20-F 1 y04560e20vf.htm FORM 20-F e20vf
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
     
o   REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
     
þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
     
o   SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
    Date of event requiring this shell company report                     
For the transition period from                      to                     
Commission file number: 000-49888
RANDGOLD RESOURCES LIMITED
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
JERSEY, CHANNEL ISLANDS
(Jurisdiction of incorporation or organization)
3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey JE2 4WJ, Channel Islands
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
     
Title of each class   Name of each exchange on which registered
     
Ordinary Shares, par value US $0.05 per Share*   Nasdaq Global Select Market
     
American Depositary Shares each represented
by one Ordinary Share
   
*   Not for trading, but only in connection with the listing of American Depositary Shares on the Nasdaq Global Select Market pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report.
     As of December 31, 2010, the Registrant had outstanding 91,089,370 ordinary shares, par value $0.05 per share.
     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
þ Yes o No
     If the report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
o Yes þ No
     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
þ Yes o No
     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
o Yes o No
     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer þ   Accelerated filer o   Non-accelerated filer o   Smaller reporting company o
        (Do not check if a smaller reporting company)    
     Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
         
U.S. GAAP o
  International Financial Reporting Standards as issued by the International Accounting Standards Board þ   Other o
     If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
o Item 17 þ Item 18
     If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o Yes þ No
 
 

 


 

TABLE OF CONTENTS
         
Index   Page No.  
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 EX-4.51
 EX-4.52
 EX-4.53
 EX-4.54
 EX-4.55
 EX-4.56
 EX-4.57
 EX-4.58
 EX-4.59
 EX-8.1
 EX-12.1
 EX-12.2
 EX-13.1
 EX-13.2
 EX-15.1
 EX-15.2

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GLOSSARY OF MINING TECHNICAL TERMS
The following explanations are not intended as technical definitions, but rather are intended to assist the reader in understanding some of the terms as used in this annual report (“Annual Report”).
     
Alteration:
  The chemical change in a rock due to hydrothermal and other fluids.
 
   
Archaean:
  A geological eon before 2.5 Ga.
 
   
Arsenopyrite:
  An iron arsenic sulfide mineral.
 
   
Birimian:
  Geological time era, about 2.1 billion years ago.
 
   
Carbonate:
  A mineral salt typically found in quartz veins and as a product of hydrothermal alteration of sedimentary rock.
 
   
Chalcopyrite:
  A copper iron sulfide mineral.
 
   
Clastic:
  Rocks built up of fragments of pre-existing rocks which have been produced by the processes of weathering and erosion.
 
   
Cut-off grade:
  The lowest grade of material that can be mined and processed considering all applicable costs, without incurring a loss or gaining a profit.
 
   
Development:
  Activities required to prepare for mining activities and maintain a planned production level.
 
   
Diamond Drilling (DDH):
  A drilling method.
 
   
Dilution:
  Mixing of ore grade material with non-ore grade/waste material in the mining process.
 
   
Discordant:
  Structurally unconformable.
 
   
Disseminated:
  A term used to describe fine particles of ore or other minerals dispersed through the enclosing rock.
 
   
Dyke:
  A sheet-like body of igneous rock which is discordant to bedding or foliation.
 
   
EEP:
  Exclusive exploration permit.
 
   
Electromagnetic:
  A geophysical tool used to test the electrical properties of rock to aid exploration.
 
   
EP:
  Exploration permit.
 
   
Exploration:
  Activities associated with ascertaining the existence, location, extent or quality of mineralized material, including economic and technical evaluations of mineralized material.
 
   
Fault:
  A fracture or a zone of fractures within a body of rock.
 
   
Feasibility Study:
  A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.
 
   
Feldspar:
  An alumino-silicate mineral.

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Felsic:
  A light colored igneous rock composed of quartz, feldspar and muscovite.
 
   
Foliation:
  A term used to describe planar arrangements of minerals or mineral bands within rocks.
 
   
Footwall:
  The underlying side of a fault, orebody or stope.
 
   
g/t:
  Gram of gold per metric tonne.
 
   
Gabbro:
  A dark granular igneous rock composed essentially of labradorite and augite.
 
   
Gneiss:
  A coarse-grained, foliated rock produced by metamorphism.
 
   
Gold reserves:
  The gold contained within proven and probable reserves on the basis of recoverable material (reported as mill delivered tonnes and head grade).
 
   
Gold sales:
  Represents the sales of gold at spot and the gains/losses on hedge contracts which have been delivered into at the designated maturity date. It excludes gains/losses which have been rolled forward to match future sales. This adjustment is considered appropriate because no cash is received/paid in respect of such contracts.
 
   
Grade:
  The quantity of metal per unit mass of ore expressed as a percentage or, for gold, as grams of gold per tonne of ore.
 
   
Granite:
  A light colored granular igneous rock composed of quartz and feldspar.
 
   
Greenstone:
  A field term used to describe any weakly metamorphosed rock.
 
   
Greywacke:
  A dark gray, coarse grained, indurated sedimentary rock consisting essentially of quartz, feldspar, and fragments of other rock types.
 
   
Head grade:
  The grade of the ore as delivered to the metallurgical plant.
 
   
Hydrothermal:
  Pertaining to the action of hot aqueous solutions on rocks.
 
   
Igneous:
  A rock or mineral that solidified from molten or partially molten material.
 
   
In situ:
  In place or within unbroken rock or still in the ground.
 
   
Kibalian:
  A geological time era.
 
   
Lower proterozoic:
  Era of geological time between 2.5 billion and 1.8 billion years before the present.
 
   
Mafic:
  A term used to describe an igneous rock that has a large percentage of iron magnesium minerals.
 
   
Measures:
  Conversion factors from metric units to US units are provided below:
         
Metric Unit       US Equivalent
1 tonne
  = 1 t   1.10231 tons
1 gram
  = 1 g   0.03215 ounces
1 gram per ton
  = 1 g/t   0.02917 ounces per ton
1 kilogram per ton
  = 1 kg/t   29.16642 ounces per ton
1 kilometer
  = 1 km   0.621371 miles
1 meter
  = 1 m   3.28084 feet
1 centimeter
  = 1 cm   0.3937 inches
1 millimeter
  = 1 mm   0.03937 inches
1 square kilometer
  = 1 sq km   0.3861 square miles

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Metamorphism:
  A change in the structure or constitution of a rock due to natural agencies, such as pressure and heat.
 
   
Mill delivered tonnes:
  A quantity, expressed in tonnes, of ore delivered to the metallurgical plant.
 
   
Milling/mill:
  The comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where the gold is separated from the ore.
 
   
Mineable:
  That portion of a mineralized deposit for which extraction is technically and economically feasible.
 
   
Mineralization:
  The presence of a target mineral in a mass of host rock.
 
   
Mineralized material:
  A mineralized body which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metals to warrant further exploration. A deposit of mineralized material does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.
 
   
Moz:
  Million troy ounces.
 
   
Mt:
  Million metric tonnes.
 
   
Open pit:
  Mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the orebody.
 
   
Orebody:
  A continuous, well-defined mass of material containing sufficient minerals of economic value to make extraction economically feasible.
 
   
Ounce:
  One troy ounce, which equals 31.1035 grams.
 
   
Oxide Ore:
  Soft, weathered rock that is oxidized.
 
   
Prefeasibility Study:
  A comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and which, if an effective method of mineral processing has been determined and includes a financial analysis based on reasonable assumptions of technical, engineering, operating, economic, social and environmental factors and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.
 
   
Probable reserves:
  Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
 
   
Prospect:
  An area of land with insufficient data available on the mineralization to determine if it is economically recoverable, but warranting further investigation.

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Proven reserves:
  Reserves for which quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
 
   
Pyrite:
  A brassy-colored mineral of iron sulfide (compound of iron and sulfur).
 
   
Quartz:
  A mineral compound of silicon and oxygen.
 
   
Quartzite:
  Metamorphic rock with interlocking quartz grains displaying a mosaic texture.
 
   
Quartz-tourmaline:
  A rock unit created by alteration due to the addition of silica and boron.
 
   
Refining:
  The final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag.
 
   
Regolith:
  Weathered products of fresh rock, such as soil, alluvium, colluvium, sands, and hardened oxidized materials.
 
   
Rehabilitation:
  The process of restoring mined land to a condition approximating its original state.
 
   
Reserve:
  That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.
 
   
Reverse circulation (RC) drilling:
  A drilling method.
 
   
Rotary Air Blast (RAB) drilling:
  A drilling method.
 
   
RP:
  Reconnaissance Permit.
 
   
Sampling:
  Taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content).
 
   
Satellite deposit:
  A smaller subsidiary deposit proximal to a main deposit.
 
   
Scoping study:
  A conceptual study and the preliminary evaluation of the mining project. The principal parameters for a scoping study are mostly assumed and/or factored. Accordingly, the level of accuracy is low. A conceptual study is useful as a tool to determine if subsequent engineering studies are warranted. However, it is not valid for economic decision making nor is it sufficient for reserve reporting.
 
   
Sedimentary:
  Pertaining to or containing sediment. Used in reference to rocks which are derived from weathering and are deposited by natural agents, such as air, water and ice.
 
   
Shear zone:
  An elongated area of structural deformation.
 
   
Silica:
  A naturally occurring dioxide of silicon.
 
   
Stockpile:
  A store of unprocessed ore.
 
   
Strike length:
  The direction and length of a geological plane.
 
   
Stripping:
  The process of removing overburden to expose ore.

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Strip ratio:
  Ratio of waste material to ore material in an open pit mine.
 
   
Sulfide:
  A mineral characterized by the linkages of sulfur with a metal or semi-metal, such as pyrite or iron sulfide. Also a zone in which sulfide minerals occur.
 
   
Tailings:
  Finely ground rock from which valuable minerals have been extracted by milling.
 
   
Tonnage:
  Quantities where the ton or tonne is an appropriate unit of measure. Typically used to measure reserves of gold-bearing material in situ or quantities of ore and waste material mined, transported or milled.
 
   
Tonne:
  One tonne is equal to 1,000 kilograms (also known as a “metric” ton).
 
   
Total cash costs:
  Total cash costs, as defined in the Gold Institute standard, include mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, transfers to and from deferred stripping where relevant and royalties.
 
   
Trend:
  The arrangement of a group of ore deposits or a geological feature or zone of similar grade occurring in a linear pattern.
 
   
Ultramafica:
  An igneous rock with a very low silica content and rich in iron magnesium minerals.
 
   
Volcaniclastic:
  Where volcanic derived material has been transported and reworked through mechanical processes.
 
   
Volcanisedimentary:
  Where volcanic and sedimentary material have been transported and reworked through mechanical processes.
 
   
Waste:
  Rock mined with an insufficient gold content to justify processing.
 
   
Weathered:
  Rock broken down by erosion.
Statements in this Annual Report concerning our business outlook or future economic performance; anticipated revenues, expenses or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements” as that term is defined under the United States federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth under “Item 3. Key Information — D. Risk Factors” in this Annual Report as well as those discussed elsewhere in this Annual Report and in our other filings with the Securities and Exchange Commission.
We are incorporated under the laws of Jersey, Channel Islands with the majority of our operations located in West and Central Africa. Our books of account are maintained in US dollars and our annual and interim financial statements are prepared on a historical cost basis, except as otherwise required under International Financial Reporting Standards as issued by International Accounting Standards Board (“IFRS”), and in accordance with IFRS. IFRS differs in significant respects from generally accepted accounting principles in the United States, or US GAAP. This Annual Report includes our audited consolidated financial statements prepared in accordance with IFRS. The financial information included in this Annual Report has been prepared in accordance with IFRS and, except where otherwise indicated, is presented in US dollars. For a definition of cash costs, please see “Item 3. Key Information — A. Selected Financial Data”.
Unless the context otherwise requires, “us”, “we”, “our”, or words of similar import, refer to Randgold Resources Limited and its subsidiaries and affiliated companies.

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PART I
Item 1. Identity of Directors, Senior Management and Advisers
     Not applicable.
Item 2. Offer Statistics and Expected Timetable
     Not applicable.
Item 3. Key Information
A. SELECTED FINANCIAL DATA
     The following selected historical consolidated financial data have been derived from, and should be read in conjunction with, the more detailed information and financial statements, including our audited consolidated financial statements for the years ended December 31, 2010, 2009, and 2008 and as at December 31, 2010 and 2009, which appear elsewhere in this Annual Report. The historical consolidated financial data as at December 31, 2008, 2007 and 2006, and for the years ended December 31, 2007 and 2006 have been derived from our audited consolidated financial statements not included in this Annual Report.
     The financial data have been prepared in accordance with IFRS, unless otherwise noted.
                                         
    Year Ended December     Year Ended December     Year Ended December     Year Ended December     Year Ended December  
$000:   31, 2010     31, 2009     31, 2008     31, 2007     31, 2006  
STATEMENT OF COMPREHENSIVE INCOME DATA:
                                       
Amounts in accordance with IFRS
                                       
Revenues
    484,553       432,780       338,572       282,805       258,304  
Profit from operations#
    136,141       113,764       75,937       63,539       71,616  
Net profit attributable to owners of the parent
    103,501       69,400       41,569       42,041       47,564  
Basic earnings per share ($)
    1.14       0.86       0.54       0.60       0.70  
Fully diluted earnings per share ($)
    1.13       0.84       0.54       0.60       0.69  
Weighted average number of shares used in computation of basic earnings per share
    90,645,366       81,022,790       76,300,116       69,588,983       68,391,792  
Weighted average number of shares used in computation of fully diluted earnings per share
    91,926,912       82,161,851       77,540,198       70,271,915       69,331,035  
Dividends declared per share
    0.20       0.17       0.13       0.12       0.10  
Other data
                                       
Total cash costs ($  per ounce sold)
    699       512       468       356       293  
Total cash costs ($  per ounce produced)
    657       510       467       356       296  
 
#   Profit from operations is calculated as profit before income tax under IFRS, excluding net finance income/(loss). Profit from operations all arises from continuing operations.

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    At     At     At     At     At  
$000:   December 31, 2010     December 31, 2009     December 31, 2008     December 31, 2007     December 31, 2006  
STATEMENT OF FINANCIAL POSITION AMOUNTS:
                                       
AMOUNTS IN ACCORDANCE WITH IFRS
                                       
Total assets
    1,994,340       1,820,168       821,442       780,719       512,164  
Long-term loans
          234       1,284       2,773       25,666  
Share capital
    4,555       4,506       3,827       3,809       3,440  
Share premium
    1,362,320       1,317,771       455,974       450,814       213,653  
Retained earnings
    393,570       305,415       245,982       213,567       178,400  
Other reserves
    31,596       18,793       (31,387 )     (69,391 )     (59,430 )
Equity attributable to the owners of the parent
    1,792,041       1,646,485       674,396       598,799       336,063  
Non-GAAP Measures
We have identified certain measures that it believes will assist understanding of the performance of the business. As the measures are not defined under IFRS, they may not be directly comparable with other companies’ adjusted measures. The non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures or performance, but management has included them as these are considered to be important comparables and key measures used within the business for assessing performance. These measures are further explained below. Total cash cost and total cash cost per ounce are non-GAAP measures. We have calculated total cash costs and total cash costs per ounce using guidance issued by the Gold Institute. The Gold Institute was a non-profit industry association comprised of leading gold producers, refiners, bullion suppliers and manufacturers. This institute has now been incorporated into the National Mining Association. The guidance was first issued in 1996 and revised in November 1999. Total cash costs, as defined in the Gold Institute’s guidance, include mine production, transport and refinery costs, general and administrative costs, movement in production inventories and ore stockpiles, transfers to and from deferred stripping where relevant, and royalties.
Under our accounting policies, there are no transfers to and from deferred stripping. Total cash costs per ounce are calculated by dividing total cash costs, as determined using the Gold Institute guidance, by gold ounces sold for the periods presented. We have calculated total cash costs and total cash costs per ounce on a consistent basis for all periods presented. Total cash costs and total cash costs per ounce should not be considered by investors as an alternative to net profit attributable to shareholders, as an alternative to other IFRS measures or an indicator of our performance. The data does not have a meaning prescribed by IFRS and therefore amounts presented may not be comparable to data presented by gold producers who do not follow the guidance provided by the Gold Institute. In particular depreciation and amortization would be included in a measure of total costs of producing gold under IFRS, but are not included in total cash costs under the guidance provided by the Gold Institute. Furthermore, while the Gold Institute has provided a definition for the calculation of total cash costs and total cash costs per ounce, the calculation of these numbers may vary from company to company and may not be comparable to other similarly titled measures of other companies. However, we believe that total cash costs per ounce is a useful indicator to investors and management of a mining company’s performance as it provides an indication of a company’s profitability and efficiency, the trends in cash costs as the company’s operations mature, and a benchmark of performance to allow for comparison against other companies. Within this Annual Report our discussion and analysis is focused on the “total cash cost” measure as defined by the Gold Institute.
We previously calculated total cash costs per ounce by dividing total cash costs, as defined above, by ounces produced, as permitted under the guidance. Given the significant difference between ounces produced and ounces sold in the year, together with the fact that, under the definitions above, costs relating to ounces produced but not sold are recognized in the quarter when the ounces are actually sold, we deemed it appropriate to change the bases for these calculations by dividing total costs by ounces sold, as this would better match the timing of costs and sales recorded. Historically, this change would not have resulted in materially different cash costs per ounce; however, in the current year the difference was significant and consequently the numbers have been restated on this basis.

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The following table lists the costs of producing gold, determined in accordance with IFRS, and reconciles this GAAP measure to total cash costs as defined by the Gold Institute’s guidance, as a non-GAAP measure, for each of the periods set forth below:
                                         
$000:   Year Ended December     Year Ended December     Year Ended December     Year Ended December     Year Ended December  
Costs   31, 2010     31, 2009     31, 2008     31, 2007     31, 2006  
Mine production costs
  $ 247,850     $ 196,318     $ 186,377     $ 136,312     $ 115,217  
Depreciation and amortization
    28,127       28,502       21,333       20,987       22,844  
Other mining and processing costs
    20,598       19,073       13,675       13,638       13,006  
Transport and refinery costs
    1,653       1,594       2,053       1,595       711  
Royalties
    27,680       25,410       19,730       18,307       16,979  
Elimination of inter-company sales
    7,414       1,047                    
Movement in production inventory and ore stockpiles
    (16,152 )     5,741       (21,865 )     (11,534 )     (13,373 )
Total cost of producing gold determined in accordance with IFRS
    317,170       277,685       221,303       179,305       155,384  
Less: Non-cash costs included in total cost of producing gold: Depreciation and amortization
    (28,127 )     (28,502 )     (21,333 )     (20,987 )     (22,844 )
Total cash costs using the Gold Institute’s guidance
    289,043       249,183       199,970       158,318       132,540  
As previously disclosed:
                                       
Ounces produced *
    440,107       488,255       428,426       444,573       448,242  
Total production costs per ounce under IFRS ($  per ounce)
    721       569       517       403       347  
Total cash costs per ounce ($  per ounce)
    657       510       467       356       296  
As now measured:
                                       
Ounces sold*
    413,262       486,324       427,713       444,597       452,523  
Total production costs per ounce under IFRS ($  per ounce)
    767       571       517       403       343  
Total cash costs per ounce ($  per ounce)
    699       512       468       356       293  
 
*   40% share of Morila and 100% share of Loulo and Tongon
B. CAPITALIZATION AND INDEBTEDNESS
     Not applicable.
C. REASONS FOR THE OFFER AND USE OF PROCEEDS
     Not applicable.
D. RISK FACTORS
     In addition to the other information included in this Annual Report, you should carefully consider the following factors, which individually or in combination could have a material adverse effect on our business, financial condition and results of operations. There may be additional risks and uncertainties not presently known to us, or that we currently see as immaterial, which may also harm our business. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, results of operations and financial condition could be materially and adversely affected. In this case, the trading price of our ordinary shares and American Depositary Shares, or ADS, could decline and you might lose all or part of your investment.
Risks Relating to Our Operations
The profitability of our operations, and the cash flows generated by our operations, are affected by changes in the market price for gold which in the past has fluctuated widely.

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     Substantially all of our revenue and cash flows have come from the sale of gold. Historically, the market price for gold has fluctuated widely and has been affected by numerous factors, over which we have no control, including:
    the demand for gold for investment purposes, industrial uses and for use in jewelry;
 
    international or regional political and economic trends;
 
    the strength of the US dollar, the currency in which gold prices generally are quoted, and of other currencies;
 
    market expectations regarding inflation rates;
 
    interest rates;
 
    speculative activities;
 
    actual or expected purchases and sales of gold bullion holdings by central banks, the International Monetary Fund, or other large gold bullion holders or dealers;
 
    hedging activities by gold producers; and
 
    the production and cost levels for gold in major gold-producing nations.
     The volatility of gold prices is illustrated in the following table, which shows the approximate annual high, low and average of the afternoon London Bullion Market fixing price of gold in US dollars for the past ten years.
                         
    Price Per Ounce ($)
Year   High   Low   Average
2001
    293       256       271  
2002
    349       278       310  
2003
    416       320       363  
2004
    454       375       409  
2005
    537       411       444  
2006
    725       525       604  
2007
    841       608       695  
2008
    1,011       712       871  
2009
    1,213       810       972  
2010
    1,421       1,058       1,224  
2011 (through February)
    1,411       1,319       1,364  
     If gold prices should fall below and remain below our cost of production for any sustained period we may experience losses, and if gold prices should fall below our cash costs of production we may be forced to curtail or suspend some or all of our mining operations. In addition, we would also have to assess the economic impact of low gold prices on our ability to recover from any losses we may incur during that period and on our ability to maintain adequate reserves. Our total cash cost of production per ounce of gold sold was $699 in the year ended December 31, 2010, $512 in the year ended December 31, 2009, and $468 in the year ended December 31, 2008. We expect that Morila’s cash costs per ounce will rise as the life of the mine advances as a result of expected declining grade, which will adversely affect our profitability in the absence of any mitigating factors. The high grades expected from the underground mining at Loulo will, in the absence of any other increases, have a positive impact on unit costs.
Our mining operations may yield less gold under actual production conditions than indicated by our gold reserve figures, which are estimates based on a number of assumptions, including assumptions as to mining and recovery factors, production costs and the price of gold.
     The ore reserve estimates contained in this Annual Report are estimates of the mill delivered quantity and grade of gold in our deposits and stockpiles. They represent the amount of gold that we believe can be mined, processed and sold at prices sufficient to recover our estimated total cash costs of production, remaining investment and anticipated additional capital expenditures. Our ore reserves are estimated based upon many factors, including:

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    the results of exploratory drilling and an ongoing sampling of the orebodies;
 
    past experience with mining properties;
 
    gold price; and
 
    operating costs.
     Because our ore reserve estimates are calculated based on current estimates of future production costs and gold prices, they should not be interpreted as assurances of the economic life of our gold deposits or the profitability of our future operations.
     Reserve estimates may require revisions based on actual production experience. Further, a sustained decline in the market price of gold may render the recovery of ore reserves containing relatively lower grades of gold mineralization uneconomical and ultimately result in a restatement of reserves. The failure of the reserves to meet our recovery expectations may have a materially adverse effect on our business, financial condition and results of operations.
The profitability of operations and the cash flows generated by these operations are significantly affected by the fluctuations in the price, cost and supply of inputs.
     Fuel, power and consumables, including diesel, steel, chemical reagents, explosives and tires, form a relatively large part of our operating costs. The cost of these consumables is impacted to varying degrees, by fluctuations in the price of oil, exchange rates and a shortage of supplies.
     Such fluctuations have a significant impact upon our operating costs and capital expenditure estimates and, in the absence of other economic fluctuations, could result in significant changes in the total expenditure estimates for mining projects, new and existing, and could even render certain projects non-viable.
We are subject to various political and economic uncertainties associated with operating in Côte d’Ivoire, which is currently experiencing a state of political unrest, and the success of the Tongon mine will depend in large part on our ability to overcome significant challenges.
     We are subject to risks associated with operating the Tongon mine in Côte d’Ivoire. Côte d’Ivoire has experienced several years of political chaos, including an attempted coup d’état. A dispute over the recent Côte d’Ivoire presidential election in November 2010 has resulted in the establishment of two rival governments. The Electoral Commission declared Mr. A. Ouattara as the winner. However, the incumbent president challenged the results and refused to give up office. Presently a stalemate exists while representatives from the African Union attempt to resolve the impasse. International sanctions have been imposed on the incumbent president and those individuals and institutions supporting him. Included in the list of entities against whom sanctions have been imposed are the Ports of Abidjan and San Pedro, the two key shipping ports of Côte d’Ivoire, and the SIR, the Ivorian Petroleum refinery. As a result of the sanctions we have had to re-arrange our logistics arrangements for our Tongon mine and we will now be shipping all materials for Tongon through the Port of Dakar in Senegal. At times, we have been unable to ship and sell our Tongon gold production, which has resulted in timing discrepancy between our gold produced and the recognition of revenue from gold sales. We are unable to predict when or how the disputed election will be resolved. Accordingly, we are unable to predict when sales of Tongon gold produced will be delayed and how this could impact our financial results, or whether the issues associated with the disputed election will require us to cease operations at the Tongon mine, which would have a material adverse effect on our gold production and financial results.
Any appreciation of the currencies in which we incur costs against the US dollar could adversely affect our results of operations.
     While our revenue is derived from the sale of gold in US dollars, a significant portion of our input costs are incurred in currencies other than the dollar, primarily Euro, Communauté Financière Africaine franc, South African Rand, and the Congolese franc. Accordingly, any appreciation in such other currencies could adversely affect our results of operations.
Our results of operations have been adversely affected by increases in fuel prices, and we would be adversely affected by future increases in fuel prices or disruptions in the supply of fuel.

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     Our results are significantly affected by the price and availability of fuel, which are in turn affected by a number of factors beyond our control. Fuel prices are volatile. During 2010, the average price of our landed fuel was higher than 2009, and it has been rising in 2011. In the year ended December 31, 2010, the cost of fuel and other power generation costs comprised 25% of our operating costs and the annual price increase of our landed fuel was 10%.
     Historically, fuel costs have been subject to wide price fluctuations based on geopolitical factors and supply and demand. While we do not currently anticipate a significant reduction in fuel availability, factors beyond our control make it impossible to predict the future availability of fuel. Recent political unrest in certain oil producing countries has led to an increase in the cost of fuel. If there are additional outbreaks of hostilities or other conflicts in oil producing areas or elsewhere, or a reduction in refining capacity (due to weather events, for example), or governmental limits on the production or sale of fuel, or restrictions on the transport of fuel, there could be reductions in the supply of fuel and significant increases in the cost of fuel.
     We are not parties to any agreements that protect us against price increases or guarantee the availability of fuel. Major reductions in the availability of fuel or significant increases in its cost, or a continuation of current high prices for a significant period of time, would have a material adverse impact on us.
Our business may be adversely affected if the Government of Mali fails to repay Value Added Tax, or TVA, owing to Morila and Loulo.
     Our mining companies operating in Mali are exonerated by their Establishment Conventions from paying TVA for the three years following first commercial production. After that, TVA is payable and reimbursable. TVA is only reclaimable insofar as it is expended in the production of income. A key aspect in TVA recovery is managing the completion of the Government of Mali’s audit of the taxpayer’s payments, at which time the Government of Mali recognizes a liability.
     By December 2007, Morila had successfully concluded a reimbursement protocol with the Government of Mali for all TVA reimbursements it was owed up to June 2005. Morila was unable to conclude a second protocol subsequent to December 2007, however, and pursuant to its establishment convention, began offsetting TVA reimbursements it was owed against corporate and other taxes payable by Morila to the Government of Mali. As a result of the offsets, the TVA owed by the Government of Mali to Morila declined to $2.6 million at December 31, 2009. As of December 31, 2010, Morila had recouped all its outstanding TVA, as the Government of Mali repaid all outstanding amounts by this date. While all the TVA at Morila was recovered and the Government of Mali recognized the tax offsets, we cannot guarantee that they will continue to reimburse the TVA going forward.
     At June 30, 2009, TVA owed by the Government of Mali to Loulo stood at $16.2 million. This amount has increased by $20.8 million to $37.0 million at December 31, 2009 due to the end of the exoneration period on November 8, 2008. As at December 31, 2010, Loulo had a balance of $11.6 million outstanding on TVA after receiving payment from the Government of Mali.
     If Morila and Loulo are unable to recover these or future amounts due, or if the future tax offsets are not recognized, then their results of operations and financial position would be adversely affected, as would their ability to pay dividends to their shareholders. Accordingly, our business, cash flows and financial condition will be adversely affected if anticipated dividends are not paid.
Certain factors may affect our ability to support the carrying value of our property, plant and equipment, and other assets on our consolidated statement of financial position.
     We review and test the carrying amount of our assets on an annual basis when events or changes in circumstances suggest that the net book value may not be recoverable. If there are indications that impairment may have occurred, we prepare estimates of expected future discounted cash flows for each group of assets. Assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units) for purposes of assessing impairment. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash flows are significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.

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We may not be able to recover certain funds from MDM Ferroman (Pty) Limited.
     In August 2004, we entered into a fixed lump sum turnkey contract for $63 million for the design, supply, construction and commissioning of the Loulo processing plant and infrastructure with MDM Ferroman (Pty) Ltd, or MDM. At the end of 2005, after making advances and additional payments to MDM totaling $26 million in excess of the contract, we determined that MDM was unable to perform its obligations under the MDM Contract, at which time we enforced a contractual remedy which allowed us to act as our own general contractor and to complete the remaining work on the Loulo project that was required under the MDM Contract.
     We believe that we are entitled to recover certain amounts from MDM, including advances of $10.7 million included in receivables as at December 31, 2010. Of this amount, $7 million is secured by performance bonds and the remainder is secured by various personal guarantees and other assets. In January 2009 and 2010, the liquidator declared and paid dividends of $1.6 million from the insolvent estate, leaving an outstanding balance of $10.7 million (stated net of an impairment provision of $1.3 million) as at December 31, 2010.
     As part of our efforts to recoup the monies owed to us, MDM was put into liquidation on February 1, 2006. This resulted in a South African Companies Act Section 417 investigation into the business and financial activities of MDM, its affiliated companies and their directors. This investigation was completed in the last quarter of 2007 and the liquidators have issued their report that confirms that MDM’s liabilities exceeded its assets. During the second quarter of 2011 we will be involved in arbitration proceedings with the providers of the performance bonds, which have been the subject of legal proceedings in the South African Courts.
     Our ability to recover in full the $10.7 million included in receivables is dependent on the amounts which can be recovered from the performance bonds, personal guarantees and other assets provided as security. Any shortfall is expected to be recovered from any free residue accruing to the insolvent estate. The aggregate amount which will ultimately be recovered cannot presently be determined. The financial statements do not reflect any additional provision that may be required if the $10.7 million cannot be recovered in full. Our results of operations may be adversely affected if we are unable to recover the amounts advanced by us to MDM. Any part of the $10.7 million included in accounts receivable which cannot in fact be recovered will need to be charged as an expense. The ultimate outcome of this claim cannot presently be determined and there is significant uncertainty surrounding the amount that will ultimately be recovered.
We may incur losses or lose opportunities for gains as a result of any future use of derivative instruments to protect us against low gold prices.
     We have from time to time used derivative instruments to protect the selling price of some of our anticipated gold production. The intended effect of our derivative transactions was to lock in a fixed sale price for some of our future gold production to provide some protection against a subsequent fall in gold prices. Although we have currently ceased using derivative instruments to protect us against low gold prices at our operations, we may in the future determine to implement the use of derivatives in connection with a portion of our anticipated gold production.
     Derivative transactions can result in a reduction in revenue if the instrument price is less than the market price at the time the hedged sales are recognized. Moreover, our decision to enter into a given instrument would be based upon market assumptions. If these assumptions are not ultimately met, significant losses or lost opportunities for significant gains may result. In all, the use of these instruments may result in significant losses which will prevent us from realizing the positive impact of any subsequent increase in the price of gold on the portion of production covered by the instrument.
Our underground project at Loulo, developing two mines at Yalea and Gara, is subject to all of the risks associated with project development and underground mining.
     Development of the underground mine at Yalea commenced in December 2006 and first ore was mined in April 2008. These planned mines represent our entry into the business of underground mining, and the commencement of underground mining in Mali by any mining company. In connection with the development of the underground mines, we must build the necessary infrastructure, the costs of which are substantial. The underground mines may experience unexpected problems and delays during their development and construction. Delays in the commencement of gold production could occur and the development costs could be larger than expected, which could affect our results of operations and profitability.

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     Since the commencement of the underground operations at Yalea, in working with a mining contractor, we have experienced a number of challenges which have led to delays and slower build up of production. These challenges included the availability of the underground fleet, the ability to drill and blast up holes and the contractor’s poor safety record.
     Following these setbacks experienced during 2009, we terminated the underground mining contract with the contractor and have assumed responsibility for underground mining at Loulo. At the beginning of 2010, we appointed a new contractor to develop the Gara underground mine, and subsequently extended their contract at the end of 2010 to include the development of the Yalea underground mine. The development and operation of the underground mine has been negatively impacted by these issues and resulting delays, and we cannot assure you that such issues are fully resolved or that we will not have future delays.
     The business of underground mining by its nature involves significant risks and hazards. In particular, as the development commences the operation could be subject to:
    rockbursts;
 
    seismic events;
 
    underground fires;
 
    cave-ins or falls of ground;
 
    discharges of gases or toxic chemicals;
 
    flooding;
 
    accidents; and
 
    other conditions resulting from drilling, blasting and the removal of material from an underground mine.
     We are at risk of experiencing any and all of these hazards. The occurrence of any of these hazards could delay the development of the mine, production, increase cash operating costs and result in additional financial liability for us.
Our success may depend on our social and environmental performance.
     Our ability to operate successfully in communities will likely depend on our ability to develop, operate and close mines in a manner that is consistent with the health, safety and well-being of our employees, the protection of the environment, and the creation of long-term economic and social opportunities in the communities in which we operate. We seek to promote improvements in health and safety, environmental performance and community relations. However, our ability to operate could be adversely impacted by accidents or events detrimental (or perceived to be detrimental) to the health, safety and well-being of our employees, the environment or the communities in which we operate.
     In July 2009, the Loulo mine experienced some disruption, caused by a small group of disaffected people unable to secure long term employment at the mine. The disruption resulted in some damage to the tailings pipeline as well as to some accommodation units and other property. All operations were suspended for 36 hours, following which all mining and processing operations were restored and operating back at normal capacity. We cannot assure you that similar events will not happen in the future, or that such events will not adversely affect our results of operations and properties.
Actual cash costs of production, production results and economic returns may differ significantly from those anticipated by our feasibility studies and scoping studies for new development projects.
     It typically takes a number of years from initial feasibility studies of a mining project until development is completed and, during that time, the economic feasibility of production may change. The economic feasibility of development projects is based on many factors, including the accuracy of estimated reserves, metallurgical recoveries, capital and operating costs and future gold prices. The capital expenditures and time required to develop new mines or other projects are considerable, and changes in costs or construction schedules can affect project economics. Thus it is possible that actual costs and economic returns may differ materially from our estimates.

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     In addition, there are a number of uncertainties inherent in the development and construction of any new mine, including:
    the availability and timing of necessary environmental and governmental permits;
 
    the timing and cost necessary to construct mining and processing facilities, which can be considerable;
 
    the availability and cost of skilled labor, power, water and other materials;
 
    the accessibility of transportation and other infrastructure, particularly in remote locations; and
 
    the availability of funds to finance construction and development activities.
     During 2010, we completed the feasibility study for the Gounkoto project. Mining at Gounkoto commenced in January 2011 and processing is anticipated to commence by mid-year. Also in 2010, we completed an update to the Kibali project feasibility study. The study will now go through a series of internal and external reviews and optimizations of the mining and processing rates and capital estimates and in particular the scheduling of the capital development ahead of final design and approval targeted for mid-2011. Exploration at our Massawa project has been slowed down as we have advanced Gounkoto and Kibali providing the time to fully evaluate the metallurgy and development strategies. Our goal is to progress the Massawa project to complete a feasibility study in 2011. We cannot provide any assurance that the projects will ultimately result in new commercial mining operations, or that new commercial mining operations will be successful.
We conduct mining, development and exploration activities in countries with developing economies and are subject to the risks of political and economic instability associated with these countries.
     We currently conduct mining, development and exploration activities in countries with developing economies. These countries and other emerging markets in which we may conduct operations have, from time to time, experienced economic or political instability. It is difficult to predict the future political, social and economic direction of the countries in which we operate, and the impact government decisions may have on our business. Any political or economic instability in the countries in which we currently operate could have a material and adverse effect on our business and results of operations.
     The countries of Mali, Senegal, Burkina Faso, DRC and Côte d’Ivoire have, since independence, experienced some form of political upheaval with varying forms of changes of government taking place.
     Goods are supplied to our operations in Mali through Ghana and Senegal, which routings have, to date, functioned satisfactorily. Our operations at Morila have been adversely affected by the higher transportation costs for diesel that now has to be delivered via Senegal. Any present or future policy changes in the countries in which we operate may in some way have a significant effect on our operations and interests.
     The mining laws of Mali, Côte d’Ivoire, Senegal, Burkina Faso, and DRC stipulate that, should an economic orebody be discovered on a property subject to an exploration permit, a permit that allows processing operations to be undertaken must be issued to the holder. Legislation in these countries currently provides for the relevant government to acquire a free ownership interest in any mining project. The requirements of the various governments as to the foreign ownership and control of mining companies may change in a manner which adversely affects us.
We are subject to various political and economic uncertainties associated with operating in the Democratic Republic of the Congo, and the success of the Kibali project will depend in large part on our ability to overcome significant challenges.
     We are subject to risks associated with operating the Kibali project in the Democratic Republic of the Congo (“DRC”). The Kibali project is located in the north-east region of the DRC and is subject to various levels of political, economic and other risks and uncertainties associated with operating in the DRC. Some of these risks include political and economic instability, high rates of inflation, severely limited infrastructure, lack of law enforcement, labor unrest, and war and civil conflict. In addition, the Kibali project is subject to the risks inherent in operating in any foreign jurisdiction including changes in government policy, restrictions on foreign exchange, changes in taxation policies, and renegotiation or nullification of existing concessions, licenses, permits and contracts.

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     The DRC is an impoverished country with physical and institutional infrastructure that is in a debilitated condition. It is in transition from a largely state-controlled economy to one based on free market principles, and from a non-democratic political system with a centralized ethnic power base to one based on more democratic principles. There can be no assurance that these changes will be effected or that the achievement of these objectives will not have material adverse consequences for the Kibali project. It is anticipated that presidential elections should take place during the latter part of 2011.
     Any changes in mining or investment policies or shifts in political attitude in the DRC may adversely affect operations and/or profitability of the Kibali project. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. These changes may impact the profitability and viability of the Kibali project.
     Furthermore, the Kibali project is located in a remote area of the DRC, which lacks basic infrastructure, including adequate roads and other transport, sources of power, water, housing, food and transport. In order to develop any of the mineral interests, facilities and material necessary to support operations in the remote locations in which they are situated must be established. The remoteness of the mineral interests would affect the potential viability of mining operations, as we would also need to establish substantially greater sources of power, water, physical plant, roads and other transport infrastructure than are currently present in the area. More specifically, we must obtain necessary licenses from the government to construct and operate hydropower stations, which will necessarily involve reconfiguring, refurbishing and maintaining existing stations. Our ability to produce sufficient power for the Kibali will be adversely affected to the extent such licenses cannot be obtained, or we are unable to comply with the conditions of such licenses.
     Moreover, the north-east region of the DRC has undergone civil unrest and instability that could have an impact on political, social or economic conditions in the DRC generally. Stability must be maintained in order for us to build and operate a mine at the Kibali project site. The impact of unrest and instability on political, social or economic conditions in the DRC could result in the impairment of the exploration, development and operations at the Kibali project.
     The communities near the Kibali project need to be resettled in an orderly manner and peaceful manner to allow the development and operation of a mine at the site. The first phase of houses are currently being built which will allow the management to commence the resettlement program, which has been implemented following agreement with the local authorities and communities affected by the project. We have committed to assist the DRC government in these efforts. Any failure to complete the settlement plan successfully will materially and adversely affect our ability to build and operate a mine at the Kibali project site.
Under our joint venture agreements with AngloGold Ashanti Limited, or AngloGold Ashanti, we operate Morila and the Kibali project through a joint venture agreement and joint venture committee, and any disputes with AngloGold Ashanti over the management of Morila or the Kibali project could adversely affect our business.
     We jointly control Morila SA, the owner of the Morila mine, and Kibali Goldmines SPRL, the owner of the Kibali project, with AngloGold Ashanti under joint venture agreements. We are responsible for the day-to-day operations of Morila and the Kibali project, subject to the overall management control of the Morila SA and Kibali Goldmines boards, respectively. Substantially all major management decisions, including approval of a budget for Morila and the Kibali project, must be approved by the Morila SA and Kibali Goldmines boards, respectively. We and AngloGold Ashanti retain equal representation on the boards, with neither party holding a deciding vote. If a dispute arises between us and AngloGold Ashanti with respect to the management of Morila SA or Kibali Goldmines, and we are unable to amicably resolve the dispute, we may have to participate in arbitration or other proceeding to resolve the dispute, which could materially and adversely affect our business.
The use of mining contractors at certain of our operations may expose it to delays or suspensions in mining activities.
     Mining contractors are used at Loulo and Morila to mine and deliver ore to processing plants. These mining contractors rely on third-party vendors to supply them with required mining equipment, many of which have been adversely affected by the global economic slowdown. Consequently, at these mines, we do not own all of the mining equipment and may face disruption of operations and incur costs and liabilities in the event that any of the mining contractors at these mines, or any of the vendors that supply them, has financial difficulties, or should there be a dispute in renegotiating a mining contract, or a delay in replacing an existing contractor.
     Following setbacks experienced during 2009 at Loulo, we terminated the underground mining contract with the contractor and assumed responsibility for the underground mining.

