing of certain activities and related payments. Expenditure on the project is now estimated to be approximately $750 million in 2013, which includes the roll-over from 2012. The total capital for the project has been updated from the prior year’s guidance.

B. BUSINESS OVERVIEW

OVERVIEW

We engage in gold mining, exploration and related activities. Our activities are focused on West and Central Africa, some of the most promising areas for gold discovery in the world. In Mali, we have an 80% controlling interest in the Loulo mine through Somilo. The Loulo mine is currently mining from one large open pit, several smaller satellite pits and two underground mines. We also have an 80% controlling interest in the Gounkoto mine through Société des Mines de Gounkoto S.A. We own 50% of Morila Limited, which in turn owns 80% of Morila SA, the owner of the Morila mine in Mali. In addition, we own an effective 89% controlling interest in the Tongon mine located in the neighboring country of Côte d’Ivoire, which was commissioned in November 2010. We also own an effective 83.25% controlling interest in the Massawa project in Senegal where we completed a technical and financial study in December 2009. In 2009, we acquired a 45% interest in the Kibali project, which is located in the DRC. We also have exploration permits and licenses covering substantial areas in Burkina Faso, Côte d’Ivoire, DRC, Mali, and Senegal. At December 31, 2012, we declared proven and probable reserves of 16.36Moz attributable to our percentage ownership interests in Loulo, Morila, Tongon, Gounkoto, Massawa and Kibali.

Our strategy is to create value for all our stakeholders by finding, developing and operating profitable gold mines. We seek to discover significant 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. We also routinely review opportunities to acquire development projects and existing mining operations and companies.

Loulo

In February 2004, we announced that we would develop a new mine at Loulo in western Mali. In 2005, we commenced open pit mining operations at the Gara and Yalea pits. In 2010, an application was made to split the Loulo and Gounkoto permits. In 2011 mining ceased in the Gara open pit. In 2012, its seventh year of production, the Loulo mine produced 219,745oz of gold at a total cash cost of $781 per ounce. We currently anticipate that mining at Loulo will continue through 2027.

We commenced development of the Yalea underground mine in August 2006, where first ore was accessed in April 2008. We commenced development of Loulo’s second underground mine, Gara, in 2010 with first ore being intersected during the second quarter of 2011 and stoping began in November 2011. During 2011, ore from Gounkoto was processed through the Loulo processing plant following the conclusion of a toll-treatment agreement between the two mines. The commencement of the toll-treatment of ore from Gounkoto resulted in a reduction of ore processing with respect to the Loulo mine. Mining of the Yalea South pushback pit continued during 2012 with first ore being delivered to the Loulo plant by mid-2012 and the remaining ore expected to be depleted during the first quarter of 2013.

The focus of exploration at Loulo is to continue to explore and discover additional orebodies within the Loulo permit.

Gounkoto

Gounkoto is located approximately 25km south of Loulo’s plant. Following the completion of the feasibility study in 2010, construction of the mine commenced in late 2010.

In January 2011, mining commenced at Gounkoto. In June 2011, the Loulo plant started to treat Gounkoto ore. 2012 represented the first full year of production for Gounkoto and a total of 2.52Mt of Gounkoto ore at a grade of 3.9g/t was processed through the Loulo plant and 283,479oz were produced at a total cash cost of $706 per ounce. We currently anticipate that mining at Gounkoto will continue through 2026.

The focus of exploration at Gounkoto is to continue to explore and discover additional orebodies within the Gounkoto permit. The viability of an underground project beneath the current pit in the Jog Zone is currently being investigated.

We estimate that the Loulo-Gounkoto complex will produce approximately 590,000oz in 2013 with the ore sourced from Gounkoto, the Loulo underground mines and the Yalea South pit in the first quarter.

Morila

In 1996, we discovered the Morila deposit, which we financed and developed and was our major gold producing asset through 2009. Since production began in October 2000, Morila has produced more than 6.2Moz of gold at a total cash cost of $263 per ounce. Morila’s total production for 2012 was 202,513oz at a cash cost of $759 per oz. Consistent with the mine plan, Morila ceased open pit mining in April 2009 and is currently processing lower grade stockpiles. During 2010 a study of the reprocessing of the Morila Tailings Storage Facility (“TSF”) was completed and in 2011 a feasibility study on the viability of treating the TSF material, marginal ore and mineralized waste stockpiles was completed and approved by the board in January 2012. During 2012, a feasibility study on the viability of the Pit 4S pushback was completed, and approved by the board in January 2013. Closure of the operation was originally scheduled for 2013, but, together with the Pit 4S pushback and the tailings treatment projects, processing of the marginal ore and mineralized waste should extend its life to 2021.

Tongon

The Tongon project is located within the Nielle exploitation permit in the north of Côte d’Ivoire, approximately 55km south of the border with Mali.

We commenced construction of the Tongon gold mine at the end of 2008, and commissioned the first stream in the fourth quarter of 2010, with first gold production being recorded. We completed and commissioned the second stream including secondary and tertiary crushing circuit and the sulfide circuit of the processing plant in 2011. Tongon has two main pits, South Zone (“SZ”) and the smaller North Zone (“NZ”). In 2012, we produced 210,615oz at a total cash cost of $772 per oz. Tongon had a difficult year in 2012 with gold production substantially below target as a result of the mine being plagued with a series of operational challenges during 2012. Gold production is estimated at 280,000oz in 2013. The Tongon mine has an initial mine life of 10 years (to 2021) but has the potential to extend this with nearby discoveries and satellite pits.

The focus of exploration at Tongon is to evaluate near-mine targets with a 15km radius and Greenfield programs beyond the near-mine 15km radius.

Kibali

Our interest in the Kibali project was acquired following the acquisition of Moto Goldmines, in conjunction with AngloGold Ashanti, and the further acquisition of a 20% interest from Sokimo on behalf of the joint venture. The Kibali project is located approximately 560km northeast of the city of Kisangani and 180km west of the Ugandan border town of Arua in the northeast of the DRC. We are managing the development and operation of the Kibali project.

The mine will comprise an integrated open pit and underground operation with the core capital program scheduled to run until early 2016. It is anticipated that the project will ultimately be supplied by four hydropower stations supported by a thermal power station for low rainfall periods and back-up. First gold production is expected in the fourth quarter of 2013. We currently anticipate that mining at Kibali will continue through 2031.

Massawa

Our Massawa project consists of a greenfields exploration find located in eastern Senegal during 2008. The Massawa target was first identified in 2007 and is located approximately 60km west of the Malian border. A successful scoping study was completed for Massawa in the first quarter of 2009 which met all of our investment criteria and we completed a detailed technical and financial study in 2009 which highlighted the complex nature of the ore, which requires pressure oxidation of the sulfides to liberate the gold. This study showed the project to be technically, economically and legally viable and has been used to determine the appropriate ore reserves. The technical study conducted on the Massawa project concluded that the reserve reporting was consistent with SEC Industry Guide 7, the JORC/SAMREC and 43-101 guidelines. In 2011, it was decided to delay the final feasibility study and focus instead on understanding the geological and metallurgical controls as well as growing the resource base of the project, while at the same time exploring possible power solutions for the project.

The exploration team focused its efforts in 2012 on the evaluation of a large number of satellite targets to discover additional non-refractory mineralization that could add value to the project. The current feasibility plan is to progress the study through 2013 and 2014. Metallurgical sampling is currently underway to support pilot pressure oxidation testwork planned to be completed by Hazen in Denver during 2013. An updated geological interpretation and prospectivity analysis of the Mako belt has provided the team with 30 new targets to evaluate in 2013.

Exploration

We have an extensive portfolio of exploration projects in both West and Central Africa. During 2012, for the Loulo plant site, exploration returned to early stage targets at the base of the resource triangle, concentrating on two highly prospective target areas: Gara North and Yalea South. At Gounkoto, during 2012, a total of 21 holes for 9,758m were completed to upgrade the geological confidence of the deposit and exploration continued to concentrate on better defining the underground potential in the Jog Zone while over in Senegal exploration has concentrated on the Massawa deposit with the start of an orientation grade control study on the portion of the Central Zone deposit where there are two phases of gold mineralization. In Côte d’Ivoire, during 2012, exploration focused on the infill at the base of the $1,000/oz pit shell at Tongon, the evaluation of satellite targets and the discovery of potential stand-alone targets within the company’s extensive permit portfolio countrywide. At Kibali, exploration has continued to focus on infill drilling as well as testing extensions at the known deposits of the project as well as starting follow-up work on early stage targets at the base of the resource triangle, which has produced the new Rhino target. In addition a new exploration camp has been established in the east of the concession area to explore this highly prospective area. In Burkina Faso, we have made steady progress in developing a new portfolio of exploration opportunities with a number of applications lodged with the State.

We are exploring in five African countries with a portfolio of 152 targets on 12,945km² of ground holding, of these 94 are satellite targets located near existing operations while 58 are potential stand-alone operations. We target profitable gold deposits that have the potential to host mineable gold reserves. Our business strategy of organic growth through exploration has been validated by our discovery and development track record, including the Morila mine, Loulo mine, Gounkoto mine and Tongon mine, the Kibali project and the Massawa discovery.

OWNERSHIP OF MINES AND SUBSIDIARIES

Morila is owned by 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 and the mine is controlled by a 50:50 joint venture management committee. Responsibility for the day-to-day operations rests with us.

Loulo is owned by a Malian Company, Somilo, which is owned 80% by us and 20% by the State of Mali.

Gounkoto is owned by a Malian company, Société des Mines de Gounkoto SA, which is owned 80% by us and 20% by the State of Mali.

Tongon is owned by an Ivorian company, Société des Mines de Tongon SA, in which we have an 89% interest, the State of Côte d’Ivoire 10% and 1% is held by a local Ivorian company.

The Kibali project is controlled by a 50:50 joint venture, between ourselves and AngloGold Ashanti, which holds an effective 90% interest in Kibali Goldmines SPRL. The remaining 10% of the shares are held by Sokimo, the parastatal mining company of the Democratic Republic of Congo. We thus have an effective 45% interest in the Kibali project. Our interest in this project was acquired following the acquisition of Moto Goldmines, in conjunction with AngloGold Ashanti, and the further acquisition of a 20% interest from Sokimo on behalf of the joint venture.

We hold an effective 83.25% interest in the Massawa project. The government of Senegal retains a 10% carried interest in the project, with the balance held by our Senegalese joint venture partner.

GEOLOGY

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 exist in West Africa in abundance. The Birimian 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 and 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 Birimian Formation, a series of Lower Proterozoic volcanic and sedimentary rocks. The West African Birimian sequences host a number of world class gold deposits and producing gold mines.

The Central African gold belts have a long history of gold production, particularly during the colonial era but due to regional instability they have seen little modern exploration. The Kibalian greenstone belts of northeastern DRC are comprised of Archaean Kibalian (Upper and Lower) volcanisedimentary rocks and ironstone-chert horizons metamorphosed to greenschist facies. They are cut by regional-scale north, east, northeast and northwest trending faults and are bounded to the north by the Middle Achaean West Nile granite-gneiss complex and cut to the south by the Upper Congo granitic complex. Our Kibali gold project is located within the Moto greenstone.

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.

ORE RESERVES

Only those reserves which qualify as proven and probable reserves for purposes of the SEC’s Industry Guide Number 7 are presented. Pit optimization is carried out at a gold price of $1,000/oz, except for Morila which is reported at $1,300/oz. Underground reserves are also based on a gold price of $1,000/oz.

The Morila open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. The Loulo and Gounkoto open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. The Loulo underground mineral reserves were calculated by Mr. Mark Odell, an independent consultant and competent person. The Tongon open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. The Kibali open pit mineral reserves were calculated by Mr. Nicholas Coomson, an officer of the company and competent person, while the underground mineral reserves were calculated by Mr. Dan Donald and Mr. Tim Peters, both independent consultants and competent persons. The Massawa open pit mineral reserves were calculated by Mr. Onno ten Brinke, in the capacity of independent consultant and reviewed by Mr. Rodney Quick, an officer of the company and competent person. All reserves were verified and approved by Mr. Rodney Quick, our Group General Manager of Evaluation.

Total reserves as of December 31, 2012 amounted to 200.60Mt at an average grade of 3.87g/t, for 24.96Moz of gold of which 16.36Moz are attributable to us.

In calculating proven and probable reserves, current industry standard estimation methods are used. The geological estimates 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.

All reserves are based on technical and financial studies. Factors such as grade distribution of the orebody, planned production rates, forecast working costs, dilution and mining recovery factors, geotechnical parameters 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 the declared reserves at our mines as of December 31, 2012:


	Proven Reserves						Probable Reserves						Total Reserves
	Tonnes		Grade		Gold		Tonnes		Grade		Gold		Tonnes		Grade		Gold
Operation/Project++	(Mt)		(g/t)		(Moz)		(Mt)		(g/t)		(Moz)		(Mt)		(g/t)		(Moz)
Morila +		—		—		—		4.88		1.51		0.24		4.88		1.51		0.24
Loulo +		2.29		2.05		0.15		37.68		5.10		6.18		39.97		4.93		6.34
Tongon +		2.52		1.44		0.12		31.28		2.51		2.53		33.79		2.43		2.64
Gounkoto +		1.80		2.43		0.14		16.52		4.98		2.64		18.32		4.73		2.78
Massawa +		—		—		—		20.73		3.07		2.05		20.73		3.07		2.05
Kibali+		3.62		3.24		0.38		79.28		4.14		10.54		82.89		4.10		10.92
Total		10.23		2.39		0.79		190.37		3.95		24.18		200.60		3.87		24.96

+	Our attributable share of Morila is 40%, Loulo 80%, Gounkoto 80%, Tongon 89%, Massawa 83.25% and Kibali 45%.

The reporting of mineral reserves is in accordance with SEC Industry Guide 7. Pit optimization is carried out a gold price of $1,000/oz, except for Morila which is reported at $1,300/oz. Underground reserves are also based on a gold price of $1,000/oz. Dilution and ore loss are incorporated into the calculation of reserves. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

At Loulo, a 10% mining dilution at zero grade and an ore loss of 3% has been incorporated into the estimates of reserves and are reported as mill delivered tonnes and head grades. At the Tongon project a dilution of 15% at zero grade and an ore loss of 2% has been modeled for the Southern Zone and 10% dilution and 2% oreloss for the Northern Zone. At Gounkoto and Massawa a dilution of 10% at zero grade and an ore loss of 3% has been used. At Kibali a dilution of 10% and ore loss of 3% has been used on the open pits, while underground dilution varies between 1% and 6.7% depending on stope design and ore loss of 3%. Metallurgical recovery factors have not been applied to the reserve figures since these are the estimates of the material to be delivered to the mill. Operating costs, metallurgical recovery, royalties, dilution and ore loss factors are used to determine the cut off grade at which to report mineral reserves. The average metallurgical recovery factors used are 89% for the Morila mine, 93.5% for the Loulo open pit material and 90.5% for Loulo underground material, 87% for the Tongon project, 91% for the Gounkoto project, 89% for the Massawa project and 87.3% for Kibali material.

