Ladies and gentlemen, welcome to Randgold's Fourth Quarter Conference Call. Today’s speaker will be Mr. Mark Bristow, Randgold’s CEO. Sir, please go ahead.

Good afternoon, ladies and gentlemen. We are broadcasting from sunny - the dry sunny so good morning to those in North America and good afternoon to the callers that are in from the U.K. and Europe. We're a full house, so let's get on with it. We had, as is tradition, we proceeded a full presentation to a packed audience at lunchtime and the idea of this call is to run you through the results and then give you an opportunity to ask questions. The full transcript or webcast of our presentations at lunchtime our -- is on website for those who want to go and get the full presentation. So, without any further ado, we ran through, as I normally do, a touch on the market and industry and the fact that we've got lots of challenges facing the gold industry today, not the least, of which is our ability to replace the gold that we're mining at the similar quality and fend off the deterioration in our reserves and, particularly in the grade. And at the same time -- and that impinges on this trend for governments to demand more and for us as an industry, to not be afford it because we’re just not able to present the sort businesses that we have done in the past. Of course, we, at Randgold feel that we stand apart from this dilemma and that we're a committed, profitable business, reinforced by this last 2017’s performance. Probably our best performance in the 23 years we've been operating and certainly the -- another record, the seventh in a row in production and the best cost profile that we’ve been able to deliver in the last six years. And the key building blocks of that delivery is not only the focus on…

[Operator Instructions] We have a question from Joshua Wolfson from Desjardins Securities. Please go ahead.

First question I had was on Massawa. Earlier in the call, you mentioned initial capital would be on the order of $500 million to $600 million. I think the old number you had discussed was $438 million. Does the new number include life of mine sustaining capital as well as the initial capital? Or is that the new upfront number being $500 million to $600 million?

No Josh I just stated if you want to hear a quick and dirty sort of numbers that you can look at, we definitely won't be more than. I think just a sort of rough estimate at this stage and when you take that even with that higher capital it’s still an attractive return and its still very low capital intensity as gold mining projects go. So, you know that's the details that this is probably at the end of the whole program around 500 million to 600 million including sustaining capital is the standard for a 10 year mine, if you go back and you look at Tongon, historically that’s the sort of number that comes up.

Got it. And so, from, I guess, a big picture perspective, the project has always screened well relative to other West African ones. If the project, I guess, fails to meet the 20% IRR but it comes pretty close, would you still advance it later this year? Or is that 20% rule kind of going to be maintained?

I think as I always said, we retain the right to change our mind in perfect harmony with changing circumstances. So, you know the one things that is embedded in our cost guidance for this year is we have a view that there is more upward pressure or there's going to be more upward pressure in the input costs this year than there was in the previous three years. And so, whether it’s the oil cost which we forecast the higher across or just the general input costs of mine. I think the other thing that's changed a lot is the fiscal foundation across sub-Saharan African in developing new mines and Massawa is privileged to have a grandfathered fiscal regime which comes with a five, it's actually a seven year as pointed out earlier today. Seven years from the circular production decision, [indiscernible] for five years tax holiday. It's got 3% royalty, the 25% tax rate, so you know that's a very attractive fiscal regime and it’s not one that's going to be readily available to any investor in the not too distant future, so we will certainly look at the benefits of being able to do that, the overall prospectivity of Massawa. But right now, we're really comfortable to pass this and get our board's approval without having to sort of negotiate on any one particular component.

Got it. And 2 other sorts of quick questions on the tax or dividend paying side of things. The first up, for Loulo, it looks like you'll recover your capital at some point maybe in the next year or 2. Are you expected to start paying dividends at that point? And is there any sort of ability to leverage that against the outstanding VAT arbitration proceedings? Or are those 2 completely separate items?

So, TVA [indiscernible] so as you see a slight improvement, increase in TVA that's really managing the amount of revenue net revenue coming out of the operations with the increased investment in Gounkoto. But we're pretty relaxed and no country including the DRC, has any dispute on the actual TVA credit and it needs to be paid back. As far as mining and disputed files goes, again we made good progress on that front, and we're, we have an agreement in principle with the Ministry of Finance on moving forward to select the mutually acceptable specific way to develop the work with our teams to deal internally with undisputed and come up with amicable settlements for the all damage of disputes. So that's good news, and again I want to reiterate on the TVA front we do have the right of offset that we do exit that. And we're not stating with any conflict when it comes to the aspect around this.

Okay. And my last question also on taxes. With regards to the comments that Gecamines is making with, I guess related to its own interest, and I guess not having seen profits there, how are -- how do you navigate that situation when you have I guess 2 different entities kind of coming out for -- or looking for more money? And also, that in the context of elections later this year. And what are implications are for ...

