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Barrick Gold Corp
Symbol C : ABX
Shares Issued 1,751,516,088
Close 2019-02-13 C$ 17.02
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Barrick Gold's Randgold earns $227.33M (U.S.) in 2018

2019-02-13 08:57 ET - News Release

Mr. Graham Shuttleworth reports

RANDGOLD BOWS OUT ON A HIGH NOTE BEFORE ITS MERGER WITH BARRICK

Randgold Resources, which merged with Barrick Gold Corp. last month, has posted a solid set of results for its final year of operation as a listed company. All financial numbers are in U.S. dollars unless otherwise stated.

Highlights of the numbers were the 35-per-cent increase to $2.69 per share in the annual dividend and the record production by Kibali in the Democratic Republic of the Congo, which at 807,000 ounces of gold was materially better than guidance. The Loulo-Gounkoto complex also delivered a record throughput.

Group gold production of 1.28 million ounces was fractionally below guidance, reflecting the impact of a protracted illegal strike at Tongon in the Ivory Coast. Total cash cost of $637/ounce was in line with guidance.

Despite a high level of activity, the group's lost-time injury frequency rate was drive down to a new low of 0.29, a 44-per-cent improvement on the previous year.

The attributable proven and probable reserves were substantially replaced at a grade which was 6 per cent higher.

                                   SUMMARIZED FINANCIAL INFORMATION
                                          (thousands of dollars)

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Average gold price received ($/oz)          $1,236           $1,209          $1,278          $1,266          $1,258
Revenue                                    334,814          243,566         328,618       1,135,317       1,280,217
Group gold sales (1)                       464,650          374,225         434,814       1,642,201       1,654,329
Cost of sales                              211,831          167,679         210,607         781,819         773,502
Group total cash costs (1)                 211,670          181,556         213,290         826,064         815,347
Operating profit                            48,148           88,892         113,051         295,730         477,943
Group profit from mining activity (1)      252,980          192,669         221,524         816,137         838,982
Exploration and corporate expenditure       22,638           11,309          12,172          64,698          47,785
Profit for the period                       29,292           73,152          87,087         227,336         335,047
Profit attributable to equity 
shareholders                                18,086           61,416          75,459         189,012         278,017
Net cash generated from operations         150,905           84,823         163,396         398,548         547,798
Cash and cash equivalents (2)              750,991          653,533         719,808         750,991         719,808
Gold on hand at period-end (3)              14,019           14,476          31,215          14,019          31,215
Group gold production (1) (oz)             374,584          308,628         340,958       1,283,405       1,315,362
Group gold sales (1) (oz)                  375,838          309,579         340,177       1,296,649       1,314,984
Cost of sales per ounce (1) ($)                783              832             819             873             762
Group total cash cost per ounce (1) ($)        563              586             627             637             620
Basic earnings per share ($)                  0.19             0.65            0.80            2.00            2.96

(1) Randgold consolidates 100 per cent of Loulo, Gounkoto and Tongon, 40 per cent of Morila and 45 per cent of 
    Kibali in the consolidated non-GAAP (generally accepted accounting principles) measures. Morila and Kibali are 
    equity accounted for under IFRS (international financial reporting standards).

(2) Cash and cash equivalents exclude $59.2-million at Dec. 31, 2018 ($7.3-million at Dec. 31, 2017, and $18.2-million
    at Sept. 30, 2018), that relates to the group's attributable cash held in Morila, Kibali and the group's asset 
    leasing companies which are equity accounted.

(3) Gold on hand represents gold in dore at the mines (attributable share) multiplied by the prevailing spot gold 
    price at the end of the period.
 

Key performance indicators

  • Merger with Barrick to create the new mining champion completed on Jan. 1, 2019;
  • Group gold production up 21 per cent quarter on quarter;
  • Cost of sales per ounce down 6 per cent quarter on quarter;
  • Group total cash cost per ounce down 4 per cent quarter on quarter;
  • Annual group total cash costs1 of $637/oz, in line with guidance, and annual group gold production of 1.28 million oz, 1 per cent below guidance;
  • Cash on hand increased by 15 per cent quarter on quarter to $751-million at Dec. 31, 2018;
  • Dividend for 2018 increased by 35 per cent to $2.69 per share;
  • Group lost-time injury frequency rate of 0.29, 44 per cent lower than the prior year;
  • Loulo-Gounkoto complex delivers record throughput at reserve grade and continues to invest in its future;
  • Kibali excels on all fronts as it reaches nameplate production;
  • Tongon delivers strong Q4 as operations return to normal;
  • Morila's pioneering agribusiness gets government go-ahead;
  • Massawa feasibility study confirms it as one of the best undeveloped projects in Africa;
  • Group attributable proven and probable reserve ounces partially replaced and grade improves by 6 per cent.

Comments on the quarter ended Dec. 31, 2018

Revenue for the quarter was $334.8-million at an average gold price of $1,236/oz compared with revenue of $243.6-million in the previous quarter at an average gold price of $1,209/oz. The increase of 37 per cent in revenue on the previous quarter was due to higher ounces sold by subsidiaries of 270,652 oz compared with 201,583 oz in the previous quarter, primarily as a result of increased ounces at Tongon compared with the previous quarter. Revenue increased by 2 per cent on the corresponding quarter of the previous year (Q4 2017: $328.6-million) on the back of higher ounces sold by subsidiaries offset by a lower average gold price received (Q4 2017: $1,278/oz).

Group gold sales for the quarter of $464.7-million increased by 24 per cent from $374.2-million in the previous quarter. Group gold production for the quarter of 374,584 oz was up 21 per cent from the previous quarter due to increases in gold production at Loulo-Gounkoto, Tongon and Kibali, as a result of higher grades and better recovery achieved at these mines. The average gold price received of $1,236/oz was up 2 per cent on the previous quarter (Q3 2018: $1,209/oz) but down 3 per cent on the corresponding quarter of the previous year (Q4 2017: $1,278/oz). Group gold sales and production increased by 10 per cent and 10 per cent respectively from the corresponding quarter of 2017 on the back of higher production across the operations.

Cost of sales for the quarter was $211.8-million compared with $167.7-million in the previous quarter. Cost of sales under IFRS comprises mine production costs, movement in production inventory and ore stockpiles, depreciation and amortization, and royalties. The increase in the current quarter was as the result of higher costs directly relating to increased sales at Loulo, Gounkoto and Tongon. Cost of sales was in line with the corresponding quarter of 2017 (Q4 2017: $210.6-million).

Group total cash costs for the quarter of $211.7-million were up 17 per cent from the prior quarter and down 1 per cent from the corresponding quarter of 2017. The increase in group total cash costs against the previous quarter reflects the increased throughput, particularly at Tongon, following the prolonged illegal industrial action in Q3, and slightly higher unit operating costs.

Cost of sales per ounce was $783/oz in the current quarter compared with $832/oz in the previous quarter on the back of higher ounces sold by subsidiaries offset by higher costs associated with sales. Cost of sales per ounce was 5 per cent lower than the corresponding quarter in 2017 (Q4 2017: $819/oz) as a result of increased ounces sold by subsidiaries in the current quarter. Group total cash cost per ounce of $563/oz decreased by 4 per cent quarter on quarter reflecting the higher production during the quarter, on the back of increased throughput and higher grade. Total cash cost per ounce decreased by 10 per cent on the corresponding quarter in 2017, driven by the increased head grade and production.

Operating profit for the quarter of $48.1-million compared with $88.9-million in the previous quarter. The decrease was the result of higher operating costs, as described above, as well as additional costs in the current quarter relating to the merger with Barrick including transaction fees of $29.4-million and accelerated non-cash share-based payment charges of $23.8-million, offset by higher revenue and higher share of profits of equity accounted joint ventures in the current quarter. Operating profit for the quarter was 46 per cent lower than the corresponding quarter of the previous year as a result of higher costs in the current quarter, including costs associated with the merger with Barrick offset by higher revenue, share of profits of equity accounted joint ventures and other income.

Group profit from mining activity increased by 31 per cent to $253.0-million from the previous quarter and was up 14 per cent on the corresponding quarter of 2017. The increase from the prior quarter reflects the higher production partially offset by increased costs as explained above as well as a higher gold price received. The increase from the corresponding quarter of 2017 reflects higher production along with increased costs offset by a lower average gold price received.

Exploration and corporate expenditure of $22.6-million increased by 100 per cent on the previous quarter and by 86 per cent on the corresponding quarter in 2017. The increase on the corresponding quarter reflects higher corporate expenditure and increased greenfields exploration expenditure.

Depreciation and amortization of $55.0-million increased by 27 per cent quarter on quarter and increased by 7 per cent from the corresponding quarter of 2017. The increase quarter on quarter is the result of higher throughput at Tongon. The increase on the corresponding quarter is as the result of a higher asset base at Loulo-Gounkoto and Tongon.

Other income in the quarter of $6.4-million was in line with the previous quarter but increased on the corresponding quarter of the prior year as a result of a foreign exchange gain in the current quarter. Management fees from Kibali and Morila were in line with the previous quarter but increased slightly on the corresponding quarter of the prior year.

Other expenses in the quarter of $92.8-million were significantly higher than other expenses of $10.2-million in the previous quarter and compared with other expenses of $7.9-million in the corresponding quarter of 2017. In the current quarter additional costs of $53.2-million were incurred relating to the merger with Barrick, including transaction fees of $29.4-million and accelerated non-cash share-based payment charges of $23.8-million. Also included within other expenses in the current quarter is $6.4-million relating to continuing costs attributable to the period without associated revenue at Loulo due to industrial action and $17.6-million of additional tax provisions made principally relating to the time value of money provisions in respect of the anticipated timing of the resolution of outstanding tax claims and the timing of the receipt of TVA receivables and other related TVA provisions.

Share of profits from equity accounted joint ventures of $34.1-million was up 21 per cent on the previous quarter and up 150 per cent compared with $13.7-million in Q4 2017.

Randgold's share of equity accounted joint venture profits from Kibali increased by 24 per cent to $37.1-million from a profit of $30.0-million in the previous quarter and increased by 147 per cent from a profit of $15.0-million in the corresponding quarter of 2017. Operating profit for the quarter of $57.7-million (attributable) increased from the previous quarter of $31.0-million (attributable). Profit from mining activity for Kibali was $70.4-million (attributable) for Q4 2018 compared with a profit of $70.1-million in Q3 2018 and a profit of $46.2-million in Q4 2017, reflecting higher gold sales and lower cash costs per ounce compared with the corresponding quarter of the prior year. The share of profits from the Kibali joint venture is stated after depreciation of $38.1-million (Q3 2018: $38.5-million), foreign exchange gains of $25.7-million (Q3 2018: losses $500,000), additional provisions related to time value of money discounting against TVA of $16.3-million (Q3 2018: $8.5-million) and a tax charge value of $5.7-million (Q3 2018: $3.7-million) related to the utilization of a deferred tax asset associated with tax losses/allowances carried forward.