MINING OPERATIONS

Loulo-Gounkoto Mine Complex

The Loulo and Gounkoto mines, known as the Loulo-Gounkoto complex, are located in the west of Mali, bordering Senegal, adjacent to the Falémé River. The complex lies within the Kedougou-Kéniéba inlier of Birimian rocks which hosts a number of major gold deposits in Mali, including Gara, Yalea and Gounkoto, Sadiola, Segala and Tabakoto as well as Sabodala across the border in Senegal.

The complex is effectively owned 80% by us and 20% by the State of Mali. In 2010, an application was made to split the Loulo and Gounkoto permits, and a separate company was created for Gounkoto in December 2010 with the same corporate structure and shareholding as Loulo. A new mining convention, which dictates the fiscal and regulatory environment applicable to the mine, was negotiated with the State of Mali and signed in March 2012. The convention includes an initial two year corporate tax holiday starting from the date of first production, and a further tax holiday, up to a maximum of five years in total, in the event of further investment such as an underground mine. It also includes royalties of 6% of revenues and a 10% priority dividend payment for the State of Mali.

The 2011 year was notable for its achievements, most important of which was the start of production at the new Gounkoto mine, from which ore was successfully toll treated through the Loulo plant ahead of schedule in June. At the same time, Loulo advanced the development of the Yalea and Gara underground mines after a full review of the underground mining strategy had been completed by mid-year. Loulo also successfully completed the expansion of the front end of the processing plant, as well as the tailings pipeline upgrade, significantly improving the throughput of the plant and started commissioning of the third mill by year end, as part of the plan to further increase production. During 2012, Loulo ramped up the development of both of its underground mines, taking Yalea to full production. At the same time, plant capacity was boosted to over 4Mt of multiple ore types per year.

In 2012, gold sales totaled $832.4 million for the year and were positively impacted by the increased production and higher gold price received. Total royalties paid to the state amounted to $49.2 million and cash operating costs totaled $321.6 million, resulting in profit from mining activities of $461.7 million. The total cash costs of gold sold was $738/oz.

Capital expenditure amounted to $237.3 million at the Loulo-Gounkoto complex spent primarily on the underground development, the plant upgrade (including the third mill) and the power plant expansion and the completion of the Gounkoto infrastructure, including the crushing circuit.

During 2012 there was significant political upheaval in Mali, including the occupation of the northern part of the country by insurgents. In spite of these challenges, the team continued to operate the mines without any major disruptions.

For 2013, gold production for the complex is targeted at 590,000oz with the ore sourced from Gounkoto, the Loulo underground mines and the Yalea South pit in the first quarter . Milling is planned to increase to an annualized rate of 4.4Mt with the ore sourced from underground mining (approximately 55%) and the Gounkoto pit (approximately 45%). Other satellite pits are currently being assessed and could provide additional flexibility to the operation.


Production results for the 12 months ended December 31,	2012		2011 (Restated)⁺
MINING
Tonnes mined (000)		38,531		40,265
Ore tonnes mined (000)		4,456		4,087

MILLING
Tonnes processed (000)		4,354		3,619
Head grade milled (g/t)		4.0		3.4
Recovery (%)		89.2		88.1
Ounces produced		503,224		346,179
Ounces sold		502,451		347,386
Average price received ($/oz)		1,657		1,582
Cash operating costs* ($/oz)		640		696	⁺
Total cash costs* ($/oz)		738		787	⁺
Gold on hand at period end# ($000)		11,961		10,096
Profit from mining activity*($000)		461,700		276,255	⁺
Gold sales* ($000)		832,350		549,569

+	The group changed its accounting policy on production phase stripping costs with effect from January 1, 2012. As a result the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

*	Refer to explanation of non-GAAP measures provided in the section “Non-GAAP Measures” above.

#	Gold on hand represents gold in doré at the mines multiplied by the prevailing spot gold price at the end of the period.

Loulo

Mining and Production

The underground operations at Loulo are being mined below the existing Yalea and Gara open pits by means of a sub level open stoping method and during 2012 mined 900,113 and 525,223 ore tonnes respectively with the Yalea mine achieving steady state production in excess of 100,000 tpm in the second half of the year. During 2013, the ore tonnages from Gara are expected to build up to a steady state of over 100,000 tpm by the third quarter. The development of the mine has been outsourced to a specialized underground mining contractor and the intention is to build the mine’s own skills base in order for it to take over all the stoping operation in approximately one year’s time. The open pits are mined by separate open pit mining contractors and are consistent with the underground mines, with the mining department supplying the direction in terms of strategy, design, planning, geology and grade control.


Production results for the 12 months ended December 31,	2012		2011 (Restated)⁺
MINING
Tonnes mined (000)		9,825		18,865
Ore tonnes mined (000)		1,964		2,385

MILLING
Tonnes processed (000)		1,837		2,670
Head grade milled (g/t)		4.2		2.8
Recovery (%)		88.6		87.7
Ounces produced		219,745		208,424
Ounces sold		214,739		209,631
Average price received ($/oz)		1,664		1,532
Cash operating costs* ($/oz)		684		866	⁺
Total cash costs* ($/oz)		781		952	⁺
Gold on hand at period end# ($000)		7,212		10,096
Profit from mining activity*($000)		189,588		121,708	⁺
Gold sales* ($000)		357,224		321,199

We own 80% of Loulo with the State of Mali owning 20%. The State’s share is not a free carried interest. We have funded the State portion of the investment in Loulo by way of shareholder loans and therefore control 100% of the cash flows from Loulo until the shareholder loans are repaid. We consolidate 100% of Loulo and shows the non-controlling interest separately.

+	The group changed its accounting policy on production phase stripping costs with effect from January 1, 2012. As a result, the 2011 results have been restated (refer to pages F-9 to F-10 of this Annual Report for further details).

*	Refer to explanation of non-GAAP measures provided in the section “Non-GAAP Measures” above.

#	Gold on hand represents gold in doré at the mine multiplied by the prevailing spot gold price at the end of the period.

Mining of the Yalea South pushback pit continued during 2012, with first ore being delivered to the plant by mid 2012 and the remaining ore expected to be depleted during the first quarter of 2013. A further pushback is being considered and a number of additional satellite pits, including Loulo 3, Gara West and Babota, are also included in the Life of Mine (“LOM”) plans.

At the underground mines, both development meters and ore tonnes increased steadily throughout 2012, while cemented aggregate fill (“CAF”) was introduced in the second half of 2012 as a temporary measure for paste aggregate fill (“PAF”). CAF is part of the overall redesign of the underground mines and will allow a proportion of the higher grade stopes to be extracted ahead of the commissioning of the paste backfill plants. The new plan also reduces the number of waste development meters over the next five years.

Ore Reserves

Total ore reserves for the years ended December 31, 2012 and 2011 are inclusive of depletions due to mining.


														Attributable gold**
		Tonnes				Grade				Gold				(Moz)		(Moz)
at 31 December	Category	(MT) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(80%) 2012		(80%) 2011
Mineral reserves*
¨ Stockpiles	Proven		1.94		1.98		1.67		1.61		0.10		0.10		0.08		0.08
¨ Open pit	Proven		0.35		0.85		4.18		4.81		0.05		0.13		0.04		0.11
	Probable		1.93		3.07		2.42		3.03		0.15		0.30		0.12		0.24
¨ Underground	Probable		35.75		35.80		5.25		5.16		6.03		5.94		4.83		4.76
TOTAL MINERAL RESERVES	Proven and probable		39.97		41.71		4.93		4.83		6.34		6.48		5.07		5.18

Open pit mineral reserves are reported at a gold price of $1,000/oz and an average cut-off of 1.1g/t and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. Underground mineral reserves are reported at a gold price of $1,000/oz and a cut-off of 2.70g/t for Yalea underground and 2.55g/t for Gara underground, and include dilution and ore loss factors. Underground mineral reserves were calculated by Mr. Mark Odell, an independent consultant and competent person. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 80% interest in Loulo.

Underground Development

Yalea Underground Development: The development rate improved during the year, exceeding an average of 1,000m per month for the last six months of 2012. The total development increased from 8,592m in 2011 to 11,375m in 2012, a 32% improvement. The Yalea decline extended down to the Purple Patch area and opened an additional level in the high grade area. Yalea underground produced 900,113 tonnes of ore at 3.89g/t, an increase of 138% compared to 2011. The continuous improvement in the development rate achieved during the year created a platform for steady ore production in the second half of 2012. At both Yalea and Gara the new mine design, with multiple spiral ramps, has been finalized together with the associated backfill strategy.

Yalea implemented CAF with the successful completion of the first test stope on 63L Block 3, while preparation for Gara CAF is in progress. The introduction of the uphole emulsion explosives, for the first time, aided both Yalea and Gara in improving their stoping capability.

Gara Underground Development: The development rate increased steadily during the year, with a record of 1,046m in December 2012. The total development for the year improved from 6,484m in 2011 to 9,155m in 2012, a 41% increase. Gara underground continued to build its infrastructure with the development of the conveyor declines as well as the equipping of CV1, CV2 and the surface conveyor. Production performed steadily during the first half of the year but showed a downturn in July and August of 2012 due to the congestion of stoping and development on the same production levels, as a result of the re-engineering of the flatter dipping stopes. Stoping showed an improvement during the fourth quarter of 2012 by achieving record tonnes for the mine to date of 62,609 ore tonnes in December. The ventilation conditions underground have been considerably improved with the completion of the phase two primary ventilation system.

The following table shows a summary of the underground section’s progress as of December 31, 2012:


at 31 December 2012	Development (meters)		Ore (tonnes)		Grade (g/t)		Ounces mined (oz)		Total (tonnes)
YALEA
Q1		2,206		127,620		4.24		17,378		282,442
Q2		2,845		163,430		3.64		19,120		355,635
Q3		3,093		320,983		3.73		38,544		516,009
Q4		3,231		288,080		4.06		37,562		495,030
TOTAL 2012		11,375		900,113		3.89		112,604		1,649,116
Total 2011		8,592		378,722		3.73		45,391		925,358
Total 2010		4,806		647,810		3.69		76,772		875,613
Total 2009		5,788		500,267		4.38		70,395		763,677
Total 2008		3,860		105,411		4.13		13,982		288,298
TOTAL YALEA		34,421		2,532,323		3.92		319,144		4,502,062
GARA
Q1		1,961		132,340		4.65		19,782		259,656
Q2		2,008		119,067		4.34		16,595		262,050
Q3		2,454		102,785		5.34		17,645		286,626
Q4		2,732		171,031		5.77		31,702		349,853
TOTAL 2012		9,155		525,223		5.08		85,724		1,158,185
Total 2011		6,484		136,215		5.02		21,984		663,765
Total 2010		1,879		—		—		—		175,701
TOTAL GARA		17,518		661,438		5.06		107,708		1,997,651

Processing

Gold production of 503,224oz for 2012 was made up of 219,745oz from Loulo and 283,479oz from Gounkoto, which exceeded management’s guidance of 500,000oz.

For the year, 4.46Mt of ore was mined of which 4.35Mt of ore was fed to the mill at a grade of 4.0g/t. This comprised feed sources from Gounkoto (58%), Yalea South pushback (8%), the underground mines (30%) and stockpiles (4%). The remaining tonnes were stockpiled.

Gounkoto has entered into a toll treatment agreement with Loulo whereby ore is processed through the Loulo plant. The commissioning of the third mill in the early part of 2012 increased the annual throughput by 20.3% compared to 2011, with an average of 363,000 tonnes per month milled. The overall plant availability was 92.8%, while scats generation was only 5.5%, compared to last year’s 12.2%, following the installation of the third mill. Gold production was positively impacted by the increased throughput, partially offset by lower head grade and lower recoveries caused by the high copper content of the Yalea South ore feed and reduced residence time at the higher throughput rate. During the year, the processing plant was also upgraded with a new tailings pipeline and commissioning of the lime plant, which had a positive impact on the reduction of lime consumption towards the end of this period.

Engineering

The metallurgical plant availability of the mills and crusher was 95.1% (2011: 92.1%) and 87.7% (2011: 84.9%), respectively. The power plant produced a total of 215GWh of electricity (2011: 150GWh) for the Loulo complex in 2012. The power plant efficiency improved from 0.236L/kWh in 2011 to 0.234L/kWh during the year. This was mainly due to the commissioning of two additional medium speed generators during the first quarter of 2012. Consequently, power costs decreased from $0.27/kWh in 2011 to $0.26/kWh in 2012. A more significant decrease is anticipated in 2013 when the medium speed generators are converted to run on heavy fuel oil, expected by mid year. During the year, the maintenance of the underground operations, both fixed and mobile fleet, was successfully taken over by the mine. The mine also introduced a computerized maintenance management system (PRAGMA) in the underground section to ensure integrated maintenance best practice.

Gounkoto

Mining at Gounkoto started in January 2011, although first ore was fed to the Loulo plant in June and, as such, 2012 represented the first full year of production from the mine. Total material mined during 2012 was 28.7Mt compared to 21.4Mt in 2011.


Production results for the 12 months ended December 31,	2012		2011
MINING
Tonnes mined (000)		28,706		21,400
Ore tonnes mined (000)		2,492		1,702

MILLING
Tonnes processed (000)		2,518		949
Head grade milled (g/t)		3.9		5.1
Recovery (%)		89.7		88.7
Ounces produced		283,479		137,755
Ounces sold		287,712		137,755
Average price received ($/oz)		1,651		1,658
Cash operating costs* ($/oz)		607		436
Total cash costs* ($/oz)		706		536
Gold on hand at period end# ($000)		4,749		—
Profit from mining activity* ($000)		272,112		154,547
Gold sales* ($000)		475,126		228,370

The State of Mali holds 20% of the share capital of Gounkoto and we hold the balance. We consolidate 100% of Gounkoto and show the non-controlling interest separately.

*	Refer to explanation of non-GAAP measures provided in the section “Non-GAAP Measures” above.

#	Gold on hand represents gold in doré at the mine multiplied by the prevailing spot gold price at the end of the period.

Gounkoto’s ore is hauled by road to the Loulo plant by a fleet of 50 tonne tipper trucks with a haulage capacity of approximately 165,000 tonnes per month.

The viability of an underground project beneath the current pit in the Jog Zone, which has total mineralized material of 6.4Mt at 6.43g/t is currently being investigated. Drilling during 2012 has identified this zone as being structurally and geologically complex and additional drilling is required in 2013 to convert the material to the indicated category.

The preliminary mine design consists of a single decline from a portal on the western side of the pit and a central spiral decline. Ore accesses will be located central to the orebody at 20m vertical intervals. Where the orebody is thin, less than 15m, ore drives will be single and where the orebody is greater than 15m, footwall and hangingwall ore drives will be developed. A Mining Rock Mass Model has been constructed from the geotechnical logging. This has been used to determine the critical geotechnical parameters such as the Q-rating and Rock Mass Rating to determine first pass estimates for mining methods, stope geometry and ground support.