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We may be required to seek funding from the global credit and capital markets to develop our properties, and the recent weaknesses in those markets could adversely affect our ability to obtain financing and capital resources.
     We require substantial funding to develop our properties, and may be required to seek funding from the credit and capital markets to finance these activities. Our ability to obtain outside financing will depend upon the price of gold and the market’s perception of its future price, and other factors outside of our control. We may not be able to obtain funding on acceptable terms when required, or at all.
     The credit and capital markets experienced significant deterioration in 2008, including the failure of significant and established financial institutions in the US and abroad, which continued throughout 2009 and 2010 and may continue in 2011 and beyond, all of which will have an impact on the availability and terms of credit and capital in the near term. If uncertainties in these markets continue, or these markets deteriorate further, it could have a material adverse effect on our ability to raise capital. Failure to raise capital when needed or on reasonable terms may have a material adverse effect on our business, financial condition and results of operations.
Regulations and pending legislation governing issues involving climate change could result in increased operating costs which could have a material adverse effect on our business.
     A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impacts of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.
We may not pay dividends to shareholders in the near future.
     We have proposed the payment of our fifth dividend to ordinary shareholders, subject to approval by our shareholders at our AGM in May 2011. It is our policy to pay dividends if profits and funds are available for that purpose. Whether or not funds are available depends on a variety of factors, including capital expenditures. We cannot guarantee that dividends will be paid in the future.
If we are unable to attract and retain key personnel our business may be harmed.
     Our ability to bring additional mineral properties into production and explore our extensive portfolio of mineral rights will depend, in large part, upon the skills and efforts of a small group of management and technical personnel, including D. Mark Bristow, our Chief Executive Officer. If we are not successful in retaining or attracting highly qualified individuals in key management positions our business may be harmed. The loss of any of our key personnel could adversely impact our ability to execute our business plan.
Our insurance coverage may prove inadequate to satisfy future claims against us.
     We may become subject to liabilities, including liabilities for pollution or other hazards, against which we have not insured adequately or at all, or cannot insure. Our insurance policies contain exclusions and limitations on coverage. Our current insurance policies provide worldwide indemnity of £50 million in relation to legal liability incurred as a result of death, injury, disease of persons and/or loss of or damage to property. Main exclusions under this insurance policy, which relates to our industry, include war, nuclear risks, silicosis, asbestosis or other fibrosis of the lungs or diseases of the respiratory system with regard to employees, and gradual pollution. In addition, our insurance policies may not continue to be available at economically acceptable premiums. As a result, in the future our insurance coverage may not cover the extent of claims against us.

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It may be difficult for you to affect service of process and enforce legal judgments against us or our affiliates.
     We are incorporated in Jersey, Channel Islands and a majority of our directors and senior executives are not residents of the United States. Virtually all of our assets and the assets of those persons are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon those persons or us. Furthermore, the United States and Jersey currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, it may not be possible for you to enforce a final judgment for payment rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon United States Federal securities laws against those persons or us.
     In order to enforce any judgment rendered by any Federal or state court in the United States in Jersey, proceedings must be initiated by way of common law action before a court of competent jurisdiction in Jersey. The entry of an enforcement order by a court in Jersey is conditional upon the following:
    that the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the foreign courts;
 
    that the judgment is final and conclusive — it cannot be altered by the courts which pronounced it;
 
    that there is payable pursuant to a judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty;
 
    that the judgment has not been prescribed;
 
    that the courts of the foreign country have jurisdiction in the circumstances of the case;
 
    that the judgment was not obtained by fraud; and
 
    that the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the rules of natural justice which require that documents in the United States proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal.
     Furthermore, it is doubtful whether you could bring an original action based on United States Federal securities laws in a Jersey court.
We are subject to significant corporate regulation as a public company and failure to comply with all applicable regulations could subject us to liability or negatively affect our share price.
     As a publicly traded company, we are subject to a significant body of regulation. While we have developed and instituted a corporate compliance program based on what we believe are the current best practices in corporate governance and continue to update this program in response to newly implemented or changing regulatory requirements, we cannot provide absolute assurance that we are or will be in compliance with all potentially applicable corporate regulations. For example, we cannot provide assurance that in the future our management will not find a material weakness in connection with its annual review of our internal control over financial reporting pursuant to Section 404 of the US Sarbanes-Oxley Act of 2002. If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. If we must disclose any material weakness in our internal control over financial reporting, our share price could decline.
     In addition, we are subject to the U.S. Foreign Corrupt Practices Act and the recently enacted UK Bribery Act, which generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. The compliance mechanisms and monitoring programs that we have in place may not adequately prevent or detect possible violations under applicable anti-bribery and corruption legislation. Failure to comply with such legislation could expose us to civil and criminal sanction, including fines, prosecution, potential debarment from public procurement and reputational damage, all of which could have a material adverse effect on our financial results and could cause our share price to decline.

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Risks Relating to Our Industry
The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently unproductive.
     We must continually seek to replenish our ore reserves depleted by production to maintain production levels over the long term. Ore reserves can be replaced by expanding known ore bodies or exploring for new deposits. Exploration for gold is highly speculative in nature. Our future growth and profitability will depend, in part, on our ability to identify and acquire additional mineral rights, and on the costs and results of our continued exploration and development programs. Many exploration programs, including some of ours, do not result in the discovery of mineralization and any mineralization discovered may not be of sufficient quantity or quality to be profitably mined. Our mineral exploration rights may not contain commercially exploitable reserves of gold. Uncertainties as to the metallurgical recovery of any gold discovered may not warrant mining on the basis of available technology. Our operations are subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, such as:
    encountering unusual or unexpected formations;
 
    environmental pollution;
 
    personal injury and flooding; and
 
    decrease in reserves due to a lower gold price.
     If we discover a viable deposit, it usually takes several years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production may change.
     Moreover, we will use the evaluation work of professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit before it can be determined whether or not the deposit contains economically recoverable mineralization. As a result of these uncertainties, we may not successfully acquire additional mineral rights, or identify new proven and probable reserves in sufficient quantities to justify commercial operations in any of our properties.
     If management determines that capitalized costs associated with any of our gold interests are not likely to be recovered, we would recognize an impairment provision against the amounts capitalized for that interest. All of these factors may result in losses in relation to amounts spent which are found not to be recoverable.
Title to our mineral properties may be challenged which may prevent or severely curtail our use of the affected properties.
     Title to our properties may be challenged or impugned, and title insurance is generally not available. Each sovereign state is the sole authority able to grant mineral property rights, and our ability to ensure that we have obtained secure title to individual mineral properties or mining concessions may be severely constrained. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, we may be unable to operate our properties as permitted or to enforce our rights with respect to our properties.
Our ability to obtain desirable mineral exploration projects in the future may be adversely affected by competition from other exploration companies.
     We compete with other mining companies in connection with the search for and acquisition of properties producing or possessing the potential to produce gold. Existing or future competition in the mining industry could materially and adversely affect our prospects for mineral exploration and success in the future.
Our operations are subject to extensive governmental and environmental regulations, which could cause us to incur costs that adversely affect our results of operations.
     Our mining facilities and operations are subject to substantial government laws and regulations, concerning mine safety, land use and environmental protection. We must comply with requirements regarding exploration operations, public safety, employee health

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and safety, use of explosives, air quality, water pollution, noxious odor, noise and dust controls, reclamation, solid waste, hazardous waste and wildlife as well as laws protecting the rights of other property owners and the public.
     Any failure on our part to be in compliance with these laws, regulations, and requirements with respect to our properties could result in us being subject to substantial penalties, fees and expenses, significant delays in our operations or even the complete shutdown of our operations. We provide for estimated environmental rehabilitation costs when the related environmental disturbance takes place. Estimates of rehabilitation costs are subject to revision as a result of future changes in regulations and cost estimates. The costs associated with compliance with government regulations may ultimately be material and adversely affect our results of operations and financial condition.
If our environmental and other governmental permits are not renewed or additional conditions are imposed on our permits, our financial condition and results of operations may be adversely affected.
     Generally, compliance with environmental and other government regulations requires us to obtain permits issued by governmental agencies. Some permits require periodic renewal or review of their conditions. We cannot predict whether we will be able to renew these permits or whether material changes in permit conditions will be imposed. Non-renewal of a permit may cause us to discontinue the operations requiring the permit, and the imposition of additional conditions on a permit may cause us to incur additional compliance costs, either of which could have a material adverse effect on our financial condition and results of operations.
Labor disruptions could have an adverse effect on our operating results and financial condition.
     Our operations in West Africa are highly unionized, and strikes are legal in the countries in which we operate. Therefore, our operations are at risk of having work interrupted for indefinite periods due to industrial action, such as strikes by employee collectives. Should long disruptions take place on our operations, the results from our operations and their financial condition could be materially and adversely affected.
AIDS poses risks to us in terms of productivity and costs.
     The incidence of AIDS in Mali, Côte d’Ivoire, Senegal and the DRC, which has been forecast to increase over the next decade, poses risks to us in terms of potentially reduced productivity and increased medical and insurance costs. The exact extent to which our workforce is infected is not known at present. The prevalence of AIDS in the countries in which we operate and among our workforce could become significant. Significant increases in the incidence of AIDS infection and AIDS-related diseases among members of our workforce in the future could adversely impact our operations and financial condition.
Item 4. Information on the Company
A. HISTORY AND DEVELOPMENT OF THE COMPANY
          Randgold Resources Limited was incorporated under the laws of Jersey, Channel Islands in August 1995, to engage in the exploration and development of gold deposits in Sub-Saharan Africa. Our principal executive offices are located at 3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey, JE2 4WJ Channel Islands and our telephone number is (011 44) 1534 735-333. Our agent in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.
     We discovered the Morila deposit during December 1996 and we subsequently financed, built and commissioned the Morila mine.
     During July 2000, we concluded the sale of 50% of our interest in Morila Limited (and also a shareholder loan made by us to Morila Limited) to AngloGold Ashanti for $132 million in cash.
     We have an 80% controlling interest in Société des Mines de Loulo SA, or Somilo, through a series of transactions culminating in April 2001. The Loulo mine commenced operations in October 2005 and mines the Gara (formerly Loulo 0) and Yalea deposits. We discovered the Yalea deposit in 1997.
     We have an 89% controlling interest in Société des Mines de Tongon SA, or Tongon.
     We conduct our mining operations through:

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    a 50% joint venture interest in Morila Limited (which in turn owns an 80% interest in the Morila mine);
 
    an 80% interest in Somilo; and
 
    an 89% interest in Tongon.
     In July 2002, we completed a public offering of 5,000,000 of our ordinary shares, including American Depositary Shares, or ADSs, resulting in gross proceeds to us of $32.5 million. These proceeds were used to repay a syndicated term loan and revolving credit facility in November 2002 and for feasibility studies and development activities. In connection with this offering, we listed our ADSs on the Nasdaq National Market (our ADSs are now listed on the Nasdaq Global Select Market).
     In February 2004, we announced that we would develop a new mine at Loulo in western Mali. Construction continued through 2005 and the new open pit mine went into production in October 2005. In addition, our board agreed to proceed with the development of the underground mine and, after the award of the development contract, work commenced with the construction of the boxcut at the Yalea mine in August 2006. We accessed first ore at Yalea in April 2008 with full production beginning in 2010. We commenced development of Loulo’s second underground mine, Gara, in 2010 with first ore scheduled to be delivered to the plant by the second quarter of 2011.
     In April 2004, Resolute Mining Limited, or Resolute, acquired the Syama mine from us. Resolute has subsequently paid us $6 million in cash and has assumed liabilities of $7 million, of which $4 million owing to ourselves has been settled. The agreement entered into in June 2004 between the parties provides for the payment of a production royalty by Resolute to us relating to Syama’s production equal to $10 per ounce on the first million ounces produced by Syama and $5 per ounce on the next three million ounces produced by Syama. This royalty payment is capped at $25 million. We received our first royalties in 2009.
     Effective on June 11, 2004, we undertook a split of our ordinary shares, which increased our issued share capital from 29,263,385 to 58,526,770 ordinary shares. In connection with this share split our ordinary shareholders of record on June 11, 2004 received two $0.05 ordinary shares for every one $0.10 ordinary share they held. Following the share split, each shareholder held the same percentage interest in us; however, the trading price of each share was adjusted to reflect the share split. ADS holders were affected the same way as shareholders and the ADS ratio remains one ADS to one ordinary share.
     On November 1, 2005, we completed a public offering of 8,125,000 of our ordinary shares, including ADSs, resulting in gross proceeds to us of $109.7 million. The new shares were allocated to institutional shareholders in the United Kingdom, the United States, Canada and the rest of the world.
     On December 6, 2007, we completed a public offering of 6,821,000 of our ordinary shares, including ADSs, resulting in gross proceeds to us of $240 million. A portion of the proceeds from the offering were used for the development of the Tongon project, and any remaining proceeds will be used for such organic and corporate opportunities, including possible acquisitions, as might arise.
     During 2007, peace initiatives in Côte d’Ivoire continued and we completed a feasibility study which allowed our board to approve the development of the new mine at Tongon subject to the approval of the mining convention by the Côte d’Ivoire Minister of Mines and Energy. Construction of the mine started at the end of 2008 and its first gold was produced in November 2010.
     On August 4, 2009, we completed a public offering of 5,750,000 of our ordinary shares, including ADSs, resulting in gross proceeds to us of $341.8 million. The proceeds from the offering are being used to fund the feasibility studies for the Gounkoto and Massawa projects, to develop the Gounkoto, Massawa and Kibali projects, and for other organic and corporate opportunities, including possible acquisitions.
     On October 15, 2009, we completed the acquisition of 50% of Moto Goldmines Limited (“Moto Goldmines”), in conjunction with AngloGold Ashanti, which resulted in a 50:50 joint venture control of the Kibali project in the DRC. On December 22, 2009 we completed a further acquisition of a 20% interest, on behalf of the joint venture, from Société des Mines d’Or de Kilo-Moto (“Sokimo”), the parastatal mining company of the DRC, resulting in an effective interest in the Kibali project of 45%.
     During November 2009, we completed the sale of our Kiaka gold project to Volta Resources Inc., for $2 million in cash and 20 million Volta Resources Inc. shares. During 2010, we sold 15.5 million Volta Resources Inc. shares for a net profit of $19.3 million.

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     Developments during 2010 relating to MDM are discussed more fully in “Item 4. Information on the Company — B. Business Overview — Legal Proceedings”.
Principal Capital Expenditures
     Capital expenditures incurred for the year ended December 31, 2010 totaled $410.8 million compared to $196.7 million for the year ended December 31, 2009, and $85 million for the year ended December 31, 2008. As of December 31, 2010, our capital commitments amounted to $85 million, principally for the Loulo underground project, Tongon mine, Gounkoto project and the Kibali project. The capital expenditures will be financed out of internal funds. The capital cost for both Loulo underground mines is expected to amount to approximately $137 million for the next three years. The capital cost for the Tongon mine is expected to amount to approximately $66 million for the next three years. The capital cost for Gounkoto is expected to amount to approximately $98 million for the next three years. The capital cost for our share of the Kibali project is expected to amount to approximately $363 million for the next three years. The capital cost for Massawa is expected to amount to approximately $26 million for the next three years.
Recent Developments
     During 2010, we completed the feasibility study for the Gounkoto project. The feasibility study is based on a toll treat project whereby the ore is mined and fed through an onsite fixed crusher. The crushed ore is then loaded onto dedicated haul trucks and trucked approximately 25 kilometers to Loulo and fed directly into the Loulo plant. Mining at Gounkoto commenced in January 2011 and processing is anticipated to commence by mid-year.
     Also in 2010, we completed an update to the Kibali project feasibility study. The study will now go through a series of internal and external reviews and optimizations of the mining and processing rates and capital estimates and in particular the scheduling of the capital ahead of final design and approval targeted for mid-2011. The Kibali project’s Resettlement Action Plan has progressed with the construction of the first houses in the resettlement area commencing in January 2011.
B. BUSINESS OVERVIEW
OVERVIEW
     We engage in gold mining, exploration and related activities. Our activities are focused on West and Central Africa, some of the most promising areas for gold discovery in the world. In Mali, we have an 80% controlling interest in the Loulo mine through Somilo SA. The Loulo mine is currently mining from two large open pits, several smaller satellite pits and one underground mine and is developing a further underground mine. We also own 50% of Morila Limited, which in turn owns 80% of Morila SA, the owner of the Morila mine in Mali. In addition, we own an effective 89% controlling interest in the Tongon mine located in the neighboring country of Côte d’Ivoire, which was commissioned in November 2010. We also own an effective 83.25% controlling interest in the Massawa project in Senegal where we completed a prefeasibility study in December 2009. In 2009, we announced a new discovery on our Loulo permit, Gounkoto, which is located approximately 25 kilometers south of the existing mine. Also in 2009, we acquired a 45% interest in the Kibali project, which is located in the DRC. We also have exploration permits and licenses covering substantial areas in Burkina Faso, Côte d’Ivoire, DRC, Mali, and Senegal. At December 31, 2010, we declared proven and probable reserves of 16.39 million ounces attributable to our percentage ownership interests in Loulo, Morila, Tongon, Gounkoto, Massawa and Kibali.
     Our strategy is to create value for all our stakeholders by finding, developing and operating profitable gold mines. We seek to discover significant gold deposits, either from our own phased exploration programs or the acquisition of early stage to mature exploration programs. We actively manage both our portfolio of exploration and development properties and our risk exposure to any particular geographical area. We also routinely review opportunities to acquire development projects and existing mining operations and companies.
Loulo
     In February 2004, we announced that we would develop a new mine at Loulo in western Mali. In 2005, we commenced open pit mining operations at the Gara and Yalea pits. In 2010, its fifth year of production, the Loulo mine produced 316,539 ounces of gold at a total cash cost of $712 per ounce. We estimate that the mine will produce between 420,000 to 440,000 ounces in 2011. We currently anticipate that mining at Loulo will continue through 2029.

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     We commenced development of the Yalea underground mine in August 2006, first ore was accessed in April 2008 and we are ramping up to full production anticipated in 2011. We commenced development of Loulo’s second underground mine, Gara, in 2010 with first ore scheduled to be delivered to the plant by the second quarter of 2011.
     The focus of exploration at Loulo is to continue to explore and discover additional orebodies within the 372 square kilometer permit.
Gounkoto
     Gounkoto is located approximately 25 kilometers south of Loulo’s plant.
     Following the completion of the feasibility in early 2010 a full feasibility was completed by the end of 2010, following a large drill program and follow up studies. The geological modeling is based on 114 RC holes totaling 11,583 meters and 194 diamond holes totaling 57,613 meters. The Gounkoto structure hosting the Gounkoto orebody has now been intersected over the 1.7km of strike length and down to 520 vertical meters. The feasibility study has led to the declaration of open pit ore reserves totaling 17.11 million tonnes at a grade of 5.10g/t for 2.80 million ounces. The P64 target, which features 250 strike meters of similar alteration and mineralization, is located 300 meters to the northwest of Gounkoto, while the Faraba deposit, with mineralized material of 6.78 million tonnes at an average grade of 2.60g/t for 565,000 ounces, is located 2.5 kilometers to the southeast.
     It is anticipated that an updated underground economic scoping study will be completed during 2011.
Morila
     In 1996, we discovered the Morila deposit, which we financed and developed and was our major gold producing asset through 2009. Since production began in October 2000, Morila has produced approximately 5.8 million ounces of gold at a total average cash cost of $216 per ounce. Morila’s total production for 2010 was 238,607 ounces at a cash cost of $669 per ounce. Consistent with the mine plan, Morila ceased pit mining in April 2009 and is currently processing lower grade stockpiles, which will continue through 2013. During 2010 a study of the reprocessing of the Morila Tailings Storage Facility was completed and it is anticipated that a bankable feasibility study will be undertaken in 2011.
Tongon
     The Tongon project is located within the Nielle exploitation permit in the north of Côte d’Ivoire, 55 kilometers south of the border with Mali.
     We commenced construction of the Tongon gold mine at the end of 2008 and commissioned the first stream in the fourth quarter of 2010 and produced 28,126 ounces at an average cash cost of $459 per ounce for the year, with first official gold production being recorded. We are forecast to complete and commission the second stream including secondary and tertiary crushing circuit and the sulfide circuit of the processing plant by midyear 2011. Gold production is projected to build up to between 260,000 and 270,000 ounces in 2011 and average 270,000 ounces per annum over a ten year period.
     The focus of exploration at Tongon is to continue to explore and discover additional orebodies within the 751 square kilometer Nielle permit.
Kibali
     Our interest in the Kibali project was acquired following the acquisition of Moto Goldmines, in conjunction with AngloGold Ashanti, and the further acquisition of a 20% interest from Sokimo on behalf of the joint venture. The Kibali project is located approximately 560 kilometers northeast of the city of Kisangani and 180 kilometers west of the Ugandan border town of Arua in the northeast of the DRC.
     During the year the feasibility was updated. Revised ore reserves reflect an increase in underground probable ore reserves to in excess of 6 million ounces, bringing the total probable ore reserve number to 10.05 million ounces.
     The overall program to complete the initial investment phase to establish gold production at Kibali is estimated to take approximately three years, with first gold expected at the end of 2013.

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     The exploration team completed the analysis of the Karagba Chauffeur Durba (KCD) deposit, resulting in a new geological model. Continuity of mineralization was confirmed between the Sessenge and KCD deposits and remains open down plunge. This will be tested by a program of deep drilling in 2011.
Massawa
     Our Massawa project consists of a greenfields exploration find located in eastern Senegal during 2008. The Massawa target was first identified in 2007 and is located approximately 60 kilometers west of the Malian border. A successful scoping study was completed for Massawa in the first quarter of 2009 which met all of our investment criteria and we advanced the project to prefeasibility. The prefeasibility study was completed at the end of 2009 which highlighted the complex nature of the ore, which requires pressure oxidation of the sulfides to liberate the gold. During 2010 significantly more work was conducted in this regard to improve the geochemical and metallurgical understanding of the ore. All studies point towards the Massawa deposit requiring high levels of energy to recover the gold and thus our focus in 2011 will be on defining a power strategy for Massawa and finding further non refractory mineralization. Further infill and twin drilling was completed in 2010 which resulted in a revised geological model. The feasibility modifying factors were applied to this resulting in updated probable open pit mineral reserves of 17.42 million tonnes at a grade of 3.36g/t for 1.88 million ounces.
     While the exploration work concentrated on the Massawa feasibility during 2010, the exploration team has been mobilized to delineate and test the large number of satellite targets in the area with the focus of finding additional non-refractory mineralization that could incrementally add to the project.
Exploration
     We have an extensive portfolio of exploration projects in both West and Central Africa. In 2010, we concentrated our exploration activities on the continued evaluation of the Massawa deposit in Senegal, the discovery of the new multi-million ounce high grade gold deposit at Gounkoto in Mali, the definition of satellite deposits at Loulo, and geological modeling and update of the ore reserves at the Kibali gold deposit in the DRC. We completed a detailed analysis of the KCD deposit, resulting in a new geological model which supported a growth in reserves from 4.5 million ounces at the acquisition to 10.05 million ounces at the end of December 2010. Continuity of mineralization was confirmed between the Sessenge and KCD deposits and remains open down plunge. This will be tested by a program of deep drilling in 2011. We are exploring in five African countries with a portfolio of 275 targets on 13,583 square kilometers of groundholding. We target profitable gold deposits that have the potential to host mineable gold reserves of three million ounces or more. Our business strategy of organic growth through exploration has been validated by our discovery and development track record, including the Morila and Loulo mines, the Tongon project and the Massawa and Gounkoto discoveries.
OWNERSHIP OF MINES AND SUBSIDIARIES
     Morila is owned by a Malian company, Société des Mines de Morila SA (Morila), which in turn is owned 80% by Morila Limited and 20% by the State of Mali. Morila Limited is jointly owned by ourselves and AngloGold Ashanti Limited and the mine is controlled by a 50:50 joint venture management committee. Responsibility for the day-to-day operations rests with us.
     Loulo is owned by a Malian company, Société des Mines de Loulo SA (Somilo), which is owned 80% ourselves and 20% by the State of Mali.
     Tongon is owned by an Ivorian company, Société des Mines de Tongon SA, in which we have an 89% interest, the State of Côte d’Ivoire 10% and 1% is held by a local Ivorian company.
     The Kibali project is controlled by a 50:50 joint venture, between ourselves and AngloGold Ashanti Limited, which holds an effective 90% interest in Kibali Goldmines SPRL. The remaining 10% of the shares are held by Sokimo, the parastatal mining company of the Democratic Republic of Congo. We thus have an effective 45% interest in the Kibali project. Our interest in this project was acquired following the acquisition of Moto Goldmines Limited, in conjunction with AngloGold Ashanti, and the further acquisition of a 20% interest from Sokimo on behalf of the joint venture.

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     The Gounkoto project is located on the Loulo Exploitation Permit. Accordingly, we hold an effective 80% interest in the Gounkoto project through our interest in Loulo. We are currently engaged in the process of applying for the formation of the new Gounkoto Exploitation Permit, which will be owned by a separate company, Société des Mines de Gounkoto S.A.
     We hold an effective 83.25% interest in the Massawa project. The government of Senegal retains a 10% carried interest in the project, with the balance held by our Senegalese joint venture partner.
GEOLOGY
     West Africa is one of the more geologically prospective regions for gold deposits in the world. Lower Proterozoic rocks are known to contain significant gold occurrences and exist in West Africa in abundance. The Birimian greenstone belts, part of the Lower Proterozoic, which are younger than the Archaean greenstones of Canada, Australia and South Africa, contain similar types of ore deposits and are located in Ghana, Côte d’Ivoire, Burkina Faso, Guinea, Mali, Senegal and Niger. Although a significant amount of geological information has been collected by government and quasi-government agencies in West Africa, the region has largely been under-explored by mining and exploration companies using modern day technology. Most of our exploration properties are situated within the Birimian Formation, a series of Lower Proterozoic volcanic and sedimentary rocks. The West African Birimian sequences host a number of world class gold deposits and producing gold mines.
     The Central African gold belts have a long history of gold production, particularly during the colonial era but due to regional instability they have seen little modern exploration. The Kibalian greenstone belts of northeastern DRC are comprised of Archaean Kibalian (Upper and Lower) volcanisedimentary rocks and ironstone-chert horizons metamorphosed to greenschist facies. They are cut by regional-scale north, east, northeast and northwest trending faults and are bounded to the north by the Middle Achaean West Nile granite-gneiss complex and cut to the south by the Upper Congo granitic complex. Our Kibali gold project is located within the Moto greenstone.
     Our strategy was initiated before the current entry of our competitors into West Africa and we believe that this enabled us to secure promising exploration permits in the countries of Côte d’Ivoire, Mali, Burkina Faso, and Senegal at relatively low entry costs.
ORE RESERVES
     Only those reserves which qualify as proven and probable reserves for purposes of the SEC’s Industry Guide Number 7 are presented in this Annual Report. Pit optimization and open pit designs are carried out at a gold price of $800 per ounce. Underground reserves are also based on a gold price of $800 per ounce.
     Morila reserves have been estimated by Mr. Stephen Ndede, an officer of the company and competent person. The Loulo open cast mineral reserves were calculated by Mr. Inigo Osei under supervision by Mr. Onno ten Brinke, an officer of the company and competent person. The Loulo underground mineral reserves were calculated by Mr. Chris Moffat, an officer of the company and competent person. The Tongon open pit mineral reserves were calculated by Mr. Samuel Baffoe, an officer of the company under the supervision of Mr. Onno ten Brinke, an officer of the company and competent person. The Gounkoto, Kibali and Massawa project open pit mineral reserves were estimated by Mr. Onno ten Brinke, an officer of the company and competent person, while the Kibali project underground mineral reserves were calculated by Mr. Paul Kerr, an officer of SRK Consulting Perth and competent person. All reserves were verified and approved by Mr. Rodney Quick, our General Manager: Evaluation and Environment and competent person.
     Total reserves as of December 31, 2010 amounted to 203.93 million tonnes at an average grade of 3.78g/t, for 24.76 million ounces of gold of which 16.39 million ounces are attributable to us.
     In calculating proven and probable reserves, current industry standard estimation methods are used. The geological estimates were calculated using classical geostatistical techniques, following geological modeling of the borehole information. The sampling and assaying is done to internationally acceptable standards and routine quality control procedures are in place.
     All reserves are based on feasibility or prefeasibility level studies. Factors such as grade distribution of the orebody, planned production rates, forecast working costs, dilution and mining recovery factors, geotechnical parameters and metallurgical factors as well as current forecast gold price are all used to determine a cut-off grade from which a life of mine plan is developed in order to optimize the profitability of the operation.

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     The following table summarizes the declared reserves at our mines and s as of December 31, 2010:
                                                                         
    Proven Reserves   Probable Reserves   Total Reserves
Operation/   Tonnes   Grade   Gold   Tonnes   Grade   Gold   Tonnes   Grade   Gold
Project++   (Mt)   (g/t)   (Moz)   (Mt)   (g/t)   (Moz)   (Mt)   (g/t)   (Moz)
Morila +
    5.86       1.68       0.32       6.69       1.14       0.24       12.55       1.39       0.56  
Loulo +
    4.54       2.98       0.43       40.89       4.63       6.09       45.43       4.47       6.52  
Tongon +
    0.42       1.93       0.03       36.69       2.47       2.91       37.11       2.46       2.94  
Gounkoto +
                      17.11       5.10       2.80       17.11       5.10       2.80  
Massawa +
                      17.42       3.36       1.88       17.42       3.36       1.88  
Kibali+
                      74.32       4.21       10.05       74.32       4.21       10.05  
Total
    10.82       2.23       0.78       193.12       3.86       23.98       203.93       3.78       24.76  
 
+   Our attributable share of Morila is 40%, Loulo 80%, Gounkoto is 80%, Tongon 89%, Massawa 83.25% and Kibali 45%.
 
++   Our reserves are calculated at a weighted average cut off grade of 2.38g/t for Loulo, 0.97g/t for Morila, 0.85g/t for Tongon, 1.40g/t for Gounkoto, 1.10g/t for Massawa, and 1.59g/t for Kibali.
     At Loulo, a 10% mining dilution at zero grade and an ore loss of 5% has been incorporated into the estimates of reserves and are reported as mill delivered tonnes and head grades. At the Tongon project a dilution of 15% at zero grade and an ore loss of 2% has been modeled for the Southern zone and for the Northern zone, dilution has been set at 10% with ore loss at 3%. At Gounkoto and Massawa a dilution of 10% and an ore loss of 3% has been used. Metallurgical recovery factors have not been applied to the reserve figures since these are the estimates of the material to be delivered to the mill. Metallurgical recovery is used to determine the cut off grade at which to report mineral reserves. The average metallurgical recovery factors used are 89% for the Morila mine, 93.5% for the Loulo open pit material and 90.5% for Loulo underground material, 90.8% for the Tongon project, 92% for the Gounkoto project, 90% for the Massawa project and between 83 and 86% for Kibali open pit projects depending on ore type and 91% for Kibali underground material.
MINING OPERATIONS
Loulo
     Loulo is controlled by a Malian company, Société des Mines de Loulo SA (Somilo), which is owned 80% by us and 20% by the Malian government. The Loulo mine complex is comprised of two open pit operations, Yalea and Gara, and two corresponding underground mines, the first of which has commenced operations and the second which is now in construction.
     Loulo is located in western Mali, bordering Senegal, adjacent to the Falémé River. The mine is located within the Kedougou-Kéniéba inlier of Birimian rocks which hosts several major gold deposits, namely Gara, Yalea and Gounkoto on the Loulo lease as well as Sadiola and Yatela in Mali and the Senegalese deposits of Massawa and Sabodala.
     In 2010, Loulo produced 316,539 ounces of gold at a total cash cost of $712 per ounce. The mine reported gold sales of $363.7 million and profit from mining of $140.7 million.
                 
Production results for the 12        
months ended December 31,   2010   2009
Mining
               
Tonnes mined (000)
    38,932       27,977  
Ore tonnes mined (000)
    4,597       3,353  
Milling
               
Tonnes processed (000)
    3,158       2,947  
Head grade milled (g/t)
    3.4       4.2  
Recovery (%)
    92.5       87.7  
Ounces produced
    316,539       351,591  
Ounces sold
    313,122       349,660  
Average price received+ ($/oz)
    1,162       864  
Cash operating costs ($/oz)
    647       475  
Total cash costs ($/oz)
    712       525  

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Production results for the 12        
months ended December 31,   2010   2009
Profit from mining activity ($000)
    140,717       118,326  
Gold sales+ ($000)
    363,717       301,963  
 
+   Includes 41,748 ounces for the year ended 31 December 2010 (31 December 2009: 84,996 ounces) delivered into the hedge at $500/oz (year ended 31 December 2009; $435/oz).
     Higher revenues were partially offset by higher mining costs, primarily due to increased open pit mining costs resulting from increased tonnes mined, deepening pits, revised mining rates and the introduction of a second mining contractor at the site, necessitated in part by the slower build up in tonnes from the underground mine.
Ore Reserves
     Total ore reserves for the years ended December 31, 2010 and 2009 are inclusive of depletions due to mining and additions from the Loulo 3 open pit.
                                                                         
                                                            Attributable  
                                                            gold**  
            Tonnes   Grade   Gold   (Moz)     (Moz)  
            (MT)     (Mt)     (g/t)     (g/t)     (Moz)     (Moz)     (80%)     (80%)  
at 31 December   Category     2010     2009     2010     2009     2010     2009     2010     2009  
Mineral reserves***
                                                                       
o Stockpiles
  Proven     2.15       1.11       1.65       1.78       0.11       0.06       0.09       0.05  
o Open pit
  Proven     2.38       4.44       4.19       3.91       0.32       0.56       0.26       0.45  
 
  Probable     1.66       2.46       2.48       2.47       0.13       0.20       0.11       0.16  
o Underground
  Proven                                                                
 
  Probable     39.23       41.45       4.72       4.66       5.96       6.22       4.76       4.97  
TOTAL MINERAL RESERVES*
  Proven and probable     45.43       49.45       4.47       4.42       6.52       7.03       5.22       5.63  
 
*   Open pit mineral reserves are reported at a gold price of $800/oz and an average cut-off of 1.23g/t and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Inigo Osei, under supervision of Mr. Onno ten Brinke, an officer of the company and competent person. Underground mineral reserves are reported at a gold price of $800/oz and a cut-off of 2.5 g/t and include dilution and ore loss factors. Underground mineral reserves were calculated by Mr. Chris Moffatt, an officer of the company and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 80% interest in Loulo.
 
***   Loulo reserves calculated at a weighted average cut off grade of 2.38g/t.
Operations
     Gold production of 316,539 ounces for the year was below management’s guidance of 400,000 ounces mainly due to lower plant throughput as a result of reduced plant availability and efficiency during the first six months of the year and the impact of lower run of mine grades due to the slower than planned build-up of underground production.
     Lower gold production negatively impacted gold sales which totaled $363.7 million for the year. This was offset by the higher gold price received. Total royalties paid during the year amounted to $20.4 million and cash operating costs totaled $202.6 million, resulting in profit from mining activities of $140.7 million for 2010.
     The total cash cost for the year was $712/oz of gold sold. Capital expenditure for the year was $86.9 million and this was covered by the cash flows generated by the mine during the year.
Underground Mining and Development
     Following the termination due to poor health, safety and environmental performance of the former underground contractor at the end of 2009, African Underground Mining Services Mali SARL (AUMS) has been contracted for the underground development of

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Gara and recently joined us in the further development of the Yalea underground mine with the commencement of another decline from the base of the Yalea pit.
     Yalea Underground Development: During 2010, a total of 4,806 meters of development was completed and 647,810 tonnes of ore at a grade of 3.69g/t was hauled to surface. The Yalea declines have now been advanced to a distance of 2,004 meters from surface and a vertical depth of 327 meters. Overall development was down on budget and against 2009. Stoping saw an improved performance during 2010 against 2009 but was also below target.
     Gara Underground Development: During 2010, a total of 1,879 meters development was completed. The Gara declines have now been advanced to a distance of 614 meters and a vertical depth of 127 meters. Overall development is down on plan, due to the influx of water during the fourth quarter and a starting date delay, but development rates picked up towards the end of the year.
     The following table shows a summary of the underground section’s progress to date:
                                         
    Development   Ore           Ounces    
at 31 December 2010   (meters)   (tonnes)   Grade (g/t)   mined (oz)   Total (tonnes)
 
YALEA
                                       
Q1
    1,611       158,944       4.32       22,056       215,461  
Q2
    1,501       123,880       3.88       15,471       187,363  
Q3
    909       157,196       3.40       17,174       196,894  
Q4
    785       207,790       3.30       22,071       275,895  
TOTAL 2010
    4,806       647,810       3.69       76,772       875,613  
Total 2009
    5,788       500,267       4.38       70,395       763,677  
Total 2008
    3,860       105,411       4.13       13,982       288,298  
TOTAL YALEA
    14,454       1,253,488       4.14       161,149       1,927,588  
GARA
                                       
Q1
                             
Q2
    265                         24,346  
Q3
    628                         56,613  
Q4
    986                         94,742  
TOTAL 2010
    1,879                         175,701  
TOTAL GARA
    1,879                         175,701  
Processing
     The utilization of mills and crusher was 84.9% and 70.9% respectively during 2010, while the average engineering availability was 90.5% and 81.1%. The mill and crusher have engineering standards of 95% and 85%. The negative variance for the mills is attributed to downtime due to various technical issues including a power outage.
     Major projects completed in 2010 include the upgrade of the secondary ore crushing circuit, a new warehouse, the Gara portal frames, vehicles and conveyor decline, the mill rotary magnet, the fourth tailing pump, and the installation of the Acacia module for gravity gold recovery. In 2011, the focus will be on the installation of the third mill, upgrading the power plant with additional medium speed energy efficient engines and the conversion of the medium speed engines to Heavy Fuel Oil (HFO) in order to increase the plant’s fuel efficiency.
Exploration
     In 2010, exploration continued to delineate open pit resource ounces from satellite deposits near the Loulo plant. Work concentrated on two main structures which not only host the Gara and Yalea deposits but also Loulo 3, Loulo 2, Loulo 1 and PQ10. While underground grade control drilling at Yalea extended the high grade mineralization associated with the purple patch.
Morila
     Morila is owned by a Malian company, Société des Mines de Morila SA (Morila), which in turn is owned 80% by Morila Limited and 20% by the Malian government. Morila Limited is jointly owned by ourselves and AngloGold Ashanti Limited and the mine is controlled by a 50:50 joint venture management committee. Responsibility for the day-to-day operations rests with us.