There is a lot of Paranoia probably in our foreign investors are more paranoid than we are. And at Gecamines there is special types of I mean sarcastically. It is a parasite who has operated in an insolvent and now that the Chief Executive first of all one minute is masquerading as the representative for private investment in the country and then the next minute, he's trying to harvest a whole lot money to fully open the business. And I mean it doesn't all the well for any business partnership when you stand up in public and demand that you have a right to jazz more although to really jazz relationships. The good news is that we don't have to deal with Gecamines. And I think that the takeaway is that ultimately the lot of commercial balance will prevail. Because either there will be profitable partnership with real opportunities for the partners to be able to deliver for its shareholders or it will still go on very quickly. And I think that and then with that we will get a new set of investors with a new set of projects. But I think without a job it's we're dealing now with individuals within this Congolese structure demanding sort of imaginative changes in the contracts with investors including some of the biggest investors in the world who have stepped up to the plate and put real hard money into these relationships. So, I am, we'll see how that works out. And we see that before Josh, across the continent and ultimately, I think today, the world is very difficult to operate in an island. I think on the flipside, what we can say is, our relationship is Kemah is healthy, it's robust. They are an integral part of our business and we are very committed to continue to develop additional projects with the Kemah coordinates and its operating team. And I think that would be our jolt.

Our next question is from David Haughton from CIBC. Please go ahead.

Good evening, Mark. Thank you for the update and thanks for all the color on the DRC. Obviously, a lot of attention there. I've got a different question on the DRC. Kibali, you've now got the underground handling system up and running. I just wondering, what your ramp expectation is for throughput from the undergrounding. And are you targeting still getting 3.6 million per ounce from the undergrounded 2019.

Yes. The capacity of 3.6 million tons on an annualized basis. In one of the slides in our slide show, you will see the monthly forecast for this year. We don’t actually get to 3.6 aggregate at the end of the year. Because we have swings and roundabouts. So certainly, some of the mines are up there at 3.6 million tons. And it's really the way the mine schedule works, but we are, as you go and analyze that slide it is very important for you. It's a combination of what's hoisted and chasable of being hoisted. Yeah.

But there does appear to be a bit of mismatch between what you've got in that slide and what you're saying in the quarter for the tons mined. And I'm just wondering, when we are looking at this, should we be thinking that you can easily exit 2018 at a consistent 3.6 million tons?

Sure. The production is 3.3 million tons at 4.8 grams a ton.

Great. And then similar kind of question just at Tongon. You've got stabilization up to now. Just wondering is it a sustainable 4.5 million tons grams through that plant?

You're talking about Tongon?

Tongon now.

Yeah sure. So, I mean we're comfortable there David, we've just put in another 8-megawatt motor not to expand it even further. But if you look at quarter 4, we're pretty much there. Just to be able to give us the extra capacity to ensure that our maintenance management is able to support consistent 4.5 million tons throughput.

And returning now to the political scene in the DRC what's the next step for you, is the government open to negotiations with you or what's the next step?

So, right now we've engaged as the industry and individually winning goals for Kibali, with the authorities from the highest level of the government and all the other stakeholders including civil society, parliamentarians, citizens and so on, and it's all very early days David, so for me to meet out any I do this, they do this, and we don’t respond like this, first of all I don't think it share that in a public forum and then secondly if there is still a way to go before this thing actually gets to a point where we have to deal with options. I think first part for everyone is sanity prevails and we sit down around the table with the executive governments and work out something that's good for everyone.

So, parliament has passed the bill as we've seen the headlines, the President is yet to sign off, so can the President with your negotiations push it back tell them saying not good enough guys, we want to recheck it?

Yes. The President today anything he likes.

So, you have to think I mean the President that changes are needed and then process sort of goes through an [update]?

Yes. And I mean this is not a one man show and that seems in that the remaining advisors and other sort of influential chancellors for the want of a better word that are [indiscernible] final stakeholder relationship.

So, until he signs it, the door is still open.

Exactly and even subsequent to that because we have recourse to engaging arbitration and more sort of confrontational approaches which is not the most constructive way to deal with things like this.

Our next question is from Howard Flinker from Flinker & Co. Please go ahead.

Did you say your CapEx this year will be 300 million? I didn't hear it clearly.

225. Last year it was just over 300.

Our next question is from Tanya Jakusconek from Scotia Bank. Please go ahead.

I just have -- and this is, Mark, from a very cold Toronto, like minus 10. So, it's sunny but cold. Just wanted to ask you, going back to Kibali and I know that Dave asked about the President and where we go from here. Thank you for mentioning the royalty and the ownership, the 10% and the 30% no change. But just on the windfall, you've seen, I guess, what's come back. Is there a mathematical formula or something you can share with us in terms of what they're asking from a windfall perspective?