A combination of three mining methods is likely to be used for underground mining in the Jog Zone:

•

overhand cut-and-fill

•

longitudinal open stoping with backfill

•

transverse open stoping with backfill.

Backfill is likely to be a combination of cemented rockfill and cemented aggregate fill. The option of transporting paste material back on the ore haulage trucks, currently running between Gounkoto and Loulo, will also be reviewed in the feasibility stage. A preliminary schedule has been completed which produces 5.8Mt at 6.42g/t over a 13 year period. The schedule envisions an average of 643,000tpa over the first full seven production years and would be a supplement from 2016 when the open pit production is expected to start decreasing.

Processing

During 2012, a total of 2.52Mt of Gounkoto ore was processed through the Loulo plant at an average head grade of 3.9g/t. This compared to 0.95Mt during 2011 at 5.1g/t. The drop in grade reflects the natural grade profile of the pit and a decision to mine and process the whole orebody, with only limited selective mining. The grade is expected to increase again as the mining progresses to lower levels.

Ore Reserves

Total ore reserves for the years ended December 31, 2012 and 2011 are inclusive of depletions due to mining.


		Tonnes				Grade				Gold				Attributable gold**
at 31 December	Category	(Mt) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(Moz) (80%) 2012		(Moz) (80%) 2011
Mineral reserves*
¨ Stockpile	Proven		0.89		0.77		2.13		2.19		0.06		0.05		0.05		0.04
¨ Open pit	Proven		0.91		—		2.72		—		0.08		—		0.06		—
	Probable		16.52		16.19		4.98		5.19		2.64		2.70		2.11		2.16
TOTAL MINERAL RESERVES*	Proven and Probable		18.32		16.96		4.73		5.06		2.78		2.76		2.23		2.21

Open pit mineral reserves are reported at a gold price of $1,000/oz and 1.27g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 80% interest in Gounkoto.

Health, safety and the environment

Loulo

The Lost Time Injury Frequency Rate (“LTIFR”) during 2012 was 1.59 against 2.29 for 2011. One million hours Lost Time Injury (“LTI”) free events were achieved twice during the year. No fatalities were recorded for the second consecutive year.

The safety management system was implemented as per the OHSAS 18001 requirement and certification was recommended during the third quarter of 2012.

Community health treated 10,411 patients while first-aid, evacuation, family planning, HIV counseling and voluntary testing free of charge were ongoing at the staff village dispensary. In addition, a widened immunization program was carried out in association with Mali’s health center at Kenieba.

The mine retained its environmental management system certification ISO 14001 following the surveillance audit by National Quality Assurance in December 2012.

Gounkoto

One LTI was recorded during 2012. The LTIFR decreased from 2.41 in 2011 to 0.38 in 2012. One million hour LTI free events were achieved twice during 2012. The mine is in the process of implementing OHSAS 18001 and a baseline risk assessment was completed for the entire mine and an OHSAS 18001 certification audit is planned for the third quarter of 2013. During 2011, Gounkoto’s Environment and Social Impact Assessment report was approved and its environmental permit was delivered by the Minister of the Environment. An environmental management program (“EMP”) was designed to address all significant environmental issues. This EMP is part of the overall environmental management system (“EMS”) which is currently being implemented. Gounkoto’s EMP was implemented during 2012. The ISO 14001 stage 1 audit took place during the fourth quarter of 2012 and thereafter a successful certification audit was completed.

Community

Loulo

Intensive community development activities were undertaken during the year and a number of significant initiatives, including in the areas of: (i) potable water supply, (ii) health, (iii) education and (iv) agriculture.

Gounkoto

The Gounkoto community liaison committee meetings were held on a monthly basis to address all community issues which included youth employment, training, potable water as well as orpaillage activities taking place on the permit of the Gounkoto mine. The management of the haul road safety and traffic control was transferred to the community associations.

Human resources

Loulo

Manpower working at Loulo increased from 2,745 in December 2011 to 2,866 in December 2012.

The Mine Level Agreement (“MLA”) was reviewed and signed off by the union and management on October 14, 2012.

Gounkoto

Manpower working at Gounkoto increased from 1,067 in December 2011 to 1,271 in December 2012.

Gounkoto management encouraged employees not to wait for the stipulated two years of service and assisted in the organization of elections for the establishment of a union committee as well as a committee of worker delegates. Elections were held resulting in the appointment of a union committee which is affiliated to SECNAMI and the national union structure (UNTM). Monthly meetings have commenced and the ‘pact with labour’ is currently being developed and established. Mine management has tabled a draft MLA for the new committee to scrutinize and negotiations are due to commence shortly. It is hoped that a new agreement will be agreed and finalized in the near future.

Loulo-Gounkoto Manpower


At December	2012						2011
	Expats		Nationals		Total		Expats		Nationals		Total
Loulo
Employees		68		532		600		68		453		521
Contractors		209		2,057		2,266		169		2,055		2,224
Total Loulo		277		2,589		2,866		237		2,508		2,745
Gounkoto
Employees		5		48		53		2		10		12
Contractors		21		1,197		1,218		2		1,053		1,055
Total Gounkoto		26		1,245		1,271		4		1,063		1,067
Total Loulo-Gounkoto Complex		303		3,834		4,137		241		3,571		3,812

Exploration

Exploration continues on the satellite deposits of Loulo and Gounkoto, while underground, the geological drilling is still improving the accuracy of the reserve estimation.

Morila

The Morila mine is situated 280km south-east of Bamako, the capital of Mali. Morila is owned by a Malian company, Société des Mines de Morila SA (Morila), which in turn is owned 80% by Morila Limited and 20% by the Malian government. Morila Limited is jointly owned by ourselves and AngloGold Ashanti Limited and the mine is controlled by a 50:50 joint venture management committee. Responsibility for the day-to-day operations rests with us. Under its stewardship the mine was successfully converted from open pit mining to a stockpile treatment operation during 2009.

The Morila mine was commissioned in October 2000 and to December 2012 had produced more than 6.2Moz of gold at a total cash cost of $263/oz. Profit from mining activities was $183.0 million, a small reduction from 2011, reflecting the lower cost of production of $759/oz, notwithstanding an increase in royalties paid to the State of Mali. This enabled Morila to pay a dividend of $180.0 million to shareholders during the year.

Closure of operations at Morila was originally scheduled for 2013 but, together with the Pit 4S pushback and the tailings treatment projects, processing of the marginal ore and mineralized waste should extend its life to 2021.


Production results for the 12 months ended December 31,	2012		2011
Mining
Tonnes mined (000)		—		16
Ore Tonnes mined (000)		—		16
Milling
Tonnes processed (000)		4,453		4,549
Head grade milled (g/t)		1.5		1.9
Recovery (%)		91.6		91.0
Ounces produced		202,513		248,635
Ounces sold		202,513		248,635
Average price received ($/oz)		1,663		1,576
Cash operating costs* ($/oz)		659		687
Total cash costs* ($/oz)		759		782
Profit from mining activity* ($000)		183,035		197,613
Stockpile adjustment# ($/oz)		130		275
Attributable (40% proportionately consolidated)
Gold sales* ($000)		134,702		156,771
Ounces produced		81,005		99,454
Ounces sold		81,005		99,454
Profit from mining activity* ($000)		73,214		79,045

#	The stockpile adjustment per ounce reflects the charge expensed in respect of stockpile movements during the period divided by the number of ounces sold. The total cash cost per ounce includes non-cash stockpile adjustments.

*	Refer to explanation of non-GAAP measures provided in the section “Non-GAAP Measures” above.

Ore Reserves

Morila ore reserves are comprised of the Pit 4S pushback and the remaining marginal ore stockpiles to be rehandled for the rest of the mine life.


		Tonnes				Grade				Gold				Attributable gold**
at 31 December	Category	(Mt) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(Moz) 40% 2012		(Moz) 40% 2011
Mineral reserves*
¨ Stockpile	Proven		—		1.44		—		1.71		—		0.08		—		0.03
	Probable		3.86		6.68		1.14		1.14		0.14		0.24		0.06		0.10
¨ Open Pit	Probable		1.02		—		2.92		—		0.10		—		0.04		—
TOTAL MINERAL RESERVES	Proven and probable		4.88		8.12		1.51		1.24		0.24		0.32		0.09		0.13

Open pit mineral reserves are those located within $1,300/oz pit shell at cut-off equivalent to $1,300/oz, which is 0.60g/t. Stockpile mineral reserves are reported at a $1,300/oz gold price and reported at a 0.68g/t cut-off. Open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 40% interest in the Morila gold mine.

Rehandling

In April 2009 Morila management successfully converted the mine from an open pit operation to a stockpile treatment facility. Mining And Rehandling Services, a subsidiary of Dragages & Travaux Publics, is conducting the rehandling activities.

Processing

During 2012 the throughput rate increased to 590tph from 576tph in 2011. During the year, the SAG mill gearbox was changed out several times which led the mine to change the configuration to only operate with the ball mill from mid-2013. The crushing plant will be upgraded to a three-stage crushing operation. As part of the oxygen system upgrade, a new oxygen unit is due to be installed in mid-2013 which is expected to continuously improve the recovery rate and provide a saving in cyanide consumption.

Engineering

Engineering availability of 93.1% was 1% lower than 2011, primarily due to the downtime associated with the SAG mill gearbox refurbishment in June, July and August. The mine also experienced several failures of the primary crusher’s inner and eccentric bushing in September and October of 2012. Refurbishment of the secondary crushers was completed by replacing the main shafts and top shell assemblies. The new HDPE piping has been received and 1,000m have been installed to complete the ring main line for the new section of the TSF. Deposition of tailings has started at a new designated area to reduce TSF dilution. The civil work and the shed metal structure manufacturing in respect of the new 10tpd oxygen plant have been completed. Planned maintenance using the PRAGMA system have helped to enhance the maintenance program.

The mine generates its own power via a diesel electrical generating station equipped with five Allen engines (6MW each). Four are producing power at any time and one is on maintenance and standby. Consumption for 2012 at 139.6GWh was in line with 2011 (138.4GWh). Power cost for the year was $0.284/kWh compared to $0.28/kWh in 2011.

Pit 4S pushback project

During 2012, the Morila team completed work on the Pit 4S pushback project. Eight RC holes drilled on the south-western wall confirmed the extension of the ore zone beneath the wall and allowed the updating of the resource model. An in-pit dumping strategy reduces the operating mining costs. This is achieved by initially utilizing the existing eastern haul ramp to dump the waste into the northern portion of the pit. In the later months of the strip the waste is hauled on the western side of the pit over the previous in-pit dumped material to dump the waste in the western side of the pit. This has reduced the haul profile for the preproduction strip. The mining schedule includes a total of 24.4Mt of waste material to be mined. This includes 1.36Mt of ore at an estimated grade of 2.92g/t, to recover 116,000oz of gold, assuming a 91% plant recovery. Mining is expected to take place over a 24-month period from April 2013 to March 2015.

Pit 4S summarized feasibility results:

The $1,300/oz pit optimization study applied to the Pit 4S area delivered the following results:

•

1.36Mt of ore at 2.92g/t

•

24.4Mt of waste

•

17.9:1 stripping ratio

•

116 000oz recovered

•

Cash flow before tax of $55 million at $1,500/oz

•

Employment sustained for 345 employees

TSF Project

Mineralized material currently consists of the remaining stockpile material, and a portion of the TSF. During 2011, plant tails at 0.11g/t were continually diluting the TSF material which stood at 0.46g/t. Consequently, a separate paddock to prevent further dilution was completed in September 2012 and the material beneath the low grade tails paddock was deducted from the rest of the TSF material. This decreased the total available material from 42Mt at 0.45g/t (in 2011) to 39Mt at 0.39g/t (in 2012). Further drilling and reagent consumption testwork was also carried out during the year for which final results are awaited.

Agribusiness

Morila continues to develop a commercial agribusiness strategy to utilize the mine’s infrastructure and provide sustainable economic activity for after the mine closes. The recruitment of a professional farm manager boosted the pilot projects which are being transformed, initially, into four core commercial scale entities. New installations for poultry farming are planned to include a rearing shed (18,000 chicks per year), a 10,000 unit layer battery component, a 300 tonne bulk storage facility and a bulk feed mix manufacturing plant. Community outgrowers have been identified together with detailed infrastructure construction plans, financial operating models and sponsors. Work on the Tilapia Fish project to renovate the old ponds, construct new ponds, achieve a monthly stocking and harvesting cycle and introduce a new, high producing Tilapia Niloticus species is ongoing. The mango project is progressing and the on-site orchard has been expanded to accommodate 4,000 trees on 8.6 hectares. In addition, a new microspray irrigation system aimed at achieving higher yields has been installed. Mango production will be increased through supply from community growers and investigation into extension of the harvest season through the development of various alternative products such as atchar, dried mango and juice is continuing. As part of the honey project, Kenyan beehives will be supplied to the community to increase the outgrower base to 600 beekeepers with 6,000 hives. Manufacture of additional Langstroth hives to produce export quality honey is also planned as one of the agribusiness core components. Value adding projects will be coupled with all core projects once these are in full production.

Health, safety and the environment

During 2012, Morila had one LTI, compared to zero LTI in 2011. The year to date LTIFR was 0.52 compared to zero in 2011. The mine maintained its OHSAS 18001 safety certification,

The malaria incidence rate increased to 31% compared to 21% in 2011. Consequently, mine and community sprayers refresher training was undertaken by the mine as part of the entomological survey recommendations and two rounds of malaria spraying were conducted.

The mine’s environmental management system has successfully completed its ISO 14001 recertification.

Human resources

During 2012, the mine’s social climate was maintained and several training and employee capacity building programs were conducted. The total number of people working at the mine at the end of 2012 was 832, including 417 contractors supplying services to the mine.


At December	2012						2011
	Expats		Nationals		Total		Expats		Nationals		Total
Employees		9		406		415		13		311		324
Contractors		6		411		417		7		358		365
Total		15		817		832		20		669		689

Tongon

The Tongon mine is located within the Nielle exploration permit in the north of Côte d’lvoire, 55km south of the border with Mali. Tongon SA is owned by an Ivorian company, Société des Mines de Tongon SA, of which Randgold has an 89% interest, the government of Côte d’lvoire 10% and 1% is held by a local company. Tongon is an open pit mining operation and employs the four standard mining practices of drill, blast, load and haul.

Tongon has a ten year LOM with mining taking place from two main pits: SZ and the smaller NZ pit. Both the SZ and NZ pits have potential for more reserves.