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     The mine was commissioned in October 2000 and, since the start of production to December 2010, has produced approximately 5.8 million ounces of gold at a total cash cost of $216 per ounce.
     As planned, the mine was converted in April 2009 from open pit mining to a 100% stockpile treatment operation. Gold production for 2010 was 238,607 ounces. Total cash cost for the year was $669 per ounce, including stockpile adjustments of $246 per ounce. The operation is expected to come to an end in 2013, although the mine is currently investigating the opportunity to retreat the TSF material, which would extend the mine life by approximately 5 years. Despite the drop in grade associated with processing the stockpiles, the mine still reported $133.9 million in profits from mining activity in 2010.
     In order to leave a sustainable source of economic activity for the local community after the closure, an agribusiness feasibility study has been advanced in conjunction with USAID.
                 
Production results for the 12 months ended December 31,   2010     2009  
Mining
               
Tonnes mined (000)
    16       3,657  
Ore Tonnes mined (000)
    13       1,620  
Milling
               
Tonnes processed (000)
    4,354       4,303  
Head grade milled (g/t)
    1.9       2.7  
Recovery (%)
    90.7       91.4  
Ounces produced
    238,607       341,661  
Ounces sold
    238,607       341,661  
Average price received ($/oz)
    1,230       968  
Cash operating costs ($/oz)
    595       422  
Total cash costs ($/oz)
    669       480  
Profit from mining activity
               
($000)
    133,855       166,713  
Stockpile adjustment# ($/oz)
    246       98  
Attributable (40% proportionately consolidated)
               
Gold sales ($000)
    117,427       132,231  
Ounces produced
    95,443       136,664  
Ounces sold
    95,443       136,664  
Profit from mining activity
               
($000)
    53,542       66,685  
 
#   The stockpile adjustment per ounce reflects the charge expensed/(credit deferred) in respect of stockpile movements during the period divided by the number of ounces sold. The total cash cost per ounce includes non-cash stockpile adjustments.
Ore Reserves
     Remaining reserves were lower than last year after mining depletion has been taken into account. Open pit mining activities ended in April 2009, and therefore the current reserves are based on already mined stockpiles only.
                                                                         
                                                            Attributable  
                                                            gold**  
            Tonnes   Grade   Gold   (Moz)     (Moz)  
            (MT)     (Mt)     (g/t)     (g/t)     (Moz)     (Moz)     (40%)     (40%)  
at 31 December   Category     2010     2009     2010     2009     2010     2009     2010     2009  
Mineral reserves***
                                                                       
o Stockpiles
  Proven     5.86       9.85       1.68       1.74       0.32       0.55       0.13       0.22  
 
  Probable     6.69       6.91       1.14       1.14       0.24       0.25       0.10       0.10  
TOTAL MINERAL RESERVES
  Proven and probable     12.55       16.76       1.39       1.49       0.56       0.80       0.22       0.32  

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*   Stockpile mineral reserves are those stockpiles which are economic at a $800/oz gold price and reported at a 0.97g/t cut-off. Stockpile mineral reserves were calculated by Mr. Stephen Ndede, an officer of the company, and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 40% interest in Morila.
 
***   Cutoff grade of 0.97g/t used to calculate the Morila reserves.
Operations
     In April 2009, Morila managed a successful transition from the open pit operation to stockpile retreatment, operated by Mining and Rehandling Services.
     Initially, the conventional Carbon in Leach plant had been designed to treat 260,000 tonnes of ore. This plant was upgraded in 2004 to treat 360,000 tonnes and by the end of 2010, 4,353,877 tonnes of sulfide had been treated. In spite of the low grade ore being treated, good gold recoveries were achieved due to improved oxygen plant availability, good control of the leach parameters, the increase in the gravity recovery and the oxygenation system upgrade.
     Total ounces of 238,607 were produced during 2010 at a total cash cost of $669/oz sold. This translated into profit from mining of $133.9 million for the year which enabled the mine to pay dividends of $135.0 million to shareholders during 2010.
     The 91.5% engineering availability was in line with the 2010 plan despite the downtime associated with the SAG mill gearbox changeover in February and December, cyclone pump conversion in May and extended crusher maintenance during January. Planned maintenance using the PRAGMA system helped to further enhance the mine maintenance program.
     The mine generates its own power via a diesel electrical generating station equipped with five Allen engines (6 Mwatts each). Three are producing power, one is on maintenance and one is on standby. 2010 consumption at 130.7 mkWh was well contained and also contributed to cost savings.
Tailings Project
     During 2010, a study on the Morila Tailing Storage Facility (TSF) retreatment project was completed. Based on management’s estimates and reclamation scoping, the project showed marginal economics at a gold price of $1,200/oz but demonstrated significant benefits and costs savings as far as mine closure plans were concerned. Based on these conclusions, the board agreed that the project should proceed to a bankable feasibility study.
Mine Closure
     Currently the plan provides for mine closure in 2013. However, the outcome of the TSF retreatment feasibility study could impact on the closure plan, its costs and risks as well as its timing.
     An internal closure coordinator has been appointed and the Ministry of Mines has revived the closure committee (including representatives from government, the local community, employees and management). The committee met quarterly in Bamako to review the closure plan and the mine’s activities related to closure.
     A communication campaign was conducted at local and regional level to inform all the stakeholders of the closure plan and the possible options.
     Work continued on the agribusiness project which is planned to ameliorate the impact of mine closure on the local economy by offering alternative employment and economic opportunities to the local community. During the year the project, which has now partnered with a number of NGO agencies, progressed to a stage in which pilot poultry, animal husbandry, honey production and fishing projects are being initiated to test the viability and sustainability potential of each activity.
     The key next steps to be addressed in order to roll out the larger project is the completion of a final comprehensive integrated feasibility study and business plan along with a solution regarding land ownership issues.

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Tongon
     Tongon is owned by an Ivorian company, Société des Mines de Tongon SA, in which we have an 89% interest, the State of Côte d’Ivoire a 10% interest, and the remaining 1% held by a local Ivorian company.
     The Tongon project is located within the Nielle exploitation permit in the north of Côte d’Ivoire, 55 kilometers south of the border with Mali.
     Tongon is an open-cut mining operation and employs the four standard mining practices of drill, blast, load and haul. Mining started in April 2010 and Tongon has a ten year Life of Mine (LOM). Two main pits are scheduled in the LOM as follows:
  South Zone pit will be mined from 2010 to 2016 to the final pit bottom; and
 
  North Zone pit, which is smaller than the South Zone, will be mined from 2015 to 2019.
         
Production results for the 12      
months ended December 31,   2010  
Mining
       
Tonnes mined (000)
    7,520  
Ore tonnes mined (000)
    898  
Milling
       
Tonnes processed (000)
    355  
Head grade milled (g/t)
    2.67  
Recovery (%)
    92.2  
Ounces produced
    28,126  
Ounces sold
    4,698  
Average price received ($/oz)
    1,389  
Cash operating costs ($/oz)
    418  
Total cash costs ($/oz)
    459  
Profit from mining activity ($000)
    4,369  
Gold sales+ ($000)
    6,527  
Ore Reserves
     Ore reserves at Tongon are sourced within two open pits, the Northern and Southern Zone. Mining commenced in the Southern pit in April 2010. Ore reserves are slightly lower this year compared to 2009 due to depletion from mining in and geological model changes form the inclusion of advanced grade control drilling over the two open pit reserves, which saw reserves increase in the northern pit but decrease in the southern pit.
                                                                         
                                                            Attributable
            Tonnes   Grade   Gold   gold**
                                                            (Moz)   (Moz)
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   (89%)   (89%)
at 31 December   Category   2010   2009   2010   2009   2010   2009   2010   2009
 
Mineral reserves***
                                                                       
o Stockpiles
  Proven     0.42             1.93             0.03             0.02        
o Open pit
  Probable     36.69       38.02       2.47       2.63       2.91       3.22       2.59       2.87  
TOTAL MINERAL RESERVES*
  Proven and probable     37.11       38.02       2.46       2.63       2.94       3.22       2.62       2.87  
 
*   Open pit mineral reserves are reported at a gold price of $800/oz and 0.85g/t cut-off and include dilution and ore loss factors. Open pit ore reserves were calculated by Mr. Samuel Baffoe, an officer of the company, under the supervision of Mr. Onno ten Brinke, an officer of the company and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 89% interest in Tongon.
 
***   Cutoff grade of 0.85g/t used to calculate the Tongon reserves.

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Operations
     Tongon started production during the fourth quarter of 2010 and 355,000 tonnes of ore was milled at a grade of 2.67g/t. The mine produced 28,126 ounces at a total cash cost of $459/oz sold. Profit from mining was $4.4 million. This was impacted by 23,428 ounces that were unsold at year end resulting from disruptions in Côte d’Ivoire following the disputed elections in November 2010.
Mining
     Mining operations are carried out by Mine de Tongonaise SA (ToMi), a contract mining company and subsidiary of DTP Terrassement. The mine operates 24 hours a day based on a working roster of three eight-hour shifts. The major load and haul mobile fleet consists of one Liebherr 984 and three Liebherr 9350 diggers and 15 Cat 777F haul trucks. The mining feet has an annual capacity of approximately 26Mtpa at a strip ratio of 4:1.
Processing
     The Tongon plant design is based on well-established gravity/flotation and Carbon in Leach technology. The plant is designed to treat 3.6 million tonnes per annum of oxide, transition and sulfide ores which can be campaigned through the plant separately or fed in a combination if required. There is a common primary crushing plant for oxides and sulfides. Oxides, which may at times contain high clay quantities and moisture content, have been identified to potentially cause material handling problems when processed through the full crushing circuit. As a result, the design allows the plant to bypass the secondary and tertiary crushing circuit, thus feeding primary jaw crusher product of size 100% passing 300 millimeters directly onto the ball mill feed conveyor, bypassing the stockpiling facility.
     Transition and sulfide ores are treated through a primary, secondary and tertiary crushing circuit to produce a ball mill feed of size 100% passing 20 millimeters. The primary crushing plant consists of a complete standby circuit, which allows higher, but also more consistent throughput and better maintenance planning. Milling consists of two ball mills when treating oxide, transition or sulfides. The discharge from each is pumped in separate cyclone feed pump and classifier systems.
     First ore was fed through mill no. 1 in October 2010. The feed rate was steadily increased via one mill, as the process circuits and systems were debugged, up to the designed throughput rate of 456tph.
     Gold recovery of 92.2% was better than forecast and overall 28,126 ounces of gold was produced.
Engineering
     Overall mill availability was 72.6% for 2010. A gradual increase in mill availability was obtained from 69.7% in October to 77.6% in December. Commissioning issues mainly associated with feeding the softer clay containing ore through the system were systematically addressed by the engineering team as part of the commissioning process which included ongoing modifications and operational enhancements with respect to the relevant process sections to facilitate ease of tonnage throughput and improvement in efficiency of key process circuits.
     The power plant availability and utilization were 90% and 51% respectively for 2010. All 20 of the power plant generators, including the PLC automatic synchronization, were commissioned ahead of the plant start-up.
Developments
Grid Power
     The Korogho substation is 90% complete. The main outstanding items are the installation of the related equipment and the 33kV link to the national grid. The forecast grid power line completion date is the second quarter of 2011.
Tongon and Poungbe Village Electrification

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     An agreement between Tongon and Enterprise d’Electricite, CIE and Power Management and Electrical Services was reached with respect to the electrification of Tongon and Poungbe villages. The project started in January 2011 and is scheduled for completion in the second quarter of 2011.
Maintenance Planning
     The software system ‘On Key’ from Pragma which was chosen as the CMMS system to be used at our operating mines has been 80% installed at Tongon. Loading of the lubrication and preventative maintenance tasks for the process plant is complete. Extensive configuration work remains to streamline the generation of job cards for these tasks and ensure these fit in with the existing business processes and staffing configurations.
Exploration
     In terms of exploration, 2010 was a critical year which saw great improvements in our understanding of the Senoufo Greenstone Belt. This followed the completion of an airborne EM survey flown in January, which enabled not only a reinterpretation of the geological and structural framework but also a target generating and prioritization exercise. Since then, follow-up work was focused on the most prospective targets within a 15 kilometer radius from the plant. These have been advanced through mapping, RAB, RC drilling and trenching.
Gounkoto
     The Gounkoto project is located approximately 25 kilometers south of the Loulo gold plant on the Loulo Exploitation Permit. We hold an effective 80% interest in the project.
     The project moved rapidly in 2009 from a greenfields exploration find through a scoping study and completed a prefeasibility study in the first quarter of 2010. In addition, the environmental and social impact assessment and feasibility study were completed during 2010.
     We are currently engaged in the process of applying for the formation of the new Gounkoto Exploitation Permit which is planned to be split from the current Loulo permit, and which will be owned by a separate company, Société des Mines de Gounkoto SA.
     The Gounkoto mine development (Gounkoto) is located within the Kedougou-Kenieba erosional inlier which is underlain by Lower Proterozoic Birimian metasedimentary-volcanic sequences. The area is extensively laterized and covered by depositional regolith, with approximately only 6% outcrop. The host rocks to the Gounkoto mineralization are a sequence of the grained arkoses which have suffered an early silica carbonate alteration event. More than 95% of the sulfide is pyrite (with minor arsenopyrite and chalcopyrite) and additionally gold tellurides are present. Mineralization is bounded by a hangingwall shear and footwall mylonite. In the hangingwall there is a prominent limestone unit which is used as a marker horizon.
Ore Reserves
     Following the completion of the mineral reserve in September 2010, drilling continued and completion of a revised geological model was incorporated into the feasibility study to produce mineral reserves as at December 31, 2010.
                                                                         
                                                            Attributable
            Tonnes   Grade   Gold   gold**
                                                            (Moz)   (Moz)
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   (80%)   (80%)
at 31 December   Category   2010   2009   2010   2009   2010   2009)   2010   2009
 
Mineral reserves***
                                                                       
o Open pit
  Probable     17.11       7.47       5.10       6.83       2.80       1.64       2.24       1.31  
TOTAL MINERAL RESERVES*
  Probable     17.11       7.47       5.10       6.83       2.80       1.64       2.24       1.31  
 
*   Open pit mineral reserves are reported at a gold price of $800/oz and 1.40g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Onno ten Brinke, an officer of the company and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 80% interest in Gounkoto.
 
***   Cutoff grade of 1.40g/t used to calculate the Gounkoto reserves.

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     Further potential exists below the present design pit where an additional 11.04 million tonnes at 5.54g/t for 1.96 million ounces of mineralized material supports the potential of underground extensions. Drilling is currently underway to test depth and strike extensions and these results will be used to evaluate upside potential from extending the Gounkoto orebody together with incremental material from Faraba and P64.
Feasibility Study
     A feasibility study was completed on the revised open pit mineral reserve calculated in September 2010. The feasibility is based on a toll treat project whereby the ore is mined and fed through an onsite fixed crusher at Gounkoto. The crushed ore is then to be loaded onto dedicated haul trucks and trucked and direct fed into the Loulo plant. Infrastructural development will include two diversion dams and a diversion trench to divert the seasonal rain flows from the east. Support facilities will include accommodation, workshops and offices. The use of the Loulo plant to process Gounkoto as opposed to building a standalone operation at Gounkoto is better utilization of the current infrastructure and human capital and has reduced the environmental footprint. It has significant synergies with the present open pit mining fleet which are nearing the completion of open pit mining at Loulo, while it also allows for the faster realization of value from Gounkoto as opposed to a standalone operation and as such is better use of our capital.
     An economic assessment on the financial viability of the Gounkoto project open pit reserve has been carried out, based on the following parameters summarized below:
    Total ore mined of 13.79 million tonnes of ore containing 2.3 million ounces of gold at a strip ratio of 9.7:1, to give total tonnes mined of 147 million tonnes;
 
    Mining costs average $2.86/tonne over the life of mine;
 
    Crush and haul costs average $5.22/tonne ore;
 
    Mill throughput of 100,000 tonnes per month to be treated at the Loulo plant;
 
    Plant costs average $21.69/tonne;
 
    Average plant recovery of 93%;
 
    G&A cost is $5.19/tonne over life of mine, including outside engineering costs;
 
    Capital cost is $84.7 million including site construction, plant upgrade, preproduction and ongoing capital.
     A financial model was run using a $1,000/oz gold price with an average 1.2M tonnes per year throughput, together with a 5 year tax holiday and 6% royalty which produced the following:
             
  Initial capital payback period   2.0 years
 
           
  Mine Life (post processing plant commissioning)   11 years
 
           
  Net after tax cashflow   $ 747m  
 
           
  IRR     69 %
 
           
  Total cash cost   $420/oz
     Based on the positive financial results the board approved the development of Gounkoto project.
Development
     Mining started in January 2011 with ore currently stockpiled until the crusher station is ready, which is expected to be in the third quarter of 2011. The dam and river diversion together with support facilities are planned for completion by midyear. Project work will continue to develop the underground resources and complete the initial design studies on the underground opportunities. In addition, a heap leach prefeasibility study is being carried out to potentially process the low grade Gounkoto material and the satellite deposits of Faraba and P64.
Exploration
     The exploration team at Gounkoto has been solely focused on completing the fast-tracked feasibility study and has succeeded in progressing the field work for the project from first borehole to submitted feasibility document in 26 months. Work at Gounkoto has included all resource definition drilling on the main orezone and the footwall and hangingwall structures.

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     The team has also completed the metallurgical, piezometric, geotechnical drilling and advanced grade control drilling and has sterilized the area around the pit to allow for the construction of the infrastructure.
Massawa
     The Massawa project is situated in eastern Senegal, approximately 75 kilometers west of the border with Mali. We hold an effective 83.25% interest in the project. The government of Senegal retains a 10% carried interest in the project while the balance is held by a Senegalese joint venture partner.
     Massawa is located within the Kedougou-Kenieba erosional inlier which is underlain by Lower Proterozoic Birimian metasedimentary-volcanic sequences. Regionally it is located on the plus 150 kilometer long northeast-southwest trending Main Transcurrent Shear Zone (MTZ) which is a significant transcrustal dislocation between the Mako Supergroup (basaltic flow rocks, minor intercalated volcaniclastics, and ultramafic sub volcanic intrusions) and the Diale-Dalema Supergroup (volcano-sedimentary to sedimentary rocks) within the Kedougou-Kenieba inlier. Mineralization at Massawa locates in various lithologies but is structurally controlled within anatomizing shears which converge to the north.
Prefeasibility study
     A prefeasibility study was completed by the end of 2009 and highlighted the complex nature of the metallurgy. Dedicated metallurgical drilling and extensive metallurgical testwork was undertaken this year to improve our understanding of geochemical and metallurgical characterization of the ore. Batch testwork completed has shown pressure oxidation to be very effective in releasing the gold from the sulfides. Significant additional bondwork testwork was also conducted which confirmed the hardness of the ore. This combined with the PoX process will make the Massawa project a high energy user and thus alternative options to diesel and heavy fuel oil power generation are required. Additional drilling was also conducted to test the geological model of the central zone which resulted in a revised geological model of higher tonnage and lower grade.
Ore Reserves
     Ore reserves were calculated by incorporating the new geological model into the 2009 prefeasibility, using a $800 per ounce gold price, for the pit design.
                                                                         
                                                            Attributable
                                                            gold**
            Tonnes   Grade   Gold   (Moz)   (Moz)
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   (83.25%)   (83.25%)
at 31 December   Category   2010   2009   2010   2009   2010   2009   2010   2009
 
Mineral reserves***
                                                                       
o Open pit
  Probable     17.42       10.51       3.36       4.62       1.88       1.56       1.56       1.30  
 
TOTAL MINERAL RESERVES*
  Proven and probable     17.42       10.51       3.36       4.62       1.88       1.56       1.57       1.30  
 
 
*   Open pit mineral reserves are reported at a gold price of $800/oz and 1.1g/t cut-off and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Onno ten Brinke, an officer of the company and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 83.25% interest in the Massawa gold project.
 
***   Cutoff grade of 1.1g/t used to calculate the Massawa reserves.
Development
     Due to the time required to secure a power solution, further pilot plant testwork has been put on hold. The exploration team has been mobilized to delineate and test the large number of satellite targets in the area with the focus of finding additional non-refractory mineralization that could incrementally add to the project.
     A heap leach study will also be undertaken to determine if this could be a viable option for the low grade non-refractory material available that will be delineated further by the ongoing exploration programs.
Exploration

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     The exploration team focused on determining the geological controls within the Massawa orebody and followed up with further exploration on Sofa, Delaya, Bakan Corridor and Bambaraya.
Kibali
     The Kibali project is controlled by a 50:50 joint venture, between ourselves and AngloGold Ashanti Limited, which holds an effective 90% interest in Kibali Goldmines SPRL.
     The remaining 10% of the shares are held by Sokimo, the parastatal mining company of the DRC. We acquired our interest in this project following the acquisition of Moto Goldmines, in conjunction with AngloGold Ashanti, and the further acquisition of a 20% interest from Sokimo on behalf of the joint venture. The Kibali project is located some 560 kilometers northeast of the city of Kisangani and 150 kilometers west of the Ugandan border town of Arua in the northeast of the DRC.
Geology and Mineralization
     The goldfields at the Kibali gold project are located within the Moto greenstone belt, which is comprised of the Archaean Kibalian (Upper and Lower) volcanisedimentary rocks and ironstone-chert horizons that have been metamorphosed to greenschist facies. The goldfields at Kibali are transgressed by regional-scale north, east, northeast and northwest trending faults and are bounded to the north by the Middle Archaean West Nile granite-gneiss complex and cut to the south by the Upper Congo granitic complex. The stratigraphy consists of a volcanisedimentary sequence comprising fine-grained sedimentary rocks, several varieties of pyroclastic rocks, basaltic flow rocks, mafic-intermediate intrusions (dykes and sills) and intermediate-felsic intrusive rocks (stocks, dykes and sills). The sequence is variably altered from slight (texture benign) to intense (texture destructive) such that in some cases the protolith rock is unrecognizable. In the Kibali district the majority of gold mineralization identified to date is disseminated style, hosted within a sequence of volcaniclastics, coarse volcaniclastics, sedimentary rocks and banded ferruginous cherts. The mineralization is generally structurally controlled and associated with quartz-carbonate alteration and pyrite.
     The majority of mineralization currently being delineated occurs within two broad mineralized trends. The first group lies within a northeast trending structural-alteration corridor; from the Kibali prospect in the southwest to the Ndala prospect in the northeast, called the Kibali-Durba-Karagba Trend. The second group lies within a northwest trending zone that stretches from the Pakaka prospect in the southeast to the Mengu Hill prospect in the northwest and is called the Pakaka-Mengu Trend.
Ore Reserves
     Following the completion of the Moto acquisition, we have moved swiftly to update the ore reserves, retaining the services of SRK Consulting in Perth, supported by in-house skills from both ourselves and AngloGold Ashanti, to ensure continuity with regards to the updates.
     Open pit reserves have been calculated in house, while SRK Consulting completed an update of the underground ore reserves based on a $800 gold price. New reserve numbers are presented below and reflect a significant increase in underground ore reserves to almost 7 million ounces, bringing the total ore reserve number to 10.05 million ounces. The main changes to the ore reserve resulted from the inclusion of additional stopes in the mine design.
                                                                         
                                                            Attributable
            Tonnes   Grade   Gold   Gold**
                                                            (Moz)   (Moz)
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   (45%)   (45%)
at 31 December   Category   2010   2009   2010   2009   2010   2009)   2010   2009
 
Mineral reserves***
                                                                       
 
o Open pit
  Probable     37.38       33.55       2.67       3.02       3.21       3.26       1.44       1.47  
o Underground
  Probable     36.94       30.25       5.76       6.10       6.84       5.93       3.08       2.67  
 
TOTAL MINERAL RESERVES*
  Probable     74.32       63.80       4.21       4.48       10.05       9.19       4.52       4.14  

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*   Open pit mineral reserves are reported at a gold price of $800/oz and an average cut-off of 1.08g/t and include dilution and ore loss factors. Open pit mineral reserves were calculated by Mr. Onno ten Brinke, an officer of the company and competent person. Underground mineral reserves are reported at a gold price of $800/oz and a cut-off of 2.1g/t and include dilution and ore loss factors. Underground mineral reserves were calculated by Mr. Paul Kerr, an officer of SRK Consulting and competent person.
 
**   Attributable gold (Moz) refers to the quantity attributable to ourselves based on its 45% interest in the Kibali gold project.
 
***   Kibali reserves calculated at a weighted average cut off grade of 1.59g/t.
Progress
     All key pre-production targets set for 2010 have been met by the Kibali development team and the project is on track for the start-up of construction by the middle of 2011, six months earlier than was originally scheduled.
     The implementation of the RAP is already underway, with the acquisition from the State of the site for a new town, to be known as Kokiza, as well as farmland. Model homes have been built and the process of house selection by each of the families involved has started. The company and its partners continue to work with the local community to alleviate the loss of income derived from illegal informal mining, which has been ended on the site. Alternative work programs have already been created and these include the production of basic building materials to be used for the construction of the RAP houses as well as the mine. Progress on other fronts includes the substantial upgrading of the regional infrastructure through the completion ahead of schedule of the roads between Aru/Doko, Nzoro and Aru/Arriwara — the latter being a contribution towards the president’s priority fund aimed at improving infrastructure. The completion of these roads has already directly benefited the local communities by improving the availability of basic goods and therefore significantly cutting their cost of living. The Aru/Doko road is particularly significant as it links Kibali with international ports.
Feasibility Study
     An update to the feasibility study along with an updated financial model was generated based on a new mining plan which incorporated an integrated mining plan including multi open pit and underground schedule. The study will now go through a process of further internal and external review and optimization of the mining and processing rates, capital estimate scheduling ahead of final design and approval which is targeted for mid 2011. The revised open pit and underground mining designs and schedules support a 4Mtpa operation over an estimated 19 year mine life. Updated processing costs and G&A costs have been generated based on the larger plant throughput. A full flotation plant is expected to be commissioned on plant start-up, planned for late 2013. Full flotation and flash flotation circuits will be incorporated due to an overall increase in gold recovery. Carbon in Leach (CIL) treatment of the flotation tailings stream will be utilized as this significantly enhances the overall process recovery. During the update of the feasibility an opportunity for a larger project of 6Mt throughput was also identified, due to the large build up in ore stockpiles. As the feasibility update continues, more work will be done to optimize the project for the benefit of all stakeholders.
     The underground mine design was completed by SRK Perth and consists of an initial single decline that accesses the ore beneath the KCD pit and then connects with a vertical shaft ore hoisting system to exploit the high tonnage stopes of the 5,000 lode and deeper 9,000 lodes. A trade off investigation points towards a blind sink of the vertical shaft being the preferred method, thus divorcing the capital sink from the operating mine as opposed to a drill and ream method of shaft sinking which would intrinsically link the decline development to the shaft progress. RSV Perth has been awarded the feasibility study for the shaft, which is targeted for completion in May 2011, pending the completion of geotechnical drilling.
     The updated study, which is based only on existing reserves, currently anticipates:
    Total open pit ore mined of 37 million tonnes of ore containing 3.2 million ounces of gold at a strip ratio of 3.8:1, to give total tonnes mined of 141 million tonnes;
 
    Total underground ore mined of 37 million tonnes of ore containing 6.8 million ounces of gold;
 
    Open pit mining costs average $3.40/tonne over the life of mine;
 
    Underground mining costs of between $31 and $34/tonne
 
    Mill throughput of 4 million tonnes per year;
 
    Plant costs average $11.79/tonne;
 
    Open pit metallurgical recoveries between 83 and 86% depending on ore type
 
    Underground metallurgical recoveries of 91%
 
    G&A cost is $4.43/tonne over life of mine, including outside engineering costs;

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    Life of Mine capital cost, including 2010 expenditure, is $1.4 billion including site construction, plant, hydropower installations, preproduction and ongoing capital
     The financial model carried out using a $1,000/oz gold price gave the following returns and cash costs of production:
     
IRR
  21%
Total Cash Cost per ounce
  $388/oz
Development
     The first six months of 2011 will be dominated by the completion of the detailed costing and designs for the underground operation, shaft complex and detailed Tailings Storage Facility design and the costing to optimize the feasibility. Hydropower technical feasibility and environmental and social impact assessment studies are to be completed. This will be coupled with the start of pre-construction and establishment of the construction camp and brick making facilities. Advanced grade control drilling on the KCD pit is planned for the third quarter of 2011 in preparation of mining works. The physical implementation of the RAP started with the construction of the first houses in February 2011. The program is expected to take 24 months to complete.
     Specification of long lead time items will be completed in the second quarter to enable finalization of tender bids for the start of the construction phase for underground, surface operations and hydropower projects at the beginning of the third quarter of 2011.
Exploration
     Following the acquisition of Moto Goldmines at the beginning of the fourth quarter of 2009, we established a geological team on site at Kibali. The primary objective was to complete a detailed geological analysis of the KCD deposit, to understand the geology, structure, alteration and mineralization, and to construct a geological model, as well as to look at the possibility of a lateral link between the KCD and Gorumbwa deposits.
     Work undertaken included: diamond drilling (44 holes completed, 8,484 meters); core review of selective KCD holes (60 holes) and geological modeling; surface mapping of the KCD — Gorumbwa area; the completion of two strategic holes (1,557 meters) in the KCD — Gorumbwa gap; ongoing soil geochemistry over block 1 west of KCD, where four new gold anomalies were identified; sampling of the old Durba mill (251 samples); first pass interpretation of the airborne magnetic data; and reconnaissance pitting (10 pits) on the ATF concession.
     Objectives in 2010 at Kibali included continued reserve determination, not only on the KCD deposit but also the satellite deposits; the identification of new near mine ore reserves; and generative work on the wider lease area through the completion of soil sampling and an airborne electro-magnetic survey.
     The exploration team completed a detailed analysis of the KCD deposit, resulting in a new geological model which supported a growth in reserves from 4.5 million ounces at acquisition to 10.05 million ounces at the end of December 2010. Continuity of mineralization was confirmed between the Sessenge and KCD deposits and remains open down plunge. This will be tested by a program of deep drilling in 2011.
     An airborne electromagnetic survey was flown over the permit holding. Three-dimensional modeling and the integration of additional geological datasets has prioritized targets for drilling in 2011.
EXPLORATION REVIEW
     We have a portfolio of projects within some of the most prospective gold belts of both West and Central Africa. We have exploration projects in five African countries hosting 275 targets on 13,583 square kilometers of groundholding. We have an exploration team of more than 70 geoscientists.
Mali
Loulo
     In 2010 exploration delivered on two key objectives:

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    Completion of a positive feasibility study at Gounkoto
 
    Delivery of additional open pittable mineral resources to the Loulo plant
Gounkoto
     At Gounkoto, a positive feasibility was completed on the back of mineralized material totaling 5.53 million ounces at 5g/t. Work included drilling for mineralized material definition, metallurgical testwork, piezometry, sterilization of infrastructure and advanced grade control. All forms of drilling totaled 99,120 meters during 2010.
     The host rocks to the Gounkoto mineralization are a sequence of fine grained arkoses which have suffered an early silica carbonate alteration event. More than 95% of the sulfide is pyrite (with minor arsenopyrite and chalcopyrite) and additionally gold tellurides are present. Mineralization is bounded by a hangingwall shear and footwall mylonite. In the hangingwall there is a prominent limestone unit which is used as a marker horizon.
     The mineralization at Gounkoto has now been intersected over a 1.9 kilometer strike length and down to a depth of 642 vertical meters. The geometry of the Gounkoto system varies along its length as well as down dip and variations in strike, dip and thickness are closely related to grade distribution. Structural intersections also played an essential role in focusing fluid flow and multiple plunging zones projected from surface have been confirmed by deeper drilling, highlighting the good potential for underground mineable resources. Additional upside has been identified in the deposit as detailed below:
     Southern pit area: near-surface drilling has identified an area of wide, high grade mineralization in the southern part of the deposit: GKAGCRC119 — 61.00 meters at 8.09g/t from 35.00 meters and GKAGCRC120 — 78.00 meters at 4.74g/t from 28.00 meters. Drilling is ongoing and results suggest this is a dilation zone within the main structure which plunges to the north and has a strike potential of 125 meters to a vertical depth of nearly 90 meters.
     Fe structure: A north-south orientated iron rich structure which locates to the west of the main zone is providing further upside following RC drilling. Drill hole GKAGCRC293 — 19.00 meters at 10.72g/t from 3.00 meters and GKAGCRC294 — 26.00 meters at 14.56g/t from 32.00 meters. The weighted average gold grade from drilling is 4.4g/t over a strike length of 275 meters, to vertical depths of 120 meters and a true thickness of 12 meters.
     Jog zone: A broad zone of high grade mineralization has been intersected at the base of the $700 pit shell, over a strike length of 100 meters. GKDH281 — 100.00 meters at 8.37g/t from 197.20 meters, GKDH285 — 93.45 meters at 5.51g/t from 182.00 meters, GKDH286 — 47.05 meters at 6.20g/t from 122.95 meters and GKDH283 — 55.30 meters at 11.60g/t from 187.50 meters.
     Hangingwall: Drilling on the hangingwall has confirmed continuity of gold mineralization associated with Si-Alb-CO3 alteration within a brittle fault, striking approximately north-south; average gold grade from drilling is 2.2g/t over a 500 meter strike length. Mineralization is open in all directions with both shallow and steep high grade plunges evident. The follow-up of these will be prioritized as part of a program to advance the underground conceptual study in 2011.
Gounkoto Region
     The southern half of the Loulo mining permit is developing into a new, significantly mineralized district. At the P64 target, 300 meters northwest of Gounkoto, previous work including trenching, diamond core and RC drilling, identified a 145 meter long strongly mineralized zone with the following intercepts: P64C13 — 26 meters at 6.29g/t, P64C4 — 34.45 meters at 8.85g/t, P64C5 - 21 meters at 4.87g/t, P64C6 — 24 meters at 2.81g/t, P64C7 — 25 meters at 2.40g/t, P64RC05 — 71 meters at 1.67g/t, and P64RC06 — 81 meters at 1.75g/t. Mineralization is hosted in a tourmalinized greywacke with weak chlorite alteration.
     Two kilometers southeast of Gounkoto is Faraba where mineralized material of 567,000 ounces at 2.60g/t has been previously delineated. Mineralization at Faraba locates where the north-south striking shear system intersects favorable coarse grained lithological layers. The resulting mineralization occurs as sub-horizontal to gently plunging shoots with blade-like morphology.
     In 2011, drill programs will further test P64 and Faraba as well as Toronto and additional targets highlighted by an update generative study.
Loulo 3

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     The Loulo 3 target has developed into a significant satellite deposit and a 1.7 kilometer long open pit. During 2010 a total of 1.93 million tonnes of ore were mined at a grade of 3.05g/t for 189,491 ounces. Geologically the deposit trends northeast and is bound both in the hangingwall and footwall by fine grained semi-pelitic units termed SQR (after the French term schistose quartz rosé meaning argillaceous pink quartzite). Mineralization is hosted within a coarse grained greywacke which has been variably altered by silica and tourmaline. Intersecting north-south to north-northwest orientated structures, which are shallow dipping to the east, control high grade plunging shoots.
     A program of nine diamond holes for 2,380 meters is ongoing to test Loulo 3 at 160 to 180 meters vertical depth, testing beneath the base of the $1,000 pit shell, the extent of which is limited by data constraints. To date, four diamond holes totaling 1,102 meters have been drilled along the entire strike length of the deposit at approximately 400 meters spacing. The holes confirmed the geological model and returned very encouraging mineralization: L3DH33 — 4.7 meters at 2.50g/t from 235.1 meters, L3DH35 — 6.0 meters at 4.59g/t from 224 meters, L3DH36 — 10.4 meters at 10.22g/t from 221.15 meters and L3DH39 — 9.5 meters at 7.59g/t from 183 meters.
Yalea Structure
     The Yalea structure is highly mineralized, hosting the deposits of Yalea and Loulo 3, as well as a number of surface targets.
     At Loulo 1, 22 RC holes totaling 1,623 meters were drilled over a 630 meter strike length to a vertical depth of 50 meters. Mineralization (5 to 15 meter thickness) follows the strike and dip of the lithological layering, trending northnortheast-northeast and dipping east at between 50 and 60 degrees. Sulfides are present predominantly as disseminated pyrite within the tourmalinized greywacke and quartz tourmaline. Results from the RC drilling include: L1RC18 — 5 meters at 4.43g/t from 7 meters, L1RC21 — 8 meters at 5.21g/t from 12 meters, L1RC22 — 8 meters at 4.71g/t from 62 meters and L1RC30 — 11 meters at 4.54g/t from 22 meters. Global mineral resource estimates amount to 23,858 ounces at 2.65g/t.
     The priority in 2011 for exploration is the five kilometer segment from Loulo 3 to Loulo 1, which is a zone of continual gold anomalism and mineralization including the surface targets of Loulo 2 and the Loulo 2-3 Gap. An initial program of deeper diamond drilling will be completed on 500 meter drill centers to vertical depths of 200 meters. Surface RC drilling will also continue to define satellite open pits.
Yalea Underground Drilling
     Grade control drilling defined additional high grade mineralization on the margins of the ‘purple patch’: YUDH109 — 25.60 meters at 10.65g/t and YUDH112 — 21.35 meters at 10.88g/t.
     In 2011, as underground development advances, grade control drilling will continue to target extensions to high grade mineralization as geological models are updated and refined.
Gara Structure
     PQ10: On the Gara structure, attention focused on the PQ10 target. Forty-six holes for 3,504 meters were drilled over a strike length of 600 meters testing the western mineralized structure. The geology consists of finely laminated sediments units which bound mineralized pink quartzite (QR) units. The SQR units are weakly foliated, striking 185 to 195 degrees and dipping 50 to 70 degrees west. Brittle-ductile shears are present in the QR units. Subsequently a small resource was mined: 60,806 tonnes at 4.11g/t (8,035 ounces). The eastern structure is narrow with a true width of 7 meters and average grade of 1.8g/t. Additional upside has been identified at PQ10 South 7 RC holes defined mineralization along a steep east-dipping shear which cross-cuts the western limb of an open antiform. The weighted average gold grade is 2.2g/t over a true width of 6 meters.
Other Loulo Targets
     During the year the potential of all the Loulo satellites was evaluated. This involved a data review and updated geological estimates, fieldwork and in the case of Bolibanta, drilling. Additionally, pit shells and resources have been calculated for the most promising of the satellites around Loulo and these will be further evaluated by exploration in 2011. The combined potential from all the Loulo satellites is approximately 270,000 ounces at 2.8 g/t.