The foreign exchange gains and losses incurred are primarily the result of the movement in the Congolese franc (CDF) compared with the dollar and the conversion of value-added tax (TVA) balances owed to Kibali which are denominated in CDF. During Q4 an agreement was reached with the Ministry of Finance on the reimbursement of the refundable TVA balance. As part of the agreement the historic CDF TVA was redenominated to a U.S.-dollar balance at the historic exchange rates at the date of submission, giving rise to a foreign exchange gain reversing previous losses that had been recorded in prior years as the CDF devalued.

Randgold's share of equity accounted joint venture losses from Morila increased from a loss of $1.8-million in Q3 2018 to a loss of $3.2-million in Q4 2018. This resulted primarily from increased mining and production costs and lower production.

Income tax expense of $20.2-million increased by 7 per cent from the charge in Q3 and decreased by 26 per cent from the corresponding quarter of 2017. The increase in the current quarter is primarily as a result of increased profits compared with the previous quarter, especially at Tongon.

Profit for the quarter of $29.3-million was down 60 per cent from the previous quarter and down 66 per cent from the corresponding quarter of 2017. The movement quarter on quarter reflects the increase in profit from mining, the increase in the share of profits of equity accounted joint ventures offset by the increased depreciation, additional other expenses and higher corporate tax expense during the quarter as explained above. The decrease from the corresponding quarter of 2017 mainly reflects an increase in profit from mining offset by additional costs incurred relating to the merger with Barrick as described above.

Basic earnings per share decreased by 71 per cent to 19 cents quarter on quarter (Q3 2018: 65 cents) and decreased by 76 per cent compared with Q4 2017, as the result of additional costs incurred during the quarter, as described above and in relation to the merger with Barrick reflecting transaction fees and accelerated non-cash share-based payment charges.

Net cash generated from operating activities for the quarter of $150.9-million was up 78 per cent from the previous quarter (Q3 2018: $84.8-million) primarily reflecting the increase in profits from operations, net of taxes paid. Net cash generated from operating activities was down 8 per cent against the corresponding quarter in 2017 as a result of lower profits from operations. Cash and cash equivalents increased to $751.0-million compared with $653.6-million at the end of Q3 2018, reflecting the net cash generated from operations and dividends received from equity accounted joint ventures, partially offset by increased additions to property, plant and equipment, as well as increased dividends paid to non-controlling interests.

Comments on the year ended Dec. 31, 2018

Revenue for the year was $1.1-billion and compared with revenue in the prior year of $1.3-billion, primarily as the result of lower ounces sold by subsidiaries at 895,966 oz compared with the prior year at 1,015,760 oz.

Group gold sales for the year ended Dec. 31, 2018, of $1.6-billion were down 1 per cent from the previous year at $1.7-billion principally as a result of the small decrease in the number of ounces of gold sold across the group, offset by a slight increase in the average gold price received of $1,266/oz (2017: $1,258/oz). Group gold production decreased by 2 per cent, on the back of lower throughput partially offset by slightly higher recoveries.

Cost of sales for the year was $781.8-million compared with $773.5-million in the prior year. The increase was the result of higher input costs at Tongon as well as lower grade throughput at Loulo, Gounkoto and Tongon. Cost of sales per ounce for the year increased to $873/oz from $762/oz in the prior year, as a result of lower ounces sold by subsidiaries as well as higher input costs.

Group total cash costs for the year ended Dec. 31, 2018, of $826.0-million (2017: $815.3-million) increased by 1 per cent on the prior year, driven by higher unit costs at Tongon and Morila. Total cash cost per ounce increased 3 per cent to $637/oz for the year (2017: $620/oz), reflecting the decrease in ounces sold year on year and the increase in total cash costs.

Operating profit for the year of $295.7-million decreased compared with the prior year of $477.9-million, as a result of lower revenue and higher costs in the current year. Included in the current year costs is $53.2-million relating to the merger with Barrick as described above.

Profit from mining activity for the year increased by 3 per cent on the prior year to $816.1-million. Lower gold sales and higher total costs, primarily as a result of lower production at Tongon and Loulo-Gounkoto during the current year, were offset by a stronger performance from Kibali compared with the prior year.

Exploration and corporate expenditure of $64.7-million for the year ended Dec. 31, 2018, increased by 35 per cent from the previous year's $47.8-million, reflecting increased exploration activity during the year as well as increased corporate and staff expenditure, in line with guidance given at the start of the year.

Depreciation and amortization for the year ended Dec. 31, 2018, of $195.8-million increased from the prior year cost of $182.9-million. Depreciation at Loulo of $110.2-million in 2018 increased slightly compared with depreciation of $106.3-million incurred in 2017, as a result of additional underground mining assets capitalized in 2018. Depreciation at Gounkoto increased from $11.2-million in 2017 to $22.5-million in 2018 due to the increase in capitalized assets in 2018 contributing to $10.0-million additional depreciation as well as the depreciation of the stripping asset ($3.0-million) which was included in 2018. Depreciation at Tongon of $62.6-million in 2018 decreased by 4 per cent compared with the depreciation charged in 2017 ($65.3-million) as a result of lower tonnes milled during the current year following from industrial action in Q3 2018.

Other income of $24.2-million and $14.9-million, for the years ended Dec. 31, 2018, and 2017 respectively, include management fees from Morila and Kibali (2018: $6.0-million compared with 2017: $5.2-million) as well as operational foreign exchange gains (2018: $10.8-million compared with 2017: $9.7-million). Other expenses for the year of $114.3-million increased substantially on the prior year's $7.9-million. Fifty-three million two hundred thousand of the increase in other expenses relates to costs associated with the merger with Barrick, $16.9-million relating to foreign exchange losses and $9.8-million of costs were classified to other expenses relating to continuing costs attributable to the period without associated revenue at Tongon due to the illegal industrial action in Q3, as well as $6.4-million relating to continuing costs attributable to the period without associated revenue at Loulo due to industrial action in Q4. Included in other expenses is $17.6-million of additional tax provisions made principally relating to the time value of money provisions and other TVA related provisions in respect of the anticipated timing of the resolution of outstanding tax claims and timing of the receipt of TVA receivables.

Share of profits of equity accounted joint ventures of $97.1-million increased by 709 per cent year on year (2017: $12.0-million).

Randgold's share of equity accounted joint venture profits from Kibali increased from $11.6-million in 2017 to $101.8-million in 2018 primarily due to increased gold sales, partially offset by higher total costs and deferred tax charges. Operating profit for the year of $108.7-million (attributable) increased substantially from the previous year operating profit of $15.8-million (attributable). Profit from mining activity for Kibali for 2018 amounted to $248.4-million (attributable) compared with a profit of $129.5-million in 2017, reflecting the increased ounces sold and lower cost per ounce of production. The share of profits from the Kibali joint venture is stated after depreciation of $154.1-million (2017: $123.7-million), foreign exchange gains of $24.2-million (2017: losses $17.2-million) additional provisions related to time value of money discounting against TVA of $16.3-million (2017: $8.5-million) and a deferred tax charge of $7.2-million (2017: credit $24.5-million).

The increase in depreciation at Kibali was driven by an increase in throughput year on year, as well as increased assets brought into use following the completion of the underground shaft, materials handling system and further underground development.

The foreign exchange gains and losses incurred are primarily the result of the movement in the Congolese franc (CDF) compared with the dollar and the conversion of value-added tax (TVA) balances owed to Kibali which are denominated in CDF. During Q4 an agreement was reached with the Ministry of Finance on the reimbursement of the refundable TVA balance and as such a foreign exchange gain has been recognized in relation to the historic CDF TVA has been redenominated to a U.S.-dollar balance at historic exchange rates at the date of submission.

Randgold's share of equity accounted joint venture losses from Morila increased from a loss of $100,000 in 2017 to a loss of $5.8-million in 2018. Operating loss for the year of $3.0-million (attributable) decreased from the previous year's profit of $1.4-million (attributable). Profit from mining activity for 2018 was $5.5-million (attributable) (2017: $7.6-million). The net loss of $5.8-million includes $5.5-million of depreciation charges (2017: $5.1-million) and $1.4-million of tax charges (2017: $1.4-million). Profits from mining activity decreased year on year following the decrease in tonnes processed as well as increased mining costs.

Income tax expense of $75.8-million decreased by 48 per cent year on year, reflecting lower accruals for tax charges at Tongon on the back of lower profits as well as the lower tax rate applicable at Gounkoto during 2018 in relation to the corporate tax reduction received from the Malian government on July 31, 2018. Gounkoto was granted a 50-per-cent corporate tax reduction over a four-year period, effective from Jan. 1, 2018, until Dec. 31, 2021, to support the development of a superpit at the mine. The agreement, which reduces the corporate tax rate, is a concession under Gounkoto's mining convention that gives Gounkoto the right to apply for the additional tax exoneration should it make additional investments. The impact of the reduced tax rate resulted in the application of an effective 15-per-cent tax for the current year and reversal of the previous tax charge on profits of 30 per cent, including associated reversals of the additional charges recorded in the current year relating to deferred tax adjustments. The effective group tax rate for the year was 25 per cent (2017: 30 per cent).

Profit for the year ended Dec. 31, 2018, of $227.3-million represents a decrease of 32 per cent compared with a profit of $335.0-million in the previous year, resulting from slightly decreased production and revenue and higher cash costs per ounce of production, as well as a 7-per-cent increase in depreciation along with additional corporate expenses relating to the merger costs of $53.2-million offset by a 48-per-cent decrease in corporate tax expenses for the year.

Basic earnings per share decreased by 32 per cent to $2 (2017: $2.96), in line with the decrease in profit for the year as described above as well as the additional charges incurred in the current year relating to the merger with Barrick.

Net cash generated from operating activities for the year of $392.6-million decreased by 28 per cent from the previous year (2017: $547.8-million), in line with the movements in profits at Loulo, Gounkoto and Tongon. Cash and cash equivalents increased to $751.0-million compared with $719.8-million at the end of 2018, reflecting the net cash generated from operations and dividends received from equity accounted joint ventures, partially offset by increased additions to property, plant and equipment, as well as increased dividends paid to shareholders.

The board authorized a cash dividend for the year of 269 U.S. cents per share on Dec. 18, 2018, an increase of 35 per cent on the 2017 dividend (paid in May, 2018), with the dividend having been paid in cash on Jan. 9, 2019.