Tongon had a difficult year in 2012, producing 210,615oz, substantially below its target. The mine was plagued by a series of operational challenges, beginning with underperformance in the mining of the pit as it struggled to manage the transition from softer oxide material to fresh rock. This was compounded by frequent power outages in the grid supply which caused disruptive plant stoppages and process upsets, as well as lower than planned recoveries. The situation was exacerbated by a fire in the milling circuits at the end of the year. The plant was restored to full production by the end of January 2013 and the power and recovery problems are being addressed.

Gold sales amounted to $351.8 million and total cash costs per ounce were $772/oz, resulting in a profit from mining activity of $189.3 million. Capital expenditure during the year totaled $33.4 million, which was principally on metallurgical and power plant engineering.


Production results for the 12 months ended December 31,	2012		2011
Mining
Tonnes mined (000)		20,380		17,353
Ore tonnes mined (000)		4,592		3,469
Milling
Tonnes processed (000)		3,432		2,963
Head grade milled (g/t)		2.5		2.9
Recovery (%)		77.4		91.2
Ounces produced		210,615		250,390
Ounces sold		210,396		271,922
Average price received ($/oz)		1,672		1,563
Cash operating costs* ($/oz)		722		510
Total cash costs* ($/oz)		772		557
Gold on hand at period end^#		3,268		2,749
Profit from mining activity* ($000)		189,313		273,686
Gold sales* ($000)		351,805		425,060

We own 89% of Tongon with the State of Côte d’lvoire and outside shareholders owning 10% and 1% respectively. We funded all the investments in Tongon by way of shareholder loans and therefore control 100% of the cash flows from Tongon until the shareholder loans are repaid. We consolidate 100% of Tongon and show the non-controlling interest separately.

*	Refer to explanation of non-GAAP measures provided in the section “Non-GAAP Measures” above.

#	Gold on hand represents gold in doré at the mines multiplied by the prevailing spot gold price at the end of the period.

Ore Reserves

Additional drilling was completed on the SZ orebody this year, consisting of diamond drilling to increase the confidence in the geological model below the pit and grade control drilling within the mined areas. Both confirmed the current geological model did not replace the depletion of ore reserves due to mining depletion since higher processing costs and lower recoveries limited the size of the open pit. The potential exists to gain further reserve ounces if the LOM recovery and processing costs can be improved.


		Tonnes				Grade				Gold				Attributable gold**
at 31 December	Category	(Mt) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(Moz) (89%) 2012		(Moz) (89%) 2011
Mineral reserves*
¨ Stockpiles	Proven		2.52		0.89		1.44		1.68		0.12		0.05		0.10		0.04
¨ Open pit	Probable		31.28		32.21		2.51		2.63		2.53		2.72		2.25		2.42
TOTAL MINERAL RESERVES	Proven and probable		33.79		33.10		2.43		2.60		2.64		2.77		2.35		2.46

Open pit mineral reserves are reported at a gold price of $1,000/oz and 1.39g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Shaun Gillespie, an independent consultant and competent person. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 89% interest in Tongon.

Mining and production

During 2012, mining took place in SZ where development was based mostly on hard ore mining to supply the plant. Activities and strategies for 2013 will focus on the SZ development and the general LOM schedule is as follows:

•

Mining in SZ which started in 2010 will continue to 2016 to the final pit bottom.

•

The NZ, which started in 2011, will only be developed in 2014 in the form of waste stripping with ore mining continuing from 2015 to 2019.

•

SZ and NZ satellite pits have been introduced into the plan and will be mined from 2019 to 2021.

Total material mined in 2012 was 20.38Mt and 4.59Mt of ore was mined at a grade of 2.4g/t.

SZ mining activity was essentially hard rock mining (ore and waste) with an oxide/saprolite cutback on the hanging wall in the third quarter. Production during the first and second quarters of 2012 was affected by industrial action and community issues as well as the non-availability of production rigs to sustain the mining plan in hard rock. Mining production improved in the third quarter and into the fourth quarter. The rainy season action plan allowed mining to continue unhindered during the rainy season with the cost per bcm mined decreasing in the same period.

Ground water and surface water management was well controlled during the year and will be upgraded as mining deepens. Dewatering forms an integral part of the mining strategy in Tongon due to the pit lying in the catchment area of an old river system. Mining schedules and plans have been developed with a view to having in-pit sumps to allow mining to take place in dry ground while the water is pumped from the sumps.

Processing

The plant treated 3.43Mt of transitional and fresh ore in 2012, compared to 2.96Mt in 2011. The mill availability at 80.0% was below plan due mainly to grid power outages and associated unplanned maintenance issues which also contributed to the shortfall in tonnage throughput. A fire in December 2012, which destroyed both the mill cyclone clusters and the flash flotation circuit also negatively impacted operations.

Gold production for the year was 26% below target at 210,615oz, largely due to an abnormal number of process upsets associated with frequent grid power interruptions, breakdown of the oxygen plant in the first quarter of 2012, insufficient oxygen capacity for leach requirements in the first half of the year and poor performance of the flash float concentrate leaching circuit during the period. An additional 10 tonne oxygen plant was installed in the second half of 2012. The flash float concentrate recovery has prompted the mine to add two additional pump cells aimed at improving residence time in the pump cell circuit. In addition, two Knelson Gravity Concentrators and an Intensive Leaching Reactor with associated electrowinning cells will be added during 2013 to further improve overall recovery.

Engineering

Overall mill availability showed improvement from 2011 but was still short of targeted levels. An upward trend was achieved from the beginning of 2012 starting with 77.1% for the first quarter, 79.4% for the second quarter and 85.3% for the third quarter, although the fourth quarter was adversely affected by the fire. Continued engineering improvements and uplifting of national workforce skills contributed positively to the overall mechanical availability through the year.

Power

In the power plant, overall mechanical and electrical availability achieved for 2012 was 95%. Utilization of diesel powered generation decreased from 92% in 2011 to 21% in 2012, with the balance of the mine’s power demand being supplied from the national power grid which has been the primary source of electrical power supply to the mine since its connection in December 2011.

Five additional diesel powered generators were installed and successfully commissioned by the end of 2012. This increased the backup installed capacity to 25.5MW and provided for better operational stability, although at a higher power cost, while the grid supply and stability issues are being addressed. Power consumption for the year was 154.8GWh at a cost of $0.19/kWh compared to 104.4GWh at $0.30/kWh in 2011.

Health, safety and the environment

During 2012, the mine achieved 695 days without an LTI, equivalent to 9,564,000 LTI free hours. The LTIFR increased, however, from 0.19 in 2011 to 0.22 in 2012.

The mine achieved its ISO 14001 environmental accreditation in the third quarter of 2012 and is working towards achieving its safety OHSAS 18001 accreditation which is now targeted for the second quarter of 2013. The first pre-audit phase of the safety accreditation was conducted in the fourth quarter of 2012. Recommendations made by the committee are being implemented and shortfalls addressed.

A major malaria control program was implemented in line with the recommendations of Tongon’s contracted entomologist and the number of malaria cases, as compared to the number of malaria cases in 2011, decreased by 35%.

In addition, with a prolonged dry season in the region, there was a focus on water efficiency resulting in Tongon improving raw water abstraction efficiency to 0.07m³/t milled from 0.94m³/t.

Human resources

The total number of people working at the mine, excluding labor employed by contractors, is 493 employees, of which 94% are Ivorians. To date, 76% of the operational labor is from local villages.


At December 31	2012						2011
	Expats		Nationals		Total		Expats		Nationals		Total
Employees		54		439		493		28		382		410
Contractors		56		1,168		1,224		47		1,108		1,155
Total		110		1,607		1,717		75		1,490		1,565

On the industrial relations front, the emphasis during 2012 was on improving communication with the workforce through weekly and monthly meetings, visits to labor authorities to improve relationships and various training initiatives on topics such as labor law and company practice. The highlight of the year was the signing of the MLA with the union.

Exploration

Models of the near-mine targets on the Nielle permit were reviewed and handed over to the mine’s mineral resource team. Reconnaissance drilling was initiated on several brownfield targets, following encouraging results, while greenfields programs, beyond the 15km radius, continued during the year.

Kibali

The Kibali project is a gold development property which covers an area of 1,836km²on the Moto Goldfields in the north east of the Democratic Republic of the Congo. It is located some 560km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua. Kibali is a joint venture between Randgold (45%), AngloGold Ashanti (45%) and a Congolese parastatal, Sokimo (10%).

The project development is being managed by Randgold which will also operate the mine. The mine will comprise an integrated open pit and underground operation with the core capital program scheduled to run until early 2016. It is planned that the project will ultimately be supplied by four hydropower stations supported by a thermal power station for low rainfall periods and back-up.

Construction

The Kibali project made excellent progress during 2012 with the team managing to stay on schedule despite a number of challenges associated with building a project of this size in a remote part of Africa. We target that first gold production will occur in the fourth quarter of 2013.

Metallurgical facility and infrastructure

During the year the team focused on concrete production for the metallurgical facility, continuing structural steel erection and supporting infrastructure works, including the following:

•

The two ball mills which arrived on site during the fourth quarter of 2012 were placed on their foundations in January of 2013, ahead of schedule.

•

Structural civils for the primary crushers, elution circuit and mill classification were completed, allowing steelwork erection to start in these areas.

•

Steelwork on the CIL progressed well with welding of five of a total of 11 tanks completed.

•

Civil works started at the gold room main block house which secures the electrowinning and smelting sections. Civils also progressed at the Nzoro 2 powerhouse.

•

The clean fuel tanks at the main fuel farm were installed and the first of the main receiving tanks was welded and is ready for testing and handover in the first quarter of 2013.

•

Earthworks focused on key areas including the high tension substation, the concentrate and flotation tailings storage facilities and the airstrip extension.

Mining

During 2012 the first ore was trucked to the Run of Mine pad. The vertical shaft platform was completed and handed over to the mining contractor. The boxcut for the decline shaft system was completed and both headings achieved the scheduled advance for the year. Earthworks at the vertical shaft platform were also completed in the fourth quarter of 2012 to allow access to the main sinking contractor in the first quarter of 2013 to start the development of the shaft collar and foundations for the winder house. The Mining Owners’ Team was fully established in line with the plan. All major mining contracts were awarded, and all major contractors have been mobilized to the site.


Mining results for the 12 months ended December 31,	2012		2011
Mining
Tonnes mined (000)		5,516		—
Ore tonnes mined (000)		97		—

Capital Expenditure

Total expenditure for 2012 was $518.6 million (100% of the project, excluding shareholder loan interest and value of leased assets) which was slightly behind plan for the year as a result of the timing of certain activities and related payments. The project is now estimated to spend approximately $750 million in 2013, which includes the roll-over from 2012. The project construction capital (excluding contingencies or escalation) is split into two phases:

•

Phase 1 is focused on bringing the mine into production at the end of 2013 and was estimated at $920 million (in 2011 real terms). It is scheduled to run into 2014 and covers the metallurgical facility, one hydropower station and back-up thermal power facility, construction of the tailings storage facility, relocation of villages, open pit mining (excluding preproduction inventory) and all shared infrastructure.

•

Phase 2 was estimated at $650 million (in 2011 real terms) and is scheduled to run concurrently with Phase 1 but extend into early 2016. It is focused primarily on the underground development and includes a twin decline and single vertical shaft system as well as three hydropower stations. This is expected to bring the underground into first production by the end of 2014, with steady state production targeted for early 2016.

The revised total capital for Phase 1 is now estimated at approximately $990 million (in 2013 real terms) while Phase 2 is estimated at $670 million (in 2013 real terms), which represents an overall 6% increase on previous estimates. A large part of this increase reflects inflation, changes which relate to scope as well as additional expenditure on the Relocation Action Plan (“RAP”) project.

Ore Reserves


		Tonnes				Grade				Gold				Attributable Gold**
at 31 December	Category	(Mt) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(Moz) (45%) 2012		(Moz) (45%) 2011
Mineral reserves*
¨ Stockpiles	Proven		0.07		—		2.16		—		0.01		—		0.002		—
¨ Open pit	Proven		3.54		—		3.26		—		0.37		—		0.17		—
	Probable		40.64		42.35		2.54		2.49		3.32		3.40		1.49		1.53
¨ KCD Underground	Probable		38.64		36.27		5.81		5.84		7.22		6.81		3.25		3.06
TOTAL MINERAL RESERVES	Proven and Probable		82.89		78.62		4.10		4.04		10.92		10.21		4.91		4.59

Open pit mineral reserves were reported at a gold price of $1,000/oz and an average cut-off of 0.9g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Nicholas Coomson, an officer of the company and competent person. Underground mineral reserves were reported at a gold price of $1,000/oz and a cut-off of 2.0g/t and include dilution and ore loss factors. Underground mineral reserves were calculated by Mr. Dan Donald and Mr. Tim Peters, both independent consultants and competent persons. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 45% interest in the Kibali gold project.

Health, safety and environment

During 2012 the project improved its safety awareness, and the LTIFR rate reduced by 71% compared to 2011. However, one fatal accident was recorded and, consequently, the board and management of Kibali introduced new measures to intensify the focus on safety with a plan to improve the Kibali LTIFR rate in line with our targets. Emphasis has also been placed on renewed and more intensive training in the light of the increase in construction activities.

Environmental monitoring continues as defined in the environmental and social impact assessment document prepared by our independent external environmental consultants.

Community

The community development function at Kibali continued to work closely with the RAP team, especially in areas of food security, life skill training and liaison with the cultural committee when relocating houses and graves. The RAP program continued to recover ground lost after the extraordinary storms experienced in the first and second quarters of 2012. By the end of the fourth quarter, the RAP team had relocated ten villages out of fourteen. The team had delivered an average of 45 houses per week for occupation and continued to work with the community representatives in managing their handover.

Human resources

The size of the workforce employed in the construction process of Kibali has grown from 1,744 in 2011 to 4,485 employees at the end of 2012, the bulk of which are employed in the construction activity by contractors. There are 181 employees directly employed by Kibali. The labor broker employees are represented through their own union committee as are the Kibali employees represented through a Kibali union committee. Both committees are affiliated to the National Association of Mineworkers.


At December 31	2012						2011
	Expats		Nationals		Total		Expats		Nationals		Total
Employees		22		159		181		16		123		139
Contractors		423		3,881		4,304		20		1,585		1,605
Total		445		4,040		4,485		36		1,708		1,744

Exploration

Exploration has continued to focus on the extensions to the known deposits. Follow-up work continued on early stage targets at the base of the resource triangle which highlighted the new Rhino target. In addition a new exploration camp has been established in the east of the concession area to explore this highly prospective area.

Massawa

The Massawa project is located approximately 700km south east of the capital city of Dakar and some 90km due west of our Loulo mine in Mali. Randgold owns 83.25% of the project with a local company holding 6.75%. The State of Senegal will have a non-contributory 10% share of any mine developed on the property.

In 2011, the further advancement of the Massawa project continued with an emphasis on ongoing exploration. A decision was taken during the year to delay the finalization of the feasibility study, and to focus instead on two key aspects of enhancing the project’s economics: namely, the refractory nature of the ore and power consumption and costs. In this regard, work on the analysis of the ore characterization was completed and a definitive power strategy has been developed. The financial analysis of the project was updated on the back of revised reserves.