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Senegal
Bambadji
     On the Bambadji permit in Senegal, adjacent to both Loulo and Gounkoto, work progressed from reconnaissance exploration, through RAB and RC drilling and culminated in diamond drilling on specific targets which have analogies to Gara, Yalea and Gounkoto styles of mineralization. By the year end, six holes had been drilled on two targets: Kolya and Waraba. The program has intersected strongly deformed and altered rocks containing pyrite mineralization at both targets. However, intersections from the Kolya target have so far confirmed a narrow mineralized quartz tourmaline (QT) system beneath strong gold mineralization at the surface. At Waraba, the holes intersected a large alteration system on the margin of an albitite intrusive. The remaining priority targets for this initial phase of drilling are Kach, Gefa, Baqata and Mananord.
Massawa
     The Massawa gold project is located within the Kounemba permit in eastern Senegal which geologically lies within the 150 kilometer long Mako greenstone belt. The Mako greenstone belt, comprises mafic-ultramafic and felsic volcanic rocks intruded by granitoids. A regional crustal scale shear zone, the Main Transcurrent Shear Zone (MTZ) with northeast-southwest trend exploits the lithological contact between the Mako and the Dialé-Daléma Supergroups and is the host structure to mineralization at Massawa.
     A total strike length of 8.5 kilometers has been drilled, but only a 4 kilometer portion of this has been evaluated for the present mineral resource modeling and has been drill tested to a 50 meter by 50 meter spacing to a maximum vertical depth of 640 meters. In 2010, 50 diamond holes for 19,835 meters, 47 dedicated metallurgical diamond holes for 8,620 meters and 15 geotechnical diamond holes for 3,697 meters were drilled. Additionally 105 shallow RC holes for 7,204 meters were drilled.
     The four kilometer strike at Massawa currently being evaluated contains two zones of mineralization: northern and central. However, they are part of the same northeast trending mineralized structure, which has been offset by north-south belt discordant structures. Geological logging of core and interpretation confirms that the mineralized system occurs at a volcanic/sedimentary contact, where a prominent and continuous lapilli tuff sequence acts as a marker horizon. The average bedding strikes 020 and dips 60 to 76 degrees to the west. Graded-bedding is common and suggests the sequence is overturned. The host sequences have been intruded by felsic dykes, gabbros and granitic bodies, particularly in the central area. Mineralization is hosted in a variety of rocks including: greywackes, volcaniclastics and both mafic (gabbros) and felsic intrusive. The mineralized system is however structurally controlled and deformation is essentially brittle-ductile. The alteration assemblage is composed of sericite, silica, carbonate, pyrite and arsenopyrite. Gold mineralization formed in two phases: an early phase composed of fine disseminated pyrite and arsenopyrite, and a later stage which is a shallow level gold system where quartz-stibnite and a large range of antimony-bearing minerals host coarse native gold.
     During 2010, as well as the resource drilling, deep drilling has confirmed continuity of the lithological sequence, structure, alteration and gold mineralization to a maximum depth of 640 meters below the surface, results include: 17.15 meters at 3.49g/t, including 4 meters at 6g/t in the central zone and 29.20 meters at 3.75g/t, including 12.60 meters at 5.98g/t in the northern zone. Step out drilling, testing the mineralization along strike confirmed continuity of high grades, 200 meters, north of Lion Extension with 1.60 meters at 15.49g/t. In Massawa South, drilling returned broad low grade intersections (MWDDH464 — 22.85 meters at 0.59g/t) but revealed a similar geological and alteration package as the central zone.
     Exploration on Massawa has been slowed down as we have advanced Gounkoto and Kibali providing the time to fully evaluate the metallurgy and development strategies. The aim is to progress the project to final feasibility in 2011.
     Satellite Targets: As well as Massawa, there are a number of targets which have had varying degrees of follow-up work completed on them from trenching through to RAB and diamond drilling, and all highlight the possibility of providing additional ounces within a 15 kilometer radius of Massawa. Our key objective is the discovery of at least 2 million ounces of non-refractory ore to supplement the ore from Massawa. These targets are summarized below:
     Sofia: 56 RC holes for 5,571 meters were drilled at 100 meter spacing along a strike length of 4 kilometers. The mineralization is continuous along strike, the weighted average gold grade is 1.45g/t over a true thickness of 18 meters and includes intersections of: SFRC001 — 31 meters at 2.5g/t, SFRC007 — 29 meters at 3.16g/t, SFRC010 — 16 meters at 4.6g/t and SFRC021 — 15 meters at 4.08g/t. Geologically the target is underlain by a sequence of andesite and volcaniclastic rocks intruded

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by quartz feldspar porphyries and gabbros. Mineralization is associated with disseminated pyrite accompanied with silica-K feldspar-carbonate alteration.
     Delya: Is defined by a 6 kilometer by 100 meter plus 20ppb gold in soil anomaly. A program of 2,761 meters of RC drilling, on 100 meter spaced centers, was completed over a strike length of 1 kilometer. Intersections from this program include DLRC005 — 5 meters at 5.59g/t, DLRC010 — 4 meters at 7.22g/t, DLRC013 — 11 meters at 9.50g/t and DLRC014 — 9 meters at 14.95g/t from a structure which averages 5 meters width and a weighted average gold grade of 4.5g/t. Mineralization is hosted within a package of schists, strongly sheared and altered by silica-sericite-iron and disseminated pyrite and arsenopyrite.
     Bakan Corridor: The Bakan Corridor groups together a number of anomalous gold in soil targets (Bakan, Tizia, Khosa, Tiwana and Tina) along a 10 kilometer segment of the northeast trending Kossanto structural corridor which is sub-parallel to the MTZ. The geology comprises a sequence of ultramafc units, felsic and intermediate volcanics (andesites, dacites and rhyodacites), cherts and igneous rocks ranging from diorite to monzonite. By year end a total of 5 RC holes for 531 meters, out of a program of 11 RC holes, had been drilled at the Bakan target. The first hole returned 29 meters at 1.9g/t, including 10 meters at 4.5g/t. A further 13 RC holes (1,175 meters) are designed to test mineralized felsic intrusive at Tina along a 1.25 kilometer strike. Additional holes are being planned at Khosa where intensively northeast sheared felsic intrusive and silicifed bodies (cherts) were mapped.
     Bambaraya: At Bambaraya, 5 RC holes for 588 meters were completed as infill drilling to previous work over a 1 kilometer strike. Results returned narrow, low grade intersections: BBRC03 — 3 meters at 2.12g/t, BBRC04 — 3 meters at 1.57g/t and BBRC08 — 18 meters at 1.8g/t and 9 meters at 1.26g/t. Mineralization is hosted within northeast trending pillow basalts and is associated with silica-sericite-tourmaline-iron carbonate-pyrite alteration. No further work is planned on this target for the time being.
     As well as RC drilling on known satellite targets the team commenced the evaluation of the next level of targets for drilling in 2011: Kawsara, Manja, Galama, Sira, Kaldou, Makana, KB and KA. Additionally, work also started on generating new targets at Nouma, Makana East and Sofia South.
Côte d’Ivoire
     With the commissioning of the new mine at Tongon and the first commercial gold production, exploration has now shifted focus to the evaluation of satellite targets.
     An 11,647 line kilometer airborne electromagnetic geophysical survey was flown over the Senoufo Greenstone Belt in northern Côte d’Ivoire, covering the Nielle permit and portions of the Diaouala and Fapoha permits. The survey provided the foundation to an improved geological and structural interpretation of the belt; the resultant prospectivity analysis identified 79 new targets, of which 18 ranked high to medium are located within a 15 kilometer radius of the Tongon plant.
     The prioritization of targets resulted in exploration programs being performed at: Seydou, Jubula, Tongon West, Sekala, Belokolo and Nafoun. Encouraging results were returned from:
     Seydou: trenching and drilling — 12.3 meters at 2.3g/t, 19 meters at 5.32g/t and 21 meters at 3.76g/t.
     Sekala: RAB drilling returned multiple mineralized zones including 23 meters at 2.18g/t and 15 meters at 1.11 g/t.
     Jubula: trenching — 61 meters at 1.31g/t, 16.5 meters at 3.52g/t and 12 meters at 1.7g/t.
     Tongon West: RC drilling — 10 meters at 4.47g/t and 14 meters at 3.08g/t.
     In 2011 RAB, RC and diamond drilling are all planned to progress these targets as well as to advance stand-alone opportunities within our permit portfolio.
Democratic Republic of Congo
Kibali

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     Exploration completed a detailed analysis of the KCD deposit resulting in a new geological model which supported a substantial increase in mineral reserves to 10 million ounces at 4.21g/t within global mineral resources of 18.4 million ounces at 3.1g/t. Drilling connected the Sessenge deposit to KCD and confirmed over 2 kilometers of continuous mineralization: DDD472 — 14.80 meters at 4.18g/t, DDD475 — 25.95 meters at 4.28g/t, DDD484 — 29.70 meters at 3.92g/t and DDD485 — 39.60 meters 6.65g/t.
     There is additional upside within the current Sessenge-KCD deposit both near surface and at depth. The deposit comprises a series of stacked lodes, which have been labeled by their elevation: 3,000 series, 5,000 series and 9,000 series plunging moderately to the northeast. The outlines of these lodes, rather than being limited by the extent of mineralization, are in fact limited by drilling.
     There are three key upside opportunities:
    Expand the open pit to the northeast by testing extensions to the 3,000 lode within the drained Lake Durba
 
    Sessenge-KCD gap requires infill drilling for resource conversion
 
    Test the continuity and extensions to the underground lodes down plunge (9,000 and 5,000 series)
Kibali Exploration
     Airborne Geophysics
     A 12,277 line kilometer SPECTREM airborne electromagnetic (EM) survey was flown over the Kibali concession during the second quarter of 2010.
     The key highlights of this survey were:
    Igneous intrusions are more widespread than previously mapped.
 
    A corridor of strong northeast trending structural grain is coincident with the main areas of mineralization.
 
    Strong EM conductor coincident with the KCD area, interpreted to be the response from carbonaceous shales +/- the Durba hill ironstone.
 
    Strong east-west conductors along the West Nile Gneiss contact possibly related to carbonaceous shale unit that was exploited by early thrusting and subsequently crosscut by a later northeast structural grain.
 
    Conductive and magnetic trend running along or parallel to the main mineralized trend.
     Three-dimensional modeling of the data has identified a number of northeast plunging shoots of highly conductive material that are interpreted to represent mainly graphitic carbonaceous shale.
     Several of these shoots are associated with areas of known mineralization, for example at KCD and Pakaka. The shoots are thought to represent intersections of important mineralizing northeast trending S2 structures and northwest trending S1 thrusts that have exploited carbonaceous shale horizons.
     Although the EM anomalies do not map actual gold mineralization it is thought the conductive shoots highlight structurally important traps especially as they daylight coincident with gold in soil anomalies.
     In 2011, exploration programs will target the upside opportunities within the Sessenge-KCD deposit. In evaluating satellite targets, priority will be given to Gorumbwa and Agbarabo, which were high grade underground mines during the Belgium era, as well as testing conceptual ideas generated from the geophysical survey.
MINERAL RIGHTS AND ORE RESERVES
     Table of mineral rights at December 31, 2010:
                 
Country   Type   Area (km2)   Area (sq miles)   Equity (%)
MALI
               
Loulo
  EP   372   144   80.0
Morila
  EP   200   77   40.0
Bena
  EEP   16   6   80.0
Zaniena
  EEP   250   97   80.0

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Country   Type   Area (km2)   Area (sq miles)   Equity (%)
Dinfora
  EEP   139   54   80.0
Konyi
  EEP   250   97   80.0
CÔTE D’IVOIRE
               
Nielle
  EP   751   290   89.0
Boundiali
  EEP   1,314   507   81.0
Dabakala
  EEP   191   74   81.0
Dignago
  EEP   1,000   386   81.0
Apouasso
  EEP   1,000   386   81.0
Diaouala
  EEP   977   377   81.0
Mankono
  EEP   704   272   81.0
Tiorotieri
  EEP   86   33   89.0
Kouassi Datekro
  EEP   922   356   89.0
SENEGAL
               
Kanoumba
  EEP   621   240   83.0
Miko
  EEP   84   32   83.0
Dalema
  EEP   401   155   83.0
Tomboronkoto
  EEP   225   87   83.0
Bambadji
  EEP   315   122   51.0
BURKINA FASO
               
Basgana
  EEP   250   97   81.0
Bourou
  EEP   122   47   81.0
Tanema
  EEP   247   95   81.0
Yibogo
  EEP   247   95   81.0
Nakomgo
  EEP   237   92   81.0
Safoula
  EEP   249   96   81.0
Dawaro
  EEP   250   97   81.0
Tiakane
  EEP   196   76   81.0
DEMOCRATIC REPUBLIC OF THE CONGO
               
Kibali
               
11447
  EP   227   88   45.0
11467
  EP   249   96   45.0
11468
  EP   46   18   45.0
11469
  EP   92   36   45.0
11470
  EP   31   12   45.0
11471
  EP   113   44   45.0
11472
  EP   85   33   45.0
5052
  EP   302   117   45.0
5073
  EP   399   154   45.0
5088
  EP   292   113   45.0
 
TOTAL AREA
      13,583   5,245    
 
EP    —   Exploitation Permit
 
EEP  —   Exclusive Exploration Permit
Annual ore reserve declaration
                                                                         
            Tonnes   Tonnes   Grade   Grade   Gold   Gold   Attributable   Attributable
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   Gold (Moz)   Gold (Moz)
At December 31,   Category   2010   2009   2010   2009   2010   2009   2010   2009
PROVEN AND PROBABLE RESERVES
                                                                       
Kibali
                                                            45 %     45 %
 
  Probable     74.32       63.80       4.21       4.48       10.05       9.19       4.52       4.14  
Sub total
  Proven and probable     74.32       63.80       4.21       4.48       10.05       9.19       4.52       4.14  
Loulo
                                                            80 %     80 %
 
  Proven     4.54       5.55       2.98       3.48       0.43       0.62       0.35       0.50  
 
  Probable     40.89       43.91       4.63       4.54       6.09       6.41       4.87       5.13  
Sub total
  Proven and probable     45.43       49.45       4.47       4.42       6.52       7.03       5.22       5.63  
Gounkoto
                                                            80 %     80 %
 
  Probable     17.11       7.47       5.10       6.83       2.80       1.64       2.24       1.31  

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            Tonnes   Tonnes   Grade   Grade   Gold   Gold   Attributable   Attributable
            (Mt)   (Mt)   (g/t)   (g/t)   (Moz)   (Moz)   Gold (Moz)   Gold (Moz)
At December 31,   Category   2010   2009   2010   2009   2010   2009   2010   2009
Sub total
  Proven and probable     17.11       7.47       5.10       6.83       2.80       1.64       2.24       1.31  
Morila
                                                            40 %     40 %
 
  Proven     5.86       9.85       1.68       1.74       0.32       0.55       0.13       0.22  
 
  Probable     6.69       6.91       1.14       1.14       0.24       0.25       0.10       0.10  
Sub total
  Proven and probable     12.55       16.76       1.39       1.49       0.56       0.80       0.22       0.32  
 
                                                            89 %     89 %
Tongon
  Proven     0.42             1.93             0.03             0.02        
 
  Probable     36.69       38.02       2.47       2.63       2.91       3.22       2.59       2.86  
 
  Proven and probable     37.11       38.02       2.46       2.57       2.94       3.22       2.62       2.86  
Massawa
                                                            83 %     83 %
 
  Probable     17.42       10.51       3.36       4.62       1.88       1.56       1.57       1.30  
Sub total
  Proven and probable     17.42       10.51       3.36       4.62       1.88       1.56       1.57       1.30  
TOTAL RESERVES
  Proven and probable     203.93       178.54       3.78       3.80       24.76       21.80       16.39       15.56  
The reporting of Ore Reserves is in accordance with SEC Industry Guide 7.
Pit optimization is carried out at a gold price of $800 per ounce; underground reserves are also based on a gold price of $800 per ounce. Dilution and ore loss are incorporated into the calculation of reserves.
Addition of individual line items may not sum to sub totals because of rounding off to two decimal places.
Our reserves are calculated at a weighted average cut off grade of 2.38g/t for Loulo, 0.97g/t for Morila, 0.85g/t for Tongon, 1.40g/t for Gounkoto, 1.10g/t for Massawa, and 1.59g/t for Kibali.
Locality of the Loulo and Morila Mines in Mali
Mineral Rights and Permits
The following maps show the position of our current permits in West and Central Africa:

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West Africa: location of mines and permits
(WEST AFRICA LOCATION OF MINES AND PERMITS)

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Central Africa: location of mines and permits
(CENTRAL AFRICA LOCATION OF MINES AND PERMITS)
     Although we believe that our exploration permits will be renewed when they expire, based on the current applicable laws in the respective countries in which we have obtained permits, we cannot assure you that those permits will be renewed on the same or

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similar terms, or at all. In addition, although the mining laws of Mali, Côte d’Ivoire, Senegal, Burkina Faso and DRC provide a right to mine should an economic orebody be discovered on a property held under an exploration permit, we cannot assure you that the relevant government will issue a permit that would allow us to mine. All mineral rights within the countries in which we are currently prospecting are state-owned. Our interests effectively grant us the right to develop and participate in any mine development on the permit areas.
GENERATIVE AND NEW BUSINESS
     As well as advancing the key strategic areas, generative work and research continues to identify new exploration opportunities within Archaean and Proterozoic age rocks across the African continent.
SOCIAL RESPONSIBILITY AND ENVIRONMENTAL SUSTAINABILITY
     We believe that a successful mining company is one which is profitable while meeting its social responsibilities in the countries and communities in which it operates.
     Strong local relationships are one of the foundation stones on which the company has been built. For each new development, a process of assessment and engagement is undertaken to ensure that the positive impacts of the operation are maximized and the negative impacts minimized.
     Our general approach is guided by the IFC Guidelines on Environmental, Safety and Health and specifically on IFC Guidelines related to Mining and Performance Standards on Social and Environmental Sustainability OHSAS 18001, the Occupational Health and Safety Advisory Service’s occupational health and safety standards, and ISO 14001, the international environmental standards, guide health, safety and environmental management practices on our operations. All social and environmental assessments are reviewed by an independent party to ensure compliance to these codes.
     During the early exploration stage our aim is to make as small a social impact as possible. Once a target progresses to feasibility, full social, medical and environmental baseline studies are conducted, which define the pre-mining conditions and are used as benchmarks while the project develops and when it moves into production. Full environmental and social impact assessments are generated including public participation programs with the local communities where the impacts, both negative and positive, are communicated and considered. During the past year a full environmental and social impact assessment was completed for Gounkoto, while good progress was made with the completion of specialist studies on flora, fauna, aquatics, water and sediment quality and archeology were completed..
     Community liaison committees, consisting of a broad spectrum of community representatives, are set up prior to production and provide a forum for regular, open dialogue where problems can be tabled and mutually acceptable solutions found. Our exploration team represents our first interface with the community and it is instrumental in allaying suspicions and conflicts, while building relationships based on trust between future mines and the community.
     To keep environmental and social issues in the forefront of our business, the executive social and environmental committee was met quarterly to review all environmental and social action plans. A summary of this review is presented at each group board meeting.
     Our integrated social and environmental management process identifies potentially negative and positive impacts. The implementation of sustainable environmental and social responsibility strategies aim to minimize negative impacts and maximize the positive impacts of our activities, commensurate with our business strategy and with national and IFC standards. The implementation and effectiveness of these strategies is audited by independent external consultants Digby Wells Associates (DWA) and monitored internally on a quarterly basis by the group’s environmental and social oversight committee.
Environmental Management
     Monthly monitoring programs incorporating dust fallout levels, physiochemical, cyanide, oil, grease and bacteriological levels of surface and groundwater across the mine sites and tailings storage facilities as well as surrounding water courses continued throughout the year. No pollution or breach of World Bank guidelines occurred.

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     Morila successfully renewed its ISO 14001 certification and Loulo achieved its certification in 2010. Tongon is planned to achieve certification in 2011.
     Environmental management plans have been implemented in Tongon on start up of production which are in line with ISO 14001 to allow for the rapid accreditation of the mine.
     Closure studies of the Morila Tailings Storage Facility have identified an option of processing the surface tailings storage facility as being economic after the completion of a sampling exercise over the dam with full environmental leach testwork to determine the environmental implications. Closure plans at Loulo and Tongon continue to be updated with the changing mining environment to ensure appropriate reclamation costs are allocated.
Environmental Performance Data
     Our environmental performance data is reported for calendar years and reported on an operational control basis at each managed operation, even though only partial ownership may exist. We are in the process of implementing measurement systems on each site in line with Global Reporting Initiative™. Principal performance areas currently reported include Greenhouse Gas Emissions, Energy Use, Freshwater Withdrawal and Land Disturbed.
Greenhouse gas (GHG) emissions
     As a growing company, operating in remote areas with poor infrastructure, on site diesel generation of power is required. This makes it more of a challenge for us to reduce our total greenhouse gas emissions while sustaining company growth. However we aware that the reduction of emissions intensity is intrinsically linked to improved operating efficiencies and where the opportunity presents itself we are aggressively working to reduce greenhouse gas emissions per production unit and have a five year strategy to achieve this. These activities include transforming to more fuel efficient low speed diesel generating machines at Loulo, linking into the predominantly hydro and gas generated national electricity grid at Tongon in the Ivory Coast and coming up with innovative solutions at Kibali in eastern DRC to maximize the generation of hydro power generation for the project. We are thus expecting to improve and materially reduce our greenhouse gas emission per production unit performance from 2011 to 2016. The company has filed its 2009 greenhouse emissions in the 2010 Carbon Disclosure Project (CDP) and will continue to do so in order to demonstrate its progress in this regard.
     Our total unverified GHG emissions for 2010, defined as the sum of onsite emissions were 314 thousand tonnes of carbon dioxide equivalent. The disclosure is currently undergoing independent verification and final verified numbers will be presented in the 2011 Carbon Disclosure Project in May 2011. Our total gross Scope 1 GHG emissions were calculated using ‘The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard’. Scope 1 emissions are direct emissions occurring from sources that are owned or controlled by a company, while Scope 2 emissions include emissions from the generation of purchased electricity. We generate the vast majority of its electricity on-site through diesel generation. Scope 2 emissions therefore only reflect electricity purchased for offsite offices. This will change once we connect to the Ivory Coast national grid in 2011. Emissions are reported as per operational control and is based on the assumption that a company accounts for 100% of the GHG emissions from operations over which it has operational control. Financial GHG emissions intensity reported on an operational basis were 645 metric tonnes CO2 equivalent per $ million revenue for 2010.
Energy use
     We generate all the energy used by its operations. Our mineral processing operations are energy intensive and currently depend on diesel power generation to keep them running. This year our energy generation and use increased from 256 to 271 thousand megawatt hours. This change has been influenced by the increase in tonnage throughput and hardness of ore at Loulo and the start up of the Tongon operation in Ivory Coast. Notwithstanding the increase in overall energy use we have been able to reduce our energy use per tonne milled from 35.3 kWh/t to 34.4 kWh/t, due to the fact the additional tonnes milled at Tongon have been oxide and thus used less energy. Once political stability returns to Ivory Coast we would expect to change over to the hydro and gas generated national grid. We are working at ways to maximize the hydro power opportunities available in the DRC project of Kibali and minimising the use of diesel generation. We are working on a concept to reduce the energy intensity of new projects

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that come on line around the Loulo complex by having a centrally powered generating complex from which power could be distributed.
Water Use
     Our water policy has focussed this year on maximizing the return of water from Tailings Storage Facilities in an attempt to minimize the off take of fresh water from the environment. All our operations withdraw fresh water from either adjacent river systems or from purpose built water storage dams as well as dewatering of mining operations. The amount of water we removed from the environment has increased this year due to the addition of the Tongon operation to our portfolio. Water management plans are aimed at increasing the reuse of water whenever we can, and to return it to the environment meeting regulatory limits. Our freshwater withdrawal increased by 3 per cent to 7,300 million litres in 2010 but our water withdrawal per tonne milled decreased from 0.98 to 0.93 kl/tonne, due to better reuse of tailings water.
Land
     Our mining concessions cover a total of 3,159 km2 of land excluding our exploration leases. At the end of 2010 our activities had impacted 1.1 per cent of this area up from 0.8 per cent in 2009, principally due to the construction of the Tongon mine. In line with IFC guidelines on mining, we aim to implement incremental rehabilitation of land rather than waiting until all operations at the site have ceased. Internal annual rehabilitation review and closure estimation helps to drive the process.
Community development
     To survive and prosper, we must be an integral part of and benefit the communities of which it is a corporate citizen. Establishing and maintaining good relations with the communities requires constant and effective two-way communication and in pursuit of such relationships we have a sustainable community development strategy backed by a budget and community development departments. We believe we have been more successful in community endeavors than most other mining companies operating in Africa. However, the need to stay focused and continually improve was brought home to us when we suffered a setback in July 2009 in community relations at our Loulo mine. Members of the community — mainly but not exclusively young job seekers newly arrived in the area — became upset about the method of recruitment of the new surface mining contractor, which had brought its mining team with it from Morila. The group disrupted operations which were suspended for 36 hours, allowing the authorities to restore the situation to normal. We have had an independent audit carried out and have implemented its recommendations, such as intensifying our interaction with the communities surrounding our operations.
     In 2010, $7 million was contributed to community development projects which focused on basic education, potable water and basic health provisions, food security and local infrastructure. This more than doubled the amount spent in 2009. This amount excluded the direct community and social work undertaken by ourselves as part of our normal operations and capital projects, including the Resettlement Action Plans and related compensation and infrastructure establishment such as road building related to Tongon, Gounkoto and the Kibali projects.
     Further payments exceeding $340.0 million were made to governments, local employees and local suppliers. The governments received taxes, royalties and dividends; employees received salaries while local suppliers and contractors were paid for goods and services received.
     We have been championing the establishment of a world class center of excellence to provide West Africans and others in Sub-Saharan Africa with the opportunity to study disciplines at the African School of Mines (ASM), based in Bamako. We are working in collaboration with the Government of Mali, the Nelson Mandela Institution, the World Bank and several leading universities in South Africa, Europe and North America. To date we have set aside $1 million for this purpose and have provided assistance from our chairman, Philippe Liétard, and the chairman of the audit committee, Karl Voltaire. The Nelson Mandela Institute and the World Bank have undertaken to provide sufficient funds to build the campus and the Malian Government has provided the land for the ASM on which a college will open in 2012
Projects
     During the year community development spending on projects identified by the representatives of the communities situated close to our operations was in excess of $2 million. This excludes the direct community and social work undertaken by the group, including the RAP at Tongon, the provision of medical care to villagers living close to our operations, the excellent community work done on

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our exploration sites and the work at Kibali to carry out medical and other baseline studies and social/economic/human rights and other impact studies.
     The focus areas for our community development efforts have remained the creation of sustainable employment opportunities, primary health care, education, food security, and potable water provision.
Human Resources Report
Group manpower
     Group manpower levels, inclusive of contractor labor, rose during the year by 1,459 to 7,257, the most significant increases occurred at Tongon, where numbers employed, including contractor staff, increased from 1,510 to 2,445. Manning levels related to employees working on our operations and projects are shown in the following table.
                         
    December   December    
Mine/function   2010   2009   Variance
MORILA
                       
Mine
    352       486       (134 )
Contractors
    430       395       35  
Total
    782       881       (99 )
LOULO
                       
Mine
    486       314       172  
Contractors
    2,709       2,550       159  
Total
    3,195       2,864       331  
TONGON
                       
Mine
    283       8       275  
 
Contractors
    2,162       1,502       660  
Total
    2,445       1,510       935  
KIBALI
                       
Project
    197       245       (48 )
Contractors
    335       75       260  
Total
    532       320       212  
EXPLORATION
                       
Field
    206       151       55  
Other
    15       10       5  
Total
    221       161       60  
CORPORATE
                       
Corporate and operational centers
    82       62       19  
TOTAL GROUP
    7,257       5,798       1,459  
Industrial relations
     We continued to support the role of unions and representative committees to strengthen our pact with labor which is structured through internal establishment agreements. Employee participation is enhanced by the presence of local mine shop stewards at quarterly mine board meetings.
     At Tongon, the political instability of the country resulted in a challenging period towards the end of 2010. Presidential elections were held resulting in extended absence of staff as they were required to vote in the areas where they were registered. At the same time the operation released a number of construction staff in line with the completion of various construction phases. The release of these employees compounded the general feeling of uncertainty and members of the community and some ex-workers blockaded the entrance of the mine preventing employees from entering the mine for a number of days until settlement could be reached for the redeployment of the released employees to other construction projects.

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     At Loulo, a second union was established on the mine. This union has recently gained dominant representation. While mine agreements made between management and the original union has been respected, allowance is made for their renegotiation every two years and this is expected to take place in 2011.
Employee health
     One of our key objectives is the reduced exposure to airborne contaminants and noise on our sites. Personal protective equipment is supplied as required in the relevant areas. Malaria remains the most significant health risk for our operations. We carried out annual entomological surveys to determine the most effective insecticide to use in the spraying programs that are carried out on site as well as in surrounding villages. At Loulo, the annual incidence rate of Malaria was 30.4% in 2010 compared to 30.9% in 2009; and 26.6% in 2010 at Morila compared to 20.7% in 2009. The incidence rate was 30.8% at Tongon and at 23.2% at Kibali in 2010.
     Awareness education of employees and local communities on HIV/AIDS and its prevention is another important health issue addressed on all sites. This is generally conducted by our medical departments in conjunction with NGOs.
Safety
     During the year, a standardized health and safety reporting format, agreed by all the medical officers, was introduced across the group. The safety statistics produced comply with OHSAS 18001 and industry best practice. Morila maintained its OHSAS 18001 accreditation and work has been ongoing during 2010 in conjunction with NOSA consultants preparing Loulo to become OHSAS 18001 accredited on the latter half of 2011. Work has also commenced at Tongon on preparing the mine for OHSAS 18001 accreditation expected in 2012.
     While low injury frequency rates do not always translate into low fatality rates the Lost Time Injury Frequency Rate (LTIFR) (number of LTI per number of hours worked) x 1,000,000 was 1.36 at Loulo, 0.55 at Morila and 3.83 at Tongon. Daily ‘toolbox’ meetings are held in workplaces across our mines to constantly remind employees of the need for each to be safety conscious. These meetings are based on the principle of personal responsibility with regard to safety where the onus is transferred to the individual to practice a high level of safety in the workplace.
LOULO
                 
Safety statistics   2010   2009
Lost time injury *
    8       13  
Lost time injury frequency rate**
    1.36       2.71  
Minor injury
    83       169  
Minor injury frequency rate
    14.10       35.27  
Total injury
    91       182  
Total injury frequency rate
    15.46       37.98  
Fatal injury
    1       4  
Fatal injury rate
    0.17       0.83  
 
*   Fatal Accidents are included in LTI cases.
 
**   Man hours are calculated based on 2,000 hours worked per employee a year. LTIFR = Number of LTIs/ Number of hours worked x 1,000,000

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MORILA
                 
Safety statistics   2010   2009
Lost time injury
    1       2  
Lost time injury frequency rate
    0.55       0.92  
Minor injury
    15       39  
Minor injury frequency rate
    8.38       17.97  
Total injury
    16       41  
Total injury frequency rate
    8.94       18.4  
Fatal injury
    0       0  
Fatal injury rate
    0       0  
TONGON
                 
Safety statistics   2010   2009
Lost time injury
    18       0  
Lost time injury frequency rate
    3.83       0  
Minor injury
    129       62  
Minor injury frequency rate
    27.45       5.89  
Total injury
    147       62  
Total injury frequency rate
    31.28       5.89  
Fatal injury
    0       0  
Fatal injury rate
    0       0  

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KIBALI
         
Safety statistics   2010
Lost time injury
    11  
Lost time injury frequency rate
    5.6  
Minor injury
    23  
Minor injury frequency rate
    11.7  
Total injury
    34  
Total injury frequency rate
    17.3  
Fatal injury
    0  
Fatal injury rate
    0  
RANDGOLD RESOURCES GROUP STATISTICS FOR LAST 3 YEARS
                                 
                    LTI Freq   All
    No. Of   Fatalities /   Rate / 1m   Incident /
Year   Fatalities   1000   hours   Accident
2010
    1       0.06       1.75       14.88  
2009
    4 (a)     0.51       0.96       18.25  
2008
    1       0.26       1.71       30.26  
 
(a)   Three of the fatalities relate to contractor employees working on developing our Yalea underground mine. These fatalities significantly affected the decision to terminate the services of the contractor at the end of 2009.
Training
     Courses given on the operations in 2010 comprised of driving competency; first aid; community development; environmental law and rehabilitation; cyanide safety; hazardous substances; metallurgy processes; engineering maintenance; electrical and mechanical practice; air conditioner repair; occupational health; computer literacy; supervision; Sanvic mechanical training; compressor maintenance; and electrical competency. A total of 536 employees attended courses during the year. In addition, we sponsored a number of employees to further extend their tertiary qualifications at universities in South Africa, Senegal, the Netherlands and the United Kingdom.
REGULATORY AND ENVIRONMENTAL MATTERS
     Our business is subject to extensive government and environment-related controls and regulations, including the regulation of the discharge of pollutants into the environment, disturbance of and threats to endangered species and other environmental matters. Generally, compliance with these regulations requires us to obtain permits issued by government agencies.
     Some permits require periodic renewal or review of their conditions. We cannot predict whether we will be able to renew those permits or whether material changes in permit conditions will be imposed. To the extent that the countries in which we have exploration and mining permits have no established environmental laws, we are currently working to ensure that our operations are in compliance with environmental performance standards set by the IFC in relation to air emissions and water discharges. In accordance with our stated policy, we provide for estimated environmental rehabilitation costs based on the net present value of future rehabilitation cost estimates for disturbance to date.
     We carry out our operations within the guidelines outlined in our social responsibility policy and in accordance with Equator Principles and IFC performance standards.
     The Morila Mine maintained its International Standard Organization (ISO14001) certification during 2007 and the Loulo mine achieved its ISO14001 certification. The Tongon mine has now commenced procedures with the aim of attaining ISO14001 certification.

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     Our environmental reporting committee comprising senior executives and chaired by our CEO continued to meet on a quarterly basis. The committee considers all issues affecting the environment.
MARKETING
     We derive the majority of our income from the sale of gold produced by Morila, Loulo and Tongon in the form of dorè, which we sell under agreement to a refinery. Under these agreements, we receive the ruling gold price on the day after dispatch, less refining and freight costs, for the gold content of the dorè gold. We have only one customer with whom we have an agreement to sell all of our gold production. The “customer” is chosen periodically on a tender basis from a selected pool of accredited refineries and international banks to ensure competitive refining and freight costs. Unlike other precious metal producers, gold mines do not compete to sell their product given that the price is not controlled by the producers.
PROPERTY
     Our operational mining area is comprised of Morila operations of 200 square kilometers, the Loulo mining permit of 372 square kilometers and the Tongon project located within the 751 square kilometer Nielle exploitation permit. Our exploration permits are detailed above.
     We also lease offices in London, Dakar, Abidjan, Bamako, Ouagadougou, Mwanza, Accra, Johannesburg, Jersey, Kinshasa and Entebbe.
LEGAL PROCEEDINGS
     In August 2004, we entered into a fixed lump sum turnkey contract for $63 million for the design, supply, construction and commissioning of the Loulo processing plant and infrastructure with MDM Ferroman (Pty) Ltd, or MDM. At the end of 2005, after making advances and additional payments to MDM totaling $26 million in excess of the contract, we determined that MDM was unable to perform its obligations under the MDM Contract, at which time we enforced a contractual remedy which allowed us to act as our own general contractor and to complete the remaining work on the Loulo project that was required under the MDM Contract.
     We believe that we are entitled to recover certain amounts from MDM, including advances of $10.7 million included in receivables as at December 31, 2010. Of this amount, $7 million is secured by performance bonds and the remainder is secured by various personal guarantees and other assets. In January 2009 and 2010, the liquidator declared and paid dividends of $1.6 million from the insolvent estate, leaving an outstanding balance of $10.7 million (stated net of an impairment provision of $1.3 million) as at December 31, 2010.
     As part of our efforts to recoup the monies owed to us, MDM was put into liquidation on February 1, 2006. This resulted in a South African Companies Act Section 417 investigation into the business and financial activities of MDM, its affiliated companies and their directors. This investigation was completed in the last quarter of 2007 and the liquidators issued their report that confirms that MDM’s liabilities exceeded its assets. During the second quarter of 2011 we will be involved in arbitration proceedings with the providers of the performance bonds, which have been the subject of legal proceedings in the South African Courts.
     Recovery of the other $47.2 million is dependent on the extent to which the group’s claim is accepted by the liquidators and the amount in the free residue. The ultimate outcome of this claim cannot be determined at present. The financial statements do not reflect any adjustment to the cost of the Loulo development that may arise from this claim, or any additional income that may arise from the claim for damages, or any charge that may arise from MDM’s inability to settle amounts that are determined to be payable by MDM to the group in respect of the Loulo development.
     As of December 31, 2010, we had approximately $366.4 million of cash and cash equivalents. In addition, we had available-for-sale financial assets with a carrying value of approximately $15.9 million. The available-for-sale financial assets consists primarily of an investment in 6 million Volta Resources Inc. shares with a market value at year end of $14.4 million.
     Other than as disclosed above we are not party to any material legal or arbitration proceedings, nor is any of our property the subject of pending material legal proceedings.

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HEALTH AND SAFETY REGULATIONS
          Mali
The primary laws, regulations and standards governing Safety and Health in our Malian operations are as follows:
    Law 1992-020 Code du travail (the “Labor Code”);
 
    Ordonnance No. 99-032 le code minier, Ordonnance 200-013 le code minier modifications 2000 (the “Mining Code”);
 
    Decree No. 91-278 / PM-RM Approving the Establishment Agreement Covering Research and Mining in the Republic of Mali (the “Decree”)
 
    Code de la Sécurité (INPS — Institute National de Prevoyance Social);
 
    Social du Mali (Social Security Code);
 
    Convention Collective (National Collective Agreement for the Mining Industry).
Labor Code
The Labor Code provides generally for the following:
    General provision for protection, prevention and hygiene,
 
    Dangerous goods handling,
 
    Employer responsibility regarding safety and health (implementation of safety system),
 
    Labor inspector duty (control of employer safety system)
 
    Injury notification to Labour Inspector within 48 hours,
 
    Requirement to ensure medical service on site, and
 
    Medical leave (up to 12 months) and medical separation compensation.
 
    Establishment of a Joint Management and employees health and safety committee,
Mining Code
The Mining Code provides generally for an Occupational Health and Safety Committee (Joint management and employee safety committee), PPE, safety guide, emergency procedure, means of education and sensitization, employees obligation regarding occupational health.
The Decree
The Decree provides generally for the following:
    Must carry out research or mining work to ensure the safety and health of the public,
 
    Must inform the local administrative authorities and the Director in the event of a fatal accident or serious injury or any natural phenomenon which may have an adverse effect on the safety of the area, the safety and hygiene of the personnel or conservation of the mine, neighboring mines or public roads,
 
    In the case of imminent danger or an accident, the local administrative authorities and the Director may requisition the necessary material and personnel to alleviate the danger, at the expense of the mining company,
Code de la Sécurité (INPS — Institute National de Prevoyance Social)
The Code de la Sécurité provides generally for the following:
    Requirement to have medical service on work site for occupational health and primary health care purposes,
 
    Requirement for pre-employment medical check,
 
    Requirement for periodical medical check of employees,
 
    Requirement for general hygiene (ablutions, change house, potable water, workplace)

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    Protection against injury, environmental pollutants, occupational disease),
 
    Ergonomic conditions,
 
    Notification of occupational disease to the employer by the occupational health practitioner
 
    Requirement for first aid training for one employee per section of work or shift,
 
    Requirement for compensation in case of debilitating injury, occupational disease,
 
    Requirement for notifying injury and or occupational disease to INPS/Labor inspection, and
 
    Redeployment of employee following injury and/or occupational disease.
     Morila and Loulo have a Hygiene and Security Committee made up of elected labor and specialist management representatives, as outlined in the respective labor code. This committee designates, from its members, a consultative technical sub-committee charged with the elaboration and application of a concerted policy of improvement of health and security conditions at work. Its composition, attributions and operational modalities are determined by legal provisions and regulations.
     The chairman of this committee coordinates monthly committee meetings, sets the agendas with his secretariat, monitors resolutions and signs off on committee determinations.
     The committee’s secretariat ensures under the supervision of the chairman that:
    follow-up activities such as action resulting from the regular surveys and inspections are carried out; and
 
    health and safety manuals and updates are distributed, posters are posted on notice boards and safety committee minutes and reports are distributed.
    Each mine’s medical officer sits on the Hygiene and Security Committee and advises on the following:
    working conditions improvements;
 
    general hygiene on the operation;
 
    ergonomics;
 
    protection of workers safety in the workplace; and
 
    medical checks and eye and ear testing.
     The Hygiene and Security Committee forms, from within its membership, two consultative commissions, the Commission of Inquiry and the Educational Commission. The Commission of Inquiry:
    investigates accidents and makes recommendations to avoid repetitions;
 
    ensures plant, machinery and equipment have adequate protection to avoid injury; and
 
    updates and revises safety and health manuals.
    The Educational Commission:
    provides information and training on safe practices and potential risks;
 
    provides first aid training;
 
    administers and promotes the safety suggestion scheme; and

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    explains, where necessary, the contents of the safety and health manual.
     All employees are covered by the state’s social security scheme and our medical reimbursement scheme, that reimburses a large portion of expenses related to medical treatment and medicines. Dental and optical expenses are also covered to 50%.
     No post-employment medical aid liability exists for the group.
Côte d’Ivoire
     The primary laws, regulations and standards governing Safety and Health in our Côte d’Ivoire operations is the Mining Code (95-553) of July 15, 1995.
     The Mining Code provides generally for the following:
    Any individual or legal entity carrying out works for prospecting or mining mineral substances is required to undertake such works in a way that the safety of the people and goods is assured,
 
    Must adopt and comply with internal regulations concerning safety and specific hygiene measures, subject to approval by the Mining Authority,
 
    Any accident in a mine or quarry or in their dependencies and any identified cause of accident must be reported to the Mining Authority as soon as possible, and
 
    In case of impending danger or accident in a mine, mining engineers and other authorized agents of the Mining Authority must take all necessary measures, at the expense of the individual or legal entity, to stop the danger and prevent it from occurring again.
Safety Performance
Officials from the Labour Ministry, INPS and officials from the Ministry of Mines regularly visit and audit our operations. Both Morila and Loulo have received safety awards and commendations from INPS.
The national statistics in the countries of West Africa in which we operate are not generally available, with only fatalities cases and lost time/compensable injuries being reported.
Our safety programs are based on the outcome of the risk assessment and continual improvement strategy. The statistical measures we use to monitor our performance, such as LTIFR, are based on international good practice (OHSAS 18001) which we believe is the most accepted by our peers and best standard specification for such statistics.
We are progressing with the implementation of occupational health and safety assessment series OHSAS 18001 at all of our operations as part of our health and safety strategy to continuously improve safety in our operations.