Operations

Loulo-Gounkoto complex

The combined quarterly gold production for the Loulo-Gounkoto complex was 192,043 oz (Loulo 104,884 oz and Gounkoto 87,159 oz), an increase of 10 per cent compared with the previous quarter (Q3 2018: 174,018 oz), due to higher grade ore milled while recovery and throughput were slightly lower. Cost of sales decreased to $684/oz (Q3 2018: $772/oz). The total cash cost per ounce decreased to $510/oz (Q3 2018: $577/oz), reflecting the increased production and lower operating cost.

Plant throughput and performance were impacted by a week of industrial action in December, negatively impacting the results for what was otherwise a good operational quarter. However, annual tonnage exceeded the prior year throughput, reflecting the good operational performance in the plant, with recoveries in line with the prior year. Gold production for the year of 660,000 oz was below the prior year, reflecting the lower grade of the ore milled, with total cash costs per ounce also increasing on the back of the lower production.

Sustainability

The complex continued with its community development projects with $600,000 invested in projects. These included the construction of two schools in the Seguelany and Torodinloto villages and the launching of the third round of the bursary program. The mines remained ISO 14001 certified. The agribusiness operation continued with the recruitment of the third round of 50 students to the agri-college. The set-up of the first group of graduates continued with 20 boreholes drilled, credit granted to 12 graduates and operations started on 16 of their farms. Annual water quality analysis feedback sessions were held in the communities -- no issues reported on the water quality and good feedback was received from attendees.

                               LOULO-GOUNKOTO COMPLEX RESULTS
                                           (100%)                             

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017
Mining
Tonnes mined (000)                           9,299           10,228           9,129          38,658          34,965
Ore tonnes mined (000)                       1,982            1,978           1,129           7,021           5,028
Milling
Tonnes processed (000)                       1,273            1,290           1,268           5,154           4,918
Head grade milled (g/t)                        5.1              4.6             4.6             4.3             5.0
Recovery (%)                                  91.5             92.0            93.8            92.3            92.7
Ounces produced                            192,043          174,018         177,565         660,234         730,372
Ounces sold                                191,614          177,264         174,495         667,316         723,438
Average price received ($/oz)                1,237            1,209           1,277           1,265           1,260
Cost of sales ($/oz)                           684              772             790             808             714
Total cash costs (1) ($/oz)                    510              577             602             609             543
Gold on hand at period-end (1) ($000)        6,513            5,526          15,771           6,513          15,771
Operating profit ($000)                     78,042           67,279          70,199         247,469         369,610
Profit from mining activity ($000)         139,444          111,887         117,707         437,591         518,413
Gold sales ($000)                          237,123          214,232         222,811         844,218         911,452

(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Loulo

No lost-time injury (LTI) was recorded during the quarter with a lost-time injury frequency rate (LTIFR) of zero per million hours worked versus 0.67 the previous quarter. The lost-time injury frequency rate for the year increased from 0.17 in 2017 to 0.67 in 2018. No major environmental incident occurred during the quarter.

On a stand-alone basis, Loulo produced 104,884 oz of gold (Q3 2018: 106,022 oz) and cost of sales of $817/oz decreased on the previous quarter (Q3 2018: $857/oz) as did total cash cost of $560/oz (Q3 2018: $595/oz). The decrease in production was mainly due to the lower throughput because of a seven-day work stoppage (as detailed above), partially offset by higher grade milled while the recovery remained in line. Cost of sales per ounce and total cash costs per ounce reduced compared with the prior quarter, reflecting the higher ore grade milled and slightly lower operating costs. During the current quarter, $6.4-million of operating costs has been classified as other expenses, relating to continuing costs attributable to the period without associated revenue due to the seven-day work stoppage.

Operating profit of $22.3-million for the quarter compared with $35.2-million in the prior quarter. Profit from mining activity of $71.1-million was 7 per cent higher than the previous quarter as a result of the lower cost of production and higher average gold price received.

For the year, gold production was 389,279 oz, 11 per cent lower than the previous year (2017: 437,255 oz). Tonnes processed increased by 7 per cent, while head grade milled decreased by 18 per cent to 4.7 grams per tonne and recovery decreased slightly to 92.4 per cent. Cost of sales per ounce of $905/oz increased on the previous year (2017: $795/oz) whilst total cash cost increased by 17 per cent to $626/oz (2017: $535/oz) following the decrease in ore grade milled and ounces produced. Operating profit decreased to $106.4-million for the year compared with $177.4-million in the prior year. Profit from mining activity also decreased year on year, reflecting the lower production and higher costs, whilst the average gold price received remained in line with the prior year.

Capital expenditure

Total capital expenditure for the quarter amounted to $23.9-million and $88.4-million for the year (2017: $87.3-million). The slight increase year on year is attributable to additional underground development capital and equipment approved at both the Yalea and Gara underground mines. Expenditure for the quarter mainly related to underground mine development expenditure ($12.1-million), installation of an additional power unit (CM13) at the power plant ($7.0-million), the tailings storage facility (TSF) extension ($1.7-million) and conversion drilling at Yalea and Gara South ($1.9-million).

                                          LOULO STAND-ALONE RESULTS
                                                     (100%)                             

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Mining
Tonnes mined (000)                             650              737             712           3,517           2,715
Ore tonnes mined (000)                         643              729             707           2,997           2,684
Milling
Tonnes processed (000)                         635              673             656           2,767           2,576
Head grade milled (g/t)                        5.6              5.3             4.8             4.7             5.7
Recovery (%)                                  91.5             91.9            93.8            92.4            92.6
Ounces produced                            104,884          106,022          95,370         389,279         437,255
Ounces sold                                105,513          108,014          93,425         394,582         432,464
Average price received ($/oz)                1,234            1,208           1,276           1,264           1,260
Cost of sales ($/oz)                           817              857             847             905             795
Total cash costs (1) ($/oz)                     560              595             604             626             535
Gold on hand at period-end (1) ($000)        2,819            3,359           9,728           2,819           9,728
Operating profit ($000)                     22,341           35,230          20,111         106,424         177,420
Profit from mining activity ($000)          71,124           66,190          62,805         252,042         313,491
Gold sales (1) ($000)                      130,228          130,489         119,214         498,903         544,941
                            
Randgold owns 80 per cent of Societe des Mines de Loulo SA and the State of Mali owns 20 per cent. Randgold has 
financed the whole investment in Loulo by way of shareholder loans and therefore controls 100 per cent of the cash 
flows from Loulo until the shareholder loans are repaid.
 
Randgold consolidates 100 per cent of Loulo and shows the non-controlling interest separately.
 
(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Loulo underground

Underground ore production and development were lower than the previous quarter due to the work stoppage in December. Good backfill performance in Yalea has resulted in more flexibility in stoping. The focus is now to improve development of Yalea South lower declines to sustain higher production in Yalea.

Annual ore production was in line with the previous year. The Gara striker belt project in the conveyor system has improved the ore production delivery from Gara. Similarly, the trifurcation of the primary ventilation fans in Yalea has improved the ventilation conditions in the underground workings.

                                    LOULO UNDERGROUND RESULTS
                                               (100%)            

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Yalea                                                                                                              
Ore tonnes mined                           368,698          402,592         383,139       1,503,821       1,502,269
Development metres                           1,040            1,359           1,314           4,985           6,187
Gara                                                                                                               
Ore tonnes mined                           274,761          326,650         324,284       1,161,647       1,181,286
Development metres                           1,008            1,210           1,790           5,288           7,507

Loulo mineral resource and ore reserve update

Both Loulo ore reserves and measured and indicated mineral resources replaced 85 per cent and 89 per cent of the 2018 annual depletion respectively. This was primarily as a result of initial resource definition of Yalea Far South transfer zone and subsequent conversion with additional definition drilling, offsetting the majority of depletion from mining. Inferred resources were down year on year as a result of resource conversion drilling in Yalea Central Deeps.

Further resource extension on Yalea is under way to extend the Far South transfer zone during 2018. Resource definition drilling is currently under way at Loulo 3 to define an underground inferred mineral resource. The mine will then optimize the open-pit underground interface and embark upon a prefeasibility study targeting conversion and definition of reserves.

The mineral resource and ore reserve base for Loulo at the end of 2018, with a comparison to figures at the end of 2017, can be seen in the "Loulo mineral resources and ore reserves" table.

                       LOULO MINERAL RESOURCES AND ORE RESERVES
                                     At Dec. 31 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017

Mineral resources (3) (4)                                                                                              
Stockpiles                      Measured                 1.9    1.7      1.7      1.6    0.10    0.086   0.083    0.068
Open pits                       Measured                 1.6    1.9      2.6      2.7    0.14     0.17    0.11     0.13
                                Indicated                5.1    6.9      3.5      3.1    0.58     0.69    0.46     0.55
                                Inferred                 2.2    2.5      3.4      3.3    0.24     0.27    0.19     0.21
Underground                     Measured                  15     17      5.5      5.0     2.6      2.7     2.1      2.1
                                Indicated                 24     26      5.7      5.2     4.4      4.3     3.5      3.4
                                Inferred                 4.9     10      4.6      4.1     0.7      1.3     0.6      1.0
Total mineral resources (3) (4) Measured and indicated    47     53      5.2      4.6     7.8      7.9     6.3      6.3
                                Inferred                   7     12      4.2      3.9     1.0      1.6     0.8      1.3
Ore reserves (5)                                                                                                      
Stockpiles                      Proved                   1.9    1.7      1.7      1.6    0.10    0.086   0.083    0.068
Open pits                       Proved                   1.2    1.5      2.3      2.4   0.088     0.12   0.070    0.093
                                Probable                 3.9    3.9      3.9      3.9    0.48     0.48    0.39     0.39
Underground                     Proved                   7.9    8.8      4.8      5.0     1.2      1.4     1.0      1.1 
                                Probable                  19     20      5.3      4.8     3.2      3.1     2.6      2.5 
Total ore reserves (5)          Proved and probable       34     36      4.7      4.5     5.1      5.2     4.1      4.1 

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 80-per-cent interest in Loulo.

(3) Open-pit mineral resources are the in situ mineral resources falling within the $1,500/oz pit shell reported at an 
    average cut-off of 0.7 g/t.  Underground mineral resources are those in situ mineral resources of the Yalea and Gara
    deposits that fall below the design pits and are reported at a cut-off of 2.04 g/t for Yalea and 1.89 g/t for Gara 
    within minimum minable shapes. All Loulo mineral resources were generated by Sekou Diallo, an officer of the 
    company, under the supervision of Simon Bottoms, an officer of the company and competent person under JORC and 
    qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate ore 
    reserves.