In 2012, a close spaced drill orientation study started over 150m strike length of the Central Zone mineralization. The aim of this program was to investigate grade variability associated with the high grade quartz antinomy phase of gold mineralization. The results confirm the continuity of the structures which host the high grade mineralization and which are surrounded by an envelope of low grade disseminated pyrite and arsenopyrite mineralization. This will allow us to accurately model the lodes, determine the short range grade variability and predict the optimal drill spacing and estimation criteria for an accurate estimate.

The majority of the fresh ore at Massawa is refractory in nature with gold locked inside arsenopyrite and only recoverable by means of a pre-oxidative step to liberate the gold prior to leaching. Batch testwork has shown pressure oxidation to be very effective in releasing the gold from the sulphides. The process requires flotation of the sulphides to concentrate the ore and processing of the concentrate through a high pressure and temperature autoclave which oxidises the sulphides. The oxidized ore is neutralized with limestone and lime following which it is processed through a normal CIL train to recover the gold.

The results of Bond work index test work confirm the abnormal hardness of the ore due to silica flooding. This combined with the pressure oxidation process will make the Massawa project a high energy user and thus alternatives to diesel and heavy fuel oil power generation are being investigated.

Meetings have been held with Organization pour la Mise en Valeur du fleuve Gambie, involving Senegal, Guinea, Gambia and Guinea Bissau, which is charged with developing the main hydroelectric scheme in the region, the Sambangalou project, 60km south east of Massawa.

Subsequent meetings have been held with the Senegalese Minister of Mines to explore possible power options for Massawa. Investigation of micro-barrage hydroschemes is also in progress. The current feasibility plan is to progress the study through 2013 and 2014. Metallurgical sampling is currently underway to support pilot pressure oxidation testwork planned to be completed by Hazen in Denver during 2013. The revised geological modeling based on the close spaced orientation drilling will be used to update the geological model and mineral resource estimate. Ground hydrological modeling will also be undertaken as well as an update to the environmental and social studies that have already been conducted. Geotechnical studies to a feasibility level are complete.

Ore reserves


														Attributable gold**
		Tonnes				Grade				Gold				(Moz)		(Moz)
at 31 December	Category	(Mt) 2012		(Mt) 2011		(g/t) 2012		(g/t) 2011		(Moz) 2012		(Moz) 2011		(83.25%) 2012			(83.25%) 2011
Mineral reserves*
¨ Open pit	Probable		20.73		20.73		3.07		3.07		2.05		2.05		1.70	1.70
TOTAL MINERAL RESERVES	Proven and probable		20.73		20.73		3.07		3.07		2.05		2.05		1.70	1.70

Open pit mineral reserves are reported at a gold price of $1,000/oz and 1.1g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Onno ten Brinke, in his capacity as an independent consultant and reviewed and verified by Mr. Rodney Quick, an officer of the company and competent person. Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

**	Attributable gold (Moz) refers to the quantity attributable to ourselves based on our 83.25% interest in the Massawa gold project.

Exploration and development

An updated geological interpretation and prospectivity analysis of the Mako belt has provided the team with 30 new targets to evaluate in 2013.

EXPLORATION REVIEW

We have a portfolio of projects within some of the most prospective gold belts of both West and Central Africa. We have exploration projects in five African countries hosting 152 targets on 12,945km²of groundholding. Of these, 94 are satellite targets located near existing operations while 58 are potential stand-alone operations.

Mali

Loulo

Work at Loulo over the past four years has concentrated on delineating mineable satellite ounces in proximity to the plant. During 2012, as well as continuing to deliver on this strategy especially at Baboto and Loulo 3, exploration returned to early stage targets at the base of the resource triangle, concentrating on two highly prospective target areas: Gara North and Yalea South.

At Gara North, the target is underlain by tourmalised greywackes, along strike to the north of PQ10 which returned 4.6m at 1.93g/t and 2m at 7.26g/t in grooves and 14m at 1.9g/t and 10m at 1.8g/t in RC holes as well as a number of anomalous lithosamples from several small outcrops. In addition, reconnaissance work at the new Iron Hill target returned positive results with 9m at 2.40g/t from 76m (including 1m at 8.9g/t from 78m) in hole IHRC005 and 5m at 3.47g/t from 80m (including 2m at 7.72g/t from 81m) in hole IHRC007. Both of these targets will be followed up with further drilling in 2013.

Yalea South Target covers an area of approximately 15km²from south of the Yalea deposit to the Falémé River and is covered by an extensive blanket of alluvium including palaeo river channels up to 30m thick. This restricts the use of surface exploration methods. During 2012, reconnaissance RC drilling was completed on five targets based on favorable structural settings from the interpretation of remote sensing data and airborne geophysics: Goldfinger structure, Yalea South plateau, Yalea Ridge South, Sansamba and Goldfinger West.

The most promising of these targets is Yalea Ridge South where an old diamond hole returned 10.5m at 1.7g/t, a trench returned 7m at 2.88g/t and 3m at 3.85g/t. Nine RC holes for 1 123m were completed over a 1km NNE trending structure. Encouraging results were returned from three holes: YRSRC01 – 14m at 1.48g/t and 23m at 1.39g/t; YSRC02 – 19m at 1.31g/t; and YSRC06 – 13m at 6.38g/t and 44m at 1.54g/t.

Two reconnaissance diamond holes were subsequently drilled to test below the RC holes and provide a structural interpretation around which to build a more comprehensive structural model. These holes failed to confirm the high grades but they did confirm extensive Silica-Carbonate-Albite alteration and structural complexity in terms of faulting and folding. The target still remains a high priority as it has all the ingredients of a significant mineralized system and further modeling is required to locate potential traps of mineralization along the target, which is partially covered by the transported gravels from the Falémé drainage system.

Baboto

The Baboto target extends over a strike length of 3.5km which currently hosts three deposits: Baboto North, Baboto Central and Baboto South. While the Baboto target has been known for some time, it was not in the LOM plan. In 2012, exploration work continued to evaluate the Baboto target area. The most significant deposit of the three is Baboto South where recent drilling has highlighted short strike length (200m) high grade payshoots which are associated with left hand flexures in the host structure. Drilling has also extended mineralization 200m to the south of the existing wireframe with intersections including: 20m at 2.82g/t and a footwall structure has also been identified returning: 31m at 2.41g/t. Similarly to the north the structure has been extended with results including 18m at 3.25g/t and 21m at 2.82g/t.

Loulo 3

The most significant satellite deposit on the permit is Loulo 3. With a strike length of 2km it has only been drill tested to vertical depths of 250 m. Mineralization, including high grade payshoots, is open at depth and there are opportunities to deepen the pit and add flexibility. In 2012, eight diamond holes totaling 2,960m were completed below the base of the pit. The drilling confirmed the geological model with all holes intersecting the targeted structure, but they also confirmed the highly variable nature of the mineralization due to the coarse gold component. Six holes returned narrow and weakly mineralized intersections. Two holes from the program returned high grade intersections at the southern end of the deposit: L3DH109 – 25.1m at 5.73g/t from 272.20; and L3DH111 – 14.13m at 3.48g/t from 336m. Gold mineralization is hosted in medium to coarse grained greywacke which has been variably tourmalinised and associated with disseminated pyrite. Further drilling will be undertaken pending a new pit optimization and mining scheduling exercise.

Gara South

In December, work started on a new target at Gara South. Lithosampling, trenching and RC drilling were completed in the area between the Gara pit and the Falémé River, some 3km of strike. A trench excavated during the fourth quarter intersected 13m at 5.46g/t from a pink quartzite which is strongly altered. Subsequent RC drilling beneath the trench and along strike, over 800m, where historical RAB holes had intersected mineralization, returned weaker results than anticipated with a best gold intersection of 15m at 1.32g/t beneath the trench. The area is entirely covered by transported paleo-alluvial material. Work is ongoing to further understand this target which is in a zone of known complexity and high prospectivity where folding, faulting and boudinage are highly likely due to the proximity to the main Senegal-Mali Shear Zone and presence of soft limestone units.

Yalea deposit

At Yalea, there is still upside to the deposit where the current extent of the block model is limited by drilling. With the mine now exploiting the high grade Purple Patch it is a key priority of the exploration team to extend and find additional high grade dilation zones on the host structure to replenish these high value ounces. The Purple Patch which forms the core of the deposit is located along the intersection of the north striking Yalea Shear Zone and north northeast striking Yalea structure. The southern end of the Yalea deposit remains open at depths below the -500mRL. Additional gently to steeply southplunging mineralized shoots may be present along intersections of the Yalea Structure, Yalea Shear Zone, and smaller shears in the footwall of the deposit.

Two holes (YDH258 and YDH259A) were drilled towards the north of the deposit to test a potential north plunge to mineralization and repetition of high grade mineralization below the current block model. Hole 258 intersected the Yalea system but returned only weakly anomalous gold results (8.6m at 0.22g/t). Hole 259A returned 5.2m at 8.11g/t which is interpreted to be the continuation of the main structure and highlights significant upside in this part of the orebody which will be followed up in 2013 as well as holes to the south of the deposit.

Gara deposit

There is similar potential upside at the Gara deposit, down dip of the current block model, which again is limited by drilling. An initial three hole drill program is planned to start in the first quarter of 2013, to test for additional high grade gold mineralization associated with the folded quartz tourmaline host unit.

Loulo underground

Exploration and infill grade control drilling continued at both Yalea and Gara underground mines with a total of 168 holes for 22,729m drilled, including three holes drilled from surface and targeting strike extensions of the Purple Patch to the south. The drill programs were designed to infill the resource model prior to mining, as well as to test the extensions of high grade lodes.

At Yalea, 54 holes for 9,845m were drilled to infill blocks scheduled for mining during the year, test low grade regions within the model, and explore the strike and down dip extensions of the Purple Patch. Drilling confirmed the geology, structure and alteration characteristic of the Purple Patch and the gold tenure where mineralization is associated with shearing and brecciation of a sedimentary host rock and massive sulphide:

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Hole YDH263, drilled 60m to the south of the current boundary of the Purple Patch, returned 16.54m at 11.11g/t confirming the continuation of the high grade mineralization.

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Holes YUDH265: 22.9m at 10.90g/t and YDH264: 14.7m at 18.02g/t were drilled inside the boundary of the Purple Patch, but in an area that had been poorly drilled during the exploration phase.

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Three holes beneath the Purple Patch returned a weighted average of 19.47m at 8.46g/t compared to 22.48m at 5.03g/t, highlighting an opportunity to extend the known high grade mineralization.

Gounkoto

During 2012, a total of 21 holes for 9,758m were completed to upgrade the geological confidence of the deposit. This work included the drilling of four twin holes within the Jog Zone which all confirmed the location and high grade of the mineralization in both MZ2 and MZ3.

Three holes were drilled outside of the Jog Zone beyond the limits of the block model, however no mineralization was intersected, although the holes did confirm the continuity of the geological units as well as the structures that host mineralization.

Gounkoto region

In 2012, exploration work over the greater Gounkoto mining permit identified 10 early stage targets which locate adjacent to a major structural break identified following a ground gravity survey which links the deposits of Gounkoto and Yalea.

An Induced Polarization (“IP”) ground geophysical survey has been completed over the permit to map the bedrock geology under an extensive cover of transported river gravels which forms part of the Falémé River drainage system. This data has not only mapped the geology but also a number of left hand flexures along major structures which are known to host high grade mineralization elsewhere across the region. The data is being integrated with other layers of information to prioritize targets for follow-up work in 2013.

Bambadji

Work has continued at Bambadji through the year, which is adjacent to both the Loulo and Gounkoto mining permits but in Senegal, focusing on a number of targets along the main SMS shear corridor. A major structural break connecting Yalea and Gounkoto was recognized after a ground gravity survey was extended across the permits. This structure also coincides with north-south linear features in the airborne electromagnetic geophysical data and transgresses the central and southern parts of the Bambadji permit. Due to the location of the Falémé River this structure is covered by extensive transported material so limited ground work can take place. A 10,760m RC drilling program was completed to test five targets within this structural corridor: West Kach, Beyanord, Mariama, Doukhiba and Setoumboung. In general, the gold assay results were weakly anomalous. The best results of the program were returned from Beyanord which requires further work following the integration of the new drilling data: 17m at 1.73g/t; 7m at 2.24g/t; and 6m at 1.67g/t.

A new target, Kolgold, was identified in 2012 and lithosampling returned high grades of up to 60g/t. Further evaluation, by trenching and RC drilling, has revealed that the mineralization at Kolgold is related to narrow zones of strong silicification and quartz veining in the hinges of isoclinal, upright folds which plunge to the SW at between 30 and 60 degrees but not in economic concentrations. Only one hole returned a positive result: 13m at 2.39g/t including 5m at 5.35g/t. No large system of alteration or structure was observed.

Mali South

Early stage work continued on the permits covered by the Nimissila JV: Nimissala (270km²), Bogo (150km²) and Madina (250km²). This ground is contiguous with our Dinfola permit. The JV is with the Djiguiya group of Malian businessmen, in line with our policy of partnering with local interests. Geologically the area is underlain by biotite rich sediments which are often shallow dipping with numerous small stocks and bosses of granodiorite and shows similarities to the setting of the Morila mine. The geological model is one of intrusion related gold. It is an area that has seen no modern exploration with the only previous work being regional soil sampling done 30 years ago.

Infill soil sampling has been completed on ten regional anomalies, nine of which returned results which warranted further follow-up in the form of pitting prior to a decision as to whether drilling will be motivated.

Elsewhere in southern Mali, Randgold continues to hunt for new opportunities by analyzing junior mining companies as well as local operators’ permit portfolios.

Senegal

Exploration work in Senegal during 2012 has concentrated on the Massawa deposit with the start of an orientation grade control study on a portion of the Central Zone deposit where there are two phases of gold mineralization: an early disseminated phase and a later quartz antinomy veinsystem. Due to the refractory nature of the Massawa deposit, exploration has also been evaluating targets with the potential to deliver non-refractory ore to supplement the ore feed.

Massawa

In 2012, a grade control orientation study started and by year end a total of 387 holes for 20,774m over a 150m strike length at a drill spacing of 5 by 5m had been completed. The aim of this program is to investigate grade variability associated with the high grade quartz antinomy phase of gold mineralization. The results confirm the continuity of the structures which host the high grade mineralization and are surrounded by an envelope of low grade disseminated pyrite and arsenopyrite mineralization. In general, the program is highlighting narrower zones of high grade mineralization as opposed to the previously modeled broad zones of low grade mineralization in the current model. The results also confirm the highly variable nature of the grade due to the coarse gold component of the veins. A further 6,000m of drilling is required to complete this program. Once this program is completed the geological model will be updated and a revised resource estimate calculated.