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C. ORGANIZATIONAL STRUCTURE
     The following table identifies our subsidiaries and joint venture and our percentage ownership in each subsidiary:
         
Countries of Incorporation   % effective
Name of Company   ownership
Jersey
     
Randgold Resources Limited
     
Randgold Resources (Burkina) Limited
    100  
Randgold Resources (Côte d’Ivoire) Limited
    100  
Randgold Resources (Kibali) Limited
    100  
Randgold Resources (Mali) Limited
    100  
Randgold Resources (Senegal) Limited
    100  
Randgold Resources (Somilo) Limited
    100  
Randgold Resources T1 Limited
    100  
Randgold Resources T2 Limited
    100  
Randgold Resources (Jersey) Limited
    100  
Randgold Resources (Gounkoto) Limited
    100  
Mining Investments (Jersey) Limited
    100  
Morila Limited
    50  
Moto (Jersey) 1 Limited
    100  
Moto (Jersey) 2 Limited
    100  
RAL 1 Limited
    50  
Kibali (Jersey) Limited
    50  
Kibali 2 (Jersey) Limited
    50  
Kibali Services Limited
    50  
Australia
       
Moto Goldmines Australia (Pty) Limited
    50  
Border Energy (Pty) Limited
    50  
Westmount Resources NL
    50  
Border Resources NL
    50  
Burkina Faso
       
Randgold Resources Burkina Faso SARL
    100  
Canada
       
Moto Goldmines Limited
    50  
0858065 B.C. Limited
    50  
Côte d’Ivoire
       
Randgold Resources (Côte’d’Ivoire) SARL
    100  
Société des Mines de Tongon SA
    89  
Democratic Republic of Congo
       
Kibali Goldmines S.P.R.L.
    45  
Mali
       
Randgold Resources Mali SARL
    100  
Société des Mines de Morila SA
    40  
Société des Mines de Loulo SA
    80  
Kankou Moussa SARL
    75  
South Africa
       
Seven Bridges Trading 14 (Pty) Limited
    100  
Tanzania
       
Randgold Resources Tanzania (T) Limited
    100  
The Netherlands
       
Kibali Cooperatief UA
    50  
Uganda
       
Border Energy East Africa (Pty) Limited
    50  
United Kingdom
       
Randgold Resources (UK) Limited
    100  

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D. PROPERTY, PLANT AND EQUIPMENT
     For a discussion of our principal properties, including mining rights and permits, see “Item 4. Information on the Company — A. History and Development of the Company” and “Item 4. Information on the Company — B. Business Overview”. We have all material legal rights necessary to entitle us to exploit such deposits in respect of the Morila mine in Mali to April 2022, Loulo in Mali to 2029 and Tongon in Côte d”Ivoire to 2020.
     The exploration permits in Côte d’Ivoire, Mali, Senegal, Burkina Faso and DRC give us the exclusive right for a fixed time period, which is open to renewal, to prospect on the permit area.
     Once a discovery is made, we, as the permit holder, then commence negotiations with the respective governments as to the terms of the exploration or mining concession. Depending on the country, some of the terms are more open to negotiation than others, but the critical areas which can be agreed to are the government’s interest in the mine, taxation rates and taxation holidays, repatriation of profits and the employment of expatriates and local labor.
Item 4A. Unresolved Staff Comments
     None.
Item 5. Operating and Financial Review and Prospects
     Statements in this Annual Report concerning our business outlook or future economic performance; anticipated revenues, expenses or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements” as that term is defined under the United States Federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth under “Item 3. Key Information — D. Risk Factors” in this Annual Report as well as those discussed elsewhere in this Annual Report and in our other filings with the Securities and Exchange Commission.
General
     We earn substantially all of our revenues in US dollars and a large proportion of our costs are denominated or based in US dollars, excluding the Morila mining contract which is partially denominated in Euros. We also have South African Rand, Communauté Financière Africaine franc, Congolese franc and Pound Sterling denominated costs, which are primarily wages and material purchases.
Impact of Malian Economic and Political Environment
     We are a Jersey incorporated company and are subject to income tax at a rate of zero percent in Jersey. Our current significant operations are located in Mali and are therefore subject to various economic, fiscal, monetary and political policies and factors that affect companies operating in Mali, as discussed under “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Operations”.
Impact of Favorable Tax Treaties
     We are subject to income tax at a rate of zero percent in Jersey. Somilo SA benefited from a five year tax holiday until November 7, 2010. Tongon SA also benefits from a five year tax holiday in Cote d’Ivoire which commenced on December 1, 2010. The benefit of the tax holidays to the group was to increase its net profit by $30.2 million, $26.7 million, and $9 million for the years ended December 31, 2010, 2009, and 2008, respectively.
     Under Malian tax law, income tax is based on the greater of 35% of taxable income or 0.75% of gross revenue. Under Ivorian tax law, income tax is based on the greater of 25% of taxable income or 0.5% of gross revenue.

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     The Morila, Loulo and Tongon operations have no assessable capital expenditure carry forwards or assessable tax losses, as at December 31, 2010 and 2009 respectively, for deduction against future mining income.
Revenues
     Substantially all of our revenues are derived from the sale of gold. As a result, our operating results are directly related to the price of gold. Historically, the price of gold has fluctuated widely. The gold price is affected by numerous factors over which we have no control. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Operations — The profitability of our operations, and the cash flows generated by our operations, are affected by changes in the market price for gold which in the past has fluctuated widely”.
     We have followed a hedging strategy the aim of which is to secure a minimum price which is sufficient to protect us in periods of significant capital expenditure and debt finance, while at the same time allowing significant exposure to the spot gold price. Accordingly, we have made use of hedging arrangements. Under the terms of the Morila project loan, we were required to hedge 50% of approximately 36% of Morila’s first 5 years of production. The last remaining hedges were closed out during 2004.
     Our prior financing arrangements for the development of Loulo included provisions for gold price protection. Although the facility was fully repaid in December 2007, these instruments were in place until the last remaining hedges were delivered into during 2010. The group is now fully exposed to the spot gold price on gold sales.
     Significant changes in the price of gold over a sustained period of time may lead us to increase or decrease our production, which could have a material impact on our revenues.
Our Realized Gold Price
     The following table sets out the average, high and low afternoon London Bullion Market fixing price of gold and our average US dollar realized gold price during the years ended December 31, 2010, 2009, and 2008.
                         
    Year Ended December 31,
    2010   2009   2008
Average
    1,224       972       871  
High
    1,421       1,213       1,011  
Low
    1,058       810       712  
Average realized gold price
    1,180 (1)     893 (1)     792 (1)
 
(1)   Our average realized gold price differs from the average gold price as a result of the timing of our gold deliveries and different realized prices achieved on the hedge book.
Costs and Expenses
     Our operations currently comprise three operations. Mining operations at both Loulo and Tongon are being conducted by contractors and managed by the company. Morila is currently processing stockpiles only as mining ceased in April 2009. Milling operations are undertaken by the group’s own employees. Total cash costs in the year ended December 31, 2010 as defined by guidance issued by the Gold Institute made up approximately 78% of total costs and expenses and comprised mainly mining and milling costs, including labor and consumable stores costs. Consumable stores costs include diesel and reagent costs. Contractor costs represented 46% of total cash costs, with diesel and reagent costs making up 25% of total cash costs. Direct labor costs accounted for approximately 5% of total cash costs. For a definition of total cash costs, please refer to “Item 3 — Key Information.”
     The price of diesel for the Loulo, Morila and Tongon operations were consistent from 2009 to 2010. Should prices increase, this could significantly impact total cash costs mainly as a result of the high volume of diesel consumed to generate power and to run the mining fleet. A significant portion of the costs at Loulo and Morila are denominated in CFA and therefore costs are exposed to fluctuations in the Euro/dollar exchange rate. The Euro weakened slightly against the dollar during 2010. The remainder of our total

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costs and expenses consists primarily of amortization and depreciation, exploration costs, exchange losses, interest expense and general administration or corporate charges.
Looking Forward
     Despite the challenges of 2010 our four year organic growth profile remains intact. Assuming the situation in the Côte d’Ivoire does not impact upon operations much longer, the group forecast production for 2011 is 750,000 to 790,000 ounces which is a 70% increase on 2010. On an equity attributable basis this equates to approximately 640,000 to 670,000 ounces compared to 373,706 ounces in 2010.
     Considering the situation in the Côte d’Ivoire and given the ongoing remedial work planned for the Yalea underground in the first quarter, as well as the anticipated contribution from Gounkoto starting in July, the production forecast is skewed towards the second half of the year. Notwithstanding the additional non-cash adjustments relating to the Morila stockpiles, management is targeting total cash costs per ounce for the group, after royalties and taxes, of less than $600/oz for 2011, assuming current prevailing oil price and Euro-Dollar exchange rates, which movements have a significant impact on operating costs. Continued growth in production over the following four years is forecast from increasing grades out of Loulo, Gara and Gounkoto with Kibali adding to production in 2014. Consequently, on the back of this forecast increase in grade, the group total cash costs based on current prevailing input cost parameters, are forecast to reduce to the lower $400/oz range over the same period.
     Given our exploration success, exploration expenditure is expected to remain high in the coming year. Significant capital expenditure will also be incurred across the group as part of our planned growth in production, including on the Massawa feasibility project in Senegal, targeted to be concluded by the end of the year, and at Kibali in the DRC, where the mine construction start-up is targeted for mid-year. At Gounkoto, capital expenditure will be focused on the first six months of the year, leading up to production anticipated to start in the second half of the year. Capital expenditure at Loulo will be focused on the Yalea and Gara underground mine developments as well as the plant upgrade as part of the Gounkoto start-up. Total group capital expenditure for 2011 is anticipated to be approximately $310 million.
     We continue to maintain our focus on organic growth through discovery and development of world class orebodies, and have a pipeline of high quality projects and exploration targets. Notwithstanding this core strategy, management routinely reviews corporate and asset acquisition opportunities, focused on gold in Africa.
Critical Accounting Policies
     Our significant accounting policies are more fully described in note 2 to our consolidated financial statements. Some of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are based on our historical experience, terms of existing contracts, management’s view on trends in the gold mining industry and information from outside sources.
     Management believes the following critical accounting policies, among others, affect the more significant judgments and estimates used in the preparation of our consolidated financial statements and could potentially impact our financial results and future financial performance.
Joint Venture Accounting
     We account for our investment in joint ventures by incorporating our proportionate share of the joint ventures’ assets, liabilities, income, expenses and cash flows in the consolidated financial statements under appropriate headings. Should this method of accounting not be permitted in the future, the results of each joint venture would need to be equity accounted. This would require the recognition in the consolidated statement of comprehensive income, on a separate line, of our share of the joint ventures’ profit or loss for the year. Our interest in the joint venture would be carried on the statement of financial position at an amount which would reflect our share of the net assets of the joint venture.
     This would result in a presentation of our statement of financial position and statement of comprehensive income that differs significantly from the current presentation, but would have no impact on our net income or our net asset value.

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Depreciation and Amortization of Mining Assets
     Depreciation and amortization charges are calculated using the units of production method and are based on tonnes processed through the plant as a percentage of total expected tonnes to be processed over the lives of our mines. A unit is considered to be produced at the time it is physically removed from the mine. The lives of the mines are based on proven and probable reserves as determined in accordance with the Securities and Exchange Commission’s industry guide number 7. The estimates of the total expected future lives of our mines could be materially different from the actual amounts of gold mined in the future and the actual lives of the mines due to changes in the factors used in determining our mineral reserves. These factors could include: (i) an expansion of proven and probable reserves through exploration activities; (ii) differences between estimated and actual cash costs of mining, due to differences in grade, metal recovery rates and foreign currency exchange rates; and (iii) differences between actual gold prices and gold price assumptions used in the estimation of reserves. Such changes in reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine, which in turn is limited to the life of the proven and probable reserves.
Valuation of Long-Lived Assets
     Management compares the carrying amounts of property, plant and equipment to the recoverable amount of the assets whenever events or changes in circumstances indicate that the net book value may not be recoverable. In determining if the asset can be recovered, we compare the recoverable amount to the carrying amount. If the carrying amount exceeds the recoverable amount, we will record an impairment charge in profit or loss to write down the asset to the recoverable amount. The recoverable amount is assessed by reference to the higher of “value in use” (being the net present value of expected future cash flows of the relevant case generating unit) and “fair value less cost to sell.” To determine the value in use amount, management makes its best estimate of the future cash inflows that will be obtained each year over the life of the mine and discounts the cash flow by a rate that is based on the time value of money adjusted for the risk associated with the applicable project. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. With the exception of mine-related exploration potential, all assets at a particular operation are considered together for purposes of estimating future cash flows.
     These reviews are based on projections of anticipated future cash flows to be generated by utilizing the long-lived assets. While management believes that these estimates of future cash flows are reasonable, different assumptions regarding projected gold prices and production costs as discussed above under depreciation and amortization of mining assets could materially affect the anticipated cash flows to be generated by the long-lived assets. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
Environmental Rehabilitation Costs
     We provide for environmental rehabilitation costs and related liabilities based on our interpretations of current environmental and regulatory standards with reference to World Bank guidelines. Final environmental rehabilitation obligations are estimated based on these interpretations and in line with responsible programs undertaken by similar operations elsewhere in the world. While management believes that the environmental rehabilitation provisions made are adequate and that the interpretations applied are appropriate, the amounts estimated may differ materially from the costs that will actually be incurred to rehabilitate our mine sites in the future.
Exploration and evaluation costs
     We expense all exploration and evaluation expenditures until the directors conclude that a future economic benefit is more likely than not of being realized, i.e. ‘probable’. While the criteria for concluding that an expenditure should be capitalized are always probable, the information that the directors use to make that determination depends on the level of exploration.
     Exploration and evaluation expenditure on greenfield sites, being those where we do not have any mineral deposits which are already being mined or developed, is expensed until such time as our directors have sufficient information to determine that future economic benefits are probable, after which the expenditure is capitalized as a mine development costs. The information required by directors is typically a final feasibility study, however, a prefeasibility study may be deemed to be sufficient where the additional work required to prepare a final feasibility study is not significant.

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     Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being mined or developed, is expensed as incurred until our directors are able to demonstrate that future economic benefits are probable through the completion of a prefeasibility study, after which the expenditure is capitalized as a mine development cost. A ‘prefeasibility study’ consists of a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating economic factors and the evaluation of other relevant factors. The prefeasibility study, when combined with existing knowledge of the mineral property that is adjacent to mineral deposits that are already being mined or developed, allow the directors to conclude that it is more likely than not that the group will obtain future economic benefit from the expenditures.
     Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed, including expenditure on the definition of mineralization of such mineral deposits, is capitalized as a mine development cost following the completion of an economic evaluation equivalent to a prefeasibility study. This economic evaluation is distinguished from a prefeasibility study in that some of the information that would normally be determined in a prefeasibility study is instead obtained from the existing mine or development. This information when combined with existing knowledge of the mineral property already being mined or developed allow our directors to conclude that more likely than not we will obtain future economic benefit from the expenditures. Costs relating to property acquisitions are also capitalized within development costs.
Receivables
     Receivables are recognized initially at fair value. There is a rebuttable presumption that the transaction price is fair value unless this could be refuted by reference to market indicators. Subsequently, receivables are measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that we will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the trade receivable is impaired.
     The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognized in the statement of comprehensive income.
Share-based payments
     The fair value of the employee services received in exchange for the grant of options or restricted shares is recognized as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options or restricted shares determined at the grant date, including any market performance conditions and excluding the impact of any service and non-market performance vesting conditions (for example profitability, sales growth targets and remaining an employee of the entity over a specified time period). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable or the number of shares that the employee will ultimately receive. This estimate is revised at each statement of financial position date and the difference is charged or credited to the statement of comprehensive income, with a corresponding adjustment to equity. Market performance conditions are included in the fair value assumptions on the grant date with no subsequent adjustment. The proceeds received on exercise of the options net of any directly attributable transaction costs are credited to equity. When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
Mineral properties
     Mineral properties acquired are recognized at fair value at the acquisition date. Mineral properties are tested annually for impairment on the same basis that property, plant and equipment are when there is an indication of impairment. Mineral properties will be amortized on a units of production basis when the related mine commences production.
Recent accounting pronouncements
     The group and company have adopted the following standards, amendments to standards and interpretations which are effective for the first time this year. Their impact is discussed below. Those standards, amendments to standards and interpretations that are

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effective for the first time this year but have no impact on the group, and are not expected to have an impact in the future, have not been included below:
Amendments to IFRIC 9 and IAS 39: Embedded Derivatives (effective for annual periods beginning on or after 30 June 2009).
     This amendment clarifies the treatment of embedded derivatives in host contracts that are reclassified out of fair value through profit or loss following the changes introduced by the Amendments to IAS 39 and IFRS 7: Reclassification of Financial Instruments. This has not had an impact on the group in the current year but may have an impact in future.
Revised IFRS 3: Business Combinations (effective for annual periods beginning on or after 1 July 2009).
     The basic approach of the existing IFRS 3 to apply acquisition accounting in all cases and identify an acquirer is retained in this revised version of the standard. It also includes much of the current guidance for the identification and recognition of intangible assets separately from goodwill. However, in some respects the revised standard may result in very significant changes, including: The requirement to write off all acquisition costs to profit or loss instead of including them in the cost of investment; the requirement to recognize an intangible asset even if it cannot be reliably measured; and, an option to gross up the statement of financial position for goodwill attributable to minority interests (which are renamed ‘non-controlling interests’). The revised standard does not require the restatement of previous business combinations. This has not had an impact on the group in the current year but may have an impact in future.
Amendment to IAS 27: Consolidated and Separate Financial Statements (effective for annual periods beginning on or after 1 July 2009).
     This amendment affects in particular the acquisition of subsidiaries achieved in stages and disposals of interests, with significant differences in the accounting depending on whether or not control is obtained as a result of the transaction, or where a transaction results only in a change in the percentage of a controlling interest. The amendment does not require the restatement of previous transactions. This has not had an impact on the group in the current year but may have an impact in future.
Amendment to IAS 39: Financial Instruments — Recognition and Measurement: Eligible Hedged Items (effective for annual periods beginning on or after 1 July 2009).
     This amendment clarifies how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation should be applied in the designation of a one-sided risk in a hedged item, and inflation in a financial hedged item. This has not had an impact on the group or company in the current year but may have an impact in future.
Improvements to IFRSs: 2010 (effective for annual periods beginning on or after 1 January 2010).
     The improvements in this amendment clarify the requirements of IFRSs and eliminate inconsistencies within and between standards. This has not had a significant impact on the group.
Amendments to IFRS 2: Group Cash-settled Share-based Payment Transactions (effective for annual periods beginning on or after 1 January 2010).
     This amendment clarifies that, where a parent (or another group entity) has an obligation to make a cash-settled share-based payment to another group entity’s employees or suppliers, the entity receiving the goods or services should account for the transaction as equity-settled. The amendment also moves the IFRIC 11 requirements in respect of equity-settled share-based payment transactions among group entities and the clarification of the scope of IFRS 2 contained within IFRIC 8 into IFRS 2 itself. This has not had an impact on the group in the current year but may have an impact in future.
     The following standards, amendment to standards and interpretations which have been recently issued or revised have not been adopted early by the group or company but may have an impact in the future; their expected impact is discussed below. Standards, amendments to standards and interpretations that are not expected to impact the group, are not included below.
Classification of Rights Issues (Amendment to IAS 32) (effective for annual periods beginning on or after 1 February 2010).

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     This Amendment addresses the accounting for rights issues (rights, options or warrants) that are denominated in a currency other than the functional currency of the issuer. Previously such rights issues were accounted for as derivative liabilities. However, the Amendment requires that, provided the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments, such rights issues are classified as equity regardless of the currency in which the exercise price is denominated. This will be applied in the year ending 31 December 2011 but is not expected to have an immediate impact on the group.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods beginning on or after 1 July 2010).
     This Interpretation addresses transactions in which an entity issues equity instruments to a creditor in return for the extinguishing of all or part of a financial liability. Broadly, it applies to transactions where the two parties are acting only in their capacity as lender and borrower. It does not address the appropriate treatment for the creditor and does not apply to arrangements in which liabilities are extinguished in return for equity instruments in accordance with the original terms of the financial liability. For transactions within its scope, where the whole liability is extinguished, the Interpretation requires the equity instruments issued to be measured at their fair value and the difference between that fair value and the carrying value of the financial liability extinguished to be recognized in profit or loss. Where only part of the financial liability is extinguished, some allocation of the consideration between the extinguished portion of the liability and the part of the liability that remains outstanding may be required. This will be applied in the year ending 31 December 2011 but is not expected to have an immediate impact on the group.
Revised IAS 24 Related Party Disclosures (effective for annual periods beginning on or after 1 January 2011).
     The revision to IAS 24 is in response to concerns that the previous disclosure requirements and the definition of a related party were too complex and difficult to apply in practice, especially in environments where government control is pervasive. The revised standard addresses these concerns by:
  Providing a partial exemption for government related entities — Until now, if a government controlled, or a significantly influenced, an entity, the entity was required to disclose information about all transactions with other entities controlled, or significantly influenced by the same government. The revised Standard requires such entities to disclose information about individually and collectively significant related party transactions only.
  Providing a revised definition of a related party — The structure of definition of a related party has been simplified and inconsistencies eliminated. Illustrative examples have also been added. The revised definition will mean that some entities will have more related parties for which disclosures will be required. The entities that are most likely to be affected are those that are part of a group that includes both subsidiaries and associates, and entities with shareholders that are involved with other entities.
This will be applied in the year ending 31 December 2011 but is not expected to have an immediate impact on the group.
Improvements to IFRSs (2010) (effective for annual periods beginning on or after 1 January 2011).
     The improvements in this Amendment clarify the requirements of IFRSs and eliminate inconsistencies within and between Standards. The changes include amendments to:
  IFRS 3 (Revised 2008) ‘Business combinations’ including: (i) Clarification that the treatment of contingent consideration arising in business combinations occurring before the effective date of IFRS 3(R) continues to be treated under the old requirements. (ii) Limiting the choice to measure non-controlling interests at a proportionate share in recognized amounts of the acquiree’s identified net assets to present ownership interests with other components of the non-controlling interest being measured at fair value. (iii) The inclusion or otherwise in the cost of investment of replacement share-based payment awards provided to employees of the acquiree.
  IFRS 7 ‘Financial instruments: Disclosures’ including clarification that an entity should provide qualitative disclosures in the context of quantitative disclosures to enable users to link related disclosures and hence form an overall picture of the nature and extent of risks arising from financial instruments.
  IAS 1 (Revised 2007) ‘Presentation of financial statements’ clarifying that the analysis of components of other comprehensive income in the statement of changes in equity may be presented in a note.

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  IAS 34 ‘Interim financial reporting’ clarifying the disclosures required in respect of significant events and transactions during the period.
     Improvements to IFRSs (2010) also made minor amendments to the wording of IFRIC 13 ‘Customer loyalty programs’ regarding the valuation of award credits and the transitional arrangements for amendments to IAS 21 ‘The effects of changes in foreign exchange rates’ and IAS 28 ‘Investments in associates’ in respect of the loss of control or significant influence which were introduced by IAS 27 (as amended 2008) ‘Consolidated and separate financial statements’. This will be applied in the year ending 31 December 2011 but is not expected to have an immediate impact on the group.
Disclosures — Transfers of Financial Assets (Amendments to IFRS 7) (effective for annual periods beginning on or after 1 July 2011).
     This Amendment requires the disclosure of information in respect of all transferred financial assets that are not derecognized and for any continuing involvement in a transferred asset, existing at the reporting date, irrespective of when the related transfer transaction occurred. The disclosures are intended to enable users of financial statements: (a) to understand the relationship between transferred financial assets that are not derecognized in their entirety and the associated liabilities; and (b) to evaluate the nature of, and risks associated with, the entity’s continuing involvement in derecognized financial assets.
     These enhanced disclosures are likely to affect, among others, entities that have debt factoring arrangements. These amendments are not yet endorsed by the EU. This will be applied in the year ending December 31, 2012 but is not expected to have an immediate impact on the group.
Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12) (effective for annual periods beginning on or after 1 January 2012).
     IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 Investment Property. The amendment provides a practical solution to the problem by introducing a presumption that recovery of the carrying amount will, normally, be through sale. As a result of the amendments, SIC-21 Income Taxes - Recovery of Revalued Non-Depreciable Assets would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC-21, which is accordingly withdrawn. These amendments are not yet endorsed by the EU. This will be applied in the year ending December 31, 2012 but is not expected to have an immediate impact on the group.
IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2013).
     IFRS 9 will eventually replace IAS 39 in its entirety. However, the process has been divided into three main components: Classification and measurement; impairment; and, hedge accounting. As each phase is completed, it will delete the relevant portions of IAS 39 and create new chapters in IFRS 9.
     To date IFRS 9 addresses only the classification and measurement of financial instruments. The requirements for financial assets are that they should be:
  Classified on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset;
  measured at amortized cost if it meets two conditions: (a) The entity’s business model is to hold the financial asset in order to collect the contractual cash flows; and, (b) the contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principle outstanding; and,
  subsequently measured at amortized cost or fair value depending on the business model of the entity and the terms of the instrument.
     Hybrid contracts with a host that is within the scope of IFRS 9 (i.e. a financial host) must be classified in its entirety in accordance with the classification approach stated above. This eliminates the existing IAS 39 requirements to separately account for an embedded derivative and a host contract. The embedded derivative requirements under IAS 39 continue to apply where the host contract is a non-financial asset and for financial liabilities.

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     The requirements for classifying and measuring financial liabilities are mostly unchanged from those set out in IAS 39.
     IFRS 9 includes an accounting policy choice allowing investments in equity instruments to be measured at fair value through other comprehensive income. This is an irreversible election made, on an instrument by instrument basis, at the date of initial recognition. Where this option is not taken, all equity instruments with the scope of IFRS 9 will be classified as fair value through profit or loss. Irrespective of the policy choice made, dividends received on equity instruments will always be recognized in profit or loss. Subsequent reclassification of financial assets between the amortized cost and fair value categories is permitted only when an entity changes its business model for managing its financial assets. The held to maturity and available for sale classifications have been eliminated. This standard has not yet been endorsed by the EU. This will be applied in the year ending 31 December 2013. We will review the impact on the group closer to the date of implementation, but it is currently expected that it will result in a reclassification of available for sale assets.
A.   OPERATING RESULTS
     Our operating and financial review and prospects should be read in conjunction with our consolidated financial statements, accompanying notes thereto, and other financial information appearing elsewhere in this Annual Report.
Years Ended December 31, 2010 and 2009
Total revenue
     Total revenues from gold sales for the year ended December 31, 2010 increased by $51.8 million, or 12%, from $432.8 million to $484.6 million. This is mainly due to a 32% increase in the average gold price received from $893/oz in 2009 to $1,180/oz in 2010, partially offset by a 15% decrease in group ounces sold to 413,262 in 2010, mainly due to a decrease in grade at Loulo, which is expected to improve in 2011.
Other Income
     Other income of $22.6 million for the year ended December 31, 2010 compared to $9 million for the year ended December 31, 2009. Other income includes a profit of $19.3 million (2009: $10.7 million) in respect of the sale of 15.5 million Volta Resources shares. The amount recognized in 2009 relates to the profit realized on the sale of the Kiaka project in Burkina Faso.
Costs and Expenses
Total Cash Costs
     The following table sets out our total ounces sold and total cash cost and production cost per ounce sold for the years ended December 31, 2010 and 2009:
                                 
            Year Ended December 31,        
    2010   2009
    Ounces sold   $ Per Ounce   Ounces sold   $ Per Ounce
Morila (40% share) cash costs
    95,443       669       136,664       480  
Loulo (100% share) cash costs
    313,122       712       351,591       522  
Tongon (100% share) cash costs
    4,698       459              
Total ounces (sold)
    413,263               488,255          
Group total cash costs*
            699               510  
 
Total production costs per ounce under IFRS†
            767               569  
 
*   For a definition of cash costs, please see “Item 3. Key Information — A. Selected Financial Data”.
 
  Total production cost includes total cash costs and also the depreciation and amortization cost which is discussed below. Total cash cost per ounce has been restated following the change in the bases for these calculations. Refer to page 9 for more information.

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     Total cash costs for the year ended December 31, 2010 of $289 million increased by 16% from 2009, mainly due to increased mining costs at Loulo primarily due to increased open pit mining costs resulting from deepening pits, revised mining rates and general cost increases in reagents and other consumables. Cash costs also increased at Morila during 2010, due to the continued impact of processing lower grade ore. The total cash costs per ounce of $699/oz increased by 37% year on year.
     Royalties increased by $2.3 million, or 9%, to $27.7 million for the year ended December 31, 2010 from $25.4 million for the year ended December 31, 2009. The increased royalties reflect the higher average gold price received.
     Other mining and processing costs comprise various expenses associated with providing on mine administration support services to the Morila, Loulo and Tongon mines. These charges amounted to $20.6 million for the year ended December 31, 2010 and $19.1 million for the year ended December 31, 2009. The increase in other mining and processing costs also reflect the commencement of operations at the Tongon mine towards the end of 2010.
Depreciation and Amortization
     Depreciation and amortization of $28.1 million for the year ended December 31, 2010 is consistent with the depreciation of $28.5 million that was charged for the year ended December 31, 2009. This includes depreciation charged at Loulo, Morila and Tongon since production commenced at Tongon in the fourth quarter of 2010.
Exploration and Corporate Expenditure
     Exploration and corporate expenditure was $47.2 million for the year ended December 31, 2010 and $51.1 million for the year ended December 31, 2009. Following the successful completion of prefeasibility studies at the Massawa project in Senegal (now at feasibility stage) and the Gounkoto project in Mali (now in construction), a higher proportion of expenditure was capitalized in 2010. During 2010, $2.5 million and $1.4 million were expensed for Massawa and Gounkoto, respectively, before these projects moved into feasibility stage and expenses thereon could be capitalized as per our accounting policies. In 2009, $14.3 million and $1.8 million were expensed on the Massawa and Gounkoto project, respectively.
Other expenses
     Other expenses for the year ended December 31, 2010 of $14.1 million mainly comprised operational foreign exchange losses of $13.4 million. Other expenses for the year ended December 31, 2009 of $0.24 million consisted of an increase in the loss related to the ineffective portion of hedging contracts. All gold price forward sales contracts were delivered into during the year.
Finance Income
     Finance income amounts consist primarily of interest received on cash held at banks of $1.3 million (2009:$1.9 million). Finance income of $3.4 million for the year ended December 31, 2009 also included a net foreign exchange gain of $1.6 million. The decrease in finance income was due to lower cash balances during 2010 compared to 2009.
Finance costs
     Finance costs for the year ended December 31, 2010 was $5.3 million compared to finance costs for the year ended December 31, 2009 of $1.9 million. Finance costs for the year ended December 31, 2010 included net foreign exchange losses on financing activities of $3.6 million, while a net foreign exchange gain of $1.6 million was achieved during the year ended December 31, 2009 and included in finance income.
Provision for financial assets
     The auction rate securities (‘ARS’) have now been disposed following a settlement that was reached in relation to these investments. The gain on settlement was $13 million. During 2009, we made a provision of $9.6 million against these assets.

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Income Tax Expense
     The income tax expense amounted to $24.5 million for the year ended December 31, 2010 and $21.5 million for the year ended December 31, 2009. The increase in the tax expense is the result of the expiration of the Loulo tax exoneration period in November 2010. Morila SA benefited from a five year tax holiday until November 14, 2005. Loulo SA also benefited from a five year tax holiday in Mali until November 7, 2010. Tongon SA benefits from a five year tax holiday in Cote d’Ivoire from December 1, 2010. Under Malian tax law, income tax is based on the greater of 35% taxable income or 0.75% of gross revenue. Under Ivorian tax law, income tax is based on the greater of 25% of taxable income or 0.5% of gross revenue.
Non-controlling interests
     The non-controlling interests for the year ended December 31, 2010 represent the Malian government’s 20% share of the profits at Loulo since production commenced in November 2005, the Ivorian government’s 10% share and other outside shareholder’s 1% share of the profits at Tongon since production commenced in November 2010 and Sokimo’s 5% share of Kibali. We have 45% interest in Kibali, but as we gross proportionally consolidate our interest, as at December 31, 2009 we recognized 50% of Kibali and a 5% non-controlling interest.
Years Ended December 31, 2009 and 2008
Total revenue
     Total revenues from gold sales for the year ended December 31, 2009 increased by $94.2 million, or 28%, from $338.6 million to $432.8 million. This is mainly due to a 14% increase in attributable ounces sold to 486,324 ounces year on year, as well as an increase in the average gold price received of $101/oz from $792/oz in 2008 to $893/oz in 2009.
Other Income
     Other income of $9.0 million for the year ended December 31, 2009 compared to $4.2 million for the year ended December 31, 2008. Other income for 2009 included management fees received from Morila ($2 million net of eliminations) since we assumed operations of the mine from February 15, 2008 (2008: $2 million). Other income also included a profit of $10.7 million (2008: $0) realized on the sale of the Kiaka project in Burkina Faso. This was partially offset by foreign exchange losses included in other income during 2009.
Costs and Expenses
Total Cash Costs
     The following table sets out our total ounces produced and total cash cost and production cost per ounce for the years ended December 31, 2009 and 2008:
                                 
    Year Ended December 31,  
            2009             2008  
    Ounces     $ Per Ounce     Ounces     $ Per Ounce  
Morila (40% share) cash costs
    136,664       480       170,331       400  
Loulo (100% share) cash costs
    349,660       525       259,382       512  
Total ounces (attributable sales)
    486,324               427,713          
Group total cash costs*
            512       468          
Total production costs per ounce under IFRS†
            571       517          
 
*   For a definition of cash costs, please see “Item 3. Key Information — A. Selected Financial Data”.
 
  Total production cost includes total cash costs and also the depreciation and amortization cost which is discussed below. Total cash cost per ounce has been restated following the change in the bases for these calculations. Refer to page 9 for more information.

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     Total cash costs for the year ended December 31, 2009 of $249.2 million increased by 25% from 2008, mainly due to the incremental increases associated with higher production, increased open cast mining costs at Loulo and the full transitioning of Morila into a stockpile treatment operation. The total cash costs per ounce of $510/oz increased by 9% year on year.
     Royalties increased by $5.7 million, or 29%, to $25.4 million for the year ended December 31, 2009 from $19.7 million for the year ended December 31, 2008. The increased royalties reflect increased gold sales and a higher gold price received.
     Other mining and processing costs comprise various expenses associated with providing on mine administration support services to the Morila and Loulo mine. These charges amounted to $19.1 million for the year ended December 31, 2009 and $13.7 million for the year ended December 31, 2008. The increase in other mining and processing costs also reflect the increase in operating activity at Loulo resulting from the development of the underground mines.
Depreciation and Amortization
     Depreciation and amortization of $28.5 million for the year ended December 31, 2009 compares to $21.3 million for the year ended December 31, 2008. This includes depreciation charged at both operations. The increase in depreciation year on year is a result of the increase in capital expenditure at Loulo as a result of the development of the underground mines and the amortization of the capital items in use during 2009. Capital expenditure at Tongon has not attracted depreciation during 2009, as the mine development is currently in the construction phase.
Exploration and Corporate Expenditure
     Exploration and corporate expenditure was $51.1 million for the year ended December 31, 2009, and $45.2 million for the year ended December 31, 2008. The increase during 2009 was due to the increase in exploration expenditure during the year as a result of continued commitment to exploration and prefeasibility drilling, especially at the Massawa project in Senegal.
Other expenses
     Other expenses for the year ended December 31, 2009 of $0.24 million and $0.36 million for the year ended December 31, 2009 both consisted of an increase in the loss related to the ineffective portion of hedging contracts.
Finance Income
     Finance income amounts consist primarily of interest received on cash held at banks ($1.9 million), as well as exchange gains on financing activities ($1.6 million). Finance income of $3.4 million for the year ended December 31, 2009 compared to $9.3 million for the year ended December 31, 2008. The decrease in finance income was due to a lower effective interest rate for 2009 (0.35%) compared to 2008 (2.7%). This was partially offset by higher cash balances during 2009 compared to 2008, resulting from the $329.7 million capital raising that was concluded in August 2009.
Finance costs
     Finance costs for the year ended December 31, 2009 was $1.9 million compared to finance costs for the year ended December 31, 2008 of $3.3 million. Finance costs for the year ended December 31, 2008 included net foreign exchange losses on financing activities of $1.3 million, while a net foreign exchange gain of $1.6 million was achieved during the year ended December 31, 2009 and included in finance income.
Provision for financial assets
     At the end of 2007, we transferred $49.0 million from cash and cash equivalents to available-for-sale financial assets which were attributable to our portfolio of ARS. The trading market for these instruments became substantially illiquid as a result of the conditions in the credit markets. During 2009, following the continued deterioration of the underlying credit ratings of the collateral of certain of the ARS, we provided $9.6 million (2008: $10.4 million) against these assets, and the assets were reclassified into the non-current section of available-for-sale financial assets during 2008.