(5) Open-pit ore reserves are reported at a gold price of $1,000/oz and an average cut-off of 1.1 g/t and include 
    dilution and ore loss factors.  Open-pit ore reserves were estimated by Shaun Gillespie, an officer of the company 
    and competent person under JORC, and reviewed by Mr. Bottoms, a qualified person under CIM. Underground ore 
    reserves are reported at a gold price of $1,000/oz and a cut-off of 2.6 g/t for Yalea underground and 2.5 g/t for 
    Gara underground, and include dilution and ore loss factors. Underground ore reserves were estimated by Andrew 
    Fox, an external consultant and competent person under JORC, and reviewed by Mr. Bottoms, a qualified person 
    under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit.  Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person 
has reconciled the ore reserves to CIM standards, and there are no material differences. 

Gounkoto

No LTI was recorded during the quarter with an LTIFR of zero per million hours worked the same as in the previous quarter. The Gounkoto mine achieved an LTI-free year. No major environmental incident occurred during the quarter.

On a stand-alone basis, Gounkoto produced 87,159 oz of gold (Q3 2018: 67,997 oz). Cost of sales per ounce for the quarter of $521/oz decreased by 18 per cent on the previous quarter ($638/oz). Total cash cost per ounce of $448/oz (Q3 2018: $549/oz) decreased by 18 per cent. The significant increase in production was due to the higher head grade milled (24 per cent) and slightly higher throughput. Total cash cost per ounce decreased on the back of the higher grade and production as well as slightly lower strip ratio.

Operating profit for the quarter was $55.7-million compared with $32.0-million in the previous quarter reflecting the higher gold produced, lower operating cost and higher average gold price received. Profit from mining activity for the quarter of $68.3-million was 50 per cent higher than the previous quarter (Q3 2018: $45.7-million), reflecting the higher gold produced, lower operating cost and higher average gold price received.

The annual gold production for Gounkoto was 270,955 oz, 8 per cent lower than the previous year, reflecting the drop in the head grade milled of 10 per cent to 3.8 g/t as per the plan. Cost of sales per ounce of $668/oz increased 12 per cent year on year and total cash cost per ounce increased by 6 per cent reflecting the lower head grade milled and production, partially offset by lower operating costs. Operating profit was $141.0-million for the year compared with $186.2-million in the previous year. Profit from mining activity for the year was lower than the prior year, reflecting the lower production and higher cash cost per ounce of production.

Capital expenditure

Total capital expenditure for the quarter amounted to $4.4-million and $15.8-million for the year (2017: $42.6-million). The decrease in annual capital expenditure reflects lower stripping $2.5-million (2017: $18.5-million) and mining fleet rebuild activities of $11.7-million (2017: $16.0-million). The expenditure for the quarter was mainly related to mining fleet rebuild activities ($3.6-million).

                                 GOUNKOTO STAND-ALONE RESULTS
                                               (100%)                             

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Mining
Tonnes mined (000)                           8,649            9,491           8,417          35,141          32,250
Ore tonnes mined (000)                       1,339            1,248             422           4,025           2,344
Milling
Tonnes processed (000)                         639              617             612           2,387           2,343
Head grade milled (g/t)                        4.6              3.7             4.5             3.8             4.2
Recovery (%)                                  91.5             92.0            93.8            92.3            92.8
Ounces produced                             87,159           67,997          82,195         270,955         293,117
Ounces sold                                 86,102           69,251          81,070         272,734         290,973
Average price received ($/oz)                1,241            1,209           1,278           1,266           1,260
Cost of sales ($/oz)                           521              638             649             668             594
Total cash costs (1) ($/oz)                    448              549             601             586             555
Gold on hand at period-end (1) ($000)        3,694            2,167           6,043           3,694           6,043
Operating profit ($000)                     55,701           32,049          50,088         141,045         186,190
Profit from mining activity ($000)          68,320           45,697          54,902         185,549         204,922
Gold sales ($000)                          106,895           83,743         103,597         345,316         366,510

Randgold owns 80 per cent of Societe des Mines de Gounkoto SA and the State of Mali owns 20 per cent. Randgold 
consolidates 100 per cent of Gounkoto and shows the non-controlling interest separately.
 
(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Gounkoto mineral resource and ore reserve update

Total Gounkoto mineral resources decreased as a result of depletion which was partially offset by a gain in ounces from grade control drilling during the year. Ore reserves similarly decreased, net of depletion, as a result of the same factors. The mineral resource and ore reserve base for Gounkoto at the end of 2018, with a comparison with figures at the end of 2017, is tabulated in the "Gounkoto mineral resources and ore reserves" table.

                           GOUNKOTO MINERAL RESOURCES AND ORE RESERVES
 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017
Mineral resources (3) (4)                                                                                              
Stockpiles                      Measured                 3.4    1.8      1.9      2.0    0.21     0.11    0.17    0.089
Open pits                       Measured                 2.8    5.4      4.8      4.3    0.44     0.75    0.35     0.60
                                Indicated                 17     18      4.1      4.0     2.2      2.3     1.8      1.9
                                Inferred                 1.7    1.4      2.7      2.3    0.14     0.11    0.12    0.085
Underground                     Measured                   -      -        -        -       -        -       -        -
                                Indicated                2.6    3.0      6.0      5.7    0.50     0.56    0.40     0.45
                                Inferred                 2.4    2.6      3.7      3.5    0.28     0.29    0.22     0.23
Total mineral resources (3) (4) Measured and indicated    25     28      4.1      4.1     3.3      3.7     2.7      3.0
                                Inferred                 4.0    4.0      3.3      3.1    0.42     0.40    0.34     0.32
Ore reserves (5)                                                                                                      
Stockpiles                      Proved                   3.4    1.8      1.9      2.0    0.21     0.11    0.17    0.089
Open pits                       Proved                   1.9    4.4      5.9      4.7    0.36     0.66    0.29     0.53
                                Probable                  10     12      4.8      4.6     1.6      1.8     1.3      1.4
Underground                     Probable                 2.3    2.2      5.5      6.1    0.41     0.42    0.33     0.34
Total ore reserves (5)          Proved and probable       18     20      4.4      4.6     2.6      3.0     2.1      2.4

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 80-per-cent interest in 
    Gounkoto.

(3) Open-pit mineral resources are the in situ mineral resources falling within the $1,500/oz pit shell reported
    at an average cut-off of 0.87 g/t. Underground mineral resources are those in situ mineral resources below 
    the $1,500/oz pit shell reported at cut-off of 2.3 g/t. All Gounkoto mineral resources were generated by 
    Sekou Diallo, an officer of the company, under the supervision of Mr. Bottoms, an officer of the company and 
    competent person under JORC and qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate ore 
    reserves.

(5) Open-pit ore reserves are reported at a gold price of $1,000/oz and an average cut-off of 1.2 g/t and include 
    dilution and ore loss factors.  Open-pit ore reserves were estimated by Mr. Gillespie, an officer of the company 
    and competent person under JORC, and reviewed by Mr. Bottoms, a qualified person under CIM. Underground ore 
    reserves are reported at a gold price of $1,000/oz and a cut-off of 2.8 g/t, and include dilution and ore loss 
    factors. Underground ore reserves were estimated Mr. McCann, an external consultant and a competent person under 
    JORC and qualified person under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit.  Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person 
has reconciled the ore reserves to CIM standards, and there are no material differences.

Morila

One LTI was recorded in the quarter and the LTIFR was 1.75 (Q3 2018: zero). For the year, two LTIs were recorded with an LTIFR of 0.97 (year 2017: zero). No major environmental incident occurred during the quarter, nor for the year 2018, in line with 2017.

Gold production for the quarter amounted to 19,679 oz, a 5-per-cent increase on the previous quarter (Q3 2018: 18,738 oz), reflecting slightly better grade and recovery, on the back of a higher portion of open-pit material fed from the N'tiola pit. Cost of sales per ounce of $1,307/oz in the quarter was slightly higher than the previous quarter (Q3 2018: $1,292/oz). The total cash cost for the quarter was $1,136/oz, in line with the previous quarter.

Gold production for the year was 74,530 oz (2017: 70,019 oz) slightly higher than the prior year resulting from a small increase in the plant recoveries. Cost of sales of $1,249/oz for the year was up on the prior year (2017: $1,192/oz). The total cash for the year was $1,082/oz compared with $988/oz in 2017, reflecting the higher cost of mining relating to the open-pit material processed.

The tailings storage facility (TSF) decapping operation continued with 2.16 million t of waste material hydro sluiced to the pit (Q3 2018: 2,068,000 t). The total material decapped for the year was 8,378,000 t compared with 7,744,000 t in 2017.

Sustainability

The official launching ceremony of the Agripole projects was held on Oct. 8 on site, including the participation of the Prime Minister of Mali, seven ministers of the government and the Randgold chief executive officer. The mine continues with the implementation of the projects as previously outlined. During the current year, $5.1-million was spent on rehabilitation activities at Morila, reducing the rehabilitation provision.

Capital expenditure

No capital expenditure was recorded during the quarter. The total expenditure in 2018 was $2.9-million, mainly related to the development of the N'tiola and Viper pits.

                                                  MORILA RESULTS
                                                      (100%)       

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Mining
Tonnes mined (000)                           1,518            1,552           1,722           5,824           2,291
Ore tonnes mined (000)                         427              313             440           1,124             502
TSF material processed (000)                   748              854             743           3,768           4,940
Milling
Tonnes processed (000)                       1,118            1,174           1,122           4,880           5,453
Head grade milled (g/t)                        0.7              0.7             0.8             0.6             0.6
Recovery (%)                                  76.8             75.6            82.1            73.6            67.2
Ounces produced                             19,679           18,738          24,434          74,530          70,019
Ounces sold                                 18,304           20,656          22,553          76,087          67,812
Average price received ($/oz)                1,232            1,206           1,283           1,262           1,269
Cost of sales ($/oz)                         1,307            1,292           1,084           1,249           1,192
Total cash costs (1) ($/oz)                  1,136            1,130             959           1,082             988
Operating (loss)/profit ($000)              (4,951)          (4,048)            980          (7,560)          3,448
Profit from mining activity ($000)           1,762            1,560           7,304          13,720          19,108
Attributable (40%)
Gold sales (1) ($000)                        9,020            9,965          11,571          38,418          34,429
Ounces produced                              7,872            7,495           9,774          29,812          28,008
Ounces sold                                  7,322            8,262           9,021          30,435          27,125
Operating (loss)/profit ($000)              (1,980)          (1,619             392          (3,024)          1,379
Profit from mining activity ($000)             705              624           2,922           5,488           7,643
Gold on hand at period-end (1) ($000)        1,359              606           2,040           1,359           2,040
            
Randgold owns 40 per cent of Societe des Mines de Morila SA with the State of Mali and joint venture partner owning 
20 per cent and 40 per cent respectively. The group equity accounts for its 40-per-cent joint venture holding in 
Morila.
 
