Dennis Bristow - CEO & Executive Director Graham Shuttleworth - Finance Director, CFO & Executive Director

Joshua Wolfson - Desjardins Securities Howard Flinker - Flinker & Co.

Ladies and gentlemen, welcome to Randgold Quarter Three Conference Call. I will now hand over to Mr. Mark Bristow, CEO. Sir, please go ahead sir.

Hello, everyone. Good afternoon here in the U.K., and across in South Africa and also to those in the Americas. As you know, today was one of those special days for Randgold Resources. We meet, for all intents and purposes, for the last time on a quarterly presentation. With the pending votes from our shareholders to approve the deal scheduled for tomorrow, and subject to that outcome, therefore, they'll trigger the combination, and we won't be having these meetings again. So a bit of a bittersweet moment when we look back over the last 23 years, when we incorporated Randgold Resources as a private company then, and then continued to migrate it to the main London Stock Exchange. And then, really, a long unbroken record of successful endeavors, including a run of profits over the past 16 years and a dividend stream that has grown annually for the past 12. And I'm pleased to say that we were able to present a quality set of results again this quarter despite the lockout at Tongon. As usual, I'll start it with just an update on our health and safety record. And again, we showed improvements. And I will just point out that we have a real commitment to the welfare of our employees and communities. And this is not a product of governor's box ticking, but really it's a deeply embedded management philosophy, both with respect to our communities who are our employees or the other way around and as well towards the environment where, as you know, Randgold has been a constituent of the FTSE4Good Index for the past four years. We're pleased to inform everyone that, during the past quarter, we have also been included in the Dow Jones Sustainability Index, which is fitting for our migration up to the New York Stock Exchange with Barrick. Moving, then, to the operations. We covered the highlights for the quarter. A much improved one for Randgold but not, as I indicated at the introduction, without its challenges, that being that Tongon strike that cost much of the planned output for the quarter. We had nearly a full September, and the team did really well to perform and get the mine up to run rate during that time. Another record quarter from Kibali and a solid performance from Loulo-Gounkoto kept the group production in line with last quarter. And more importantly, we had a very good performance on total cash cost per ounce, coming down by 16%, profit increasing by 25%. And as is always the case with Randgold, an improved - when you get those sort of movements, you get an improved net cash position with cash up 8% or to more than $650 million. We made good progress with Massawa and also our exploration progress across our portfolio. These are the numbers. And as you'll recall, we had a slow start to the year with the pushback for Gounkoto super pit impacting production during the first two quarters. But this set of numbers shows that, as we forecast, there was a big improvement on the back of grade, both with - driven by Kibali's underground performance and also Loulo getting back to mining closer to its reserved grade. Talking about Loulo, this is the update for the Loulo-Gounkoto complex. Back to normal with the run rate and production up 16%, total cash cost down by the same margin and profit from mining increased by 19%. And Brownfields exploration continued to confirm the potential to replace the ounces that we have been mining this year. Operating results show the head grade milled was back at the reserved grade target of 4.6 grams as a combination, as a complex. Although this was weighted towards the underground mines while Gounkoto was still on its way to returning to its full capacity. Loulo standalone. The underground mines at Loulo delivered across-the-board improvements, and we continue to work on further efficiencies. And these are the results of the Loulo standalone operation. And again, you'll see grade is up and the throughput was back down. And that is really because, if you recall last quarter and the first two quarters as we processed a lot of Baboto open pit ore as we managed the scheduling of Gounkoto. That's now stopped and we're back to full-grade ore from underground. On the exploration side, Yalea, good results from the extension and base of the Purple Patch, adding some 460,000 ounces at 11 grams a tonne to the mine plan. And similarly, ongoing work at Gara has confirmed that the main mineral system remains open in all directions. And then Loulo 3, we progressed that too, and completed our preliminary economic assessment, which really points to the potential for an open pit resource of 300,000 ounces and an additional 500,000 ounces if the underground operation is included. At Gounkoto, the establishment of the super pit has delivered significant performance and production was up 39%, total cash cost per ounce down by 26%. And with this operation, I've settled the relative contributions from Loulo and Gounkoto have returned to their targets of 60:40 ratio. And these are the numbers, which look a lot better as a result of the increased tonnes