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Income Tax Expense
     The income tax expense amounted to $21.5 million for the year ended December 31, 2009 and $24.6 million for the year ended December 31, 2008. The decrease in the tax expense is the result of a decrease in profit before tax at Morila. Morila SA benefited from a five year tax holiday until November 14, 2005. Loulo SA also benefits from a five year tax holiday in Mali. The tax holiday commenced on November 8, 2005. Under Malian tax law, income tax is based on the greater of 35% taxable income or 0.75% of gross revenue.
Non-controlling interests
     The non-controlling interests for the years ended December 31, 2009 and December 31, 2008 represent the Malian Governments 20% share of the profits at Loulo since production commenced in November 2005 and Sokimo’s share of Kibali. We have 45% interest in Kibali, but as we gross proportionally consolidate our interest, as at December 31, 2009 we recognized 50% of Kibali and a 5% non-controlling interest.
B. LIQUIDITY AND CAPITAL RESOURCES
Cash Resources
     The group had $366.4 million cash and cash equivalents for the year ended December 31, 2010 and $589.7 million for the year ended December 31, 2009.
Operating Activities
     Net cash generated from operating activities was $107.8 million for the year ended December 31, 2010 and $63.7 million for the year ended December 31, 2009. The $44.1 million increase was due mainly to the changes in operating working capital items. Cash flows related to receivables increased by $26.4 million during 2010, due to the settlement of TVA balances at Loulo and Morila, the settlement of contractor receivables and improved debtor management. Cash flows related to inventories and ore stockpiles decreased significantly during 2010 by $61.4 million, due to the Tongon stockpiles now being included following commencement of mining activities in 2010, as well as significant dore balances on hand at Tongon at year end ($11.3 million). Cash flows related to trade and other payables increased by $10.8 million from December 31, 2009 to December 31, 2010, mainly due to the effect of additional contractors and accruals at the Tongon mine at year end.
     Net cash generated from operating activities was $63.7 million for the year ended December 31, 2009 and $57.5 million for the year ended December 31, 2008. The $6.2 million increase was due mainly to the changes in operating working capital items, offset by movements in the actual tax paid for 2009 compared to 2008. Cash flows related to trade and other payables increased significantly ($25.6 million) from December 31, 2008 to December 31, 2009, mainly due to the timing of payments of creditors. Cash flows related to receivables decreased by $73.7 million during 2009 and increased by $8.6 million during 2008, mainly as a result of the timing of receipts of gold sales and loans made to contractors.
     Net cash provided by operating activities was $57.5 million for the year ended December 31, 2008 and $62.2 million for the year ended December 31, 2007. The $4.7 million decrease was mainly the result of the changes in operating working capital items, as well as movements in the actual tax paid for 2008 compared to 2007.
Investing
     Investing activities for the year ended December 31, 2010 utilized $410.8 million compared to $196.7 million utilized for the year ended December 31, 2009 and consisted primarily of expenditure related to bringing the Tongon mine into production of $232.7 million, expenditure incurred on the Yalea and Gara underground developments, the plant expansion and the power plant at Loulo amounting to $86.9 million and $33.2 million related to the Kibali project.
     Investing activities for the year ended December 31, 2009 utilized $82.4 million compared to $85 million utilized for the year ended December 31, 2008. Investing activities in 2009 consisted primarily of expenditures incurred on the underground development work at Loulo amounting to $74 million at Yalea and Gara, crusher upgrade stockpile reclaim facility, overland conveyer expenditure, power plant expansion and the oxygen plant expansion at Loulo. Capital expenditure at Tongon included costs related to earthworks, site establishment, infrastructure, design and engineering, as well as progress payments on the mills, crushers and fleet amounting to $120 million. Investing activities also includes the acquisition of the Moto group as well as the acquisition of a further 10% interest in

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the Kibali project amounting to $56 million. The overall net cash inflow in respect of the acquisition of Moto and Kibali was $114 million as a result of the joint agreement with AngloGold in which they paid cash for their share of the acquisition.
Financing
     Financing activities for the year ended December 31, 2010 generated $14 million. This comprised $30.6 million received on exercise of share options offset by a dividend payment of $15.3 million and repayment of long term loans of $1.3 million.
     Financing activities for the year ended December 31, 2009 generated $350.8 million. This comprised mainly of the proceeds from our equity placement in July 2009 ($329.7 million) less a payment of dividends to our shareholders amounting to $10 million. $32.6 million was further received on the exercise of share options during 2009.
Credit and Loan Facilities
     During the year ended December 31, 2000, Morila entered into a finance lease for five Rolls-Royce generators under the terms of a Deferred Terms Agreement between Morila and Rolls-Royce. The lease is repayable over ten years commencing April 1, 2001 and bears interest at a variable rate which at December 31, 2010 was approximately 38% (2009: 38%) per annum. Our attributable share of this finance lease obligation amounted to $0.2 million at December 31, 2010 and $1.1 million at December 31, 2009. We have guaranteed the repayment of the lease.
     Morila had a finance lease with Air Liquide relating to three oxygen generating units. The lease was fully repaid in 2010.
     Somilo SA has a $0.6 million loan from the Government of Mali. This loan is uncollateralized and bears interest at the base rate of the Central Bank of West African States plus 2% per annum. The accrual of interest ceased in the last quarter of 2005 per mutual agreement between shareholders. This loan is repayable from cash flows of the Loulo mine after the repayment of all other loans.
     The Loulo project finance loan was arranged by NM Rothschild & Sons Limited and SG Corporate & Investment Banking, who were joined in the facility by Absa Bank and HVB Group, and was repaid in December 2007.
     The Loulo project finance facility was replaced in May of 2007 with a $60 million corporate revolving credit facility to Randgold Resources (Somilo) Limited. The facility was with NM Rothschild, Société Générale, Fortis and Barclays. It carried interest at rates of between LIBOR + 1.4% and LIBOR + 1.6%. The facility was fully repaid in December 2007. The corporate facility was cancelled during the year, ended December 31, 2009.
     Loulo had a Euro denominated Caterpillar finance facility relating to fifteen 3512B HD generator sets and ancillary equipment purchased from JA Delmas and financed by a loan from Caterpillar Finance. The lease was payable quarterly over 42 months commencing on August 1, 2005, and bore interest at a fixed rate of 6.03% per annum. Together with Randgold Resources (Somilo) Limited, we jointly guaranteed the repayment of this lease. The average lease payments of $0.5 million were payable in installments over the term of the lease.
Corporate, Exploration, Development and New Business Expenditures
     Our expenditures on corporate, exploration, development and new business activities for the past three years are as follows:
                         
    Year Ended December 31,  
    $’000  
Area   2010     2009     2008  
Rest of Africa
    498       430       200  
Burkina Faso
    558       653       1,886  
Mali
    3,432       3,484       4,334  
Tanzania
    97       236       1,105  
Côte d’Ivoire
    4,203       2,360       2,129  
Senegal
    2,210       14,330       4,768  
Ghana
    85       336       846  
 
                 
Total exploration expenditure
    11,083       21,829       15,268  
 
                 

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    Year Ended December 31,  
    $’000  
Area   2010     2009     2008  
Corporate expenditure
    36,095       29,282       29,895  
 
                 
Total exploration and corporate expenditure
    47,178       51,111       45,163  
     The Group has various exploration programs, ranging from substantial to early stage in Mali, Senegal, Burkina Faso, Côte d’Ivoire and the Democratic Republic of the Congo.
Working Capital
     Management believes that our working capital resources, by way of internal sources are sufficient to fund our currently foreseeable future business requirements.
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
We are not involved in any research and development and have no registered patents or licenses.
D. TREND INFORMATION
     Our financial results are subject to the movement in gold prices. In the past fiscal year, the general trend has been upwards and this has had an impact on revenues. However it should be noted that fluctuations in the price of gold remain a distinct risk to us.
Gold Market
     The gold market is relatively liquid compared with many other commodity markets, with the price of gold generally quoted in US dollars. The physical demand for gold is primarily for fabrication purposes, and gold is traded on a world-wide basis. Fabricated gold has a variety of uses, including jewelry, electronics, dentistry, decorations, medals and official coins. In addition, central banks, financial institutions and private individuals buy, sell and hold gold bullion as an investment and as a store of value.
     Historically, gold has been used as a store of value because it tends to retain its value in relative terms against basic goods in times of inflation and monetary crisis. Therefore, large quantities of gold in relation to annual mine production are held for this purpose. This has meant that, historically, the potential total supply of gold has been far greater than annual demand. Thus, while current supply and demand play some part in determining the price of gold, this does not occur to the same extent as for other commodities.
     Instead, gold prices have been significantly affected, from time to time, by macro-economic factors such as expectations of inflation, interest rates, exchange rates, changes in reserve policy by central banks, and global or regional political and economic crises. In times of inflation, currency devaluation, and political and economic crises, gold has traditionally been seen as refuge, leading to increased purchases of gold and a support for the price of gold.
     Interest rates affect the price of gold on several levels. High real interest rates increase the cost of holding gold, and discourage physical buying in developed economies. High Dollar interest rates also make hedging by forward selling attractive because of the higher contango premiums (differential between LIBOR and gold lease rates) obtained in the forward prices. Increased forward selling in turn has an impact on the spot price at the time of sale.
     Changes in reserve policies of central banks have affected the gold market and gold price on two levels. On the physical level, a decision by a central bank to decrease or to increase the percentage of gold in bank reserves leads to either sales or purchases of gold, which in turn has a direct impact on the physical market for the metal. In practice, sales or purchases by central banks have often involved substantial tonnages within a short period of time and this selling/buying can place strong pressure on the markets at the time they occur. As important as the physical impact to official sales, announcements of rumors of changes in central bank policies which might lead to the sale of gold reserves historically had an effect on market sentiment and encouraged large speculative positions against gold in the futures market for the metal.

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     The volatility of gold prices is illustrated in the following table, which shows the approximate annual high, low and average of the afternoon London Bullion Market fixing price of gold in Dollars for the past ten years.
                         
    Price Per Ounce ($)  
Year   High     Low     Average  
2001
    293       256       271  
2002
    349       278       310  
2003
    416       320       363  
2004
    454       375       409  
2005
    537       411       444  
2006
    725       525       604  
2007
    841       608       695  
2008
    1,011       712       871  
2009
    1,213       810       972  
2010
    1,421       1,058       1,224  
2011 (through February)
    1,411       1,319       1,364  
E. OFF-BALANCE SHEET ARRANGEMENTS
     None.
F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
     Our contractual obligations and commercial commitments consist primarily of credit facilities, as described below. The related obligations as at December 31, 2010 are set out below:
                                         
            Less                    
            than 1     1-3     3-5     More than  
    Total     Year     Years     Years     5 Years  
Contractual Obligations   (dollars in thousands)  
Capital lease obligations(1)
    334       334                    
Operating lease obligations
    2,624       328       656       656       984  
 
                                       
Environmental rehabilitation
    29,564       67       953       4,812       23,732  
Loans from minority shareholders in subsidiaries
    2,718                         2,718  
 
                             
Total contractual cash obligations
    35,240       729       1,609       5,468       27,434  
Contracts for capital expenditure
    85,008       85,008                    
 
(1)   Includes total interest of $0.1 million calculated at the interest rate existing at year end.
Item 6. Directors, Senior Management and Employees
A. DIRECTORS AND SENIOR MANAGEMENT
     Our Articles of Association provide that the board must consist of no less than two and no more than 20 directors at any time. During January 2010, Dr. K. Dagdelen was appointed as a non-executive director. Mr. J.K. Walden resigned from the board on July 1, 2010. The board currently consists of 8 directors.
     Our Articles of Association provide that any new director should be re-elected by the shareholders at the annual general meeting following the date of the director’s appointment. As a result of his appointment in January 2010, Dr. K. Dagdelen was re-elected at the annual general meeting held on May 4, 2010, as required by our Articles of Association. At the annual general meeting Mr. P. Liétard, Mr. R.I. Israel, Mr. N.P. Cole Jr and Dr. K. Voltaire were re-elected,
     According to the Articles of Association, the board meets at intervals determined by the board from time to time.

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     The address of each of our executive directors and non-executive directors is the address of our principal executive offices, 3rd Floor, Unity Chambers, 28 Halkett Street, St. Helier, Jersey, JE2 4WJ, Channel Islands.
Executive Directors
     D. Mark Bristow (52) Chief Executive Officer. Chief executive since our incorporation, which was founded on his pioneering exploration work in West Africa. He has subsequently led our growth through the discovery and development of world-class assets into a major gold mining business with a market capitalization of more than $7 billion. He also played a significant part in promoting the emergence of a sustainable mining industry in West Africa. A geologist with more than 28 years’ experience in the mining industry and a PhD from Natal University, South Africa, he has held board positions at a number of global mining companies and is currently a non-executive director of Rockwell Resources International.
     Graham P. Shuttleworth (42) Chief Financial Officer; Financial Director. Mr. Shuttleworth joined us as Chief Financial Officer and Financial Director in July 2007 but has been associated with the company since its inception, initially as part of the management team involved in our listing on the London Stock Exchange in 1997, and subsequently as an advisor. A chartered accountant, he was a managing director and the New York-based head of metals and mining for the Americas in the global investment banking division of HSBC before taking his new position with us. At HSBC he led or was involved in a wide range of major mining industry transactions, including our Nasdaq listing, and subsequent equity offerings.
Non-Executive Directors
     Philippe Liétard (62) Non-Executive Chairman; Chairman of the nomination and governance committee. Mr. Liétard was managing director of the Global Natural Resources Fund from 2000 to 2003. Prior to July 2000, he was director of the Oil, Gas and Mining Department of the International Finance Corporation. His experience in corporate and project finance with UBS, IFC and the World Bank extends over 30 years, most of them in the minerals business and in Africa. Mr. Liétard is now an independent consultant and a promoter of mining and energy investments. He was appointed a director in February 1998 and chairman in November 2004. He is also a director of CellMark AB of Sweden, the world’s largest independent marketer of forest products.
     Norborne P. Cole (69) Senior Independent Non-Executive Director. Chairman of the remuneration committee and member of the governance and nomination committee. Mr. Cole started working for the Coca-Cola Company as a field representative in the USA in 1996 and advanced steadily through the organization, becoming chief executive of Coca-Cola Amatil in Australia in 1994, a position he held until 1998. Under his leadership, Coca-Cola Amatil grew into the second largest Coca-Cola bottler in the world. Now based in San Antonio, Texas, he serves on the boards of a number of US companies. He was appointed a director in May 2006.
     Christopher L. Coleman (42) Non-Executive Director; member of the governance and nomination, remuneration and audit committees. Mr. Coleman is co-head of banking and a managing director of NM Rothschild, chairman of Rothschild Bank International in the Channel Islands and serves on a number of other boards and committees of the Rothschild Group, which he joined in 1989. A BSc (Econ) graduate from the London School of Economics, he served as a non-executive director of the Merchant Bank of Central Africa from 2001 to 2008. He was appointed a director in November 2008.
     Kadri Dagdelen (56) Non-Executive Director; Member of the audit committee. Dr. Dagdelen is a professor and head of the Department of Mining Engineering at the Colorado School of Mines in the US. He began his professional career as a mining engineer at Homestake Mining Co (now Barrick Gold Corporation) and was the technical services manager when he left for academia in 1992. He holds a PhD in Mining Engineering and an ME in Geostatistics and has been involved in numerous research and consulting projects worldwide, also serving on the board of directors of the Society of Mining, Exploration and Metallurgy in the US for six years and chairing other professional societies that support the mining industry. He was appointed a director in January 2010.
     Robert I. Israel (61) Non-Executive Director; Member of the governance and nomination committee. He is currently the managing partner of One Stone Energy Partners, a private equity fund. Until April 2000, a managing director of Schroder & Co Inc and head of its energy department, and until 2010 he was a partner at Compass Advisers, LLP. He holds a BA from Middlebury College and an MBA from Harvard Business School. His experience in corporate finance, especially in the natural resources sector, extends over 30 years. He was appointed a director in June 1997.
     Karl Voltaire (60) Non-Executive Director; Chairman of the audit committee since May 5, 2009 and member of the remuneration committee. A graduate in mineral resources engineering from the Ecole des Mines in Paris, he holds an MBA and a PhD in economics and finance from the University of Chicago. He started his career as a mining engineer in Haiti and subsequently spent 23

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years in the World Bank Group in Washington DC, the bulk of these at the International Finance Corporation (IFC) where his last position was that of director of global financial markets. Subsequently he was director of the Office of President at the African Development Bank. He was the CEO of the Nelson Mandela Institution from 2005 to 2009, and is currently a member of the Board of Trustees of the African University of Science and Technology. He was appointed a director in May 2006.
Executive Officers
     Luiz Correia (49) General Manager — Tongon. A metallurgist with 25 years’ experience in the gold mining industry, he has a BSc Eng as well as a BCom degree. He joined us in 2005 and in 2006 was appointed operations manager responsible for the mining, planning, processing, maintenance and engineering functions at Loulo. He was recently appointed general manager of the Tongon mine in Côte d’Ivoire, which is scheduled to be commissioned in the last quarter of 2010.
     Edouard de Villiers (57) Group general manager — mining. A mining engineer, he has 34 years’ experience in gold and base metal mining operations, mining contracting and consulting. He joined us in December 2010, having executive responsibility for the group’s rapidly expanding mining operations in Africa. He brings a wealth of mining knowledge to the group.
     David Haddon (53) General Counsel and Secretary. Having overseen our administrative obligations from our incorporation in 1995, Mr. Haddon assumed full secretarial responsibility when we became listed on the London Stock Exchange in July 1997. He has over 26 years of legal and administrative experience. He assumed the responsibility as general counsel in January 2004. He is a director of Seven Bridges Trading 14 (Pty) Limited.
     Paul Harbidge (41) General Manager — Exploration. Mr. Harbidge is a geologist with 17 years’ experience, mainly in West Africa. He joined us in 2000 and was appointed exploration manager in 2004 and general manager — exploration in November 2006.
     Bill Houston (63) General Manager — Human Capital and Social Responsibility. Mr. Houston joined us in 1992 as group training and development manager and currently heads the human resources function. He has 30 years of human resources experience. He is a director of Morila Ltd, Somilo SA and Seven Bridges Trading 14 (Pty) Limited.
     Willem Jacobs (52) General Manager Operations — Central and East Africa. With a BPL(Hons) and DCom he is a seasoned executive. Having served as a director of listed and private companies in the areas of mining, engineering and manufacturing in Southern, Central and Eastern Africa for the past 15 years, he joined the group in January 2010.
     Amadou Konta (53) General Manager — Loulo. Mr. Konta has a degree in civil engineering as well as several management and project management qualifications. He was appointed mine foreman and superintendent at Syama mine and served as mine manager from 1997. In 2001 he was promoted as our construction manager in Mali and was appointed Loulo general manager on October 1, 2004.
     Victor Matfield (46) General Manager — Corporate Finance. Mr. Matfield is a chartered accountant with 18 years’ experience in the mining industry. He was appointed corporate finance manager in August 2001, prior to that he served as financial manager of the Syama mine and of the Morila capital project. He is a director of Seven Bridges Trading 14 (Pty) Limited.
     Philip Pretorius (47) Human Resources Executive. Joined us in 2008, bringing with him 22 years of human resources experience of which the last 14 years were spent exclusively dealing with the West African gold mining industry. With a post-graduate diploma in management practice, he has been involved in establishing various gold mining projects in Mali.
     Chris Prinsloo (60) General Manager — Commercial and Operations. Mr. Prinsloo was appointed general manager commercial and operations in April 2009 and prior to that he was group commercial and financial manager. He has 37 years of experience in the mining industry. He is a director of Somilo SA, Morila SA, Tongon SA, Kankou Moussa SARL, RAL 1 Limited and Randgold Resources (UK) Ltd.
     Rodney Quick (39) General Manager — Evaluation and Environment. Mr. Quick is a geologist with 17 years’ experience in the gold mining industry. Since joining us in 1996, he has been involved in the exploration, evaluation and production phases of the Morila, Loulo and Tongon deposits and was appointed the Somilo resource manager in 2006. He is now responsible for all project development, evaluation and environmental issues.

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     Mahamadou Samaké (63) General Manager — West Africa. Mr. Samaké is the general manager for West Africa and is a director of our Malian subsidiaries. He was a professor of company law at the University of Mali.
     N’golo Sanogo (48) General Manager — Mali. Has a masters degree in economics from the National School of Administration of Bamako as well as several management, accounting and financial qualifications. Qualified as an auditor in 1992 before joining BHP Mali in 1995. Appointed material manager in 1998 and management accountant in 2001 at the Syama mine. Following the sale of Somisy SA in 2004, joined us as Mali financial controller. He was appointed Mali general manager in March 2009.
     John Steele (50) Technical and Capital Projects Executive. Mr. Steele has overseen the capital expansion program at the Syama mine, and at the beginning of July 1998, assumed the position of general manager capital projects for the group, overseeing the construction of Morila. He is a director of Somilo SA and Morila Limited and is currently leading the Tongon construction project.
     Samba Touré (57) General Manager — Operations: West Africa. Mr. Touré has a masters degree in chemical engineering and geochemistry and was part of the team that set up Mali’s first research laboratory for the mining and petroleum industries in 1985. As country manager for BHP Minerals, he oversaw that company’s exploration programs in West Africa. He joined Morila in 2000 and was promoted to operations manager in 2004 and general manager in 2007.
     Tania de Welzim (35) Chief Accounting Officer; Group Financial Manager. Ms. de Welzim was appointed group financial manager in April 2009 and prior to that she was group financial controller. She is a chartered accountant with 12 years’ experience in finance including nine years in the mining industry. She is responsible for financial reporting in the group as well as internal control procedures.
     Lois Wark (55) Group Corporate Communications Manager. A member of our team since our inception who assumed management of the cartography department in 1995, Ms. Wark is responsible for the coordination of the group’s communication and investor relations programs as well as for the management of its South African subsidiary, Seven Bridges. She holds a diploma in land surveying: cadastral and topographical.
     Louis Watum (48) General Manager — Kibali Gold Project; Country Manager — DRC. A metallurgist with 21 years’ experience in base metals, coal and gold processing, he has an MSc in Chemical Engineering. He joined us in 2009 and was appointed general manager and country manager responsible for: Building and leading the Kibali team; communicating with the DRC government and local authorities; directing and managing Kibali business; and, delivering on strategies, objectives and the Kibali business plan.
     Our Articles of Association provide that the longest serving one-third of directors retire from office at each annual general meeting. Retiring directors normally make themselves available for re-election and are re-elected at the annual general meeting on which they retire. Our officers who are also directors retire as directors in terms of the Articles of Association, but their service as officers is regulated by standard industry employment agreements.
     The date of appointment, date of expiration and length of service for each of our directors is set forth in the table below:
                         
            Date of    
    Date of   Expiration   Number of
Director   Appointment   Term   Years Served
Executive
                       
D.M. Bristow
    8/05/95       5/03/11 *     16  
G.P. Shuttleworth
    7/01/07       5/03/11 *     4  
Non-Executive
                       
R.I. Israel
    6/12/97       5/03/11 *     14  
P. Liétard
    2/11/98       5/03/11 *     13  
N.P. Cole
    5/03/06       5/03/11 *     6  
K. Voltaire
    5/03/06       5/03/11 *     6  
C.L. Coleman
    11/03/08       5/03/11 *     3  
K. Dagdelen
    1/29/10       5/03/11 *     1  
 
*   The UK Corporate Governance Code issued in June 2010 requires that all directors should stand for re-election on an annual basis.

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     None of our directors and executive officers was selected under any arrangements or understandings between that director or executive officer and any other person. All of our non-Executive directors are considered independent directors.
B. COMPENSATION
     Our objective is to provide senior management, including executive directors, with a competitive remuneration package which will attract and retain executives of the highest caliber and will encourage and reward superior performance in the manner consistent with the interests of our shareholders. The remuneration committee’s policies are designed to meet these objectives and to ensure that the individual directors are fairly and responsibly rewarded for their respective contributions to our performance.
     We have no liability in respect of retirement provisions for executive directors. We do, however, provide a vehicle in the form of a defined contribution fund into which employees, including executive directors, may contribute for the purpose of providing for retirement. While we make an annual contribution on behalf of our employees, we do not do so on behalf of our executive directors.
     Each executive director receives a basic salary. Executive directors do not receive any fees. Executive directors are paid an annual bonus which is determined in accordance with set performance criteria agreed between the executive directors and the board.
     The fees paid to non-executive directors have remained unchanged since the 2010 annual general meeting save for a proposal at the next annual general meeting, which proposes that the chairman, in addition to the general retainer, which will remain unchanged, will receive a fee increasing annually from $170,000 to $200,00 in addition to an additional award of 2,400 restricted shares per annum. The fees paid to our non-executive directors, including the chairman, and are:
    A general retainer to all non-executive directors of $50,000;
 
    An annual committee assignment fee per committee served:
      Audit committee $35,000;
 
      Remuneration committee $25,000; and
 
      Governance and Nomination committee $10,000.
    The chairman of a board committee to receive an additional premium to the committee assignment fee of $15,000;
 
    The senior independent director, in addition to the general annual retainer but in lieu of any committee assignment fee, to receive an additional $85,000;
 
    The non-executive chairman, in addition to the general annual retainer but in lieu of any committee assignment fee, to receive an additional $200,000;
 
    An award to each director of “restricted” shares being 1,200 ordinary shares per year and an additional award of 2,400 ordinary shares per year to the Non-executive chairman. The shares are to vest over a three year period from the date of the award, being January 1, 2012.
In the circumstances listed in paragraph (i) and (ii) below, a Director shall be entitled to retain all his vested and unvested awards and all such awards shall vest immediately, if not already vested, on the date on which the relevant event occurs:
(i)   a change of control of the Company other than as a result of an internal reorganization or restructuring such that the shareholdings in the Company and any acquiring company remain substantially the same both before and after the relevant event.
 
(ii)   the Director ceasing to hold office after a minimum of three years’ service as a Director, in the following circumstances:
  (a)   resignation after a minimum of three years’ service as a Director;

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  (b)   giving notice to terminate his office under the terms of his appointment where he has decided not to seek re-election as a director but has completed a minimum of three years’ service as a Director;
 
  (c)   not being re-elected as a director at a meeting of the Company’s shareholders where the Director has stood for re-election with board support;
 
  (d)   injury, ill-health or disability proved to the satisfaction of the Board;
 
  (e)   death.
Where a Director ceases to hold office for any of the reasons specified in paragraphs (f) or (g) below, the Director shall retain all his vested awards and the Board may in its absolute discretion determine whether the Director may retain all or any of his unvested awards and the conditions of vesting.
  (f)   termination of the Director’s appointment by the Company other than where the Director:
  (i)   has committed any serious breach or (after warning in writing) any repeated or continued material breach of his obligations to the Company (which include an obligation not to breach his fiduciary duties);
 
  (ii)   has been guilty of any act of dishonesty or serious misconduct or any conduct which in the reasonable opinion of the Board tends to bring the Director concerned or the Company into disrepute; or
 
  (iii)   has been declared bankrupt or have made an arrangement or composition for the benefit of his creditors;
     the Director ceasing to hold office for any reason other than a reason specified in paragraphs (i), (ii) and (a) to (f) above.”
     A non-executive director must hold shares at least equal in value (as at the beginning of the year) to the general annual retainer. A director would be granted three years in which to acquire the required shareholding and this period could be extended by the unanimous approval of the uninterested directors. If the number of shares were to fall below the threshold due to a fall in the share price, no additional purchase of shares would be required. Except for Dr. K. Dagdelen, who was appointed to the board in January 2010 and only obtained his first restricted shares with effect from January 1, 2011, the remaining non-executive directors hold shares equal to the value of the general annual retainer.
     There is now a proposal that the requirement for executive directors to hold shares in the company at least equal in value (as at the beginning of the year) of $50,000 has been amended and it is now proposed, for approval by shareholders, that the executive directors should hold shares equal to at least two times their base salary (being $1,500,000 per annum for Dr. D.M. Bristow and £330,212 per annum for Mr. G. P. Shuttleworth). Both Dr. D.M. Bristow and Mr. G.P. Shuttleworth hold shares at least equal in value to twice their base salary. New directors will be allowed three years in which to acquire the required shareholding and this period may be extended at the discretion of the remuneration committee.
     In the past non-executive directors have been granted options to purchase our ordinary shares. However, all options have been exercised by the respective non-executive directors. Details of the options exercised by the non-executive directors are shown below.
     On February 13, 2006 the second $30,000 award was allocated to each of the non-executive directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq National Market closing price on February 10, 2006, or $17.11. In terms of the policy, 584 shares were issued directly to each non-executive director and 1,169 shares were held as restricted stock. Non-executive directors were issued the second tranche of 584 ordinary shares on January 3, 2007 and the final balance was issued on January 1, 2008.
     On January 3, 2007 the third $30,000 award was allocated to each of the non-executive directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq Global Select Market closing price on January 3, 2007, or $22.37. In terms of the policy 447 shares were issued directly to each non-executive director and 894 shares were held as restricted stock. Non-executive directors were issued the second and third tranches on January 1, 2008 and January 1, 2009, respectively.

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     On January 3, 2008, the fourth $30,000 award was allocated to each of the non-executive directors for the purpose of acquiring restricted stock. The price of the restricted stock calculation was the Nasdaq Global Select Market closing price on January 2, 2008, or $38.15. In terms of the policy 262 shares were issued directly to each non-executive director and 524 shares were held as restricted stock. Non-executive directors were issued the second tranche and the third tranches on January 1, 2009 and January 1, 2010 respectively.
     On January 1, 2009, the first award of 1,200 restricted shares was allocated to the non-executive directors as approved by shareholders at our 2008 annual general meeting. The price of the restricted stock calculation was the Nasdaq Global Select market closing price on January 2, 2009, or $43.92. In terms of the policy, 400 shares were issued directly to each non-executive director and 800 shares were held as restricted stock. Non-executive directors were issued the second tranche on January 1, 2010 and to the final tranche was issued on and January 1, 2011.
     On January 1, 2010, the second award of 1,200 restricted shares was allocated to the non-executive directors as approved by shareholders at our 2009 annual general meeting. The price of the restricted stock calculation was the Nasdaq Global Select market closing price on January 4, 2010 or $82.25. In terms of the policy, 400 shares were issued directly to each non-executive director and 800 shares are held as restricted stock. Non-executive directors were issued the second tranche on January 1, 2011 and subject to agreed conditions, the final tranche will be issued on January 1, 2012.
     On January 1, 2011, the third award of 1,200 restricted shares was allocated to the non-executive directors as approved by shareholders at our 2010 annual general meeting. This price of the restricted stock calculation was the Nasdaq Global Select market closing price on January 3, 2011, or $81.60. In terms of the policy, 400 shares were issued directly to each non-executive director and 800 shares are held as restricted stock. Non-executive directors will be issued the second and third tranches subject to agreed conditions on January 1, 2012 and January 1, 2013, respectively.
     During the year ended December 31, 2010, the aggregate compensation paid or payable to our directors and executive officers as a group was approximately $18 million, of which $10.7 million was payable to directors and recognized as a remuneration expense.
     The remuneration of the executive directors comprised:
    Basic salary and benefits (fixed remuneration).
 
    An annual bonus opportunity.
 
    Participation in the Restricted Share Scheme, measuring performance over the longer term.
     The total executive directors’ remuneration for the year ended December 31, 2010, was $10.3 million (2009: $9.3 million).
     Fixed remuneration comprises a basic salary, from which executive directors can elect to contribute into a defined contribution pension scheme, and pay for certain other benefits such as medical aid. Fixed remuneration normally represents less than 50% of the individual’s remuneration package (based on target performance and expected values of share awards).
     Base salaries are determined by the committee, taking into account the performance of the individual and pay practice among a comparable group of FTSE 100 companies as well as individual companies in the mining industry. When setting base salaries, the committee also takes into consideration executives’ personal commitment to extensive travel and time spent at the company’s operations overseas. This is considered critical in effective management of the company’s business.
     Executive directors can elect to sacrifice up to 20% of their base salary to contribute to a defined contribution provident fund. The company does not make any contribution to the fund.
     Executive directors can elect to receive other benefits including, medical aid and group life insurance. All such benefits are funded out of the executives’ base salary and are nonpensionable. Where appropriate, executive directors may be provided with other benefits such as security services for executives while travelling for work, social club fees to facilitate the entertainment of business associates and professional association membership costs. All such benefits authorized by the board are paid for by the company and end when the employee leaves the company’s service, for whatever reason.

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     Executive directors are eligible to receive an annual bonus, subject to the achievement of stretching performance criteria. The performance criteria for 2010 focus on achieving challenging strategic and financial targets that contribute to the creation of sustainable shareholder value. The committee may make adjustments to the criteria used for measuring performance on an annual basis taking into account the strategic objectives of the company for the year.
     Based on exceptional performance achieved against all targets during the 2010 financial year, the remuneration committee determined that both Dr. D.M. Bristow and Mr. G.P. Shuttleworth should receive their maximum annual bonus of $4.5 million and $800,000 respectively.
     The company’s policy is to incentivize executives over the long term by awarding shares under the Restricted Share Scheme. Neither Dr. D.M. Bristow nor Mr. G.P. Shuttleworth participate in the company’s share option scheme. The Restricted Share Scheme was approved by shareholders on July 28, 2008. Awards are made periodically, generally not every year, at the discretion of the committee.
     The company’s policy is that the shares awarded are normally expressed as a specific number of shares, rather than a percentage of salary. The CEO received an award of 40,000 shares on January 1, 2010. The CFO will not receive an award in 2010. (Both executive directors received awards in 2009, as described below). Shares awarded under the scheme generally vest in three equal tranches over a relevant three year period as specified at the date of award.
     In 2009, the CEO received the following restricted share awards:
    40,000 restricted shares with an award date of January 1, 2009. Two thirds vested on January 1, 2010 and the remaining third was to vest on January 1, 2011. However, no vesting occurred because the company TSR performance fell below that of the HSC Global Gold Index over the performance period. The issue price of these shares was $43.26.
 
    40,000 restricted shares with an award date of January 1, 2009, one third vesting on January 1, 2010, one third vesting on January 1, 2011 and the remaining third vesting on January 1, 2012. The issue price of these shares was $43.26.
     In 2009, the CFO received 54,000 restricted shares at an issue price of $56.99. The first tranche of the restricted shares vests on September 2, 2011, with the second and third tranches vesting on September 2, 2012 and September 2, 2013, respectively.
     The following tables set forth the aggregate compensation for each of the directors, firstly the executive directors and secondly the non-executive directors:
                                                                 
    Basic Salary   Annual Bonus   Other Payments*   Total**
    December 31,   December 31,   December 31   December 31,
    2010 ($)   2009 ($)   2010 ($)   2009 ($)   2010 ($)   2009 ($)   2010 ($)   2009 ($)
Executive
                                                               
D.M. Bristow (CEO)
    1,500,000       1,250,000       4,400,000       3,750,000       1,730,400       2,626,000       7,730,400       7,626,000  
G.P. Shuttleworth (CFO)
    509,901       424,047       800,00       400,000       1,244,444       821,933       2,554,345       1,645,980  
TOTAL
    2,009,901       1,674,047       5,300,000       4,150,000       2,974,844       3,447,933       10,284,745       9,271,980  
 
*   Other payments include expenses for restricted share award, which have been costed in accordance with IFRS 2 based on the valuation at the date of grant. Performance is measured against the HSBC Global Gold Index for each tranche of the restricted share awards. No vesting occurred on January 1, 2011, in respect of Dr. D. M. Bristow’s shares over the past 12 month period, as the company’s performance fell below that of the HSBC Global Gold Index over the performance period, however, $1.7 million is still included in the figures above for Dr. D. M. Bristow, in line with the accounting requirements.
 
**   The total remuneration disclosed in our Annual Report on Form 20-F for the year ended December 31, 2010 was therefore $11,084,745.
                                                 
    Fees     Other Payments*     Total  
    December 31,     December 31,     December 31,  
    2010 ($)     2009 ($)     2010 ($)     2009 ($)     2010 ($)     2009 ($)  
Non-Executive                                    
P. Liétard
    220,000       220,000       98,700       52,704       318,700       272,704  
B.H. Asher**
          45,000             52,704             97,704  

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    Fees     Other Payments*     Total  
    December 31,     December 31,     December 31,  
    2010 ($)     2009 ($)     2010 ($)     2009 ($)     2010 ($)     2009 ($)  
Non-Executive                                    
R.I. Israel
    60,000       65,000       98,700       52,704       158,700       117,704  
A.L. Paverd**
          28,334             52,704             81,083  
N.P. Cole Jr.
    135,000       123,333       98,700       52,704       233,700       177,704  
K. Voltaire
    125,000       120,000       98,700       52,704       223,700       172,704  
C.L. Coleman
    120,000       100,000       98,700       52,704       218,700       151,037  
J.K. Walden
    42,500       85,000       98,700       52,704       141,200       137,704  
K. Dagdelen
    77,917                           77,917          
TOTAL
    780,417       786,667       592,200       421,632       1,372,617       1,208,299  
 
*   Other payments — The awards of 1,200 restricted shares allocated on January 1, 2009 and January 1, 2010, vest over a three year period from the date of the award.
 
**   Dr. A.L. Paverd and Mr. B.H. Asher retired from the board on May 5, 2009.
 
***   Mr. J.K. Walden resigned from the board on July 1, 2010.
     The executive directors do not receive any benefits in kind and the only long term incentive scheme in which they are anticipated to participate is our Restricted Share Scheme.
Share options exercised by the directors during 2009 and up to December 31, 2009 are detailed below:
                         
                    Average market
    Number of Options   Average Exercise   Price at date of
Name   Exercised   Price ($)   exercise ($)
B.H. Asher
    25,400       1.65       66.66  
     The high and low share prices for our ordinary shares for the year on the London Stock Exchange were (pounds sterling) £67.55 and (pounds sterling) £41.26, respectively, and our high and low price for our ADSs on the Nasdaq Global Select Market were $106.44 and $64.91, respectively. The ordinary share price on the London Stock Exchange and the price of an ADS on the Nasdaq Global Select Market at December 31, 2010, the last day of trading, were (pounds sterling) £52.75 and $82.33, respectively.
     Share options outstanding at February 28, 2011 and held by executive officers were as follows:
                         
    Options to        
    Purchase Ordinary        
    Shares   Expiration Date   Exercise Prices ($)
Officers
                       
L.C. Correia
    15,000       8/20/17       22.19  
D.J. Haddon
    20,000       8/20/17       22.19  
P.D. Harbidge
    20,000       8/20/17       22.19  
W.R.A. Houston
    25,000       8/05/17       22.19  
A. Konta
    25,000       8/20/17       22.19  
V. Matfield
    75,000       8/05/14       8.05  
V. Matfield
    60,000       8/20/17       22.19  
P. Pretorius
    30,000       5/22/18       45.27  
C.J. Prinsloo
    20,000       8/05/17       22.19  
R.B. Quick
    20,000       8/20/17       22.19  
M. Samaké
    20,000       8/20/17       22.19  
N. Sanogo
    7,000       8/20/17       22.19  
J. Steele
    40,000       8/20/17       22.19  
S. Touré
    30,000       5/22/18       45.27  
L.V. Wark
    25,000       8/20/17       22.19  
T. de Welzim
    2,000       11/30/16       22.50  
T. de Welzim
    15,000       8/20/17       22.19  
Restricted shares outstanding at February 28, 2011 and held by executive officers were as follows:

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    Number of
Name   Shares
J. Steele
    30,000  
M. Samaké
    18,000  
P.D. Harbidge
    18,000  
W.R.A. Houston
    18,000  
C.J. Prinsloo
    18,000  
R.B. Quick
    18,000  
S. Touré
    18,000  
P. Pretorius
    18,000  
L. Watum
    18,000  
W. Jacobs
    18,000  
A. Konta
    12,000  
V. Matfield
    12,000  
D.J. Haddon
    12,000  
L.V. Wark
    12,000  
T. de Welzim
    12,000  
L. Correia
    12,000  
N. Sanogo
    7,500  
Expiration date January 1, 2020
C. BOARD PRACTICES
Directors’ Terms of Employment
     We have entered into contracts of employment with Dr. D.M. Bristow and Mr. G.P. Shuttleworth with the period of employment set as one year.
     We have entered into letters of appointment with our non-executive directors. Each non-executive director is now subject to re-election annually by our shareholders in accordance with the provisions of the 2010 UK Corporate Governance Code.
Board of Directors Committees
     In order to ensure good corporate governance, the board has formed an audit committee, a remuneration committee and a governance and nomination committee. The audit, remuneration, and governance and nomination committees are comprised of a majority of non-executive directors.
Audit Committee
     Our audit committee charter, which defines the terms of reference for the audit committee members, sets out the framework through which the audit committee reviews our annual results, the effectiveness of our systems of internal control, internal audit procedures and legal and regulatory compliance and the cost effectiveness of the services provided by the external auditors. The audit committee also reviews the scope of work carried out by our external auditors and holds discussions with the external auditors at least twice a year. The audit committee is comprised of three independent non-executive directors. The members of the audit committee are Dr. K. Voltaire (chairman), Mr. C.L. Coleman and Dr. K. Dagdelen, was appointed a member of the audit committee on January 29, 2010. Mr. J.K. Walden resigned from the board on July 1, 2010.
Remuneration Committee
     The remuneration committee reviews the remuneration of directors and senior management and determines the structure and content of the senior executives’ remuneration packages by reference to a number of factors including current business practice and our prevailing business conditions and the mining and exploration industry. The members of the remuneration committee are Mr. N.P. Cole Jr. (chairman), Dr. K. Voltaire and Mr. C.L. Coleman.
Governance and Nomination Committee

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     The governance and nomination committee reviews our corporate governance and sets out the framework in which such policies are established to guide our operations and activities. In addition, the committee at the instance of the board interviews and recruits any future board members. The members of the governance and nomination committee are Messrs. P. Liétard (chairman), N.P. Cole, Jr., C.L. Coleman and R.I. Israel.
D. EMPLOYEES
     At the end of each of the past three years, the breakdown of employees, including our subsidiaries by main categories of activity was as follows:
                         
    December 31, 2010   December 31, 2009   December 31, 2008
Category of Activity
                       
Mining and related engineering
    202       136       241  
Processing and related engineering
    767       631       668  
Management and technical
    125       105       100  
Exploration
    221       161       164  
Administration
    290       261       253  
TOTAL*
    1,605       1,294       1,426  
 
*   Tongon became fully commissioned in the fourth quarter of 2010.
E. SHARE OWNERSHIP
See “Item 7 — Major Shareholders and Related Party Transactions”.
Employee Share Option Scheme
     Since 1996, we have operated a share option scheme under which senior management may be offered options to purchase our ordinary shares. The aggregate number of shares available for issuance under the option scheme may not exceed 15% of our issued share capital. Share options granted since 2007 are subject to performance criteria for individual employees. Any options provided to an individual employee as defined by the rules of the scheme, are subject to an upper limit of 2% of our issued ordinary share capital.
     The exercise price of any new share options is determined as the closing price of the share on the trading day preceding that on which the person was granted the option. Under the rules of the share option scheme, all option holders, inclusive of executive and non-executive directors, were granted additional options to subscribe for shares in the open offer which was concluded in November 1998. These additional options are exercisable at the open offer price and otherwise on the same terms as the initial grant.
     The scheme provides for the early exercise of all options in the event of an acquisition of a number of shares that would require an offer to be made to all of our other shareholders.
Restricted Share Scheme
     On July 28, 2008, our shareholders approved the creation of a restricted share scheme for employees and executive directors. At that time, the Board elected to limit eligibility for awards to executive directors. The Board has subsequently decided that all employees would be eligible to receive restricted shares in the future. The aggregate number of shares available for issuance under the restricted share scheme may not exceed 5% of our issued share capital. The awards of shares under the restricted share scheme are subject to the attainment of performance criteria agreed between the remuneration committee and the individual executive director on an annual basis.
     No options were awarded to staff in terms of the Employee Share Option Scheme during 2010.
Item 7. Major Shareholders and Related Party Transactions
A. MAJOR SHAREHOLDERS

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     As of February 28, 2011, our issued share capital consisted of 91,097,370 ordinary shares with a par value of $0.05 per share. To our knowledge we are not, directly or indirectly, owned or controlled by another corporation, any foreign government or other person.
     The following table sets forth information regarding the beneficial ownership of our ordinary shares as of February 28, 2011, by:
    Any person of whom the directors are aware that is interested directly or indirectly in 3% or more of our ordinary shares;
 
    Each of our directors; and
 
    All of our executive officers and directors as a group.
     Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Ordinary shares issuable pursuant to options, to the extent the options are currently exercisable or convertible within 60 days of February 28, 2011, are treated as outstanding for computing the percentage of the person holding these securities but are not treated as outstanding for computing the percentage of any other person.
Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where applicable. Unless indicated otherwise, the business address of the beneficial owners is: Randgold Resources Limited, 3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey JE2 4WJ, Channel Islands.
                 