(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Morila mineral resource and ore reserve update

Morila reserves currently comprise TSF material of 6.6 million tonnes at 0.62 g/t for 120,000 oz with the remaining ore from the Viper satellite pit of 415,000 t at 1.3 g/t for 17,000 oz and stockpiles of 7,800 t at 1.5 g/t for 3,700 oz.

Evaluations of the economic viability for mine life extension opportunities, through satellite pit mineralized waste and processing of additional TSF areas previously scheduled to be decapped, will be completed during 2019.

The mineral resource and ore reserve base for Morila at the end of 2018, with a comparison with figures at the end of 2017, is in the "Morila mineral resources and ore reserves" table.

                            MORILA MINERAL RESOURCES AND ORE RESERVES
 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017
Mineral resources (3) (4)
Stockpiles                      Measured               0.078      -      1.5        -  0.0037        -  0.0015        -
Satellite open pits             Indicated               0.39   0.25      1.4      1.6   0.018    0.013  0.0072   0.0052
                                Inferred                   -      -        -        -       -        -       -        -
TSF                             Measured                  12     16     0.52     0.51    0.20     0.26    0.80     0.10
                                Indicated                  -      -        -        -       -        -       -        -
                                Inferred                   -   0.94        -     0.45       -    0.014       -   0.0055
Total mineral resources (3) (4) Measured and indicated    12     16     0.56     0.53    0.22     0.27   0.089     0.11
                                Inferred                   -   0.94        -     0.45       -    0.014       -   0.0055
Ore reserves (5)                                                                                                      
Stockpiles                      Proved                 0.078      -      1.5        -  0.0037        -  0.0015        -
Open pits                       Probable                0.41   0.29      1.3      1.3   0.017    0.013  0.0070   0.0051
TSF                             Proved                   6.1      -     0.62        -    0.12        -   0.048        -
                                Probable                   -     10        -     0.54       -     0.18       -    0.071
Total ore reserves (5)          Proved and probable      6.6     11     0.67     0.56    0.14     0.19   0.057    0.077

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 40-per-cent interest in Morila.

(3) Satellite pit mineral resources are reported at $1,000/oz within minable polygons designed at the economic cut-off 
    to reflect the bulk mining of full ore. Satellite pit mineral resources are reported in situ. TSF resources are 
    reported at $1,500/oz at a 0.33 g/t Au cut-off grade. Mineral resources for Morila were generated by Mamadou Ly, 
    an officer of the company under the supervision of Mr. Bottoms, an officer of the company, competent person under 
    JORC and qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate ore 
    reserves.

(5) Ore reserves are reported at a gold price of $1,000/oz. TSF ore reserves are reported at a 0.49 g/t Au cut-off 
    grade. Satellite pit ore reserves are reported at a zero cut-off grade to reflect the bulk mining using polygons to 
    outline areas of economic mining above the calculated reserve cut-off. Ore reserves are reported including 
    dilution and ore loss factors. Ore reserves were estimated by Mr. Gillespie, an officer of the company and 
    competent person under JORC, and reviewed by Mr. Bottoms, a qualified person under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit. Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person has 
reconciled the ore reserves to CIM standards, and there are no material differences.
 

Tongon

No LTIs occurred in Q4 and 2018 resulting in an LTIFR of zero respectively (Q3 2018: zero). No major environmental incident occurred during Q4 2018.

Tongon produced 80,614 oz of gold in Q4 2018, 209 per cent up from the previous quarter as a result of a 167-per-cent increase in throughput. In Q3 2018, Tongon only produced 26,068 oz of gold, stemming from sustained illegal industrial action and the resultant lockout, which impacted production for approximately two months. Head grade milled of 2.6 g/t was up 13 per cent while recovery increased 2 per cent from the previous quarter, despite to the implementation of a coarser grind strategy to improve throughput rate.

The year 2018 ended on a positive note with the signing of the government endorsed protocol agreement at Tongon mine on Dec. 27, in the presence of the Minister of Mines, government delegation and facilitator employees, putting an end to the social and industrial relations unrest that occurred in 2018.

Operating profit for the quarter of $10.4-million compared with a loss of $8.3-million in the previous quarter. Profit from mining activity increased to $38.5-million in Q4 2018, reflecting the improved gold sales, lower unit operating costs and high average gold price received.

For the year, Tongon produced 230,096 oz, a 20-per-cent drop on the prior year on the back of lower production, mainly as the result of illegal industrial action taken by the work force causing a cessation of operations from July 13 to Sept. 4. Cost of sales reduced to $242.0-million compared with $262.9-million in the prior year. Total cash costs decreased by 16 per cent on the prior year. Operating profit for the year of $30.8-million compared with $95.0-million in the previous year. Profit from mining activity was also negatively impacted, down 35 per cent at $111.7-million, notwithstanding a slightly higher average gold price received, primarily as a result of illegal industrial action as described above.

                                        TONGON RESULTS
                                             (100%)   

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Mining
Tonnes mined (000)                           6,824            2,903           6,436          18,582          24,536
Ore tonnes mined (000)                       1,209              365           1,224           3,065           4,334
Milling
Tonnes processed (000)                       1,151              431           1,140           3,491           4,360
Head grade milled (g/t)                        2.6              2.3             2.5             2.4             2.5
Recovery (%)                                  83.7             81.7            83.7            83.8            83.8
Ounces produced                             80,614           26,068          77,389         230,096         288,680
Ounces sold                                 79,038           24,319          82,596         228,651         292,322
Average price received ($/oz)                1,236            1,206           1,281           1,273           1,262
Cost of sales ($/oz)                         1,001            1,281             875           1,059             899
Total cash costs (1) ($/oz)                    749              911             658             785             676
Gold on hand at period-end (1) ($000)        4,998            2,760           3,188           4,998           3,188
Operating profit/(loss) ($000)              10,372           (8,257)         29,643          30,813          94,998
Profit from mining activity ($000)          38,510            7,191          51,465         111,670         171,202
Gold sales ($000)                           97,691           29,334         105,807         291,099         368,765

Randgold owns 89.7 per cent of Societe des Mines de Tongon SA with the State of Ivory Coast and outside 
shareholders owning 10 per cent and 0.3 per cent respectively. Randgold consolidates 100 per cent of Tongon and 
shows the non-controlling interest separately.
 
(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Sustainability

Tongon achieved its goal of providing health care centres to all eight surrounding community villages by completing and equipping the Mbengue surgical unit, completing the construction of houses for the health staff teams, and equipping the health care centre at Kationron.

Tongon has continued to invest in education by redirecting its drive toward secondary and nursery school installations, after the installation of primary schools in each village, with the start of the first college construction at Kofiple and the construction of seven additional classrooms in the existing secondary schools. Additional investment has been made to further increase the capacity of the community primary schools above the initial goal of providing six-classroom schools to the eight surrounding community villages, to improve the accommodation and living conditions of the primary school teachers and to further improve the quality of education.

With respect to the potable water pillar goal, water installations have improved following constructing and commissioning of the water tower and reticulation systems. Construction of a water supply system is under way at Katonon, bringing the total water supply systems built to date to six. The remaining villages will be provided for in the coming year.

Capital expenditure

Total capital expenditure for the quarter amounted to $4.6-million and $11.3-million for the year (2017: $20.0-million). The decrease for the year mainly related the industrial action that delayed some of the primary projects for 2018. Expenditure for the quarter mainly related to mining fleet rebuild activities ($3.1-million) and the tailings storage facility (TSF) standby line ($700,000). Two thousand eighteen capital expenditure related to mining fleet rebuild activities ($7.1-million), the installation of the TSF standby line ($1.1-million) and the installation of an eight-megawatt mill motor ($600,000).

Tongon mineral resource and ore reserve update

Total Tongon mineral resources and ore reserves both decreased as a result of depletion. During 2019 initial resource definition drill testing will be completed on strike extensions of Tongon North zone, in addition to continuing exploration at other targets within economically viable haulage distance.

The mineral resource and ore reserve base for Tongon at the end of 2018, with a comparison with figures at the end of 2017, is in the "Tongon mineral resources and ore reserves" table.

                               TONGON MINERAL RESOURCES AND ORE RESERVES
 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017
Mineral resources (3) (4)                                                                                              
Stockpiles                      Measured                 2.5    2.9      1.5      1.6    0.12     0.15    0.11     0.13
Open pits                       Measured                 4.2    5.1      2.9      2.7    0.39     0.44    0.35     0.39
                                Indicated                 14     16      2.5      2.6     1.2      1.3     1.1      1.2
                                Inferred                 2.5    2.8      2.5      2.5    0.20     0.22    0.18     0.20
Underground                     Inferred                 6.1    6.4      2.9      2.8    0.58     0.58    0.52     0.52
Total mineral resources (3) (4) Measured and indicated    21     24      2.5      2.5     1.7      1.9     1.5      1.7
                                Inferred                 8.6    9.2      2.8      2.7    0.77     0.80    0.69     0.72
Ore reserves (5)                                                                                                       
Stockpiles                      Proved                   2.5    2.9      1.5      1.6    0.12     0.15    0.11     0.13
Open pits                       Proved                   3.2    4.1      2.7      2.5    0.28     0.34    0.26     0.30
                                Probable                 7.1    9.3      2.4      2.5    0.54     0.74    0.49     0.66
Total ore reserves (5)          Proved and  probable      13     16      2.3      2.3    0.95      1.2    0.85      1.1

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 89.7-per-cent interest in 
    Tongon.

(3) Open-pit mineral resources are the in situ mineral resources falling within the $1,500/oz pit shell reported at an 
    average cut-off of 0.73 g/t. Underground mineral resources are those in situ mineral resources below the NZ, 
    $1,500/oz pit shell reported at a cut-off of 2.0 g/t. All Tongon mineral resources were generated by Karamogo 
    Diabate, an officer of the company, under the supervision of Mr. Bottoms, an officer of the company and competent 
    person under JORC, and qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate 
    ore reserves.

(5) Open-pit ore reserves are reported at a gold price of $1,000/oz at an average cut-off of 0.80 g/t, and include 
    both dilution and ore loss factors. Open-pit ore reserves were estimated by Mr. Gillespie, an officer of the 
    company and competent person under JORC, and reviewed by Mr. Bottoms, a qualified person under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit. Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person has 
reconciled the ore reserves to CIM standards, and there are no material differences.