processed, as we went back to that tonnage from Gounkoto and at a higher grade, which produced 61% increase in profit from mining. On the geology, generally and particularly, the Loulo district continues to live up to its reputation as a world-class gold destination. And we've made a lot of progress on our work in understanding not only within the Loulo and Gounkoto mining permits but also the southern exploration permits of Bena and Bakalobi. And just to put it in perspective, this is, up here, this last quarter where we largely are processing data collected during the dry season because we've been in the rainy season for the last couple of months. Morila. Closure preparations were advanced with the government's endorsement of the agripole initiative. And we had the Prime Minister and the Minister of Mines & Petroleum attend a conference where we showcased the Morila agribusiness along with a series of stalls hosted by the various business partners that are committed to participate in the life after mining. Moving south to the Côte d'Ivoire. The Tongon, as you all know, is a quality asset and, really, it has an excellent management team and workforce. But it's faced many socio-political changes since it days as a project and, most recently, this manifested in a strike action, which impacted operations, and we eventually closed the mine down for two months. And we believe that, that really got people's attention. And we reopened it with the engagement of the workers' representatives, management, the authorities and also the government. And it's worth noting that the Tongon - it's worth noting that the state of Côte d'Ivoire has now change the Ministry of Mines to a dedicated ministry. It always was a ministry shared with another ministry. And that really has helped us in dealing with a more focused approach to mining and mining investments. We are very pleased with the new minister and his efforts that he's made. And he's a man who comes from, originally, from the one-stop investment shop in Ivory Coast. And before this appointment, he was the Minister of Labor, so a man who really understands both the importance of investment, capital investment and, too, the complexities of labor. And staying with Tongon. We've continued to progress our exploration work along the Badenous corridor and, again, we've progressed. You'll see the results on Djinni and also Mercator. And we're excited about the prospects of being able to extend the life of mine of Tongon with the work that we're doing along this significant trend, which really is a continuum of the structures that host the two main ore bodies, Tongon North and South. The ongoing work at and across our exploration portfolio throughout the Ivory Coast continued. And as you know, the more advanced projects in this portfolio is Boundiali and Mankono. And again, it's worth noting that the minister, the new minister, with his focus has brought a much more engaging approach to this. And he's been working very diligently on addressing some of the backlog on applications and various permitting, et cetera. Just on the Mankono update. We continue to expand the footprint of this joint venture. It's a joint venture with Endeavour. And, again, we know that we've got just under 1 million ounces to farm here, but the big focus here is to really evaluate the whole highly prospective portfolio of mineral rights. And this locates within a wide junction of two major belts, the Boundiali belt and the belt that hosts Tongon. Across Africa to Kibali, where Kibali has, again, delivered a stellar performance with a new production record of 224,000 ounces, up 11% on the previous record of quarter two. Total cash costs were down 22% to just about $500 an ounce. And profit from mining rising a stellar 17%. We also finalized the commissioning of the hydropower plant during the quarter and its contributing to the good health of our costs. It's fully supplying power now into the mine master grid. On the broader front, we continued our constructive engagement with the Congolese government, and as you would have read from our press releases out of country, that this has already delivered a formal agreement for the resumption of the TVA payback owed to Kibali. And we continue on all fronts to progress our engagements on seeking a resolution of some of the issues around the country's 2018 mining code. Ramp up from underground has really raised the grade and was the driver behind the improvement, and that was planned. At the same time, throughput has been ahead of nameplate. So, on three fronts, as I'll take you through, Kibali has achieved its nameplates on hoisting through the vertical shaft. It's more than achieved its throughput nameplate in the processing plant and, at the same time, its recoveries are now up where we expected them to be in the feasibility study. This just illustrates how well the team has ramped up the underground hoisting, the latter part of the bar is the vertical shaft tonnes hoisted. And, as I've said, it's at nameplate now. And again, the next slide really summarizes the improvements in recoveries on the processing side. And, really, now it's all about efficiency improvements. We still think there's more to do, although it was a very good performance. And the big focus is we start to pay back the loans as well as, as we always do, making