    Shares Beneficially Owned
Holder   Number   %
D.M. Bristow
    697,584       0.77  
G.P. Shuttleworth
    28,000       0.03  
N.P. Cole Jr.
    4,572       0.01  
C. Coleman
    3,800       0.00  
K. Dagdelen
    400       0.00  
R.I. Israel
    39,463       0.04  
P. Liétard
    4,572       0.01  
K. Voltaire
             
BNY (Nominees) Limited (1) 30 Cannon Street London EC4M XH
    60,158,282       66.04  
Wells Fargo & Company (2) 420 Montgomery Street San Francisco, CA 94104
    4,685,031       5.14  
FMR LLC(3) 82 Devonshire Street, Boston, MA 02109
    11,812,915       12.97  
BlackRock Inc.(4) 40 East 52nd Street New York, NY 10022
    10,622,151       11.66  
Van Eck Associates Corporation(5) 335 Madison Ave, 19th Floor New York, NY 10017
    5,939,876       6.53  
Directors and executive officers (6)
    792,293       0.87  
 
(1)   Shares held by BNY (Nominees) Limited are held for and on behalf of our ADS holders.
 
(2)   Wells Fargo & Company reported in its Schedule 13G filed with the Securities and Exchange Commission on January 25, 2011 that its beneficial ownership in us amounted to 4,685,031 ordinary shares (5.15%) on a consolidated basis. These shares are included in the shares held by BNY (Nominees) Limited.
 
(3)   FMR LLC reported in its Schedule 13G/A filed with the Securities and Exchange Commission that as at February 14, 2011 its beneficial ownership in us amounted to 11,812,915 ordinary shares (12.98%) on a consolidated basis. These shares are included in the shares held by BNY (Nominees) Limited.
 
(4)   BlackRock Inc. reported in its Schedule 13G/A filed with the Securities and Exchange Commission on January 10, 2011 that its beneficial ownership in us amounted to 10,622,151 ordinary shares (11.67%) on a consolidated basis. These shares are included in the shares held by BNY (Nominees) Limited.

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(5)   Van Eck Associates Corporation reported in its Schedule 13G filed with the Securities and Exchange Commission on February 14, 2011 that its beneficial ownership in us amounted to 5,939,876 ordinary shares (6.53%) on a consolidated basis. These shares are included in the shares held by BNY (Nominees) Limited.
 
(6)   No executive officer beneficially owns in excess of 1% of the outstanding ordinary shares.
     To the knowledge of management, none of the above shareholders hold voting rights which are different from those held by our other shareholders.
     As of February 28, 2011, there were 4 record holders of our ordinary shares in the United States, holding an aggregate of 1,691 ordinary shares or 0.0%.
     As of February 28, 2011, there were 51 record holders of our ADSs in the United States, holding an aggregate of 60,160,282 ADSs or 100%.
B. RELATED PARTY TRANSACTIONS
None of our directors, officers or major shareholders or, to our knowledge, their families, had any interest, direct or indirect, in any transaction during the last fiscal year or in any proposed transaction which has affected or will materially affect us or our investment interests or subsidiaries, other than as stated below.
The Randgold Name
Under an agreement dated June 26, 1997, Randgold & Exploration Group has licensed us to carry on business under the name “Randgold”. The license has been provided to us on a royalty free perpetual basis. The U.K. Trademark Registry granted a registration certificate to us for “Randgold” on February 16, 2001.
C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
Item 8. Financial Information
See Item 18.
Item 9. The Offer and Listing
A. OFFER AND LISTING DETAILS
     The following table sets forth, for the periods indicated, the high and low sales prices of our ordinary shares, as reported by the London Stock Exchange, and of our ADSs, as reported by the Nasdaq Global Select Market. Effective March 10, 2003, we changed the ratio of ordinary shares to ADSs from two ordinary shares per ADS to one ordinary share per ADS, so that each ADS now represents one ordinary share. In March 2003 we changed the currency in which the price of our ordinary shares that are traded on the London Stock Exchange are quoted. The ordinary shares are now quoted in pound sterling and not in US dollars. The ADSs continue to be quoted on the London Stock Exchange and the Nasdaq Global Select Market in US dollars.
                                 
    Price Per Ordinary Share   Price Per ADS
Financial Period Ended   High (£)   Low (£)   High ($)   Low ($)
December 31, 2010
    67.55       41.26       106.44       64.91  
December 31, 2009
    54.50       24.25       90.30       36.24  
December 31, 2008
    30.00       15.57       55.65       23.45  
December 31, 2007
    19.50       10.53       38.86       21.04  
December 31, 2006
    14.08       9.09       26.32       15.88  

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    Price Per Ordinary Share   Price Per ADS  
Calendar Period   High (£)   Low (£)   High ($) Low ($)  
2011
                               
First Quarter (through February 28, 2011)
    53.30       47.24       83.55       75.05  
2010
                               
Fourth Quarter
    67.55       50.85       106.44       80.66  
Third Quarter
    66.20       53.55       104.22       85.11  
Second Quarter
    66.00       50.40       99.67       77.39  
First Quarter
    54.00       41.26       86.83       64.91  
2009
                               
Fourth Quarter
    54.50       39.30       90.30       63.57  
Third Quarter
    46.49       33.51       76.08       55.06  
Second Quarter
    44.49       28.23       73.96       41.59  
First Quarter
    37.76       25.10       54.35       36.65  
                                 
    Price Per Ordinary Share   Price Per ADS  
Calendar Month   High (£ )   Low (£)   High ($) Low ($)  
2011
                               
February
    52.40       47.62       83.50       76.85  
January
    53.30       47.24       83.55       75.05  
2010
                               
December
    61.15       50.85       95.72       80.66  
November
    63.30       57.65       101.92       92.00  
October
    67.55       57.35       106.44       90.48  
September
    66.20       58.85       104.22       90.74  
B. PLAN OF DISTRIBUTION
     Not applicable.
C. MARKETS
     Our ordinary shares are listed on the London Stock Exchange, which currently constitutes the principal non-United States trading market for those shares, under the symbol RRS and our ADSs trade in the United States on the Nasdaq Global Select Market under the trading symbol GOLD, in the form of American Depositary Receipts. The American Depositary Receipts are issued by The Bank of New York Mellon, as Depositary. Each American Depositary Receipt represents one American Depositary Share. Each American Depositary Share represents one of our ordinary shares.
D. SELLING SHAREHOLDERS
     Not applicable.
E. DILUTION
     Not applicable.
F. EXPENSES OF THE ISSUE
     Not applicable.
Item 10. Additional Information
A. SHARE CAPITAL
     Not applicable.
B. MEMORANDUM AND ARTICLES OF ASSOCIATION

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General
     We are a company organized with limited liability under the laws of Jersey, Channel Islands. Our registered number is 62686.
     The authorized share capital is $6,000,000 divided into 120,000,000 ordinary shares of $0.05 each, of which 91,097,370 were issued as of February 28, 2011 and 28,902,630 were available for issue.
     At the annual general meeting held on May 4, 2010, shareholders approved a resolution which authorized an increase in the authorized share capital of the company from $5,000,000 divided into 100,000,000 ordinary shares of $0.05 each to $6,000,000 divided into 120,000,000 ordinary shares of $0.05 each.
Memorandum of Association
     Clause 2 of our Memorandum of Association provides that we shall have all the powers of a natural person including but not limited to the power to carry on mining, exploration or prospecting.
Changes in Capital or Objects and Powers
     Subject to the 1991 Law and our Articles of Association, we may by special resolution at a general meeting:
    increase our authorized or paid up share capital;
 
    consolidate and divide all or any part of our shares into shares of a larger amount;
 
    sub-divide all or any part of our shares having a par value;
 
    convert any of our issued or unissued shares into shares of another class;
 
    convert any of our paid-up shares into stock, and reconvert any stock into any number of paid-up shares of any denomination;
 
    convert any of our issued shares into redeemable shares which can be redeemed;
 
    cancel shares which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of the authorized share capital by the amount of the shares so cancelled;
 
    reduce the authorized share capital;
 
    reduce our issued share capital; or
 
    alter our Memorandum or Articles of Association.
Articles of Association
     We adopted our Articles of Association by special resolution passed on June 24, 1997. Our Articles of Association include provisions to the following effect:
General Meeting of Shareholders
     We may at any time convene general meetings of shareholders. We hold an annual general meeting for each fiscal year within nine months of the end of each fiscal year. No more than eighteen months may elapse between the date of one annual general meeting and the next.
     Annual general meetings and meetings calling for the passing of a special resolution require twenty-one days’ notice of the place, day and time of the meeting in writing to our shareholders. Any other general meeting requires no less than fourteen days’ notice in writing. Our business may be transacted at a general meeting only when a quorum of shareholders is present. Two persons entitled to attend and to vote on the business to be transacted, each being a member or a proxy for a member or a duly authorized representative

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of a corporation which is a member, constitute a quorum. Nasdaq’s marketplace rules, which apply to all companies listed on the Nasdaq Global Select Market, state in Rule 4350(f) that the minimum quorum for any meeting of holders of a company’s common stock is 33 1/3% of the outstanding shares.
As a result, we requested, and Nasdaq granted to us, an exemption from compliance with the Rule 4350(f) requirement.
     The annual general meetings deal with and dispose of all matters prescribed by our Articles of Association and by the 1991 Law including:
    the consideration of our annual financial statements and report of our independent accountants;
 
    the election of directors; and
 
    the appointment of independent auditors.
Voting Rights
     Subject to any special terms as to voting on which any shares may have been issued or may from time to time be held, at a general meeting, every shareholder who is present in person (including any corporation present by its duly authorized representative) shall on a show of hands have one vote and every shareholder present in person or by proxy shall on a poll have one vote for each share of which he is a holder. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.
     Unless we otherwise determine, no shareholder is entitled to vote at a general meeting or at a separate meeting of the holders of any class of shares, either in person or by proxy, or to exercise any other right or privilege as a shareholder in respect of any share held by him unless all calls presently payable by him in respect of that share, whether alone or jointly with any other person, together with interest and expenses, if any, have been paid to us.
Dividends
     Subject to the provisions of the 1991 Law and of the Articles of Association, we may, by ordinary resolution, declare dividends to be paid to shareholders according to their respective rights and interests in our profits. However, no dividend shall exceed the amount recommended by us. Subject to the provisions of the 1991 Law, we may pay an interim dividend, including a dividend payable at a fixed rate, if an interim dividend appears to us to be justified by our profits available for distribution.
     Except as otherwise provided by the rights attached to any shares, all dividends shall be declared and paid according to the amounts paid up, otherwise than in advance of calls, on the shares on which the dividend is paid. All dividends unclaimed for a period of 12 years after having been declared or become due for payment shall, if we so resolve, be forfeited and shall cease to remain owing by us.
     We may, with the authority of an ordinary resolution, direct that payment of any dividend declared may be satisfied wholly or partly by the distribution of assets, and in particular of paid up shares or debentures of any other company, or in any one or more of those ways.
     We may also with the prior authority of an ordinary resolution, and subject to such conditions as we may determine, offer to holders of shares the right to elect to receive shares, credited as fully paid, instead of the whole, or some part, to be determined by us, of any dividend specified by the ordinary resolution.
Ownership Limitations
     Our Articles of Association and the 1991 Law do not contain limits on the number of shares that a shareholder may own.
Distribution of Assets on a Winding-Up
     If we are wound up, the liquidator may, with the sanction of a special resolution and any other sanction required by law, divide among the shareholders in specie the whole or any part of our assets and may, for that purpose, value any assets and determine how

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the dividend shall be carried out as between the shareholders or vest the whole or any part of the assets in trustees on such trusts for the benefit of the shareholders as he with the like sanction shall determine but no shareholder shall be compelled to accept any assets on which there is a liability.
Transfer of Shares
     Every shareholder may transfer all or any of his shares by instrument of transfer in writing in any usual form or in any form approved by us. The instrument must be executed by or on behalf of the transferor and, in the case of a transfer of a share which is not fully paid up, by or on behalf of the transferee. The transferor is deemed to remain the holder until the transferee’s name is entered in the register of shareholders.
     We may, in our absolute discretion and without giving any reason, refuse to register any transfer of a share or renunciation of a renounceable letter of allotment unless:
    it is in respect of a share which is fully paid up;
 
    it is in respect of only one class of shares;
 
    it is in favor of a single transferee or not more than four joint transferees;
 
    it is duly stamped, if so required; and
 
    it is delivered for registration to our registered office for the time being or another place that we may from time to time determine accompanied by the certificate for the shares to which it relates and any other evidence as we may reasonably require to prove the title of the transferor or person renouncing and the due execution of the transfer or renunciation by him or, if the transfer or renunciation is executed by some other person on his behalf, the authority of that person to do so; provided that we shall not refuse to register any transfer of partly paid shares which are listed on the grounds they are partly paid shares in circumstances where our refusal would prevent dealings in those shares from taking place on an open and proper basis.
Variation of Rights
     If at any time our share capital is divided into shares of different classes, any of the rights for the time being attached to any share or class of shares may be varied or abrogated in the manner, if any, that is provided by the rights or, in the absence of any such provision, either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of the class or with the sanction of a resolution passed by the holders of not less than three-quarters in nominal value of the issued shares of that class at a separate general meeting of the holders of shares of the class. The quorum at that meeting shall be not less than two persons holding or representing by proxy at least one-third of the nominal amount paid up on the issued shares of the class in question and at an adjourned meeting not less than one person holding shares of the class in question or his proxy.
     Subject to the terms of issue of or rights attached to any shares, the rights or privileges attached to any class of shares shall be deemed not to be varied or abrogated by the creation or issue of any new shares ranking equally in all respects, except as to the date from which those new shares shall rank for dividend, with or subsequent to those already issued or by the reduction of the capital paid up on those shares or by the purchase or redemption by us of our own shares in accordance with the provisions of the 1991 Law and the Articles.
Capital Calls
     Subject to the terms of allotment of shares, we may from time to time make calls on the members in respect of any monies unpaid on the shares, whether in respect of nominal value or premium, and not payable on a fixed date. A member must receive fourteen days’ notice of any call and any call is deemed to be made when the resolution of the board authorizing such call was passed.
     If any call is not paid on or before the date appointed for payment, the person liable to pay that call shall pay all costs, charges and expenses of ours in connection with the non-payment, including interest on the unpaid amount, if requested by us.

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     Unless we otherwise determine, no member shall be entitled to receive any dividend or to be present and vote at any general meeting, or be included in a quorum, or to exercise any other right or privilege as a shareholder unless and until any outstanding calls in respect of his shares are paid.
Borrowing Powers
     We may exercise all of our powers to borrow money and to mortgage or charge all or any part of our undertaking, property and assets, present and future, and uncalled capital and, subject to the provisions of the 1991 Law, to create and issue debenture and other loan stock and other securities, whether outright or as collateral security for any debt, liability or obligation of ours or of any third party.
Issue of Shares and Preemptive Rights
     Subject to the provisions of the 1991 Law and to any special rights attached to any shares, we may allot or issue shares with those preferred, deferred or other special rights or restrictions regarding dividends, voting, transfer, return of capital or other matters as we may from time to time determine by ordinary resolution, or if no ordinary resolution has been passed or an ordinary resolution does not make specific provision, as we may determine. We may issue shares that are redeemable or are liable to be redeemed at our option or the option of the holder in accordance with our Articles of Association. Subject to the provisions of the 1991 Law the unissued shares at the date of adoption of the Articles of Association and shares created thereafter shall be at our disposal. We cannot issue shares at a discount.
     There are no pre-emptive rights for the transfer of our shares either within the 1991 Law or our Articles of Association.
Meetings of the Board of Directors
     Any director may, and the secretary at the request of a director shall, call a board meeting at any time on reasonable notice. A director may waive this notice requirement.
     Subject to our Articles of Association our board of directors may meet for the conducting of business, adjourn and otherwise regulate its proceedings as it sees fit. The quorum necessary for the transaction of business may be determined by the board of directors and unless otherwise determined shall be two persons, each being a director or an alternate director. A duly convened meeting of the board of directors at which a quorum is present is necessary to exercise all or any of the board’s authorities, powers and discretions.
     Our board of directors may delegate or entrust to and confer on any director holding an executive office any of its powers, authorities and discretions for such time, on such terms and subject to such conditions as it sees fit. Our board of directors may also delegate any of its powers, authorities and discretions for such time and on such terms and subject to such conditions as it sees fit to any committee consisting of one or more directors and one or more other persons, provided that a majority of the members of the committee should be directors.
Remuneration of Directors
     Our directors (other than alternate directors) shall be entitled to receive by way of fees for their services as directors any sum that we may from time to time determine, not exceeding in aggregate $300,000 per annum or any other sum as we, by ordinary resolution in a general meeting, shall from time to time determine. That sum, unless otherwise directed by ordinary resolution of us by which it is voted, shall be divided among the directors in the proportions and in the manner that the board determines or, if the board has not made a determination, equally. The directors are entitled to be repaid all traveling, hotel and other expenses properly incurred by them in or about the performance of their duties as directors.
     The salary or remuneration of any director appointed to hold any employment or executive office may be either a fixed sum of money, or may altogether or in part be governed by business done or profits made or otherwise determined by us, and may be in addition to or in lieu of any fee payable to him for his services as director.
Pensions and Gratuities for Directors

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     We may exercise all of our powers to provide and maintain pensions, other retirement or superannuation benefits, death or disability benefits or other allowances or gratuities for persons who are or were directors of any company in our group and their relatives or dependants.
Directors’ Interests in Contracts
     Subject to the provisions of the 1991 Law and provided that his interest is disclosed as soon as practicable after a director becomes aware of the circumstances which gave rise to his duty to disclose in accordance with the Articles of Association, a director, notwithstanding his office, may enter into or otherwise be interested in any contract, arrangement, transaction or proposal with us, or in which we are otherwise interested, may hold any other office or place of profit under us (except that of auditor of, or of a subsidiary of ours) in conjunction with the office of director and may act by himself or through his firm in a professional capacity for us, and in any such case on such terms as to remuneration and otherwise as we may arrange, and may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any company promoted by us or in which we are otherwise interested and shall not be liable to account to us for any profit, remuneration or other benefit realized by any such office, employment, contract, arrangement, transaction or proposal.
     No such contract, arrangement, transaction or proposal shall be avoided on the grounds of any such interest or benefit.
Restrictions on Directors’ Voting
     Except as provided in our Articles of Association, a director shall not vote on, or be counted in the quorum in relation to, any resolution of the board or of a committee of the board concerning any contract, arrangement, transaction or any other proposal whatsoever to which we are or will be a party and in which he has an interest which (together with an interest of any person connected with him) is to his knowledge a material interest otherwise than by virtue of his interests in shares or debentures or other securities of or otherwise in or through us, unless the resolution concerns any of the following matters:
    the giving of any guarantee, security, or indemnity in respect of money lent or obligations incurred by him or any other person at the request of or for the benefit of us or any of our subsidiary undertakings;
 
    the giving of any guarantee, security or indemnity in respect of a debt or obligation of ours or any of our subsidiary undertakings for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;
 
    any proposal concerning an offer of shares or debentures or other securities of or by us or any of our subsidiary undertakings in which offer he is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which he is to participate;
 
    any proposal concerning any other body corporate in which he (together with persons connected with him) does not to his knowledge have an interest in 1% or more of the issued equity share capital of any class of that body corporate or of the voting rights available to shareholders of that body corporate;
 
    any proposal relating to an arrangement for the benefit of our employees or the employees of any of our subsidiary undertakings which does not award him any privilege or benefit not generally awarded to the employees to whom the arrangement relates; or
 
    any proposal concerning insurance which we propose to maintain or purchase for the benefit of directors or for the benefit of persons who include directors.
     A director shall not vote or be counted in the quorum for any resolution of the board or committee of the board concerning his own appointment (including fixing or varying the terms of his appointment or termination) as the holder of any office or place of profit with us or any company in which we are interested.
Number of Directors
Unless and until otherwise determined by a special resolution, the number of directors shall be not less than two or more than 20.

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Directors’ Appointment and Retirement by Rotation
     Directors may be appointed by ordinary shareholder resolution or by the board. If appointed by ordinary resolution, a director holds office only until the next annual general meeting and shall not be taken into account in determining the number of directors who are to retire by rotation. A director shall not be required to hold any of our shares.
     At each annual general meeting, one-third of the directors who are subject to retirement by rotation will retire by rotation and be eligible for re-election. Subject to the provisions of the 1991 Law and to the Articles, the directors to retire will, first, be any director who wishes to retire and not offer himself for re-election and secondly, will be those who have been longest in office since their last appointment or re-appointment, but as between those who have been in office an equal length of time, those to retire shall (unless they otherwise agree) be determined by lot. There is no age limit imposed upon directors.
Untraced Shareholders
     Subject to the Articles, we may sell any of our shares registered in the name of a shareholder remaining untraced for 12 years who fails to communicate with us following advertisement of an intention to make such a disposal. Until we can account to the shareholder, the net proceeds of sale will be available for use in our business or for investment, in either case at our discretion. The proceeds will not carry interest.
CREST
     The Companies (Amendment No. 4) (Jersey) Law 1998 and the Companies (Uncertificated Securities) (Jersey) Order 1999 allow the holding and transfer of shares under CREST, the electronic system for settlement of securities in the United Kingdom. Our Articles of Association already provide for our shares to be held in uncertificated form under the CREST system.
Purchase of Shares
     Subject to the provisions of the 1991 Law, we may purchase any of our own shares of any class. The 1991 Law provides that we may, by special resolution approve the acquisition of our own shares from any source, but only if they are fully paid.
Non-Jersey Shareholders
     There are no limitations imposed by Jersey law or by our Articles of Association on the rights of non-Jersey shareholders to hold or vote on our ordinary shares or securities convertible into our ordinary shares.
Rights of Minority Shareholders and Fiduciary Duties
     Majority shareholders of Jersey companies have no fiduciary obligations under Jersey law to minority shareholders. However, under the 1991 Law, a shareholder may, under some circumstances, seek relief from the court if he has been unfairly prejudiced by us. The provisions of the 1991 Law are designed to provide relief from oppressed shareholders without necessarily overriding the majority’s decision. There may also be common law personal actions available to our shareholders.
Jersey Law and Our Memorandum and Articles of Association
     The content of our Memorandum and Articles of Association is largely derived from an established body of corporate law and therefore they mirror the 1991 Law. Jersey company law draws very heavily from company law in England and there are various similarities between the 1991 Law and the English Companies Act 1985 (as amended). However, the 1991 Law is considerably shorter in content than the English Companies Act 1985 and there are some notable differences between English and Jersey company law. There are, for example, no provisions under Jersey law (as there are under English law):
    controlling possible conflicts of interests between us and our directors, such as loans by us or directors, and contracts between us and our directors other than a duty on directors to disclose an interest in any transaction to be entered into by us or any of our subsidiaries which to a material extent conflicts with our interest;

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    specifically requiring particulars to be shown in our accounts of the amount of loans to officers or directors’ emoluments and pensions, although these would probably be required to be shown in our accounts in conformity to the requirement that accounts must be prepared in accordance with generally accepted accounting principles;
 
    requiring us to file details of charges other than charges of Jersey realty; or
 
    as regards statutory preemption provisions in relation to further issues of shares.
     Under Article 143 of the 1991 Law, the court may make an order giving relief, including regulation of our affairs requiring us to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by any of our other shareholders.
     The court has wide powers within its inherent jurisdiction and a shareholder could successfully bring an action in a variety of circumstances. Although there is no statutory definition of unfairly prejudicial conduct, authority suggests that it includes oppression and discrimination and that the test is objective.
     There are no provisions in our Memorandum or Articles of Association concerning changes of capital where these provisions would be considered more restrictive than that required by the 1991 Law.
Proposed Amended Articles of Association
     We will be submitting a proposal to amend the Articles of Association to our stockholders at our 2011 annual general meeting to be held on May 3, 2011. The Articles of Association will be amended primarily take account of changes to law and practice since the current Articles of Association were last updated and incorporate certain amendments required as a result of changes to the laws and regulations to which we are subject. In particular, the amended Articles of Association will reflect certain amendments to the Companies (Jersey) Law 1991 (as amended) and certain requirements of the UK Listing Rules which come into effect for companies incorporated outside of the UK who have a premium listing of equity securities on the Official List of the UK Financial Services Authority.
C. MATERIAL CONTRACTS
1. Arrangement Agreement dated August 5, 2009 between Randgold Resources Limited, 0858065 B.C. Limited and Moto Goldmines Limited.
We entered into the arrangement agreement in connection with the acquisition of Moto Goldmines Limited.
2. Protocole d’Accord dated October 31, 2009 between Randgold Resources Limited, AngloGold Ashanti Limited, Moto Goldmines Limited, Kibali Goldmines S.P.R.L. and the Government of the Democratic Republic of The Congo.
We entered into the Protocole d’Accord in connection with the development of the Moto Gold Project.
3. Share Purchase Agreement dated October 31, 2009 between L’Office des Mines de Kilo-Moto, Randgold Resources Limited, AngloGold Ashanti Limited, Moto Goldmines Limited, Border Energy Pty Limited, Kibali (Jersey) Limited and Kibali Goldmines S.P.R.L.
We entered into a share purchase agreement for the indirect acquisition of 10% of the issued share capital of Kibali Goldmines S.P.R.L.
4. Agreement between Randgold Resources Limited and DTP Terrassement, dated July 26, 2010.
We entered into an Agreement with DTP Terrassment with respect to the equipment for the Gounkoto mine.
5. Joint Venture Agreement between Anglogold Ashanti Limited and Randgold Resources Limited, dated July 16, 2009.
We entered into a Joint Venture Agreement in connection with the acquisition of Moto Goldmines Limited.
6. Employment Contract between Randgold Resources Limited and Graham P. Shuttleworth, dated August 3, 2010.

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We entered into an employment contract with Mr. Shuttleworth in respect of his position as Chief Financial Officer. Pursuant to the employment contract, Mr. Shuttleworth is deemed to have been employed by us from July 1, 2007. The employment contract provides that Mr. Shuttleworth’s base remuneration is £330,212 per annum beginning January 1, 2010, and a bonus based on the achievement of certain performance targets.
D. EXCHANGE CONTROLS
     There are currently no Jersey or United Kingdom foreign exchange control restrictions on the payment of dividends on our ordinary shares or on the conduct of our operations. Jersey is in a monetary union with the United Kingdom. There are currently no limitations under Jersey law or our Articles of Association prohibiting persons who are not residents or nationals of the United Kingdom from freely holding, voting or transferring our ordinary shares in the same manner as United Kingdom residents or nationals.
E. TAXATION
Material Jersey Tax Consequences
General
     The following summary of the anticipated tax treatment in Jersey in relation to the payments on the ordinary shares and ADSs is based on the taxation law and practice in force at the date of this Annual Report, and does not constitute legal or tax advice and prospective investors should be aware that the relevant fiscal rules and practice and their interpretation may change. We encourage you to consult your own professional advisers on the implications of subscribing or buying, holding, selling, redeeming or disposing of ordinary shares or ADSs and the receipt of interest and distributions, whether or not on a winding-up, with respect to the ordinary shares or ADSs under the laws of the jurisdictions in which they may be taxed.
     Following amendments to the Income Tax (Jersey) Law 1961 (the “Income Tax Law”), our tax position (along with all other companies incorporated in Jersey) has changed. Up until December 31, 2008, we were an “exempt company” within the meaning of Article 123A of the Income Tax Law. As an “exempt company” we were not liable for Jersey income tax other than on Jersey source income, except by concession bank deposit interest on Jersey bank accounts. For as long as we were an “exempt company”, payments in respect of the ordinary shares and ADSs were not subject to any taxation unless a shareholder was resident in Jersey, and no withholding in respect of taxation was required on those payments to any holder of the ordinary shares or ADSs.
     We are now subject to Jersey income tax at the rate of zero percent in accordance with Article 123C of the Income Tax Law with effect from January 1, 2009.
     The Income Tax Law now provides that the standard rate of income tax on profits of a non-financial service company regarded as resident in Jersey or having a permanent establishment in Jersey will be zero percent. The Income Tax Law also provides that the new tax regime will apply for the year of assessment 2008 in relation to non-financial service companies which are first regarded as resident in Jersey or which have a permanent establishment in Jersey on or after June 3, 2008.
     As a non-financial service company subject to tax at the rate of zero percent, we will not be liable for Jersey income tax other than on income arising from Jersey land or property. For so long as we are subject to tax at the rate of zero percent, payments in respect of the ordinary shares and ADSs will not be subject to any taxation in Jersey and no withholding in respect of taxation will be required on those payments to any holder of the ordinary shares or ADSs.
     Currently, there is no double tax treaty or similar convention between the US and Jersey.
Taxation of Dividends
     Dividends are declared and paid gross in US dollars. Under the existing Jersey law, payments in respect of the ordinary shares and ADSs, whether by dividend or other distribution paid to shareholders (other than to residents in Jersey), will not be subject to any taxation in Jersey and no withholding in respect of taxation will be required on those payments to any holder of our ordinary shares or ADSs.

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Taxation of Capital Gains and Estate and Gift Tax
     Under current Jersey law, there are no death or estate duties, capital gains, gift, wealth, inheritance or capital transfer taxes. No stamp duty is levied in Jersey on the issue or transfer of ordinary shares or ADSs. In the event of the death of an individual sole shareholder, duty at rates of up to 0.75% of the value of the ordinary shares or ADSs held may be payable on the registration of Jersey probate or letters of administration which may be required in order to transfer or otherwise deal with ordinary shares or ADSs held by the deceased individual sole shareholder.
Material United States Federal Income Tax Consequences
     The following summary describes the material US Federal income tax consequences to US holders (as defined below) arising from the purchase, ownership and disposition of our ordinary shares or ADSs. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, final, temporary and proposed US Treasury Regulations promulgated under the Code, and administrative and judicial interpretations of the Code and the US Treasury Regulations, all as in effect as of the date of this summary, and all of which are subject to change, possibly with retroactive effect. In addition, this discussion assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement have been and will be complied with in accordance with their terms.
     This summary has no binding effect or official status of any kind; we cannot assure holders that the conclusions reached below would be sustained by a court if challenged by the Internal Revenue Service.
     For purposes of this discussion, a “US holder” is a holder of our ordinary shares or ADSs that is a beneficial owner of such shares or ADSs and is:
    a US citizen;
 
    an individual resident in the United States for US Federal income tax purposes;
 
    a domestic corporation, or other entity taxable as a corporation, organized under the laws of the United States or of any US state or the District of Columbia;
 
    an estate the income of which is includible in its gross income for US Federal income tax purposes without regard to its source; or
 
    a trust, if either: a US court is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all the substantial decisions of the trust, or the trust has a valid election in effect under applicable US Treasury regulations to be treated as a US person.
     This summary does not address all aspects of US Federal income taxation that may be relevant to particular US holders in light of their particular circumstances, or to US holders subject to special rules, including, without limitation:
    retirement plans;
 
    insurance companies;
 
    persons that hold ordinary shares or ADSs as part of a “straddle,” “synthetic security,” “hedge,” “conversion transaction” or other integrated investment;
 
    persons that enter into “constructive sales” involving our ordinary shares or ADSs or substantially identical property with other transactions;
 
    persons whose functional currency is not the US Dollar;
 
    expatriates or former long-term residents of the United States;
 
    financial institutions;

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    dealers in securities or currencies;
 
    tax-exempt organizations;
 
    persons that own, actually or constructively, 10% or more of our outstanding voting stock;
 
    persons subject to the alternative minimum tax;
 
    regulated investment companies;
 
    real estate investment trusts;
 
    persons who trade in securities who elect to apply a mark-to-market method of accounting; and
 
    persons who acquired their shares or ADSs pursuant to the exercise of employee stock options or otherwise as compensation.
     In addition, this summary does not address the effect of any applicable US state, local or non-US tax laws or any federal, estate or gift tax consequences, does not consider the tax treatment of persons who own our ordinary shares or ADSs through a partnership or other pass-through entity, and deals only with ordinary shares or ADSs held by US holders as “capital assets” as defined in Section 1221 of the Code. If a partnership (including for this purpose, any entity treated as a partnership for US Federal income tax purposes) holds shares or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If a US holder is a partner in a partnership that holds shares or ADSs, the holder is urged to consult its own tax advisor regarding the specific tax consequences of the ownership and disposition of the shares or ADSs.
     We encourage holders of our ordinary shares or ADSs to consult with their own tax advisors with respect to the US Federal, state and local tax consequences, as well as the tax consequences in other jurisdictions, of the purchase, ownership and disposition of our ordinary shares or ADSs applicable in their particular tax situations.
Ownership of Ordinary Shares or ADSs
     For purposes of the Code, US holders of ADSs should be treated for US Federal income tax purposes as the owner of the ordinary shares represented by those ADSs. Accordingly, exchanges of ordinary shares for ADSs and ADSs for ordinary shares generally should not be subject to US Federal income tax. The US Treasury has, however, expressed concerns that intermediaries in the chain of ownership between the US holder of an ADS and the issuer of the security underlying the ADS may, in some circumstances, be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, pre-releasing ADSs to persons that do not have the beneficial ownership of the securities underlying the ADSs). Accordingly, the availability of the reduced tax rate (as discussed below) for dividends received by certain non-corporate US holders, including US holders who are individuals, could be affected by future actions that may be taken by the US Treasury and/or intermediaries in the chain of ownership between the US holders of ADSs and us.
     Subject to the discussion below under the heading “Passive Foreign Investment Company Rules,” for US Federal income tax purposes, distributions with respect to our ordinary shares or ADSs, other than distributions in liquidation and distributions in redemption of stock that are treated as exchanges, will be taxed to US holders as ordinary dividend income to the extent that the distributions do not exceed our current and accumulated earnings and profits as determined for federal income tax purposes. Distributions, if any, in excess of our current and accumulated earnings and profits will constitute a non-taxable return of capital and will be applied against and reduce the holder’s basis in our ordinary shares or ADSs. To the extent that these distributions exceed the US holder’s tax basis in our ordinary shares or ADSs, as applicable, the excess generally will be treated as capital gain. We do not, however, intend to calculate our earnings and profits under US federal income tax principles. Therefore, you should expect that any distribution from us generally will be treated for US federal income tax purposes as a dividend. Such dividends will not be eligible for the dividends received deduction generally allowed to a US corporation under Section 243 of the Code.
     Individual US holders are eligible for reduced rates of US Federal income tax (currently a maximum of 15%) in respect of “qualified dividend income” received in taxable years beginning before January 1, 2013. For this purpose, qualified dividend income generally includes dividends paid by non-US corporations if, among other things, certain minimum holding periods are met and either (i) the ordinary shares (or ADSs) with respect to which the dividend has been paid are readily tradable on an established securities

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market in the United States, or (ii) the non-US corporation is eligible for the benefits of a comprehensive US income tax treaty which provides for the exchange of information. For this purpose, ADSs listed on the Nasdaq exchange are considered to be readily tradable on an established securities market in the United States. Therefore, we currently believe that dividends paid with respect to our ordinary shares and ADSs will constitute qualified dividend income for US federal income tax purposes, provided the individual US holders of our shares and ADSs meet certain holding period requirements. However, if we are a passive foreign investment company, as discussed below under the heading “Passive Foreign Investment Company Rules”, in the taxable year of the distribution or the preceding tax year, the dividends paid with respect to our ADSs will not constitute qualified dividend income. US holders are urged to consult their own tax advisors regarding the classification of any distributions from us as qualified dividend income.
     Dividends from us generally will constitute non-US-source income for foreign tax credit limitation purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us generally will be treated as “passive category income” or, in the case of certain US holders, as “general category income.”
Sale or Other Disposition of Ordinary Shares or ADSs
     Subject to the discussion below under “Passive Foreign Investment Company Rules,” if a US holder sells or otherwise disposes of its ordinary shares or ADSs in a taxable transaction, it will generally recognize gain or loss for US Federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other taxable disposition and its tax basis in the ordinary shares or ADSs. Such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the US holder has held the ordinary shares or ADSs for more than one year at the time of the sale or other taxable disposition. In general, any gain that US holders recognize on the sale or other taxable disposition of ordinary shares or ADSs will be US source income for purposes of the foreign tax credit limitation and any losses recognized will generally be allocated against US source income. Deduction of capital losses is subject to limitations under the Code.
Additional Tax After 2012
     For taxable years beginning after December 31, 2012, US holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally will be subject to an additional 3.8% Medicare contribution tax on unearned income, including, among other things, cash dividends on, and capital gains from the sale or other taxable disposition of, our ordinary shares, subject to certain limitations and exceptions. US holders should consult their own tax advisors regarding the effect, if any, of such tax on their ownership and disposition of our ordinary shares.
Passive Foreign Investment Company Rules
     A special and adverse set of US Federal income tax rules apply to a US holder that holds stock in a passive foreign investment company, or PFIC. In general, we will be a PFIC if 75% or more of our gross income in a taxable year is passive income. Alternatively, we will be considered to be a PFIC if at least 50% of our assets in a taxable year, averaged over the year and determined based on fair market value, are held for the production of, or produce, passive income.
     In determining whether a non-US corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.
     We believe that we currently are not a PFIC and do not expect to become a PFIC in 2011. However, there is significant uncertainty in the application of the PFIC rules to mining enterprises such as ourselves as a result of the interplay of several sets of tax rules. In addition, because the tests for determining PFIC status are applied as of the end of each taxable year and are dependent upon a number of factors, some of which are beyond our control, including the value of our assets, the market price of our ordinary shares, and the amount and type of our gross income, we cannot assure you that we will not become a PFIC in the future or that the US Internal Revenue Service will agree with our conclusion that we are not a PFIC now.
     If we are a PFIC for US Federal income tax purposes for any year during a US holder’s holding period of our ADSs or ordinary shares and the US holder does not make a “mark-to-market” election or a QEF election, both as described below:
    any gain recognized by a US holder upon the sale of ADSs or ordinary shares, or the receipt of some types of distributions, would be treated as ordinary income;

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    this income generally would be allocated ratably over a US holder’s holding period with respect to our ADSs or ordinary shares; and
 
    the amount allocated to prior years, with certain exceptions, will be subject to tax at the highest tax rate in effect for those years and an interest charge would be imposed on the amount of deferred tax on the income allocated to the prior taxable years.
     We generally will be treated as a PFIC as to any US holder if we are a PFIC for any year during such holder’s holding period. However, if we cease to satisfy the requirements for PFIC classification, a US holder may avoid PFIC classification for subsequent years if such holder elects to recognize gain based on the unrealized appreciation in the ADSs or ordinary shares through the close of the tax year in which we cease to be a PFIC. Additionally, if we are a PFIC, a US holder who acquires ADSs or ordinary shares from a decedent would be denied the normally available step-up in tax basis for our ADSs or ordinary shares to fair market value at the date of death and instead would have a tax basis equal to the lower of the fair market value or the decedent’s tax basis.
     Further, if we are a PFIC, each US holder will generally be required to file an annual report with the Internal Revenue Service for the taxable years beginning on or after March 18, 2010. US holders are urged to consult their own tax advisors regarding this new reporting obligation and how it may apply to their particular circumstances.
     A US holder generally may be able to avoid the imposition of the special tax and interest charge described above by electing to mark its ADSs or ordinary shares to market annually, and, therefore, recognize for each taxable year, subject to certain limitations, ordinary income or loss equal to the difference, as of the close of taxable year, between the fair market value of its ADSs or ordinary shares and the adjusted tax basis of his or its ADSs or ordinary shares. Losses would be allowed only to the extent of the net mark-to-market gain previously included by the US holder under the election in prior taxable years. If a mark-to-market election with respect to ADSs or ordinary shares is in effect on the date of a US holder’s death, the tax basis of the ADSs or ordinary shares in the hands of a US holder who acquired them from a decedent will be the lesser of the decedent’s tax basis or the fair market value of the ADSs or ordinary shares. A mark-to-market election is available only if the ADSs or ordinary shares, as the case may be, are considered “marketable stock.” Generally, stock will be considered marketable stock if it is “regularly traded” on a “qualified exchange” within the meaning of applicable US Treasury regulations. A class of stock is regularly traded during any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The Nasdaq constitutes a qualified exchange, and a non-US securities exchange constitutes a qualified exchange if it is regulated or supervised by a governmental authority of the country in which the securities exchange is located and meets certain trading, listing, financial disclosure and other requirements set forth in US Treasury regulations.
     In certain circumstances a holder of stock or ADSs in a PFIC may avoid taxation under the rules described above by making a “qualified electing fund,” or “QEF,” election to include in income its share of a PFIC’s annual income on a current basis. However, a QEF election is only available if the PFIC annually provides its stockholders with certain tax information, and we currently do not intend to prepare or provide such information. Accordingly, you should assume that a QEF election is unavailable.
     Rules relating to a PFIC are very complex. US holders are encouraged to consult their own tax advisors regarding the application of the PFIC rules to their investments in our ADSs or our ordinary shares.
Backup Withholding and Information Reporting
     Payments to US holders in respect of our ordinary shares or ADSs may be subject to information reporting to the US Internal Revenue Service and to backup withholding tax, currently imposed at a rate of 28% (but currently scheduled to increase to 31% for taxable years beginning on or after January 1, 2013).
     However, backup withholding and information reporting will not apply to a US holder that is a corporation or comes within an exempt category, and demonstrates the fact when so required, or furnishes a correct taxpayer identification number and makes any other required certification. US holders who are required to establish their exempt status generally must provide such certification on Internal Revenue Service Form W-9.
     Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules will be allowed as a refund or credit against a US holder’s US Federal income tax liability, provided that the required procedures are followed.