Kibali

There were zero LTIs during the quarter at Kibali, compared with one in the previous quarter (LTIFR: 0.31). There were two LTIs during the year, giving an LTIFR of 0.15 compared with the previous year LTIFR of 0.47. No major environmental incident occurred during Q4 2018.

Kibali produced 209,012 oz in Q4, a 7-per-cent decrease from the record production in Q3, but in line with the plan. Cost of sales of $904/oz increased on the previous quarter (Q3 2018: $893/oz). Total cash cost per ounce increased marginally to $515/oz because of the slightly lower recoveries and production. Over all, the mine continued to perform well, with throughput above nameplate level and recoveries in line with expectations.

Attributable operating profit was $57.7-million increasing on the previous quarter (Q3 2018: $31.0-million). Attributable profit from mining activity increased marginally to $70.4-million in the current quarter (Q3 2018: $70.1-million), reflecting the slightly higher average gold price received.

Cost of sales for the year of $1,011/oz decreased on the previous year (2017: $1,228/oz). The year's production was 807,251 oz at a total cash cost of $594/oz, a 35-per-cent increase and 23-per-cent decrease on 2017 production and cost respectively. This was achieved through year-on-year improvements in throughput, grade and recovery. Attributable operating profit for the year was $108.6-million and compared with $15.8-million for the previous year. Attributable profit from mining activity increased by 92 per cent to $248.4-million, reflecting the strong operating performance and slightly higher average gold price received.

Sustainability

Three hundred thousand dollars was spent on community development during the quarter, including bursaries for the top students in the region to continue with tertiary education. Other projects included sport facilities and health equipment for several clinics. The total community financing for 2018 amounted to $2.4-million. Kibali attained its ISO 45001 safety management system certification in Q4, one of the first mining operations to be certified on the new safety standard and maintained its ISO 14001:2015 environmental management system certification.

                                       KIBALI RESULTS
                                           (100%)                             

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Mining
Tonnes mined (000)                           8,142            8,223           8,878          32,866          36,522
Ore tonnes mined (000)                       2,996            2,482           2,188           8,910           6,761
Milling
Tonnes processed (000)                       2,024            2,140           2,004           8,218           7,619
Head grade milled (g/t)                       3.6               3.6             3.1             3.4             2.9
Recovery (%)                                  89.3             89.9            84.7            88.7            83.4
Ounces produced                            209,012          224,549         169,400         807,251         596,225
Ounces sold                                217,475          221,630         164,589         822,772         604,667
Average price received ($/oz)                1,235            1,210           1,278           1,265           1,248
Attributable (45%)  
Gold sales (1) ($000)                      120,816          120,649          94,624         468,466         339,683
Ounces produced                             94,055          101,047          76,230         363,263         268,301
Ounces sold                                 97,864           99,734          74,065         370,247         272,100
Cost of sales ($/oz)                           904              893           1,036           1,011           1,228
Total cash costs ($/oz)                        515              507             654             594             773
Operating profit ($000)                     57,743           31,039          15,319         108,657          15,835
Profit from mining activity ($000)          70,412           70,146          46,197         248,381         129,454
Gold on hand at period-end (1) ($000)        1,148            5,584          10,216           1,148          10,216

Randgold owns 45 per cent of Kibali Goldmines SA with the Democratic Republic of the Congo (DRC) state and joint 
venture partner owning 10 per cent and 45 per cent respectively. The group equity accounts for its 45-per-cent joint 
venture holding in Kibali. As part of its investment in Kibali (Jersey) Ltd. The information includes the group's 
45-per-cent effective interest in Kibali together with corporate charges arising in the holding company structure.
 
(1) Gold on hand represents gold in dore at the mines multiplied by the prevailing spot gold price at the end of 
    the period.

Underground

Underground mining produced 861,000 t of ore in Q4, a 6-per-cent decrease from the previous quarter. Ore delivery from the shaft was stable, with 748,000 t delivered to surface. Underground ore production more than doubled from 2017, with 3,465,000 t mined during the first year of full operation. Development metres increased from the previous quarter to 3,073 m, taking the development for the year to 10.8 kilometres as the mine continues to expand into new stoping levels.

                                      KIBALI UNDERGROUND RESULTS
                                                 (100%)                      

                                     Quarter ended    Quarter ended   Quarter ended      Year ended      Year ended
                                     Dec. 31, 2018   Sept. 30, 2018   Dec. 31, 2017   Dec. 31, 2018   Dec. 31, 2017

Ore tonnes mined                           860,964          917,994         505,373       3,455,393       1,668,488
Development metres                           3,073            2,703           2,653          10,776          11,721
Off shaft development metres                     -                -               -               -           1,257

Capital expenditure

Total capital expenditure for the quarter amounted to $31.9-million and $147.8-million for the year (2017: $244.3-million). The decrease year on year mainly relates to a decrease in development capital for the underground and the commissioning of the shaft in 2017 which ceased with capital expenditure. Expenditure for the quarter mainly related to final works completed at the Azambi hydrostation ($2.2-million), investment in underground capital development ($2.9-million), and equipment and drilling ($19.1-million), mining fleet rebuild activities ($1.6-million), and brownfield exploration capital ($1.0-million). Two thousand eighteen capital expenditure related to the completion of the Azambi hydropower station ($24.6-million), underground mining development, raise boring and drilling expenditure ($38.0-million), investment in underground mining equipment ($32.7-million), mining fleet rebuild activities ($8.4-million), the completion of the cyanide tailings storage facility raise ($10.4-million), brownfields exploration expenditure capitalized ($4.8-million), grade control drilling ($4.1-million) and capitalized stripping ($9.2-million).

Kibali mineral resource and ore reserve update

Kibali mineral resources more than replaced the 2018 annual depletion, as a result of initial resource definition of Kalimva-Ikamva open-pit inferred mineral resource combined with delineation of an over 10 g/t high-grade shoot within the 5000 lode and extensions of the 9000 lode.

Further resource extension on KCD underground is under way on the 275L underground exploration drive to extend the 5000 and 9000 lodes down plunge. Additional surface drill programs are under way to test the 9000 up plunge connection to Sessenge.

During 2019 a feasibility study will be completed on the Kalimva-Ikamva open-pit mineral resource with significant additional advanced grade control drilling targeting reserve conversion.

The mineral resource and ore reserve base for Kibali at the end of 2018, with a comparison with figures at the end of 2017, is in the "Kibali mineral resources and ore reserves" table.

                              KIBALI MINERAL RESOURCES AND ORE RESERVES
 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017
Mineral resources (3) (4)
Stockpiles                      Measured                 2.3    1.7      2.3      1.4    0.17    0.080   0.076     0.036
Open pits                       Measured                  11    8.7      2.5      2.6    0.87     0.73    0.39      0.33
                                Indicated                 32     39      2.1      2.1     2.2      2.6     1.0       1.2
                                Inferred                  30     22      2.0      1.8     1.9      1.3    0.86      0.59
Underground                     Measured                 7.3     12      8.4      5.6     2.0      2.1    0.89       1.0
                                Indicated                 67     65      3.5      3.6     7.5      7.6     3.4       3.4
                                Inferred                  23     22      3.2      2.8     2.3      2.0     1.1      0.91
Total mineral resources (3) (4) Measured and indicated   120    126      3.3      3.3      13       13     5.7       5.9
                                Inferred                  53     44      2.5      2.3     4.2      3.3     1.9       1.5
Ore reserves (5)                                                                                                     
Stockpiles                      Proved                   2.3    1.7      2.3      1.4    0.17    0.080   0.076     0.036
Open pits                       Proved                   5.8    4.9      2.7      2.7    0.50     0.43    0.23      0.19
                                Probable                  11     16      2.3      2.3    0.84      1.2    0.38      0.54
Underground                     Proved                    12     12      5.2      5.0     2.0      2.0    0.92      0.89
                                Probable                  31     31      4.8      5.1     4.8      5.0     2.2       2.3
Total ore reserves (5)          Proved and probable       63     66      4.1      4.1     8.3      8.7     3.7       3.9

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 45-per-cent interest in the 
    Kibali gold mine.

(3) Open-pit mineral resources are the in situ mineral resources falling within the $1,500/oz pit shell reported at an 
    average cut-off of 0.73 g/t. Underground mineral resources in the KCD deposit are in situ mineral resources, that 
    meet a cut-off of 1.6 g/t within a minimum minable stope shape, reported at and a gold price of $1,500/oz. KCD 
    mineral resources were generated by Mr. Bottoms, an officer of the company and competent person under JORC, and 
    qualified person under CIM. Mineral resources for Pakaka and Gorumbwa were generated by Rolly Wassonga, an officer 
    of the company, under the supervision of Mr. Bottoms, an officer of the company and competent person under JORC, 
    and qualified person under CIM. Mineral resources for Kombokolo and Pamou were generated by Rolly Wassonga, an 
    officer of the company, under the supervision of Mr. Bottoms, an officer of the company and competent person under 
    JORC, and qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate ore 
    reserves.

(5) Open-pit ore reserves were reported at a gold price of $1,000/oz except KCD open pit which is reported inside a 
    $1,100 pit design at an average cut-off of 0.96 g/t, and include both dilution and ore loss factors. Open-pit 
    ore reserves were estimated by Nicholas Coomson, an officer of the company and competent person under JORC, and 
    reviewed by Mr. Bottoms, a qualified person under CIM. Underground ore reserves are reported at a gold price of 
    $1,000/oz and a cut-off of 2.4 g/t, and include dilution and ore loss factors. Underground ore reserves were 
    estimated by Mr. Fox, an external consultant and a competent person under JORC, and reviewed by Mr. Bottoms, a 
    qualified person under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit. Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person has 
reconciled the ore reserves to CIM standards, and there are no material differences.

Development projects

Senegal

Massawa

The feasibility study of the Massawa project was completed at the end of 2018. The study includes the open-pit material from four pits, namely Massawa Central and North zone, Sofia, and Delya. The deposits consist of free milling ore from the oxide contribution of the pits together with the fresh material of Sofia and the bulk of the Central zone pit. Refractory fresh material is sourced from the northern part of Central zone pit as well as North zone and Delya pits. The refractory ores have proven to be highly recoverable through a bio-oxidation process. Subsequent to the completion of the feasibility study, an application has been lodged with the Senegalese government to convert the Kanoumba permit into a mining licence under the 2003 Senegal mining code.