Satellite targets

Exploration work to date has highlighted the potential for six satellite deposits around Massawa: Sofia, Bambaraya, Delya, Kawsara, Tina and Tombo. Preliminary metallurgical bottle roll testwork returned good recoveries in the range of 75% to 97%, apart from Delya which returned 40% and has a similar refractory nature to Massawa. While the grade is low the results support the prospectivity of the region. No drilling was completed on these deposits during 2012.

Regional potential

An updated geological interpretation and prospectivity analysis of the Mako belt has provided the team with 30 new targets to evaluate in 2013. Of particular importance is the recognition of a second terrain boundary to the west of the MTZ which hosts the Sofia mineralization as well as the Sabodala mine. Meanwhile on the ground, a set of weakly anomalous and patchy intersections were returned from RAB and RC drilling at both East Mandinka and South Kawsara, no further work is planned on these two targets. Early stage exploration work has started on three targets: Salama, Kabya and Tama.

Côte d’Ivoire

During 2012, exploration focused on the infill at the base of the $1,000/oz pit shell at Tongon, the evaluation of satellite targets and the discovery of potential stand-alone targets within the company’s extensive permit portfolio countrywide.

Tongon Mine Lease (Nielle Permit)

A total of 26 diamond holes for 8,785m (including 481m of redrills) were completed in the Southern Zone deposit during 2012 to infill at the base of the $1,000/oz pit shell. Gold assay results reveal the mineralized structures narrow in the northeast and southwest of the deposit but dilate in the center of the pit over a 200m strike length: TND370 – 18m at 2.40g/t (from 296.05m) including 4.80m at 6.32g/t, 17.63m at 3.86g/t (from 259.32m) including 7.39m at 7.37g/t; and TND369 – 35.93m at 2.23g/t. A further high grade zone was also encountered towards the northern section of the pit with TND374: 9.20m at 4.49g/t (from 135.40m) including 5.50m at 6.38g/t and 5m at 7.97g/t (from 283.60m) including 2.28m at 14.03g/t and a wide intersection in the southeastern end of the pit (35.70m at 2.21g/t). Mineralization is associated with brecciated zones with silicification and arsenopyrite.

The Coucal and Coucal South targets are located approximately 2km from the Tongon NZ deposit. The two targets locate on subparallel structures with a similar structural setting to the Tongon NZ deposit and are underlain by four soil anomalies, each 1km long. A reconnaissance aircore drill program returned weak anomalism at Coucal including 6m at 0.85g/t, 6m at 0.59g/t, 9m at 0.60g/t and 30m at 0.20g/t, whereas encouraging values were returned from Coucal South with 7m at 1.83g/t, 21m at 2.52g/t and 6m at 0.45 g/t. A follow-up program of 43 AC holes for 2,089m across three lines spaced 300 to 500m was completed. The alteration assemblage encountered is mainly hosted in volcanics and is composed of limonite, sericite as well as significant silica alteration with evidence of disseminated pyrite and arsenopyrite. In addition, four RC holes for 483m have been completed below the previous intersections. Integration of these observations with previous results obtained from July drilling shows a possible mineralized corridor of 1.2km and open ended in both directions.

At Katosol, detailed soil sampling defined a 9km, 20ppb gold in soil anomaly at the contact between volcanics and sediments. A shear zone hosting high grade lithosamples (29g/t, 44g/t and 24.3g/t) has been mapped truncating a regional fold in the sediments. A phase 1 RC drill program is planned for the first quarter of 2013.

In addition to this ongoing exploration, the Nielle team has revised the resource triangle, identified areas defined by the generative team as potential targets that do not have detailed oil geochemistry and analyzed work done on targets within and outside a 15km radius from Tongon. Based on this analysis, a ranking of the targets to be evaluated during 2013 was established as follows: Tongon East-Soumo South, Belokolo, Tease-Seydou East-Katula and Belokolo North for the brownfields.

For greenfields work, the team has identified the northern continuity of Katosol, the southern part of the permit with the corridors of Seleko-East Kolivogo-Batie and Batie-Gbodonon- Bladonon and the Oleo North corridor as priority for follow up. In addition, several gap areas were identified for detailed soil geochemistry.

Diouala

At Diouala, on strike between the Nielle permit and the Gryphon Banfora project in Burkina Faso, high grade lithosamples were returned from the Gnelezie target (35.6g/t, 18.6g/t, 12g/t and 1.62g/t) from strongly sheared and altered granite.

At Kokoriko several subparallel silicified structures within andesites have returned high grade lithosamples over 3km including: 17g/t, 16.6g/t, 9.36g/t and 3.6g/t. Subsequently, a 3,000m RC reconnaissance drilling program was completed over the target. Drill results confirm the occurrence of a mineralised envelope of roughly 6.5m width averaging 1.40g/t and extending over 2.2km with possible higher grade in the eastern zone of the target.

In the eastern part of the permit, at the contact between an amphibolitic schist package and volcanics, a detailed soil sampling program has been completed over a corridor of the 4 by 4km Tidiane target. Soil geochemistry is ongoing at Dierrisso south of Tidiane with the aim of identifying new drill targets for 2013.

In the west, regional sampling highlighted an 8km long north-south to northeast trending, plus 25ppb gold in soil anomaly which constitutes the new Fargolo target. This locates at the contact between granite and volcanics. In the north of the permit, the Ouahiri South target is coincident with a 5km long, north northeast trending, plus 25ppb gold in soil anomaly. Follow-up work is still required on these targets.

Regional soil sampling over the Nafoungolo target (locating over the Nogbele granite, west of the Oleo shear) highlighted a northeast trending anomaly over an 8km strike which has been followed up with detailed soil sampling.

Boundiali

At Boundiali, 60km to the west of Nielle, early stage exploration work has identified four district scale (gold in soil) anomalous corridors, up to 30km in strike length, for follow-up work. Detailed mapping is currently in progress to define drill targets for testing in 2013.

Regional Permits

Randgold has a further six permits in northern Côte d’Ivoire totaling 2,700km²: Dabakala, Mankono, Tiorotieri, Koussai Datekro and Fapoha North and South, where exploration will start in 2013.

Burkina Faso

In Burkina Faso, we have made steady progress in developing a new portfolio of exploration opportunities with a number of applications lodged with the State. On the Kampti permit, which locates on the Hounde belt in the southwest of the country, a full analysis of historical data together with soil sampling, geological and regolith mapping was completed across the permit. This work identified several mineralized corridors striking both NS and NW across the permit, which host eight targets. These include the Tiossera and Kounkana targets which have considerable strike potential of over 2km and have returned highly mineralised lithosamples (25g/t, 16g/t and 3g/t) from the extensive artisanal workings.

Subsequent trenching on both targets has revealed that narrow shear zones (3m to 5m) host quartz veins and associated gold mineralization but they are not of economic importance. As well as continuing to evaluate Kampti, a key output for 2013 is to establish a new exploration portfolio either through the approval of applications in Randgold’s own name or through joint venture.

Democratic Republic of Congo

Kibali

At Kibali, exploration has continued to focus on infill drilling as well as testing extensions to known deposits and starting follow-up work on early stage targets at the base of the resource triangle, which has produced the new Rhino target. In addition a new exploration camp has been established in the east of the concession area to explore this highly prospective area.

Brownfields exploration

A phase one program of six diamond holes was drilled over a 1.5km strike at KCD confirming a 150 to 200m wide extension of the 9000 lode towards Gorumbwa with an average thickness of 9m. Results include: DDD545 – 1m at 4.53g/t (from 391.6m), 1.6m at 5.6g/t from 395.8m and 23.5m at 2.93g/t (including 10m at 5.46g/t from 403.5m).

Hole DDD548A demonstrated the down plunge continuity of the 3000 lode intersecting: 86m at 4.61g/t from 294m (including 4m at 15g/t from 300m, 12m at 13.01g/t from 320m, 4m at 6.65g/t from 336m, 4m at 8.71g/t from 346m and 2m at 19g/t from 374m). The mineralization is associated with albite-carbonate-silica-pyrite alteration. Mineralization remains open down plunge where further drilling is required to further evaluate these high grade intersections.

At the north eastern end of the 5000 lode drilling focused on infill drilling the 5000 lode in an area demarcated for underground stoping. Three diamond holes confirmed the geological model, and returned the following gold assay results:

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DDD564: 13.35m at 1.99g/t from 277m; 26m at 1.20g/t from 322m; 65.6m at 4.14g/t from 391.4m (including 7.6m at 7.1g/t from 391.4m; 6m at 4.66g/t from 405m; and 15.73m at 7.88g/t from 427.27m), 29m at 3.73g/t from 464m (including 18m at 4.72g/t from 466m).

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DDD565: 71m at 1.81g/t from 285m (including 7m at 8.93g/t from 320m); 48.81m at 4.99g/t from 365.3m (including 23.7m at 8.58g/t from 365.3m); 9.6m at 2.5g/t from 444.4m (including 2m at 4.37g/t from 452m); 53m at 8.58g/t from 554m (including 18m at 6.24g/t from 554m); 4m at 4.87g/t from 578m and 19m at 15.15g/t 588m; 20.7m at 4.41g/t from 626.3m (including 8m at 7.20g/t from 630m).

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DDD563A: 23m at 1.7g/t from 276m; 57m at 2.1g/t from 327m; 27m at 7.18g/t from 491.8m; 77.2m at 3.29g/t from 563.1m (including 15.1m at 6.4g/t from 563.84m).

A review of the drilling and mineralized intersections in the vicinity of the southwest termination of the 9000 lode stope designs has identified a significant gap in drill spacing that has potential to host high grade mineralization. Drilling is in progress. Within a 10km radius of the main Sessenge-KCD deposit there is the potential for a number of satellite deposits which are at various stages of investigation. These are Kombokolo, Gorumbwa, Pakaka, Pamao, Agbarabo, Megi, Marakeke, Mengu Hill, Mengu Village and Ndala.

Gorumbwa

At Gorumbwa, a seven hole program has been completed to confirm the geological model and provide further open pit flexibility to the operation. All results have been received and a comparison between significant intersection grades and projected block model grades is in progress. A revised resource estimate will be completed together with a pit optimization and mining schedule in the first half of 2013. Drill results from this program include:

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GDD036: 15m at 3.04g/t from 98m; 2m at 0.99g/t from 141m.

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GDD038: 32m at 3.59g/t from 147m; 8m at 2.03g/t from 185m.

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GDD039: 15.85m at 2.01g/t from 11m, 11m at 1.32g/t from 28m; 8m at 1.32g/t from 48m.

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GDD040: 4m at 2.28g/t from 79m; 12m at 6.77g/t from 95m; 1.40m at 3.35g/t from 113m; 9.70m at 2.61g/t from 117.3m.

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GDD041: 13m at 9.85g/t from 96m; 10.85m at 1.43g/t from 2m; 23m at 0.99g/t from 131m.

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GDD042: 16m at 1.65g/t from 111m; 1.5m at 3.55g/t from 143.5m; 6m at 1.83g/t from 220m.

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GDD043: 32m at 3g/t from 65m; 4m at 2.4g/t from 145m.

Rhino

Rhino is a new target, located between the Kombokolo deposit and the Agbarabo old pit. Rhino consists of a package of broadly E-W trending and moderately north dipping volcaniclastic units and a ironstone marker unit which is up to five meters thick. Following mapping and encouraging surface lithosample results, which average 3g/t over a 100m area, three reconnaissance diamond holes were drilled for a total length of 247.22m. The holes confirm up to 34m of alteration and mineralization with localized zones of high sulphide (pyrite) content. Significant results include:

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RHDD001: 33.8m at 1.37g/t from 26m (including 3m at 3.89g/t from 55m) and 13.3m at 1.1g/t from 67.7m.

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RHDD002: 11.9m at 2.4g/t from 42m.

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RHDD003: 26.1m at 4.3g/t from 26m (including 9m at 8.51g/t from 38m).

Follow-up drilling is planned.

Greenfields exploration

The known deposits of the Kibali project are hosted along a reactivated thrust plane which creates plunging lodes of mineralization as exemplified by the KCD deposit. The identification of a major northeast trending sub vertical shear zone from the interpretation of geophysical data supported by field mapping, has provided a new exploration opportunity. The structure locates in the western part of the Kibali permit and transgresses the area for more than 30km causing offsets to the main lithological units, as well as acting as a conduit for intrusives and gold bearing fluids producing the coincident gold in soil anomaly. Two prioritized targets, Zambula in the south and Kalimva and Ikamva in the north, have been the focus of work during 2012.

Kalimva and Ikamva

The Kalimva target is situated 15km north of KCD, close to the Nzoro Road, and hosted three shallow open pits during the early 1950s. Soil sampling results highlight gold peaking at 2 562ppb and the 100ppb soil contour delineates a northeast trend with plus 2km cumulative strike length and 250m average width. Lithosample assay results returned up to 13.6g/t and averaged 2.9g/t. SOKIMO drill data returned narrow high grade intersections from the main zone: K300 – 3m at 22.0g/t from 38.63m; K301 – 4.39m at 12.5g/t from 45.99m; S12 – 1.5m at 8.6g/t; and S15 – 15m at 3.40g/t.

The stratigraphic sequence comprises magnetic ironstones and a volcano sedimentary unit (fine to medium grained tuff and volcaniclastic agglomerate) intercalated with sediments, mainly chert. Locally small bands of argillite are encountered within the tuffaceous units. Basalt occurs in the northeast and the contact with the volcano sedimentary package is marked by a highly deformed quartz feldspar porphyry intrusion. A reconnaissance phase of diamond drilling consisting of six holes over a strike of 1.5km was completed. Gold assay results include the following intersects:

•

KVDD001: 73.7m at 3.41g/t (including 7.2m at 6.83g/t, 6.8m at 5.73g/t and 7.8m at 7.2g/t).

•

KVDD0002: 26.03m at 2.57g/t (including 11.55m at 4.19g/t).

•

KVDD004A: 37.75m at 1.39g/t (including 6.56m at 3.04g/t).

•

KVDD006: 10.16m at 1.17g/t and 4m at 3.56g/t.

A second phase of diamond drilling, comprising five holes has been completed with positive results returned:

•

KVDD007: 21m at 2.13g/t including 8m at 3.98g/t.

•

KVDD009: 9.3m at 1.31g/t and 14.9m at 2.19g/t including 3.3m at 4.48g/t.

•

KVDD010: 20.15m at 3.27g/t including 1.8m at 16g/t.

Due to the relatively low grade and distance from the plant site, this project will have no immediate impact on the LOM schedule and therefore no further work will be done for the time being.

The Ikamva target, located 2km to the west of Kalimva, was progressed by completing detailed mapping of the previous shallow workings in the area, along with lithosampling and trenching. Mineralization is associated with strong silicasericite alteration of volcaniclastics rocks capped by ironstones.