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     Recently enacted legislation requires US individuals to report an interest in any “specified foreign financial asset” if the aggregate value of such assets owned by the U.S. individual exceeds $50,000 (or such higher amount as the IRS may prescribe in future guidance). Stock issued by a foreign corporation is treated as a specified foreign financial asset for this purpose. US holders should consult their own tax advisors regarding this reporting obligation and how it may apply to their particular circumstances.
United Kingdom Tax Considerations
     The following statements do not constitute tax advice and are intended as a general guide only to the U.K. tax position under current U.K. tax legislation, case law and published HM Revenue & Customs (“HMRC”) practice as at the date of this document, both of which is subject to change at any time, possibly with retrospective effect. These statements deal only with the position of shareholders who are resident (and, in the case of individuals only, ordinarily resident and domiciled) solely in the U.K. for tax purposes (except where the position of a non-U.K. tax resident shareholder is expressly referred to), who hold their ordinary shares or ADSs as an investment and who are the absolute beneficial owners of the ordinary shares or ADSs and of all dividends of any kind paid in respect of them in circumstances where the dividends paid are regarded for U.K. tax purposes as that person’s own income (and not the income of some other person). The tax position of certain categories of shareholders who are subject to special rules (such as persons acquiring their shares or ADSs (or deemed to acquire their shares or ADSs) in connection with an employment or office, dealers in securities, insurance companies and collective investment schemes and shareholders owning 10% or more of the ordinary shares or voting power, rights to profit or capital of the company) is not considered. Any shareholder who is in doubt as to their tax position regarding the acquisition, ownership or disposal of their ordinary shares or ADSs, or who are subject to tax in a jurisdiction other than the U.K., should consult their own independent tax adviser.
Dividends
     A person having an interest in ADSs or ordinary shares who is not a resident in the U.K. will not be subject to tax in the U.K. on dividends paid on ordinary shares, unless that person carries on a trade, profession or vocation in the U.K. (and, if that person is a company, does so through a permanent establishment) to which the ordinary shares or ADSs in question are attributable.
     A person having an interest in ADSs or ordinary shares who is resident in the U.K. and is not a body corporate will, in general, be subject to U.K. income tax on dividends paid by us.
     A U.K. resident body corporate holding an interest in ADSs or ordinary shares should not generally be taxable on dividends paid by us after July 1, 2009. Dividends paid before this date were, in general, subject to U.K. corporation tax.
     A U.K. resident individual shareholder will be entitled to a tax credit, which may be set off against the shareholder’s total income tax liability on the dividend. The value of the tax credit is currently 10% of the aggregate of the dividend and the tax credit (the “Gross Dividend”), which is also equal to one -ninth of the cash dividend received.
     Such an individual U.K. resident shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of 10% of the Gross Dividend, so that any tax credit will satisfy in full such shareholder’s liability to income tax on the dividend.
     An individual shareholder who is liable to income tax at the 40% tax rate will be taxed at the rate of 32.5% on the Gross Dividend. Any tax credit will be set against, but not fully match, the shareholder’s tax liability on the Gross Dividend and such shareholder will have to account for additional income tax equal to 22.5% of the Gross Dividend (which is equal to 25% of the cash dividend received) to the extent that the Gross Dividend, falls within the 40% tax band.
     From April 6, 2010 a tax rate of 50% for taxable income above £150,000 was introduced. Dividends which are taxable at the 50% rate will be liable to income tax at a rate of 42.5% of the Gross Dividend. Any tax credit will be set against, but not fully match, the shareholder’s tax liability on the Gross Dividend and such shareholder will have to account for additional income tax equal to 32.5% of the Gross Dividend (this equates to 36.1% of the cash dividend received) to the extent that the Gross Dividend, when treated as the top slice of the shareholder’s income, falls above the threshold for the 50% rate of tax.
     An individual shareholder will not generally be able to claim repayment from HMRC of any part of the tax credit attaching to dividends paid by us.

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     Each shareholder resident outside the U.K. may also be subject to foreign taxation on dividend income under the local law of the country(ies) in which they reside/are resident.
     We are subject to tax at the rate of zero percent for the purposes of Article 123C of the Income Tax (Jersey) Law 1961 and therefore we are taxed in Jersey at the rate of 0% on our worldwide income. We are not required to make any deduction or withholding in respect of Jersey taxation on any dividend we may pay.
     Capital Gains
     A person having an interest in ADSs or ordinary shares who is neither resident nor, in the case of an individual shareholder, ordinarily resident in the U.K. will generally not be subject to tax in the U.K. on gains arising on a disposal of our ordinary shares or interests in the ADSs.
     However, individuals who left the U.K. on or after March 17, 1998, who were resident in the U.K. for four out of seven tax years prior to departure, and who return to the U.K. before five complete tax years following departure will be subject to U.K. capital gains tax on any gains realized on the disposal during the period of absence of any assets which were owned before taking up residence abroad.
     Persons having an interest in ADSs or ordinary shares who are resident and/or, in the case of an individual shareholder, ordinarily resident in the U.K. or who hold their ordinary shares or interests in ADSs through a U.K. trading branch or agency (or, if that person is a company, a permanent establishment) will, in general, be subject to U.K. taxation on gains arising on a disposal of ordinary shares or interests in ADSs. The first £10,100 of an individual’s net chargeable gains are exempt. For gains realized on or after June 23, 2010, the balance is taxed at 18% for gains that fall within the individual’s otherwise unused basic rate income tax band (currently £37,400) and 28% thereafter. Gains realized prior to June 23, were taxed at a flat rate of 18% irrespective of the level of the individual’s other income.
     A body corporate will generally be subject to U.K. corporation tax on chargeable gains at the standard rate of U.K. corporation tax (which is reducing from 28% to 26% from April 1, 2011).
     Inheritance Tax
     Liability to U.K. inheritance tax may arise on the death of an individual having an interest in ADSs or ordinary shares, or on a gift (or disposal at an undervalue) of ordinary shares or ADSs by an individual, who is domiciled, or deemed to be domiciled, in the U.K.
     U.K. inheritance tax may still be relevant for individuals who are neither domiciled nor deemed to be domiciled in the U.K. U.K. property is generally liable to U.K. inheritance tax subject to Double Tax Treaty provisions. This is a complicated area and individuals should consult their own independent tax adviser.
     Stamp Duty and Stamp Duty Reserve Tax
     No U.K. stamp duty or stamp duty reserve tax should be payable on the issue of the ordinary shares or ADSs, or on the delivery of the ADSs into DTC.
     No U.K. stamp duty should in practice be payable on the transfer of ordinary shares or ADSs provided any instrument of transfer is executed and retained outside of the U.K. and no U.K. stamp duty will arise in respect of any dealings in the ordinary shares or ADSs within a clearance service, where such dealings are effected in book entry form in accordance with the procedures of the clearance service and not by written instrument.
     Stamp duty reserve tax will not be payable on an agreement to transfer ADSs or ordinary shares, provided there is no register in the United Kingdom in respect of the ordinary shares or ADSs.
F. DIVIDENDS AND PAYING AGENTS
     Not applicable.
G. STATEMENTS BY EXPERTS
     Not applicable.
H. DOCUMENTS ON DISPLAY

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     You may request a copy of our US Securities and Exchange Commission filings, at no cost, by writing or calling us at Randgold Resources Limited, 3rd Floor, Unity Chambers, 28 Halkett Street, St. Helier, Jersey, JE2 4WJ, Channel Islands. Attention: D. J. Haddon, Telephone: (011 44) 1534-735-333. A copy of each report submitted in accordance with applicable United States law is available for public review at our principal executive offices at 3rd Floor, Unity Chambers, 28 Halkett Street, St. Helier, Jersey, Channel Islands.
     A copy of each document (or a translation thereof to the extent not in English) concerning us that is referred to in this Annual Report, is available for public view at our principal executive offices at 3rd Floor Unity Chambers, 28 Halkett Street, St. Helier, Jersey, Channel Islands. Attention: D. J. Haddon, Telephone: (011 44) 1534-735-333.
I. SUBSIDIARY INFORMATION
     Not applicable.
Item 11. Quantitative and Qualitative Disclosures About Market Risk Hedge Policy
     Although, in general, it is not our policy to hedge our gold sales, we believe it is prudent to hedge during times of significant capital expansion and debt and we are sometimes required to do so under debt financing arrangements. The market price of gold has a significant effect on our results of operations, our ability to pay dividends and undertake capital expenditures, and the market price of our ordinary shares. Gold prices have historically fluctuated widely and are affected by numerous industry factors over which we have no control. The aggregate effect of these factors is impossible for us to predict.
     We use hedging instruments to protect the selling price of some of our anticipated gold production. These hedging instruments have been required by the terms of our Morila and Loulo loans.
     The Morila hedge book was closed out in 2004.
     The Loulo project finance loan was entered into in 2004 with a consortium of financial lenders, namely, Rothschild, SG Corporate and Investment Bank, ABSA Bank and HVB Group, and had as a requirement that some hedging be put in place. The intended effect of the hedging transactions was to lock in a fixed sale price for some of our future gold production, and reduce the adverse impact of a future fall in gold prices.
     Loulo’s hedging is administered by our finance department which acts upon the recommendations of a hedging committee within the guidelines of a policy set by our board. The hedging was entered into in terms of a requirement of the Loulo Loan. The Loulo loan and our hedging arrangements were with a consortium of financial lenders: NM Rothschild, SG Corporate and Investment Bank, ABSA Bank and HVB Group. The Loulo Loan had in early May 2007 been replaced by a Revolving Credit Facility, which was terminated in 2009.
     All of Loulo’s derivative transactions previously had to be in compliance with the terms and conditions of the Loulo loan agreement. That agreement placed a limit on derivative transactions of 70% of Loulo’s forecast production for a given year. Our board agreed as part of the financing arrangements for the development of Loulo that some gold price protection be secured. All remaining gold price forward sales contracts were delivered into during the year.
Foreign Currency and Commodity Price Sensitivity
     In the normal course of business, the group enters into transactions denominated in foreign currencies (primarily Euro, South African Rand, Congolese franc and Communauté Financière Africaine Franc). As a result, the group is subject to exposure from fluctuations in foreign currency exchange rates. In general, the group does not enter into derivatives to manage these currency risks. Generally, the group does not hedge its exposure to gold price fluctuation risk and sells at market spot prices. Gold sales are disclosed in US dollars and do not expose the group to any currency fluctuation risk. However, during periods of capital expenditure or loan finance, the company may use forward contracts or options to reduce the exposure to price movements, while maintaining significant exposure to spot prices. These derivatives may establish a fixed price for a portion of future production while the group maintains the ability to benefit from increases in the spot gold price for the majority of future gold production. The group is also exposed to

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fluctuations in the price of consumables, such as fuel, steel, rubber, cyanide and lime, mainly due to changes in the price of oil, as well as fluctuations in exchange rates.
                 
$000   2010     2009  
Level of exposure of foreign currency risk
               
Carrying value of foreign currency balances
               
Cash and cash equivalents includes balances denominated in:
               
    Communauté Financière Africaine franc (CFA)
    24,532       7,506  
    Euro (EUR)
    3,439       10,987  
    South African rand (ZAR)
    502       (668 )
    British pound (GBP)
    281       59  
    Australian dollar (AUD)
    205       3,617  
    Canadian dollar (CAD)
    1,155       360  
Accounts receivable and prepayments include balances denominated in:
               
    Communauté Financière Africaine franc (CFA)
    18,578       51,435  
    Euro (EUR)
    1       3,956  
    South African rand (ZAR)
    345       6,564  
    British pound (GBP)
    131       159  
    Australian dollar (AUD)
    12       1,171  
    Canadian dollar (CAD)
          47  
Accounts payable includes balances denominated in:
               
    Communauté Financière Africaine franc (CFA)
    (5,453 )     (28,264 )
    Euro (EUR)
    (3,949 )     (5,895 )
    South African rand (ZAR)
    (3,583 )     (3,489 )
    British pound (GBP)
    (51 )      
    Australian dollar (AUD)
    (21 )     (3,487 )
    Canadian dollar (CAD)
    (39 )      
     The group’s exposure to foreign currency arises where a company holds monetary assets and liabilities denominated in a currency different to the functional currency of the group which is the US dollar. Set out below is the impact of a 10.0% change in the US dollar on profit and equity arising as a result of the revaluation of the group’s foreign currency financial instruments.
                 
            Effect of 10.0%  
    Closing     strengthening of US  
    exchange     dollar on net earnings  
Level of exposure of foreign currency risk (continued)   Rate     and equity  
At December 31, 2010
               
    Euro (EUR)
    0.7546       51  
    British pound (GBP)
    0.6465       36  
    Communauté Financière Africaine franc (CFA)
    504.68       3,766  
    South African rand (ZAR)
    6.6468       274  
    Australian dollar (AUD)
    1.0163       20  
    Canadian dollar (CAD)
    1.0001       112  
At December 31, 2009
               
    Euro (EUR)
    0.6977       905  
    British pound (GBP)
    0.6279       22  
    Communauté Financière Africaine franc (CFA)
    457.66       2,600  
    South African rand (ZAR)
    7.4174       241  
    Australian dollar (AUD)
    1.1199       130  
    Canadian dollar (CAD)
    1.0494       41  
     The sensitivities are based on financial assets and liabilities held at December 31 where balances were not denominated in the functional currency of the group. The sensitivities do not take into account the group’s sales and costs and the results of the sensitivities could change due to other factors such as changes in the value of financial assets and liabilities as a result of non-foreign exchange influenced factors.

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     The market price of gold has a significant effect on our results of operations, our ability to pay dividends and undertake capital expenditures and the market prices of our ordinary shares.
     Gold prices have historically fluctuated widely and are affected by numerous industry factors over which we have no control. The aggregate effect of these factors is not possible for us to predict.
All gold price forward sales contracts were delivered into during the year.
     During 2004, a hedging program totaling 365,000 ounces was put in place in terms of a requirement of the Loulo loan. We have used four counterparties for our current hedge book. These counterparties are international banks which have not failed to perform as required under our hedging arrangements.
     During January 2006, 10,000 ounces previously sold in even amounts over the period January 2006 to June 2006 at $430 per ounce were rolled forward into the period January 2009 to June 2009, with a new forward price of $489 per ounce. In the same month, 6,667 ounces from the January 2006 forward sales, previously priced at $430 per ounce, were rolled forward into May and June 2006 at a price of $437 per ounce. In February 2006, we moved 20,000 ounces previously sold forward over the period February 2006 to April 2006 at a price of $430 per ounce, into the period June 2006 to December 2006 at a price of $441 per ounce.
     In August 2006, 5,999 ounces previously sold forward at $425.91 were rolled out in equal quantities into January 2007 and April 2007 at prices of $431.81 and $434.06, respectively.
     In December 2006, we moved 10,580 ounces previously sold forward at $435.33 in equal quantities into February and March 2007 at new forward prices of $437.90 and $438.18, respectively.
     During the first quarter of 2007, 10,752 ounces previously sold forward at $444.81 were rolled out to the second and third quarters of 2007, 3,583 ounces at $454.51 into the second quarter and 7,168 ounces at $456.09 into the third quarter.
     The Revolving Credit Facility replaced the Loulo Loan in May 2007. As the HVB Group, which previously participated in the Loulo Loan, is not a lender in the Revolving Credit Facility, the 40,248 ounces of the remaining 2007, 2008 and 2009 hedged ounces which pertained to the HVB Group was novated to other counterparties in May 2007. The 11,748 ounces at an average forward price of $436.69 per ounce due for delivery in 2007 were novated and subsequently rolled forward to 2010 at $472 per ounce. The new price is net of any novation charges. The 28,500 ounces at a previous average forward price of $429.95 due for delivery in 2008 and 2009 were novated at $418.58, the lower price being the result of novation charges pertaining to these ounces. Also in May 2007, 30,000 ounces previously sold forward in 2007 at an average price of $447.29 per ounce, were rolled into 2010 at a new average forward price of $511.28 per ounce. The revolving credit facility was cancelled during 2009.
     The accounting effects of our hedging activities are as follows:
All remaining gold price forward sales contracts were delivered into during the year.
     The total fair value of the above financial instruments as at December 31, 2010 was a liability of $0 million (December 31, 2009: liability of $25.3 million).
     During the year ended December 31, 2008, we sold 427,713 ounces of gold at an average price of $792 per ounce. At the average spot gold price for the year of approximately $871 per ounce, product sales would have amounted to approximately $373 million for the year, an increase of approximately $34 million in sales.
     During the year ended December 31, 2009, we sold 486,324 ounces of gold at an average price of $893 per ounce. At the average spot gold price for the year of approximately $973 per ounce, product sales would have amounted to approximately $473 million for the year, an increase of approximately $40 million in sales.
     During the year ended December 31, 2010, we sold 413,262 ounces of gold at an average price of $1,180 per ounce. At the average spot gold price for the year of approximately $1,224 per ounce, product sales would have amounted to approximately $506 million for the year, an increase of approximately $21 million in sales.

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Interest Rate Sensitivity
     We generally do not undertake any specific actions to cover our exposure to interest rate risk and at December 31, 2010 were not party to any interest rate risk management transactions.
     At December 31, 2008 the fair value of our borrowings, including the short-term portion of these liabilities, excluding loans from outside shareholders in subsidiaries, was estimated at $2.8 million. The aggregate hypothetical loss in earnings on an annual basis from a hypothetical increase of 10% of the three month LIBOR rate is negligible.
     At December 31, 2009 the fair value of our borrowings, including the short-term portion of these liabilities, excluding loans from outside shareholders in subsidiaries, was estimated at $1.3 million. The aggregate hypothetical loss in earnings on an annual basis from a hypothetical increase of 10% of the three month LIBOR rate is negligible.
At December 31, 2010 the fair value of our borrowings, including the short-term portion of these liabilities, excluding loans from outside shareholders in subsidiaries, was estimated at $0.2 million. The aggregate hypothetical loss in earnings on an annual basis from a hypothetical increase of 10% of the three month LIBOR rate is negligible.
     As our net earnings exposure with respect of debt instruments was mostly to the one month LIBOR, the hypothetical loss was modeled by calculating the 10% adverse change in one month LIBOR multiplied by the fair value of the respective debt instrument.
Item 12. Description of Securities Other Than Equity Securities
A. DEBT SECURITIES
     Not Applicable.
B. WARRANTS AND RIGHTS
     Not Applicable.
C. OTHER SECURITIES
     Not Applicable.
D. AMERICAN DEPOSITARY SHARES
Fees Payable by ADS Holders
     Our American Depositary Shares, or ADSs, each representing the right to receive one of our ordinary shares, are listed on the Nasdaq Global Select Market under the symbol “GOLD.” A copy of our Form of Amended and Restated Deposit Agreement with The Bank of New York Mellon (the “Depositary”) was filed with the SEC as an exhibit to our Form F-6 filed on October 7, 2009 (the “Deposit Agreement”). Pursuant to the Deposit Agreement, holders of our ADSs may have to pay to the Depositary, either directly or indirectly, fees or charges up to the amounts set forth in the table below:
     
Associated Fee   Depositary Action
$5.00 or less per 100 ADSs (or portion thereof).
  Execution and delivery of ADRs and the surrender of ADRs pursuant to the Deposit Agreement.
 
   
$0.02 or less per ADS (or portion thereof).
  Any cash distribution made pursuant to the Deposit Agreement, including, among other things:
 
   
 
 
    cash distributions or dividends,
 
   
 
 
    distributions other than cash, shares or rights,
 
   
 
 
    distributions in shares, and
 
   
 
 
    rights of any other nature, including rights to subscribe for additional shares.

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Associated Fee   Depositary Action
Taxes and other governmental charges.
  As applicable.
 
   
Registration fees in effect for the registration of transfers of shares generally on the share register of the Company or foreign registrar and applicable to transfers of shares to or from the name of the Depositary or its nominee or the custodian or its nominee on the making of deposits or withdrawals.
  As applicable.
 
   
A fee equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities.
  Distributions of securities other than cash, shares or rights.
 
   
Any other charges payable by the Depositary, any of its agents (and their agents), including the custodian (by billing such owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).
  Servicing of shares or other deposited securities.
 
   
Expenses incurred by the Depositary.
 
    Cable, telex and facsimile transmission (where expressly provided for in the Deposit Agreement)
 
   
 
 
    Foreign currency conversion into U.S. dollars
Depositary Payments for 2009
     For the year ended December 31, 2010, our Depositary made no payments on our behalf in relation to our ADR program.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
     There have been no material defaults in the payment of principal, interest, a sinking fund or purchase fund installment or any other material default with respect to any of our indebtedness.
Item 14. Material Modification to the Rights of Security Holders and Use of Proceeds
     Effective on June 11, 2004, we undertook a subdivision of our ordinary shares, which increased our issued share capital from 29,273,685 to 58,547,370 ordinary shares. In connection with this “share split”, our ordinary shareholders of record on June 11, 2004 received two additional $0.05 ordinary shares for every one $0.10 ordinary share they held. Following the share split, each shareholder held the same percentage interest in us, however, the trading price of each share was adjusted to reflect the share split. ADS holders were affected the same way as shareholders and the ADS ratio remains one ADS to one ordinary share.
Item 15. Controls and Procedures
     (a) Disclosure Controls and Procedures: Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, including controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons

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performing similar functions, as appropriate to allow timely decisions regarding required disclosure, are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the required time periods.
     (b) Management’s Report on Internal Control over Financial Reporting: Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Securities Exchange Act of 1934 defines internal control over financial reporting in Rule 13a-15(f) and 15d-15(f) as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
    Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
 
    Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
 
    Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the consolidated financial statements.
     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
     Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.
     Based upon its assessment, our management concluded that, as of December 31, 2010, our internal control over financial reporting is effective based upon those criteria.
     BDO LLP, an independent registered public accounting firm that audited the consolidated financial statements included in this annual report on Form 20-F, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2010.
     (c) See report of BDO LLP, an Independent Registered Public Accounting Firm included under “Item 18 — Financial Statements”, on page F-1.
     (d) Changes in Internal Control Over Financial Reporting: There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
     During the year ended December, 31 2010, as our business has expanded, we put in place internal controls over financial reporting for two new operational areas of the business: Kibali and Tongon. We have experienced an increase in the number of controls operated that are consistent with those already in place. As at December 31, 2010, due to the on-going political situation in Côte d’Ivoire, a higher level of control was exercised in respect of Tongon by Randgold’s group level finance staff.
Item 16. Reserved
Item 16A. Audit Committee Financial Expert
     Our board determined that Mr. B.H. Asher, the former chairman of the audit committee (through May 5, 2009), was an “audit committee financial expert” as defined in Item 16A of Form 20-F. Dr. K. Voltaire, the current chairman of the audit committee, has been determined by the board to be an “audit committee financial expert”. Dr. Voltaire and each of the other members of the audit committee (being Mr. C.L. Coleman and Dr. K. Dagdelen) are independent directors.

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Item 16B. Code of Ethics
     Our board has adopted a code of ethics that applies to the Chief Executive Officer, Chief Financial Officer and all financial officers. This code of ethics is posted on our website, www.randgoldresources.com.
Item 16C. Principal Accountant Fees and Services
     BDO LLP has served as our independent registered public accounting firm for the financial years ended December 31, 2010, 2009, and 2008.
     The following table presents the aggregate fees for professional services and other services rendered by our Independent Registered Public Accounting Firm to us in 2010 and 2009.
                 
    2010     2009  
    $     $  
    (in millions)  
Audit Fees (1)
    0.7       0.8  
Audit-related Fees (2)
          0.2  
Tax Fees
           
All Other Fees (3)
          0.2  
Total
  $ 0.7     $ 1.2  
 
(1)   The Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include our audit and statutory audits.
 
(2)   Audit-related fees include fees billed relating to comfort letters and consents; attest services; and assistance with and review of documents filed with the Securities and Exchange Commission and UK Listing Authority.
 
(3)   Other fees relate to other work performed in respect of the documents filed with the UK Listing Authority.
Audit Committee Pre-Approval Policies and Procedures
     Below is a summary of the Audit Committee’s pre-approved policies and procedures:
     The Audit Committee comprises only independent non-executive directors and its mandate covers the sphere of duties relating to accounting policies, internal control, financial reporting practices, identification of exposure to significant risks and all corporate governance issues.
     The Audit Committee is responsible for the appointment, removal and oversight of the activities of the external auditors. In addition, the Audit Committee sets the principles for recommending the use of external auditors for non-audit services. The Audit Committee approves all external consulting services and other charges levied by the external auditors.
     The Audit Committee met six times during 2010. At some of these meetings the committee met with the external audit partner and the finance director, to review the audit plans of the external auditors, to ascertain the extent to which the scope of the audit can be relied upon to detect weaknesses in internal controls and to review the quarterly and half-yearly financial results, the preliminary announcement of the annual results and the annual financial statements, as well as all statutory submissions of a financial nature, prior to approval by the board.
     During 2010, all Audit-related Fees provided to us by BDO LLP were approved by the Audit Committee pursuant to the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
     No work was performed by persons other than BDO LLP’s full-time, permanent employees on the BDO LLP’s engagement to audit our financial statements for 2010 and 2009.

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     During 2010, the Audit Committee has overseen work undertaken to ensure compliance with the requirements of Section 404 of the Sarbanes Oxley Act.
Item 16D. Exemptions from the Listing Standards for Audit Committees
     Not Applicable.
Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers
     Neither the issuer nor any affiliate of the issuer purchased any of our shares during 2009.
Item 16F. Change in Registrant’s Certifying Accountant
     Not Applicable.
Item 16G. Corporate Governance
     We are subject to a variety of corporate governance guidelines and requirements of Nasdaq, the London Stock Exchange and the SEC. We believe that we comply with the applicable corporate governance requirements. Although we are listed on the Nasdaq Global Select Market, we are not required to comply with all of Nasdaq’s corporate governance rules which are applicable to US companies. The significant ways in which the Nasdaq corporate governance rules differ for us, as a foreign company, are a reduced quorum requirement for shareholder meetings. In the year 2010 we were required to comply with the provisions of the Combined Code on Corporate Governance which was issued in the United Kingdom in June 2008. According to the provisions of the Combined Code we were in compliance with the provisions throughout the year, and we disclosed that Mr. R. I. Israel was not deemed independent in accordance with the independence definitions and was subject to re-election on an annual basis as per such requirements. At the annual general meeting held in May 2010 Mr. Israel was re-elected. With respect to reporting periods after June 29, 2010 we are subject to the requirements of the United Kingdom’s Corporate Governance Code.
PART III
Item 17. Financial Statements
Not Applicable.
Item 18. Financial Statements
     Reference is made to the financial statements, commencing on page F-1, and the financial statement schedule on page S-1.
Item 19. Exhibits
     The following exhibits are filed as part of this Annual Report:
     
Exhibit No.   Exhibit
1.1*
  Memorandum of Association of Randgold Resources Limited, as amended.
 
   
1.2*
  Articles of Association of Randgold Resources Limited, as amended.
 
   
2.1
  Memorandum of Association of Randgold Resources Limited, as amended (see Exhibit 1.1).
 
   
2.2+++
  Form of Amended and Restated Deposit Agreement, dated as of October 14, 2009 among Randgold Resources Limited, The Bank of New York as Depositary, and owners and holders from time to time of American Depositary receipts issued thereunder.
 
   
2.3+++
  Form of American Depositary Receipt.

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Exhibit No.   Exhibit
2.4*
  Excerpts of relevant provisions of the Companies (Jersey) Law 1991.
 
   
2.5*
  Shareholder’s Agreement (English translation), dated June 23, 2000, between the Government of Mali and Morila Limited.
 
   
4.1*
  Deed Governing the Relationship Between the Parties Upon Admission between Randgold & Exploration Company Limited and Randgold Resources Limited, dated June 26, 1997 (Relationship Agreement).
 
   
4.2*
  License Agreement, dated June 26, 1997, between Randgold & Exploration Company Limited and Randgold Resources Limited.
 
   
4.3*
  Agreement, dated December 21, 1999, between Société des Mines de Morila SA, Randgold Resources Limited and Morila Limited (loan from Randgold Resources Limited to Morila Limited).
 
   
4.4*
  Sale of Shares Agreement, dated May 29, 2000, between AngloGold Limited, Randgold Resources Limited and Randgold Resources (Morila) Limited.
 
   
4.5*
  Joint Venture Agreement, dated May 29, 2000, between AngloGold Limited and Randgold Resources Limited.
 
   
4.6*
  Operator Agreement, dated May 29, 2000, between Société des Mines de Morila SA and AngloGold Services Mali SA.
 
   
4.7*
  Cession of Shareholder’s Loan — Memorandum of Agreement, dated July 3, 2000, between Randgold Resources Limited and AngloGold Morila Holdings Limited.
 
   
4.8*
  Deferred Terms Agreement by and between Société des Mines de Morila SA and Rolls-Royce Power Ventures Limited, dated February 25, 2000.
 
   
4.9*
  Deed of Guarantee, dated August 25, 2000, between Randgold Resources Limited, Randgold & Exploration Company Limited and SYPPS.
 
   
4.10*
  Deferred Terms Agreement by and between Société des Mines de Morila SA and Rolls-Royce Power Ventures Limited, dated December 9, 1999.
 
   
4.11*
  Deed of Guarantee given under the Morila Deferred Terms Agreement, dated March 3, 2000, between Randgold Resources Limited, Randgold & Exploration Company Limited and Mopps.
 
   
4.12*
  Morila Exploitation Permit (English translation).
 
   
4.13*
  Transfer of Morila Exploitation Permit from Randgold Resources Limited to Morila SA.
 
   
4.14*
  Randgold Resources Limited Share Option Scheme.
 
   
4.15+
  Structured Precious Metals Option and Loan Confirmation, dated August 30, 2002, between Randgold Resources Limited and NM Rothschild & Sons Limited.
 
   
4.16+
  Third Contract of Employment between Randgold Resources Limited and Roger Ainsley Ralph Kebble.
 
   
4.17+
  Services Agreement between Randgold & Exploration Company Limited and Randgold Resources Limited, dated February 2, 2003.
 
   
4.18++
  Shareholder Loan Agreement dated August 1, 2004, between Randgold Resources Limited and Randgold Resources (Somilo) Limited.

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Exhibit No.   Exhibit
4.19++
  Termination Agreement, dated November 9, 2004, between Randgold Resources Limited and Mr. R.A.R. Kebble.
 
   
4.20++
  Deed of Assignment, dated December 20, 2004, between Randgold Resources Limited and Société des Mines de Loulo S.A.
 
   
4.21++
  International Swap Dealers Association Inc. Master Agreement, dated December 21, 2004, between Randgold Resources Limited and Absa Bank Limited.
 
   
4.22++
  Amendment to Shareholders’ Loan Agreement, between Randgold Resources Limited and Randgold Resources (Somilo) Limited.
 
   
4.23#
  Fifth Contract of Employment, dated January 31, 2005, between Randgold Resources Limited and Dennis Mark Bristow.
 
   
4.24§
  Mining Contract Agreement, dated February 15, 2005, between Société des Mine de Loulo S.A and BCM Mali S.A.
 
   
4.25§
  Third Contract of Employment, dated April 20, 2006, between Randgold Resources Limited and Roger A. Williams.
 
   
4.26#
  International Swap Dealers Association Inc. Master Agreement and Schedule thereto, dated April 23, 2007, between Fortis Bank NV/SA Limited and Randgold Resources Limited.
 
   
4.27#
  International Swap Dealers Association Inc. Novation Agreement, dated April 23, 2007, between Randgold Resources Limited, Société Générale and Fortis Bank NV/SA.
 
   
4.28#
  Revolving Credit Facility Agreement, dated May 1, 2007, among Randgold Resources (Somilo) Limited, Randgold Resources Limited, various Banks and Other Financial Institutions and NM Rothschild & Sons Limited.
 
   
4.29#
  Charge Over Shares, dated May 8, 2007, between Randgold Resources Limited and NM Rothschild & Sons Limited.
 
   
4.30#
  Charge Over Shares, dated May 8, 2007, between Mining Investments (Jersey) Limited and NM Rothschild & Sons Limited.
 
   
4.31#
  Deed of Guarantee and Indemnity, dated May 8, 2007, between Randgold Resources Limited and NM Rothschild & Sons Limited.
 
   
4.32#
  Deed of Guarantee and Indemnity, dated May 8, 2007, between Société des Mines de Loulo S.A. and NM Rothschild & Sons Limited.
 
   
4.33#
  Deed of Assignment, dated May 8, 2007, between Randgold Resources Limited and NM Rothschild & Sons Limited.
 
   
4.34#
  Registered Share Pledge Agreement, dated May 9, 2007, between Randgold Resources (Somilo) Limited and NM Rothschild & Sons Limited.
 
   
4.35##
  Joint Venture Agreement, dated April 4, 2008, between New Mining CI and Randgold Resources (Côte d’Ivoire) Limited.
 
   
4.36###
  Addendum to the Joint Venture Agreement, dated April 4, 2008, between New Mining CI and Randgold Resources (Côte d’Ivoire) Limited.
 
   
4.37###
  Employment Contract, dated April 28, 2008, between Randgold Resources Limited and Dennis Mark Bristow.
 
   
4.38###
  First Contract of Employment, dated April 28, 2007, between Randgold Resources Limited and Graham P. Shuttleworth.

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Exhibit No.   Exhibit
4.39###
  Addendum to the Joint Venture Agreement, dated April 22, 2008, between AngloGold Ashanti Limited and Randgold Resources Limited.
 
   
4.40###
  Addendum to the Operatorship Agreement, dated April 22, 2008, between AngloGold Ashanti Limited, AngloGold Services Mali SA, Société des Mines de Morila SA and Mining Investments Jersey Limited.
 
   
4.41%
  Project Management Agreement between La Société d’Opération Ivoirienne d’Électricité (SOPIE) and Randgold Resources C.I. — SARL, dated March 2009.
 
   
4.42%
  Letter Agreement, dated September 18, 2008, between Randgold Resources (Côte d’Ivoire) Limited and New Mining Côte d’Ivoire SARL.
 
   
4.43%
  Rules of the Randgold Resources Limited Restricted Share Scheme.
 
   
4.44%
  Contract of Employment, dated July 1, 2008, between Randgold Resources Limited and Graham P. Shuttleworth.
 
   
4.45%%
  Agreement between Randgold Resources Limited and AngloGold Ashanti Limited dated July 16, 2009.
 
   
4.46%%
  Amendment dated July 27, 2009 to Agreement between Randgold Resources Limited and AngloGold Ashanti Limited, dated July 16, 2009.
 
   
4.47%%
  Irrevocable Commitment from Randgold Resources Limited to Moto Goldmines Limited, dated July 27, 2009.
 
   
4.48**
  Arrangement Agreement, dated August 5, 2009, between Randgold Resources Limited, 0858065 B.C. Limited and Moto Goldmines Limited.
 
   
4.49**
  Protocole d’Accord, dated October 31, 2009, between Randgold Resources Limited, AngloGold Ashanti Limited, Moto Goldmines Limited, Kibali Goldmines S.P.R.L. and the Government of the Democratic Republic of The Congo.
 
   
4.50**
  Share Purchase Agreement, dated October 31, 2009, between L’Office des Mines de Kilo-Moto, Randgold Resources Limited, AngloGold Ashanti Limited, Moto Goldmines Limited, Border Energy Pty Limited, Kibali (Jersey) Limited and Kibali Goldmines S.P.R.L.
 
   
4.51***
  Agreement, dated July 26, 2010 between Randgold Resources and DTP Terrassement.
 
   
4.52***
  Joint Venture Agreement, dated July 16, 2009 between Randgold Resources Limited and AngloGold Ashanti Limited
 
   
4.53***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Philippe Liétard.
 
   
4.54***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Norborne Cole Jr.
 
   
4.55***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Christopher L Coleman.
 
   
4.56***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Robert I Israel.
 
   
4.57***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Karl Voltaire.
 
   
4.58***
  Appointment Letter, dated May 4, 2010, between Randgold Resources Limited and Kadri Dagdelen.
 
   
4.59***
  Contract of Employment, dated Aug