a fair contribution to the Congolese economy and treasury. At the other operations, there is also a strong emphasis on Brownfields' exploration. As you can imagine, with this sort rate of gold production, we consume the orebody quite quickly, so it's very important. And this slide really highlights the opportunity where we've got current visibility of more than 2 million ounces for conversion into reserves over the next 20 to 30 months. We're also planning the next optimization stage of the very successful ore handling, haulage automation that we commissioned along with the shaft. And it's integrated with that, as you can see here. The implementation of the system will enable a single surface based operator to control three loaders at three different levels or within three different zones of the mine. On the exploration front, also made significant advances. As of the - we discussed, we completed a preliminary economic assessment of Kalimva-Ikamva, as shown here. And it has the potential of 400,000 ounces at around 2 grams a tonne. That's - given the throughput rate that we're achieving in Kibali, it's important that the teams focus on improving the reserve base of our open pittable material as well as continuing to expand the underground reserves. And Kalimva-Ikamva is on the far northwestern section of the K-Z zone. The K-Z zone itself has significant potential, as you can see you here and particularly down in the southern part, which is a new extension of that structure. Turning back now to Massawa and Senegal. The infill drilling is being completed and the resource models are being updated for the full feasibility study due by the end of the year. And we've also completed a very detailed capital review of the project as part of our focus on taking out or addressing technical risk in the project. And we're pleased to confirm that the construction costs remain in line with the previous estimates of around $415 million. And then the current 2.7 million ounces reserve in Massawa falls short of our 3-million-ounce threshold, but drilling on the multiple targets within the Kounemba exploration permit operate 400,000-ounce resource potential that could lift the project above the required level. And our exploration team is continuing its evaluation of these targets as well as generating more targets. Most advanced of these targets are the KV targets, where mineralization zones coincide with east, northeast trends defined by high soil anomalies. And we're busy infilling and the scoping study on these targets has been scheduled for the current quarter. Just for your information, the KV targets are only around five kilometers away from Massawa's planned plant site. Indications from the preliminary metallurgical test work is it's free-milling ore with a recovery rate in excess of 19%. Staying with Senegal, but going east towards the Mali boarder. We, again, received the renewal of the Bambadji joint venture permits, which we have in joint venture with I-M Gold. And this is a very exciting block of ground, highly prospective, across the border and immediately adjacent to the Loulo-Gounkoto permits in Mali and represents one of the most prolific targets in the zone, which has been a significant producer of major gold discoveries over the past three decades. I think, just wrapping up as is traditional. Before I leave the operations, a reminder that we regard our social license as being as important as our legal permits. Our extent of community support programs have made us a well-considered neighbor in our host countries. It doesn't always make us immune to some of the challenges of operating in Africa, but it certainly gives us an advantage in finding solutions and resolving things after such events, as we have demonstrated again this quarter. Finally, as you know, our shareholders, in what I implied or indicated in the beginning of the presentation, our shareholders will vote tomorrow on Randgold's proposed merger with Barrick, a transformational transaction that will bring the Randgold strategy to bear on the two companies' combined assets in a new business with a unique capacity to create value and sustain profitability. It will own five of the world's top Tier 1 gold mines, along with projects with potential to become Tier 1 assets and extensive land positions in prolific gold districts on three continents. Its management team will be led by myself and some of the key Randgold executives but will draw on the large pool of the young talent in Barrick. People, of course, capable of driving this industry leader to heights which neither company, I believe, could have reached on its own. And as we pointed out, in many occasions, with its superior assets, best-in-class management team and a disciplined approach to capital allocation, we believe this new Barrick has the potential to stand apart from the rest of the industry. And we're all very excited to be a part of this truly transformational transaction. A transaction that has attracted significant support from the market as is shown by our share price performance since the announcement. That's the quick summary of our presentation at the London Stock Exchange, ladies and gentlemen. Really, the object of our visit is to give you a chance to answer questions. So I'll pass it over to the operator, and we're happy to take questions.