In the main pit, 41 lithosamples were taken and returned up to 13.2g/t and averaging 1.79g/t, while in the southeast pit 16 lithosamples returned average grade of 3.9g/t. A trench at the ironstone-volcaniclastic contact returned 22.5m at 2.36g/t. A first reconnaissance phase of drilling has also been completed drill hole IVDD006 returned a promising intersection of 34.8m at 2.42g/t associated with a fold hinge.

Zambula

At Zambula, results were received from trenches situated in the central part of the Zambula anomaly: ZBTR19 returned 8m at 2.5g/t and ZBTR20 returned 34m at 1.32g/t including 6m at 5.65g/t. Phase one work including trenching and one reconnaissance diamond hole, confirmed mineralization along the main 4km extent of the soil anomaly. Assay results and logging have indicated a narrow high grade system surrounded by a low grade halo. The target is 22km from the Kibali plant site and at this stage the geology and results do not support further work.

Generative work and new business

Our exploration strategy, which directs a team of 70 geoscientists, is based on access to quality mineral rights and the ability to generate targets. In line with this, and as reported last year, a key objective was to increase our Central African footprint.

During 2012, we signed a joint venture agreement with the Toronto based Kilo Goldmines (“KGL”) to explore for gold on 12 licenses covering 2,057km²over the northern portion of the Archaean Ngayu greenstone belt and the Isiro greenstone belt. The licenses have numerous gold occurrences which were explored during the colonial era and which include current active artisanal sites.

The main provisions of the agreement are:

•

Randgold to earn 51% for the completion of a prefeasibility study (“PFS”).

•

KGL has the right to maintain 49% post PFS.

•

Randgold to earn 65% for the completion of a bankable feasibility study (“BFS”) should KGL not contribute post PFS.

•

KGL equity to convert to 1.5% royalty if diluted to 10% or less.

•

PFS to be established within five years.

•

BFS to be established within one year after PFS, or such longer time to be agreed by the parties.

A generative study is in progress and teams were mobilized to the site in early January 2013 to start reconnaissance fieldwork.

In addition to acquiring exploration permits in its own name, we continue to evaluate potential joint ventures with local businessmen as well as international mining companies at a time when there is increasing stress in the junior market. It also monitors the exploration activities of others with a view to identifying companies that offer acquisition or joint venture opportunities.

MINERAL RIGHTS AND ORE RESERVES

Table of mineral rights at December 31, 2012


Country	Type		Area (km²)		Area (miles²)		Effective equity (%)
Mali
• Loulo		EP		263		101		80
• Gounkoto		EP		100		39		80
• Morila		EP		200		77		40
• Bena		EEP		16		6		80
• Dinfola		EEP		139		54		80
• Madina		EEP		250		97		90
• Nimissila		EEP		250		97		90
• Massabougou		EEP		125		48		90
• Bogo		EEP		150		58		90
Côte d’Ivoire
• Nielle		EP		751		290		89
• Boundiali		EEP		1,314		507		81
• Dabakala		EEP		191		74		81
• Diaouala		EEP		977		377		81
• Mankono		EEP		704		272		81
• Tiorotieri		EEP		86		33		81
• Kouassi Datekro		EEP		922		356		81
• Fapoha North		EEP		387		149		81
• Fapoha South		EEP		399		154		81
Senegal
• Kanoumba		EEP		621		240		83.3
• Miko		EEP		84		32		83.3
• Dalema		EEP		401		155		83.3
• Tomboronkoto		EEP		225		87		83.3
• Bambadji		EEP		315		122		51
Burkina Faso
• Kampti		EEP		183		71		81
DRC
Kibali
• 11447		EP		227		88		45
• 11467		EP		249		96		45
• 11468		EP		46		18		45
• 11469		EP		92		36		45
• 11470		EP		31		12		45
• 11471		EP		113		44		45
• 11472		EP		85		33		45
• 5052		EP		302		117		45
• 5073		EP		399		154		45
• 5088		EP		292		113		45
Kilo*
• 2226		EEP		137		53		51
• 2227		EEP		137		53		51
• 2229		EEP		126		49		51
• 2230		EEP		154		59		51
• 2231		EEP		196		76		51
• 2285		EEP		196		76		51
• 2286		EEP		184		71		51
• 2287		EEP		182		70		51
• 2288		EEP		172		66		51
• 2289		EEP		194		75		51
• 2290		EEP		189		73		51
• 2291		EEP		190		73		51
TOTAL AREA				12,945		4,998

EP	– Exploitation Permit

EEP	– Exclusive Exploration Permit

*	Subject to a joint venture agreement

Annual ore reserve declaration at December 31, 2012

At December 31,

Category

Tonnes
(Mt)
2012

Tonnes
(Mt)
2011

Grade
(g/t)
2012

Grade
(g/t)
2011

Gold
(Moz)
2012

Gold
(Moz)
2011

Attributable
Gold (Moz)
2012

Attributable
Gold (Moz)
2011

PROVEN AND PROBABLE RESERVES

Kibali

Proven

3.62

—

3.24

—

0.38

—

0.17

—

Probable

79.28

78.62

4.14

4.04

10.54

10.21

4.74

4.59

Sub total

Proven and probable

82.89

78.62

4.10

4.04

10.92

10.21

4.91

4.59

Loulo

Proven

2.29

2.83

2.05

2.58

0.15

0.23

0.12

0.19

Probable

37.68

38.88

5.10

5.00

6.18

6.24

4.95

5.00

Sub total

Proven and probable

39.97

41.71

4.93

4.83

6.34

6.48

5.07

5.18

Gounkoto

Proven

1.80

0.77

2.43

2.19

0.14

0.05

0.11

0.04

Probable

16.52

16.19

4.98

5.19

2.64

2.70

2.11

2.16

Sub total

Proven and probable

18.32

16.96

4.73

5.06

2.78

2.76

2.23

2.21

Morila

Proven

—

1.44

—

1.71

—

0.08

—

0.03

Probable

4.88

6.68

1.51

1.14

0.24

0.09

0.10

Sub total

Proven and probable

4.88

8.12

1.51

1.24

0.24

0.32

0.09

0.13

Tongon

Proven

2.52

0.89

1.44

1.68

0.12

0.05

0.10

0.04

Probable

31.28

32.21

2.51

2.63

2.53

2.72

2.25

2.42

Proven and probable

33.79

33.10

2.43

2.60

2.64

2.77

2.35

2.46

Massawa

Probable

20.73

3.07

2.05

1.70

Sub total

Proven and probable

20.73

3.07

2.05

1.70

TOTAL RESERVES

Proven and probable

200.60

199.25

3.87

3.84

24.96

24.58

16.36

16.28

The reporting of mineral reserves is in accordance with SEC Industry Guide 7. Pit optimization is carried out at a gold price of $1,000/oz, except for Morila which is reported at $1,300/oz. Underground reserves are also based on a gold price of $1,000/oz. Dilution and ore loss are incorporated into the calculation of reserves.

Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.

Locality of the Loulo, Gounkoto and Morila Mines in Mali.

Locality of the Tongon Mine in Côte d’Ivoire.

Locality of the Kibali Mine in the Democratic Republic of Congo

Mineral Rights and Permits

The following map shows the position of our current permits in West Africa:

LOGO

The following map shows the position of our current permits in Central Africa:

LOGO

Although we believe that our exploration permits will be renewed when they expire, based on the current applicable laws in the respective countries in which we have obtained permits, there can be no assurance that those permits will be renewed on the same or similar terms, or at all. In addition, although the mining laws of Mali, Côte d’Ivoire, Senegal, Burkina Faso and DRC provide a right to mine should an economic orebody be discovered on a property held under an exploration permit, there can be no assurance that the relevant government will issue a permit that would allow us to mine. All mineral rights within the countries in which we are currently prospecting are state-owned. Our interests effectively grant us the right to develop and participate in any mine development on the permit areas.

SOCIAL RESPONSIBILITY AND ENVIRONMENTAL SUSTAINABILITY

This section highlights the key sustainability challenges facing our business, how we are addressing them and some of our achievements in this field from 2012. Sustainability is of growing importance to all our stakeholders and we are committed to reporting what we do, as well as monitoring performance against both our values and internationally accepted sustainability standards including the 10 sustainable development principles of the International Council on Mining and Metals (“ICMM”), World Bank Operational Guidelines, International Finance Corporation (“IFC”) Performance Standards on Environmental and Social Sustainability, OECD Convention on Combating Bribery, the Voluntary Principles on Security and Human Rights and the Conflict-Free Gold Standard. In 2012, we completed our second year of reporting in accordance with the Global Reporting Initiative and have produced a separate self-declared B+ application level report, up from a C+ level in 2011.

The company has established an environmental and social oversight committee which is responsible for identifying and managing strategic sustainability risks and opportunities. This committee tables its quarterly reports for review at the group board of directors’ meetings. The committee is chaired by our chief executive officer and includes our group executive for sustainability, the chief operating officers, group projects and process executive and the general managers of each mine. Sustainability KPIs are reviewed weekly by the group executive committee, and at operational level, we have dedicated site-level managers for both sustainability and health and safety to ensure effective implementation of the board’s policies on a day-to-day basis.

For all of our staff and contractors, the standards of behavior that we expect in relation to sustainability issues are clearly defined in our code of conduct and corporate human rights policy, all publicly available and included on the company’s website at www.randgoldresources.com. These form a central part of induction training for all employees and contravention leads to automatic disciplinary action, which can include the termination of employment. We have zero tolerance for corruption and we do not offer, pay or accept bribes of any form.

Remuneration

Where appropriate, we build sustainability outcomes into the remuneration of senior management. For example, a portion of our chief executive officer’s and chief financial officer’s annual bonus payments are dependent on achieving a 10% reduction in the LTIFR from year to year. The achievement of safety and sustainability targets also influence the remuneration packages of our regional operational managers, group sustainability manager and site general managers.

Product Responsibility

Apart from a small percentage sold through the Malian company, Kankou Moussa SARL, all of our gold is sold to Rand Refinery (Pty) Limited (Rand Refinery), which has an internationally-respected reputation for integrity and ethics. Rand Refinery is able to certify that its entire chain of custody is responsible and ‘conflict free’, and this certification is independently audited. It is also a member of the World Gold Council and the Responsible Jewellery Council. This gives us assurance that the onward distribution of our gold, proceeds in a responsible way.

Our Process to Identify Sustainability Risks

We have robust and practical internal processes to ensure that all material and emerging sustainability risks are identified, that controls are put in place to mitigate those risks, and to ensure that the controls themselves are monitored to maintain adequacy, effectiveness and appropriateness. Potential sustainability risks are assessed at an annual executive committee workshop, reviewed by the board, and priorities are determined based on frequency, consequence and mitigation potential. This company-led process is complemented by an informal stakeholder engagement process which asks eight groups of stakeholders for their input and assessments.

Throughout the year, the sustainability risks and mitigation strategies identified by the board and our stakeholder engagement process are managed by the environmental and social oversight committee and our general manager for sustainability.

Economic Footprint

Our policies

We are long term investors in our host countries and our policy is to share the benefits of our operations in an equitable way with all stakeholders. Host governments are included in the ownership structure on all our mines and we see the payment of taxes, duties and royalties as an integral part of our commitment to the countries in which we operate.

It is our policy to maximize, as far as possible, the local economic benefits of our operations through preferential use of local service providers, local procurement, local employment and local skills development. These factors are important ways in which we help host governments turn mineral wealth into national wealth.

Our performance

We continued to increase the revenue we generated for host countries in 2012. Payments to the DRC in 2012 increased to $28.4 million. Over Kibali’s expected 20-year life, the DRC State will receive more revenue than any of the other shareholders financing the project; although they are free of the investment risk.

In total, 92% of employees and contractors working for us were nationals from host countries in 2012 and 94% were Africans. Therefore a large amount of the revenue distributed via wages and other employee benefits also contributes to economic development.

Infrastructure for Growth

Our capital investments are primarily focused on the exploration for and extraction of gold. Yet as our mines are usually located in remote areas, they often necessitate the provision of new infrastructure, in particular roads and key utilities. We often partner with governments to build such infrastructure. Last year, we invested in power substations and transmission lines, road improvement schemes, a major hydropower station in the DRC and a new border crossing between Mali and Senegal.

Supply and expand

Our procurement policy explicitly strives to build up local supply chains. Much of our expenditure on service providers goes to companies based in host countries. One of our oldest partnerships is with CSTTAO or AFRILOG who started in 1995 as our West African transporter of choice and progressed to where, today, they are responsible for sourcing, procuring, freight and transport of consumables and spares for our operations in West Africa, from warehouse to warehouse. Together with our partners we had a combined vision to build a supply chain company capable of servicing the mining industry and today AFRILOG has achieved this vision with offices in South Africa, Mali, Senegal and Côte d’Ivoire. With our entry into East and Central Africa, we decided to stick to the formula of finding a local partner and developing a long term relationship. In this regard, we identified Freight Forwarders of Kenya as a possible partner and have started building the logistics chain with them for Kibali. To date they have moved all the materials and equipment from the port of Mombasa to site without incident.

By prioritizing local procurement where possible, we benefit from contractors that have better availability, offer better value and who tend to be more motivated. The benefits of this strategy were vividly demonstrated in the weeks after the coup in Mali in March last year. That event led to some foreign suppliers leaving the country, with consequent impacts on the firms that relied on them. However, our production was unaffected in this period as our largely local supply chain is based in the country itself and was both able and willing to operate and work with us throughout this time.

Foundations for the future

We strive to encourage high standards of corporate governance and transparency in our countries of operation, with the aim of helping them attract other world-class companies to invest there. For example, we have worked with the governments of both Mali and DRC to help them become compliant with the Extractive Industries Transparency Initiative. Mali is now compliant and the DRC is an official candidate country. To support the development of a wide skills base, we help build the capacity of local tertiary institutions in our host countries.

During 2012, for example, we invited experts from the University of Cape Town Business School to run a course for selected employees on ‘finance for non-financial managers’ in conjunction with the Bamako Business School. Also in 2012, in association with a Malian NGO, we assessed whether better governance could lead to improvements in the distribution of the country’s patent tax. During 2012, we also held positive discussions with the Government of DRC about a potential review of their mining code, and with the Government of Côte d’Ivoire on a windfall tax. It is a positive sign that these discussions have been open and multilateral, and that we have been invited to discuss our plans for long term investment at the highest levels. We took the opportunity to reiterate our desire for stable, predictable and transparent tax systems that encourage inward investment to our host countries.

In partnership with communities

Community Relations

Our policies

At the heart of our community relations policy is a commitment to sharing the benefits of our operations with, and being fully accountable to, the local communities directly affected by our mines (defined as those within a 10km radius of our mine site). Communication is central to our policy and we discuss and consult our activities over the full life cycle of each mine. At the exploration phase, communities are involved through a Public Participation Process (“PPP”) and by assisting us with local recruitment. Once a mine becomes operational we form a Community Development Committee (“CDC”) consisting of local leaders and representatives from women and youth groups to maintain a two-way flow of information. The CDCs are also responsible for the distribution of the community investment budget, which provides significant direct investment for local projects. The budget is steered towards long term, sustainable development but is led by the communities themselves.