An economic assessment was completed on the four open pits, based on the key parameters summarized below:

  • Total ore mined from Massawa (Central and North), Sofia and Delya pits of 18 million t of ore at an average grade of 4.2 g/t Au containing 2.4 million oz of gold;
  • Strip ratio of 7.6:1 to give total tonnes mined of 156 million t;
  • Contract mining costs at an average of $3.60/t mined over the life of mine on a contract basis;
  • Haulage cost average of $1.20/t of ore over the LoM;
  • Plant costs average at $21.20/t ore milled but include a range of costs dependant on ore feed and process route;
  • General and administrative costs of $8.80/t ore milled over LoM;
  • Preproduction capital cost of $17-million;
  • Construction capital cost of $413-million;
  • Continuing capital of $12-million over LoM;
  • Rehabilitation cost of $23-million at the end of the LoM.

The financial model is based on annual cash flow projections, with the technical and economic parameters stated above using constant money terms. Real term annual cash flows were used to calculate the internal rate of return (IRR), net present values (NPVs), and simple and discounted payback periods in real after-tax terms. Costs up to start of construction are considered as sunk costs.

A financial model was run using a range of gold prices with feeding the reserve mining schedule, together with a 3-per-cent royalty on revenue and a five-year tax holiday on production, followed by a corporate tax rate of 25 per cent. A sensitivity table on NPV, IRR and payback against gold price is attached. At current gold prices the feasibility confirms the Massawa project as being one of the most attractive undeveloped gold projects on the continent.

          FEASIBILITY FINANCIAL ANALYSIS
 
Discount rate                                   Gold price                          
                   $1,000/oz      $1,200/oz      $1,400/oz   

0%              $258-million   $591-million   $925-million
5%              $109-million   $344-million   $579-million
10%              $22-million   $193-million   $363-million
IRR                      12%            25%            37%         
Payback              5 years      2.8 years      2.4 years   

Massawa mineral resource and ore reserve update

During the feasibility study geological interpretations were updated for Massawa Central zone and refined for Northern zone, Sofia and Delya mineral resources, using updated both resource definition and advanced grade control drilling. This has resulted in an increase in the grade of both mineral resources and ore reserves, which is primarily attributed to Massawa Central zone.

Additionally, ore reserve modifying factors have been updated, including updated mining costs, processing costs selective mining unit and recoveries.

The mineral resource and ore reserve base for Massawa at the end of 2018, with a comparison with figures at the end of 2017, is in the "Massawa mineral resources and ore reserves" table.

                               MASSAWA MINERAL RESOURCES AND ORE RESERVES
 
                                                                                                           Attributable
                                                     Tonnes (1) (Mt)   Grade (1) (g/t)   Gold (1) (Moz)   gold (2) (Moz)

                                Category                2018   2017     2018     2017    2018     2017    2018     2017

Open pits                       Measured                   -      -        -        -       -        -       -        -
                                Indicated                 23     24      4.0      3.8     3.0      2.9     2.5      2.4
                                Inferred                 3.7     10      2.2      2.3    0.26     0.79    0.22     0.66
Underground                     Inferred                 2.6    1.4      4.1      4.5    0.35     0.20    0.29     0.17
Total mineral resources (3) (4) Measured and indicated    23     24      4.0      3.8     3.0      2.9     2.5      2.4
                                Inferred                 6.3     12      3.0      2.6    0.61     0.99    0.51     0.82
Ore reserves (5)                                                                                                       
Open pits                       Probable                  18     23      4.2      3.6     2.4      2.7     2.0      2.2
Total ore reserves (5)          Proved and probable       18     23      4.2      3.6     2.4      2.7     2.0      2.2

(1) Tonnes, grades and contained gold are presented on a non-attributable 100-per-cent basis.

(2) Attributable gold (Moz) refers to the quantity attributable to Randgold based on its 83.25-per-cent interest in 
    Massawa.

(3) Open-pit mineral resources are reported as the in situ mineral resources falling within the $1,500/oz pit shell 
    reported at an average cut-off of 1.0 g/t. Underground mineral resources are those in situ mineral resources below 
    the $1,500/oz pit shell of the NZ deposit reported at a 2.3 g/t cut-off. Mineral resources for Massawa Central zone 
    were generated by Mr. Bottoms, an officer of the company and competent person. All other Massawa mineral resources 
    were generated by Sarah Harvey, an officer of the company under the supervision of Mr. Bottoms, an officer of the 
    company, competent person under JORC and qualified person under CIM.

(4) All mineral resources tabulations are reported inclusive of that material which is then modified to estimate 
    ore reserves.

(5) Open-pit ore reserves are reported at a gold price of $1,000/oz and an average cut-off of 1.2 g/t, and include 
    both dilution and ore loss factors. Open-pit ore reserves were estimated by Mr. Gillespie, an officer of the 
    company and competent person under JORC, and reviewed by Mr. Bottoms, a qualified person under CIM.
 
Mineral resources and ore reserve numbers are reported as per JORC 2012 and as such are reported to the second 
significant digit. Accordingly numbers may not add due to rounding.
 
The mineral resource and ore reserve estimates have been prepared according to JORC code. The qualified person has 
reconciled the ore reserves to CIM standards, and there are no material differences.

Exploration activities

This quarter concludes a year of strong progress both on the greenfield and brownfield projects across the company's portfolio. Focus at the top of the resource triangle has converted resources and delivered flexibility to the operations whilst expanded generative and grassroots initiatives have provided long-term foundations to its continuing programs.

Mali

Loulo project

At Loulo 3, a 19-hole infill diamond program was completed (8,273 m total) to provide the data for resource estimation. Observations from core support the geologic model in terms of the style, alteration and position of mineralization. Drilling shows increased variability in the width and tenor of MZ2 mineralization in the area below the dolerite dike compared with the block model. Stepout drilling at Faleme successfully identified the strike continuation of the Gara system beneath mapped intrusive rocks. L0CP296, located 230 m south of the current resource limit, intersected thin, but strong QT with moderate quartz-carbonate veining. The low thickness and tenor of mineralization in L0CP296 highlight the characteristic variability of these parameters at Gara, and numerous drill holes within the known reserve and resource have similar width and grade. Follow-up drilling is under way to pierce the system at higher elevation (minus 500 m RL), to produce a geological cross-section that will be used to motivate and optimize further stepout drilling along strike.

Gounkoto project

At Gounkoto hangingwall, scout drilling testing the Upper and Lower south-plunging shoot targets that flank the $1,000 superpit shell, confirmed down plunge continuity of the host stratigraphy and alteration, with broad intercepts (six m to 32 m) of low-grade (one g/t to two g/t) mineralization expected. Preliminary relogging of 25 holes across four principal cross-sections at Faraba Main has been completed. An updated and improved geological model will be compiled with the aim of further optimizing the target using information recently gathered from continuing work in the district. Building on the new geological model at Faraba North last quarter, scout drilling began late in Q4 testing mineralization continuity and underground potential hosted in the Main and FW zone shoots. An RC program to address empirical drill gaps in the open-pit portion of the target will be motivated, pending a block model update and positive economic scope for a pit operation scheduled for completion in Q1.

Bakolobi JV (Taurus Gold)

A three-hole diamond drilling program was completed at Dioula West and Gamaye South targets to confirm mineralization and to assist with the interpretation of the control of the high-grade mineralization intersected in previous AC and RC holes. At Dioula West, DLWDH001 testing beneath BKAC020 (nine m at 4.32 g/t from 31 m, including five m at 7.36 g/t) confirmed the shallow intercept with 17.45 m at 2.34 g/t (48.55 m) including 2.90 m at 12.17 g/t. Future work is being planned to test the model of plunging high-grade shoots along the Dioula West structure. At Gamaye the diamond hole twinning high-grade GARC048 (19 m at 8.98 g/t including six m at 25.61 g/t) intersected and confirmed mineralization associated with a wide alteration/mineralization system with strong grades expected over 11.5 m. Once assay results are received the whole structure will be reviewed for follow up with closer spaced holes to define potential ore shoots.

Bena

An air core drilling program has started to test gaps on Boulandissou, Teriya and Teriya SE structures, the southern part of Sinsinko structure, and the northern part of the permit covered by transported material. To date 36 per cent of the program has been completed for 3,696 m over 10,200 m planned. At Boulandissou Main, the drill fence testing the extension of the structure 450 m north of an artisanal site has intersected (beneath a wide transported laterite plateau) the continuity of the main system hosted within 35 m width of sheared and altered quartzites (results are pending). At Sinsinko, a line drilled 300 m to the south of the orpaillage zone testing the continuity of the main system and a possible northeast structure is expected to have intersected both these structures. The eastern zone (15 m wide) is interpreted to be the continuity of Sinsinko main zone with silica, albite and sulphide observed. Results are pending.

Mali South

At Mogoyafara, interesting results returned from the pits completed over the Mogocen target confirmed mineralization in the saprolite within a northwest corridor. Pitting on the northern continuity of an interpreted mineralized structure returned 32.7 g/t hosted in sediments with moderate silica alteration and weak limonite-hematite weathering. Infill pits and a short trench are planned to better understand mineralization and controls on the high grade. On the Diangouemerila permit, validation of the soil geochemistry has shown that the geology and structures measured in the field are supporting the west-northwest-trending soil anomalism in the central and southern part of the permit. This orientation is unusual in this part of the Birimian and further fieldwork will be carried out in Q1.

In Mali the company received ministerial approval to carry out research programs over two separate areas of interest located in the Birimian. Additionally, this authorization also enables Barrick to carry out research over a larger area in southern Mali where it aims to improve its understanding of the geology and prospectivity. Large-scale mapping with regional traverses will start next quarter.

Senegal

Massawa

Drilling programs on multiple targets around Massawa continued during the quarter. At the KB target in the ENE-1 domain, RC drilling confirmed over 360 m east-northeast strike continuity to mineralization with infill drilling to 40 m line spacing, with mineralization open to the west-southwest and at depth. An additional target trend has been delineated with over 180 m northeast strike continuity confirmed, remaining open to the southwest. High-grade (over three g/t) mineralization is observed at the intersections of these two orientations resulting in moderately plunging shoots toward the northwest. Highlights include high-grade intercepts, such as 30 m at 7.67 g/t from 51 m including six m at 20.99 g/t (KBRC203). Additional drilling is planned to determine the volume and number of these high-grade shoots within the broad over two g/t ENE1 domain.

RC scoping drilling across the KB target area aimed to test additional structures during the quarter. Results highlighted multiple zones of east-west mineralization with highlights including four m at 20.47 g/t from 17 m (KBRC146) and six m at 1.19 g/t from three m (KBRC161). These zones remain untested along strike.

Testing for mineralization potential at the TG target within the Tinkoto granite confirmed mineralization associated with hematite-magnetite alteration and pyrite and/or quartz veining. Highlights include: seven m at 2.39 g/t from 12 m including three m at 4.81 g/t from 12 m (KBRC171) and 12 m at 7.68 g/t from eight m including two m at 31.7 g/t from 13 m and four m at five g/t from 15 m (KBRC179). Infill drilling is planned for Q1.

