Randgold Resources spent $2.7 million on its three-month bidding war against AngloGold for control of Ghana’s Ashanti Goldfields, Dr Mark Bristow, the chief executive of Randgold has said.

He stated that the group had received good value for the money spent on the bid. “We usually spend between $10 million and $15 million every year on new business development and this bid was for a 46-million ounce resource, so I don’t think there will be any complaints,” Bristow said.

Roger Kebble, the chairman of Randgold, said the company’s bid for Ashanti was deadly serious. “The Ashanti bid was not done in jest, it was done seriously. It’s taken Randgold’s profile and the share to new heights and the share price has kept its value,” he said.

For AngloGold, Randgold shifted between a real threat and an expensive irritation, ultimately forcing it to deliver the knockout blow by raising its paper offer for Ashanti by 12 per cent. The higher bid helped AngloGold win unanimous support of Ashanti’s two largest shareholders, the Ghanaian government and platinum group Lonmin. Bristow said Randgold had forced the higher bid, winning it friends in Ghanaian government circles. “Certainly, we believe we are friends of the Ghanaian people. We ensured they got a bit more of a premium for their asset”, Dr Bristow said.

Both Mr Kebble and Dr Bristow tried to put a brave face on the drubbing by their larger rival, hinting that Randgold would wait until the deal was finalised before accepting defeat. Their comments, however, suggest that the fat lady has already sung. “It’s not the end of the road, the game is not over yet. There is still a process that needs to be completed but we still have to go forward with our plan B”, Mr Kebble said.

The company’s priority for the time being appears to be the development of the long awaited Loulo project in Mali. Dr Bristow said the company’s board would decide before the end of the year whether to push the button on the $80 million project, which is expected to produce between 200,000 ounces and 250,000 ounces of gold a year over its 15-year life of mine. Dr Bristow said at a gold price of $375/oz, Loulo would show an internal rate of return of 40 per cent.

Dr Bristow also said the company would continue scanning Africa for acquisition opportunities. Interestingly, Dr Bristow showed a slide of the remaining independent gold producers operating in East and West Africa.

Meanwhile, the company recorded a net profit of $13.7m for the third quarter ending September 30, 2003, resulting in earnings per share of $0.48. This was 55 per cent lower than the net profit achieved for the corresponding period in 2002 of $30.5 million.

Revenues were affected by lower ounces produced, resulting from reduced grades, offset by higher metallurgical recoveries during the quarter and a higher received gold price.

The operating profit margin for the quarter was adversely affected by accelerated waster stripping and rebuild costs but remains at above 70 per cent for the nine months ended September 2003.

The company said that gold production at the Morila Mine dropped to just under 200,000 ounces for the quarter as against 236,499 ounces the previous quarter, mainly as a result of lower grades processed. Higher grade areas were not accessible in the pit, partly as a result of heavier than normal rainy season.

Costs were subsequently higher this quarter and averaged $85/oz total cash operating cost and $111 total cash cost. The company also said that this higher cost trend is expected to continue as lower grade ore is accessed over the next few months.