Our performance

The budgets allocated to CDCs have more than tripled since 2010 and rose by approximately 87% in 2012 to more than $830,000. Our total spending on community development, including advantageous infrastructural development and philanthropy, came to a total of $33.6 million in 2012. This compares with $20.6 million for 2011.

A range of community projects were implemented during 2012 including the building of new classrooms and housing for teachers, borehole drilling, local road repairs, sponsorship of cultural projects, equipment for a women’s market garden initiative and donations for Ramadan. Formal CDCs are now in place at all our operational mines and at Kibali several liaison bodies are building strong community relations. All CDCs hold monthly meetings to discuss progress and we have used local radio to help support community outreach, offering representatives the opportunity to speak on a regular community radio station slot. Employment remains the critical community issue raised by the village chiefs.

Grievance Mechanism

Our policies

Across all our communities, we ensure that a fair and accessible grievance mechanism is available, based on guidance laid out by the IFC Performance Standards. This mechanism provides a channel for the local community to lodge a complaint if they feel they have been unfairly treated or discriminated against in a non-work related disagreement. We commit to responding to all grievances within one week.

Our performance

To ensure that our grievance mechanisms are fully accessible, we have stepped up efforts to publicize them. For example at Kibali, 13 new access points were created in 2012, with some open daily. These points serve as liaison offices where grievances can be lodged, recorded, addressed and responded to. Over 100 public meetings, numerous radio broadcasts and community inductions and a Kibali Open Day were also held in 2012. The grievance mechanism is the primary route by which individuals affected by resettlement can query compensation claims and the vast majority of grievances were in relation to compensation. Grievances in 2012 tended to relate to capital damage, such as a field being disturbed by earthwork equipment or a house crack caused by blasting; or environmental disturbance such as fugitive dust from haul roads. In total, 94% of grievances were successfully resolved across all sites in 2012.

Grievances registered and resolved


At December 31	Grievances registered 2012		Grievances resolved 2012		Grievances registered 2011		Grievances resolved 2011
Loulo		5		5		3		2
Morila		—		—		1		1
Tongon		16		16		6		5
Gounkoto		10		10		7		7
Kibali		1,078		1,013		378		369

Total		1,109		1,044		395		384

Human Rights

Our policies

We pro-actively support the protection of human rights in conducting our business and a focus of our human resources strategy in 2012 has been the development and implementation of a group-wide human rights policy. In the remote areas where we work, we strive to foster awareness of human rights issues among our employees and to actively safeguard the protection of human rights among our contractors and sub-contractors. Starting last year, human rights issues have been included in induction training for all new staff. Moreover, we include a human rights clause in all our agreements with suppliers that binds them to comply with our human rights policy and puts a legal duty on them to ensure there is no child or forced labor within the supply chain. The first point of contact is the grievance process and in the DRC, which remains a conflict zone, we have now begun to record human rights as a separate category within the mechanism. We also work in partnership with the state, NGOs and international bodies to ensure human rights issues are understood and managed in our host communities. It is our policy not to arm any security forces on our mines. Instead, we have legally binding contracts with the relevant local authorities that take into account the Universal Declaration of Human Rights and aim to ensure safety and security for any military or policing matters. We also monitor any security incidents on our mine sites.

Our performance

Last year, one of the key items of feedback from shareholders and other stakeholders was the need for our company to adopt a more formal and transparent management system for human rights issues, especially as the company grows. We took this feedback on board and in 2012 introduced a new group-wide human rights policy, which taken together with our code of ethics, has further entrenched our adherence to international principles of good governance. The policy also protects the rights of indigenous people. Our new human rights policy supports the principles contained within the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work (often referred to as the ILO Core Convention) and the Voluntary Principles on Security and Human Rights. It has helped ensure that we have a clear record regarding human rights abuses during this reporting period. In 2012, we successfully introduced human rights issues into the induction training for all new staff, relevant to about 3,700 people. All our security staff on all our sites completed training on the Voluntary Principles on Security and Human Rights, mostly conducted by United Nations agencies. There has been only one significant incident resulting in injury to security personnel in 2012. This was an accidental gunshot injury, caused by an armed state policeman, at Kibali and the matter has been addressed with action taken to prevent a similar incident being repeated. Following the formalization of our corporate human rights policy, we are now developing effective targets and programs to ensure the policy is implemented at all mine sites.

Community Health

Our policies

We work in isolated parts of Africa where public health issues and a lack of access to basic healthcare can be widespread. Our policy is to provide free basic medical services to local community residents and to immediate family members of our employees. This provision makes an important contribution to worker morale and to maintaining the support of local communities. At all our mine sites, we establish a clinic in the surrounding community. We also give employee dependents access to the on-site clinics at each mine site. The specific medical services provided at the community health and on-site clinics are based on the needs identified by the initial social impact assessments that we perform at each site, but generally include medical consultations, first aid, family planning, HIV counseling and voluntary testing and a wide immunization program. Ensuring the long term sustainability of community health services is of huge importance to our approach. Therefore we also work with partners in governments, NGOs and/or international agencies to build local capacity, such as government-run health clinics, which can provide medical services when the mine closes.

Malaria and HIV/AIDS are the two diseases that pose the most serious threats to both our local communities and our productivity. We therefore have two stand-alone programs to fight these diseases that are applied to local communities at all our mine sites. The target for our HIV/AIDS program is to have no new infections among our employees and communities, and our program to achieve this includes the distribution of free condoms, local awareness campaigns and provision of free and confidential voluntary counseling and testing.

Our performance

A total of 29,669 medical consultations were provided to local community residents and family members of employees at all our clinics in 2012, an 11% increase compared to 2011. These consultations were in addition to more than 60,000 consultations for employees, many of whom are also local community members.

Important work to build local capacity for healthcare is underway at both Kibali and Loulo where government-run health clinics are being built in surrounding villages. For both clinics, we have helped provide initial support for equipment and construction, but ongoing funding will come from the government. We continued to work with medical charity CURE and the United Nations to facilitate the delivery of containers of medical equipment into Côte d’Ivoire, and in Mali we worked with local NGO CSP to train community peer educators as part of our HIV/AIDS campaign. We also joined forces with other mining companies to sustain the medical program fighting neglected tropical diseases in Mali.

Preventing HIV/AIDS

We spent $187,846 on our HIV/AIDS program and distributed approximately 250,000 condoms to local community residents in 2012. A total of 2,054 voluntary counseling and testings were carried out in 2012, an increase of over 60% compared to 2011. The increase is encouraging but the number of HIV voluntary tests still remains relatively low because of the social stigma attached to the disease and the fear of testing positive. In 2013, however, we aim to encourage more people to undertake testing. As part of our efforts to raise awareness of HIV/AIDS prevention techniques, we have used closed and open talking forums in local villages, mobile video units and radio broadcasting. We also worked with partners to train peer educators, who can reach out to important constituents in the community such as sex workers and young men.

Our program to fight malaria has been an important part of our community health performance during 2012.

Artisanal and small-scale mining

Our policies

Artisanal and small-scale mining (“ASM”) activity is present on two of our mine complexes. Although artisanal mining can be an important source of economic activity in some of our host countries a large proportion of it is illegal, as opposed to the traditional orpailluers, and its presence can create tensions for local communities and endanger both health and the environment due to the chemicals, erosion and land degradation used by its practitioners. In addition, many of the artisanal miners are under the control of syndicate leaders who are often illegal immigrants exploiting local communities through practices such as the use of child labor.

We have a ‘no conflict’ and ‘no invasions’ policy in regard to artisanal mining communities present on or adjacent to our sites. Our policy is formed with reference to both ICMM and IFC guidance and sets out that, wherever possible, we offer alternative livelihoods for orpailleurs including work on our mines or in new economic sectors such as agriculture and bricklaying. Our policy is to work in partnership with host communities and regional and national governments to find long term strategies that are mutually beneficial.

Where orpailleurs are not interested in alternative employment we seek to offer a designated site, approved by government, where ASMs can be relocated to work without causing harm to others and where they can be gently introduced to the alternative livelihoods on offer. Ultimately, the existence of the ASM community is linked to unemployment, inequality and poverty and a viable long term solution requires a broader answer devised in partnership with governments.

Our performance

There is an ASM presence at both Kibali and on the Loulo- Gounkoto complex. At Kibali, the strategy of offering ASM practitioners jobs on the main Kibali mine and as suppliers of bricks or as building contractors, has been a great success and has led to a rapidly declining number of orpailleurs on or near the site. Our partner, SOKIMO, has also assisted by identifying alternative sites for orpaillures to mine. At the Loulo-Gounkoto complex, there is still a sizeable presence of ASM, located mainly at Sansamba on the Gounkoto haul road. In the summer of 2012, a government delegation visited the artisanal miners and confirmed their use of hazardous chemicals including mercury and cyanide. We are therefore working closely with government and community leaders to implement a long term strategy for the orpailleurs.

Part of this has included the creation of an agricultural project in partnership with the Mayor of Sitakily. An area of 30 hectares of land near Sansamba growing rice, corn and other crops was harvested for the first time in 2012, and the mayor invited the ASM community to help harvest and enjoy a feast, with the aim of demonstrating alternatives to artisanal mining. In 2012, a public consultation process was held at Baboto, a planned exploration site, to discourage people’s support for orpailleurs’ activities on the potential mine site.

Resettlement

Our policies

We strive to avoid or minimize physical or economic displacement of people, but where resettlement does need to take place, we make sure it is done in the right way. Our policy is to ensure that affected parties are fully engaged, helping shape the process, and that their standard of living is improved, or at the very least restored. We have tried and tested procedures for resettlement, guided by the IFC Performance Standards on land acquisition and involuntary resettlement and national legislation.

Our resettlement policy puts the affected person at the center of our policy. Our starting point is a PPP to encourage all opinions and grievances to be heard and fed into the compensation process. The general PPP is then followed by more intensive discussions and negotiations with a Resettlement Working Group (“RWG”). The results of the PPP are incorporated into a draft RAP which is then also put forward as the basis for further consultation with the RWG before a final RAP is agreed.

Our procedure is to offer a ‘like for like’ asset replacement to affected parties and we aim to ensure that all affected people feel fully and fairly compensated for the upheaval and have an improved standard of living after resettlement. We aim to maintain community structures wherever possible and respect sites of cultural or religious significance. The implementation of our RAPs is always monitored by independent third parties.

Our performance

In line with our plans, we spent more than $51 million (on a 100% attributable basis) on RAP implementation in 2012. Kibali is our only current site where resettlement is taking place. The Kibali RAP will have resettled around 20,000 people when completed, most of whom were previously living in isolated villages without basic utilities and who will be resettled into the newly constructed village of Kokiza which has civic infrastructure including schools, clinics, shops and churches. It includes the construction or relocation of 14 churches, a catholic cathedral, 17 schools and 2,300 graves. Approximately 50% of the Kibali resettlement has been completed and it is moving rapidly towards its final phase, with new houses being constructed at a rate of up to 75 to 90 houses per week. All people have been successfully moved from the new mine’s main pit, construction areas and tailings storage facility and in total nine villages and 1,208 households were successfully resettled in 2012. The resettlement is due to be completed by the end of the third quarter of 2013 and will have facilitated the creation of over 4,200 new houses.

In partnership with our workforce

Our policies

We have a target to run all our mines with zero fatalities and zero Lost Time Injuries (LTIs—injuries that prevent a person from working for at least one shift). We believe it is an achievable aim and we are putting the processes, behaviors and technologies in place to accomplish it. We use the internationally recognized best practice standard OHSAS 18001 as a framework for our management of safety, with two out of four of our operational mines now certified. Gounkoto and Tongon are scheduled for certification in 2013.

Safety

Safety training is a critical part of our approach and is included in the inductions of every employee and contractor. Specific safety risks in each department, such as chemical hazards are separately assessed and each has its own specialized training modules. Personal protective equipment and morning ‘toolbox’ safety briefings – where daily reminders and discussions about safety are raised – are other vital elements in our approach. When accidents happen, our Safety, Health and Environment department ensures the incident is analyzed and that remedial actions are taken. They also ensure that illiterate employees are fully briefed on the meanings of written procedures and safety signage is always symbolic, an important consideration in some of the underdeveloped areas in which we operate. We have a zero tolerance policy towards drug or alcohol abuse and unsafe behavior on site.

Our performance

Regrettably, we experienced one fatal accident at our operations during 2012. The incident occurred on the Kibali site in October when a front-end-loader vehicle was exited by its operator and rolled back causing the accident. The deceased was Bangaya David Latu, a 32 year-old general laborer who was Congolese and married. As is our policy, we conducted an in-depth investigation into the cause of this incident, which included a presentation to the Kibali board, and we have implemented a detailed action plan, which includes improvements to safety awareness, capacity assessment systems and skills developments in this specific area, to prevent a similar event from recurring.

In 2012, we took a positive step towards our aim of zero LTI by far exceeding our annual target of a 10% reduction in the LTIFR, a standard benchmark to measure safety performance. The LTIFR for 2012 at our five active mines (Loulo, Gounkoto, Morila, Tongon and Kibali) reduced by 52% from 3.13 to 1.50 across the group, with the number of LTIs reducing by more than a third to 38 last year. The LTIFR at our operational mines (that is excluding Kibali which is under construction) has improved by 37% from 1.29 to 0.81.

Morila and Tongon both showed that our goal of zero LTI is very much achievable by completing a year with only one LTI at each site. This is the second consecutive year that Morila has achieved this level of performance. By the end of last year, we had substantially advanced towards the landmark of having all our active mines certified to the OHSAS 18001 Occupational Health and Safety Management standard. Gounkoto and Tongon’s applications are due to be finalized mid-2013.

A disproportionate number of the group’s LTIs, around 70% of them, occurred at Kibali. This is partly because the mine is in its construction phase, which is the most testing time for our safety practices. Kibali has also brought in a large number of new employees, many of whom have no previous experience of working in an extensive industrial zone and whose training in the importance of safety is starting from a low base. Even with these challenges, Kibali managed to achieve the greatest improvement in LTIFR within the group, reducing from a LTIFR of 8.5 in 2011 to 2.5 in 2012. We are, however, aiming for further improvements at Kibali next year as we strive towards zero LTIs.

Last year we also took action to reduce accidents involving light vehicles on site. All our sites impose a speed limit, we have increased the numbers of signs and guards at crossings to regulate traffic and where possible have separated roads for heavy and light vehicles including motorbikes. At the Loulo-Gounkoto complex we have tried a new driving test and permit system that has restricted poor-performing drivers from driving on site. Although this system was only implemented towards the end of the year, there have already been indications of a substantial decrease in property damage and vehicle accidents.

Safety Performance

2012

2011

2010

Labor

11,477

***

8,652

***

n/a

Person Hours

25,327,309

19,806,975

n/a

Number of Active Mines