At the ENE-4 domain portion of the KB target, RC drilling comprising 12 holes has confirmed shallow mineralization related to a low-angle structure inferred from previous trenching and drilling. Highlights include 11 m at 5.56 g/t from 60 m including three m at 14.87 g/t from 62 m and four m at 2.51 g/t from 93 m (KBRC209) and 12 m at 3.22 g/t from five m including four m at 7.69 g/t from 13 m (KBRC204). These results demonstrate the potential for a broad, near-surface target currently defined over 135 m strike. Further diamond drilling is planned in Q1 in addition to RC.

At Samina (Delya extension), initial RC drilling testing the potential of multiple over 350 m northeast-striking mineralized trends identified by grooving, trenching and mapping has confirmed the mineralized system down to over 50 m VD. Five northeast-striking zones are modelled, with the highest potential identified at a steeply dipping gabbro contact. Highlights include 15 m at 16.06 g/t from 52 m including 10 m at 21.8 g/t (SMRC004) and 15 m at 2.40 g/t from 71 m including nine m at 3.27 g/t (SMRC011). Mineralization remains open to the southwest and at depth. Additional RC drilling testing interpreted extensions to mineralization is planned for Q1.

At Tina, RC drilling and two trenches (300 m) confirmed mineralization at the margins of granodiorite contacts and north-south-to-northeast-trending brittle-ductile structures. Mineralization is characterized by strong sericite-silica alteration, moderate disseminated pyrite (2 to 3 per cent), weak arsenopyrite (1 per cent) and quartz veining with occasional visible gold. Highlights include: 43 m at 2.03 g/t from 84 m including 13 m at 4.08 g/t and eight m at 5.09 g/t (TNRC020), 52 m at 2.23 g/t from 68 m including seven m at 2.69 g/t and 13 m at 5.29 g/t (TNRC023A), 13 m at 8.62 g/t from 95 m (TNRC022).

The Q4 exploration program continues to confirm the Massawa project's high gold endowment and potential to continue delivering new ounces.

Bambadji

The consolidation and review of the Bambadji datasets are continuing with field validation of the updated regolith map preceding Auger drilling scheduled in Q1.

Ivory Coast

Mankono Sissedougou JV

Work this quarter has focused on priority targets recently generated within the Mankono permit with particular focus on the Bafretou South prospect where a 6.5 km long soil anomaly has been recently delineated on the immediate extension of Orca Gold's Morondo target. Four scout trenches display structural and alteration features that could drive the strong soil signature with shearing, silica-carbonate, disseminated pyrite and boxworks, and promote a geological continuity between Morondo and Bafretou. Although trench results are pending, geological observations were sufficient to orient an AC program to optimally progress the target. At this stage, four lines out of 10 have been drilled and intersected multiple potential zones of mineralization varying from 10 m to 30 m wide associated with sericite-silica-carbonate alteration hosted in deformed volcanics and within over 200 m wide moderately foliated diorite.

Boundiali permit

This quarter, air core drilling has been in progress over the Fonondara structure testing the targets identified from the recent generative work undertaken on the southern portion of the structure. At this stage, four out of 12 targets have been tested and, while most of the results are pending, subparallel mineralized structures have been confirmed at Katiere target with 13 m at 2.20 g/t in KTIAC004 and eight m at 4.93 g/t in KTIAC021. The AC program will continue with investigating additional targets from the northern portion of the Fonondara corridor and new targets to be generated from the Syama structure.

Nielle

Following on from the encouraging air core results that were returned from the Badenou trend in previous quarters, results for Q4 continued to highlight the prospectivity of the trend. AC results along strike of the Mercator target include six m at 1.27 g/t (MTAC065) and nine m at 1.35 g/t (MTAC088). Across the length of the Badenou AOI, results from AC drilling include 15 m at 2.5 g/t (BDAC014) and 42 m at 1.86 g/t (BDAC028). These results have also confirmed the alteration envelopes as interpreted.

Trenches totalling over 400 m length were placed along the 15 km Badenou trend, over AC lines with good intersections and results have been returned for four trenches. Two trenches immediately southwest of Djinni, up to 600 m along strike, confirm the presence of the altered structure, with zones of up to 18 m of anomalous grade. Trenches at the Belekolo Bend AOI (three km southwest, along strike from Djinni) and at the Badenou AOI returned more encouraging intersections including 8.5 m at 1.42 g/t in BBTR002, as well as 18 m at 1.20 g/t (including six m at 2.90 g/t) in BDTR001 on the second-to-last AC line drilled at the Badenou AOI. The three trenches along the Badenou target have intercepted a coarse-grained diorite interpreted to be the same unit intersected at the Mercator target to the north.

At Mercator, 13 RC holes were drilled within the North zone to target both oxide potential and the existence of a possible gentle-to-moderate northerly plunge to the mineralization. Results returned include 30.0 m at 2.20 g/t in MTRC010 and 23 m at 1.30 g/t in MTRC012. As a result of these new data and the continuing remodelling program, the company expects the main target for increased ounce potential is to the immediate south of the Mercator target and to the north, where wide Au-in-soil anomalies are poorly tested. RC and diamond follow-up drilling is planned for Q1 2019 in these areas.

DRC

Kibali

At Kombokolo main, diamond hole KKDD045 was designed and drilled to test the down plunge continuity of the eastern domain as well as the revised geological model down to 950 m from surface. The hole intersected the target and returned 42.4 m at 1.08 g/t from 264 m including 1.02 m at 6.57 g/t from 278.6 m, 0.85 m at 3.5 g/t from 283.15 m and one m at 3.92 g/t from 300 m within the modelled mineralization zone, confirming that the mineralized envelope is still open down plunge but with narrow high-grade zones but do not support an underground project.

At Ngoyoba, additional floatation-leach test work confirmed the refractory nature of the ore type and thus the target has been downgraded and team has switched focused to the Madungu-Memekazi trend, an over three km strike corridor with structural complexity and lithological contrasts, for near mine non-refractory ore.

At Kalimva/Ikamva, following up on the results received from the fourth phase of drilling, an updated resource model was completed, delivering an inferred resource which supported the project being advanced through a prefeasibility study with phase 1 drilling currently under way.

At Oere, an RC program of 20 holes confirmed the model of dipping planar mineralization on a segment of the main KZ trend. Combined results including historic holes indicate an orebody of an average thickness of 11.57 m with an average grade of 1.97 g/t, over two km strike length with a sigmoidal shape. A review and gap analysis are continuing including the coverage of the 1.6 km gap between the Oere target and Kalimva, to the north.

At Zakitoko-Birindi, four RC holes were completed, the first holes to be drilled in this target area. The first holes show that the target mineralization is hosted in brecciated chert with silica-limonite alteration and fine disseminated pyrite. Assay results from ZKRC0001 which returned 21 m at 1.39 g/t support the geological model suggesting a steep planar structure associated with the brecciated ferruginous chert.

Most of the results were received for the stream sediment sampling program completed in Q3 across the Kibali permit. Seven anomalous basins were identified and will be followed up with mapping and soil sampling programs next quarter.

Ngayu JV (Loncor/Devon/Randgold)

At the Makasi trend, results from auger drilling covering the trend over a 1.2 km strike length indicate that narrow mineralization is hosted within a wide, anastomosing shear corridor (southwest to northeast), on or near the contact between interbedded coarse and fine sediments and volcanics. Auger drilling was also completed on the Itali-Ngalisa trend (results pending) while currently testing the BIF system at the Bikira target. Trenching at the Bavadili West target continues to confirm mineralization within a folded brecciated cherty BIF. A pitting program is to continue delineating the footprint of the system.

                     CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                             $000                                                                      
                                                                               Quarter ended                Year ended
                                                           Dec. 31,    Sept. 30,     Dec. 31,     Dec. 31,     Dec. 31,
                                                              2018         2018         2017         2018         2017

Revenues 
Gold sales on spot                                        $334,814     $243,566     $328,618   $1,135,317   $1,280,217
Total revenues                                             334,814      243,566      328,618    1,135,317    1,280,217
Share of profits of equity accounted joint ventures         34,109       28,277       13,692       97,082       11,950
Other income                                                 6,446        6,233        1,385       24,171       14,928
Total income                                               375,369      278,076      343,695    1,256,570    1,307,095
Cost and expenses
Mine production costs                                      144,901      114,255      123,754      515,426      473,909
Movement in production inventory and ore stockpiles        (24,540)     (17,949)       3,498      (54,782)     (12,095)
Depreciation and amortization                               54,970       43,193       51,161      195,764      182,900
Other mining and processing costs                           19,370       14,470       15,672       66,120       63,125
Mining and processing costs                                194,701      153,969      194,085      722,528      707,839
Royalties                                                   17,130       13,710       16,522       59,291       65,663
Cost of sales                                              211,831      167,679      210,607      781,819      773,502
Exploration and corporate expenditure                       22,638       11,09        12,172       64,698       47,785
Other expenses                                              92,752       10,196        7,865      114,323        7,865
Total costs                                                327,221      189,184      230,644      960,840      829,152
Operating profit                                            48,148       88,892      113,051      295,730      477,943
Finance income                                               4,781        3,806        3,082       12,691        6,018
Finance costs                                               (3,448)        (673)      (1,840)      (5,313)      (3,107)
Finance income/(costs) -- net                                1,333        3,133        1,242        7,378        2,911
Profit before income tax                                    49,481       92,025      114,293      303,108      480,854
Income tax expense                                         (20,189)     (18,873)     (27,206)     (75,772)    (145,807)
Profit for the period                                       29,292       73,152       87,087      227,336      335,047
Other comprehensive income
Share of equity accounted joint
ventures other comprehensive
profit/(loss)                                                    -            -            -            -          (17)
Total other comprehensive expense                                -            -            -            -          (17)
Total comprehensive income                                  29,292       73,152       87,087      227,336      335,030
Profit attributable to
Owners of the parent                                        18,086       61,416       75,459      189,012      278,017
Non-controlling interests                                   11,206       11,736       11,628       38,324       57,030
                                                            29,292       73,152       87,087      227,336      335,047
Total comprehensive income attributable to
Owners of the parent                                        18,086       61,416       75,459      189,012      278,000
Non-controlling interests                                   11,206       11,736       11,628       38,324       57,030
                                                            29,292       73,152       87,087      227,336      335,030
Basic earnings per share ($)                                  0.19         0.65         0.80         2.00         2.96
Diluted earnings per share ($)                                0.19         0.64         0.79         1.98         2.92

We seek Safe Harbor.

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