[Operator Instructions]. Our first question comes from Josh Wolfson with Desjardins.

Mark, with regards to the DRC. Has there been any updated discussion about some of their qualms that they had highlighted with the transaction? Or any way to get them all on side with the terms that have disclosed to market?

So Josh, the only issue was that press speculation from SOKIMO, which we responded to in the press. That, really that SOKIMO is a 10% shareholder in Kibali, the mine, S.A., Kibali S.A. which is a local company that owns the mining permit and the asset. And it's not - a lot of people, including SOKIMO's CEO, tried to make a comparison between and Tenke Fungurume and some of the Gecamines Glencore sort of scenarios that played themselves out earlier in the year. And it's not the same case. And what's more is we're not selling this asset or moving out. Everyone's the same. There's no change in control, whichever way you cut the agreement. And SOKIMO has no rights other than their 10% shareholding in certain provisions in the joint venture, which gives them access in the normal course of business to the benefits of their investments. So I think there's no preemption that they can exercise at all.

Alright, that sounds promising. And then, similarly in the DRC, based on the new mining law, I'm just trying to understand how cash flows from Kibali will work going forward? Because I guess - I'm assuming, in protest you'll be effectively accounting for those taxes appropriately, but there's also the VAT balance that will be accounted against that. Is there any sort of perspective you can provide in terms of how we should be looking at taxes or cash taxes, at the very least, for Kibali in the next 12 months, let's call it?

So we've indicated to the market that a lot of those taxes embedded in the 2018 code, we were already paying under duress. And that the net impact of the application of the 2018 code on Kibali is around $10 million. At the same time, the TVA - just to remind you, as I said earlier, we've reached agreement on that. The government has accepted the value in U.S. dollars of the outstanding amount and has committed to a program, an agreement, signed agreement, on allowing us to recover those monies that owed under the TVA reimbursement. And it will start with the government, and they've already paid us the first check. They'll pay us in cash, the $40 million, Willem? Willem's [ph] on the call, so. And then we've got a program of being able to recoup it through offsets as we do in other parts of Africa. And, again, that's a material bit of progress in dealing with these outstanding issues.

And just realize the value is in dollars.

And as I've said, the value - the recognition of that outstanding amount is in U.S. dollars.

Got it. And one last question, sort of related to DRC as well. Unit costs for Kibali looked very good this quarter. Should we assume similar costs going forward, given that the shaft is operating near steady-state?

So we've always guided costs sort around the $500 mark. And we'll, certainly for the next four years or so, we're sitting at between $500 million and $600 million - I mean $500 and $600. As I pointed out in my introduction, I still think there's efficiency improvement opportunities at the mine and that's what Willem and the team are already focused on. But we're comfortable with the numbers more or less around these levels. There will be some variations driven by things like strip ratio and other prices. As you know, unless it's a big pushback, we take it on the nose.

[Operator Instructions]. Our next question comes from Howie Flinker, Flinker & Co.

I didn't hear clearly from you and Graham, what's the total amount that the Malian government owes you?

So you're talking about DRC government. That's what you're referring to, which is about $218 million.

$218 million. Oh, I confused them. And is there any settlement with the taxable dispute with the Malian government or not yet?

So we're busy with the facilitation, Howie. And we're in the middle of that process.

Howie, the Malian amount is about $200 million as well.

[Operator Instructions]. We have no further questions. Speakers, back to you for the conclusion.

So thank you, everyone, for making the effort. We see there's a long list of people on the call. And it's encouraging that we managed to get all the numbers out. And it's unique only to have two questions, but thank you. And again, thank you for your support and continued interest in the company and we trust that you will be equally engaging with us as we migrate to the new combination, which we're all very excited about. So again, thank you very much.

This concludes today's conference call. Thank you for your participation. You may now disconnect.