Sure, its 25% above the feasibility study goal thrust and there's no provision for the feasibility per se, in the previous stages sanctioned. But if you go back its probably realistic to point out that on the developed -- on the investment decision, it was average commodity price global commodity price for that period and so 25% on that price would be -- would attract additional tax however, in part of normal tax rate, which is 30%, and the indication to just get to be around 50, instead of 30.

There is a differential.

Yes, the differential.

So instead of paying a 30% tax rate, you'll be paying 50%?

On that differential, yes.

Okay, that’s great.

Tanya, I was going to note, which Mark pointed out on the call earlier is that at the time that we made the development decision the gold price was [$1500] an ounce. So, in theory, it would have to go above that before this would apply to us.

Yes. No, I appreciate but if they're changing all sorts of things, you may guess that they might even change -- bring it to spot pricing, I'm not sure. Okay, so but it's helpful that…

I know it's very cold in Canada and all that sort of thing and you feel like better interested and jealous that we are sitting in the sun but we have got enough problems dealing with these government officials and we don’t know any additional for legislation to already complex one.

No, we are not adding legislation, just trying to understand the mathematics of it. And then you said the $0.04 royalty unchanged, 10% ownership unchanged and 30% tax rate unchanged.

Yes. As we said we are still working through the details of the fiscal components of this legislation. But the point here is, the -- our first prize is it's relatively benign for Kibali, but that's not the point. The point is we didn’t go and $2 plus billion of our shareholders money just to exploit Kibali and be forced to hydrate it and stick to our 10-year minimum. Our change in this is to participate in the development of this mining industry in DRC and have the ability to reinvest and that’s the point we are making to everyone. Just hang on I'll be careful that you don't roast the gold in and prevent any opportunities for your investments.

Okay. Well, I guess, we'll wait to see what happens as this moves along. May be just moving onto the Loulo-Gounkoto complex. Just wanted to make sure that in those 5-year forecasts that doesn't include anything from the super pit?

On the five-year forecast, yes it does, but in super pit business the contengium of you know our current business profiles, so it's picked and what the super pit did as we disclosed last time we spoke when we sort of gave you the details of the mine cast is that it pegs that [indiscernible] six-seven thousand ounces that's $600 and below dollars an ounce that's what it does. And have you know we took you through the -- you know the way we capitalize this strip and that sort of thing and that's all baked into that capital project.

Okay. Just want to make sure we don't double count it. And just on the Massawa, you mentioned that we are going to get production decision sometime later this year. When is later this year? Are you targeting midyear or end of year?

So, no one usually roast me upon this today so I'm not going to get good dates and I think that the point here is, one of the things that people say is you know that they've been up a long road try to fit in and that's correct because you know Randgold has a history of making the right decisions and we allocate capital very carefully. And if you go back to when it was Morila or Loulo or Gounkoto, or Tongon we've always taken our time because we understand the one-way decision when you starting holding mines and Massawa is as far as our rental rates goes is not -- is not going to apply to any of defaulters really and very similar to Tongon when we wrestled with that decision because remember we were going to start Tongon first and then we leapfrogged towards Loulo because there's the discovery of Yalea and Yalea we were two years late in the decision after we indicated that we would told this because it didn’t fit our criteria at this stage. And so you know Massawa is you know compared to anything else in sub-Saharan Africa it's got more ounces at a lower price rate any of the undeveloped assets and it’s very close to meeting our criteria that we got a bit more work to do on the metallurgy both [indiscernible] in particular and we believe that you know additional drilling to actually get the project through our hurdles is warranted rather than try to become you know a hostage to the premise.

Okay. Well maybe just to confirm some numbers that you provided to us when you were here in Toronto in November. And that was that we were still at about a hurdle rate of about 18%, and I think we were still looking for a couple of hundred thousand ounces to help get that hurdle rate to what you need. Is that something that is still on target? Is that -- has anything changed there?

Exactly that we're, we're still around that -- I think 2.6 billion ounces reserved because we haven't declared anything else but there's a couple of extra 100,000 ounces on that right now which is currently the focus of reserve conversion. And in addition to that there’s a few more targets that we’re drilling out. So, we're still very well positioned to complete a final feasibility study by the end of the year. That would require our board, in principle, to approve us; progressing towards that point sometime in the middle of the year, if that helps you with your planning. But as I pointed out, everything is conditional on that project being able to pass hurdle.

Okay. Thank you. I look forward to get into more information.

And we've got the production forecast in 2021.

[Operator Instructions] We have no further question. Mr. Bristow, back to you for conclusion.

Thank you very much. Thank you, thank you, ma’am and thank you everyone for making the time and I’m sorry that you're so cold in Toronto, Tanya. So, everyone we -- as you know, it’s --- in a short while, we'll see you down in sunny Florida. And for those people who are not going to be migrating down there with the snow geeks, we'll see you in New York, and we'll be moving up through Toronto as well. So, over the next couple of weeks, we'll be catching up with all of you on a face-to-face basis. Again, thanks for joining the call.

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